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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 Scalia
delivered the opinion of the Court.
Respondent Joseph A. Fausto, an employee of the Department of the Interior Fish and Wildlife Service (FWS), was suspended from his job for 30 days because of unauthorized use of a Government vehicle. The United States Court of Appeals for the Federal Circuit held that he could maintain a suit for backpay in the United States Claims Court alleging that his suspension was in violation of Department of the Interior regulations. We granted certiorari to decide whether the Civil Service Reform Act of 1978 (CSRA or Act), Pub. L. 95-454, 92 Stat. 1111 et seq. (codified, as amended, in various sections of 5 U. S. C. (1982 ed. and Supp. IV)), which affords an employee in respondent’s situation no review of the agency’s decision, precludes such a Claims Court suit.
I
Respondent was hired by FWS in January 1978, as an administrative officer for the Young Adult Conservation Corps camp in Virginia Beach, Virginia. His position was in the excepted service, and was to last for the duration of the Conservation Corps program at Virginia Beach, but not beyond September 30, 1982.
In November 1980, FWS advised respondent that it intended to dismiss him for a number of reasons, including unauthorized use of a Government vehicle. After respondent replied to the charges, he received a memorandum from FWS informing him that he would be removed effective January 16,1981. That memorandum did not advise respondent of his grievance rights under Department of the Interior regulations, which included the right to a formal hearing conducted by a grievance examiner. See Department of the Interior Federal Personnel Manual — 231, pt. 370 DM, ch. 771, subch. 3, 3.22A (May 4, 1981).
Respondent sought review of his removal with the Merit Systems Protection Board (MSPB), which dismissed his appeal in August 1981, on the ground that under the CSRA a nonpreference eligible in the excepted service has no right to appeal to the MSPB. Fausto v. Department of Interior, No. PH 075281102271 (M. S. P. B. Aug. 27, 1981), aff’d, 738 F. 2d 454 (CA Fed. 1984) (judgment order). On September 18, 1981, FWS permanently closed the camp at Virginia Beach. In March 1982, in response to an inquiry initiated on behalf of respondent, FWS admitted that respondent had not been informed of his grievance rights, and offered him the opportunity to challenge his removal. Respondent filed a formal grievance, and on June 30, 1982, FWS concluded, based on the administrative file and without a hearing, that respondent should not have been removed. FWS found that most of the charges against respondent were de minimis and warranted no penalty, but imposed a 30-day suspension for misuse of a Government vehicle. See 31 U. S. C. § 638a(c)(2) (1976 ed.) (now codified at 31 U. S. C. § 1349(b)). FWS offered respondent backpay from February 15, 1981, the date his 30-day suspension would have ended, through September 18, 1981, the date the camp was closed.
Respondent filed an appeal with the Department of the Interior, claiming that his suspension was unwarranted and that he was entitled to additional backpay for the period covered by the suspension as well as for the period from the date on which the camp closed through the date on which FWS admitted that he should not have been removed. The Secretary of the Interior upheld FWS’s decision.
In February 1983, respondent filed the present action under the Back Pay Act, 5 U. S. C. §5596, in the Claims Court. The Claims Court dismissed, holding that the CSRA comprised the exclusive catalog of remedies for civil servants affected by adverse personnel action. 7 Cl. Ct. 459, 461 (1985). The Federal Circuit reversed and remanded, 783 F. 2d 1020 (1986), holding that although the CSRA did not afford nonpreference excepted service employees a right of appeal to the MSPB, it did not preclude them from seeking the Claims Court review traditionally available under the Tucker Act, 28 U. S. C. § 1491, based on the Back Pay Act. 783 F. 2d, at 1022-1023. On the merits it found Fausto’s suspension wrongful and awarded backpay for the period of the suspension. Id., at 1023-1024. The Court of Appeals denied the Government’s petition for rehearing of the case en banc, but issued a second panel opinion reaffirming its decision. 791 F. 2d 1554 (1986).
The Government petitioned for certiorari on the question whether a nonveteran member of the excepted service may obtain, under the Tucker Act, judicial review of adverse personnel action for which the CSRA does not provide him a right of review.
II
We have recognized that the CSRA “comprehensively overhauled the civil service system,” Lindahl v. OPM, 470 U. S. 768, 773 (1985), creating an elaborate “new framework for evaluating adverse personnel actions against [federal employees],” id., at 774. It prescribes in great detail the protections and remedies applicable to such action, including the availability of administrative and judicial review. No provision of the CSRA gives nonpreference members of the excepted service the right to administrative or judicial review of suspension for misconduct. The question we face is whether that withholding of remedy was meant to preclude judicial review for those employees, or rather merely to leave them free to pursue the remedies that had been available before enactment of the CSRA. The answer is to be found by-examining the purpose of the CSRA, the entirety of its text, and the structure of review that it establishes. See Lindahl, supra, at 779; Block v. Community Nutrition Institute, 467 U. S. 340, 345 (1984).
A leading purpose of the CSRA was to replace the haphazard arrangements for administrative and judicial review of personnel action, part of the “outdated patchwork of statutes and rules built up over almost a century” that was the civil service system, S. Rep. No. 95-969, p. 3 (1978). Under that pre-existing system, only veterans enjoyed a statutory right to appeal adverse personnel action to the Civil Service Commission (CSC), the predecessor of the MSPB. 5 U. S. C. §7701 (1976 ed.). Other employees were afforded this type of administrative review by Executive Order. Exec. Order No. 11491, §22, 3 CFR 874 (1966-1970 Comp.), note following 5 U. S. C. §7301 (1976 ed.) (extending CSC review to competitive service employees). Still others, like employees in respondent’s classification, had no right to such review. As for appeal to the courts: Since there was no special statutory review proceeding relevant to personnel action, see 5 U. S. C. §703, employees sought to appeal the decisions of the CSC, or the agency decision unreviewed by the CSC, to the district courts through the various forms of action traditionally used for so-called nonstatutory review of agency action, including suits for mandamus, see, e. g., Taylor v. United States Civil Service Comm’n, 374 F. 2d 466 (CA9 1967), injunction, see, e. g., Hargett v. Summerfield, 100 U. S. App. D. C. 85, 243 F. 2d 29 (1957), and declaratory judgment, see, e. g., Camero v. McNamara, 222 F. Supp. 742 (ED Pa. 1963). See generally R. Vaughn, Principles of Civil Service Law § 5.4, p. 5-21, and nn. 13-17 (1976) (collecting cases). For certain kinds of personnel decisions, federal employees could maintain an action in the Court of Claims of the sort respondent seeks to maintain here. See, e. g., Ainsworth v. United States, 185 Ct. Cl. 110, 399 F. 2d 176 (1968).
Criticism of this “system” of administrative and judicial review was widespread. The general perception was that “appeals processes [were] so lengthy and complicated that managers [in the civil service] often avoid[ed] taking disciplinary action” against employees even when it was clearly warranted. S. Rep. No. 95-969, at 9. With respect to judicial review in particular, there was dissatisfaction with the “wide variations in the kinds of decisions . . . issued on the same or similar matters,” id., at 63, which were the product of concurrent jurisdiction, under various bases of jurisdiction, of the district courts in all Circuits and the Court of Claims. Moreover, as the Court of Appeals for the District of Columbia Circuit repeatedly noted, beginning the judicial process at the district court level, with repetition of essentially the same review on appeal in the court of appeals, was wasteful and irrational. See Polcover v. Secretary of Treasury, 155 U. S. App. D. C. 338, 341-342, 477 F. 2d 1223, 1226-1228 (1973).
Congress responded to this situation by enacting the CSRA, which replaced the patchwork system with an integrated scheme of administrative and judicial review, designed to balance the legitimate interests of the various categories of federal employees with the needs of sound and efficient administration. See S. Rep. No. 95-969, at 4. Three main sections of the CSRA govern personnel action taken against members of the civil service. In each of these sections, Congress deals explicitly with the situation of nonpreference members of the excepted service, granting them limited, and in some cases conditional, rights.
Chapter 43 of the CSRA governs personnel actions based on unacceptable job performance. It applies to both competitive service employees and members of the excepted service. 5 U. S. C. §4301. It provides that before an employee can be removed or reduced in grade for unacceptable job performance certain procedural protections must be afforded, including 30 days’ advance written notice of the proposed action, the right to be represented by an attorney or other representative, a reasonable period of time in which to respond to the charges, and a written decision specifying the instances of unacceptable performance. § 4303(b)(1). Although Congress extended these protections to nonpreference members of the excepted service, it denied them the right to seek either administrative or judicial review of the agency’s final action. Chapter 43 gives only competitive service employees and preference eligible members of the excepted service the right to appeal the agency’s decision to the MSPB and then to the Federal Circuit. § 4303(e).
Chapter 23 of the CSRA establishes the principles of the merit system of employment, § 2301, and forbids an agency to engage in certain “prohibited personnel practices,” including unlawful discrimination, coercion of political activity, nepotism, and reprisal against so-called whistleblowers. § 2302. Nonpreference excepted service employees who are not in positions of a confidential or policymaking nature are protected by this chapter, § 2302(a)(2)(B), and are given the right to file charges of “prohibited personnel practices” with the Office of Special Counsel of the MSPB, whose responsibility it is to investigate the charges and, where appropriate, to seek remedial action from the agency and the MSPB. § 1206.
Chapter 75 of the Act governs adverse action taken against employees for the “efficiency of the service,” which includes action of the type taken here, based on misconduct. Sub-chapter I governs minor adverse action (suspension for 14 days or less), §§ 7501-7504, and Subchapter II governs major adverse action (removal, suspension for more than 14 days, reduction in grade or pay, or furlough for 30 days or less), §§7511-7514. In each subchapter, covered employees are given procedural protections similar to those contained in Chapter 43, §§ 7503(b), 7513(b), and in Subchapter II covered employees are accorded administrative review by the MSPB, followed by judicial review in the Federal Circuit. §§ 7513(d), 7703. The definition of “employee[s]” covered by Subchapter II (major adverse action) specifically includes preference eligibles in the excepted service, § 7511(a)(1)(B), but does not include other members of the excepted service. The Office of Personnel Management is, however, given authority to extend coverage of Subchapter II to positions in the excepted service that have that status because they have been excluded from the competitive service by OPM regulation. § 7511(c).
The Court of Appeals viewed the exclusion of nonpreference members of the excepted service from the definitional sections of Chapter 75 as congressional silence on the issue of what review these employees should receive for the categories of personnel action covered by that chapter, including a suspension of the duration at issue here, which would come within Subchapter II. The court therefore found respondent free to pursue whatever judicial remedies he would have had before enactment of the CSRA. We view the exclusion quite differently. In the context of the entire statutory scheme, we think it displays a clear congressional intent to deny the excluded employees the protections of Chapter 75— including judicial review — for personnel action covered by that chapter.
In Block v. Community Nutrition Institute, 467 U. S., at 345-348, we observed that, under the Agricultural Marketing Agreement Act of 1937, the omission of review procedures for consumers affected by milk market orders, coupled with the provision of such procedures for milk handlers so affected, was strong evidence that Congress intended to preclude consumers from obtaining judicial review. Similarly, in United States v. Erika, Inc., 456 U. S. 201 (1982), we found that in the context of the “precisely drawn provisions” of the Medicare statute, the provision of judicial review for awards made under Part A of the statute, coupled with the omission of judicial review for awards under Part B, “provides persuasive evidence that Congress deliberately intended to foreclose further review of such claims.” Id., at 208 (citations omitted). The same type of analysis applies here. The comprehensive nature of the CSRA, the attention that it gives throughout to the rights of nonpreference excepted service employees, and the fact that it does not include them in provisions for administrative and judicial review contained in Chapter 75, combine to establish a congressional judgment that those employees should not be able to demand judicial review for the type of personnel action covered by that chapter. Their exclusion from the scope of those protections can hardly be explained on the theory that Congress simply did not have them in mind, since, as noted earlier, Congress specifically included in Chapter 75 preference eligible excepted service employees, § 7511(a)(1)(B), and specifically provided for optional inclusion (at the election of OPM) of certain nonpreference excepted service employees with respect to certain protections of the chapter, including MSPB and judicial review, § 7511(c). (Respondent, incidentally, falls within the category eligible for that optional inclusion, see ibid.; 5 CPR §213.3102(hh) (1978), which OPM has chosen not to invoke.) It seems to us evident that the absence of provision for these employees to obtain judicial review is not an uninformative consequence of the limited scope of the statute, but rather manifestation of a considered congressional judgment that they should not have statutory entitlement to review for adverse action of the type governed by Chapter 75.
This conclusion emerges not only from the statutory language, but also from what we have elsewhere found to be an indicator of nonreviewability, the structure of the statutory scheme. Block v. Community Nutrition Institute, supra, at 345; see Southern R. Co. v. Seaboard Allied Milling Corp., 442 U. S. 444, 456-459 (1979). Two structural elements important for present purposes are clear in the framework of the CSRA: First, the preferred position of certain categories of employees — competitive service employees and “preference eligibles” (veterans). See 5 U. S. C. §§ 4303(e), 7501(1), 7503, 7511(a)(1), 7513. This is of course not an innovation of the CSRA, but continuation of a traditional feature of the civil service system. See Veterans Preference Act of 1944, ch. 287, § 14, 58 Stat. 390; Exec. Order No. 10988, § 14, 3 CFR 527 (1959-1963 Comp.). The second structural element is the primacy of the MSPB for administrative resolution of disputes over adverse personnel action, 5 U. S. C. §§ 1205, 4303(e), 7513(d), 7701 (1982 ed. and Supp. IV), and the primacy of the United States Court of Appeals for the Federal Circuit for judicial review, § 7703. This enables the development, through the MSPB, of a unitary and consistent Executive Branch position on matters involving personnel action, avoids an “unnecessary layer of judicial review” in lower federal courts, and “[ejncourages more consistent judicial decisions . . . .” S. Rep. No. 95-969, at 52; see Lindahl v. OPM, 470 U. S., at 797-798.
Interpreting the exclusion of nonpreference excepted service personnel from Chapter 75 as leaving them free to pursue other avenues of review would turn the first structural element upside down, and would seriously undermine the sec - ond. As to the former: Under respondent’s view, he would be able to obtain judicial review of a 10-day suspension for misconduct, even though a competitive service employee would not, since Chapter 75 makes MSPB review, and hence judicial review, generally unavailable for minor adverse personnel action, including suspensions of less than 14 days. Moreover, this inverted preference shown to nonpreference excepted service employees would be shown as well to probationary employees, another disfavored class. See 5 U. S. C. § 4303(f)(2) (expressly excluding probationary employees from review under Chapter 43); § 7511(a)(1)(A) (expressly excluding probationary employees from Chapter 75); S. Rep. No. 95-969, at 45 (“It is inappropriate to restrict an agency’s authority to separate an employee who does not perform acceptably during the [probationary period]”). Since probationary employees, like nonpreference excepted service employees, are excluded from the definition of “employee” for purposes of Chapter 75, respondent’s theory that persons so excluded retain their pre-CSRA remedies must apply to them as well. And as it happens, the very case relied upon by the Federal Circuit as demonstrating the pre-CSRA right to Court of Claims review involved a probationary employee. See Greenway v. United States, 163 Ct. Cl. 72 (1963).
The manner in which respondent’s interpretation would undermine the second structural element of the Act is obvious. First, for random categories of employees, legally enforceable employment entitlements will exist that are not subject to the unifying authority, in consistency of fact-finding as well as interpretation of law, of the MSPB. Second, for these same employees, the second layer of judicial review, which Congress meant to eliminate, would persist, see Lindahl, supra, at 797-798, since pre-CSRA causes of action had to be commenced in the federal courts of first instance rather than in the courts of appeals. Finally, for certain kinds of actions, these employees would be able to obtain review in the district courts and the regional courts of appeals throughout the country, undermining the consistency of interpretation by the Federal Circuit envisioned by § 7703 of the Act. Although a Tucker Act suit is appeal-able only to the Federal Circuit, regardless of whether it is brought in the Claims Court or in district court, see 28 U. S. C. §§ 1295(a)(2), 1295(a)(3), 1346(a)(2), actions brought under the other statutes used to obtain judicial review before the CSRA, see supra, at 445, would be appealable to the various regional Circuits. When, as would often be the case, particular agency action could be challenged under either the Tucker Act or one of the other bases of jurisdiction, an agency office would not know whether to follow the law of its geographical Circuit or the conflicting law of the Federal Circuit. This, and the other consequences of respondent’s theory that the pre-CSRA remedies of nonpreference excepted service employees were not meant to be affected by the Act, are inherently implausible.
Amicus contends that interpreting the CSRA to foreclose review in this case is contrary to two well-established principles of statutory construction. The first is that Congress will be presumed to have intended judicial review of agency action to be available unless there is “persuasive reason” to believe otherwise. Abbott Laboratories v. Gardner, 387 U. S. 136, 140 (1967). We agree with the principle, but find ample basis for applying the exception it contains. As we have made clear elsewhere, the presumption favoring judicial review is not to be applied in the “strict evidentiary sense,” but may be “overcom[e] whenever the congressional intent to preclude review is ‘fairly discernible in the statutory scheme.’” Block v. Community Nutrition Institute, 467 U. S., at 351 (quoting Data Processing Service v. Camp, 397 U. S. 150, 157 (1970)). Here, as in Block, we think Congress’ intention is fairly discernible, and that “the presumption favoring judicial review . . . [has been] overcome by inferences of intent drawn from the statutory scheme as a whole.” 467 U. S., at 349.
The other principle of statutory construction to which amicus appeals is the doctrine that repeals by implication are strongly disfavored, Rodriguez v. United States, 480 U. S. 522, 524 (1987); Regional Rail Reorganization Act Cases, 419 U. S. 102, 133 (1974), so that a later statute will not be held to have implicitly repealed an earlier one unless there is a clear repugnancy between the two, Georgia v. Pennsylvania R. Co., 324 U. S. 439, 456-457 (1945); Wood v. United States, 16 Pet. 342, 362-363 (1842). This means, amicus asserts, that absent an express statement to the contrary, the CSRA cannot be interpreted to deprive respondent of the the statutory remedy he possessed under the Back Pay Act.
Once again we agree with the principle, but do not find it applicable here. Repeal by implication of an express statutory text is one thing; it can be strongly presumed that Congress will specifically address language on the statute books that it wishes to change. See, e. g., Morton v. Mancari, 417 U. S. 535 (1974) (Equal Employment Opportunity Act of 1972, 86 Stat. 103, 42 U. S. C. §2000e et seq. (1970 ed., Supp. II), did not negate employment preference for Indians expressly established by the Indian Reorganization Act of 1934, 48 Stat. 984, 25 U. S. C. §461 et seq.). But repeal by implication of a legal disposition implied by a statutory text is something else. The courts frequently find Congress to have done this — whenever, in fact, they interpret a statutory text in the light of surrounding texts that happen to have been subsequently enacted. This classic judicial task of reconciling many laws enacted over time, and getting them to “make sense” in combination, necessarily assumes that the implications of a statute may be altered by the implications of a later statute. And that is what we have here. By reason of the interpretation we adopt today, the Back Pay Act does not stand repealed, but remains an operative part of the integrated statutory scheme set up by Congress to protect civil servants. All that we find to have been “repealed” by the CSRA is the judicial interpretation of the Back Pay Act — or, if you will, the Back Pay Act’s implication — allowing review in the Court of Claims of the underlying personnel decision giving rise to the claim for backpay.
To be more explicit: The Back Pay Act provides in pertinent part:
“An employee of an agency who, on the basis of a timely appeal or an administrative determination ... is found by appropriate authority under applicable law, rule, regulation, or collective bargaining agreement, to have been affected by an unjustified or unwarranted personnel action ... [is entitled to back pay].” 5 U. S. C. § 5596(b)(1) (emphasis added).
Before enactment of the CSRA, regulations promulgated by the Civil Service Commission provided that a court authorized to correct, or to direct the correction of, an unjustified personnel action was an “appropriate authority” within the meaning of the Back Pay Act. 5 CFR § 550.803(c) (1968). And the Court of Claims had held (with some circularity of reasoning) that it was such a court because it had jurisdiction to award backpay. Ainsworth v. United States, 185 Ct. Cl., at 118-119, 399 F. 2d, at 181. Without disagreeing with that determination made in the context of the pre-existing patchwork scheme, see supra, at 444-445, we find that under the comprehensive and integrated review scheme of the CSRA, the Claims Court (and any other court relying on Tucker Act jurisdiction) is not an “appropriate authority” to review an agency’s personnel determination. This does not mean that the statutory remedy provided in the Back Pay Act is eliminated, or even that the conditions for invoking it are in any way altered. Now, as previously, if an employee is found by an “appropriate authority” to have undergone an unwarranted personnel action a suit for backpay will lie. PostCSRA, such an authority would include the agency itself, or the MSPB or the Federal Circuit where those entities have the authority to review the agency's determination. It seems to us that what respondent would have us invoke is a rule akin to the doctrine that statutes in derogation of the common law will be strictly construed — that is, a presumption against any change rather than a presumption against implicit repeal of a statute. We decline to embrace that principle.
The CSRA established a comprehensive system for reviewing personnel action taken against federal employees. Its deliberate exclusion of employees in respondent’s service category from the provisions establishing administrative and judicial review for personnel action of the sort at issue here prevents respondent from seeking review in the Claims Court under the Back Pay Act. Accordingly, the judgment of the Court of Appeals is
Reversed.
The CSRA divides civil service employees into three main classifications that can be generally described as follows: “Senior Executive Service” employees are those who occupy high-level positions in the Executive Department, but for whom appointment by the President and confirmation by the Senate is not required. 5 U. S. C. § 3132(a)(2). “Competitive service” employees are all other employees for whom nomination by the President and confirmation by the Senate is not required, and who are not specifically excepted from the competitive service by statute or by statutorily authorized regulation. § 2102. “Excepted service” personnel are the remainder — those who are in neither the competitive service nor the Senior Executive Service. § 2103. Respondent’s position was in the excepted service because it had been excluded from the competitive service by authorized Civil Service Commission (now Office of Personnel Management) regulation. 5 CFR § 213.3102(hh) (1978).
Within each of the three classifications of employment, the Act accords preferential treatment to certain veterans and their close relatives — so-called “preference eligibles.” §2108. Respondent, who is not a preference eligible, is referred to as a nonpreference member of the excepted service.
Both parties have characterized the grievance rights included in the Department of the Interior Federal Personnel Manual as agency regulations. For purposes of this case we assume, without deciding, that they are such.
This assumes, of course, that competitive service employees, who are given review rights by Chapter 75, cannot expand these rights by resort to pre-CSRA remedies. Cf. Pinar v. Dole, 747 F. 2d 899, 910-912 (CA4 1984), cert. denied, 471 U. S. 1016 (1985); Carducci v. Regan, 230 U. S. App. D. C. 80, 82-84, 714 F. 2d 171, 173-175 (1983). Even respondent has not questioned this assumption.
The dissent makes no attempt to explain these anomalies, except to assert that we have “create[d] from thin air the notion” that the CSRA affords preferred status to competitive service and preference eligible employees. See post, at 466. Aside from the obvious linguistic response to this assertion — that the CSRA explicitly draws distinctions between “preference” and nonpreference members of the excepted service, 5 U. S. C. § 7511(a)(1)(B) — we think it sufficient to reiterate that this preferred status is a traditional feature of the civil service system. See supra, at 449. This in no way means, of course, that Congress has judged nonpreference excepted service employees to be “less worthy than other federal emplyees,” post, at 466, but only that it has chosen to give them less employ-' ment protection.
The dissent seeks to minimize the impact of respondent’s interpretation by observing that the remedy he seeks will be “limited to those instances when the agency violates its own regulations.” Ibid. This sounds like a substantial limitation, but is in reality an insignificant one. The Department of the Interior grievance system that is the subject of this suit not only provides to nonpreference excepted service employees in respondent’s position the right to be advised of grievance procedures (which is the precise matter at issue here) but also provides that the grievance will be successful unless “management. . . establishes] the facts it asserts by a preponderance of evidence demonstrating that its action was for such cause as would promote the efficiency of the service.” Department of the Interior Federal Personnel Manual — 231, pt. 370 DM, ch. 771, subch. 3, app. A-l(H) (May 4, 1981). Therefore, under respondent’s analysis, a non-preference excepted service employee in his position would be able to appeal to the courts, as a violation of agency regulations, the alleged insufficiency of the evidence to prove the acts for which he was dismissed, and the alleged failure of those acts to establish that his dismissal would promote the efficiency of the service. That would hardly be a narrow supplement to the otherwise integrated system of review established by the CSRA.
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 Stevens
delivered the opinion of the Court.
Respondent is in petitioner’s custody pursuant to a conviction for second-degree murder. The question presented to us is whether the New York State trial judge’s failure to instruct the jury on the issue of causation was constitutional error requiring a Federal District Court to grant habeas corpus relief. Disagreeing with a divided panel of the Court of Appeals for the Second Circuit, we hold that it was not.
On the evening of December 30, 1970, respondent and his codefendant encountered a thoroughly intoxicated man named Stafford in a bar in Rochester, N. Y. After observing Stafford display at least two $100 bills, they decided to rob him and agreed to drive him to a nearby town. While in the car, respondent slapped Stafford several times, took his money, and, in a search for concealed funds, forced Stafford to lower his trousers and remove his boots. They then abandoned him on an unlighted, rural road, still in a state of partial undress, and without his coat or his glasses. The temperature was near zero, visibility was obscured by blowing snow, and snow banks flanked the roadway. The time was between 9:30 and 9:40 p. m.
At about 10 p. m., while helplessly seated in a traffic lane about a quarter mile from the nearest lighted building, Stafford was struck by a speeding pickup truck. The driver testified that while he was traveling 50 miles per hour in a 40-mile zone, the first of two approaching cars flashed its lights — • presumably as a warning which he did not understand. Immediately after the cars passed, the driver saw Stafford sitting in the road with his hands in the air. The driver neither swerved nor braked his vehicle before it hit Stafford. Stafford was pronounced dead upon arrival at the local hospital.
Respondent and his accomplice were convicted of grand larceny, robbery, and second-degree murder. Only the conviction of murder, as defined in N. Y. Penal Law § 125.25 (2) (McKinney 1975), is now challenged. That statute provides that “[a] person is guilty of murder in the second degree" when “[u]nder circumstances evincing a depraved indifference to human life, he recklessly engages in conduct which creates a grave risk of death to another person, and thereby causes the death of another person.” (Emphasis added.)
Defense counsel argued that it was the negligence of the truckdriver, rather than the defendants’ action, that had caused Stafford’s death, and that the defendants could not have anticipated the fatal accident. On the other hand, the prosecution argued that the death was foreseeable and would not have occurred but for the conduct of the defendants who therefore were the cause of death. Neither party requested the trial judge to instruct the jury on the meaning of the statutory requirement that the defendants’ conduct “thereby cause [d] the death of another person,” and no such instruction was given. The trial judge did, however, read the indictment and the statute to the jury and explained the meaning of some of the statutory language. He advised the jury that a “person acts recklessly with respect to a result or to a circumstance described by a statute defining an offense ivhen he is aware of and consciously disregards a substantial and unjustifiable risk that such result will occur or that such circumstance exists.” App. 89 (emphasis added).
The Appellate Division of the New York Supreme Court affirmed respondent’s conviction. People v. Kibbe, 41 App. Div. 2d 228, 342 N. Y. S. 2d 386 (1973). Although respondent did not challenge the sufficiency of the instructions to the jury in that court, Judge Cardamone dissented on the ground that the trial court’s charge did not explain the issue of causation or include an adequate discussion of the necessary mental state. That judge expressed the opinion that “the jury, upon proper instruction, could have concluded that the victim’s death by an automobile was a remote and intervening cause.”
The New York Court of Appeals also affirmed. 35 N. Y. 2d 407, 321 N. E. 2d 773 (1974). It identified the causation issue as the only serious question raised by the appeal, and then rejected the contention that the conduct of the driver of the pickup truck constituted an intervening cause which relieved the defendants of criminal responsibility for Stafford’s death. The court held that it was “not necessary that the ultimate harm be intended by the actor. It will suffice if it can be said beyond a reasonable doubt, as indeed it can be here said, that the ultimate harm is something which should have been foreseen as being reasonably related to the acts of the accused.” The court refused to consider the adequacy of the charge to the jury because that question had not been raised in the trial court.
Respondent then filed a petition for a writ of habeas corpus in the United States District Court for the Northern District of New York, relying on 28 U. S. C. § 2254. The District Court held that the respondent’s attack on the sufficiency of the charge failed to raise a question of constitutional dimension and that, without more, “the charge is not reviewable in a federal habeas corpus proceeding.” App. 21.
The Court of Appeals for the Second Circuit reversed, 534 F. 2d 493 (1976). In view of the defense strategy which consistently challenged the sufficiency of the proof of causation, the majority held that the failure to make any objection to the jury instructions was not a deliberate bypass precluding federal habeas corpus relief, but rather was an “obviously inadvertent” omission. Id., at 497. On the merits, the court held that since the Constitution requires proof beyond a reasonable doubt of every fact necessary to constitute the crime, In re Winship, 397 U. S. 358, 364, the failure to instruct the jury on an essential element as complex as the causation issue in this case created an impermissible risk that the jury had not made a finding that the Constitution requires.
Because the Court of Appeals decision appeared to conflict with this Court's holding in Cupp v. Naughten, 414 U. S. 141, we granted certiorari, 429 U. S. 815.
Respondent argues that the decision of the Court of Appeals should be affirmed on either of two independent grounds: (1) that the omission of an instruction on causation created the danger that the jurors failed to make an essential factual determination as required by Winship; or (2) assuming that they did reach the causation question, they did so without adequate guidance and might have rendered a different verdict under proper instructions. A fair evaluation of the omission in the context of the entire record requires rejection of both arguments.
I
The Court has held “that the Due Process Clause protects the accused against conviction except upon proof beyond a reasonable doubt of every fact necessary to constitute the crime with which he is charged.” In re Winship, supra, at 364. One of the facts which the New York statute required the prosecution to prove is that the defendants’ conduct caused the death of Stafford. As the New York Court of Appeals held, the evidence was plainly sufficient to prove that fact beyond a reasonable doubt. It is equally clear that the record requires us to conclude that the jury made such a finding.
There can be no question about the fact that the jurors were informed that the case included a causation issue that they had to decide. The element of causation was stressed in the arguments of both counsel. The statutory language, which the trial judge read to the jury, expressly refers to the requirement that defendants’ conduct “cause [d] the death of another person.” The indictment tracks the statutory language; it was read to the jurors and they were given a copy for use during their deliberations. The judge instructed the jury that all elements of the crime must be proved beyond a reasonable doubt. Whether or not the arguments of counsel correctly characterized the law applicable to the causation issue, they surely made it clear to the jury that such an issue had to be decided. It follows that the objection predicated on this Court's holding in Winship is without merit.
II
An appraisal of the significance of an error in the instructions to the jury requires a comparison of the instructions which were actually given with those that should have been given. Orderly procedure requires that the respective adversaries' views as to how the jury should be instructed be presented to the trial judge in time to enable him to deliver an accurate charge and to minimize the risk of committing reversible error. It is thé rare case in which an improper instruction will justify reversal of a criminal conviction when no objection has been made in the trial court.
The burden of demonstrating that an erroneous instruction was so prejudicial that it will support a collateral attack on the constitutional validity of a state court's judgment is even greater than the showing réquired to establish plain error on direct appeal. The question in such a collateral proceeding is “whether the ailing instruction by itself so infected the entire trial that the resulting conviction violates due process," Cupp v. Naughten, 414 U. S., at 147, not merely whether “the instruction is undesirable, erroneous, or even 'universally condemned,' " id., at 146.
In this case, the respondent’s burden is especially heavy because no erroneous instruction was given; his claim of prejudice is based on the failure to give any explanation — beyond the reading of the statutory language itself — of the causation element. An omission, or an incomplete instruction, is less likely to be prejudicial than a misstatement of the law. Since this omission escaped notice on the record until Judge Cardamone filed his dissenting opinion at the intermediate appellate level, the probability that it substantially affected the jury deliberations seems remote.
Because respondent did not submit a draft instruction on the causation issue to the trial judge, and because the New York courts apparently had no previous occasion to construe this aspect of the murder statute, we cannot know with certainty precisely what instruction should have been given as a matter of New York law. We do know that the New York Court of Appeals found no reversible error in this case; and its discussion of the sufficiency of the evidence gives us guidance about the kind of causation instruction that would have been acceptable.
The New York Court of Appeals concluded that the evidence of causation was sufficient because it can be said beyond a reasonable doubt that the “ultimate harm” was “something which should have been foreseen as being reasonably related to the acts of the accused.” It is not entirely clear whether the court’s reference to “ultimate harm” merely required that Stafford’s death was foreseeable, or, more narrowly, that his death by a speeding vehicle was foreseeable. In either event, the court was satisfied that the “ultimate harm” was one which “should have been foreseen.” Thus, an adequate instruction would have told the jury that if the ultimate harm should have been foreseen as being reasonably-related to defendants’ conduct, that conduct should be regarded as having caused the death of Stafford.
The significance of the omission of such an instruction may be evaluated by comparison with the instructions that were given. One of the elements of respondent’s offense is that he acted “recklessly,” supra, at 148, 149. By returning a guilty verdict, the jury necessarily found, in accordance with its instruction on recklessness, that respondent was “aware of and consciously disregard[ed] a substantial and unjustifiable risk” that death would occur. A person who is “aware of and consciously disregards” a substantial risk must also foresee the ultimate harm that the risk entails. Thus, the jury’s determination that the respondent acted recklessly necessarily included a determination that the ultimate harm was foreseeable to him.
In a strict sense, an additional instruction on foreseeability would not have been cumulative because it would have related to an element of the offense not specifically covered in the instructions given. But since it is logical to assume that the jurors would have responded to an instruction on causation consistently with their determination of the issues that were comprehensively explained, it is equally logical to conclude that such an instruction would not have affected their verdict. Accordingly, we reject the suggestion that the omission of more complete instructions on the causation issue “so infected the entire trial that the resulting conviction violated due process.” Even if we were to make the unlikely assumption that the jury might have reached a different verdict pursuant to an additional instruction, that possibility is too speculative to justify the conclusion that constitutional error was committed.
The judgment is reversed.
It is so ordered.
Mr. Justice Rehnquist took no part in the consideration or decision of this case.
A pathologist testified that the alcohol content in Stafford’s blood was indicative of a “very heavy degree of intoxication.” App. 58.
Tr. 723.
Respondent was sentenced to concurrent terms of 15 years to life on the murder conviction; 5-15 years on the robbery conviction; and an indeterminate term of up to four years on the grand larceny conviction.
“Let’s look at this indictment. Count 1 says and I will read the important part. That the defendant, ‘Felon[i] ously and under circumstances evincing a depraved indifference to human life recklessly engaged in conduct which created a grave risk of death to another person, to wit, George Stafford and thereby caused the death of George Stafford.’ So, you can see by the accent that I put on reaching that, the elements of this particular crime, and which must be proven beyond a reasonable doubt.
“. . . [YJou are going to have to honestly come to the conclusion that here is three people, all three drinking, and that these two, or at least my client were in a position to perceive this grave risk, be aware of it and disregard it. Perceive that Mr. Stafford would sit in the middle of the northbound lane, that a motorist would come by who was distracted by flashing lights in the opposite lane, who then froze at the wheel, who then didn’t swerve, didn’t brake, and who was violating the law by speeding, and to make matters worse, he had at that particular time, because of what the situation was, he had low beams on, that is a lot of anticipation. That is a lot of looking forward. Are you supposed to anticipate that somebody is going to break the law when you move or do something? I think that is a reasonable doubt.” App. 68.
“As I mentioned not only does the first count contain reference to and require proof of a depraved indifference to a human life, it proves that the defendant recklessly engaged in conduct which created a risk of death in that they caused the death of George Stafford. Now, I very well know, members of the jury, you know, that quite obviously the acts of both of these defendants were not the only the direct or the most preceding cause of his death. If I walked with one of you downtown, you know, and we went across one of the bridges and you couldn’t swim and I pushed you over and you drowned because you can’t swim, I suppose you can say, well, you drowned because you couldn’t swim. But of course, the fact is that I pushed you over. The same thing here. Sure, the death, the most immediate, the most preceding, the most direct cause of Mr. Stafford’s death was the motor vehicle .... But how did he get there ? Or to put it differently, would this man be dead had it not been for the acts of these two defendants? And I submit to you, members of the jury, that the acts of these two defendants did indeed cause the death of Mr. Stafford. He didn’t walk out there on East River Road. He was driven out there. His glasses were taken and his identification was taken and his pants were around his ankles.” Id,., at 75-76.
41 App. Div. 2d, at 231, 342 N. Y. S. 2d, at 390. He added:
“There are no statutory provisions dealing with intervening causes — nor is civil case law relevant in this context. The issue of causation should have been submitted to the jury in order for it to decide whether it would be unjust to hold these appellants liable as murderers for the chain of events which actually occurred. Such an approach is suggested in the American Law Institute Model Penal Code (see Comment, § 2.03, pp. 133, 134 of Tentative Draft No. 4).” Id., at 231-232, 342 N. Y. S. 2d, at 390.
The dissent did not cite any New York authority describing the causation instruction that should have been given.
35 N. Y. 2d, at 412, 321 N. E. 2d, at 776. The New York court added:
“We subscribe to the requirement that the defendants’ actions must be a sufficiently direct cause of the ensuing death before there can be any imposition of criminal liability, and recognize, of course, that this standard is greater than that required to serve as a basis for tort liability. Applying these criteria to the defendants’ actions, we conclude that their activities on the evening of December 30, 1970 were a sufficiently direct cause of the death of George Stafford so as to warrant the imposition of criminal sanctions. In engaging in what may properly be described as a despicable course of action, Kibbe and KralL left a helplessly intoxicated man without his eyeglasses in a position from which, because of these attending circumstances, he could not extricate himself and whose condition was such that he could not even protect himself from the elements. The defendants do not dispute the fact that their conduct evinced a depraved indifference to human life which created a grave risk of death, but rather they argue that it was just as likely that Stafford would be miraculously rescued by a good [SJamaritan. We cannot accept such an argument. There can be little doubt but that Stafford would have frozen to death in his state of undress had he remained on the shoulder of the road. The only alternative left to him was the highway, which in his condition, for one reason or another, clearly foreboded the probability of his resulting death.” Id., at 413, 321 N. E. 2d, at 776.
Cf. Humphrey v. Cady, 405 U. S. 504, 517; Fay v. Noia, 372 U. S. 391, 427-428, 438-439.
“The omission of any definition of causation, however, permitted the jury to conclude that the issue was not before them or that causation could be inferred merely from the fact that Stafford’s death succeeded his abandonment by Kibbe and Krall.
“. . . The possibility that jurors, as laymen, may misconstrue the evidence before them makes mandatory in every case instruction as to the legal standards they must apply. . . . Error in the omission of an instruction is compounded where the legal standard is complex and requires that fine distinctions be made. That is most assuredly the situation in this case. It has been held that where death is produced by an intervening force, such as Blake’s operation of his truck, the liability of one who put an antecedent force into action will depend on the difficult determination of whether the intervening force was a sufficiently independent or supervening cause of death. See W. LaFave & A. Scott, Criminal Law 257-263 (1972) (collecting cases). The few cases that provide similar factual circumstances suggest that the controlling questions are whether the ultimate result was foreseeable to the original actor and whether the victim failed to do something easily within his grasp that would have extricated him from danger.” 534 F. 2d, at 498-499 (footnotes omitted).
In dissent, Judge Mansfield reasoned that the arguments of counsel, the reading of the statutory definition of the crime, and the general instructions made it clear to the jury that they had to find beyond a reasonable doubt that defendants’ conduct was a direct cause of Stafford’s death and that the death was not attributable solely to the truckdriver. Even though instructions on intervening cause might have been helpful, Judge Mansfield concluded that the omission was not constitutional error.
“In determining the effect of this instruction on the validity of respondent’s [state] conviction, we accept at the outset the well-established proposition that a single instruction to a jury may not be judged in artificial isolation, but must be viewed in the context of the overall charge. Boyd v. United States, 271 U. S. 104, 107 (1926). While this does not mean that an instruction by itself may never rise to the level of constitutional error, see Cool v. United States, 409 U. S. 100 (1972), it does recognize that a judgment of conviction is commonly the culmination of a trial which includes testimony of witnesses, argument of counsel, receipt of exhibits in evidence, and instruction of the jury by the judge. Thus not only is the challenged instruction but one of many such instructions, but the process of instruction itself is but one of several components of the trial which may result in the judgment of conviction.” Cupp v. Naughten, 414 U. S. 141, 146-147.
Allis v. United States, 155 U. S. 117, 122-123; Harvey v. Tyler, 2 Wall. 328, 339; see, e. g., Lopez v. United States, 373 U. S. 427, 436.
In Namet v. United States, 373 U. S. 179, 190, the Court characterized appellate consideration of a trial court error which was not obviously prejudicial and which the defense did not mention during the trial as “extravagant protection.” See Boyd v. United States, 271 U. S. 104, 108.
The strong interest in preserving the finality of judgments, see, e. g., Blackledge v. Allison, ante, p. 83 (Powell, J., concurring); Schneckloth v. Bustamonte, 412 U. S. 218, 256-266 (Powell, J., concurring), as well as the interest in orderly trial procedure, must be overcome before collateral relief can be justified. For a collateral attack may be made many years after the conviction when it may be impossible, as a practical matter, to conduct a retrial.
35 N. Y. 2d, at 412-413, 321 N. E. 2d, at 776. The passage of the opinion quoted in n. 7, supra, emphasizes the obvious risk of death by freezing, suggesting that defendants need not have foreseen the precise manner in which the death did occur.
Supra, at 149. In charging the jury on recklessness the trial judge quoted the statutory definition of that term in N. Y. Penal Law § 15.05 (3) (McKinney 1975).
In fact, it is not unlikely that a complete instruction on the causation issue would actually have been favorable to the prosecution. For example, an instruction might have been patterned after the following example given in W. LaFave & A. Scott, Criminal Law 260 (1972):
“A, with intent to kill B, only wounds B, leaving him lying unconscious in the unlighted road on a dark night, and then C, driving along the road, runs over and kills B. Here C’s act is a matter of coincidence rather than a response to what A has done, and thus the question is whether the subsequent events were foreseeable, as they undoubtedly were in the above illustration.”
Such an instruction would probably have been more favorable to the prosecution than the instruction on recklessness which the court actually gave.
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 the writ in this case to resolve the question whether an employer is prohibited by the Civil Rights Act of 1964, Title VII, from requiring a high school education or passing of a standardized general intelligence test as a condition of employment in or transfer to jobs when (a) neither standard is shown to be significantly related to successful job performance, (b) both requirements operate to disqualify Negroes at a substantially higher rate than white applicants, and (c) the jobs in question formerly had been filled only by white employees as part of a longstanding practice of giving preference to whites.
Congress provided, in Title VII of the Civil Rights Act of 1964, for class actions for enforcement of provisions of the Act and this proceeding was brought by a group of incumbent Negro employees against Duke Power Company. All the petitioners are employed at the Company’s Dan River Steam Station, a power generating facility located at Draper, North Carolina. At the time this action was instituted, the Company had 95 employees at the Dan River Station, 14 of whom were Negroes; 13 of these are petitioners here.
The District Court found that prior to July 2, 1965, the effective date of the Civil Rights Act of 1964, the Company openly discriminated on the basis of race in the hiring and assigning of employees at its Dan River plant. The plant was organized into five operating departments: (1) Labor, (2) Coal Handling, (3) Operations, (4) Maintenance, and (5) Laboratory and Test. Negroes were employed only in the Labor Department where the highest paying jobs paid less than the lowest paying jobs in the other four “operating” departments in which only whites were employed. Promotions were normally made within each department on the basis of job seniority. Transferees into a department usually began in the lowest position.
In 1955 the Company instituted a policy of requiring a high school education for initial assignment to any department except Labor, and for transfer from the Coal Handling to any “inside” department (Operations, Maintenance, or Laboratory). When the Company abandoned its policy of restricting Negroes to the Labor Department in 1965, completion of high school also was made a prerequisite to transfer from Labor to any other department. From the time the high school requirement was instituted to the time of trial, however, white employees hired before the time of the high school education requirement continued to perform satisfactorily and achieve promotions in the “operating” departments. Findings on this score are not challenged.
The Company added a further requirement for new employees on July 2, 1965, the date on which Title VII became effective. To qualify for placement in any but the Labor Department it became necessary to register satisfactory scores on two professionally prepared aptitude tests, as well as to have a high school education. Completion of high school alone continued to render employees eligible for transfer to the four desirable departments from which Negroes had been excluded if the incumbent had been employed prior to the time of the new requirement. In September 1965 the Company began to permit incumbent employees who lacked a high school education to qualify for transfer from Labor or Coal Handling to an “inside” job by passing two tests— the Wonder lie Personnel Test, which purports to measure general intelligence, and the Bennett Mechanical Comprehension Test. Neither was directed or intended to measure the ability to learn to perform a particular job or category of jobs. The requisite scores used for both initial hiring and transfer approximated the national median for high school graduates.
The District Court had found that while the Company previously followed a policy of overt racial discrimination in a period prior to the Act, such conduct had ceased. The District Court also concluded that Title VII was intended to be prospective only and, consequently, the impact of prior inequities was beyond the reach of corrective action authorized by the Act.
The Court of Appeals was confronted with a question of first impression, as are we, concerning the meaning of Title VII. After careful analysis a majority of that court concluded that a subjective test of the employer’s intent should govern, particularly in a close case, and that in this case there was no showing of a discriminatory purpose in the adoption of the diploma and test requirements. On this basis, the Court of Appeals concluded there was no violation of the Act.
The Court of Appeals reversed the District Court in part, rejecting the holding that residual discrimination arising from prior employment practices was insulated from remedial action. The Court of Appeals noted, however, that the District Court was correct in its conclusion that there was no showing of a racial purpose or invidious intent in the adoption of the high school diploma requirement or general intelligence test and that these standards had been applied fairly to whites and Negroes alike. It held that, in the absence of a discriminatory purpose, use of such requirements was permitted by the Act. In so doing, the Court of Appeals rejected the claim that because these two requirements operated to render ineligible a markedly disproportionate number of Negroes, they were unlawful under Title VII unless shown to be job related. We granted the writ on these claims. 399 U. S. 926.
The objective of Congress in the enactment of Title VII is plain from the language of the statute. It was to achieve equality of employment opportunities and remove barriers that have operated in the past to favor an identifiable group of white employees over other employees. Under the Act, practices, procedures, or tests neutral on their face, and even neutral in terms of intent, cannot be maintained if they operate to “freeze” the status quo of prior discriminatory employment practices.
The Court of Appeals’ opinion, and the partial dissent, agreed that, on the record in the present case, “whites register far better on the Company’s alternative requirements” than Negroes. 420 F. 2d 1225, 1239 n. 6. This consequence would appear to be directly traceable to race. Basic intelligence must have the means of articulation to manifest itself fairly in a testing process. Because they are Negroes, petitioners have long received inferior education in segregated schools and this Court expressly recognized these differences in Gaston County v. United States, 395 U. S. 285 (1969). There, because of the inferior education received by Negroes in North Carolina, this Court barred the institution of a literacy test for voter registration on the ground that the test would abridge the right to vote indirectly on account of race. Congress did not intend by Title VII, however, to guarantee a job to every person regardless of qualifications. In short, the Act does not command that any person be hired simply because he was formerly the subject of discrimination, or because he is a member of a minority group. Discriminatory preference for any group, minority or majority, is precisely and only what Congress has proscribed. What is required by Congress is the removal of artificial, arbitrary, and unnecessary barriers to employment when the barriers operate invidiously to discriminate on the basis of racial or other impermissible classification.
Congress has now provided that tests or criteria for employment or promotion may not provide equality of opportunity merely in the sense of the fabled offer of milk to the stork and the fox. On the contrary, Congress has now required that the posture and condition of the job-seeker be taken into account. It has — to resort again to the fable — provided that the vessel in which the milk is proffered be one all seekers can use. The Act proscribes not only overt discrimination but also practices that are fair in form, but discriminatory in operation. The touchstone is business necessity. If an employment practice which operates to exclude Negroes cannot be shown to be related to job performance, the practice is prohibited.
On the record before us, neither the high school completion requirement nor the general intelligence test is shown to bear a demonstrable relationship to successful performance of the jobs for which it was used. Both were adopted, as the Court of Appeals noted, without meaningful study of their relationship to job-performance ability. Rather, a vice president of the Company testified, the requirements were instituted on the Company’s judgment that they generally would improve the overall quality of the work force.
The evidence, however, shows that employees who have not completed high school or taken the tests have continued to perform satisfactorily and make progress in departments for which the high school and test criteria are now used. The promotion record of present employees who would not be able to meet the new criteria thus suggests the possibility that the requirements may not be needed even for the limited purpose of preserving the avowed policy of advancement within the Company. In the context of this case, it is unnecessary to reach the question whether testing requirements that take into account capability for the next succeeding position or related future promotion might be utilized upon a showing that such long-range requirements fulfill a genuine business need. In the present case the Company has made no such showing.
The Court of Appeals held that the Company had adopted the diploma and test requirements without any “intention to discriminate against Negro employees.” 420 F. 2d, at 1232. We do not suggest that either the District Court or the Court of Appeals erred in examining the employer’s intent; but good intent or absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as “built-in headwinds” for minority groups and are unrelated to measuring job capability.
The Company’s lack of discriminatory intent is suggested by special efforts to help the undereducated employees through Company financing of two-thirds the cost of tuition for high school training. But Congress directed the thrust of the Act to the consequences of employment practices, not simply the motivation. More than that, Congress has placed on the employer the burden of showing that any given requirement must have a manifest relationship to the employment in question.
The facts of this case demonstrate the inadequacy of broad and general testing devices as well as the infirmity of using diplomas or degrees as fixed measures of capability. History is filled with examples of men and women who rendered highly effective performance without the conventional badges of accomplishment in terms of certificates, diplomas, or degrees. Diplomas and tests are useful servants, but Congress has mandated the commonsense proposition that they are not to become masters of reality.
The Company contends that its general intelligence tests are specifically permitted by § 703 (h) of the Act. That section authorizes the use of “any professionally developed ability test” that is not “designed, intended or used to discriminate because of race . . . .” (Emphasis added.)
The Equal Employment Opportunity Commission, having enforcement responsibility, has issued guidelines interpreting § 703 (h) to permit only the use of job-related tests. The administrative interpretation of the Act by the enforcing agency is entitled to great deference. See, e. g., United States v. City of Chicago, 400 U. S. 8 (1970); Udall v. Tallman, 380 U. S. 1 (1965); Power Reactor Co. v. Electricians, 367 U. S. 396 (1961). Since the Act and its legislative history support the Commission’s construction, this affords good reason to treat the guidelines as expressing the will of Congress.
Section 703 (h) was not contained in the House version of the Civil Rights Act but was added in the Senate during extended debate. For a period, debate revolved around claims that the bill as proposed would prohibit all testing and force employers to hire unqualified persons simply because they were part of a group formerly subject to job discrimination. Proponents of Title VII sought throughout the debate to assure the critics that the Act would have no effect on job-related tests. Senators Case of New Jersey and Clark of Pennsylvania, comanagers of the bill on the Senate floor, issued a memorandum explaining that the proposed Title VII “expressly protects the employer’s right to insist that any prospective applicant, Negro or white, must meet the applicable job qualifications. Indeed, the very purpose of title VII is to promote hiring on the basis of job qualifications, rather than on the basis of race or color.” 110 Cong. Rec. 7247. (Emphasis added.) Despite these assurances, Senator Tower of Texas introduced an amendment authorizing “professionally developed ability tests.” Proponents of Title VII opposed the amendment because, as written, it would permit an employer to give any test, “whether it was a good test or not, so long as it was professionally designed. Discrimination could actually exist under the guise of compliance with the statute.” 110 Cong. Rec. 13504 (remarks of Sen. Case).
The amendment was defeated and two days later Senator Tower offered a substitute amendment which was adopted verbatim and is now the testing provision of § 703 (h). Speaking for the supporters of Title VII, Senator Humphrey, who had vigorously opposed the first amendment, endorsed the substitute amendment, stating: “Senators on both sides of the aisle who were deeply interested in title VII have examined the text of this amendment and have found it to be in accord with the intent and purpose of that title.” 110 Cong. Rec. 13724. The amendment was then adopted. From the sum of the legislative history relevant in this case, the conclusion is inescapable that the EEOC's construction of § 703 (h) to require that employment tests be job related comports with congressional intent.
Nothing in the Act precludes the use of testing or measuring procedures; obviously they are useful. What Congress has forbidden is giving these devices and mechanisms controlling force unless they are demonstrably a reasonable measure of job performance. Congress has not commanded that the less qualified be preferred over the better qualified simply because of minority origins. Far from disparaging job qualifications as such, Congress has made such qualifications the controlling factor, so that race, religion, nationality, and sex become irrelevant. What Congress has commanded is that any tests used must measure the person for the job and not the person in the abstract.
The judgment of the Court of Appeals is, as to that portion of the judgment appealed from, reversed.
Mr. Justice Brennan took no part in the consideration or decision of this case.
The Act provides:
“Sec. 703. (a) It shall be an unlawful employment practice for an employer—
“(2) to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex, or national origin.
“(h) Notwithstanding any other provision of this title, it shall not be an unlawful employment practice for an employer . . . to give and to act upon the results of any professionally developed ability test provided that such test, its administration or action upon the results is not designed, intended or used to discriminate because of race, color, religion, sex or national origin. . . .” 78 Stat. 255, 42 U. S. C. § 2000e-2.
A Negro was first assigned to a job in an operating department in August 1966, five months after charges had been filed with the Equal Employment Opportunity Commission. The employee, a high school graduate who had begun in the Labor Department in 1953, was promoted to a job in the Coal Handling Department.
The test standards are thus more stringent than the high school requirement, since they would screen out approximately half of all high school graduates.
The Court of Appeals ruled that Negroes employed in the Labor Department at a time when there was no high school or test requirement for entrance into the higher paying departments could not now be made subject to those requirements, since whites hired contemporaneously into those departments were never subject to them. The Court of Appeals also required that the seniority rights of those Negroes be measured on a plantwide, rather than a departmental, basis. However, the Court of Appeals denied relief to the Negro employees without a high school education or its equivalent who were hired into the Labor Department after institution of the educational requirement.
One member of that court disagreed with this aspect of the decision, maintaining, as do the petitioners in this Court, that Title VII prohibits the use of employment criteria that operate in a racially exclusionary fashion and do not measure skills or abilities necessary to performance of the jobs for which those criteria are used.
In North Carolina, 1960 census statistics show that, while 34% of white males had completed high school, only 12% of Negro males had done so. U. S. Bureau of the Census, TJ. S. Census of Population: 1960, Vol. 1, Characteristics of the Population, pt. 35, Table 47.
Similarly, with respect to standardized tests, the EEOC in one case found that use of a battery of tests, including the Wonderlic and Bennett tests used by the Company in the instant case, resulted in 58% of whites passing the tests, as compared with only 6% of the blacks. Decision of EEOC, CCH Empl. Prac. Guide, ¶ 17,304.53 (Dec. 2, 1966). See also Decision of EEOC 70-552, CCH Empl. Prac. Guide, ¶ 6139 (Feb. 19, 1970).
For example, between July 2, 1965, and November 14, 1966, the percentage of white employees who were promoted but who were not high school graduates was nearly identical to the percentage of nongraduates in the entire white work force.
Section 703 (h) applies only to tests. It has no applicability to the high school diploma requirement.
EEOC Guidelines on Employment Testing Procedures, issued August 24, 1966, provide:
“The Commission accordingly interprets ‘professionally developed ability test’ to mean a test which fairly measures the knowledge or skills required by the particular job or class of jobs which the applicant seeks, or which fairly affords the employer a chance to measure the applicant’s ability to perform a particular job or class of jobs. The fact that a test was prepared by an individual or organization claiming expertise in test preparation does not, without more, justify its use within the meaning of Title VII.”
The EEOC position has been elaborated in the new Guidelines on Employee Selection Procedures, 29 CFR § 1607, 35 Fed. Reg. 12333 (Aug. 1, 1970). These guidelines demand that employers using tests have available “data demonstrating that the test is predictive of or significantly correlated with important elements of work behavior which comprise or are relevant to the job or jobs for which candidates are being evaluated.” Id., at § 1607.4 (c).
The congressional discussion was prompted by the decision of a hearing examiner for the Illinois Fair Employment Commission in Myart v. Motorola Co. (The decision is reprinted at 110 Cong. Rec. 5662.) That case suggested that standardized tests on which whites performed better than Negroes could never be used. The decision was taken to mean that such tests could never be justified even if the needs of the business required them. A number of Senators feared that Title VII might produce a similar result. See remarles of Senators Ervin, 110 Cong. Rec. 5614-5616; Smathers, id., at 5999-6000; Holland, id., at 7012-7013; Hill, id., at 8447; Tower, id., at 9024; Talmadge, id., at 9025-9026; Fulbright, id., at 9599-9600; and Ellender, id., at 9600.
The Court of Appeals majority, in finding no requirement in Title VII that employment tests be job related, relied in part on a quotation from an earlier Clark-Case interpretative memorandum addressed to the question of the constitutionality of Title VII. The Senators said in that memorandum:
“There is no requirement in title VII that employers abandon bona fide qualification tests where, because of differences in background and education, members of some groups are able to perform better on these tests than members of other groups. An employer may set his qualifications as high as he likes, he may test to determine which applicants have these qualifications, and he may hire, assign, and promote on the basis of test performance.” 110 Cong. Rec. 7213.
However, nothing there stated conflicts with the later memorandum dealing specifically with the debate over employer testing, 110 Cong. Rec. 7247 (quoted from in the text above), in which Senators Clark and Case explained that tests which measure “applicable job qualifications” are permissible under Title VII. In the earlier memorandum Clark and Case assured the Senate that employers were not to be prohibited from using tests that determine qualifications. Certainly a reasonable interpretation of what the Senators meant, in light of the subsequent memorandum directed specifically at employer testing, was that nothing in the Act prevents employers from requiring that applicants be fit for the job.
Senator Tower’s original amendment provided in part that a test would be permissible “if ... in the ease of any individual who is seeking employment with such employer, such test is designed to determine or predict whether such individual is suitable or trainable with respect to his employment in the particular business or enterprise involved . . . 110 Cong. Rec. 13492. This language indicates that Senator Tower’s aim was simply to make certain that job-related tests would be permitted. The opposition to the amendment was based on its loose wording which the proponents of Title VII feared would be susceptible of misinterpretation. The final amendment, which was acceptable to all sides, could hardly have required less of a job relation than 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:
|
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 Blackmun
delivered the opinion of the Court.
In this case we consider whether Kentucky prison regulations give state inmates, for purposes of the Fourteenth Amendment, a liberty interest in receiving certain visitors.
I
In September 1976, Kentucky inmates brought a federal class action under 42 U. S. C. § 1983 challenging conditions of confinement in the Kentucky State Penitentiary at Eddy-ville. Other cases, one of them relating to the Kentucky State Reformatory at La Grange, were consolidated with the one concerning the penitentiary. The litigation was settled by a consent decree dated 28 May 1980, and supplemented 22 July 1980, containing provisions governing a broad range of prison conditions. App. 2-44, 45-55. See Kendrick v. Bland, 541 F. Supp. 21, 27-50 (WD Ky. 1981); see also Kendrick v. Bland, 740 F. 2d 432 (CA6 1984). Of sole relevance here, the consent decree provides: “The Bureau of Corrections encourages and agrees to maintain visitation at least at the current level, with minimal restrictions,” and to “continue [its] open visiting policy.” See 541 F. Supp., at 37.
The Commonwealth in 1981 issued “Corrections Policies and Procedures” governing general prison visitation, including a nonexhaustive list of visitors who may be excluded. Four years later, the reformatory issued its own more detailed “Procedures Memorandum” on the subject of “Visiting Regulations.” The memorandum begins with a Statement of Policy and Purpose: “Although administrative staff reserves the right to allow or disallow visits, it is the policy of the Kentucky State Reformatory to respect the right of inmates to have visits in the spirit of the Court decisions and the Consent Decree, while insuring the safety and security of the institution.” App. 106. The memorandum then goes on to state that a visitor may be denied entry if his or her presence would constitute a “clear and probable danger to the safety and security of the institution or would interfere with the orderly operation of the institution.” ¶ K(1)(a), App. 133. A nonexhaustive list of nine specific reasons for excluding visitors is set forth. The memorandum also states that the decision whether to exclude a visitor rests with the duty officer, who is to be consulted by any staff member who “feels a visitor should not be allowed admittance.” ¶ K(3), App. 134.
This particular litigation was prompted in large part by two incidents when applicants were denied the opportunity to visit an inmate at the reformatory. The mother of one inmate was denied visitation for six months because she brought to the reformatory a person who had been barred for smuggling contraband. Another inmate’s mother and woman friend were denied visitation for a limited time when the inmate was found with contraband after a visit by the two women. In both instances the visitation privileges were suspended without a hearing. The inmates were not prevented from receiving other visitors.
The representatives of the Kendrick-inmate class filed a motion with the United States District Court for the Western District of Kentucky (the court which had issued the consent decree), claiming that the suspension of visitation privileges without a hearing in these two instances violated the decree and the Due' Process Clause of the Fourteenth Amendment. By a memorandum dated June 26, 1986, the District Court found that the prison policies did not violate the decree, App. 147, but concluded that the language of the decree was “mandatory in character,” id., at 148, and that, under the standards articulated by this Court in Hewitt v. Helms, 459 U. S. 460 (1983), respondents “possess a liberty interest in open visitation.” The District Court directed petitioners to develop “minimal due process procedures,” including “an informal, nonadversary review in which a prisoner receives notice of and reasons for” any decision to exclude a visitor, as well as an opportunity to respond. App. 148. A formal order was issued accordingly. Id., at 149.
The United States Court of Appeals for the Sixth Circuit affirmed and remanded the case. 833 F. 2d 614 (1987). Relying not only on the consent decree but also on the regulations and stated policies, the court held that the relevant language was sufficiently mandatory to create a liberty interest. The Court of Appeals found that the relevant prison policies “placed ‘substantive limitations on official discretion.’” Id., at 618-619, quoting Olim v. Wakinekona, 461 U. S. 238, 249 (1983). The court also found that the language of the consent decree, that “[defendants shall continue their open visiting policy” (emphasis supplied by Court of Appeals), see Kendrick v. Bland, 541 F. Supp., at 37, coupled with a provision from the policy statement that “[a]n inmate is allowed three (3) separate visits . . . per week” (emphasis added by Court of Appeals), Reformatory Procedures ¶B(3), App. 108, satisfied the requirement of “mandatory language” articulated by our prior cases. See 833 F. 2d, at 618.
Because this case appeared to raise important issues relevant to general prison administration, we granted certiorari. 487 U. S. 1217 (1988).
II
The Fourteenth Amendment reads in part: “nor shall any State deprive any person of life, liberty, or property, without due process of law,” and protects “the individual against arbitrary action of government,” Wolff v. McDonnell, 418 U. S. 539, 558 (1974). We examine procedural due process questions in two steps: the first asks whether there exists a liberty or property interest which has been interfered with by the State, Board of Regents of State Colleges v. Roth, 408 U. S. 564, 571 (1972); the second examines whether the procedures attendant upon that deprivation were constitutionally sufficient, Hewitt v. Helms, 459 U. S., at 472. The types of interests that constitute “liberty” and “property” for Fourteenth Amendment purposes are not unlimited; the interest must rise to more than “an abstract need or desire,” Board of Regents of State Colleges v. Roth, 408 U. S., at 577, and must be based on more than “a unilateral hope,” Connecticut Board of Pardons v. Dumschat, 452 U. S. 458, 465 (1981). Rather, an individual claiming a protected interest must have a legitimate claim of entitlement to it. Protected liberty interests “may arise from two sources — the Due Process Clause itself and the laws of the States.” Hewitt v. Helms, 459 U. S., at 466.
Respondents do not argue — nor can it seriously be contended, in light of our prior cases — that an inmate’s interest in unfettered visitation is guaranteed directly by the Due Process Clause. We have rejected the notion that “any change in the conditions of confinement having a substantial adverse impact on the prisoner involved is sufficient to invoke the protections of the Due Process Clause.” (Emphasis in original.) Meachum v. Fano, 427 U. S. 215, 224 (1976). This is not to say that a valid conviction extinguishes every direct due process protection; “consequences visited on the prisoner that are qualitatively different from the punishment characteristically suffered by a person convicted of crime” may invoke the protections of the Due Process Clause even in the absence of a state-created right. Vitek v. Jones, 445 U. S. 480, 493 (1980) (transfer to mental hospital). However, “[a]s long as the conditions or degree of confinement to which the prisoner is subjected is within the sentence imposed upon him and is not otherwise violative of the Constitution, the Due Process Clause does not in itself subject an inmate’s treatment by prison authorities to judicial oversight." Montanye v. Haymes, 427 U. S. 236, 242 (1976). The denial of prison access to a particular visitor “is well within the terms of confinement ordinarily contemplated by a prison sentence,” Hewitt v. Helms, 459 U. S., at 468, and therefore is not independently protected by the Due Process Clause.
We have held, however, that state law may create enforceable liberty interests in the prison setting. We have found, for example, that certain regulations granted inmates a protected interest in parole, Board of Pardons v. Allen, 482 U. S. 369 (1987); Greenholtz v. Nebraska Penal Inmates, 442 U. S. 1 (1979), in good-time credits, Wolff v. McDonnell, 418 U. S., at 556-572, in freedom from involuntary transfer to a mental hospital, Vitek v. Jones, 445 U. S., at 487-494, and in freedom from more restrictive forms of confinement within the prison, Hewitt v. Helms, supra. In contrast, we have found that certain state statutes and regulations did not create a protected liberty interest in transfer to another prison. Meachum v. Fano, 427 U. S., at 225 (intrastate transfer); Olim v. Wakinekona, supra (interstate transfer). The fact that certain state-created liberty interests have been found to be entitled to due process protection, while others have not, is not the result of this Court’s judgment as to what interests are more significant than others; rather, our method of inquiry in these cases always has been to examine closely the language of the relevant statutes and regulations.
Stated simply, “a State creates a protected liberty interest by placing substantive limitations on official discretion.” Olim v. Wakinekona, 461 U. S., at 249. A State may do this in a number of ways. Neither the drafting of regulations nor their interpretation can be reduced to an exact science. Our past decisions suggest, however, that the most common manner in which a State creates a liberty interest is by establishing “substantive predicates” to govern official decision-making, Hewitt v. Helms, 459 U. S., at 472, and, further, by mandating the outcome to be reached upon a finding that the relevant criteria have been met.
Most of our procedural due process cases in the prison context have turned on the presence or absence of language creating “substantive predicates” to guide discretion. For example, the failure of a Connecticut statute governing commutation of sentences to provide “particularized standards or criteria [to] guide the State’s decisionmakers,” Connecticut Board of Pardons v. Dumschat, 452 U. S., at 467 (Brennan, J., concurring), defeated an inmate’s claim that the State had created a liberty interest. Id., at 465 (majority opinion). See also Olim v. Wakinekona, 461 U. S., at 249-250 (interstate prison transfer left to “completely unfettered” discretion of administrator); Meachum v. Fano, 427 U. S., at 228 (intrastate prison transfer at discretion of officials); Montanye v. Haymes, 427 U. S., at 243 (same). In other instances, we have found that prison regulations or statutes do provide decisionmaking criteria which serve to limit discretion. See, e. g., Hewitt v. Helms, 459 U. S., at 472 (administrative segregation not proper absent particular substantive predicates); Board of Pardons v. Allen, 482 U. S., at 381 (parole granted unless certain standards met, even though the decision is “‘necessarily subjective . . . and predictive’”).
We have also articulated a requirement, implicit in our earlier decisions, that the regulations contain “explicitly mandatory language,” i. e., specific directives to the decisionmaker that if the regulations’ substantive predicates are present, a particular outcome must follow, in order to create a liberty interest. See Hewitt v. Helms, 459 U. S., at 471-472. The regulations at issue in Hewitt mandated that certain procedures be followed, and “that administrative segregation will not occur absent specified substantive predicates.” Id., at 472. In Board of Pardons v. Allen, supra, the relevant statute “use[d] mandatory language (‘shall’) to ‘creat[e] a presumption that parole release will be granted’ when the designated findings are made,” 482 U. S., at 377-378, quoting Greenholtz v. Nebraska Penal Inmates, 442 U. S., at 12. See also id., at 11 (statute providing that board “shall order” release unless one of four specified conditions is found). In sum, the use of “explicitly mandatory language,” in connection with the establishment of “specified substantive predicates” to limit discretion, forces a conclusion that the State has created a liberty interest. Hewitt v. Helms, 459 U. S., at 472.
Ill
The regulations and procedures at issue in this case do provide certain “substantive predicates” to guide the decisionmaker. See nn. 1 and 2, supra. The state procedures provide that a visitor “may be excluded” when, inter alia, officials find reasonable grounds to believe that the “visitor’s presence in the institution would constitute a clear and probable danger to the institution’s security or interfere with [its] orderly operation.” See n. 1, supra. Among the more specific reasons listed for denying visitation are the visitor’s connection to the inmate’s criminal behavior, the visitor’s past disruptive behavior or refusal to submit to a search or show proper identification, and the visitor’s being under the influence of alcohol or drugs. Ibid. The reformatory procedures are nearly identical, and include a prohibition on a visit from a former reformatory inmate, without the prior approval of the warden. See n. 2, supra. These regulations and procedures contain standards to be applied by a staff member in determining whether to refer a situation to the duty officer for resolution, and require the staff member to notify the duty officer if the staff member feels that a visitor should not be allowed admittance. Ibid. The same “substantive predicates” undoubtedly are intended to guide the duty officer’s discretion in making the ultimate decision.
The regulations at issue here, however, lack the requisite relevant mandatory language. They stop short of requiring that a particular result is to be reached upon a finding that the substantive predicates are met. The Reformatory Procedures Memorandum begins with the caveat that “administrative staff reserves the right to allow or disallow visits,” and goes on to note that “it is the policy” of the reformatory “to respect the right of inmates to have visits.” App. 106. This language is not mandatory. Visitors may be excluded if they fall within one of the described categories, see n. 1, supra, but they need not be. Nor need visitors fall within one of the described categories in order to be excluded. The overall effect of the regulations is not such that an inmate can reasonably form an objective expectation that a visit would necessarily be allowed absent the occurrence of one of the listed conditions. Or, to state it differently, the regulations are not worded in such a way that an inmate could reasonably expect to enforce them against the prison officials.
Because the regulations at issue here do not establish a liberty interest entitled to the protections of the Due Process Clause, the judgment of the Court of Appeals is reversed.
It is so ordered.
The relevant provision states:
“Certain visitors who are either a threat to the security or order of the institution or nonconducive to the successful re-entry of the inmate to the community may be excluded. These are, but not restricted to:
“A. The visitor’s presence in the institution would constitute a clear and probable danger to the institution’s security or interfere with the orderly operation of the institution.
“B. The visitor has a past record of disruptive conduct.
“C. The visitor is under the influence of alcohol or drugs.
“D. The visitor refuses to submit to search, if requested to do so, or show proper identification.
“E. The visitor is directly related to the inmate’s criminal behavior.
“F. The visitor is currently on probation or parole and does not have special written permission from both his or her Probation or Parole Officer and the institutional Superintendent.” Commonwealth of Kentucky Corrections Policies and Procedures §403.06 (issued Aug. 28, 1981, effective Sept. 28, 1981); App. 101-102.
The memorandum reads in relevant part:
“K. Vinitor Ref lined Admittance
“1. A visitor may be denied a visit at any time if one or more of the following exists or there are reasonable grounds to believe that:
“a. The visitor’s presence in the institution would constitute a clear and probable danger to the safety and security of the institution or would interfere with the orderly operation of the institution, including, but not limited to:
“(1) The visitor has a past record of disruptive conduct.
“(2) The visitor is under the influence of alcohol or drugs.
“(3) The visitor refuses to submit to search or show proper identification upon request.
“(4) The visitor is directly related to the inmate’s criminal behavior.
“(5) The visit will be detrimental to the inmate’s rehabilitation.
“(6) The visitor is a former resident currently on parole who does not have the approval of his Parole Officer or the Warden.
“(7) The visitor is a former resident who has left by maximum expiration of sentence and does not have the prior approval of the Warden.
“(8) The visitor has previously violated institutional visiting policies.
“(9) Former employees of the Kentucky State Reformatory will not be allowed to visit inmates unless they have authorization from the Warden prior to the time of the visit.
“2. A master log will be kept at the Visiting Desk of all visitors who have been denied a visit for any of the reasons listed above. A visitor who is denied a visit will not be allowed to visit an inmate for up to six (6) months following the incident. Persons who bring dangerous drugs or contraband into the institution may be denied visits indefinitely, until permission is granted by the Warden. The Duty Officer has the responsibility of denying a visit for the above reasons.
“a. The master log will be furnished to all institutions and updated as required.
“3. Any time a staff member feels a visitor should not be allowed admittance for any of the reasons above, the Shift Supervisor and the Duty Officer shall be notified. The final decision will be with the Duty Officer. All decisions will be documented. If it is felt that the individual presents a serious threat of danger to himself or others the Kentucky State Police will be advised of the situation so they may make a decision on whether their intervention is needed.” Kentucky State Reformatory Procedures Memorandum, No. KSR 16-00-01 (issued and effective Sept. 30, 1985); App. 132-134.
Petitioners and their amici urge us to adopt a rule that prison regulations, regardless of the mandatory character of their language or the extent to which they limit official discretion, “do not create an entitlement protected by the Due Process Clause when they do not affect the duration or release from confinement, or the very nature of confinement.” See Brief for Petitioners 10. They argue that this bright line would allow prison officials to issue guidelines to prison staff to govern minor decisions, without thereby transforming the details of prison life into “liberty interests” with accompanying procedural rights. Inasmuch as a “bright line" of this kind is not necessary for a ruling in favor of petitioners, we refrain from considering it at this time. We express no view on the proposal and leave its resolution for another day.
It should be obvious that the mandatory language requirement is not an invitation to courts to search regulations for any imperative that might be found. The search is for relevant mandatory language that expressly requires the decisionmaker to apply certain substantive predicates in determining whether an inmate may be deprived of the particular interest in question. Thus, one of the examples of mandatory language relied upon by the Court of Appeals is unavailing, that is, the statement that an inmate “is allowed three (3) separate visits in the Visiting Building per week.” App. 108. This directive says nothing about whether any particular visitor must be admitted, and thus has no direct relevance to the decision whether to exclude a particular visitor, which is what is at issue here. Another example of irrelevant mandatory language is the following: “A visitor who is denied a visit will not be allowed to visit an inmate for up to six (6) months following the incident.” (Emphasis added.) See n. 2, supra. This language refers only to the penalty to be imposed once an individual is found to be unfit to visit, and has no role to play in guiding prison officials’ discretion in deciding whether to exclude a visitor in the first instance.
The language of the consent decree, that “[defendants shall continue their open visiting policy,” is mandatory only to the extent that it prevents the State from making its regulations more restrictive than they were at the time the decree was entered. Obviously, the promise to leave unchanged a discretionary policy does not transform that policy into a mandatory one. The District Court found that the regulations enacted after the decree was signed were no more restrictive than those already in place. App. 147. For this reason, we need make no judgment as to whether a consent decree can create a liberty interest protected by the Fourteenth Amendment. The issue was not briefed or argued by the parties or discussed below and is not necessary to our decision.
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. Chief Justice Warren
delivered the opinion of the Court.
In this case, among other issues which we need not reach, we are asked to decide whether a Texas tax statute, Article 5248 of the Revised Civil Statutes of Texas, as amended in 1950, discriminates unconstitutionally against the United States and those with whom it deals. We hold that it does.
Appellant, Phillips Chemical Company, engages in the commercial manufacture of ammonia on valuable industrial property leased from the Federal Government in Moore County, Texas. The lease, executed in 1948 pursuant to the Military Leasing Act of 1947, 61 Stat. 774, is for a primary term of 15 years and calls for an annual rental of over $1,000,000. However, it reserves to the Government the right to terminate upon 30 days’ notice in the event of a national emergency and upon 90 days’ notice in the event of a sale of the property.
In 1954, appellee, Dumas Independent School District, assessed a tax against Phillips for the years 1949 through 1954. The tax, measured by the estimated full value of the leased premises, was assessed in accordance with the District’s ordinary ad valorem tax procedures.
When the District assessed the tax, Phillips commenced the present action in the state courts to enjoin its collection. Phillips contested both the District’s right to levy the tax and the valuation figure upon which the amount of the tax was calculated. The latter issue was severed by the trial court for later decision and is not involved in this appeal. The lower state courts denied relief for the years subsequent to the effective date of the 1950 amendment to Article 5248, and on writ of error the Supreme Court of Texas, by a divided court, affirmed. 159 Tex. -, 316 S. W. 2d 382. Phillips appealed from the decision, and we noted probable, jurisdiction. 359 U. S. 987.
The District’s power to levy the tax was found to lie in amended Article 5248. Before 1950, Article 5248 provided a general tax exemption for land and improvements “held, owned, used and occupied by the United States” for public purposes. In 1950, the Texas Legislature added two provisions to Article 5248, one providing for taxation of privately owned-personal property located on federal lands, and the other reading as follows:
“[Pjrovided, further, that any portion of said lands and improvements which is used and occupied by any person, firm, association of persons or corporation in its private capacity, or which is being used or occupied in the conduct of any private business or enterprise, shall be subject to taxation by this State and its political subdivisions.”
As construed by a majority of the Texas court, this provision is an affirmative grant of authority to the State and its political subdivisions to tax private users of government realty. While the subject ci the tax is the right to the use of the property, i. e., the leasehold, its measure is apparently the value of the fee. The constitutionality of the provision, thus construed, depended upon the court’s interpretation of our decisions in the Michigan cases two Terms ago, where we held that a State might levy a tax on the private use of government property,, measured by the full value of the property. . United States v. City of Detroit, 355 U. S. 466; United States v. Township of Muskegon, 355 U. S. 484; cf. City of Detroit v. Murray Corp., 355 U. S. 489.
However, three members of the Texas court, joined by a fourth on petition for rehearing, were of the opinion that under the majority’s construction the statute discriminates unconstitutionally against the United States and its lessees. Their conclusion rested on the fact that Article 7173 of the Revised Civil Statutes of Texas imposes a distinctly lesser burden on similarly situated lessees of exempt property owned by the State and its political subdivisions. We agree with the dissenters’ conclusion.
Article 7173 is the only Texas statute other than Article 5248 which authorizes a tax on lessees. It provides in-part that:
“Property held under a lease for a term of three years or more, or held under a contract for the purchase thereof, belonging to this State, or that is exempt by law from taxation in the hands of- the owner thereof, shall be considered for all the purposes of taxation, as the property of the person so holding the same, except as otherwise specially provided by law.”
As construed by the Texas courts, Article 7173 is less burdensome than Article 5248 in three respects. First, the measure of a tax under Article 7173 is not the full value of leased tax-exempt premises, as it apparently is under Article 5248, but only the price the taxable lease-, hold would bring at a fair voluntary sale for cash — the value of the leasehold itself. Second, by its very terms, Article 7173 imposes no tax on a lessee whose lease is for a term of less than three years. Finally, and crucial here, a lease for three years or longer but subject — like-Phillips^ — to. termination at the lessor’s option in the event of a sale is not “a lease for a term of three years or moré” for purposes of Article 7173. Trammell v. Faught, 74 Tex. 557, 12 S. W. 317. Therefore, because of the termination provisions in its lease, Phillips could not be taxed under Article 7173.
Although Article 7173 is, in terms, applicable to all lessees who hold tax-exempt property under a lease for a term of three years or more, it appears that only lessees of public property fall within this class in Texas. Tax exemptions for real property owned by private organizations — charities, churches, and similar entities — do not survive a lease to a business lessee. The full value of the leased property becomes taxable to the owner, and the lessee’s indirect burden consequently is as heavy as the burden imposed directly on federal lessees by Article 5248. Under these circumstances, there appears to be no discrimination between the Government’s lessees and lessees of private property.
However, all lessees of exempt public lands would appear to belong to the class defined by Article 7173. In view of the fact that lessees in this class are taxed because they use exempt property for a nonexempt purpose, they appear to be similarly situated and presumably should be taxed alike. Yet by the amendment of Article 5248, the Texas Legislature segregated federal lessees and imposed on them a heavier tax burden than is imposed on the other members of the class by Article 7173. In this case the resulting difference in tax, attendant upon the identity of Phillips’ lessor, is extreme; the State and the School District concede that Phillips would not be taxed at all if its. lessor were the State or one of its political subdivisions. instead of the Federal Government. The discrimination against the United States and its lessee seems apparent. The question, however, is whether it can be justified.
Phillips argues that because Article 5248 applies only to private users of federal property, it is invalid for that reason, without more. For this argument, it relies on Miller v. Milwaukee, 272 U. S. 713; see also Macallen.Co. v. Massachusetts, 279 U. S. 620. Macollen might be deemed to support the argument, but to the extent that it dóes, it no longer has precedential value. See United States v. City of Detroit, supra, at 472, n. 2. Miller was a rather, different case. In Miller it was thought that a State had attempted indirectly to levy a tax on exempt .income from government bonds. Phillips’ use of the Government’s property, by way of contrast, is not exempt. 10 U. S. C. § 2667 (e); United States v. City of Detroit, supra: It is true that in Miller the ostensible incidence of the tax — shareholders’ income from corporate dividends — was not itself exempt, but the measure of the tax excluded all income not attributable to federal bonds owned by the corporation; that was the defect in the tax. See Pacific Co. v. Johnson, 285 U. S. 480, 493. Therefore, in practical operation, the tax was either an indirect tax on the exempt income, ór a discriminatory tax on shareholders of corporations which, as bondholders, dealt with the Government. Thus, if Miller has any relevance here, it is only to the extent that it may support the proposition that a State may not single out those who deal with the Government, in one capacity or another,, for a tax burden not imposed on others similarly situated.
A determination that Article 5248 is invalid, under this test, cannot rest merely on an examination of that article. It does not operate in a vacuum. First, it is necessary to determine how other taxpayers similarly situated are treated. Such a determination requires “an examination of the whole tax structure of the state.” Cf. Tradesmens National Bank v. Oklahoma Tax Comm’n, 309 U. S. 560, 568. Although Macollen may have departed somewhat from this rule, nothing in Miller, at least as it has been interpreted in later cases,' should be read as indicating that less is required. Cf. Educational Films Corp. v. Ward, 282 U. S. 379; Pacific Co. v. Johnson, 285 U. S. 480.
Therefore, we must focus on the nature of the classification erected by Articles 5248 and 7173. The imposition of a heavier tax burden on lessees of federal property than is imposed on lessees of other exempt public property must be justified by significant differences between the two classes: The School District addresses.this problem, essentially, as-one of equal protection, and argues that we must uphold the classification, though apparently discriminatory, “if any state of facts reasonably can be conceived that would sustain it.” Allied Stores v. Bowers, 358 U. S. 522, 528. The argument, in this context, turns on three supposed differences between the two classes. First, the School District and the State say that the State can collect in rent what it loses in taxes from its own lessees — something it cannot do, of course, with the Federal Government’s lessees. Second, they argue that the State may legitimately ■ foster its own interests by adopting measures which facilitate the leasing of its property. Finally, they claim that because of its allegedly greater magnitude, federal leasing of exempt land has a more serious impact on the finances and operations of local government than does the State’s own leasing activities.
None of these considerations provides solid support for the classification. It is- undoubtedly true, as a general proposition, that the State is free to adopt measures reasonably designed to facilitate the leasing of its own land. But if the incentive which it provides is in the form of a reduction in tax which discriminates against the Gov- ' ernment’s lessees, the question remains, is it permissible?
Likewise, it is not enough to say that the State can make up in' rent what it loses in taxes from its lessees. What the State’s political subdivisions lose in taxes from the State’s lessees cannot be made up in this fashion. Other local taxpayers — including the Government’s lessees — must make up the difference.
Nor is the classification here supported by the allegedly serious impact of federal leasing, as contrasted with state leasing, on the operations of local government. .It is claimed, in this respect, that neither the State nor its subdivisions lease property exactly comparable — in size, value, or number of employees involved — to the ordnance works leased by Phillips from the Government. However, the classification erected by Article 5248 is not based on such factors. Article 5248 imposes its burdens on atl lessees of federal property. It is conceded that the State and its subdivisions lease valuable property to commercial and business enterprises, as does the Federal Government. Warehouse facilities are an example.- But the identity of the exempt lessor bears no relation to the impact on local government of otherwise identical leasing activities. Still, the variant tax consequences to the lessee, under Article 7173 on the one hand and Article 5248 on the other, differ, widely.
It is true that perfection is by no means required under the equal protection test of permissible classification.. But we have made it clear, in the equal protection cases, that our decisions in that field are not necessarily controlling where problems of intergovernmental tax immunity are involved. In Allied Stores v. Bowers, supra, for example, we noted that the State was “dealing with [its] proper domestic concerns, and not trenching upon the prerogatives of the National Government.” 358 U. S., at 526. When such is the-case, the State’s power to classify is,' indeed, extremely broad, and its discretion is limited only by constitutional rights and by the doctrine that a classification may not be palpably arbitrary. Id., at 526-528. But where taxation of the private use of the Government’s property is concerned, the Government’s interests must be weighed in the balance. Accordingly, it does not seem toó much to require that the State treat those who deal with the Government as well as it treats those with whom it deals itself. Compare Esso Standard Oil Co. v. Evans, 345 U. S. 495, 500.
Nevertheless, it is claimed that the classification here is supported by our decision in United States v. City of Detroit, supra, because of the assertedly similar nature of the classification created by the statute involved in that case. The Michigan statute, although applicable generally to lessees of exempt property, contained an exception for property owned by state-supported educational institutions. Appellee’S argument, essentially, is that the exemption of lessees of- school-owned property from the Michigan statute supports the imposition here of a heavier tax on federal lessees than is imposed on lessees of other exempt public property, in general.
This argument misconceives the scope of the Michigan decisions. In those cases we did not decide — in fact, we were not asked to decide — whether the exemption of school-owned property rendered the statute discriminatory. Neither the Government nor its lessees, to whom the statute was applicable, claimed discrimination of this character. Since the issue was not ráised, the basis for the separate classification of property owned by schools was not examined. Therefore, the Michigan cases shed no light on the classification problem here.
None of these arguments, urged in support of the Texas classification, seems adequate to justify what appears to be so substantial and transparent a discrimination against the Government and its lessees. Here, Phillips is taxed under Article 5248 on the full value of the real property which it leases from the Federal Government, while businesses with similar leases, using exempt property .owned by the State and its political subdivisions, are not taxed on their leaseholds at all. The differences between the two classes, at least when the Government’s interests are weighed in the balance, seem too impalpable to warrant such a gross differentiation. It follows that Article 5248, as applied in this case, discriminates unconstitutionally against the United States and its lessee. As we had occasion to state, quite recently, it still remains true, as it has from the time of M’Culloch v. Maryland, 4 Wheat. 316, that a state tax may not discriminate against the Government or those with whom it deals. See United States v. City of Detroit, supra, at 473. Therefore, this tax may not be exacted.
Reversed.
Mr. Justice Frankfurter concurs in the result.
Vernon’s Tex. Rev. Civ. Stat., 1948 (Supp. 1950), Art. 5248. The amendatory Act is Tex. Laws, 1st C. S. 1950, c. 37.
The Court of Civil Appeals thought that the tax should be limited to the value of Phillips’ leasehold, 307 S. W. 2d 605, 609, while the Texas Supreme Court expressed the view indicated above. However, as the State points out, these statements in the opinions of the two appellate courts were apparently dicta, for the trial court decided only the bare question of taxability, reserving for later a decision on the measure and amount of the tax. The measure of the tax, however, is not presently critical, for, as will be indicated, the levy of any tax in the circumstances of this case appears to discriminate against the Government and Phillips.
Vernon’s Tex. Rev. Civ. Stat., ,1948, Art. 7173.
Vernon’s Tex. Rev. Civ. Stat., 1948, Art. 7174; State v. Taylor & Kelley, 72 Tex. 297, 12 S. W. 176; cf. Daugherty v. Thompson, 71 Tex. 192, 9 S. W. 99; Taylor v. Robinson, 72 Tex. 364, 10 S. W. 245.
Tex. Const., Art. VIII, § 2; Morris v. Masons, 68 Tex. 698, 5 S. W. 519; State v. Settegast, 254 S. W. 925 (Tex. Comm. App.); cf. Houston v. Scottish Rite Benev. Assn., 111 Tex. 191, 230 S. W. 978; Markham Hospital v. Longview, 191 S. W. 2d 695 (Tex. Civ. App.).
Although public lands in general are exempt from state and local taxation in Texas, Tex. Const., Art. XI, § 9; Vernon’s Tex. Rev. Civ. Stat., 1948, Art. 7150 (4), there are certain conditions and exceptions to the exemption. The exemption does not survive a lease if the “public purpose” of the property is abandoned. Abilene v. State, 113 S. W. 2d 631 (Tex. Civ. App.); State v. Beaumont, 161 S. W. 2d 344 (Tex. Civ. App.). The School District concedes that this condition is met in this case because the lease reserves to the United States the right to terminate in the event of a national emergency. Exceptions to the general exemption of land owned by the State and its political subdivisions are created by statutes expressly providing for the taxation of certain types of public property by specific taxing authorities. E. g., school-owned agricultural and grazing land is subject to local taxation, Tex. Const., Art. VII, § 6a; Vernon’s Tex. Rev. Civ. Stat., 1948, Art. 7150a; state farms on which convict labor is employed are subject to county and school taxation, Vernon’s Tex. Rev. Civ. Stat., 1948, Art. 7150 (4); prison property is subject to school taxation, Vernon’s Tex. Rev. Civ. Stat., 1948, Arts. 7150 (17) and (18); and land which forms a part of the endowment of the University of Texas is subject to county taxation, Vernon’s Tex. Rev. Civ. Stat., 1948, Art. 7150c. Although these exceptions to the general nontaxability of public lands reduce th,e extent of the discrimination created by Article 5248, they obviously do not eliminate it.
During the years in question, the leasehold was taxable under § 6 of the Military Leasing Act of 1947, 61 Stat. 774, the predecessor • of the provision now codified as 10 U. S. C. § 2667 (e). Section 6 provided in part that “[tjhe lessee’s interest, made or created pursuant to the provisions of this Act, shall be made subject to State or local taxation.”
See, e. g., Op. Tex. Atty. Gen., No. WW-531, Dec. 9, 1958.
Mich. Acts 1953, No. 189, now compiled in 6 Mich. Stat. Ann., 1950 (1957 Cum. Supp.), §§ 7.7 (5) and 7.7 (6). See United States v. City of Detroit, supra, at 467, n. 1.
“Under Michigan law this means persons who use property-owned by the Federal Government, the State, its political subdivisions, churches, charitable organizations and a great host of other entities.” United States v. City of Detroit, supra, at 473.
In its brief, the Government stated that the exception was not pertinent to its argument. Its- discrimination argument rested on the proposition that the Michigan, statute was, in reality, “special legislation” directed at government property. The Government argued that this purpose was manifested by the fact that the statute contained an exception for cases in which payments had been, made by the United States “in lieu of taxes in amounts equivalent to taxes which might otherwise be lawfully assessed.” It was argued that the purpose thus manifested was improper under Macallen Co. v. Massachusetts, supra. We pointed out, in rejecting the argument, that the exception to the tax relied on by the Government in this connection served to protect it against thé possibility of a double contribution to the revenues of the State, and that the precedential value of Macollen had been substantially impaired by later decisions. See United States v. City of Detroit, supra, at 472, n. 2, 474, n. 6.
Only issues raised by the jurisdictional statement or petition for certiorari,, as the case may be, are considered by the Court. Supreme Court Rules, 15, par. 1 (c)(1), 23, par. 1 (c).
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.
The appeal in Hadnott v. Amos, ante, p. 358, decided today, was argued with the motion filed by appellants on November 19, 1968, “for an order to show cause why Judge Herndon should not be held in contempt and for other relief.” 393 U. S. 996.
On September 18, 1968, the three-judge court entered a temporary restraining order enjoining appropriate Alabama officials from using any ballots at the general election of November 5, 1968 which did not include the names of the candidates of the National Democratic Party of Alabama (NDPA). This order was dissolved on October 11, 1968, one judge dissenting. 295 F. Supp. 1003. The appellants sought interim relief from this Court pending appeal, and on October 14, 1968, we entered an order that: “The application for restoration of temporary relief is granted pending oral argument on the application . . . 393 U. S. 815 (1968). Oral argument was heard on October 18, and on October 19 we entered an order that: “The order entered on October 14, 1968, restoring temporary relief is continued pending action upon the jurisdictional statement which has been filed.” 393 U. S. 904. Nevertheless, Judge Herndon, who was responsible for the preparation of the Greene County ballot for local offices, did not place the NDPA candidates for such offices on the ballot.
We conclude that decision on the motion should await timely initiation and completion of appropriate proceedings in the District Court to determine whether Judge Herndon’s failure to place NDPA candidates on the ballot constituted contempt of the order of September 18 of the District Court. Decision on the motion is therefore postponed.
It is so ordered.
Mr. Justice Black 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:
|
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 Kennedy
delivered the opinion of the Court.
“[T]he Eighth Amendment prohibits a State from carrying out a sentence of death upon a prisoner who is insane.” Ford v. Wainwright, 477 U. S. 399, 409-410 (1986). The prohibition applies despite a prisoner’s earlier competency to be held responsible for committing a crime and to be tried for it. Prior findings of competency do not foreclose a prisoner from proving he is incompetent to be executed because of his present mental condition. Under Ford, oncé a prisoner makes the requisite preliminary showing that his current mental state would bar his execution, the Eighth Amendment, applicable to the States under the Due Process Clause of the Fourteenth Amendment, entitles him to an adjudication to determine his condition. These determinations are governed by the substantive federal baseline for competency set down in Ford.
Scott Louis Panetti, referred to here as petitioner, was convicted and sentenced to death in a Texas state court. After the state trial court set an execution date, petitioner made a substantial showing he was not competent to be executed. The state court rejected his claim of incompeteney on the merits. Filing a petition for writ of habeas corpus in the United States District Court for the Western District of Texas, petitioner claimed again that his mental condition barred his execution; that the Eighth Amendment set forth a substantive standard for competency different from the one advanced by the State; and that prior state-court proceedings on the issue were insufficient to satisfy the procedural requirements mandated by Ford. The State denied these assertions and argued, in addition, that the federal courts lacked jurisdiction to hear petitioner’s claims.
We conclude we have statutory authority to adjudicate the claims petitioner raises in his habeas application; we find the state court failed to provide the procedures to which petitioner was entitled under the Constitution; and we determine that the federal appellate court employed an improperly restrictive test when it considered petitioner’s claim of incompeteney on the merits. We therefore reverse the judgment of the Court of Appeals for the Fifth Circuit and remand the case for further consideration.
I
On a morning in 1992 petitioner awoke before dawn, dressed in camouflage, and drove to the home of his estranged wife’s parents. Breaking the front-door lock, he entered the house and, in front of his wife and daughter, shot and killed his wife’s mother and father. He took his wife and daughter hostage for the night before surrendering to police.
Tried for capital murder in 1995, petitioner sought to represent himself. The court ordered a psychiatric evaluation, which indicated that petitioner suffered from a fragmented personality, delusions, and • hallucinations. 1 App. 9-14. The evaluation noted that petitioner had been hospitalized numerous times for these disorders. Id., at 10; see also id., at 222. Evidence later revealed that doctors had prescribed medication for petitioner’s mental disorders that, in the opinion of one expert, would be difficult for a person not suffering from extreme psychosis even to tolerate. See id., at 233 (“I can’t imagine anybody getting that dose waking up for two to three days. You cannot take that kind of medication if you are close to normal without absolutely being put out”). Petitioner’s wife described one psychotic episode in a petition she filed in 1986 seeking extraordinary relief from the Texas state courts. See id., at 38-40. She explained that petitioner had become convinced the devil had possessed their home and that, in an effort to cleanse their surroundings, petitioner had buried a number of valuables next to the house and engaged in other rituals. Id., at 39. Petitioner nevertheless was found competent to be tried and to waive counsel. At trial he claimed he was not guilty by reason of insanity.
During his trial petitioner engaged in behavior later described by his standby counsel as “bizarre,” “scary,” and “trance-like.” Id., at 26, 21, 22. According to the attorney, petitioner’s behavior both in private and in front of the jury made it evident that he was suffering from “mental incompetence,” id., at 26; see also id., at 22-23, and the net effeet of this dynamic was to render the trial “truly a judicial farce, and a mockery of self-representation,” id., at 26. There was evidence on the record, moreover, to indicate that petitioner had stopped taking his antipsychotic medication a few months before trial, see id., at 339,345, a rejection of medical advice that, it appears, petitioner has continued to this day with one brief exception, see Brief for Petitioner 16-17. According to expert testimony, failing to take this medication tends to exacerbate the underlying mental dysfunction. See id., at 16, 18, n. 12; see also 1 App. 195, 228. And it is uneontested that, less than two months after petitioner was sentenced to death, the state trial court found him incompetent to waive the appointment of state habeas counsel. See Brief for Petitioner 15, n. 10. It appears, therefore, that petitioner’s condition has only worsened since the start of trial.
The jury found petitioner guilty of capital murder and sentenced him to death. Petitioner challenged his conviction and sentence both on direct appeal and through state habeas proceedings. The Texas courts denied his requests for relief. See Panetti v. State, No. 72,230 (Crim. App., Dec. 3, 1997) (en banc); Ex parte Panetti, No. 37,145-01 (Crim. App., May 20,1998) (en banc). This Court twice denied a petition for certiorari. Panetti v. Texas, 525 U. S. 848 (1998); Panetti v. Texas, 524 U. S. 914 (1998).
Petitioner filed a petition for writ of habeas corpus pursuant to 28 U. S. C. §2254 in the United States District Court for the Western District of Texas. His claims were again rejected, both by the District Court, Panetti v. Johnson, Cause No. A-99-CV-260-SS (2001), and the Court of Appeals for the Fifth Circuit, Panetti v. Cockrell, 73 Fed. Appx. 78 (2003) (judgt. order), and we again denied a petition for certiorari, Panetti v. Dretke, 540 U. S. 1052 (2003). Among the issues petitioner raised in the course of these state and federal proceedings was his competency to stand trial and to waive counsel. Petitioner did not argue, however, that mental illness rendered him incompetent to be executed.
On October 31, 2003, Judge Stephen B. Abies of the 216th Judicial District Court in Gillespie County, Texas, set petitioner’s execution date for February 5, 2004. See First Order Setting Execution in Cause No. 3310; Order Setting Execution in Cause No. 3310. On December 10, 2003, counsel for petitioner filed with Judge Abies a motion under Tex. Code Crim. Proc. Ann., Art. 46.05 (Vernon Supp. Pamphlet 2006). Petitioner claimed, for the first time, that due to mental illness he was incompetent to be executed. The judge denied the motion without a hearing. When petitioner attempted to challenge the ruling, the Texas Court of Criminal Appeals dismissed his appeal for lack of jurisdiction, indicating it has authority to review an Art. 46.05 determination only when a trial court has determined a prisoner is incompetent. Ex parte Panetti, No. 74,868 (Jan. 28, 2004) (per curiam).
Petitioner returned to federal court, where he filed another petition for writ of habeas corpus pursuant to § 2254 and a motion for stay of execution. On February 4, 2004, the District Court stayed petitioner’s execution to “allow the state court a reasonable period of time to consider the evidence of [petitioner’s] current mental state.” Order in Case No. A-04-CA-042-SS, 1 App. 113-114,116.
The state court had before it, at that time, petitioner’s renewed motion to determine competency to be executed (hereinafter Renewed Motion To Determine Competency). Attached to the motion were a letter and a declaration from two individuals, a psychologist and a law professor, who had interviewed petitioner while on death row on February 3, 2004. The new evidence, according to counsel, demonstrated that petitioner did not understand the reasons he was about to be executed.
Due to the absence of a transcript, the state-court proceedings after this point are not altogether clear. The claims raised before this Court nevertheless make it necessary to recount the procedural history in some detail. Based on the docket entries and the parties’ filings it appears the following occurred.
The state trial court ordered the parties to participate in a telephone conference on February 9, 2004, to discuss the status of the case. There followed a court directive instructing counsel to submit, by February 20, the names of mental health experts the court should consider appointing pursuant to Art. 46.05(f). See ibid. (“If the trial court determines that the defendant has made a substantial showing of incompetency, the court shall order at least two mental health experts to examine the defendant”). The court also gave the parties until February 20 to submit any motions concerning the competency procedures and advised it would hold another status conference on that same date. Defendant’s Motion to Reconsider in Cause No. 3310, pp. 1-2 (Mar. 4, 2004) (hereinafter Motion to Reconsider).
On February 19, 2004, petitioner filed 10 motions related to the Art. 46.05 proceedings. They included requests for transcription of the proceedings, a competency hearing comporting with the procedural due process requirements set forth in Ford, and funds to hire a mental health expert. See Motion to Transcribe All Proceedings Related to Competency Determination Under Article 46.05 in Cause No. 3310; Motion to Ensure that the Article 46.05 “Final Competency Hearing” Comports with the Procedural Due Process Requirements of Ford in Cause No. 3310; Ex Parte Motion for Prepayment of Funds to Hire Mental Health Expert to Assist Defense in Article 46.05 Proceedings in Cause No. 3310.
On February 20, the court failed to hold its scheduled status conference. Petitioner’s counsel called the courthouse and was advised Judge Abies was out of the office for the day. Counsel then called the Gillespie County District Attorney, who explained that the judge had informed state attorneys earlier that week that he was canceling the conference he had set and would appoint the mental health experts without input from the parties. Motion to Reconsider 2.
On February 23, 2004, counsel for petitioner received an order, dated February 20, advising that the court was appointing two mental health experts pursuant to Art. § 46.05(f). Order in Cause No. 3310, p. 1 (Feb. 26, 2004), 1 App. 59. On February 25, at an informal status conference, the court denied two of petitioner’s motions, indicating it would consider the others when the court-appointed mental health experts completed their evaluations. Motion to Reconsider 3. On March 4, petitioner filed a motion explaining that a delayed ruling would render a number of the motions moot. Id., at 1. There is no indication the court responded to this motion.
The court-appointed experts returned with their evaluation on April 28, 2004. Concluding that petitioner “knows that he is to be executed, and that his execution will result in his death,” and, moreover, that he “has the ability to understand the reason he is to be executed,” the experts alleged that petitioner’s uncooperative and bizarre behavior was due to calculated design: “Mr. Panetti deliberately and persistently chose to control and manipulate our interview situation,” they claimed. 1 App. 75. They maintained that petitioner “could answer questions about relevant legal issues... if he were willing to do so.” Ibid.
The judge sent a letter to counsel, including petitioner’s attorney, Michael C. Gross, dated May 14, 2004. It said:
“Dear Counsel:
“It appears from the evaluations performed by [the court-appointed experts] that they are of the opinion that [petitioner] is competent to be executed in accordance with the standards set out in Art. 46.05 of the Code of Criminal Procedure.
“Mr. Gross, if you have any other matters you wish to have considered, please file them in the case papers and get me copies by 5:00 p.m. on May 21, 2004.” Id., at 77-78.
Petitioner responded with a filing entitled “Objections to Experts’ Report, Renewed Motion for Funds To Hire Mental Health Expert and Investigator, Renewed Motion for Appointment of Counsel, and Motion for Competency Hearing” in Cause No. 3310 (May 21, 2004), 1 App. 82-95 (hereinafter Objections to Experts’ Report). In this filing petitioner criticized the methodology and conclusions of the court-appointed experts; asserted his continued need for a mental health expert as his own criticisms of the report were “by necessity limited,” id., at 1; again asked the court to rule on his outstanding motions for funds and appointment of counsel; and requested a competency hearing. Petitioner also argued, as a more general matter, that the process he had received thus far failed to comply with Art. 46.05 and the procedural mandates set by Ford.
The court, in response, closed the case. On May 26, it released a short order identifying the report submitted by the court-appointed experts and explaining that “[b]ased on the aforesaid doctors’ reports, the Court finds that [petitioner] has failed to show, by a preponderance of the evidence, that he is incompetent to be executed.” Order Regarding Competency To Be Executed in Cause No. 3310, 1 App. 99. The order made no mention of petitioner’s motions or other filings. Petitioner did not appeal the ruling to the Court of Criminal Appeals, and he did not petition this Court for certiorari.
This background leads to the matter now before us. Petitioner returned to federal court, seeking resolution of the §2254 petition he had filed on January 26. The District Court granted petitioner’s motions to reconsider, to stay his execution, to appoint counsel, and to provide funds. The court, in addition, set the case for an evidentiary hearing, which included testimony by a psychiatrist, a professor, and two psychologists, all called by petitioner, as well as two psychologists and three correctional officers, called by respondent. See 1 App. 117-135, 362-363; see also id., at 136-336. We describe the substance of the experts’ testimony in more detail later in our opinion.
On September 29,2004, the District Court denied petitioner’s habeas application on the merits. It concluded that the state trial court had failed to comply with Art. 46.05; found the state proceedings “constitutionally inadequate” in light of Ford; and reviewed petitioner’s Eighth Amendment claim without deferring to the state court’s finding of competency. Panetti v. Dretke, 401 F. Supp. 2d 702, 706, 705-706 (WD Tex. 2004). The court nevertheless denied relief. It found petitioner had not shown incompetency as defined by Circuit precedent. Id., at 712. “Ultimately,” the court explained, “the Fifth Circuit test for competency to be executed requires the petitioner know no more than the fact of his impending execution and the factual predicate for the execution.” Id., at 711. The Court of Appeals affirmed, Panetti v. Dretke, 448 F. 3d 815 (CA5 2006), and we granted certiorari, 549 U. S. 1106 (2007).
II
We first consider our jurisdiction. The habeas corpus application on review is the second one petitioner has filed in federal court. Under the gatekeeping provisions of 28 U. S. C. § 2244(b)(2), “[a] claim presented in a second or successive habeas corpus application under section 2254 that was not presented in a prior application shall be dismissed” except under certain, narrow circumstances. See §§2244(b)(2)(A)-(B).
The State maintains that, by direction of §2244, the District Court lacked jurisdiction to adjudicate petitioner’s § 2254 application. Its argument is straightforward: “[Petitioner’s] first federal habeas application, which was fully and finally adjudicated on the merits, failed to raise a Ford claim,” and, as a result, “[his] subsequent habeas application, which did raise a Ford claim, was a ‘second or successive’ application” under the terms of § 2244(b)(2). Supplemental Brief for Respondent 1. The State contends, moreover, that any Ford claim brought in an application governed by §2244’s gatekeeping provisions must be dismissed. See Supplemental Brief for Respondent 4-6 (citing §§2244(b)(2)(AMB)).
The State acknowledges that Ford-based incompetency claims, as a general matter, are not ripe until after the time has run to file a first federal habeas petition. See Supplemental Brief for Respondent 6. The State nevertheless maintains that its rule would not foreclose prisoners from raising Ford claims. Under Stewart v. Martinez-Villareal, 523 U. S. 637 (1998), the State explains, a federal court is permitted to review a prisoner’s Ford claim once it becomes ripe if the prisoner preserved the claim by filing it in his first federal habeas application. Under the State’s approach a prisoner contemplating a future Ford claim could preserve it by this means.
The State’s argument has some force. The results it would produce, however, show its flaws. As in Martinez-Villareal, if the State’s “interpretation of ‘second or successive’ were correct, the implications for habeas practice would be far reaching and seemingly perverse.” 523 U. S., at 644. A prisoner would be faced with two options: forgo the opportunity to raise a Ford claim in federal court; or raise the claim in a first federal habeas application (which generally must be filed within one year of the relevant state-court ruling), even though it is premature. The dilemma would apply not only to prisoners with mental conditions indicative of incompeteney but also to those with no early sign of mental illness. All prisoners are at risk of deteriorations in their mental state. As a result, conscientious defense attorneys would be obliged to file unripe (and, in many cases, meritless) Ford claims in each and every § 2254 application. This counterintuitive approach would add to the burden imposed on courts, applicants, and the States, with no clear advantage to any.
We conclude there is another reasonable interpretation of §2244, one that does not produce these distortions and inefficiencies.
The phrase “second or successive” is not self-defining. It takes its full meaning from our case law, including decisions predating the enactment of the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), 110 Stat. 1214. See Slack v. McDaniel, 529 U. S. 473, 486 (2000) (citing Martinez-Villareal, supra); see also Felker v. Turpin, 518 U. S. 651, 664 (1996). The Court has declined to interpret “second or successive” as referring to all § 2254 applications filed second or successively in time, even when the later filings address a state-court judgment already challenged in a prior §2254 application. See, e. g., Slack, 529 U. S., at 487 (concluding that a second §2254 application was not “second or successive” after the petitioner’s first application, which had challenged the same state-court judgment, had been dismissed for failure to exhaust state remedies); see also id., at 486 (indicating that “pre-AEDPA law governed]” the case before it but implying that the Court would reach the same result under AEDPA); see also Martinez-Villareal, supra, at 645.
Our interpretation of § 2244 in Martinez-Villareal is illustrative. There the prisoner filed his first habeas application before his execution date was set. In the first application he asserted, inter alia, that he was incompetent to be executed, citing Ford. The District Court, among other holdings, dismissed the claim as premature; and the Court of Appeals affirmed the ruling. When the State obtained a warrant for the execution, the prisoner filed, for the second time, a habeas application raising the same incompetency claim. The State argued that because the prisoner “already had one ‘fully-litigated habeas petition, the plain meaning of § 2244(b)... requires his new petition to be treated as successive.’ ” 523 U. S., at 643.
We rejected this contention. While the later filing “may have been the second time that [the prisoner] had asked the federal courts to provide relief on his Ford claim,” the Court declined to accept that there were, as a result, “two separate applications, [with] the second... necessarily subject to § 2244(b).” Ibid. The Court instead held that, in light of the particular circumstances presented by a Ford claim, it would treat the two filings as a single application. The petitioner “was entitled to an adjudication of all of the claims presented in his earlier, undoubtedly reviewable, application for federal habeas relief.” 523 U. S., at 643.
Our earlier holding does not resolve the jurisdictional question in the instant ease. Martinez-Villareal did not address the applicability of § 2244(b) “where a prisoner raises a Ford claim for the first time in a petition filed after the federal courts have already rejected the prisoner’s initial habeas application.” Id., at 645, n. Yet the Court’s willingness to look to the “implications for habeas practice” when interpreting §2244 informs the analysis here. Id., at 644. We conclude, in accord with this precedent, that Congress did not intend the provisions of AEDPA addressing “second or successive” petitions to govern a filing in the unusual posture presented here: a §2254 application raising a Ford-based incompetency claim filed as soon as that claim is ripe.
Our conclusion is confirmed when we consider AEDPA’s purposes. The statute’s design is to “further the principles of comity, finality, and federalism.” Miller-El v. Cockrell, 537 U. S. 322, 337 (2003) (internal quotation marks omitted). Cf. Day v. McDonough, 547 U. S. 198, 205-206 (2006) (“The AEDPA statute of limitation promotes judicial efficiency and conservation of judicial resources, safeguards the accuracy of state court judgments by requiring resolution of constitutional questions while the record is fresh, and lends finality to state court judgments within a reasonable time” (internal quotation marks omitted)).
These purposes, and the practical effects of our holdings, should be considered when interpreting AEDPA. This is particularly so when petitioners “run the risk” under the proposed interpretation of “forever losing their opportunity for any federal review of their unexhausted claims.” Rhines v. Weber, 544 U. S. 269, 275 (2005). See also Castro v. United States, 540 U. S. 375, 381 (2003). In Rhines “[w]e recognize[d] the gravity of [the] problem” posed when petitioners file applications with only some claims exhausted, as well as “the difficulty [this problem] has posed for petitioners and federal district courts alike.” 544 U. S., at 275, 276. We sought to ensure our “solution to this problem [was] compatible with AEDPÁ’s purposes.” Id., at 276. And in Castro we resisted an interpretation of the statute that would “produce troublesome results,” “create procedural anomalies,” and “close our dóors to a class of habeas petitioners seeking review without any clear indication that such was Congress’ intent.” 540 U. S., at 380, 381. See also Williams v. Taylor, 529 U. S. 420, 437 (2000); Johnson v. United States, 544 U. S. 295, 308-309 (2005); Duncan v. Walker, 533 U. S. 167, 178 (2001); cf. Granberry v. Greer, 481 U. S. 129, 131-134 (1987).
An empty formality requiring prisoners to file unripe Ford claims neither respects the limited legal resources available to the States nor encourages the exhaustion of state remedies. See Duncan, supra, at 178. Instructing prisoners to file premature claims, particularly when many of these claims will not be colorable even at a later date, does not conserve judicial resources, “reducfe] piecemeal litigation,” or “streamlin[e] federal habeas proceedings.” Burton v. Stewart, 549 U. S. 147, 154 (2007) (per curiam) (internal quotation marks omitted). AEDPA’s concern for finality, moreover, is not implicated, for under none of the possible approaches would federal courts be able to resolve a prisoner’s Ford claim before execution is imminent. See Martinez-Villareal, supra, at 644-645 (acknowledging that the District Court was unable to resolve the prisoner’s incompetency claim at the time of his initial habeas filing). And last-minute filings that are frivolous and designed to delay executions can be dismissed in the regular course. The requirement of a threshold preliminary showing, for instance, will, as a general matter, be imposed before a stay is granted or the action is allowed to proceed.
There is, in addition, no argument that petitioner’s actions constituted an abuse of the writ, as that concept is explained in our cases. Cf. Felker, 518 U. S., at 664 (“[AEDPA’s] new restrictions on successive petitions constitute a modified res judicata rule, a restraint on what is called in habeas corpus practice ‘abuse of the writ’ ”). To the contrary, we have confirmed that claims of incompetency to be executed remain unripe at early stages of the proceedings. See Martinez-Villareal, 523 U. S., at 644-645; see also ibid, (suggesting that it is therefore appropriate, as a general matter, for a prisoner to wait before seeking resolution of his incompetency claim); Ford, 477 U. S. 399 (remanding the case to the District Court to resolve Ford’s incompetency claim, even though Ford had brought that claim in a second federal habeas petition); Barnard v. Collins, 13 F. 3d 871, 878 (CA5 1994) (“[0]ur research indicates no reported decision in which a federal circuit court or the Supreme Court has denied relief of a petitioner’s competency-to-be-executed claim on grounds of abuse of the writ”). See generally McCleskey v. Zant, 499 U. S. 467, 489-497 (1991).
In the usual case, a petition filed second in time and not otherwise permitted by the terms of § 2244 will not survive AEDPA’s “second or successive” bar. There are, however, exceptions. We are hesitant to construe a statute, implemented to further the principles of comity, finality, and federalism, in a manner that would require unripe (and, often, factually unsupported) claims to be raised as a mere formality, to the benefit of no party.
The statutory bar on “second or successive” applications does not apply to a Ford claim brought in an application filed when the claim is first ripe. Petitioner’s habeas application was properly filed, and the District Court had jurisdiction to adjudicate his claim.
III
A
Petitioner claims that the Eighth and Fourteenth Amendments of the Constitution, as elaborated by Ford, entitled him to certain procedures not provided in the state court; that the failure to provide these procedures constituted an unreasonable application of clearly established Supreme Court law; and that under § 2254(d) this misapplication of Ford allows federal-court review of his incompetency claim without deference to the state court’s decision.
We agree with petitioner that no deference is due. The state court’s failure to provide the procedures mandated by Ford constituted an unreasonable application of clearly established law as determined by this Court. It is uncontested that petitioner made a substantial showing of incompetency. This showing entitled him to, among other things, an adequate means by which to submit expert psychiatric evidence in response to the evidence that had been solicited by the state court. And it is clear from the record that the state court reached its competency determination after failing to provide petitioner with this process, notwithstanding counsel’s sustained effort, diligence, and compliance with court orders. As a result of this error, our review of petitioner’s underlying incompetency claim is unencumbered by the deference AEDPA normally requires.
Ford identifies the measures a State must provide when a prisoner alleges incompetency to be executed. The four-justice plurality in Ford concluded as follows:
“Although the condemned prisoner does not enjoy the same presumptions accorded a defendant who has yet to be convicted or sentenced, he has not lost the protection of the Constitution altogether; if the Constitution renders the fact or timing of his execution contingent upon establishment of a further fact, then that fact must be determined with the high regard for truth that befits a decision affecting the life or death of a human being. Thus, the ascertainment of a prisoner’s sanity as a predicate to lawful execution calls for no less stringent standards than those demanded in any other aspect of a capital proceeding.” 477 U. S., at 411-412.
Justice Powell’s concurrence, which also addressed the question of procedure, offered a more limited holding. When there is no majority opinion, the narrower holding controls. See Marks v. United States, 430 U. S. 188, 193 (1977). Under this rule Justice Powell’s opinion constitutes “clearly established” law for purposes of § 2254 and sets the minimum procedures a State must provide to a prisoner raising a Ford-based competency claim.
Justice Powell’s opinion states the relevant standard as follows. Once a prisoner seeking a stay of execution has made “a substantial threshold showing of insanity,” the protection afforded by procedural due process includes a “fair hearing” in accord with fundamental fairness. Ford, 477 U. S., at 426, 424 (opinion concurring in part and concurring in judgment) (internal quotation marks omitted). This protection means a prisoner must be accorded an “opportunity to be heard,” id., at 424 (internal quotation marks omitted), though “a constitutionally acceptable procedure may be far less formal than a trial,” id., at 427. As an example of why the state procedures on review in Ford were deficient, Justice Powell explained, the determination of sanity “appeared] to have been made solely on the basis of the examinations performed by state-appointed psychiatrists.” Id., at 424. “Such a procedure invites arbitrariness and error by preventing the affected parties from offering contrary medical evidence or even from explaining the inadequacies of the State’s examinations.” Ibid.
Justice Powell did not set forth “the precise limits that due process imposes in this area.” Id., at 427. He observed that a State “should have substantial leeway to determine what process best balances the various interests at stake” once it has met the “basic requirements” required by due process. Ibid. These basic requirements include an opportunity to submit “evidence and argument from the prisoner’s counsel, including expert psychiatric evidence that may differ from the State’s own psychiatric examination.” Ibid.
Petitioner was entitled to these protections once he had made a “substantial threshold showing of insanity.” Id., at 426. He made this showing when he filed his Renewed Motion To Determine Competency — a fact disputed by no party, confirmed by the trial court’s appointment of mental health experts pursuant to Article 46.05(f), and verified by our independent review of the record. The Renewed Motion to Determine Competency included pointed observations made by two experts the day before petitioner’s scheduled execution; and it incorporated, through petitioner’s first Motion To Determine Competency, references to the extensive evidence of mental dysfunction considered in earlier legal proceedings.
In light of this showing, the state court failed to provide petitioner with the minimum process required by Ford.
The state court refused to transcribe its proceedings, notwithstanding the multiple motions petitioner filed requesting this process. To the extent a more complete record may have put some of the court’s actions in a more favorable light, this only constitutes further evidence of the inadequacy of the proceedings. Based on the materials available to this Court, it appears the state court on repeated occasions conveyed information to petitioner’s counsel that turned.out not to be true; provided at least one significant update to the State without providing the same notice to petitioner; and failed in general to keep petitioner informed as to the opportunity, if any, he would have to present his case. There is also a strong argument the court violated state law by failing to provide a competency hearing. See Tex. Code Grim. Proc. Ann., Art. 46.05(k). If this did, in fact, constitute a violation of the procedural framework Texas has mandated for the adjudication of incompetency claims, the violation undermines any reliance the State might now place on Justice Powell’s assertion that “the States should have substantial leeway to determine what process best balances the various interests at stake.” Ford, supra, at 427. See also, e. g., Brief for Respondent 16. What is more, the order issued by the state court implied that its determination of petitioner’s competency was made solely on the basis of the examinations performed by the psychiatrists it had appointed — precisely the sort of adjudication Justice Powell warned would “invit[e] arbitrariness and error,” Ford, supra, at 424.
The state court made an additional error, one that Ford makes clear is impermissible under the Constitution: It failed to provide petitioner with an adequate opportunity to submit expert evidence in response to the report filed by the court-appointed experts. The court mailed the experts’ report to both parties in the first week of May. The report, which rejected the factual basis for petitioner’s claim, set forth new allegations suggesting that petitioner’s bizarre behavior was due, at least in part, to deliberate design rather than mental illness. Petitioner’s counsel reached the reasonable conclusion that these allegations warranted a response. See Objections to Experts’ Report 13, and n. 1. On May 14, the court told petitioner’s counsel, by letter, to file “any other matters you wish to have considered” within a week. Petitioner, in response, renewed his motions for an evidentiary hearing, funds to hire a mental health expert, and other relief. He did not submit at that time expert psychiatric evidence to challenge the court-appointed experts’ report, a decision that in context made sense: The court had said it would rule on his outstanding motions, which included a request for funds to hire a mental health expert and a request for an evidentiary hearing, once the court-appointed experts had completed their evaluation. Counsel was justified in relying on this representation by the court.
Texas law, moreover, provides that a court’s finding of ineompeteney will be made on the basis of, inter alia, a “final competency hearing.” Tex. Code Crim. Proc. Ann., Art. 46.05(k); see also Ex parte Caldwell, 58 S. W. 3d 127,
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.
Petitioner was convicted of knowingly concealing and transporting narcotic drugs in Denver, Colorado, in violation of 35 Stat. 614, as amended, 21 U. S. C. § 174. His conviction was based in part on the use in evidence against him of two “envelopes containing [865 grains of] heroin” and a hypodermic syringe that had been taken from his person, following his arrest, by the arresting officer. Before the trial, he moved to suppress that evidence as having been secured through an unlawful search and seizure. After hearing, the District Court found that the arresting officer had probable cause to arrest petitioner without a warrant and that the subsequent search and seizure were therefore incident to a lawful arrest, and overruled the motion to suppress. 146 F. Supp. 689. At the subsequent trial, that evidence was offered and, over petitioner’s renewed objection, was received in evidence, and the trial resulted, as we have said, in petitioner’s conviction. The Court of Appeals affirmed the conviction, 248 F. 2d 295, and certiorari was sought on the sole ground that the search and seizure violated the Fourth Amendment and therefore the use of the heroin in evidence vitiated the conviction. We granted the writ to determine that question. 357 U. S. 935.
The evidence offered at the hearing on the motion to suppress was not substantially disputed. It established that one Marsh, a federal narcotic agent with 29 years’ experience, was stationed at Denver; that one Hereford had been engaged as a “special employee” of the Bureau of Narcotics at Denver for about six months, and from time to time gave information to Marsh regarding violations of the narcotic laws, for which Hereford was paid small sums of money, and that Marsh had always found the information given by Hereford to be accurate and reliable. On September 3, 1956, Hereford told Marsh that James Draper (petitioner) recently had taken up abode at a stated address in Denver and “was peddling narcotics to several addicts” in that city. Four days later, on September 7, Hereford told Marsh “that Draper had gone to Chicago the day before [September 6] by train [and] that he was going to bring back three ounces of heroin [and] that he would return to Denver either on the morning of the 8th of September or the morning of the 9th of September also by train.” Hereford also gave Marsh a detailed physical description of Draper and of the clothing he was wearing, and said that he would be carrying “a tan zipper bag,” and that he habitually “walked real fast.”
On the morning of September 8, Marsh and a Denver police officer went to the Denver Union Station and kept watch over all incoming trains from Chicago, but they did not see anyone fitting the description that Hereford had given. Repeating the process on the morning of September 9, they saw a person, having the exact physical attributes and wearing the precise clothing described by Hereford, alight from an incoming Chicago train and start walking “fast” toward the exit. He was carrying a tan zipper bag in his right hand and the left was thrust in his raincoat pocket. Marsh, accompanied by the police officer, overtook, stopped and arrested him. They then searched him and found the two “envelopes containing heroin” clutched in his left hand in his raincoat pocket, and found the syringe in the tan zipper bag. Marsh then took him (petitioner) into custody. Hereford died four days after the arrest and therefore did not testify at the hearing on the motion.
26 U. S. C. (Supp. V) § 7607, added by § 104 (a) of the Narcotic Control Act of 1956, 70 Stat. 570, provides, in pertinent part:
“The Commissioner . . . and agents, of the Bureau of Narcotics . . . may—
“(2) make arrests without warrant for violations of any law of the United States relating to narcotic drugs . . . where the violation is committed in the presence of the person making the arrest or where such person has reasonable grounds to believe that the person to be arrested has committed or is committing such violation.”
The crucial question for us then is whether knowledge of the related facts and circumstances gave Marsh “probable cause” within the meaning of the Fourth Amendment, and “reasonable grounds” within the meaning of § 104 (a), supra, to believe that petitioner had committed or was committing a violation of the narcotic laws. If it did, the arrest, though without a warrant, was lawful and the subsequent search of petitioner’s person and the seizure of the found heroin were validly made incident to a lawful arrest, and therefore the motion to suppress was properly overruled and the heroin was competently received in evidence at the trial. 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.
Petitioner does not dispute this analysis of the question for decision. Rather, he contends (1) that the information given by Hereford to Marsh was “hearsay” and, because hearsay is not legally competent evidence in a criminal trial, could not legally have been considered, but should have been put out of mind, by Marsh in assessing whether he had “probable cause” and “reasonable grounds” to arrest petitioner without a warrant, and (2) that, even if hearsay could lawfully have been considered, Marsh’s information should be held insufficient to show “probable cause” and “reasonable grounds” to believe that petitioner had violated or was violating the narcotic laws and to justify his arrest without a warrant.
Considering the first contention, we find petitioner entirely in error. Brinegar v. United States, 338 U. S. 160, 172-173, has settled the question the other way. There, in a similar situation, the convict contended “that the factors relating to inadmissibility of the evidence [for] purposes of proving guilt at the trial, deprive[d] the evidence as a whole of sufficiency to show probable cause for the search . . . .” Id., at 172. (Emphasis added.) But this Court, rejecting that contention, said: “[T]he so-called distinction places a wholly unwarranted emphasis upon the criterion of admissibility in evidence, to prove the accused’s guilt, of the facts relied upon to show probable cause. That emphasis, we think, goes much too far in confusing and disregarding the difference between what is required to prove guilt in a criminal case and what is required to show probable cause for arrest or search. It approaches requiring (if it does not in practical effect require) proof sufficient to establish guilt in order to substantiate the existence of probable cause. There is a large difference between the two things to be proved [guilt and probable cause], as well as between the tribunals which determine them, and therefore a like difference in the quanta and modes of proof required to establish them.” 338 U. S., at 172-173.
Nor can we agree with petitioner’s second contention that Marsh’s information was insufficient to show probable cause and reasonable grounds to believe that petitioner had violated or was violating the narcotic laws and to justify his arrest without a warrant. The information given to narcotic agent Marsh by “special employee” Hereford may have been hearsay to Marsh, but coming from one employed for that purpose and whose information had always been found accurate and reliable, it is clear that Marsh would have been derelict in his duties had he not pursued it. And when, in pursuing that information, he saw a man, having the exact physical attributes and wearing the precise clothing and carrying the tan zipper bag that Hereford had described, alight from one of the very trains from the very place stated by Hereford and start to walk at a “fast” pace toward the station exit, Marsh had personally verified every facet of the information given him by Hereford except whether petitioner had accomplished his mission and had the three ounces of heroin on his person or in his bag. And surely, with every other bit of Hereford's information being thus personally verified, Marsh had “reasonable grounds” to believe that the remaining unverified bit of Hereford's information — that Draper would have the heroin with him — was likewise true.
“In dealing with probable cause, ... as the very name implies, we deal with probabilities. These are not technical; they are the factual and practical considerations of everyday life on which reasonable and prudent men, not legal technicians, act.” Brinegar v. United States, supra, at 175. Probable cause exists where “the facts and circumstances within [the arresting officers’] knowledge and of which they had reasonably trustworthy information [are] sufficient in themselves to warrant a man of reasonable caution in the belief that” an offense has been or is being committed. Carroll v. United States, 267 U. S. 132, 162.
We believe that, under the facts and circumstances here, Marsh had probable cause and reasonable grounds to believe that petitioner was committing a violation of the laws of the United States relating to narcotic drugs at the time he arrested him. The arrest was therefore lawful, and the subsequent search and seizure, having been made incident to that lawful arrest, were likewise valid. It follows that petitioner’s motion to suppress was properly denied and that the seized heroin was competent evidence lawfully received at the trial.
Affirmed.
The Chief Justice and Mr. Justice Frankfurter took no part in the consideration or decision of this case.
The Fourth Amendment of the Constitution of the United States provides: “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”
Hereford told Marsh that Draper was a Negro of light brown complexion, 27 years of age, 5 feet 8 inches tall, weighed about 160 pounds, and that he was wearing a light colored raincoat, brown slacks and black shoes.
The terms “probable cause” as used in the Fourth Amendment and “reasonable grounds” as used in § 104 (a) of the Narcotic Control Act, 70 Stat. 570, are substantial equivalents of the same meaning. United States v. Walker, 246 F. 2d 519, 526 (C. A. 7th Cir.); cf. United States v. Bianco, 189 F. 2d 716, 720 (C. A. 3d Cir.).
In United States v. Heitner, 149 F. 2d 105, 106 (C. A. 2d Cir.), Judge Learned Hand said “It is well settled that an arrest may be made upon hearsay evidence; and indeed, the ‘reasonable cause’ necessary to support an arrest cannot demand the same strictness of proof as the accused’s guilt upon a trial, unless the powers of peace officers are to be so cut down that they cannot possibly perform their duties.”
Grau v. United States, 287 U. S. 124, 128, contains a dictum that “A search warrant may issue only upon evidence which would be competent in the trial of the offense before a jury (Giles v. United States, 284 Fed. 208; Wagner v. United States, 8 F. (2d) 581) . . . .” But the principles underlying that proposition were thoroughly discredited and rejected in Brinegar v. United States, supra, 338 U. S., at 172-174, and notes 12 and 13. There are several cases in the federal courts that followed the now discredited dictum in the Grau case, Simmons v. United States, 18 F. 2d 85, 88; Worthington v. United States, 166 F. 2d 557, 564-565; cf. Reeve v. Howe, 33 F. Supp. 619, 622; United States v. Novero, 58 F. Supp. 275, 279, but the great weight of authority is the other way. See, e. g., Wrightson v. United States, 236 F. 2d 672 (C. A. D. C. Cir.); United States v. Heitner, supra (C. A. 2d Cir.); United States v. Bianco, 189 F. 2d 716 (C. A. 3d Cir.); Wisniewski v. United States, 47 F. 2d 825 (C. A. 6th Cir.); United States v. Walker, 246 F. 2d 519 (C. A. 7th Cir.); Mueller v. Powell, 203 F. 2d 797 (C. A. 8th Cir.). And see Note, 46 Harv. L. Rev. 1307, 1310-1311, criticizing the Grau dictum.
To the same effect are: Husty v. United States, 282 U. S. 694, 700-701; Dumbra v. United States, 268 U. S. 435, 441; Steele v. United States No. 1, 267 U. S. 498, 504-505; Stacey v. Emery, 97 U. S. 642, 645; Brinegar v. United States, supra, at 175, 176.
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.
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:
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A
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sc_issuearea
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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 Souter
delivered the opinion of the Court.
Respondent Construction Laborers Pension Trust for Southern California (Plan) is a multiemployer pension trust fund established under a Trust Agreement executed in 1962. Petitioner Concrete Pipe and Products of California, Inc. (Concrete Pipe), is an employer and former contributor to the Plan that withdrew from it and was assessed “withdrawal liability” under provisions of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U. S. C. §§1301-1461 (1988 ed. and Supp. III), added by the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), Pub. L. 96-364, 94 Stat. 1208. Concrete Pipe contends that the MPPAA’s assessment and arbitration provisions worked to deny it procedural due process. And, although we have upheld the MPPAA against constitutional challenge under the substantive component of the Due Process Clause and the Takings Clause, Pension Benefit Guaranty Corporation v. R. A. Gray & Co., 467 U. S. 717 (1984); Connolly v. Pension Benefit Guaranty Corporation, 475 U. S. 211 (1986), Concrete Pipe contends that, as applied to it, the MPPAA violates these provisions as well. We see merit in none of Concrete Pipe’s contentions.
I
A pension plan like the one in issue, to which more than one employer contributes, is characteristically maintained to fulfill the terms of collective-bargaining agreements. The contributions made by employers participating in such a multiemployer plan are pooled in a general fund available to pay any benefit obligation of the plan. To receive benefits, an employee participating in such a plan need not work for one employer for any particular continuous period. Because service credit is portable, employees of an employer participating in the plan may receive such credit for any work done for any participating employer. An employee obtains a vested right to secure benefits upon retirement after accruing a certain length of service for participating employers; benefits vest under the Plan in this case when an employee accumulates 10 essentially continuous years of credit. See Brief for Petitioner 28.
Multiemployer plans like the one before us have features that are beneficial in industries where
“there [is] little if any likelihood that individual employers would or could establish single-employer plans for their employees...[,] where there are hundreds and perhaps thousands of small employers, with countless numbers of employers going in and out of business each year, [and where] the nexus of employment has focused on the relationship of the workers to the union to which they belong, and/or the industry in which they are employed, rather than to any particular employer.” Multiemployer Pension Plan Termination Insurance Program: Hearings before the Subcommittee on Oversight of the House Committee on Ways and Means, 96th Cong., 1st Sess., 50 (1979) (statement of Robert A. Georgine, Chairman, National Coordinating Committee for Multiemployer Plans).
Multiemployer plans provide the participating employers with such labor market benefits as the opportunity to offer a pension program (a significant part of the covered employees’ compensation package) with cost and risk-sharing mechanisms advantageous to the employer. The plans, in consequence, help ensure that each participating employer will have access to a trained labor force whose members are able to move from one employer and one job to another without losing service credit toward pension benefits. See 29 CFR § 2530.210(c)(1) (1991); accord, Washington Star Co. v. International Typographical Union Negotiated Pension Plan, 582 F. Supp. 301, 304 (DC 1983).
Since the enactment of ERISA in 1974, the Plan has been subject to the provisions of the statute as a “defined benefit plan.” Such a plan is one that does not qualify as an “ ‘individual account plan’ or ‘defined contribution plan/” which provide, among other things, for an individual account for each covered employee and for benefits based solely upon the amount contributed to the covered employee’s account. See 29 U. S. C. §§ 1002(35), 1002(34), 1002(7). Concrete Pipe has not challenged the determination that the Plan falls within the statutory definition of defined benefit plan, and no issue as to that is before the Court.
A
We have canvassed the history of ERISA and the MPPAA before. See Pension Benefit Guaranty Corporation v. R. A. Gray & Co., supra; Connolly v. Pension Benefit Guaranty Corporation, supra. ERISA was designed “to ensure that employees and their beneficiaries would not be deprived of anticipated retirement benefits by the termination of pension plans before sufficient funds have been accumulated in [them].... Congress wanted to guarantee that if a worker has been promised a defined pension benefit upon retirement — and if he has fulfilled whatever conditions are required to obtain a vested benefit — he will actually receive it.” Id., at 214 (citations and internal quotation marks omitted). As enaeted in 1974, ERISA created the Pension Benefit Guarantee Corporation (PBGC) to administer and enforce a pension plan termination insurance program, to which contributors to both single-member and multiemployer plans were required to pay insurance premiums. 29 U. S. C. §§ 1302(a), 1306 (1988 ed. and Supp. III). Under the terms of the statute as originally enacted, the guarantee of basic benefits by multiemployer plans that terminated was not to be mandatory until 1978, and for terminations prior to that time, any guarantee of benefits upon plan termination was discretionary with PBGC. 29 U. S. C. §§ 1381(c)(2)-(4) (1976 ed.). If PBGC did choose to extend a guarantee when a multiemployer plan terminated with insufficient assets to pay promised benefits, an employer that had contributed to the plan in the five preceding years was liable to PBGC for the shortfall in proportion to its share of contributions during that 5-year period, up to 30 percent of the employer’s net worth. 29 U. S. C. §§ 1362(b), 1364 (1976 ed.). “In other words, any employer withdrawing from a multiemployer plan was subject to a contingent liability that was dependent upon the plan’s termination in the next five years and the PBGC’s decision to exercise its discretion and pay guaranteed benefits.” Gray, 467 U. S., at 721.
“As the date for mandatory coverage of multiemployer plans approached, Congress became concerned that a significant number of plans were experiencing extreme financial hardship.” Ibid. Indeed, the possibility of liability upon termination of a plan created an incentive for employers to withdraw from weak multiemployer plans. Connolly, 475 U. S., at 215. The consequent risk to the insurance system was unacceptable to Congress, which in 1978 postponed the mandatory guarantee pending preparation by the PBGC of a report “analyzing the problems of multiemployer plans and recommending possible solutions.” Ibid. PBGC issued that report on July 1, 1978. Pension Benefit Guaranty Corporation, Multiemployer Study Required by P. L. 95-214 (1978). “To alleviate the problem of employer withdrawals, the PBGC suggested new rules under which a withdrawing employer would be required to pay whatever share of the plan’s unfunded liabilities was attributable to that employer’s participation.” Connolly, 475 U. S., at 216 (citation and internal quotation marks omitted).
Congress ultimately agreed, see id., at 217, and passed the MPPAA, which was signed into law by the President on September 26, 1980. Under certain provisions of the MPPAA (which when enacted had an effective date of April 29, 1980, 29 U. S. C. § 1461(e)(2)(A) (1976 ed., Supp. V)), if an employer withdraws from a multiemployer plan, it incurs “withdrawal liability” in the form of “a fixed and certain debt to the pension plan.” Gray, supra, at 725. An employer’s withdrawal liability is its “proportionate share of the plan’s ‘unfunded vested benefits,’ ” that is, “the difference between the present value of vested benefits” (benefits that are currently being paid to retirees and that will be paid in the future to covered employees who have already completed some specified period of service, 29 U. S. C. § 1053) “and the current value of the plan’s assets. 29 U. S. C. §§ 1381,1391.” Gray, supra, at 725.
B
The MPPAA provides the procedure for calculating and assessing withdrawal liability. The plan’s actuary, who is subject to regulatory and professional standards, 29 U. S. C. §§1241, 1242; 26 U. S. C. § 7701(a)(35), must determine the present value of the plan’s liability for vested benefits. In the absence of regulations promulgated by the PBGC, the actuary must employ “actuarial assumptions and methods which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations) and which, in combination, offer the actuary’s best estimate of anticipated experience under the plan.” 29 U. S. C. § 1393(a)(1). The assumptions must cover such matters as mortality of covered employees, likelihood of benefits vesting, and, importantly, future interest rates. After settling the present value of vested benefits, the actuary calculates the unfunded portion by deducting the value of the plan’s assets. § 1393(c).
In order to determine a particular employer’s withdrawal liability, the unfunded vested liability is allocated under one of several methods provided by law. § 1391. In this case, the Plan used the presumptive method of § 1391(b), which bases withdrawal liability on the proportion of total employer contributions to the plan made by the withdrawing employer during certain 5-year periods. See §§ 1391(b)(2) (E)(ii), (b)(3)(B), (b)(4)(D)(ii). In essence, the withdrawal liability imposes on the withdrawing employer a share of the unfunded vested liability proportional to the employer’s share of contributions to the plan during the years of its participation.
Withdrawal liability is assessed in a notification by the “plan sponsor” (here the trustees, see § 1301(a)(10)(A)) and a demand for payment. § 1399(b). The statute requires notification and demand to be made “[a]s soon as practicable after an employer’s complete or partial withdrawal.” § 1399(b)(1). A “complete withdrawal”
“occurs when an employer—
“(1) Permanently ceases to have an obligation to contribute under the plan, or
“(2) permanently ceases all covered operations under the plan.” § 1383(a).
“[T]he date of a complete withdrawal is the date of the cessation of the obligation to contribute or the cessation of covered operations.” § 1383(e).
The statute provides that if an employer objects after notice and demand for withdrawal liability, and the parties cannot resolve the dispute, § 1399(b)(2), it shall be referred to arbitration. See § 1401(a)(1). Two presumptions may attend the arbitration. First, “any determination made by a plan sponsor under [29 U. S. C. §§ 1381-1399 and 1405 (1988 ed. and Supp. III)] is presumed correct unless the party contesting the determination shows by a preponderance of the evidence that the determination was unreasonable or clearly erroneous.” 29 U. S. C. § 1401(a)(3)(A). Second, the sponsor’s calculation of a plan’s unfunded vested benefits
“is presumed correct unless a party contesting the determination shows by a preponderance of evidence that—
“(i) the actuarial assumptions and methods used in the determination were, in the aggregate, unreasonable (taking into account the experience of the plan and reasonable expectations), or
“(ii) the plan’s actuary made a significant error in applying the actuarial assumptions or methods.” § 1401(a) (3)(B).
The statute provides for judicial review of the arbitrator’s decision by an action in the district court to enforce, vacate, or modify the award. See § 1401(b)(2). In any such action “there shall be a presumption, rebuttable only by a clear preponderance of the evidence, that the findings of fact made by the arbitrator were correct.” § 1401(c).
II
The parties to the Trust Agreement creating the Plan in 1962 are the Southern California District Council of Laborers (Laborers) and three associations of contractors, the Building Industry of California, Inc., the Engineering Contractors Association, and the Southern California Contractors Association, Inc. App. 75, ¶ 6 (stipulation of facts filed in the District Court). Under § 302(c)(5)(B) of the Labor Management Relations Act, 1947 (LMRA), 29 U. S. C. § 186(c)(5)(B), when a union participates in management of a plan permitted by the LMRA, the plan must be administered jointly by representatives of labor and management. Accordingly, half of the Plan’s trustees are selected by the Laborers, and half by these contractors’ associations. Concrete Pipe has never been a member of any of the contractors’ associations that are parties to the Trust Agreement.
In 1976, Concrete Pipe, which is a wholly owned subsidiary of Concrete Pipe and Products Co., Inc., purchased certain assets of another company, Cen-Vi-Ro, including a concrete pipe manufacturing plant near Shafter, California, which Concrete Pipe continued to operate much as Cen-Vi-Ro had done. Cen-Vi-Ro had collective-bargaining agreements with several unions including the Laborers, and Concrete Pipe abided by the agreement with the latter by contributing to the Plan at a specified rate for each hour worked by a covered employee. In 1978, Concrete Pipe negotiated a new 3-year contract with the Laborers that called for continuing contributions to be made to the Plan based on hours worked by covered employees in the collective-bargaining unit. The collective-bargaining agreement specified that it would remain in effect until June 30, 1981, and thereafter from year to year unless either Concrete Pipe or the Laborers gave notice of a desire to renegotiate or terminate it. “‘Such written notice [was to] be given at least sixty (60) days prior to June 30... [and if] no agreement [was] reached by June 30... the Employer or the [Laborers might] thereafter give written notice to the other that on a specified date [at least] fifteen (15) days [thereafter] the Agreement [should] be considered terminated.’ ” App. 76.
In August 1979, Concrete Pipe stopped production at the Shatter facility. Although the details do not matter here, by October 1979, work by employees covered by the agreement with the Laborers had virtually ceased, and Concrete Pipe eventually stopped making contributions to the Plan. In the spring of 1981, Concrete Pipe and the Laborers each sent the other a timely notice of a desire to renegotiate the collective-bargaining agreement. Concrete Pipe subsequently bargained to an impasse and, on November 30, 1981, sent the Laborers a letter withdrawing recognition of that union as an employee representative, and giving notice of intent to terminate the 1978 collective-bargaining agreement. At about the same time, however, in November 1981, Concrete Pipe reopened the Shafter plant to produce 7,000 tons of concrete pipe needed to fill two orders for which it had successfully bid. It hired employees in classifications covered by its prior agreement with the Laborers, but did not contribute to the Plan for their work.
In January 1982, the Plan notified Concrete Pipe of withdrawal liability claimed to amount to $268,168.81. See id., at 89-94. Although the demand letter did not specify the date on which the Plan contended that “complete withdrawal” from it had taken place, it referred to the failure of Concrete Pipe to make contributions to the Plan since February 1981, and stated that “[w]e are further advised that you have not signed a renewal of a collective bargaining agreement obligating you to continue contributions to the Plan on behalf of the Construction laborers currently in your employ.” Id., at 90.
The Plan filed suit seeking the assessed withdrawal liability. Concrete Pipe countersued to bar collection, contending that “complete withdrawal” had occurred when operations at the Shatter plant ceased in August 1979, a date prior to the effective date of the MPPAA, and challenging the MPPAA on constitutional grounds. These cases were consolidated in the United States District Court for the Central District of California, which sua sponte ordered the parties to arbitrate the issue of whether withdrawal occurred prior to the effective date of the MPPAA.
The arbitration took place in two phases. In the first, the arbitrator determined that Concrete Pipe had not withdrawn from the Plan prior to the effective date of the MPPAA. App. 216. In the second phase, explicitly applying the presumption of 29 U. S. C. § 1401(a)(3)(B), the arbitrator found that Concrete Pipe had failed to meet its burden of showing the actuarial assumptions and methods to be unreasonable in the aggregate. App. 400. For reasons not at issue here, the arbitrator did rule partially in Concrete Pipe’s favor, and reduced the withdrawal liability from $268,168.81 to $190,465.57.
Concrete Pipe then filed a third action in the District Court, to set aside or modify the arbitrator’s decision, and again raised its constitutional challenge. Id., at 406. The District Court treated Concrete Pipe’s subsequent motion for summary judgment as a petition to vacate the arbitrator’s award, which it denied, and granted a motion by the Plan to confirm the award. Construction Laborers Pension Trust for Southern California v. Cen-Vi-Ro Concrete Pipe and Products, CV-82-5184-HLH (CD Cal., July 5, 1989), App. 416-425. On Concrete Pipe’s appeal, the judgment of the District Court was affirmed. Board of Trustees of Construction Laborers Pension Trust for Southern California v. Concrete Pipe and Products of California, Inc., No. 89-55854 (CA9, June 27, 1991), App. 431-432, judgt. order reported at 936 F. 2d 576. We granted certiorari limited to two questions presented, which are set out in the margin. 504 U. S. 940 (1992).
Ill
Concrete Pipe challenges the assessment of withdrawal liability on several grounds, the first being that by placing determination of withdrawal liability in the trustees, subject to the presumptions provided by § 1401, the MPPAA is unconstitutional because it denies Concrete Pipe an impartial adjudicator. This is not the first time this legal question has been before the Court. See Pension Benefit Guaranty Corporation v. Yahn & McDonnell, Inc., 481 U. S. 735 (1987), aff’g by an equally divided Court United Retail & Wholesale Employees Teamsters Union Local No. 115 Pension Plan v. Yahn & McDonnell, Inc., 787 F. 2d 128 (CA3 1986).
A
1
Concrete Pipe and its amici point to several potential sources of trustee bias toward imposing the greatest possible withdrawal liability. The one they emphasize most strongly has roots in the fact that “all of the trustees, including those selected by employers, are fiduciaries of the fund, 29 U. S. C. § 1002(21)([A]), and thus owe an exclusive duty to the fund.” Id., at 139 (emphasis omitted). As we said in another case discussing employee benefit pension plans permitted under LMRA:
“Under principles of equity, a trustee bears an unwavering duty of complete loyalty to the beneficiary of the trust, to the exclusion of the interests of all other parties. To deter the trustee from all temptation and to prevent any possible injury to the beneficiary, the rule against a trustee dividing his loyalties must be enforced with ‘uncompromising rigidity.’
“In sum, the duty of the management-appointed trustee of an employee benefit fund under § 302(c)(5) is directly antithetical to that of an agent of the appointing party.... ERISA essentially codified the strict fiduciary standards that a § 302(c)(5) trustee must meet. [Title 29 U. S. C. § 1104(a)(1)] requires a trustee to ‘discharge his duties... solely in the interest of the participants [i. e., covered employees] and beneficiaries.’” NLRB v. Amax Coal Co., 453 U. S. 322, 329-332 (1981) (citations and footnote omitted).
The resulting tug away from the interest of the employer is fueled by the threat of personal liability for any breach of the trustees’ fiduciary responsibilities, obligations, or duties, 29 U. S. C. § 1109, which may be enforced by civil actions brought by the Secretary of Labor or any covered employee or beneficiary of the plan, § 1132(a)(2).
The trustees could act in a biased fashion for several reasons. The most obvious would be in attempting to maximize assets available for the beneficiaries of the trust by making findings to enhance withdrawal liability. The next would not be so selfless, for if existing underfunding was the consequence of prior decisions of the trustees, those decisions could, if not offset, leave the trustees open to personal liability. See Brief for American Trucking Associations, Inc., as Amicus Curiae 9. A risk of bias may also inhere in the mere fact that, fiduciary obligations aside, the trustees are appointed by the unions and by employers. Union trustees may be thought to have incentives, unrelated to the question of withdrawal, to impose greater rather than lesser withdrawal liability. Employer trustees may be responsive to concerns -of those employers who continue to contribute, whose future burdens may be reduced by high withdrawal liability, and whose competitive position may be enhanced to boot. See Brief for Midwest Motor Express, Inc., et al. as Amici Curiae 8, citing Note, Trading Fairness for Efficiency: Constitutionality of the Dispute Resolution Procedures of the Multiemployer Pension Plan Amendments Act of 1980, 71 Geo. L. J. 161, 168 (1982).
As against these supposed threats to the trustees’ neutrality, due process requires a “neutral and detached judge in the first instance,” Ward v. Village of Monroeville, 409 U. S. 57, 61-62 (1972), and the command is no different when a legislature delegates adjudicative functions to a private party, see Schweiker v. McClure, 456 U. S. 188, 195 (1982). “That officers acting in a judicial or quasi-judicial capacity are disqualified by their interest in the controversy to be decided is, of course, the general rule.” Tumey v. Ohio, 273 U. S. 510, 522 (1927). Before one may be deprived of a protected interest, whether in a criminal or civil setting, see Marshall v. Jerrico, Inc., 446 U. S. 238, 242, and n. 2 (1980), one is entitled as a matter of due process of law to an adjudicator who is not in a situation “ ‘which would offer a possible temptation to the average man as a judge... which might lead him not to hold the balance nice, clear and true....” Ward, supra, at 60 (quoting Tumey, supra, at 532). Even appeal and a trial de novo will not cure a failure to provide a neutral and detached adjudicator. 409 U. S., at 61.
“[J]ustice,” indeed, “must satisfy the appearance of justice, and this stringent rule may sometimes bar trial [even] by judges who have no actual bias and who would do their very best to weigh the scales of justice equally between contending parties.” Marshall v. Jerrico, Inc., supra, at 243 (citations and internal quotation marks omitted). This, too, is no less true where a private party is given statutory authority to adjudicate a dispute, and we will assume that the possibility of bias, if only that stemming from the trustees’ statutory role and fiduciary obligation, would suffice to bar the trustees from serving as adjudicators of Concrete Pipe’s withdrawal liability.
2
The assumption does not win the case for Concrete Pipe, however, for a further strand of governing law has to be applied. Not all determinations affecting liability are adjudicative, and the “ ‘rigid requirements’... designed for officials performing judicial or quasi-judicial functions, are not applicable to those acting in a prosecutorial or plaintiff-like capacity.” 446 U. S., at 248. Where an initial determination is made by a party acting in an enforcement capacity, due process may be satisfied by providing for a neutral adjudicator to “conduct a de novo review of all factual and legal issues.” Cf. id., at 245; see also id., at 247-248, and n. 9; cf. Withrow v. Larkin, 421 U. S. 35, 58 (1975) (“Clearly, if the initial view of the facts based on the evidence derived from nonadversarial processes as a practical or legal matter foreclosed fair and effective consideration at a subsequent adversary hearing leading to ultimate decision, a substantial due process question would be raised”).
The distinction between adjudication and enforcement disposes of the claim that the assumed bias or appearance of bias in the trustees’ initial determination of withdrawal liability alone violates the Due Process Clause, much as it did the similar claim in Marshall v. Jerrico. Although we were faced there with a federal agency administrator who determined violations of a child labor law and assessed penalties under the statute, we concluded that the administrator could not be held to the high standards required of those “whose duty it is to make the final decision and whose impartiality serves as the ultimate guarantee of a fair and meaningful proceeding in our constitutional regime.” 446 U. S., at 250. Of the administrator there we said, “He is not a judge. He performs no judicial or quasi-judicial functions. He hears no witnesses and rules on no disputed factual or legal questions. The function of assessing a violation is akin to that of a prosecutor or civil plaintiff.” Id., at 247.
This analysis applies with equal force to the trustees, who, we find, act only in an enforcement capacity. The statute requires the plan sponsor, here the trustees, to notify the employer of the amount of withdrawal liability and to demand payment, 29 U. S. C. § 1399(b)(1), actions that bear the hallmarks of an assessment, not an adjudication. The trustees are not required to hold a hearing, to examine witnesses, or to adjudicate the disputes of contending parties on matters of fact or law. In Marshall, we observed that an employer “excepting] to a penalty... is entitled to a de novo hearing before an administrative law judge,” 446 U. S., at 247, and we concluded that this latter proceeding was the “initial adjudication,” id., at 247, n. 9. Likewise here, we conclude that the first adjudication is the proceeding that occurs before the arbitrator, not the trustees’ initial determination of liability.
B
This does not end our enquiry, however, for Concrete Pipe goes on to argue that the statutory presumptions preserve the trustees’ bias by limiting the arbitrator’s autonomy to determine withdrawal liability, and thereby work to deny the employer a fair adjudication.
1
Under the first provision at issue here, “any determination made by the plan sponsor under [29 U. S. C. §§ 1381-1399 and 1405] is presumed correct unless the party contesting the determination shows by a preponderance of the evidence that the determination was unreasonable or clearly erroneous.” 29 U. S. C. § 1401(a)(3)(A). Concrete Pipe argues that this presumption denied it an impartial adjudicator on the issue of its withdrawal date, thus raising a constitutional question on which the Courts of Appeals have divided.
The parties apparently agree that this presumption applies only to factual determinations, see Reply Brief for Petitioner 17; Brief for Respondent 24 (deferring to brief for the PBGC as amicus curiae); Brief for Pension Benefit Guaranty Corporation as Amicus Curiae 10, and n. 11, and this position is consistent with a PBGC regulation requiring the arbitrator “[i]n reaching his decision [to] follow applicable law, as embodied in statutes, regulations, court decisions, interpretations of the agencies charged with the enforcement of the Act, and other pertinent authorities,” 29 CFR § 2641.4(a)(1) (1992). We will assume for purposes of this ease that the regulation reflects a sound reading of the statute.
a
It is clear that the presumption favoring determinations of the plan sponsor shifts a burden of proof or persuasion to the employer. The hard question is what the employer must show under the statute to rebut the plan sponsor’s factual determinations, that is, how and to what degree of probability the employer must persuade the arbitrator that the sponsor was wrong. The question is hard because the statutory text refers to three different concepts in identifying this burden: “preponderance,” “clearly erroneous,” and “unreasonable.”
The burden of showing something by a “preponderance of the evidence,” the most common standard in the civil law, “simply requires the trier of fact ‘to believe that the existence of a fact is more probable than its nonexistence before [he] may find in favor of the party who has the burden to persuade the [judge] of the fact’s existence.’” In re Winship, 397 U. S. 358, 371-372 (1970) (Harlan, J., concurring) (brackets in original) (citation omitted). “A finding is ‘clearly erroneous’ when although there is evidence to support it, the reviewing [body] on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” United States v. United States Gypsum Co., 333 U. S. 364, 395 (1948). A showing of “unreasonableness” would require even greater certainty of error on the part of a reviewing body. See, e.g., Anderson v. Liberty Lobby, Inc., 477 U. S. 242, 252 (1986).
In creating the presumption at issue, these terms are combined in a very strange way. As our descriptions indicate, the first, “preponderance,” is customarily used to prescribe one possible burden or standard of proof before a trier of fact in the first instance, as when the proponent of a proposition loses unless he proves a contested proposition by a preponderance of the evidence. The term thus belongs in the same category with “clear and convincing” and “beyond a reasonable doubt,” which are also used to prescribe standards of proof (but when greater degrees of certainty are thought necessary). Before any such burden can be satisfied in the first instance, the factfinder must evaluate the raw evidence, finding it to be sufficiently reliable and sufficiently probative to demonstrate the truth of the asserted proposition with the requisite degree of certainty.
The second and third terms differ from the first in an important way. They are customarily used to describe, not a degree of certainty that some fact has been proven in the first instance, but a degree of certainty that a factfinder in the first instance made a mistake in concluding that a fact had been proven under the applicable standard of proof. They are, in other words, standards of review, and they are normally applied by reviewing courts to determinations of fact made at trial by courts that have made those determinations in an adjudicatory capacity (unlike the trustees here). See, e. g., Fed. Rule Civ. Proc. 52(a). As the terms readily indicate, a reviewing body characteristically examines prior findings in such a way as to give the original factfinder’s conclusions of fact some degree of deference. This makes sense because in many circumstances the costs of providing for duplicative proceedings are thought to outweigh the benefits (the second would render the first ultimately useless), and because, in the usual case, the factfinder is in a better position to make judgments about the reliability of some forms of evidence than a reviewing body acting solely on the basis of a written record of that evidence. Evaluation of the credibility of a live witness is the most obvious example.
Thus, review under the “clearly erroneous” standard is significantly deferential, requiring a “definite and firm conviction that a mistake has been committed.” And application of a reasonableness standard is even more deferential than that, requiring the reviewer to sustain a finding of fact unless it is so unlikely that no reasonable person would find it to be true, to whatever the required degree of proof.
The strangeness in the statutory language creating the first presumption arises from the combination of terms from the first category (burdens of proof) with those from the second (standards of review). It is true, of course, that this apparent confusion of categories may have resulted from the hybrid nature of the arbitrator’s proceeding in which it is supposed to be applied. The arbitrator here does not function simply as a reviewing body in the classic sense, for he is not only obliged to enquire into the soundness of the sponsor’s determinations when they are challenged, but may receive new evidence in the course of his review and adopt his own conclusions of fact. He may conduct proceedings in the same maimer and with the same powers as an arbitrator may-do under Title 9 of the United State Code, see 29 U. S. C. § 1401(b)(3), being authorized, for example, to hear (indeed to subpoena) witnesses and to take evidence. See 9 U. S. C. § 7; 29 U. S. C. § 1401(b)(3) (making specific reference to subpoena power). He is, then, a reviewing body (as is clear from his obligation, absent a contrary showing, to deem certain determinations by the plan sponsor correct), but a reviewing body invested with the further powers of a finder of fact (as is clear from his power to take evidence in the course of his review and from the presumption of correctness that a district court is bound to give his “findings of fact,” § 1401(c)). The arbitrator may thus provide a dual sort of trial and review, ultimately empowered to draw his own conclusions, and it would make sense to describe his different functions respectively by the language of trial and the language of review.
It does not, however, make sense to use the language of trial and the language of review as the statute does, for the statute does not refer to different arbitrator’s functions in language appropriate to each; it refers, rather, to one single conclusion that must be drawn about a determination previously made by a plan sponsor. By its terms the statute purports to provide a standard for reviewing the sponsor’s findings, and it defines the nature of the conclusion the arbitrator must draw by using a combination of terms that are categorically ill-matched. They are also inconsistent with each other on any reading. As used here, as distinct from its more usual context, the statutory phrase authorizing the arbitrator to reject a factual conclusion upon proof by a “preponderance” implies review of the sponsor’s determination on the basis of the record, supplemented by any new evidence, for simple error. If this statutory phrase were given effect, and the arbitrator concluded from a review of the record and of new evidence that a finding of fact was more probably wrong
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:
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H
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sc_issuearea
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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.
Mr. Chief Justice Burger
delivered the opinion of the Court.
We granted certiorari to resolve a question on which there is a conflict in the courts of appeals: whether state trade Secret protection is pre-empted by operation of the federal patent law. In the instant case the Court of Appeals for the Sixth Circuit held that there was preemption.. The Courts of Appeals for the Second, Fourth, Fifth, and..Ninth Circuits have reached the opposite conclusion.
I
Harshaw Chemical Co., an unincorporated division of petitioner, is a leading manufacturer of a type of synthetic crystal which is useful in the detection of ionizing radiation. In 1949 Harshaw commenced research into the growth of this type crystal and was able to produce one less than two inches in diameter. By 1966, as the result of expenditures in excess of $1 million, Harshaw was able to grow a 17-inch crystal, something no one else had done previously. Harshaw hád developed many processes, procedures, and manufacturing techniques in the purification of raw materials and the growth and encapsulation of the crystals which enabled it to accomplish this feat. Some of these processes Harshaw considers to be trade secrets.
The individual respondents ape former employees of Harshaw who formed or later joined respondent Bicron. While at Harshaw the individual respondents executed, as a condition of employment, at least one agreement each, requiring them not to disclose confidential information or trade secrets obtained as employees of Harshaw. Bicron was formed in August 1969 to compete with Harshaw in the production of the crystals; and by April 1970, had grown a 17-inch crystal.
Petitioner brought this diversity action in United States District Court for the Northern District of Ohio seeking injunctive relief and damages for the misappropriation of trade secrets. The District Court, applying Ohio trade secret law, granted a permanent injunction against the disclosure or use by respondents of 20 of the 40 claimed trade secrets until such time as the trade secrets had been released to the public, had otherwise generally become available to the public, or had been obtained by respondents from sources having the legal right to convey the information.
The Court of Appeals for the Sixth Circuit held that the findings of fact by the District Court were not clearly erroneous, and that it was evident from the record that the individual respondents appropriated to the benefit of Bicron secret information on processes obtained while they were employees at Harshaw. Further, the Court of Appeals held that the District Court properly applied Ohio law relating to trade secrets. Nevertheless, the Court of Appeals reversed the District Court, finding Ohio’s trade secret law to be in conflict with the patent •laws of the United States. The Court of Appeals reasoned that Ohio could not grant monopoly protection to processes and manufacturing techniques that were appropriate subjects for consideration under 35 U. S. C. § 101 for a federal patent but which had been in commercial use for over one year and so were no longer eligible for patent protection under 35 U. S. C. § 102 (b).
We hold that Ohio’s law of trade secrets is not preempted by the patent laws of the United States, and, accordingly, we reverse.
n
Ohio has adopted the widely relied-upon definition of a trade secret found at Restatement of Torts § 757, comment b (1939). B. F. Goodrich Co. v. Wohlgemuth, 117 Ohio App. 493, 498, 192 N. E. 2d 99, 104 (1963); W. R. Grace & Co. v. Hargadine, 392 F. 2d 9, 14 (CA6 1968). According to the Restatement,
“ [a] trade secret may consist of any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. ft may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a- machine or other device, or a list of customers.”
The subject of a trade secret must be secret, and must not be of public knowledge or of a general knowledge in the trade or business. B. F. Goodrich Co. v. Wohlgemuth, supra, at 499, 192 N. E. 2d, at 104; National Tube Co. v. Eastern Tube Co., 3 Ohio C. C. R. (n. s.) 459, 462 (1902), aff’d, 69 Ohio St. 560, 70 N. E. 1127 (1903). This necessary element of secrecy is not lost, however, if the holder of the trade secret reveals the trade secret to another “in confidence, and under an implied obligation not.to use or disclose it.” Cincinnati Bell Foundry Co. v. Dodds, 10 Ohio Dec. Reprint 154, 156, 19 Weekly L. Bull. 84 (Super. Ct. 1887). These others may include those of the holder’s “employees to whom it is necessary to confide it, in order to apply it to the uses for which it is intended.” National Tube Co. v. Eastern Tube Co., supra, at 462. Often the recipient of confidential knowledge of the subject of a trade secret is a licensee of its holder. See Lear, Inc. v. Adkins, 395 U. S. 653 (1969).
The protection accorded the trade secret holder is against the.disclosure or unauthorized use of the trade secret by those to whom' the secret has been confided under the express or implied restriction of nondisclosure or nonuse. The law also protects the holder of a trade secret against disclosure or use.when the knowledge is gained, not by the owner’s volition, but by some “improper means,” Restatement of Torts § 757 (a),, which may include theft, wiretapping, or even aerial reconnaissance. A trade secret law, however, does not offer protection against discovery by fair and honest means, such as by independent invention, accidental disclosure, or by' so-called reverse engineering, that is by starting with the known product and working backward to divine the process' which.aided in its development or manufacture.
Novelty, in the patent law sense, is not required for a trade secret, W. R. Grace & Co. v. Hargadine, 392 F. 2d, at 14. “Quite clearly discovery is something less than invention.” A. O. Smith Corp. v. Petroleum Iron Works Co., 73 F. 2d 531, 538 (CA6 1934), modified to increase scope of injunction, 74 F. 2d 934 (1935). However, some novelty will be required if merely because that which does not possess novelty is usually known; secrecy, in the context of trade' secrets, thus implies at least minimal novelty.
The subject matter of a patent is limited to a “process, machine, manufacture, or composition of matter,, or.... improvement thereof,” 35 U. "S. C. § 101, which fulfills the three conditions of novelty and utility as articulated and defined in 35 U. S. C. §§ 101 and 102, and nonobviousness, as set out in 35 U. S. C. § 103. If an invention xueets the rigorous statutory tests for the issuance of a patent, the patent is granted, for a period of 17 years, giving what has been described as the “right of exclusion,” R. Ellis, Patent Assignments and Licenses § 4, p. 7 (2d ed. 1943). This protection goes not only to copying the subject matter, which is forbidden under the Copyright Act, 17 U. S, C. § 1 et seq., but also to independent creation.
Ill
The first issue we deal with is whether the States are forbidden to act at all in the area of protection of the kinds of intellectual property which may make up the subject matter of trade secrets.
' Article I, § 8, cl. 8, of the Constitution grants to the Congress the power ■
“[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries....”
In the 1972 Term, in Goldstein v. California, 412 U. S. 546 (1973), we held that the cl. 8 grant of power to Congress was not exclusive and that, at least in the case of writings, the States were not prohibited from encouraging and protecting the efforts of those within their borders by appropriate legislation. The States could, therefore, protect against the unauthorized rerecording for sa,le of performances fixed on records or tapes, even though those performances qualified as “writings” in the constitutional sense and Congress was empowered to legislate regarding such performances and could pre-empt the area if it chose to do so. This determination was premised on the great diversity of interests in.our Nation — the essentially nonuniform character of the. appreciation of intellectual achievements in the various States. Evidence for this came from patents granted by the States in the 18th century. 412 U. S., at 557.
Just as the States may exercise regulatory power over writings so may the States regulate with respect to discoveries. States may hold diverse viewpoints in protecting intellectual property relating to invention as they do in protecting the intellectual property relating to the subject matter of copyright. The only limitation on the States is that in regulating the area of patents and copyrights they do not conflict with the operation of the laws in this area passed by Congress, and it is to that more difficult question, we now turn.
IV
The.-question of whether the trade secret law of Ohio is void under the Supremacy Clause involves a consideration of whether that law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Hines v. Davidowitz, 312 U. S. 52, 67 (1941). See Florida Avocado Growers v. Paul, 373 U. S. 132, 141 (1963). We stated in Sears, Roebuck &. Co. v. Stiffel Co., 376 U. S. 225, 229 (1964), that when state law touches upon'the area of federal statutes enacted pursuant to constitutional authority, “it is-'familiar doctrine’ that the federal policy ‘may not be set at naught, or its benefits denied’ by the state law. Sola Elec. Co. v. Jefferson Elec. Co., 317 U. S. 173, 176 (1942). This is true, of course, even, if the state law is enacted in the exercise of otherwise undoubted state power.”
The laws which the.Court of Appeals in this case held to be in conflict, with the Ohio law.of.trade secrets were the patent laws passed by the Congress in the unchallenged, exercise'of its clear power under Art. I, §8, cl. 8, of the Constitution. The patent law does not explicitly endorse or forbid the operation of trade secret law. However, as we have noted, if the scheme of protection developed by Ohio respecting trade secrets “clashes with the objectives of the federal patent laws,” Sears, Roebuck & Co. v. Stiffel Co., supra, at 231, then the state law must-fall. To determine whether the Ohio' law “clashes” with the federal law it is helpful to examine the objectives of both the patent and trade secret, laws».
. The stated objective of the Constitution in granting the power to Congress to legislate in the area of intellectual property is. to, “promote the Progress of Science and. useful Arts.”. The patent laws promote this progress by offering a right of 'exclusion for a limited period as an incentive* to inventors to risk the often enormous costs in'-terms of time, research, and development..The productive effort thereby fostered will have a positive effect on societyithrough the introduction of new products, and processes of manufacture into (the economy, and the emanations by why of increased employment and better lives for our citizens. In return, for the right of ex'clusion — this “reward for inventions,” Universal Oil Co. v. Globe Co., 322 U. S. 471, 484 (1944) — the patent laws impose upon the inventor a requirement of disclosure. To insure adequate and full disclosure so that upon the expiration of the 17-year period “the. knowledge of the invention enures to the people, who are thus enabled without restriction to practice it and profit by its use,” United States v. Dubilier Condenser Corp., 289 U. S. 178, 187 (1933), the patent laws require' that the patent application shall include a full and clear description of the invention and “of the manner and process of making and using it” so that any person skilled in the art may make and use the invention. 35 U. S. C. § 112. When a patent is granted and the information contained in it is circulated to the general public and those especially skilled in the trade, such additions to the general store óf knowledge are of such importance to the public weal that the Federal Government is willing to pay the high price of 17 years of exclusive use for its disclosure, which' disclosure, it is assumed, will stimulate ideas and the eventual development.of further significant advances in the art. The Court has also articulated another policy of the patent law: that which is in the public domain cannot be removed therefrom by action of the States.
“[FJederal law requires that all ideas in general circulation be dedicated to the common good unless they are protected by a valid patent.” Lear, Inc. v. Adkins, 395 U. S., at 668.
See also Goldstein v. California, 412 U. S., at 570-571; Sears, Roebuck & Co. v. Stiffel Co., supra; Compco Corp. v. Day-Brite Lighting, Inc., 376 U. S. 234, 237-238 (1964); International News Service v. Associated Press. 248 U. S. 215, 250 (1918) (Brandéis, J., dissenting).
The maintenance of standards of commercial ethics and the encouragement of invention are the broadly stated policies behind trade secret law. “The necessity of good faith and honest, fair dealing, is the very life and spirit of the commercial world.” National Tube Co. v. Eastern Tube Co., 3 Ohio C. C. R. (n. s.), at. 462. In A. O. Smith Corp. v. Petroleum Iron Works Co., 73 F. 2d, at 539, the Court emphasized that even though a discovery may not be patentable, that does not
“destroy the value of the discovery to one who makes it, or advantage the competitor who by unfair means, or as the beneficiary of a broken faith, obtains thé desired knowledge without himself paying the price in lábor, money, or machines expended by the discoverer.”
In Wexler v. Greenberg, 399 Pa. 569, 578-579, 160 A. 2d 430, 434-435 (1960), the Pennsylvania Supreme Court noted the importance, of trade secret protection to the subsidization of. research and- development and to increased economic efficiency within large companies through the dispersion of responsibilities for creative developments.
Having now in mind the objectives of both the patent and trade secret law, we turn to an examination of the interaction of these systems of protection of intellectual property-one established by the Congress' and the other by a State — to determine whether, and under7 what circumstances the latter might constitute “too great an encroachment on the federal patept system to be tolerated.” Sears, Roebuck & Co. v. Stiffel Co., 376 U. S., at 232.
As,we noted earlier,, trade secret law protects items which would not be proper subjects for consideration for patent protection under 35 U. S. C. §101. As dn the' case of the recordings in Goldstein v. California, Congress, with respect to nonpatentable subject matter, “has drawn no balance; rather, it has left the area unattended, and no reason exists why the State should not be free to act.” Goldstein v. California, supra, at 570 (footnote omitted).
Since no patent is available for a discovery, however useful, novel, and nonobvious, unless it falls within one of the express categories of patentable subject matter of 35 U. S. C. § 101, the holder of such a discovery would have no reason to apply for a patent whether trade secret' protection existed or not. Abolition of trade secret protection would, therefore, not result in increased disclosure to the public of discoveries in the area of nonpatentable subject matter. Also, it is hard to see how the public would be benefited by disclosure of customer lists or advertising campaigns; in fact, keeping such items secret encourages businesses to initiate new and individualized plans of operation, and constructive competition results. This, in turn, leads to a greater variety of business methods than would otherwise be the case if privately developed marketing and other data were passed illicitly among firms involved in the same enterprise.
Congress has spoken in the area of those discoveries which fall within one of the categories of patentable subject matter of 35 U. S. C. § 101 and which are, therefore, of a nature that would be subject to consideration for a patent. Processes, machines, manufactures, compositions of matter, and improvements thereof, which meet the tests of utility, novelty, and nonobviousness are entitled to be patented, but those which do not, are not. The question remains whether those items which are proper subjects for consideration for a patent may also have available the alternative, protection accorded by trade secret law.
Certainly the patent policy of encouraging invention is not disturbed by the existence of another form of incentive to invention. In this respect the two; systems are not and never would be in conflict. Similarly, the policy that matter once in- the public domain must remain in the- public domain is not incompatible with the existence of trade secret protection. By definition a trade secret has not been placed in the public domain.
The more difficult objective of the patent law to reconcile with trade secret law is that of disclosure, the quid pro quo of the right to exclude. Universal Oil Co. v. Globe Co., 322 U. S., at 484. We' are helped in this stage of the analysis by Judge Henry Friendly’s opinion in Painton & Co. v. Bourns, Inc., 442 F. 2d 216 (CA2 1971). There the Court of Appeals thought it useful, in determining whether inventors will refrain because of the existence of trade secret law from applying for patents, thereby depriving the public from learning of the invention, to distinguish between three categories of trade secrets: '
“(1) the trade secret believed by its owner to constitute a validly patentable invention; (2) the trade secret known to its owner not to be so patentable; and (3) the trade secret whose valid patentability is considered5 dubious.”. Id., at 224.
Trade.secret protection in each of these categories would run against breaches of confidence — the employee and licensee situations — and theft and other forms of industrial espionage.
As to. the trade secret known not to meet "the standards of patentability, very little in the way of disclosure would be accomplished by abolishing trade secret' protection. With trade secrets of nonpatentable subject matter, the patent alternative would not reasonably be available to the inventor. “There can be no public interest in stimulating- developers of such [unpatentable] know-how to flood an overburdened Patent Office with applications [for] what they do npt consider patentable.” Ibid. The- mere filing of applications doomed to be turned down by the Patent Office will bring forth no new public knowledge or enlightenment, since under federal statute and regulation patent applications and abandoned patent applications are held by the Patent Office in confidence and are not open to public inspection. 35 U. S. C. § 122; 37 CFR § 1.14 (b)..
Even as the extension of trade secret protection to patentable subject matter that the owner knows will not meet the standards of patentability will not conflict with the patent policy of disclosure, it will Rave a decidedly beneficial effect on society. Trade secret law will encourage invention in areas where patent law does not reach, and will prompt the independent innovator to proceed with the discovery and exploitation of his invention. Competition is fostered and the public is not deprived of the use of valuable, if not quite patentable, invention.
Even if trade secret protection against the faithless employee were abolished, inventive and exploitive effort in the.area of patentable subject matter that did iiot meet the standards of patentability would continue, although at a reduced level. Alternatively with the effort that remained, however, would come an increase in the amount of self-help that innovative companies would employ. Knowledge would be widely dispersed among the employees of those still active in research. Security precautions necessarily would be increased, and salaries and fringe benefits of those few officers or employees who had to know the whole of the secret invention would be fixed in an amount thought sufficient to assure their loyalty. Smaller companies would be placed at a distinct economic disadvantage, since the costs of this kind of self-help could be great, and the cost to the public of the use of this invention would be increased. The innovative entrepreneur with limited resources would tend to confine his r ¡Search efforts to himself and those few he felt he could > mst without the ultimate assurance of legal protection against breaches of confidence. As a result, organized scientific and technological research could become fragmented, and society, as a whole, would suffer.
Another problem that would arise if state trade secret protection were precluded is in the area of licensing others to exploit secret processes. The holder óf a trade secret would not likely share his secret with a manufacturer who cannot be placed under binding legal obligation to pay a license fee or to protect the secret. The result would be to hoard rather than disseminate knowledge. Painton & Co. v. Bourns, Inc., 442 F. 2d, at 223. Instead, then,- of licensing others to use his invention and making the most efficient use of existing manufacturing and marketing structures within the industry, the trade secret holder would tend either to limit his utilization of the invention, thereby depriving the public of the maximum benefit of its use, or engage in the time-consuming and economically wasteful enterprise of constructing duplicative manufacturing and marketing mechanisms for the exploitation of the invention. The detrimental misallbcation of resources and economic waste that would thus take place if trade secret protection were abolished with respect to employees or licensees cannot be justified by reference to any policy that the federal patent law seeks to advance.
Nothing in the patent law. requires that States refrain from action to prevent industrial espionage. In addition to the increased costs for protection from burglary, wiretapping, bribery, and the other means used to misappropriate trade secrets, there is the inevitable cost to the basic decency of society when one firm steals from another. A most fundamental human right, that of privacy, is threatened when industrial espionage is con-, doned or is made profitable^ the state interest in denying profit to such illegal ventures is unchallengeable.
The next category of patentable subject matter to deal with is theG invention Whose holder has a legitimate doubt as to its patentability. The risk of eventual patent invalidity by the courts -and the costs associated with that risk may well impel some with a good-faith doubt as to patentability not to take the trouble to seek to obtain and defend patent protection for their discoveries, regardless of the existence of trade secret protection. Trade secret protection would assist those inventors in the more efficient exploitation óf their discoveries and not conflict with the patent l$w. In most cases of genuine doubt as'to patent validity the potential rewards of patent protection are so far superior to those accruing to holders of trade secrets, that the holders of such inventions will seek patent protection, ignoring the trade secret route. For those inventors “on the line” as to whether to seek patent protection, the abolition of trade secret protection might encourage some to. apply for a patent who otherwise would not have done so. For some of those so encouraged, no patent will be granted and the result
“will have been an unnecessary postponement in the divulging of the trade secret to persons, willing to pay for it. If [the patent does issue], it may well be invalid, yet many will prefer to pay a modest royalty than to contest it, even though Lear allows them to accept a license and pursue the contest without paying royalties while the.fight goes on. The. result in such a case would be unjustified royalty payments from many who would prefer not to pay them rather than agreed fees from one or a few who are entirely willing to do so.” Painton & Co. v. Bourns, Inc., 442 F. 2d, at 225.
The point is that those who might be encouraged to file for patents by the absence of trade secret law will include inventors possessing the chaff as well as the wheat.' Some of the chaff — the nonpatentablfe discoveries — will be thrown out by the Patent Office, but in the meantime society will have been deprived of use of those discoveries through trade secret-protected licensing. Some of the. chaff may not be thrown out. This Court has noted the difference between the standards used by the Patent Office and the courts to determine patentability. Graham v. John Deere Co., 383 U. S. 1, 18 (1966). In Lear, Inc. v. Adkins, 395 U. S. 653 (1969), the Court thought that an invalid patent was so serious a threat to the free use of ideas already in the public domain that the Court permitted licensees of the patent holder to challenge, the validity of the patent. Better had the invalid patent, never been issued. More of those patents would likely issue if trade secret law were abolished. Eliminating trade secret law for the doubtfully patentable invention is thus likely to have deleterious effects on society and patent policy which we cannot say are balanced out by the speculative gain which might result from the encouragement of some inventors with doubtfully patentable inventions which -deserve patent protection to come forward and apply for patents. • There is no conflict, then, between trade'secret, law and the patent law policy of disclosure, at least insofar as the first two categories of patentable subject matter are concerned.
The final category of patentable subject matter to deal with is the clearly patentable invention, i. e., that invention which the owner believes to meet the standards of patentability. It is here that the federal interest in disclosure is at its peak;- these inventions, novel, useful and non obvious, are “ ‘the things which, are worth to the public.the embarrassment of an exclusive patent.’ ” Graham v. John Deere Co., supra, at 9 (quoting. Thomas Jefferson). The interest of the public is that the bargain of 17 years of exclusive use in return for disclosure be accepted. If a State, through a system of protection, were to cause a substantial risk that holders of patentable inventions would not seek.patents, but rather would -rely on the state protection, we would be compelled to hold that such a system could not constitutionally cbntinue to exist. In the case of trade secret law no reasonable risk of déterrence from patent application by' those who can reasonably expect' to be granted patents exists.
■ Trade Secret law provides far weaker protection in many'.respects than the patent law. While trade secret law does not forbid the discovery of the trade secret by fair and honest means, e. g., independent creation or reverse- engineering, patent law operates “against the world,” forbidding any use of the invention -for whatever purpose for a significant length of time. The holder of a trade secret also takes a substantial risk that the secret will be passed on to his competitors, by theft or by breach of a confidential relationship, in a manner not easily susceptible of discovery or proof. Painton & Co. v. Bourns, Inc., 442 F. 2d, at 224. Where patent law acts as a barrier, trade secret law functions relatively as a sieve.'The possibility that an inventor who believes his invention meets the standards of patentability will sit back, rely on trade secret law, and after one year of use forfeit any right to patent protection, 35 U. S. C. § 102 (b), is rémote indeed.
Nor does society face much risk that scientific Or technological progress will be impeded by the rare inventor with a patentable invention who chooses trade secret protection over patent protection. The ripeness-of-time concept of invention, developed from the study of the -many independent multiple, discoveries in history, predicts. that if a particular individual had not made a particular discovery others would.have, and in probably a relatively short period of time.'If something is to be discovered at all- very likely it will be discovered by more than one person. Singletons and Multiples in Science (1961), in R. Merton, The Sociology of Science 343 (1973); J. Cole & S. Cole, Social Stratification in Science 12-13, 229-230 (1973); Ogburn & Thomas, Are Inventions Inevitable?, 37 Pol. Sci. Q. 83 (1922). Even were an inventor to keep his discovery completely to himself, something that neither the patent nor trade secret laws forbid, there is a high probability that it will be soon independently developed. If the invention, though still a trade secret, is put into public use, the competition is alerted to the existence of the inventor’s solution to the problem and may be encouraged to make an extra effort to independently find the solution thus known to be possible. The inventor faces pressures not only from private industry, but from the skilled scientists who work in our universities and our other great publicly supported centers of learning and research.
We conclude that the extension of trade secret protection to clearly patentable inventions does not conflict with the patent policy of disclosure. Perhaps because trade secret law does not produce any positive effects in the. area of clearly patentable inventions, as opposed to the beneficial effects resulting from trade secret protection in the areas of the doubtfully patentable and the clearly unpatentable inventions, it has been suggested that partial pre-emption may be appropriate, and that courts should refuse to apply trade secret protection to inventions which the holder should have patented, and which would have been, thereby, disclosed. However, since' there is no real possibility that trade secret law will conflict with the federal policy favoring disclosure of clearly patentable inventions partial pre-emption is inapprbpriate. Partial pre-emption, furthermore, could well create serious problems for state courts in the administration of trade secret law. As a preliminary matter in trade secret actions, state courts would be obliged to distinguish between what a reasonable inventor would and would not <correctly consider to be clearly patentable, with the holder of the trade secret arguing that the invention was not patentable and the misappropriator of. the trade secret árguing its undoubted novelty, utility, and -non-obviousness. Federal courts have a difficult enough time trying to determine whether an invention, narrowed by the patent application procedure and fixed in the specifications which describe the invention for which the patent has been granted,, is patentable/ Although state courts in some circumstances must join federal courts in judging whether an issued patent is valid, Lear, Inc. v. Adkins, supra, it would be undesirable ■ to. impose the almost impossible burden on state courts to determine the patentability — in fact and in the mind of a' reasonable inventor — of a discovery which has not been patented and remains entirely uncircumscribed by expert analysis in the administrative process.. Neither complete nor partial pre-emption of state trade secret,law is justified.
Our conclusion that patent, law does not pre-empt trade secret law is in accord with prior cases of this Court. Universal Oil Co. v. Globe Co., 322 U. S., at 484; United States v. Dubilier Condenser Corp., 289 U. S., at 186—187; Becher v. Contoure Laboratories, 279 U. S. 388, 391 (1929); Du Pont Powder Co. v. Masland, 244 U. S. 100, 102 (1917); Dr. Miles Medical Co. v. Park & Sons Co., 220 U. S. 373, 402-403 (1911); Board of Trade v. Christie Grain & Stock Co., 198 U. S. 236, 250-251 (1905). Trade secret law and patent law have co-existed in this country for over one hundred years. Each has its particular, role to play, and the operation of one does not take away from the need for the other. Trade secret law encourages the development and exploitation of those items of lesser or different invention than might be ac- ‘ corded protection under the patent laws, but which items still have an important part to play in the technological •and scientific advancement of the Nation. Trade secret law promotes the sharing of knowledge, and the efficient operation of industry; it permits the individual inventor to reap the rewards of his labor by contracting with a company large'enough to develop and exploit it. Congress, by its silence over these many years, has seen the wisdom of allowing the States to enforce trade secret protection.. Until Congress takes affirmative action to the contrary, States should be free to grant protection to trade secrets.
Since we- hold that Ohio trade secret law is not preempted by the federal patent law, the judgment of the Court of Appeals for the Sixth Circuit is reversed,, and the case is remanded to the Court of Appeals with directions to reinstate the judgment of the District Court.
It 'is- so ordered.
Mr. Justice Powell took no part in-the decision of this case.
414 U. S. 818 (1973).
478 F. 2d 1074 (1973).
Painton & Co. v. Bourns, Inc., 442 F. 2d 216 (CA2 1971); Servo Corp. of America v. General Electric Co., 337 F. 2d 716 (CA4 1964), cert. denied, 383 U. S. 934 (1966); Water Services, Inc. v. Tesco. Chemicals, Inc., 410 F. 2d 163 (CA5 1969); Winston Research Corp. v. Minnesota Mining & Mfg. Co., 350 F. 2d 134 (CA9 1965); Dekar Industries, Inc. v. Bissett-Berman Corp., 434 F. 2d 1304 (CA9 1970), cert. denied, 402 U. S. 945 (1971).
Ohio Rev. Code Ann. § 1333.51 (C) (Supp. 1973) provides:
“No person, having obtained possession of an article representing a trade secret or access thereto with the owner’s consent, shall convert such article to his own use or" that of another person, or thereafter without the owner’s consent make or cause to be made a copy of such article, or exhibit su,ch article to another.”
Ohio Rev. Code Ann. § 1333.99 (E) (Supp. 1973) provides:
“Whoever violates section 1333.51 of the RevisedXode sTia.ll be fined not more than five thousand dollars, imprisoned not less than one nor more than ten years, or both.”
E. I. duPont deNemours & Co. v. Christopher, 431 F. 2d 1012 (CA5 197
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
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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.
This is a challenge to a biological opinion issued by the Fish and Wildlife Service in accordance with the Endangered Species Act of 1973 (ESA), 87 Stat. 884, as amended, 16 U. S. C. § 1531 et seq., concerning the operation of the Kla-math Irrigation Project by the Bureau of Reclamation, and the project’s impact on two varieties of endangered fish. The question for decision is whether the petitioners, who have competing economic and other interests in Klamath Project water, have standing to seek judicial review of the biological opinion under the citizen-suit provision of the ESA, § 1540(g)(1), and the Administrative Procedure Act (APA), 80 Stat. 392, as amended, 5 U. S. C. § 701 et seq.
I
The ESA requires the Secretary of the Interior to promulgate regulations listing those species of animals that are “threatened” or “endangered” under specified criteria, and to designate their “critical habitat.” 16 U. S. C. § 1533. The ESA further requires each federal agency to “insure that any action authorized, funded, or carried out by such agency... is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat of such species which is determined by the Secretary... to be critical.” § 1536(a)(2). If an agency determines that action it proposes to take may adversely affect a listed species, it must engage in formal consultation with the Fish and Wildlife Service, as delegate of the Secretary, ibid.; 50 CFR §402.14 (1995), after which the Service must provide the agency with a written statement (the Biological Opinion) explaining how the proposed action will affect the species or its habitat, 16 U. S. C. § 1536(b)(3)(A). If the Service concludes that the proposed action will “jeopardize the continued existence of any [listed] species or threatened species or result in the destruction or adverse modification of [critical habitat],” § 1536(a)(2), the Biological Opinion must outline any “reasonable arid prudent alternatives” that the Service believes will avoid that consequence, § 1536(b)(3)(A). Additionally, if the Biological Opinion concludes that the agency action will not result in jeopardy or adverse habitat modification, or if it offers reasonable and prudent alternatives to avoid that consequence, the Service must provide the agency with a written statement (known as the Incidental Take Statement) specifying the “impact of such incidental taking on the species,” any “reasonable and prudent measures that the [Service] considers necessary or appropriate to minimize such impact,” and setting forth “the terms and conditions... that must be complied with by the Federal agency... to implement [those measures].” § 1536(b)(4).
The Klamath Project, one of the oldest federal reclamation schemes, is a series of lakes, rivers, dams, and irrigation canals in northern California and southern Oregon. The project was undertaken by the Secretary of the Interior pursuant to the Reclamation Act of 1902, 32 Stat. 388, as amended, 43 U. S. C. § 371 et seq., and the Act of Feb. 9,1905, 33 Stat. 714, and is administered by the Bureau of Reclamation, which is under the Secretary’s jurisdiction. In 1992, the Bureau notified the Service that operation of the project might affect the Lost River Sucker (Deltistes luxatus) and Shortnose Sucker (Chasmistes brevirostris), species of fish that were listed as endangered in 1988, see 53 Fed. Reg. 27130-27133 (1988). After formal consultation with the Bureau in accordance with 50 CFR §402.14 (1995), the Service issued a Biological Opinion which concluded that the “ ‘long-term operation of the Klamath Project was likely to jeopardize the continued existence of the Lost River and shortnose suckers.’ ” App. to Pet. for Cert. 3. The Biological Opinion identified “reasonable and prudent alternatives” the Service believed would avoid jeopardy, which included the maintenance of minimum water levels on Clear Lake and Gerber reservoirs. The Bureau later notified the Service that it intended to operate the project in compliance with the Biological Opinion.
Petitioners, two Oregon irrigation districts that receive Klamath Project water and the operators of two ranches within those districts, filed the present action against the director and regional director of the Service and the Secretary of the Interior. Neither the Bureau nor any of its officials is named as defendant. The complaint asserts that the Bureau “has been following essentially the same procedures for storing and releasing water from Clear Lake and Gerber reservoirs throughout the twentieth century,” id,., at 36; that “[tjhere is no scientifically or commercially available evidence indicating that the populations of endangered suckers in Clear Lake and Gerber reservoirs have declined, are declining, or will decline as a result” of the Bureau’s operation of the Klamath Project, id., at 37; that “[tjhere is no commercially or scientifically available evidence indicating that the restrictions on lake levels imposed in the Biological Opinion will have any beneficial effect on the... populations of suckers in Clear Lake and Gerber reservoirs,” id., at 39; and that the Bureau nonetheless “will abide by the restrictions imposed by the Biological Opinion,” id., at 32.
Petitioners' complaint included three claims for relief that are relevant here. The first and second claims allege that the Service’s jeopardy determination with respect to Clear Lake and Gerber reservoirs, and the ensuing imposition of minimum water levels, violated § 7 of the ESA, 16 U. S. C. § 1536. The third claim is that the imposition of minimum water elevations constituted an implicit determination of critical habitat for 'the suckers, which violated § 4 of the ESA, 16 U. S. C. § 1533(b)(2), because it failed to take into consideration the designation’s economic impact. Each of the claims also states that the relevant action violated the APA’s prohibition of agency action that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U. S. C. § 706(2)(A).
The complaint asserts that petitioners’ use of the reservoirs and related waterways for “recreational, aesthetic and commercial purposes, as well as for their primary sources of irrigation water,” will be “irreparably damaged” by the actions complained of, App. to Pet. for Cert. 34, and that the restrictions on water delivery “recommended” by the Biological Opinion “adversely affect plaintiffs by substantially reducing the quantity of available irrigation water,” id., at 40. In essence, petitioners claim a competing interest in the water the Biological Opinion declares necessary for the preservation of the suckers.
The District Court dismissed the complaint for lack of jurisdiction. It concluded that petitioners did not have standing because their “recreational, aesthetic, and commercial interests... do not fall within the zone of interests sought to be protected by ESA.” Id., at 28. The Court of Appeals for the Ninth Circuit affirmed. Bennett v. Plenert, 63 F. 3d 915 (1995). It held that the “zone of interests” test limits the class of persons who may obtain judicial review not only under the APA, but also under the citizen-suit provision of the ESA, 16 U. S. C. § 1540(g), and that “only plaintiffs who allege an interest in the preservation of endangered species fall within the zone of interests protected by the ESA,” 63 F. 3d, at 919 (emphasis in original). We granted certiorari. 517 U. S. 1102 (1996).
In this Court, petitioners raise two questions: first, whether the prudential standing rule known as the “zone of interests” test applies to claims brought under the citizen-suit provision of the ESA; and second, if so, whether petitioners have standing under that test notwithstanding that the interests they seek to vindicate are economic rather than environmental. In this Court, the Government has made no effort to defend the reasoning of the Court of Appeals. Instead, it advances three alternative grounds for affirmance: (1) that petitioners fail to meet the standing requirements imposed by Article III of the Constitution; (2) that the ESA’s citizen-suit provision does not authorize judicial review of the types of claims advanced by petitioners; and (3) that judicial review is unavailable under the APA because the Biological Opinion does not constitute final agency action.
II
We first turn to the question the Court of Appeals found dispositive: whether petitioners lack standing by virtue of the zone-of-interests test. Although petitioners contend that their claims lie both under the ESA and the APA, we look first at the ESA because it may permit petitioners to recover their litigation costs, see 16 U. S. C. § 1540(g)(4), and because the APA by its terms independently authorizes review only when “there is no other adequate remedy in a court,” 5 U. S. C. §704.
The question of standing “involves both constitutional limitations on federal-court jurisdiction and prudential limitations on its exercise.” Warth v. Seldin, 422 U. S. 490, 498 (1975) (citing Barrows v. Jackson, 346 U. S. 249 (1953)). To satisfy the “case” or “controversy” requirement of Article III, which is the “irreducible constitutional minimum” of standing, a plaintiff must, generally speaking, demonstrate that he has suffered “injury in fact,” that the injury is “fairly traceable” to the actions of the defendant, and that the injury will likely be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U. S. 555, 560-561 (1992); Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U. S. 464, 471-472 (1982). In addition to the immutable requirements of Article III, “the federal judiciary has also adhered to a set of prudential principles that bear on the question of standing.” Id., at 474-475. Like their constitutional counterparts, these “judicially self-imposed limits on the exercise of federal jurisdiction,” Allen v. Wright, 468 U. S. 737, 751 (1984), are “founded in concern about the proper — and properly limited — role of the courts in a democratic society,” Warth, supra, at 498; but unlike their constitutional counterparts, they can be modified or abrogated by Congress, see 422 U. S., at 501. Numbered among these prudential requirements is the doctrine of particular concern in this case: that a plaintiff’s grievance must arguably fall within the zone of interests protected or regulated by the statutory provision or constitutional guarantee invoked in the suit. See Allen, supra, at 751; Valley Forge, supra, at 474-475.
The “zone of interests” formulation was first employed in Association of Data Processing Service Organizations, Inc. v. Camp, 397 U. S. 150 (1970). There, certain data processors sought to invalidate a ruling by the Comptroller of the Currency authorizing national banks to sell data processing services on the ground that it violated, inter alia, § 4 of the Bank Service Corporation Act of 1962, 76 Stat. 1132, which prohibited bank service corporations from engaging in “any activity other than the performance of bank services for banks.” The Court of Appeals had held that the banks’ data-processing competitors were without standing to challenge the alleged violation of §4. In reversing, we stated the applicable prudential standing requirement to be “whether the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question.” Data Processing, supra, at 153. Data Processing, and its companion case, Barlow v. Collins, 397 U. S. 159 (1970), applied the zone-of-interests test to suits under the APA, but later cases have applied it also in suits not involving review of federal administrative action, see Dennis v. Higgins, 498 U. S. 439, 449 (1991); Boston Stock Exchange v. State Tax Comm’n, 429 U. S. 318, 320-321, n. 3 (1977); see also Note, A Defense of the “Zone of Interests” Standing Test, 1983 Duke L. J. 447, 455-456, and nn. 40-49 (1983) (cataloging lower court decisions), and have specifically listed it among other prudential standing requirements of general application, see, e. g., Allen, supra, at 751; Valley Forge, supra, at 474-475. We have made clear, however, that the breadth of the zone of interests varies according to the provisions of law at issue, so that what comes within the zone of interests of a statute for purposes of obtaining judicial review of administrative action under the “ ‘generous review provisions’ ” of the APA may not do so for other purposes, Clarke v. Securities Industry Assn., 479 U. S. 388, 400, n. 16 (1987) (quoting Data Processing, supra, at 156).
Congress legislates against the background of our prudential standing doctrine, which applies unless it is expressly negated. See Block v. Community Nutrition Institute, 467 U. S. 340, 345-348 (1984). Cf. Associated Gen. Contractors of Cal., Inc. v. Carpenters, 459 U. S. 519, 532-533, and n. 28 (1983). The first question in the present case is whether the ESA’s citizen-suit provision, set forth in pertinent part in the margin, negates the zone-of-interests test (or, perhaps more accurately, expands the zone of interests). We think it does. The first operative portion of the provision says that “any person may commence a civil suit” — an authorization of remarkable breadth when compared with the language Congress ordinarily uses. Even in some other environmental statutes, Congress has used more restrictive formulations, such as “[any person] having an interest which is or may be adversely affected,” 33 U. S. C. § 1365(g) (Clean Water Act); see also 30 U. S. C. § 1270(a) (Surface Mining Control and Reclamation Act) (same); “[a]ny person suffering legal wrong,” 15 U. S. C. § 797(b)(5) (Energy Supply and Environmental Coordination Act); or “any person having a valid legal interest which is or may be adversely affected... whenever such action constitutes a case or controversy,” 42 U. S. C. § 9124(a) (Ocean Thermal Energy Conversion Act). And in contexts other than the environment, Congress has often been even more restrictive. In statutes concerning unfair trade practices and other commercial matters, for example, it has authorized suit only by “[a]ny person injured in his business or property,” 7 U. S. C. § 2305(c); see also 15 U. S. C. §72 (same), or only by “competitors, customers, or subsequent purchasers,” § 298(b).
Our readiness to take the term “any person” at face value is greatly augmented by two interrelated considerations: that the overall subject matter of this legislation is the environment (a matter in which it is common to think all persons have an interest) and that the obvious purpose of the particular provision in question is to encourage enforcement by so-called “private attorneys general” — evidenced by its elimination of the usual amount-in-controversy-and diversity-of-citizenship requirements, its provision for recovery.of.the costs of litigation (including even expert witness fees), and its reservation to the Government of a right of first refusal to pursue the action initially and a right to intervene later. Given these factors, we think the conclusion of expanded standing follows a fortiori from our decision in Trafficante v. Metropolitan Life Ins. Co., 409 U. S. 205 (1972), which held that standing was expanded to the full extent permitted under Article III by § 810(a) of the Civil Rights Act of 1968, 82 Stat. 85, 42 U. S. C. § 3610(a) (1986 ed.), that authorized “[a]ny person who claims to have been injured by a discriminatory housing practice” to sue for violations of the Act. There also we relied on textual evidence of a statutory scheme to rely on private litigation to ensure compliance with the Act. See 409 U. S., at 210-211. The statutory language here is even clearer, and the subject of the legislation makes the intent to permit enforcement by everyman even more plausible.
It is true that the plaintiffs here are seeking to prevent application of environmental restrictions rather than to implement them. But the “any person” formulation applies to all the causes of action authorized by § 1540(g) — not only to actions against private violators of environmental restrictions, and not only to actions against the Secretary asserting underenforcment under § 1533, but also to actions against the Secretary asserting overenforcement under § 1533. As we shall discuss below, the citizen-suit provision does favor environmentalists in that it covers all private violations of the ESA but not all failures of the Secretary to meet his administrative responsibilities; but there is no textual basis for saying that its expansion of standing requirements applies to environmentalists alone. The Court of Appeals therefore erred-in concluding that petitioners lacked standing under the zone-of-interests test to bring their claims under the ESA’s citizen-suit provision.
III
The Government advances several alternative grounds upon which it contends we may affirm the dismissal of petitioners’ suit. Because the District Court and the Court of Appeals found the zone-of-interests ground to be dispositive, these alternative grounds were not reached below. A respondent is entitled, however, to defend the judgment on any ground supported by the record, see Ponte v. Real, 471 U. S. 491, 500 (1985); Matsushita Elec. Industrial Co. v. Epstein, 516 U. S. 367, 379, n. 5 (1996). The asserted grounds were raised below, and have been fully briefed and argued here; we deem it an appropriate exercise of our discretion to consider them now rather than leave them for disposition on remand.
A
The Government’s first contention is that petitioners’ complaint fails to satisfy the standing requirements imposed by the “case” or “controversy” provision of Article III. This “irreducible constitutional minimum” of standing requires: (1) that the plaintiff have suffered an “injury in fact” — an invasion of a judicially cognizable interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) that there be a causal connection between the injury and the conduct complained of — the injury must be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court; and (3) that it be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. Defenders of Wildlife, 504 U. S., at 560-561.
Petitioners allege, among other things, that they currently receive irrigation water from Clear Lake, that the Bureau “will abide by the restrictions imposed by the Biological Opinion,” App. to Pet. for Cert. 32, and that “[t]he restrictions on lake levels imposed in the Biological Opinion adversely affect [petitioners] by substantially reducing the quantity of available irrigation water,” id., at 40. The Government contends, first, that these allegations fail to satisfy the “injury in fact” element of Article III standing because they demonstrate only a diminution in the aggregate amount of available water, and do not necessarily establish (absent information concerning the Bureau’s water allocation practices) that 'petitioners will receive less water. This contention overlooks, however, the proposition that each element of Article III standing “must be supported in the same way as any other matter on which' the plaintiff bears the burden of proof, i. e., with the manner and degree of evidence required at the successive stages of the litigation.” Defenders of Wildlife, supra, at 561. Thus, while a plaintiff must “set forth” by affidavit or other evidence “specific facts” to survive a motion for summary judgment, Fed. Rule Civ. Proc. 56(e), and must ultimately support any contested facts with evidence adduced at trial, “[a]t the pleading stage, general factual allegations of injury resulting from the defendant’s conduct may suffice, for on a motion to dismiss we ‘presum[e] that general allegations embrace those specific facts that are necessary to support the claim.’ ” Defenders of Wildlife, supra, at 561 (quoting Lujan v. National Wildlife Federation, 497 U. S. 871, 889 (1990)). Given petitioners’ allegation that the amount of available water will be reduced and that they will be adversely affected thereby, it is easy to presume specific facts under which petitioners will be injured — for example, the Bureau’s distribution of the reduction pro rata among its customers. The complaint alleges the requisite injury in fact.
The Government also contests compliance with the second and third Article III standing requirements, contending that any injury suffered by petitioners is neither “fairly traceable” to the Service’s Biological Opinion, nor “redressable” by a favorable judicial ruling, because the “action agency” (the Bureau) retains ultimate responsibility for determining whether and how a proposed action shall go forward. See 50 CFR § 402.15(a) (1995) (“Following the issuance of a biological opinion, the Federal agency shall determine whether and in what manner to proceed with the action in light of its section 7 obligations and the Service’s biological opinion”). “If petitioners have suffered injury,” the Government contends, “the proximate cause of their harm is an (as yet unidentified) decision by the Bureau regarding the volume of water allocated to petitioners, not the biological opinion itself.” Brief for Respondents 22. This wrongly equates injury “fairly traceable” to the defendant with injury as to which the defendant’s actions are the very last step in the chain of causation. While, as we have said, it does not suffice if the injury complained of is “ ‘th[e] result [of] the independent action of some third party not before the court,’ ” Defenders of Wildlife, supra, at 560-561 (emphasis added) (quoting Simon v. Eastern Ky. Welfare Rights Organization, 426 U. S. 26, 41-42 (1976)), that does not exclude injury produced by determinative or coercive effect upon the action of someone else.
By the Government’s own account, while the Service’s Biological Opinion theoretically serves an “advisory function,” 51 Fed. Reg. 19928 (1986), in reality it has a powerful coercive effect on the action agency:
“The statutory scheme... presupposes that the biological opinion will play a central role in the action agency’s decisionmaking process, and that it will typically be based on an administrative record that is fully adequate for the action agency’s decision insofar as ESA issues are concerned.... [A] federal agency that chooses to deviate from the recommendations contained in a biological opinion bears the burden of ‘articulating] in its administrative record its reasons for disagreeing with the conclusions of a biological opinion.’ 51 Fed. Reg. 19,956 (1986). In the government’s experience, action agencies very rarely choose to engage in conduct that the Service has concluded is likely to jeopardize the continued existence of a listed species.” Brief for Respondents 20-21.
What this concession omits to say, moreover, is that the action agency must not only articulate its reasons for disagreement (which ordinarily requires species and habitat investigations that are not within the action agency’s expertise), but that it runs a substantial risk if its (inexpert) reasons turn out to be wrong. A Biological Opinion of the sort rendered here alters the legal regime to which the action agency is subject. When it “offers reasonable and prudent alternatives” to the proposed action, a Biological Opinion must include a so-called “Incidental Take Statement” — a written statement specifying, among other things, those “measures that the [Service] considers necessary or appropriate to minimize [the action’s impact on the affected species]” and the “terms and conditions... that must be complied with by the Federal agency... to implement [such] measures.” 16 U. S. C. § 1536(b)(4). Any taking that is in compliance with these terms and conditions “shall not be considered to be a prohibited taking of the species concerned.” § 1536(o)(2). Thus, the Biological Opinion’s Incidental Take Statement constitutes a permit authorizing the action agency to “take” the endangered or threatened species so long as it respects the Service’s “terms and conditions.” The action agency is technically free to disregard the Biological Opinion and proceed with its proposed action, but it does so at its own peril (and that of its employees), for “any person” who knowingly “takes” an endangered or threatened species is subject to substantial civil and criminal penalties, including imprisonment. See §§ 1540(a) and (b) (authorizing civil fines of up to $25,000 per violation and criminal penalties of up to $50,000 and imprisonment for one year); see also Babbitt v. Sweet Home Chapter, Communities for Great Ore., 515 U. S. 687, 708 (1995) (upholding interpretation of the term “take” to include significant habitat degradation).
The Service itself is, to put it mildly, keenly aware of the virtually determinative effect of its biological opinions. The Incidental Take Statement at issue in the present case begins by instructing the reader that any taking of a listed species is prohibited unless “such taking is in compliance with this incidental take statement,” and warning that “[t]he measures described below are nondiscretionary, and must be taken by [the Buréau].” App. 92-93. Given all of this, and given petitioners’ allegation that the Bureau had, until issuance of the Biological Opinion, operated the Klamath Project in the same manner throughout the 20th century, it is not difficult to conclude that petitioners have met their burden— which is relatively modest at this stage of the litigation — of alleging that their injury is “fairly traceable” to the Service’s Biological Opinion and that it will “likely” be redressed— i. e., the Bureau will not impose such water level restrictions — if the Biological Opinion is set aside.
B
Next, the Government contends that the ESA’s citizen-suit provision does not authorize judicial review of petitioners’ claims. The relevant portions of that provision provide that
“any person may commence a civil suit on his own behalf—
“(A) to enjoin any person, including the United States and any other governmental instrumentality or agency... who is alleged to be in violation of any provision of this chapter or regulation issued under the authority thereof; or
“(C) against the Secretary [of Commerce or the Interior] where there is alleged a failure of the Secretary to perform any act or duty under section 1533 of this title which is not discretionary with the Secretary.” 16 U. S. C. § 1540(g)(1).
The Government argues that judicial review is not available under subsection (A) because the Secretary is not “in violation” of the ESA, and under subsection (C) because the Secretary has not failed to perform any nondiscretionary duty under § 1533.
1
Turning first to subsection (C): that it covers only violations of § 1533 is clear and unambiguous. Petitioners’ first and second claims, which assert that the Secretary has violated § 1536, are obviously not reviewable under this provision. However, as described above, the third claim alleges that the Biological Opinion implicitly determines critical habitat without complying with the mandate of § 1533(b)(2) that the Secretary “tak[e] into consideration the economic impact, and any other relevant impact, of specifying any particular area as critical habitat.” This claim does come within subsection (C).
The Government seeks to avoid this result by appealing to the limitation in subsection (C) that the duty sought to be enforced not be “discretionary with the Secretary.” But the terms of § 1533(b)(2) are plainly those of obligation rather than discretion: “The Secretary shall designate critical habitat, and make revisions thereto,... on the basis of the best scientific data available and after taking into consideration the economic impact, and any other relevant impact, of specifying any particular area as critical habitat.” (Emphasis added.) It is true that this is followed by the statement that, except where extinction of the species is at issue, “[t]he Secretary may exclude any area from critical habitat if he determines that the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat.” Ibid, (emphasis added). However, the fact that the Secretary’s ultimate decision is reviewable only for abuse of discretion does not alter the categorical requirement that, in arriving at his decision, he “tak[e] into consideration the economic impact, and any other relevant impact,” and use “the best scientific data available.” Ibid. It is rudimentary administrative law that discretion as to the substance of the ultimate decision does not confer discretion to ignore the required procedures of decisionmaking. See SEC v. Chenery Corp., 318 U. S. 80, 94-95 (1943). Since it is the omission of these required procedures that petitioners complain of, their §1533 claim is reviewable under § 1540(g)(1)(C).
2
Having concluded that petitioners’ §1536 claims are not reviewable under subsection (C), we are left with the question whether they are reviewable under subsection (A), which authorizes injunctive actions against any person “who is alleged to be in violation” of the ESA or its implementing regulations. The Government contends that the Secretary’s conduct in implementing or enforcing the ESA is not a “violation” of the ESA within the meaning of this provision. In its view, § 1540(g)(1)(A) is a means by which private parties may enforce the substantive provisions of the ESA against regulated parties — both private entities and Government agencies — but is not an alternative avenue for judicial review of the Secretary’s implementation of the statute. We agree.
The opposite contention is simply incompatible with the existence of § 1540(g)(1)(C), which expressly authorizes suit against the Secretary, but only to compel him to perform a nondiscretionary duty under § 1533. That provision would be superfluous — and, worse still, its careful limitation to § 1533 would be nullified — if § 1540(g)(1)(A) permitted suit against the Secretary for any “violation” of the ESA. It is the “ ‘cardinal principle of statutory construction’... [that] [i]t is our duty ‘to give effect, if possible, to every clause and word of a statute’... rather than to emasculate an entire section.” United States v. Menasche, 348 U. S. 528, 538 (1955) (quoting NLRB v. Jones & Laughlin Steel Corp., 301 U. S. 1, 30 (1937), and Montclair v. Ramsdell, 107 U. S. 147, 152 (1883)). Application of that principle here clearly requires us to conclude that the term “violation” does not include the Secretary’s failure to perform his duties as administrator of the ESA.
Moreover, the ESA uses the term “violation” elsewhere in contexts in which it is most unlikely to refer to failure by the Secretary or other federal officers and employees to perform their duties in administering the ESA. Section 1540(a), for example, authorizes the Secretary to impose substantial civil penalties on “[a]ny person who knowingly violates... any provision of [the ESA],” and entrusts the Secretary with the power to “remi[t] or mitigat[e]” any such penalty. We know of no precedent for applying such a provision against those who administer (as opposed to those who are regulated by) a substantive law. Nor do we think it likely that the statute meant to subject the Secretary and his officers and employees to criminal liability under § 1540(b), which makes it a crime for “[a]ny person [to] knowingly violat[e] any provision of [the ESA],” or that § 1540(e)(3), which authorizes law enforcement personnel to “make arrests without a warrant for any violation of [the ESA],” was intended to authorize war-rantless arrest of the Secretary or his delegates for “knowingly” failing to use the best scientific data available.
Finally, interpreting the term “violation” to include any errors on the part of the Secretary in administering the ESA would effect a wholesale abrogation of the APA’s “final agency action” requirement. Any procedural default, even one that had not yet resulted in a final disposition of the matter at issue, would form the basis for a lawsuit. We are loathe to produce such an extraordinary regime without the clearest of statutory direction, which is hardly present here.
Viewed in the context of the entire statute, § 1540(g) (l)(A)’s reference to any “violation” of the ESA cannot be interpreted to include the Secretary’s maladministration of the ESA. Petitioners’ claims are not subject to judicial review under § 1540(g)(1)(A).
IV
The foregoing analysis establishes that the principal statute invoked by petitioners, the ESA, does authorize review of their § 1533 claim, but does not support their claims based upon the Secretary’s alleged failure to comply with §1536. To complete our task, we must therefore inquire whether these § 1536 claims may nonetheless be brought under the Administrative Procedure Act, which authorizes a court to “set aside agency action, findings, and conclusions found to be... arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” 5 U. S. C. § 706.
A
No one contends (and it would not be maintainable) that the causes of action against the Secretary set forth in the ESA’s citizen-suit provision are exclusive, supplanting those provided by the APA. The APA, by its terms, provides a right to judicial review of all “final agency action for which there is no other adequate remedy in a court,” §704, and applies universally “except to the extent that — (1) statutes preclude judicial review; or (2) agency action is committed to agency discretion by law,” § 701(a). Nothing in the ESA’s citizen-suit provision expressly precludes review under the APA, nor do we detect anything in the statutory scheme suggesting a purpose to do so. And any contention that the relevant provision of 16 U. S. C. § 1536(a)(2) is discretionary would fly in the face of its text, which uses the imperative “shall.”
In determining whether the petitioners have standing under the zone-of-interests test to bring their APA claims, we look not to the terms of the ESA’s citizen-suit provision, but to the substantive provisions of the ESA, the alleged violations of which serve as the gravamen of the complaint. See National Wildlife Federation, 497 U. S., at 886. The classic formulation of 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:
|
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 Stevens
delivered the opinion of the Court.
Section 547(b) of the Bankruptcy Code, 11 U. S. C. § 547(b), authorizes a trustee to avoid certain property transfers made by a debtor within 90 days before bankruptcy. The Code makes an exception, however, for transfers made in the ordinary course of business, § 547(c)(2). The question presented is whether payments on long-term debt may qualify for that exception.
On December 17,1986, ZZZZ Best Co., Inc. (Debtor), borrowed $7 million from petitioner, Union Bank (Bank). On July 8, 1987, the Debtor filed a voluntary petition under Chapter 7 of the Bankruptcy Code. During the preceding 90-day period, the Debtor had made two interest payments totaling approximately $100,000 and had paid a loan commitment fee of about $2,500 to the Bank. After his appointment as trustee of the Debtor’s estate, respondent filed a complaint against the Bank to recover those payments pursuant to § 547(b).
The Bankruptcy Court found that the loans had been made “in the ordinary course of business or financial affairs” of both the Debtor and the Bank, and that both interest payments as well as the payment of the loan commitment fee had been made according to ordinary business terms and in the ordinary course of business. As a matter of law, the Bankruptcy Court concluded that the payments satisfied the requirements of § 547(c)(2) and therefore were not avoidable by the trustee. The District Court affirmed the Bankruptcy Court’s summary judgment in favor of the Bank.
Shortly thereafter, in another case, the Court of Appeals held that the ordinary course of business exception to avoidance of preferential transfers was not available to long-term creditors. In re CHG Int'l, Inc., 897 F. 2d 1479 (CA9 1990). In reaching that conclusion, the Court of Appeals relied primarily on the policies underlying the voidable preference provisions and the state of the law prior to the enactment of the 1978 Bankruptcy Code and its amendment in 1984. Thus, the Ninth Circuit concluded, its holding in CHG Int'l, Inc. dictated a reversal in this case. 921 F. 2d 968, 969 (1990). The importance of the question of law decided by the Ninth Circuit, coupled with the fact that the Sixth Circuit had interpreted § 547(c)(2) in a contrary manner, In re Finn, 909 F. 2d 903 (1990), persuaded us to grant the Bank's petition for certiorari. 500 U. 5. 915 (1991).
I
We shall discuss the history and policy of § 547 after examining its text. In subsection (b), Congress broadly authorized bankruptcy trustees to "avoid any transfer of an interest of the debtor in property" if five conditions are satisfied and unless one of seven exceptions defined in subsection (c) is applicable. In brief, the five characteristics of a voidable preference are that it (1) benefit a creditor; (2) be on account of antecedent debt; (3) be made while the debtor was insolvent; (4) be made within 90 days before bankruptcy; and (5) enable the creditor to receive a larger share of the estate than if the transfer had not been made. Section 547 also provides that the debtor is presumed to have been insolvent during the 90-day period preceding bankruptcy. § 547(f). In this case, it is undisputed that all five of the foregoing conditions were satisfied and that the interest and loan commitment fee payments were voidable preferences unless excepted by subsection (c)(2).
The most significant feature of subsection (c)(2) that is relevant to this case is the absence of any language distinguishing between long-term debt and short-term debt. That subsection provides:
“The trustee may not avoid under this section a transfer—
“(2) to the extent that such transfer was—
“(A) in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the transferee;
“(B) made in the ordinary course of business or financial affairs of the debtor and the transferee; and
“(C) made according to ordinary business terms.”
Instead of focusing on the term of the debt for which the transfer was made, subsection (c)(2) focuses on whether the debt was incurred, and payment made, in the “ordinary course of business or financial affairs” of the debtor and transferee. Thus, the text provides no support for respondent’s contention that § 547(c)(2)’s coverage is limited to short-term debt, such as commercial paper or trade debt. Given the clarity of the statutory text, respondent’s burden of persuading us that Congress intended to create or to preserve a special rule for long-term debt is exceptionally heavy. United States v. Ron Pair Enterprises, Inc., 489 U. S. 235, 241-242 (1989). As did the Ninth Circuit, respondent relies on the history and the policies underlying the preference provision.
II
The relevant history of §547 contains two chapters, one of which clearly supports, and the second of which is not inconsistent with, the Bank’s literal reading of the statute. Section 547 was enacted in 1978 when Congress overhauled the Nation’s bankruptcy laws. The section was amended in 1984. For purposes of the question presented in this case, the original version of §547 differed in one significant respect from the current version: It contained a provision that the ordinary course of business exception did not apply unless the payment was made within 45 days of the date the debt was incurred. That provision presumably excluded most payments on long-term debt from the exception. In 1984 Congress repealed the 45-day limitation but did not substitute a comparable limitation. See Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub. L. 98-353, § 462(c), 98 Stat. 378.
Respondent contends that this amendment was intended to satisfy complaints by issuers of commercial paper and by trade creditors that regularly extended credit for periods of more than 45 days. Furthermore, respondent continues, there is no evidence in the legislative history that Congress intended to make the ordinary course of business exception available to conventional long-term lenders. Therefore, respondent argues, we should follow the analysis of the Ninth Circuit and read § 547(c)(2) as protecting only short-term debt payments. Cf. In re CHG Int’l, 897 F. 2d, at 1484.
We need not dispute the accuracy of respondent’s description of the legislative history of the 1984 amendment in order to reject his conclusion. For even if Congress adopted the 1984 amendment to redress particular problems of specific short-term creditors, it remains true that Congress redressed those problems by entirely deleting the time limitation in § 547(c)(2). The fact that Congress may not have foreseen all of the consequences of a statutory enactment is not a sufficient reason for refusing to give effect to its plain meaning. Toibb v. Radloff, 501 U. S. 157, 164 (1991).
Respondent also relies on the history of voidable preferences prior to the enactment of the 1978 Bankruptcy Code. The text of the preference provision in the earlier Bankruptcy Act did not specifically include an exception for payments made in the ordinary course of business. The courts had, however, developed what is sometimes described as the “current expense” rule to cover situations in which a debtor’s payments on the eve of bankruptcy did not diminish the net estate because tangible assets were obtained in exchange for the payment. See Marshall v. Florida Nat. Bank of Jacksonville, 112 F. 2d 380, 382 (CA5 1940); 3 Collier on Bankruptcy ¶ 60.23, p. 873 (14th ed. 1977). Without such an exception, trade creditors and other suppliers of necessary goods and services might have been reluctant to extend even short-term credit and might have required advance payment instead, thus making it difficult for many companies in temporary distress to have remained in business. Respondent argues that Congress enacted § 547(c)(2) in 1978 to codify that exception, and therefore the Court should construe § 547(c)(2) as limited to the confines of the current expense rule.
This argument is not compelling for several reasons. First, it is by no means clear that § 547(c)(2) should be construed as the statutory analogue of the judicially crafted current expense rule because there are other exceptions in § 547(c) that explicitly cover contemporaneous exchanges for new value. Those provisions occupy some (if not all) of the territory previously covered by the current expense rule. Nor has respondent directed our attention to any extrinsic evidence suggesting that Congress intended to codify the current expense rule in § 547(c)(2).
The current expense rule developed when the statutory preference provision was significantly narrower than it is today. To establish a preference under the Bankruptcy Act, the trustee had to prove that the challenged payment was made at a time when the creditor had “reasonable cause to believe that the debtor [was] insolvent.” 11 U. S. C. § 96(b) (1976 ed.). When Congress rewrote the preference provision in the 1978 Bankruptcy Code, it substantially enlarged the trustee’s power to avoid preferential transfers by eliminating the reasonable cause to believe requirement for transfers made within 90 days of bankruptcy and creating a presumption of insolvency during that period. See 11 U. S. C. §§ 547(b), (c)(2), (f); H. R. Rep. No. 95-595, p. 178 (1977). At the same time, Congress created a new exception for transfers made in the ordinary course of business, 11 U. S. C. § 547(c)(2). This exception was intended to “leave undisturbed normal financial relations, because it does not detract from the general policy of the preference section to discourage unusual action by either the debtor or his creditors during the debtor’s slide into bankruptcy.” H. R. Rep. No. 95-595, at 373.
In light of these substantial changes in the preference provision, there is no reason to assume that the justification for narrowly confining the “current expense” exception to trade creditors before 1978 should apply to the ordinary course of business exception under the 1978 Code. Instead, the fact that Congress carefully reexamined and entirely rewrote the preference provision in 1978 supports the conclusion that the text of § 547(c)(2) as enacted reflects the deliberate choice of Congress.
III
The Bank and the trustee agree that § 547 is intended to serve two basic policies that are fairly described in the House Committee Report. The Committee explained:
“A preference is a transfer that enables a creditor to receive payment of a greater percentage of his claim against the debtor than he would have received if the transfer had not been made and he had participated in the distribution of the assets of the bankrupt estate. The purpose of the preference section is two-fold. First, by permitting the trustee to avoid prebankruptcy transfers that occur within a short period before bankruptcy, creditors are discouraged from racing to the courthouse to dismember the debtor during his slide into bankruptcy. The protection thus afforded the debtor often enables him to work his way out of a difficult financial situation through cooperation with all of his creditors. Second, and more important, the preference provisions facilitate the prime bankruptcy policy of equality of distribution among creditors of the debtor. Any creditor that received a greater payment than others of his class is required to disgorge so that all may share equally. The operation of the preference section to deter ‘the race of diligence’ of creditors to dismember the debtor before bankruptcy furthers the second goal of the preference section — that of equality of distribution.” Id., at 177-178.
As this comment demonstrates, the two policies are not entirely independent. On the one hand, any exception for a payment on account of an antecedent debt tends to favor the payee over other creditors and therefore may conflict with the policy of equal treatment. On the other hand, the ordinary course of business exception may benefit all creditors by deterring the “race to the courthouse” and enabling the struggling debtor to continue operating its business.
Respondent places primary emphasis,- as did the Court of Appeals, on the interest in equal distribution. See In re CHG Int’l, 897 F. 2d, at 1483-1485. When a debtor is insolvent, a transfer to one creditor necessarily impairs the claims of the debtor’s other unsecured and undersecured creditors. By authorizing the avoidance of- such preferential transfers, § 547(b) empowers the trustee to restore equal status to all creditors. Respondent thus contends that the ordinary course of business exception should be limited to short-term debt so the trustee may order that preferential long-term debt payments be returned to the estate to be distributed among all of the creditors.
But the statutory text — which makes no distinction between short-term debt and long-term debt — precludes an analysis that divorces the policy of favoring equal distribution from the policy of discouraging creditors from racing to the courthouse to dismember the debtor. Long-term creditors, as well as trade creditors, may seek a head start in that race. Thus, even if we accept the Court of Appeals’ conclusion that the availability of the ordinary business exception to long-term creditors does not directly further the policy of equal treatment, we must recognize that it does further the policy of deterring the race to the courthouse and, as the House Report recognized, may indirectly further the goal of equal distribution as well. ' Whether Congress has wisely balanced the sometimes conflicting policies underlying § 547 is not a question that we are authorized to decide.
IV
In sum, we hold that payments on long-term debt, as well as payments on short-term debt, may qualify for the ordinary course of business exception to the trustee’s power to avoid preferential transfers. We express no opinion, however, on the question whether the Bankruptcy Court correctly concluded that the Debtor’s payments of interest and the loan commitment fee qualify for the ordinary course of business exception, § 547(e)(2). In particular, we do not decide whether the loan involved in this case was incurred in the ordinary course of the Debtor’s business and of the Bank’s business, whether the payments were made in the ordinary course of business, or whether the payments were made according to ordinary business terms. These questions remain open for the Court of Appeals on remand.
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.
The Bankruptcy Court found that the Bank and Debtor executed a revolving credit agreement on December 16, 1986, in which the Bank agreed to lend the Debtor $7 million in accordance with the terms of a promissory note to be executed and delivered by the Debtor. No. 87-13692 (Bkrtcy. Ct. CD Cal., Aug. 22, 1988), App. to Pet. for Cert. 12a. On December 17, 1986, the Debtor executed and delivered to the Bank a promissory note in the principal sum of $7 million. The promissory note provided that interest would be payable on a monthly basis and would accrue on the principal balance at a rate of 0.65% per annum in excess of the Bank’s reference rate. Ibid.
App. to Pet. for Cert. 14a.
Ibid.
In re ZZZZ Best Co., Inc., No. 88-6285, 1989 U. S. Dist. LEXIS 17500, *1 (CD Cal., Aug. 4, 1989).
In so holding, the Ninth Circuit rejected the Bank's argument that the revolving line of credit in this case was not "long-term" because it was for less than one year. 921 F. 2d, at 969. Because we hold that the ordinary course of business exception applies to payments on long-term as well as short-term debt, we need not decide whether the revolving line of credit was a "long-term" debt.
11 U. S. C. § 547(b) provides:
"Except as provided in subsection (c) of this section, the trustee may avoid any transfer of an interest of the debtor in property-
"(1) to or for the benefit of a creditor;
"(2) for or on account of an antecedent debt owed by the debtor before such transfer was made;
"(3) made while the debtor was insolvent;
"(4) made-
"(A) on or within 90 days before the date of the ffling of the petition; or
"(B) between ninety days and one year before the date of the filing of the petition, if such creditor at the time of such transfer was an insider; and
"(5) that enables such creditor to receive more than such creditor would receive if-
"(A) the case were a case under chapter 7 of this title;
"(B) the transfer had not been made; and
"(C) such creditor received payment of such debt to the extent provided by the provisions of this title."
Nor does the definitional section of the Bankruptcy Code, which defines the term “debt” broadly as a “liability on a claim,” 11 U. S. C. § 101(11), distinguish between short-term debt and long-term debt.
As enacted in 1978, § 547(c) provided, in relevant part:
“The trustee may not avoid under this section a transfer—
“(2) to the extent that such transfer was—
“(A) in payment of a debt incurred in the ordinary course of business or financial affairs of the debtor and the transferee;
“(B) made not later than U5 days after such debt was incurred;
“(C) made in the ordinary course of business or financial affairs of the debtor and the transferee; and
“(D) made according to ordinary business terms.” 92 Stat. 2598 (emphasis added).
We use the term “presumably” because it is not necessary in this case to decide whether monthly interest payments on long-term debt were protected by the initial version of § 547(c)(2). Cf. In re Iowa Premium Serv. Co., Inc., 695 F. 2d 1109 (CA8 1982) (en banc) (holding that interest obligations are “incurred” when they become due, rather than when the promissory note is signed). We refer to “most” instead of “all” long-term debt payments because of the possibility that a debtor’s otherwise avoidable payment was made within 45 days of the date the long-term loan was made.
Because payments to a commercial paper purchaser within 90 days prior to bankruptcy may be preferential transfers under § 547(b), a purchaser could be assured that the payment would not be avoided under the prior version of § 547(c)(2) only if the commercial paper had a maturity of 45 days or less. Commercial issuers thus complained that the 45-day limitation lowered demand for commercial paper with a maturity in excess of 45 days. See Hearings on S. 3023 before the Subcommittee on Judicial Machinery of the Senate Committee on the Judiciary, 96th Cong., 2d Sess., 8-27 (1980) (statements of George Van Cleave, partner, Goldman, Sachs & Co., and James Ledinsky, Senior Vice President, A. G. Becker & Co.).
Trade creditors stated that normal payment periods in many industries exceeded 45 days and complained that the arbitrary 45-day limitation in § 547(c)(2) deprived these trade creditors of the protection of the ordinary course of business exception to the trustee’s power to avoid preferential transfers. See, e. g., Hearings on Bankruptcy Reform Act of 1978 before the Subcommittee on Courts of the Senate Committee on the Judiciary, 97th Cong., 1st Sess., 259-260 (1981) (statement of Vyto Gestautas on behalf of the National Association of Credit Management).
Section 60 of the 1898 Bankruptcy Act, as amended and codified in 11 U. S. C. § 96 (1976 ed.), provided in relevant part:
“(a)(1) A preference is a transfer, as defined in this title, of any of the property of a debtor to or for the benefit of a creditor for or on account of an antecedent debt, made or suffered by such debtor while insolvent and within four months before the filing by or against him of the petition initiating a proceeding under this title, the effect of which transfer will be to enable such creditor to obtain a greater percentage of his debt than some other creditor of the same class.
“(b) Any such preference may be avoided by the trustee if the creditor receiving it or to be benefited thereby or his agent acting with reference thereto has, at the time when the transfer is made, reasonable cause to believe that the debtor is insolvent. Where the preference is voidable, the trustee may recover the property ... .”
Thus, for example, § 547(c)(1) exempts a transfer to the extent that it was a “contemporaneous exchange for new value given to the debtor,” and § 547(c)(4) exempts a transfer to a creditor “to the extent that, after such transfer, such creditor gave new value to or for the benefit of the debtor . ..
In fact, the legislative history apparently does not even mention the current expense rule. See Broome, Payments on Long-Term Debt as Voidable Preferences: The Impact of the 1984 Bankruptcy Amendments, 1987 Duke L. J. 78, 97.
Indeed, the House Committee Report concludes its discussion of the trustee’s avoidance powers with the observation that the language in the preference section of the earlier Bankruptcy Act was “hopelessly complex” and had been “subject to varying interpretations. The bill undoes the numerous amendments that have been heaped on section 60 during the past 40 years, and proposes a unified and coherent section to deal with the problems created by prebankruptcy preferential transfers.” H. R. Rep. No. 95-595, p. 179 (1977). Respondent’s assumption that § 547(c)(2) was intended to preserve pre-existing law is at war with this legislative history.
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.
Opinion of the Court by
Mr. Justice Harlan,
announced by Mr. Justice Burton.
Czaplicki was injured in 1945 while working as a longshoreman on the “SS Hoegh Silvercloud,” a vessel owned by the Norwegian Shipping and Trade Mission and operated by the Kerr Steamship Company. The injury occurred when some steps, constructed by the Hamilton Marine Contracting Company, gave way, causing Czap-licki to fall about five feet. At the time, Czaplicki was employed by the Northern Dock Company, which was insured for purposes of the Longshoremen’s and Harbor Workers’ Compensation Act by the Travelers Insurance Company. Travelers, which was also the insurer of the Hamilton Company, filed notice with the Compensation Commission that any compensation claim by Czaplicki would be controverted. Three weeks after the accident, Czaplicki elected to accept compensation rather than proceed against any third parties, and, one daylater, a formal compensation award was entered by a Deputy Commissioner. Payments under the award were made by Travelers.
In 1952, Czaplicki filed a libel against the vessel, her owners and operators, and the Hamilton Company, claiming damages for his injuries on grounds of unseaworthiness and negligence. After various proceedings in the District Court for the Southern District of New York, the libel was dismissed as to all respondents, on the ground that Czaplicki was not the proper party libelant, since his election to accept compensation under the award had operated, under §§ 33 (b) and 33 (i), as an assignment to Northern and its insurer, Travelers, of his rights of action against third parties. The District Court also overruled Czaplicki’s contention that the compensation award was invalid because of alleged procedural defects, and denied his motion to add Travelers “as party libel-ant to sue in its behalf and as trustee for libelant,” or simply to add Travelers as a party. The District Court found it unnecessary, in light of this disposition of the case, to consider the defense of laches, which had been interposed by each respondent. The Court of Appeals, affirming the District Court, held the compensation award valid and the libel barred by laches; although it indicated some doubt as to the correctness of the District Court’s decision on Czaplicki’s right to maintain the suit, it did not pass on that question. We granted certiorari, 350 U. S. 872, because of the importance of these questions in the administration of the Longshoremen’s and Harbor Workers’ Compensation Act.
1. Czaplicki seeks to avoid the assignment question by attacking the compensation award itself, on the ground of asserted procedural defects. However, we think that the award must be treated as a valid one. In the first place, the alleged irregularity could not have prejudiced Czaplicki, since it resulted from a failure to afford his employer a procedural benefit which, we assume arguendo, the statute gives. The defect, if any, is one of which only the employer could complain; Czaplicki, who has not been in any way harmed by it, cannot use it as a vehicle for setting aside the award. Secondly, the supposed defect cannot be used to attack collaterally an otherwise valid award. The statute provides a means for contesting action by the Deputy Commissioner in compensation award cases, and unless that procedure is followed, the award becomes binding. In short, the defect was not one which would deprive the Deputy Commissioner of jurisdiction to enter an award.
2. Under § 33 (b) of the Compensation Act, Czaplicki’s acceptance of the compensation award had the effect of assigning his rights of action against third parties to his employer, Northern. Travelers, as Northern’s insurer, was in turn subrogated to all Northern’s rights by § 33 (i). Travelers, therefore, was the proper party to sue on those rights of action. Travelers was also the insurer of Hamilton, one of the third parties subject to suit. Hamilton had constructed the steps on which the accident occurred, and might be held liable if its negligence was the cause of Czaplicki’s injuries; it might also be subject to a claim over by Kerr or the Norwegian Trade Mission if either of them should be held liable. Cf. Ryan Stevedoring Co. v. Pan-Atlantic S. S. Corp., 350 U. S. 124. The result is that Czaplicki’s rights of action were held by the party most likely to suffer were the rights of action to be successfully enforced. In these circumstances, we cannot agree that Czaplicki is precluded by the assignment of his rights of action from enforcing those rights in an action brought by himself.
Although § 33 (b) assigns to the employer “all right of the person entitled to compensation to recover damages” against third parties when there has been acceptance of compensation under an award, this does not mean that the assignee is entitled to retain all damages in the event of a recovery against a third party. Instead, § 33 (e) specifically apportions any such recovery between the assignee and the employee whose right of action it was originally, giving to the former an amount equal to the expenses incurred in enforcing the right, expenses of medical care for the employee, and any amounts paid and payable as compensation, and to the latter any balance remaining. In a very real sense, therefore, the injured employee has an interest in his right of action even after it has been assigned. Normally, this interest will not be inconsistent with that of the assignee, for presumably the assignee will want to recoup the payments made to the employee. Since the assignee’s right to, recoup comes before the employee’s interest, and because the assignee is likely to be in a better position to prosecute any claims against a third party, control over the right of action is given to the assignee, who can either institute proceedings for the recovery of damages against a third person, “or may compromise with such third person either without or after instituting such proceeding.” § 33 (d), 33 U. S. C. § 933 (d). In giving the assignee exclusive control over the right of action, however, we think that the statute presupposes that the assignee’s interests will not be in conflict with those of the employee, and that through action of the assignee the employee will obtain his share of the proceeds of the right of action, if there is a recovery. Here, where there is such a conflict of interests, the inaction of the assignee operates to defeat the employee’s interest in any possible recovery. Since an action by Travelers would, in effect, be an action against itself, Czaplicki is the only person with sufficient adverse interest to bring suit. In this circumstance, we think the statute should be construed to allow Czaplicki to enforce, in his own name, the rights of action that were his originally.
We need not go so far as to say that by giving the employee an interest in the proceeds of a third-party action the statute places the assignee in the position of a fiduciary, cf. United States Fidelity & Guaranty Co. v. United States, 152 F. 2d 46, 48; all we hold is that, given the conflict of interests and inaction by the assignee, the employee should not be relegated to any rights he may have against the assignee, but can maintain the third-party action himself. In so holding, we recognize that one Court of Appeals has held otherwise under this same statute, see Hunt v. Bank Line, 35 F. 2d 136, as have certain state courts under similar statutes, see Taylor v. New York Central R. Co., 294 N. Y. 397, 62 N. E. 2d 777; cf. Whalen v. Athol Mfg. Co., 242 Mass. 547, 136 N. E. 600. We think, however, that allowing suit by the employee in these circumstances is the proper way to ensure him the rights given by the Compensation Act.
Travelers is, of course, a proper party to this suit, since any recovery must first go to reimburse it for amounts already paid out. If Travelers is subject to the court’s jurisdiction it should therefore be made a party, pursuant to Czaplicki’s motion, assuming that there has been proper service of process.
3. Respondents contend that since Czaplicki did not, under § 33 (a), 33 U. S. C. § 933 (a), elect to proceed against third parties, but rather chose to accept compensation, he can in no event revoke this election and maintain this suit. But, as this Court has already pointed out, “election not to sue a third party and assignment of the cause of action are two sides of the same coin.” American Stevedores, Inc. v. Porello, 330 U. S. 446, 455. Czaplicki can bring this suit not because there has been no assignment, but because in the peculiar facts here there is no other procedure by which he can secure his statutory share in the proceeds, if any, of his right of action. For the same reason, we hold that the election to accept compensation, as a step toward the compensation award, does not bar this suit.
4. The Court of Appeals found it unnecessary to consider whether Czaplicki could maintain this suit, because it was held barred in any event on account of laches. The only reason given for this holding was that both the New York and New Jersey statutes of limitations, the two that might be applicable, had run. It is well settled, however, that laches as a defense to an admiralty suit is not to be measured by strict application of statutes of limitations; instead, the rule is that “the delay which will defeat such a suit must in every case depend on the peculiar equitable circumstances of that case.” The Key City, 14 Wall. 653, 660. In cases where suit has been brought after some lapse of time, the question is whether it would be inequitable, because of the delay, to enforce the claim. Holmberg v. Armbrecht, 327 U. S. 392, 396; Southern Pacific Co. v. Bogert, 250 U. S. 483, 488-489. “Where there has been no inexcusable delay in seeking a remedy and where no prejudice to the defendant has ensued from the mere passage of time, there should be no bar to relief.” Gardner v. Panama R. Co., 342 U. S. 29, 31. This does not mean, of course, that the state statutes of limitations are immaterial in determining whether laches is a bar, but it does mean that they are not conclusive, and that the determination should not be made without first considering all the circumstances bearing on the issue.
In this case, the District Court never passed on the defense of laches, which although properly put in issue was made irrelevant by the holding that, because of the statutory assignment of his right of action, Czaplicki could not maintain this action. Not only was there no decision on laches, but there was never an opportunity for Czaplicki to introduce evidence to justify the delay, since the suit was dismissed after preliminary hearings and argument on the issue of Czaplicki’s “standing.”
When the case reached the Court of Appeals, therefore, the record was incomplete on the issue of laches. There is nothing in the record to show that Czaplicki was given any more opportunity in the. Court of Appeals to explain the delay than he had been given in the District Court. The only “finding” made by the Court of Appeals was that the running of the statutes of limitations constituted laches, and that, as we have stated, was insufficient. From all that appears, Czaplicki may have failed to bring suit earlier because he relied on the assignee of the right of action to enforce what was presumably an interest common to both of them. The record does not disclose when Czaplicki discovered the assignee’s conflicting interest, or whether there has been unjustifiable delay since that discovery. Nor has there been opportunity to prove the statement, made in an affidavit to the District Court, that the delay has in no way prejudiced the respondents. These are questions on which the parties should have been allowed to present evidence. The present record is inadequate to justify a holding that this action was barred by laches.
Since “the existence of laches is a question primarily addressed to the discretion of the trial court,” Gardner v. Panama R. Co., supra, at p. 30, we remand the case to the District Court for further proceedings not inconsistent with this opinion.
Reversed and remanded.
44 Stat. 1424, as amended, 52 Stat. 1164, 33 U. S. C. § 901 et seq.
The only reason given for controverting the claim was: “Injured is undecided whether or not to sue the 3rd party and reserves the right to controvert for such other reasons as may later appear.”
In 1946, petitioner sued the Kerr Company in the New Jersey state courts, but the suit was dismissed for improper service of process. He brought a second suit against the same company in the New York state courts, but that suit was subsequently discontinued in 1947 by his then attorney. Petitioner claims that the commencement and discontinuance of that suit were without his knowledge. Petitioner had retained his present attorney by October 4, 1948, but the present libel was not filed until 1952.
110 F. Supp. 933; 133 F. Supp. 358; the opinion of Judge Ryan dismissing the suit against Hamilton Company and the Norwegian Trade Mission is not officially reported.
33 U. S. C. § 933 (b): “Acceptance of such compensation under an award in a compensation order filed by the deputy commissioner shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person.”
33 U. S. C. § 933 (i): “Where the employer is insured and the insurance carrier has assumed the payment of the compensation, the insurance carrier shall be subrogated to all the rights of the employer under this section.”
110 F. Supp. 933.
133 F. Supp. 358.
223 F. 2d 189.
Section 19 (c), 33 U. S. C. §919 (c), provides that the Deputy Commissioner may either hold hearings on a compensation claim, or, “if no hearing is ordered within twenty days” after notice of the claim is given to the employer and other interested parties, the Deputy Commissioner can decide the claim. In this case, the award was entered only one day after the claim was filed, on the same day that notice was sent to the employer, and no hearing was ordered or held. None of the parties requested a hearing.
§ 21, 33 U. S. C. § 921.
Czaplicki also contends that the award made by the Deputy Commissioner was “little more than a temporary or interlocutory order,” and should not be considered the kind of award which operates as an assignment. But the record indicates that what the Deputy Commissioner called an “award” was in effect just that, and was sufficient to call into play the assignment provisions of the Act.
Aetna Life Ins. Co. v. Moses, 287 U. S. 530, was an action at law brought under this Act, which had been made applicable as a workmen’s compensation law in the District of Columbia. It was held that the employer was the proper party to bring the action. Since that case was decided, § 33 (i) has been added to the Compensation Act, providing that “the insurance carrier shall be subrogated to all the rights of the employer under this section.” 52 Stat. 1168, 33 U. S. C. § 933 (i). As noted in the Moses case, 287 U. S., at p. 542, n. 3, it has long been the admiralty rule that the insurer subrogated to the rights of the insured can sue in his own name. See, e. g., Liverpool & Great Western Steam Co. v. Phenix Ins. Co., 129 U. S. 397, 462; The Potomac, 105 U. S. 630, 634. Travelers was, therefore, the proper party libelant had it chosen to sue in this case. Cf. United States v. Aetna Cas. & Surety Co., 338 U. S. 366, 380-381. Doleman v. Levine, 295 U. S. 221, again an action at law, is not in point, since in that case, unlike the case at bar, there was no complete assignment of the employee’s right of action.
33 U. S. C. § 933 (e). The “present value” of amounts payable by the employer as future compensation and medical benefits is computed and retained by the employer “as a trust fund to pay such compensation and the cost of such benefits as they become due.” §33 (e)(D), 33 ü. S. C. §933 (e)(D).
Cf. Ettlinger v. Persian Rug & Carpet Co., 142 N. Y. 189, 36 N. E. 1055.
In his petition for rehearing to the court below, Czaplicki asked for “an opportunity to prove the facts which would negative laches,” although he did not attempt to set forth the facts on which he expected to rely. The petition was denied without opinion.
Cf. Admiralty Rules, No. 46½.
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:
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H
|
sc_issuearea
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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 Kennedy
delivered the opinion of the Court.
In order to be admitted to the Bar of the District Court of the Virgin Islands, an otherwise qualified attorney must demonstrate that he or she has resided in the Virgin Islands for at least one year and that, if admitted, the attorney intends to continue to reside and practice in the Virgin Islands. The question before us is whether these residency requirements are lawful.
I
Local Rule 56(b) of the District Court of the Virgin Islands provides that before an otherwise qualified attorney is admitted to the Virgin Islands Bar, he must “allege and prove to the satisfaction” of the Committee of Bar Examiners that he has “resided in the Virgin Islands for at least one year immediately preceding his proposed admission to the Virgin Islands Bar,” V. I. Code Ann., Tit. 5, App. V., Rule 56(b)(4) (1982); and that, “[i]f admitted to practice, he intends to continue to reside in and to practice law in the Virgin Islands,” Rule 56(b)(5). The rule applies not only to practice before the District Court, but also to practice before the local territorial courts.
Respondents Susan Esposito Thorstenn and Lloyd DeVos are attorneys who are members in good standing of the Bars of the States of New York and New Jersey, and who practice law in New York City. Neither respondent resides in the Virgin Islands. In the spring of 1985, respondents applied to take the Virgin Islands bar examination, but their applications were rejected by the Committee of Bar Examiners because they did not satisfy the residency requirements of Local Rule 56(b). Respondents filed this suit in the District Court against petitioner Geoffrey W. Barnard, the Chairman of the Committee of Bar Examiners, seeking a declaration that the residency requirements of Rule 56(b) violate the Privileges and Immunities Clause of Article IV of the Constitution, as interpreted by our decision in Supreme Court of New Hampshire v. Piper, 470 U. S. 274 (1985). Respondents also sought to enjoin the enforcement of Rule 56(b) against them.
On June 21, 1985, while reserving a decision on the merits, the District Court ordered that respondents be allowed to take the bar examination. They took the examination and passed. Petitioner Virgin Islands Bar Association intervened, and all parties submitted motions for summary judgment with supporting affidavits. The District Court granted summary judgment for petitioners, concluding that the reasons offered for Rule 56(b)’s residency requirements, grounded in the unique conditions in the Virgin Islands, were substantial enough to justify the discrimination against nonresidents. App. to Pet. for Cert. 64a-67a.
While the District Court’s decision was pending on appeal in the Third Circuit, we decided Frazier v. Heebe, 482 U. S. 641 (1987), where we invoked our supervisory power to invalidate certain residency requirements contained in the local rules of the United States District Court for the Eastern District of Louisiana. A divided panel of the Court of Appeals reversed the District Court’s judgment for petitioners, concluding that the reasons given for Rule 56(b) were in essence the same as those we rejected in Heebe. See Esposito v. Barnard, No. 87-3034 (CA3, Sept. 30, 1987), vacated sub nom. Thorstenn v. Barnard, 833 F. 2d 29 (1987). The case was reheard en banc, and a majority of the full Court of Appeals agreed with the original panel decision that the residency requirements of Rule 56(b) were invalid under Heebe. See 842 F. 2d 1393 (1988). The en banc court emphasized that alternative and less restrictive means, short of a residency requirement, were available to the District Court to assure that nonresident bar members would bear professional responsibilities comparable to those imposed on resident attorneys. Id., at 1396. In view of its determination that Heebe controlled the case, the Court of Appeals did not address respondents’ claim under the Privileges and Immunities Clause. 842 F. 2d, at 1397, n. 6.
We granted certiorari, 487 U. S. 1232 (1988), and now affirm.
II
In Frazier v. Heebe, supra, we invoked supervisory power over district courts of the United States to invalidate discriminatory residency requirements for admission to the Bar of the United States District Court for the Eastern District of Louisiana. The Court of Appeals in the case now before us expressed “no doubt” that our supervisory power extends to the bar requirements of the District Court of the Virgin Islands. 842 F. 2d, at 1396.
Without attempting to define the limits of our supervisory power, we decline to apply it in this case. Both the nature of the District Court of the Virgin Islands and the reach of its residency requirements implicate interests beyond the federal system. As to the former, the District Court, which was given its current form and jurisdiction by Congress in the Revised Organic Act of 1954, 68 Stat. 506, see 48 U. S. C. §§ 1611-1616 (1982 ed. and Supp. IV); see generally §§ 1541-1645, is not a United States district court, but an institution with attributes of both a federal and a territorial court. Although it is vested with the jurisdiction of a United States district court, see 48 U. S. C. § 1612(a) (1982 ed., Supp. IV), the District Court also has original jurisdiction over certain matters of local law not vested in the local courts of the Virgin Islands, see § 1612(b), as well as concurrent jurisdiction with the local courts over certain criminal matters, see § 1612 (c). It also serves as an appellate court for decisions rendered by the local courts. See 48 U. S. C. § 1613a (1982 ed., Supp. IV). In fact, Congress provides in the Revised Organic Act that, for certain purposes, the District Court “shall be considered a court established by local law.” § 1612(b). The application of Rule 56(b) itself similarly extends beyond practice in the federal system. Unlike the rule in Heebe, which was confined to practice before the United States District Court, Rule 56(b) applies to admission to the Bar of the Virgin Islands, and so governs practice before the territorial courts. See n. 1, supra.
Because these territorial interests are intertwined with the operation of Rule 56, we decline to examine this case as an issue of supervisory power.
HH I — I 1 — 4
Respondents also contend that Rule 56(b) violates the Privileges and Immunities Clause of Article IV of the Constitution, which Congress has made applicable to the Virgin Islands in the Revised Organic Act. See 48 U. S. C. § 1561. Petitioners concede that the District Court is an instrumentality of the Government of the Virgin Islands and is subject to the Privileges and Immunities Clause through the Revised Organic Act. Tr. of Oral Arg. 5-6.
Article IV, § 2, of the Constitution provides that the “Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.” When a challenged restriction deprives nonresidents of a privilege or immunity protected by this Clause, it is invalid unless “(i) there is a substantial reason for the difference in treatment; and (ii) the discrimination practiced against nonresidents bears a substantial relationship to the State’s objective.” Supreme Court of New Hampshire v. Piper, supra, at 284; see Supreme Court of Virginia v. Friedman, 487 U. S. 59, 65 (1988). In deciding whether the discrimination bears a substantial relation to the State’s objectives, we consider, among other things, whether less restrictive means of regulation are available. Piper, 470 U. S., at 284.
It is by now well settled that the practice of law is a privilege protected by Article IV, § 2, and that a nonresident who passes a state bar examination and otherwise qualifies for practice has an interest protected by the Clause. See Friedman, supra, at 65; Piper, supra, at 279-283. We need consider here only whether there are substantial reasons to support treating qualified nonresident attorneys differently, and whether the means chosen by the District Court, total exclusion from the Bar, bear a close or substantial relation to the Territory’s legitimate objectives.
Petitioners offer five justifications for the residency requirements of Rule 56(b), which track the reasons recited by the District Court. First, petitioners contend that the geographical isolation of the Virgin Islands, together with irregular airline and telephone service with the mainland United States, will make it difficult for nonresidents to attend court proceedings held with little advance notice. Second, petitioners cite the District Court’s finding that the delay caused by trying to accommodate the schedules of nonresident attorneys would increase the massive caseload under which that court suffers. Third, petitioners contend that delays in publication and lack of access to local statutes, regulations, and court opinions will prevent nonresident attorneys from maintaining an adequate level of competence in local law. Fourth, petitioners argue that the Virgin Islands Bar does not have the resources for adequate supervision of a nationwide bar membership. Finally, petitioners exert much energy arguing that the residency requirements of Rule 56(b) are necessary to apply Local Rule 16 in a strict and fair manner. That Rule requires all active members of the Bar to represent indigent criminal defendants on a regular basis. See V. I. Code Ann., Tit. 5, App. V, Rule 16 (1982). We find none of these justifications sufficient to meet the Virgin Island’s burden of demonstrating that the discrimination against nonresidents by Rule 56(b) is warranted by a substantial objective and bears a close or substantial relation to that objective.
The answer to petitioners’ first justification, based on the geographical isolation of the Virgin Islands and the unreliable airline and telephone service, is found in Piper. In that case, as here, the Bar argued that “[e]ven the most conscientious lawyer residing in a distant State may find himself unable to appear in court for an unscheduled hearing or proceeding.” 470 U. S., at 286. We did not find this a sufficient justification for a residency requirement for two reasons. First, we found it likely that a high percentage of nonresidents who took the trouble to take the state bar examination and to pay the annual dues would reside in a place convenient to New Hampshire. Id,., at 286-287. Although that observation is not applicable here, we went on to hold in Piper that, for lawyers who reside a great distance from New Hampshire, the State could protect its interests by requiring the lawyer to retain a local attorney who will be available for unscheduled meetings and hearings. Id., at 287. The same solution is available to the Virgin Islands. The exclusion of nonresidents from the bar is not substantially related to the District Court’s interest in assuring that counsel will be available on short notice for unscheduled proceedings.
Petitioners’ second proffered justification is similar to their first. The District Court found that because of its unusually large and increasing caseload, it could not countenance interruptions caused by nonresident lawyers attempting to reach the Virgin Islands from the mainland, or conflicts with their appearances on the mainland. To the extent this justification reiterates the point we have addressed above, the same response applies. Any burden on the Virgin Islands court system to accommodate travel schedules of nonresidents can be relieved in substantial part by requiring nonresidents to associate with local counsel. The large caseload of the Virgin Islands District Court does not alter the analysis. Quite aside from the paradox in citing extreme caseload as the reason to exclude more attorneys, it is clear that a State, or a Territory to which the Privileges and Immunities Clause applies, may not solve the problem of congested court dockets by discriminating against nonresidents. Nor do we see the problem of conflicting court appearances as justifying the exclusion of nonresidents from the bar. The problem is not unique to the Virgin Islands. A court in New Jersey may be inconvenienced to some extent by a request to accommodate the conflicting court appearance of a nonresident attorney in New York. But that does not justify closing the New Jersey Bar to New York residents. Further, the District Court may make appropriate orders for prompt appearances and speedy trials.
Nor are we persuaded by petitioners’ claim that the delay in publication of local law requires exclusion of nonresidents because they will be unable to maintain an adequate level of professional competence. As we said in Piper, we will not assume that “a nonresident lawyer — any more than a resident — would disserve his clients by failing to familiarize himself with the [local law].” Id., at 285. We can assume that a lawyer who anticipates sufficient practice in the Virgin Islands to justify taking the bar examination and paying the annual dues, see ibid., will inform himself of the laws of the Territory. And although petitioners allege that the most recent legal materials, such as District Court opinions and local statutes and regulations, are not available on a current basis, this does not justify exclusion of nonresidents. If legal materials are not published on a current basis, we do not see how this is more of a problem for nonresidents than residents. All that petitioners allege on this point is that residents can review slip opinions by visiting the offices of the law clerks for the District Court judges. See Affidavit of Patricia D. Steele, App. 45. We do not think it either realistic or practical to assume that residents resort to this practice with regularity, or that nonresidents, faced with the occasional need to do so, cannot find some adequate means to review unpublished materials. We note, moreover, that the record discloses that after the initial affidavits were submitted by petitioners in this case, the Virgin Islands Bar Association Committee on Continuing Legal Education began a subscription service for all opinions of the District Court and the territorial courts, available to all members of the bar. See Affidavit of William L. Blum, App. 51. In short, we do not think the alleged difficulties in maintaining knowledge of local law can justify the drastic measure of excluding all nonresidents as a class.
Petitioners’ fourth contention, that the Virgin Islands Bar Association does not have the resources and personnel for adequate supervision of the ethics of a nationwide bar membership, is not a justification for the discrimination imposed here. Increased bar membership brings increased revenue through dues. Each lawyer admitted to practice in the Virgin Islands pays an initial fee of $200 to take the bar examination, annual bar association dues of $100, and an annual license fee of $500. There is no reason to believe that the additional moneys received from nonresident members will not be adequate to pay for any additional administrative burden. To the extent petitioners fear that the Bar will be unable to monitor the ethical conduct of nonresident practitioners, respondents note that petitioners can, and do, rely on character information compiled by the National Conference of Bar Examiners. In this regard, the monitoring problems faced by the Virgin Islands Bar are no greater than those faced by any mainland State with limited resources.
The final reason offered by petitioners for Rule 56(b)’s residency requirements is somewhat more substantial, though ultimately unavailing. Under District Court Rule 16, each active member of the Virgin Islands Bar must remain available to accept appointments to appear on behalf of indigent criminal defendants. See V. I. Code Ann., Tit. 5, App. V, Rule 16(A) (1982). According to the affidavit of the President of the Virgin Islands Bar Association, each member can expect to receive appointments about four times per year. App. 44. Once appointed, it is the duty of the lawyer “to communicate with the defendant at his place of incarceration as promptly as possible and not later than five days from the date of the clerk’s mailing of the order of appointment.” Rule 16(B)(f). Although the statute does not specifically so provide, the District Court interprets Rule 16 tc require that only the appointed attorney may appear on behalf of the criminal defendant. See App. to Pet. for Cert. 66a. The District Court found that, in light of this individual appearance requirement and the strict time constraints imposed by the Speedy Trial Act, 18 U. S. C. §§3161-3174, it would be virtually impossible for this system of appointed counsel to work with nonresident attorneys. App. to Pet. for Cert. 65a-66a.
In Piper, we recognized that a State can require nonresidents to share in the burden of representing indigent criminal defendants as a condition for practice before the Bar. 470 U. S., at 287. That, however, is not quite what is at issue here. The question in this case is whether bar admission can be denied to a nonresident because at times it may not be feasible for him to appear personally to represent his share of indigent defendants. We determine that this requirement is too heavy a burden on the privileges of nonresidents and bears no substantial relation to the District Court’s objective. Petitioners offer no persuasive reason why the strong interests in securing representation for indigent criminal defendants cannot be protected by allowing an appointed nonresident attorney to substitute a colleague in the event he is unable to attend a particular appearance. Further, contrary to the District Court’s characterization of the personal appearance requirement as a hard and fast rule, we must assume that in some circumstances it would in fact be detrimental to the goal of competent representation for criminal defendants to require the appointed attorney, whether a resident or nonresident, to appear personally. For instance, where the bar member is an expert in trusts and estates, but has no prior experience in criminal procedure, it would seem counterproductive to the interests that Rule 16 is designed to serve to require the appointed attorney to make an individual appearance. The text of Rule 16 appears to recognize as much in its explicit provision that, where the interests of justice so require, the District Court may substitute one appointed counsel for another. See V. I. Code Ann., Tit. 5, App. V, Rule 16(B)(j) (1982).
Petitioners’ only effort to explain why this seemingly more sensible and less intrusive alternative would not work is to predict that resident attorneys would not be willing to make the additional appearances required where nonresidents are unavailable. Such speculation, however, is insufficient to justify discrimination against nonresidents. As respondents point out, if handling indigent criminal cases is a requirement of admission to the Bar, a nonresident knows that he must either appear himself or arrange with a resident lawyer to handle the case when he is unavailable. If the nonresident fails to make all arrangements necessary to protect the rights of the defendant, the District Court may take appropriate action. This possibility does not, however, justify a blanket exclusion of nonresidents.
IV
In sum, we hold that petitioners neither advance a substantial reason for the exclusion of nonresidents from the Bar, nor demonstrate that discrimination against nonresidents bears a close or substantial relation to the legitimate objectives of the court’s Rule. When the Privileges and Immunities Clause was made part of our Constitution, commercial and legal exchange between the distant States of the Union was at least as unsophisticated as that which exists today between the Virgin Islands and the mainland United States. Nevertheless, our Founders, in their wisdom, thought it important to our sense of nationhood that each State be required to make a genuine effort to treat nonresidents on an equal basis with residents. By extending the Privileges and Immunities Clause to the Virgin Islands, Congress has made the same decision with respect to that Territory.
The residency requirements of Rule 56(b) violate the Privileges and Immunities Clause of Article IV, § 2, of the Constitution, as extended to the Virgin Islands by 48 U. S. C. § 1561. Accordingly, the judgment of the Court of Appeals is affirmed.
It is so ordered.
This is true because “[t]he Virgin Islands Bar Association [is] an integrated bar association comprising all attorneys admitted to practice in the District Court of the Virgin Islands pursuant to the provisions of Rule 56 . . . Rule 51(a), and “[n]o attorney may practice law in the Virgin Islands who is not an active or government member of the Virgin Islands Bar Association . . . except pursuant to the provisions in the District Court’s rules governing pro hac vice participation in litigation and limited participation by inactive members of the bar, Rule 51(b).
The District Court decided this case on cross-motions for summary-judgment after the parties had submitted affidavits that offered conflicting accounts of, inter alia, the ease of travel and communications between the Virgin Islands and the continental United States. See App. 32-46. The Court of Appeals concluded that, in light of the justifications we rejected in Piper and Heebe, these conflicting affidavits did not create an issue of material fact. See 842 F. 2d 1393, 1395, and n. 3 (CA3 1988). To the extent that any points of factual disagreement are material to our analysis here, we have assumed the facts included in petitioners’ affidavits to be true.
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:
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B
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sc_issuearea
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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 Blackmun
delivered the opinion of the Court.
This is the latest chapter in the long-lasting litigation between the Federal Government and the States of the Gulf Coast concerning ownership of the seabed, minerals, and other natural resources underlying the Gulf of Mexico. The particular and narrow issue presented here is whether the waters of Mississippi Sound are inland waters. If the Sound constitutes inland waters, as the States of Alabama and Mississippi contend, then these States own the lands submerged under the Sound. If the Sound in substantial part does not constitute inland waters, as the Government contends, then the United States owns the lands submerged under several “enclaves” of high seas within the Sound. We conclude that Mississippi Sound qualifies as a historic bay, and that the waters of the Sound, therefore, are inland waters.
H
The Submerged Lands Act of 1953, 67 Stat. 29, 43 U. S. C. § 1301 et seq., confirms to each State title to and ownership of the lands beneath navigable waters within the State’s boundaries. § 1311(a). The Act also confirms in each coastal State a seaward boundary three geographical miles distant from its coastline. § 1312. A State bordering on the Gulf of Mexico, however, may be entitled to a historic seaward boundary beyond three geographical miles and up to three marine leagues (approximately nine geographical miles) distant from its coastline. §§ 1301(b), 1312. The Act defines the term “coast line” as “the line of ordinary low water along that portion of the coast which is in direct contact with the open sea and the line marking the seaward limit of inland waters.” § 1301(c). The first part of this definition is relatively easy to apply. The second part — requiring determination of “the line marking the seaward limit of inland waters” — is more difficult to apply because the term “inland waters” is not defined in the Act.
In United States v. Louisiana, 363 U. S. 1 (1960), this Court determined, among other things, that the States of Alabama and Mississippi are not entitled under the Submerged Lands Act to a historic seaward boundary three marine leagues distant from their coastlines. Rather, the Court held, these two States are entitled, as against the United States, to all the lands, minerals, and other natural resources underlying the Gulf of Mexico, extending seaward from their coastlines for a distance of no more than three geographical miles. Id., at 79-82, 83 (opinion); United States v. Louisiana, 364 U. S. 502, 503 (1960) (decree). The Court, however, did not express any opinion as to the precise location of the coastline from which the 3-mile belt is to be measured. 363 U. S., at 82, nn. 135 and 139. The Court merely noted, in accordance with the above-mentioned definition in §2(c) of the Submerged Lands Act, 43 U. S. C. § 1301(c), that “the term ‘coast line’ means the line of ordinary low water along that portion of the coast which is in direct contact with the open sea and the line marking the seaward limit of inland waters.” 364 U. S., at 503. See also 363 U. S., at 83. The Court retained jurisdiction to entertain further proceedings, including proceedings to resolve any dispute in locating the relevant coastline. Ibid.; 364 U. S., at 504.
As has been noted, locating the coastline requires the determination of the seaward limit of “inland waters.” Following the Court’s decision in United States v. Louisiana, a disagreement arose between the United States and the States of Alabama and Mississippi concerning the status of Mississippi Sound as inland waters. The Sound is a body of water immediately south of the mainland of the two States. It extends from Lake Borgne at the west to Mobile Bay at the east, and is bounded on the south by a line of barrier islands. These islands, from west to east, are Isle au Pitre, Cat Island, Ship Island, Horn Island, Petit Bois Island, and Dauphin Island. The Sound is approximately 80 miles long and 10 miles wide.
The two States contend that the whole of Mississippi Sound constitutes “inland waters.” Under this view, the coastline of the States consists of the lines of ordinary low water along the southern coasts of the barrier islands together with appropriate lines connecting the barrier islands. These latter lines mark the seaward limit of Mississippi Sound. The United States, on the other hand, denies the inland-water status of Mississippi Sound. Under its view, the coastline of the States generally consists of the lines of ordinary low water along the southern mainland and around each of the barrier islands.
Under the States’ view, then, the States own all the lands underlying Mississippi Sound, as well as the lands underlying the Gulf of Mexico extending seaward for a distance of three geographical miles from the southern coasts of the barrier islands and the lines connecting those islands. Under the United States’ view, on the other hand, the States own only those lands underlying Mississippi Sound and the Gulf of Mexico that are within three geographical miles of the mainland coast or of the coasts of the barrier islands. There are several areas within Mississippi Sound that are more than three miles from any point on these coasts. Under the United States’ view, those areas constitute “enclaves” or pockets of high seas, and the lands underlying them belong to the United States.
To resolve this dispute over the inland-water status of Mississippi Sound, the two States and the United States filed motions and cross-motions for the entry of a supplemental decree. The Court referred these pleadings to its Special Master, the Honorable Walter P. Armstrong, Jr., who already had been appointed in United States v. Louisiana (Louisiana Boundary Case), 394 U. S. 11 (1969). See 444 U. S. 1064 (1980); 445 U. S. 923 (1980). See also 457 U. S. 1115 (1982). Following extended proceedings, the Special Master has submitted his Report to this Court.
I — I
As noted above, the Submerged Lands Act employs but does not define the term “inland waters.” In United States v. California, 381 U. S. 139, 161-167 (1965), this Court observed that Congress had left to the Court the task of defining “inland waters” for purposes of the Submerged Lands Act. The Court for those purposes has adopted the definitions provided in the Convention on the Territorial Sea and the Contiguous Zone, [1964] 15 U. S. T. (pt. 2) 1607, T. I. A. S. No. 5639 (the Convention). 381 U. S., at 165. See also Louisiana Boundary Case, 394 U. S., at 35; United States v. Maine (Rhode Island and New York Boundary Case), 469 U. S. 504, 513 (1985).
The Convention, however, uses terminology differing somewhat from the terminology of the Submerged Lands Act. In particular, the Convention uses the term “baseline” to refer to the “coast line,” and it uses the term “territorial sea” to refer to the 3-geographical-mile belt extending seaward from the coastline. The territorial sea is one of the three zones into which, in international law, the sea is divided. The Court so explained in the Louisiana Boundary Case:
“Under generally accepted principles of international law, the navigable sea is divided into three zones, distinguished by the nature of the control which the contiguous nation can exercise over them. Nearest to the nation’s shores are its inland, or internal waters. These are subject to the complete sovereignty of the nation, as much as if they were a part of its land territory, and the coastal nation has the privilege even to exclude foreign vessels altogether. Beyond the inland waters, and measured from their seaward edge, is a belt known as the marginal, or territorial, sea. Within it the coastal nation may exercise extensive control but cannot deny the right of innocent passage to foreign nations. Outside the territorial sea are the high seas, which are international waters not subject to the dominion of any single nation.” 394 U. S., at 22-23 (footnotes omitted).
Article 3 of the Convention provides the general rule for determining the “baseline”:
“Except where otherwise provided in these articles, the normal baseline for measuring the breadth of the territorial sea is the low-water line along the coast as marked on large-scale charts officially recognized by the coastal State.”
The Convention, however, provides several exceptions to the general rule pursuant to which Mississippi Sound might qualify as inland waters.
First, Article 4 of the Convention permits a nation to employ the method of straight baselines in delimiting its coastline. Article 4(1) provides in pertinent part:
“In localities where the coast line is deeply indented and cut into, or if there is a fringe of islands along the coast in its immediate vicinity, the method of straight baselines joining appropriate points may be employed in drawing the baseline from which the breadth of the territorial sea is measured.”
If the method of straight baselines were applied to the coast of Alabama and Mississippi, the coastline would be drawn by connecting the barrier islands, thus enclosing Mississippi Sound as inland waters. The Court has held, however, that the method of straight baselines is applicable only if the Federal Government has chosen to adopt it. See Louisiana Boundary Case, 394 U. S., at 72-73; United States v. California, 381 U. S., at 167-169. In the present case, the Special Master concluded that the United States has not adopted the straight baseline method.
Second, Article 7 of the Convention provides a set of rules for determining whether a body of water qualifies as inland waters because it is a “juridical bay.” Under Article 7(2), such a bay is defined to be “a well-marked indentation whose penetration is in such proportion to the width of its mouth as to contain landlocked waters and constitute more than a mere curvature of the coast.” In addition, the area of the indentation must be “as large as, or larger than, that of the semicircle whose diameter is a line drawn across the mouth of that indentation.” And the closing line of the bay must not exceed 24 miles. The Special Master concluded that Mississippi Sound satisfies these criteria and thus qualifies as a juridical bay. In reaching this conclusion, the Master determined that Dauphin Island was to be treated as part of the mainland. The closing line drawn from the easternmost point of Isle au Pitre to the westernmost point of Dauphin Island, connecting each of the intervening barrier islands, crosses water gaps totaling less than 24 miles in length.
Finally, Article 7(6) of the Convention indicates that a body of water can qualify as inland waters if it is a “historic bay.” The Convention does not define the term “historic bay.” The Special Master concluded that Mississippi Sound qualifies as a historic bay under the tests noted in United States v. California, 381 U. S., at 172, and United States v. Alaska, 422 U. S. 184, 189 (1975).
The Special Master, accordingly, recommended to this Court that a decree be entered in favor of Alabama and Mississippi.
The United States and the States of Alabama and Mississippi respectively filed exceptions to the Master’s Report. The United States argued that the Master erred in concluding that Mississippi Sound is both a juridical bay and a historic bay; it claims that it is neither. Alabama and Mississippi agreed with those conclusions of the Special Master, but argued that there also were alternative grounds for concluding that Mississippi Sound constitutes inland waters. In particular, the States argued that their Acts of Admission established their boundaries along the southern coast of the barrier islands; that Mississippi Sound qualifies as inland waters under the straight baseline method of Article 4 of the Convention and prior United States practice; that Mississippi Sound qualifies as a juridical bay regardless of the characterization of Dauphin Island as a “mainland headland”; and that even if the whole of Mississippi Sound is not a juridical bay, a smaller juridical bay exists at the eastern end of the Sound.
We have independently reviewed the record, as we must. See Mississippi v. Arkansas, 415 U. S. 289, 291-292, 294 (1974); Colorado v. New Mexico, 467 U. S. 310, 317 (1984); Rhode Island and New York Boundary Case, 469 U. S., at 506. Upon that review, we conclude that the Special Master correctly determined that Mississippi Sound is a historic bay. We therefore need not, and do not, address the exceptions presented by the States of Alabama and Mississippi or those exceptions of the United States that relate to the question whether Mississippi Sound qualifies as a juridical bay under Article 7 of the Convention.
H-f I — I I — I
The term historic bay” is not defined in the Convention, and there is no complete accord as to its meaning. The Court has stated that a historic bay is a bay “over which a coastal nation has traditionally asserted and maintained dominion with the acquiescence of foreign nations.” United States v. California, 381 U. S., at 172. See also United States v. Alaska, 422 U. S., at 189; Louisiana Boundary Case, 394 U. S., at 23. The Court also has noted that there appears to be general agreement that at least three factors are to be taken into consideration in determining whether a body of water is a historic bay: (1) the exercise of authority over the area by the claiming nation; (2) the continuity of this exercise of authority; and (3) the acquiescence of foreign nations. See United States v. Alaska, 422 U. S., at 189; Louisiana Boundary Case, 394 U. S., at 23-24, n. 27. An authoritative United Nations study concludes that these three factors require that “the coastal State must have effectively exercised sovereignty over the area continuously during a time sufficient to create a usage and have done so under the general toleration of the community of States.” Juridical Regime of Historic Waters, Including Historic Bays 56, U. N. Doc. A/CN.4/143 (1962) (hereinafter Juridical Regime). In addition, there is substantial agreement that a fourth factor to be taken into consideration is the vital interests of the coastal nation, including elements such as geographical configuration, economic interests, and the requirements of self-defense. See id., at 38, 56-58; 1 Shalo-witz, at 48-49. See also Fisheries Case (U. K. v. Nor.), 1951 I. C. J. 116, 142. In the present case, the facts establish that the United States effectively has exercised sovereignty over Mississippi Sound as inland waters from the time of the Louisiana Purchase in 1803 until 1971, and has done so without protest by foreign nations.
A
Mississippi Sound historically has been an intracoastal waterway of commercial and strategic importance to the United States. Conversely, it has been of little significance to foreign nations. The Sound is shallow, ranging in depth generally from 1 to 18 feet except for artificially maintained channels between Cat Island and Ship Island leading to Gulf-port, Miss., and between Horn Island and Petit Bois Island leading to Pascagoula, Miss. Outside those channels, it is not readily navigable for oceangoing vessels. Furthermore, it is a cul de sac, and there is no reason for an oceangoing vessel to enter the Sound except to reach the Gulf ports. The historic importance of Mississippi Sound to vital interests of the United States, and the corresponding insignificance of the Sound to the interests of foreign nations, lend support to the view that Mississippi Sound constitutes inland waters.
Throughout most of the 19th century, the United States openly recognized Mississippi Sound as an inland waterway of importance for commerce, communications, and defense. Early in this period the Nation took steps to enhance and protect its interests in the Sound. On February 8, 1817, the House of Representatives listed among objects of national importance several “improvements' requisite to afford the advantages of internal navigation and intercourse throughout the United States and its Territories,” including “as a more distant object, a canal communication, if practicable, from the Altamaha and its waters to Mobile, and from thence to the Mississippi.” H. R. Doc. No. 427, 14th Cong., 2d Sess., reprinted in 2 American State Papers 420, 422 (1834). This project ultimately became the Intracoastal Waterway through Mississippi Sound. On February 28, 1822, the House Committee on Military Affairs issued a Report that recognized the importance of the intracoastal communication between New Orleans and Mobile Bay through what an 1820 letter reprinted in the Report described as “the little interior sea, comprised between the main and the chain of islands, bounded by Cat Island to the west, and Dauphin Island to the east.” H. R. Rep. No. 51, 17th Cong., 1st Sess., 7.
Defense of this important waterway has been a longstanding concern of the United States. On April 20, 1836, the Senate passed a resolution calling upon the Secretary of War to survey the most eligible sites for a fortification suitable for the defense of Mississippi Sound and the commerce along it. See S. Rep. No. 490, 26th Cong., 1st Sess., 1 (1840). A subsequent resolution instructed the Senate Committee on Military Affairs to study the expediency of erecting a fort on the western extremity of Ship Island. See S. Rep. No. 618, 26th Cong., 1st Sess., 1 (1840). In response to an inquiry pursuant to this resolution, the War Department noted: “The defenses indicated would cover one of the channels leading from the gulf into the broad interior water communication extending from Lake Borgne to the bay of Mobile.” Id., at 2.
Ship Island was reserved for military purposes by an Executive Order of August 30, 1847. In 1858, the War Department, responsive to an appropriation made by Congress, see the Act of Mar. 3, 1857, 11 Stat. 191, 192, authorized the building of a fort on the island. It was to be constructed at the island’s west end, and to command the pass into Mississippi Sound between Ship and Cat Islands. Forty-eight cannons were ordered to arm the fort. During the War Between the States, the fort was occupied alternately by Union and Confederate troops. It was finally abandoned in 1875. In 1879, the United States erected a lighthouse on the central section of the island.
The United States argues that this official recognition of Mississippi Sound as an internal waterway of commercial and strategic importance has no relevance to the Sound’s status as a historic bay. It would support this argument with a citation to the 1962 United Nations study of historic waters. Juridical Regime, at 56-58. The cited pages of the study discuss the view taken by some authors and governments that such circumstances as geographic configuration, requirements of self-defense, or other vital interests of the coastal state may justify a claim to historic-bay status without the necessity of establishing long usage. The study notes, id., at 58, that “[tjhere is undoubtedly some justification for this view,” but ultimately suggests that it' does not make sense for “historic title” to be claimed in circumstances where the historic element is wholly absent. Ibid. The study, however, does not suggest that such circumstances as geographic configuration and vital interests are irrelevant to the question whether a body of water is a historic bay and, indeed, it affirmatively indicates that such circumstances can fortify a claim to “historic bay” status that is based on usage.
In any event, the evidence discussed above does not merely demonstrate that Mississippi Sound is presently important to vital interests of the United States. Rather, the evidence demonstrates that the United States historically and expressly has recognized Mississippi Sound as an important internal waterway and has exercised sovereignty over the Sound on that basis throughout much of the 19th century.
B
The United States continued openly to assert the inland water status of Mississippi Sound throughout the 20th century until 1971. Prior to its ratification of the Convention on March 24, 1961, the United States had adopted a policy of enclosing as inland waters those areas between the mainland and off-lying islands that were so closely grouped that no entrance exceeded 10 geographical miles. This 10-mile rule represented the publicly stated policy of the United States at least since the time of the Alaska Boundary Arbitration in 1903. There is no doubt that foreign nations were aware that the United States had adopted this policy. Indeed, the United States’ policy was cited and discussed at length by both the United Kingdom and Norway in the celebrated Fisheries Case (U. K. v. Nor.), 1951 I. C. J. 116. Nor is there any doubt, under the stipulations of the parties in this case, that Mississippi Sound constitutes inland waters under that view.
The United States contends that its earlier adoption of and adherence to a general formulation of coastline delimitation under which Mississippi Sound would have qualified as inland waters is not a sufficiently specific claim to the Sound as inland waters to establish it as a historic bay. In the present case, however, the general principles in fact were coupled with specific assertions of the status of the Sound as inland waters. The earliest such assertion in the 20th century occurred in Louisiana v. Mississippi, 202 U. S. 1 (1906). In that case, the Court determined the location of the boundary between Louisiana and Mississippi in the waters of Lake Borgne and Mississippi Sound. The Court described the Sound as “an inclosed arm of the sea, wholly within the United States, and formed by a chain of large islands, extending westward from Mobile, Alabama, to Cat Island. The openings from this body of water into the Gulf are neither of them six miles wide.” Id., at 48. The Court ruled that the doctrine of “thalweg” was applicable to determine the exact location of the boundary separating Louisiana from Mississippi in Lake Borgne and Mississippi Sound. Under that doctrine, the water boundary between States is defined as the middle of the deepest or most nayigable channel, as distinguished from the geographic center or a line midway between the banks. See Texas v. Louisiana, 410 U. S. 702, 709-710 (1973); Louisiana v. Mississippi, 466 U. S. 96, 99-101 (1984). The Court concluded that the “principle of thalweg is applicable,” not only to navigable rivers, but also to “sounds, bays, straits, gulfs, estuaries and other arms of the sea.” 202 U. S., at 50. The Court rejected the contention that the doctrine did not apply in Lake Borgne and Mississippi Sound because those bodies were “open sea.” Id., at 51-52. The Court noted that the record showed that Lake Borgne and the relevant part of Mississippi Sound are not open sea but “a very shallow arm of the sea, having outside of the deep water channel an inconsiderable depth.” Id., at 52. The Court clearly treated Mississippi Sound as inland waters, under the category of “bays wholly within [the Nation’s] territory- not exceeding two marine leagues in width at the mouth.” Ibid.
The United States argues that the language in Louisiana v. Mississippi does not constitute a holding that Mississippi Sound is inland waters. It appears to us, however, that the Court’s conclusion that the Sound is inland waters was essential to its ruling that the doctrine of thalweg was applicable. The United States also argues that it cannot be bound by the holding because it was not a party in that case. The significance of the holding for the present case, however, is not its effect as precedent in domestic law, but rather its effect on foreign nations that would be put on notice by the decision that the United States considered Mississippi Sound to be inland waters.
If foreign nations retained any doubt after Louisiana v. Mississippi that the official policy of the United States was to recognize Mississippi Sound as inland waters, that doubt must have been eliminated by the unequivocal declaration of the inland-water status of Mississippi Sound by the United States in an earlier phase of this very litigation. In a brief filed with this Court on May 15,1958, the United States noted:
“[W]e need not consider whether the language, ‘including the islands’ etc., would of itself include the water area intervening between the islands and the mainland (though we believe it would not), because it happens that all the water so situated in Mississippi is in Mississippi Sound, which this Court has described as inland water. Louisiana v. Mississippi, 202 U. S. 1, 48. The bed of these inland waters passed to the State on its entry into the Union. Pollard’s Lessee v. Hagan, 8 How. 212.” Brief for United States in Support of Motion for Judgment on Amended Complaint in United States v. Louisiana, O. T. 1958, No. 10 Orig., p. 254.
Similarly, in discussing Alabama’s entitlement to submerged lands, the United States conceded that “the water between the islands and the Alabama mainland is inland water; consequently, we do not question that the land under it belongs to the State.” Id., at 261.
The United States argues that the States cannot now invoke estoppel based on the Federal Government’s earlier construction of Louisiana v. Mississippi as describing Mississippi Sound as inland waters. The United States points out that the Court in the Louisiana Boundary Case, 394 U. S., at 73-74, n. 97, concluded that a similar concession with respect to Louisiana was not binding on the United States. As with the Court’s holding in 1906 in Louisiana v. Mississippi, however, the significance of the United States’ concession in 1958 is not that it has binding effect in domestic law, but that it represents a public acknowledgment of the official view that Mississippi Sound constitutes inland waters of the Nation.
C
In addition to showing continuous exercise of authority over Mississippi Sound as inland waters, the States must show that foreign nations acquiesced in, or tolerated, this exercise. It is uncontested that no foreign government has ever protested the United States’ claim to Mississippi Sound as inland waters. This is not surprising in light of the geography of the coast, the shallowness of the waters, and the absence of international shipping lanes in the vicinity. Scholarly comment is divided over whether the mere absence of opposition suffices to establish title. See United States v. Alaska, 422 U. S., at 189, n. 8, 199-200; Louisiana Boundary Case, 394 U. S., at 23-24, n. 27. In United States v. Alaska, this Court held that, under the circumstances of that case, mere failure to object was insufficient because it had not been shown that foreign governments knew or reasonably should have known of the authority being asserted. There is substantial agreement that when foreign governments do know or have reason to know of the effective and continual exercise of sovereignty over a maritime area, inaction or toleration on the part of the foreign governments is sufficient to permit a historic title to arise. See Juridical Regime, at 48-49. See also Fisheries Case (U. K. v. Nor.), 19511. C. J., at 138-139. Moreover, it is necessary to prove only open and public exercise of sovereignty, not actual knowledge by the foreign governments. See Juridical Regime, at 54-55. In the present case, the United States publicly and unequivocally stated that it considered Mississippi Sound to be inland waters. We conclude that under these circumstances the failure of foreign governments to protest is sufficient proof of the acquiescence or toleration necessary to historic title.
IV
The United States contends that, notwithstanding the substantial evidence discussed above of the Government’s assertion of sovereignty over Mississippi Sound as inland waters, the States have failed to satisfy their burden of proof that Mississippi Sound is a historic bay. The United States relies on its recent disclaimer of the inland-water status of the Sound and on the absence of any evidence of actual exclusion from the Sound of foreign navigation in innocent passage. We find neither of these points persuasive.
A
In April 1971, the United States for the first time publicly disclaimed the inland-water status of Mississippi Sound by publishing a set of maps delineating the 3-mile territorial sea and certain inland waters of the United States. These maps, which include the entire Gulf Coast, have been distributed to foreign governments in response to requests made upon the Department of State for documents delimiting the boundaries of the United States.
This Court repeatedly has made clear that the United States’ disclaimer of historic inland-water status will not invariably be given decisive weight. In United States v. California, 381 U. S., at 175, the Court gave decisive effect to a disclaimer of historic inland-water status by the United States only because the case involved “questionable evidence of continuous and exclusive assertions of dominion over the disputed waters.” The Court suggested, however, that such a disclaimer would not be decisive in a case in which the historic evidence was “clear beyond doubt.” Ibid. The Court also suggested that “a contraction of a State’s recognized territory imposed by the Federal Government in the name of foreign policy would be highly questionable.” Id., at 168. See Geofroy v. Riggs, 133 U. S. 258, 267 (1890). The Court reiterated this latter theme in the Louisiana Boundary Case, where it stated:
“It is one thing to say that the United States should not be required to take the novel, affirmative step of adding to its territory by drawing straight baselines. It would be quite another to allow the United States to prevent recognition of a historic title which may already have ripened because of past events but which is called into question for the first time in a domestic lawsuit. The latter, we believe, would approach an impermissible contraction of territory against which we cautioned in United States v. California.” 394 U. S., at 77, n. 104 (emphasis in original).
The maps constituting the disclaimer in the present case were published more than 2 years after the decree in the Louisiana Boundary Case, and 11 years after the decision in United States v. Louisiana, 363 U. S. 1 (1960). The Special Master concluded that “under the circumstances it is difficult to accept the disclaimer as entirely extrajudicial in its motivation.” Report of Special Master 47. Rather, according to the Master, the disclaimer “would appear to be more in the nature of an attempt by the United States to prevent recognition of any pre-existing historic title which might already have ripened because of past events but which was called into question for the first time in a domestic lawsuit.” Ibid.
We conclude that historic title to Mississippi Sound as inland waters had ripened prior to the United States’ ratification of the Convention in 1961 and prior to its disclaimer of the inland-water status of the Sound in 1971. That disclaimer, issued while the Court retained jurisdiction to resolve disputes concerning the location of the coastline of the Gulf Coast States, is insufficient to divest the States of their entitlement to the submerged lands under Mississippi-Sound.
B
Finally, the United States argues that proof of historic inland-water status requires a showing that sovereignty was exerted to exclude from the area all foreign navigation in innocent passage. This argument is based on the principle that a coastal nation has the privilege to exclude innocent-passage foreign navigation from its inland waters, but not from its territorial sea. See Louisiana Boundary Case, 394 U. S., at 22. According to the United States, such exclusion is therefore the only conduct that conclusively demonstrates that the nation exercises authority over the waters in question as inland waters and not merely as territorial sea.
This rigid view of the requirements for establishing historic inland-water status is unrealistic and is supported neither by the Court’s precedents nor by writers on international law. To the contrary, in advocating a flexible approach to appraisal of the factors necessary to a valid claim of historic inland-waters status, two leading commentators have stated: “A relatively relaxed interpretation of the evidence of historic assertion and of the general acquiescence of other states seems more consonant with the frequently amorphous character of the facts available to support these claims than a rigidly imposed requirement of certainty of proof, which must inevitably demand more than the realities of international life could ever yield.” M. McDougal & W. Burke, The Public Order of the Oceans 372 (1962). Similarly the 1962 United Nations study of historic waters notes that the requirement of effective exercise of sovereignty over the area by the appropriate action on the part of the claiming state
“does not, however, imply that the State necessarily must have undertaken concrete action to enforce its relevant laws and regulations within or with respect to the area claimed. It is not impossible that these laws and regulations were respected without the State having to resort to particular acts of enforcement. It is, however, essential that, to the extent that action on the part of the State and its organs was necessary to maintain authority over the area, such action was undertaken.” Juridical Regime, at 43.
Thus, although a coastal nation has the privilege to exclude from its inland waters foreign vessels in innocent passage, the need to exercise that privilege may never arise. Indeed, in the present case, as the United States seems to concede, the record does not indicate that there ever was any occasion to exclude from Mississippi Sound foreign vessels in innocent passage. Tr. of Oral Arg. 16. This is not surprising since, as noted above, foreign nations have little interest in Mississippi Sound and have acquiesced willingly in the United States’ express assertions of sovereignty over the Sound as inland waters. We conclude that the absence in the record of evidence of any occasion for the United States to have exercised its privilege to exclude foreign navigation in innocent passage from Mississippi Sound supports rather than disproves the claim of historic title to the Sound as inland waters.
V
In sum, we conclude that the evidence discussed in the Report of the Special Master and in Part III above, considered in its entirety, is sufficient to establish that Mississippi Sound constitutes a historic bay. The exception of the United States to the Special Master’s recommended ruling that the whole of Mississippi Sound constitutes historic inland waters is overruled. We repeat that we do not address the exceptions of Alabama, or those of Mississippi, or the exceptions of the United States that relate to the question whether Mississippi Sound qualifies as a juridical bay. The recommendations of the Special Master and his Report, to the extent they are consistent with this opinion, are respectively adopted and confirmed. The parties are directed promptly to submit to the Special Master a proposed appropriate decree for this Court’s consideration; if the parties are unable to agree upon the form of the decree, each shall submit its proposal to the Master for his consideration and recommendation. Each party shall bear its own costs; the actual expenses of the Special Master shall be borne half by the United States and half by Alabama and Mississippi.
The Court retains jurisdiction to entertain such further proceedings, enter such orders, and issue such writs as from time to time may be determined necessary or advisable to effectuate and supplement the forthcoming decree and the rights of the respective parties.
It is so ordered.
Justice Marshall took no part in the consideration or decision of this case.
The United States’ position actually is somewhat more complicated. First, the United States concedes that Isle au Pitre may be treated as part of the mainland, and that a bay-closing line may be drawn from the eastern tip of Isle au Pitre to the eastern promontory of St. Louis Bay on the mainland. Thus, the waters of Mississippi Sound west of this bay-closing line are inland waters, and the bay-closing line forms part of the legal coastline of Mississippi. Second, the United States takes the position
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
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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.
Based on an anonymous telephone tip, police stopped respondent’s vehicle. A consensual search of the car revealed drugs. The issue is whether the tip, as corroborated by independent police work, exhibited sufficient indicia of reliability to provide reasonable suspicion to make the investigatory stop. We hold that it did.
On April 22, 1987, at approximately 3 p.m., Corporal B. H. Davis of the Montgomery Police Department received a telephone call from an anonymous person, stating that Vanessa White would be leaving 235-C Lynwood Terrace Apartments at a particular time in a brown Plymouth station wagon with the right taillight lens broken, that she would be going to Dobey’s Motel, and that she would be in possession of about an ounce of cocaine inside a brown attaché case. Corporal Davis and his partner, Corporal P. A. Reynolds, proceeded to the Lynwood Terrace Apartments. The officers saw a brown Plymouth station wagon with a broken right taillight in the parking lot in front of the 235 building. The officers observed respondent leave the 235 building, carrying nothing in her hands, and enter the station wagon. They followed the vehicle as it drove the most direct route to Dobey’s Motel. When the vehicle reached the Mobile Highway, on which Dobey’s Motel is located, Corporal Reynolds requested a patrol unit to stop the vehicle. The vehicle was stopped at approximately 4:18 p.m., just short of Dobey’s Motel. Corporal Davis asked respondent to step to the rear of her car, where he informed her that she had been stopped because she was suspected of carrying cocaine in the vehicle. He asked if they could look for cocaine, and respondent said they could look. The officers found a locked brown attaché case in the car, and, upon request, respondent provided the combination to the lock. The officers found marijuana in the attaché case and placed respondent under arrest. During processing at the station, the officers found three milligrams of cocaine in respondent’s purse.
Respondent was charged in Montgomery County Court with possession of marijuana and possession of cocaine. The trial court denied respondent’s motion to suppress, and she pleaded guilty to the charges, reserving the right to appeal the denial of her suppression motion. The Court of Criminal Appeals of Alabama held that the officers did not have the reasonable suspicion necessary under Terry v. Ohio, 392 U. S. 1 (1968), to justify the investigatory stop of respondent’s car, and that the marijuana and cocaine were fruits of respondent’s unconstitutional detention. The court concluded that respondent’s motion to dismiss should have been granted and reversed her conviction. 550 So. 2d 1074 (1989). The Supreme Court of Alabama denied the State’s petition for writ of certiorari, two justices dissenting. 550 So. 2d 1081 (1989). Because of differing views in the state and federal courts over whether an anonymous tip may furnish reasonable suspicion for a stop, we granted the State’s petition for certiorari, 493 U. S. 1042 (1990). We now reverse.
Adams v. Williams, 407 U. S. 143 (1972), sustained a Terry stop and frisk undertaken on the basis of a tip given in person by a known informant who had provided information in the past. We concluded that, while the unverified tip may have been insufficient to support an arrest or search warrant, the information carried sufficient “indicia of reliability” to justify a forcible stop. 407 U. S., at 147. We did not address the issue of anonymous tips in Adams, except to say that “[t]his is a stronger case than obtains in the case of an anonymous telephone tip,” id., at 146.
Illinois v. Gates, 462 U. S. 213 (1983), dealt with an anonymous tip in the probable-cause context. The Court there abandoned the “two-pronged test” of Aguilar v. Texas, 378 U. S. 108 (1964), and Spinelli v. United States, 393 U. S. 410 (1969), in favor of a “totality of the circumstances” approach to determining whether an informant’s tip establishes probable cause. Gates made clear, however, that those factors that had been considered critical under Aguilar and Spinelli—an informant’s “veracity,” “reliability,” and “basis of knowledge”—remain “highly relevant in determining the value of his report.” 462 U. S., at 230. These factors are also relevant in the reasonable-suspicion context, although allowance must be made in applying them for the lesser showing required to meet that standard.
The opinion in Gates recognized that an anonymous tip alone seldom demonstrates the informant’s basis of knowledge or veracity inasmuch as ordinary citizens generally do not provide extensive recitations of the basis of their everyday observations and given that the veracity of persons supplying anonymous tips is “by hypothesis largely unknown, and unknowable.” Id., at 237. This is not to say that an anonymous caller could never provide the reasonable suspicion necessary for a Terry stop. But the tip in Gates was not an exception to the general rule, and the anonymous tip in this case is like the one in Gates: “[It] provides virtually nothing from which one might conclude that [the caller] is either honest or his information reliable; likewise, the [tip] gives absolutely no indication of the basis for the [caller’s] predictions regarding [Vanessa White’s] criminal activities.” 462 U. S., at 227. By requiring “[s]omething more,” as Gates did, ibid., we merely apply what we said in Adams: “Some tips, completely lacking in indicia of reliability, would either warrant no police response or require further investigation before a forcible stop of a suspect would be authorized,” 407 U. S., at 147. Simply put, a tip such as this one, standing alone, would not “‘warrant a man of reasonable caution in the belief’ that [a stop] was appropriate.” Terry, supra, at 22, quoting Carroll v. United States, 267 U. S. 132, 162 (1925).
As there was in Gates, however, in this case there is more than the tip itself. The tip was not as detailed, and the corroboration was not as complete, as in Gates, but the required degree of suspicion was likewise not as high. We discussed the difference in the two standards last Term in United States v. Sokolow, 490 U. S. 1, 7 (1989):
“The officer [making a Terry stop]. . . must be able to articulate something more than an ‘inchoate and unparticularized suspicion or “hunch.”’ [Terry, 392 U. S.,] at 27. The Fourth Amendment requires ‘some minimal level of objective justification’ for making the stop. INS v. Delgado, 466 U. S. 210, 217 (1984). That level of suspicion is considerably less than proof of wrongdoing by a preponderance of the evidence. We have held that probable cause means ‘a fair probability that contraband or evidence of a crime will be found,’ [Gates, 462 U. S., at 238], and the level of suspicion required for a Terry stop is obviously less demanding than for probable cause.”
Reasonable suspicion is a less demanding standard than probable cause not only in the sense that reasonable suspicion can be established with information that is different in quantity or content than that required to establish probable cause, but also in the sense that reasonable suspicion can arise from information that is less reliable than that required to show probable cause. Adams v. Williams, supra, demonstrates as much. We there assumed that the unverified tip from the known informant might not have been reliable enough to establish probable cause, but nevertheless found it sufficiently reliable to justify a Terry stop. 407 U. S., at 147. Reasonable suspicion, like probable cause, is dependent upon both the content of information possessed by police and its degree of reliability. Both factors—quantity and quality—are considered in the “totality of the circumstances—the whole picture,” United States v. Cortez, 449 U. S. 411, 417 (1981), that must be taken into account when evaluating whether there is reasonable suspicion. Thus, if a tip has a relatively low degree of reliability, more information will be required to establish the requisite quantum of suspicion than would be required if the tip were more reliable. The Gates Court applied its totality-of-the-circumstances approach in this manner, taking into account the facts known to the officers from personal observation, and giving the anonymous tip the weight it deserved in light of its indicia of reliability as established through independent police work. The same approach applies in the reasonable-suspicion context, the only difference being the level of suspicion that must be established. Contrary to the court below, we conclude that when the officers stopped respondent, the anonymous tip had been sufficiently corroborated to furnish reasonable suspicion that respondent was engaged in criminal activity and that the investigative stop therefore did not violate the Fourth Amendment.
It is true that not every detail mentioned by the tipster was verified, such as the name of the woman leaving the building or the precise apartment from which she left; but the officers did corroborate that a woman left the 235 building and got into the particular vehicle that was described by the caller. With respect to the time of departure predicted by the informant, Corporal Davis testified that the caller gave a particular time when the woman would be leaving, App. 5, but he did not state what that time was. He did testify that, after the call, he and his partner proceeded to the Lynwood Terrace Apartments to put the 235 building under surveillance, id., at 5-6. Given the fact that the officers proceeded to the indicated address immediately after the call and that respondent emerged not too long thereafter, it appears from the record before us that respondent’s departure from the building was within the timeframe predicted by the caller. As for the caller’s prediction of respondent’s destination, it is true that the officers stopped her just short of Dobey’s Motel and did not know whether she would have pulled in or continued past it. But given that the 4-mile route driven by respondent was the most direct route possible to Dobey’s Motel, 550 So. 2d, at 1075, Tr. of Oral Arg. 24, but nevertheless involved several turns, App. 7, Tr. of Oral Arg. 24, we think respondent’s destination was significantly corroborated.
The Court’s opinion in Gates gave credit to the proposition that because an informant is shown to be right about some things, he is probably right about other facts that he has alleged, including the claim that the object of the tip is engaged in criminal activity. 462 U. S., at 244. Thus, it is not unreasonable to conclude in this case that the independent corroboration by the police of significant aspects of the informer's predictions imparted some degree of reliability to the other allegations made by the caller.
We think it also important that, as in Gates, “the anonymous [tip] contained a range of details relating not just to easily obtained facts and conditions existing at the time of the tip, but to future actions of third parties ordinarily not easily predicted.” Id., at 245. The fact that the officers found a car precisely matching the caller’s description in front of the 235 building is an example of the former. Anyone could have “predicted” that fact because it was a condition presumably existing at the time of the call. What was important was the caller’s ability to predict respondent’s future behavior, because it demonstrated inside information—a special familiarity with respondent’s affairs. The general public would have had no way of knowing that respondent would shortly leave the building, get in the described car, and drive the most direct route to Dobey’s Motel. Because only a small number of people are generally privy to an individual’s itinerary, it is reasonable for police to believe that a person with access to such information is likely to also have access to reliable information about that individual’s illegal activities. See ibid. When significant aspects of the caller’s predictions were verified, there was reason to believe not only that the caller was honest but also that he was well informed, at least well enough to justify the stop.
Although it is a close case, we conclude that under the totality of the circumstances the anonymous tip, as corroborated, exhibited sufficient indicia of reliability to justify the investigatory stop of respondent’s car. We therefore reverse the judgment of the Court of Criminal Appeals of Alabama and remand the case for further proceedings not inconsistent with this opinion.
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
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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 Rehnquist
delivered the opinion of the Court.
Commerce Savings and Loan Association of Tacoma, Wash., merged into Citizens Federal Savings and Loan Association of Seattle in July 1976. Petitioners Harold and Marie Paulsen sought to treat their exchange of stock in Commerce for an interest in Citizens as a tax-free reorganization under 26 U. S. C. §§ 354(a)(1) and 368(a)(1)(A). The Court of Appeals for the Ninth Circuit, disagreeing with the Court of Claims and other Courts of Appeals, reversed a decision of the Tax Court in favor of petitioners. 716 F. 2d 563 (1983). We granted certiorari, 465 U. S. 1021 (1984), to resolve these conflicting interpretations of an important provision of the Internal Revenue Code.
At the time of the merger, petitioner Harold T. Paulsen was president and a director of Commerce. He and his wife, petitioner Marie B. Paulsen, held as community property 17,459 shares of “guaranty stock” in Commerce. In exchange for this stock petitioners received passbook savings accounts and time certificates of deposit in Citizens. Relying on 26 U. S. C. §§ 354(a)(1) and 368(a)(1)(A), they did not report the gain they realized on their 1976 federal income tax return because they considered the merger to be a tax-free reorganization.
Before it ceased to exist, Commerce was a state-chartered savings and loan association incorporated and operated under Washington State law. It was authorized to issue “guaranty stock,” to offer various classes of savings accounts, and to make loans. Each stockholder, savings account holder, and borrower was a member of the association. Each share of stock and every $100, or fraction thereof, on deposit in a savings account carried with it one vote. Each borrower also had one vote.
The “guaranty stock” had all of the characteristics normally associated with common stock issued by a corporation. Under the bylaws, a certain amount of guaranty stock was required to be maintained as the fixed and nonwithdrawable capital of Commerce. In accordance with Wash. Rev. Code Ann. §33.48.080 (Supp. 1981), holders of guaranty stock, but no other members, had a proportionate proprietary interest in its assets and net earnings, subordinate to the claims of creditors. Dividends could not be declared or paid on the guaranty stock unless certain reserves had been accumulated and dividends had been declared and paid on withdrawable savings accounts.
Citizens is a federally chartered mutual savings and loan association under the jurisdiction of the Federal Home Loan Bank Board. 12 U. S. C. § 1461 et seq. It offers savings accounts and makes loans, but has no capital stock. Its members are its depositors and borrowers. Each savings account holder has one vote for each $100, or fraction thereof, of the withdrawal value of his savings account up to a maximum of 400 votes. Each borrower has one vote.
Citizens is owned by its depositors. Twice each year its net earnings and any surplus are to be distributed to its savings account holders pro rata to the amounts on deposit. Its net assets would similarly be distributed if liquidation or dissolution should occur. It is obligated to pay written withdrawal requests within 30 days, and may redeem any of its accounts at any time by paying the holder the withdrawal value.
The merger was effected pursuant to a “Plan of Merger,” under which Commerce’s stockholders exchanged all their stock for passbook savings accounts and certificates of deposit in Citizens. The plan was designed to conform to the requirements of Wash. Rev. Code §33.40.010 (1983), which provides for mergers between business entities, and to qualify as a tax-free reorganization under the terms of §§ 354(a)(1) and 368(a)(1)(A). Under the plan, Commerce stockholders received for each share a $12 deposit in a Citizens passbook savings account, subject only to the restriction that such deposits could not be withdrawn for one year. They also had the alternative of receiving time certificates of deposit in Citizens with maturities ranging from 1 to 10 years at the same $12-per-share exchange rate. The plan further provided that former Commerce stockholders could borrow against their deposits resulting from the exchange at 1.5% above the passbook rate as opposed to a 2% differential for other depositors. Following the exchange, the merged entity continued to operate under the Citizens name.
Petitioners had a cost basis in their Commerce stock of $56,802; in the exchange they received passbook accounts and certificates of deposit worth $209,508. In 1976, 26 U. S. C. § 1002 (1970 ed.) required that “on the sale or exchange of property the entire amount of the gain or loss . . . shall be recognized.” Accordingly, petitioners were required to declare as income on their 1976 return the $152,706 profit unless one of the exceptions incorporated by reference in § 1002 applied.
Included among the exceptions to § 1002 were the corporate reorganization provisions set out in §§354 to 368. As already noted, petitioners have attempted to rely on § 354(a)(1), which provides:
“No gain or loss shall be recognized if stock or securities in a corporation a party to a reorganization are, in pursuance of the plan of reorganization, exchanged solely for stock or securities in such corporation or in another corporation a party to the reorganization.”
Section 368(a)(1)(A) defines a “reorganization” to include “a statutory merger or consolidation,” and §§ 7701(a)(3), 7701(a)(7), and 7701(a)(8) further define the terms “corporation” to include “associations,” “stock” to include “shares in an association,” and “shareholder” to include a “member in an association.” There is no dispute that at the time of the merger Commerce and Citizens qualified as associations, petitioners qualified as shareholders, Commerce’s guaranty stock and Citizens’ passbook accounts and certificates of deposit qualified as stock, and the merger qualified as a statutory merger within these provisions of the Code. Accordingly, under the literal terms of the Code the transaction would qualify as a tax-free “reorganization” exchange rather than a sale or exchange on which gain must be recognized and taxes paid.
Satisfying the literal terms of the reorganization provisions, however, is not sufficient to qualify for nonrecognition of gain or loss. The purpose of these provisions is “‘to free from the imposition of an income tax purely “paper profits or losses” wherein there is no realization of gain or loss in the business sense but merely the recasting of the same interests in a different form.’” Southwest Natural Gas Co. v. Commissioner, 189 F. 2d 332, 334 (CA5), cert. denied, 342 U. S. 860 (1951) (quoting Commissioner v. Gilmore’s Estate, 130 F. 2d 791, 794 (CA3 1942)). See Treas. Reg. § 1.368-l(b), 26 CFR §1.368-l(b) (1984). In order to exclude sales structured to satisfy the literal terms of the reorganization provisions but not their purpose, this Court has construed the statute to also require that the taxpayer’s ownership interest in the prior organization must continue in a meaningful fashion in the reorganized enterprise. Pinellas Ice & Cold Storage Co. v. Commissioner, 287 U. S. 462, 468-470 (1933). In that case we held that “the seller must acquire an interest in the affairs of the purchasing company more definite than that incident to ownership of its short-term purchase-money notes.” Id., at 470. We soon added the requirement that “this interest must be definite and material; it must represent a substantial part of the value of the thing transferred.” Helvering v. Minnesota Tea Co., 296 U. S. 378, 385 (1935). Compare LeTulle v. Scofield, 308 U. S. 415, 420-421 (1940) (no retained property interest where transferor received transferee’s bonds), with John A. Nelson Co. v. Helvering, 296 U. S. 374, 377 (1935) (continuity of interest satisfied where non voting preferred stock received). Known as the “continuity-of-interest” doctrine, this requirement has been codified in Treas. Regs. §§ 1.368 — 1(b), 1.368-2(a).
The present case turns on whether petitioners’ exchange of their guaranty stock in Commerce for their passbook savings accounts and certificates of deposit in Citizens satisfies this continuity-of-interest requirement. More generally, we must decide whether a merger of a stock savings and loan association into a mutual savings and loan association qualifies as a tax-free reorganization. Following his ruling in Rev. Rul. 69-6, 1969-1 Cum. Bull. 104, which itself apparently was at odds with his earlier policy expressed in Rev. Rul. 54-624, 1954-2 Cum. Bull. 16, the Commissioner rejected petitioners’ treatment of the Commerce-Citizens merger as a tax-free reorganization under §§ 354(a)(1) and 368(a)(1)(A) and issued a statutory notice of deficiency finding petitioners liable for tax on their entire $152,706 gain.
Petitioners sought redetermination of the deficiency in the Tax Court, which found that the Commissioner’s position had been uniformly rejected by the courts. Following Capital Savings and Loan Assn. v. United States, 221 Ct. Cl. 557, 607 F. 2d 970 (1979); West Side Federal Savings and Loan Assn. v. United States, 494 F. 2d 404 (CA6 1974); Everett v. United States, 448 F. 2d 357 (CA10 1971), the Tax Court reasoned that the savings accounts and certificates of deposit were the only forms of equity in Citizens, and it held that the requisite continuity of interest existed. 78 T. C. 291 (1982).
The Commissioner appealed to the Court of Appeals for the Ninth Circuit, which declined to follow the cases cited by the Tax Court and reversed. 716 F. 2d 563 (1983). It reasoned that “despite certain formal equity characteristics” the passbook savings accounts and time certificates of deposit “are in reality indistinguishable from ordinary savings accounts and are essentially the equivalent of cash.” Id., at 569. For the reasons that follow we affirm the decision of the Court of Appeals.
Citizens is organized pursuant to Charter K (Rev.), 12 CFR §544.1(b) (as of July 1, 1976), which provides for raising capital “by accepting payments on savings accounts representing share interests in the association.” These shares are the association’s only means of raising capital. Here they are divided into passbook accounts and certificates of deposit. In reality, these shares are hybrid instruments having both equity and debt characteristics. They combine in one instrument the separate characteristics of the guaranty stock and the savings accounts of stock associations like Commerce.
The Citizens shares have several equity characteristics. The most important is the fact that they are the only ownership instrument of the association. Each share carries in addition to its deposit value a part ownership interest in the bricks and mortar, the goodwill, and all the other assets of Citizens. Another equity characteristic is the right to vote on matters for which the association’s management must obtain shareholder approval. The shareholders also receive dividends rather than interest on their accounts; the dividends are paid out of net earnings, and the shareholders have no legal right to have a dividend declared or to have a fixed return on their investment. The shareholders further have a right to a pro rata distribution of any remaining assets after a solvent dissolution.
These equity characteristics, however, are not as substantial as they appear on the surface. Unlike a stock association where the ownership of the assets is concentrated in the stockholders, the ownership interests here are spread over all of the depositors. The equity interest of each shareholder in relation to the total value of the share, therefore, is that much smaller than in a stock association. The right to vote is also not very significant. A shareholder is limited to 400 votes; thus any funds deposited in excess of $40,000 do not confer any additional votes. The vote is also diluted each time a loan is made, as each borrower is entitled to one vote. In addition the Commissioner asserts, and petitioners do not contest, that in practice, when depositors open their accounts, they usually sign proxies giving management their votes.
The fact that dividends rather than interest are paid is by no means controlling. Petitioners have not disputed the Commissioner’s assertion that in practice Citizens pays a fixed, preannounced rate on all accounts. As the Court of Appeals observed, Citizens would not be able to compete with stock savings and loan associations and commercial banks if it did not follow this practice. Potential depositors are motivated only by the rate of return on their accounts and the security of their deposits. In this latter respect, the Citizens accounts are insured by the Federal Savings and Loan Insurance Corporation (FSLIC), up to $40,000 in 1976 and now up to $100,000. 12 U. S. C. § 1728(a). The Code treats these dividends just like interest on bank accounts rather than like dividends on stock in a corporation. The dividends are deductible to Citizens, 26 U. S. C. §591, and they do not qualify for dividend exclusion by the Citizens shareholders under § 116.
The right to participate in the net proceeds of a solvent liquidation is also not a significant part of the value of the shares. Referring to the possibility of a solvent liquidation of a mutual savings association, this Court observed: “It stretches the imagination very far to attribute any real value to such a remote contingency, and when coupled with the fact that it represents nothing which the depositor can readily transfer, any theoretical value reduces almost to the vanishing point.” Society for Savings v. Bowers, 349 U. S. 143, 150 (1955).
In contrast, there are substantial debt characteristics to the Citizens shares that predominate. Petitioners’ passbook accounts and certificates of deposit are not subordinated to the claims of creditors, and their deposits are not considered permanent contributions to capital. Shareholders have a right on 30 days’ notice to withdraw their deposits, which right Citizens is obligated to respect. While petitioners were unable to withdraw their funds for one year following the merger, this restriction can be viewed as akin to a delayed payment rather than a material alteration in the nature of the instruments received as payment. In this case petitioners were immediately able to borrow against their deposits at a more favorable rate than Citizens’ depositors generally. As noted above, petitioners were also in effect guaranteed a fixed, preannounced rate of return on their deposits competitive with stock savings and loan associations and commercial banks.
In our view, the debt characteristics of Citizens’ shares greatly outweigh the equity characteristics. The face value of petitioners’ passbook accounts and certificates of deposit was $210,000. Petitioners have stipulated that they had a right to withdraw the face amount of the deposits in cash, on demand after one year or at stated intervals thereafter. Their investment was virtually risk free and the dividends received were equivalent to prevailing interest rates for savings accounts in other types of savings institutions. The debt value of the shares was the same as the face value, $210,000; because no one would pay more than this for the shares, the incremental value attributable to the equity features was, practically, zero. Accordingly, we hold that petitioners’ passbook accounts and certificates of deposit were cash equivalents.
Petitioners have failed to satisfy the continuity-of-interest requirement to qualify for a tax-free reorganization. In exchange for their guaranty stock in Commerce, they received essentially cash with an insubstantial equity interest. Under Minnesota Tea Co., their equity interest in Citizens would have to be “a substantial part of the value of the thing transferred.” 296 U. S., at 385. Assuming an arm’s-length transaction in which what petitioners gave up and what they received were of equivalent worth, their Commerce stock was worth $210,000 in withdrawable deposits and an unquan-tifiably small incremental equity interest. This retained equity interest in the reorganized enterprise, therefore, is not a “substantial” part of the value of the Commerce stock which was given up. We agree with the Commissioner that the equity interests attached to the Citizens shares are too insubstantial to satisfy Minnesota Tea, Co. The Citizens shares are not significantly different from the notes that this Court found to be the mere “equivalent of cash” in Pinellas & Cold Storage Ice Co., 287 U. S., at 468-469. The ownership interest of the Citizens shareholders is closer to that of the secured bondholders in LeTulle v. Scofield, 308 U. S., at 420-421, than to that of the preferred stockholders in John A. Nelson Co. v. Helvering, 296 U. S., at 377. The latter case involved a classic ownership instrument — preferred stock carrying voting rights only in the event of a dividend default — which we held to represent “a definite and substantial interest in the affairs of the purchasing corporation.” Ibid.
Petitioners argue that the decision below erroneously turned on the relative change in the nature and extent of the equity interest, contrary to the holding in Minnesota Tea Co. that “the relationship of the taxpayer to the assets conveyed [could] substantially chang[e],” and only a “material part of the value of the transferred assets” need be retained as an equity interest. 296 U. S., at 386. In that case, taxpayers received voting trust certificates representing $540,000 of common stock and $425,000 cash; 56% of the value of the assets given up was retained as an equity interest in the transferee. In John A. Nelson Co., supra, the taxpayer received consideration consisting of 38% preferred stock and 62% cash. Here, in contrast, the retained equity interest had almost no value. It did not amount to a “material part” of the value of the Commerce stock formerly held by petitioners. See Southwest Natural Gas Co. v. Commissioner, 189 F. 2d, at 335 (insufficient continuity of interest where stock received represented less than 1% of the consideration).
Petitioners’ real complaint seems to be our willingness to consider the equity and debt aspects of their shares separately. Clearly, if these interests were represented by separate pieces of paper — savings accounts on the one hand and equity instruments of some kind on the other — the value of the latter would be so small that we would not find a continuity of proprietary interest. In order not “to exalt artifice above reality and to deprive the statutory provision in question of all serious purpose,” Gregory v. Helvering, 293 U. S. 465, 469-470 (1935), it is necessary in the present case to consider the debt and equity aspects of a single instrument separately. See Rev. Rul. 69-265, 1969-1 Cum. Bull. 109, 109-110, which treats the conversion rights incorporated in convertible preferred stock as “property other than voting stock” for purposes of § 368(a)(1)(C).
Petitioners also complain that the result reached by the court below is inconsistent with the Commissioner’s position that a merger of one mutual savings and loan institution into another mutual association or into a stock association would still qualify as a tax-free reorganization. See Rev. Rul. 69-3, 1969-1 Cum. Bull. 103. If the continuity-of-interest test turns on the nature of the thing received, and not on the relative change in proprietary interest, argue petitioners, the interest received in the merger of two mutual associations is no different from the interest received in the instant case.
As already indicated, shares in a mutual association have a predominant cash-equivalent component and an insubstantial equity component. When two mutual associations merge, the shares received are essentially identical to the shares given up. As long as the cash value of the shares on each side of the exchange is the same, the equity interest represented by the shares received — though small — is equivalent to the equity interest represented by the shares given up. Therefore, to the extent that a mutual association share reflects an equity interest, the continuity-of-interest requirement, as defined in Minnesota Tea Co., is satisfied in an exchange of this kind. The fact that identical cash deposits are also exchanged does not affect the equity aspect of the exchange. In the case of a merger of a mutual association into a stock association, the continuity-of-interest requirement is even more clearly satisfied because the equity position of the exchanging shareholders is not only equivalent before and after the exchange, but it is enhanced.
Finally, petitioners argue that the characterization of their mutual association shares as debt conflicts with this Court’s decision in Tcherepnin v. Knight, 389 U. S. 332 (1967), holding that a withdrawable mutual association share indistinguishable from Citizens’ shares was a “security” within the meaning of §3(a)(10) of the Securities Exchange Act of 1934. Cf. Marine Bank v. Weaver, 455 U. S. 551, 557 (1982) (distinguishing Tcherepnin because the withdrawable capital shares there did not pay a fixed rate of return and “were much more like ordinary shares of stock and ‘the ordinary concept of a security’ . . . than a certificate of deposit” [in a bank]); Wisconsin Bankers Assn. v. Robertson, 111 U. S. App. D. C. 85, 294 F. 2d 714, 717 (Burger, J., concurring), cert. denied, 368 U. S. 938 (1961). The purpose of the Securities Acts is different from the purpose of the Tax Code. The focus in Tcherepnin was on the investment character of the shares, specifically whether they satisfied the test in SEC v. W. J. Howey Co., 328 U. S. 293, 301 (1946), for an investment contract, namely the “investment of money in a common enterprise with profits to come solely from the efforts of others.” Unlike the instant case, there is no requirement that the investors have a substantial proprietary interest in the enterprise. Moreover, in Howey as in this case, we disregarded the formal terms of the instruments in question and looked to their economic substance. Any remaining tension between the instant decision and Tcherepnin and Weaver can be explained by the fact that this Court has in cases such as Tcherepnin liberally construed the definition of “security” in the Securities Acts, while such liberality is not warranted in construing the scope of the reorganization provisions.
The judgment of the Court of Appeals is
Affirmed.
Justice Powell took no part in the decision of the case.
Capital Savings and Loan Assn. v. United States, 221 Ct. Cl. 557, 607 F. 2d 970 (1979); West Side Federal Savings and Loan Assn. v. United States, 494 F. 2d 404 (CA6 1974); Everett v. United States, 448 F. 2d 357 (CA10 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:
|
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 White
announced the judgment of the Court and an opinion in which The Chief Justice, Mr. Justice Stewart, and Mr. Justice Blackmun join.
An indictment was returned in March 1963 charging petitioner Fred T. Mackey in five counts of evading payment of income taxes by willfully preparing and causing to be prepared false and fraudulent tax returns for the years 1956 through 1960, in violation of 26 U. S. C. § 7201. On January 21, 1964, a jury in the District Court for the Northern District of Indiana found Mackey guilty on all five counts. The conviction was affirmed on appeal by the Court of Appeals for the Seventh Circuit in the spring of 1965. 345 F. 2d 499 (CA7), cert. denied, 382 U. S. 824 (1965).
At petitioner’s trial, the Government used the net-worth method to prove evasion of income taxes. As part of its case, it introduced 60 wagering excise tax returns — one for every month of each of the five years covered by the indictment — filed by petitioner pursuant to 26 U. S. C. § 4401. A summary exhibit prepared from these returns and petitioner’s income tax returns were also introduced, and an Internal Revenue Service technical advisor testified that for the years in question the totals of the gross amount of wagers reported on the wagering tax returns, less the expenses of running petitioner’s “policy wheel” operation as reported on his annual income tax returns, exceeded the net profits from gambling reported on the petitioner’s income tax returns. Defense counsel objected to the introduction of these exhibits, arguing that they were prejudicial, inflammatory, and irrelevant; the Government responded that the wagering tax returns and the summary exhibit were relevant because they showed a likely source of unreported income. The exhibits were admitted, and the Court of Appeals found, without specific discussion, no error in the ruling.
On January 29, 1968, this Court held that the Fifth Amendment privilege against compulsory self-incrimination was a valid defense to a prosecution for failure to register as a gambler and to pay the related occupational and gambling excise taxes under 26 U. S. C. §§4401, 4411, 4412. Marchetti v. United States, 390 U. S. 39 (1968); Grosso v. United States, 390 U. S. 62 (1968). Petitioner, who had begun serving his sentence in December 1965, filed on February 12, 1968, a motion pursuant to 28 U. S. C. § 2255 to vacate his sentence and set aside the judgment of conviction on authority of Marchetti and Grosso. The motion was denied by the District Court for the Northern District of Indiana, and the Court of Appeals affirmed. 411 F. 2d 504 (CA7 1969).
Although the Court of Appeals suggested that petitioner’s argument that he had not waived the Fifth Amendment claim by his failure to raise it at trial was open to question, 411 F. 2d, at 506-507, it specifically held that Marchetti and Grosso would not be applied retroactively to upset a pre-Marchetti conviction for evading payment of income tax simply because the wagering excise tax returns filed pursuant to 26 U. S. C. § 4401 were introduced in evidence at trial. Employing the threefold analysis set forth in our retroactivity decisions, see, e. g., Stovall v. Denno, 388 U. S. 293, 297 (1967), the Court of Appeals found that law enforcement officials had relied on the old rule, that retroactive application of Marchetti and Grosso in cases such as petitioner’s would have a substantial impact on the administration of justice, and that “[t]he unreliability of the fact-finding process which is the touchstone of retro-activity is simply not threatened by the impersonal command of the wagering tax laws.” 411 F. 2d, at 509. We granted certiorari. 396 U. S. 954.
I
In United States v. Kahriger, 345 U. S. 22 (1953), a prosecution for failure to register and pay the gambling tax, this Court held that the registration requirement and the obligation to pay the gambling tax did not violate the Fifth Amendment. The Court construed the privilege as relating “only to past acts, not to future acts that may or may not be committed. . . . Under the registration provisions of the wagering tax, appellee is not compelled to confess to acts already committed, he is merely informed by the statute that in order to engage in the business of wagering in the future he must fulfill certain conditions.” 345 U. S., at 32-33. Lewis v. United States, 348 U. S. 419 (1955), reaffirmed this construction of the Fifth Amendment. Thirteen years later we could not agree with what was deemed an “excessively narrow” view of the scope of the privilege. 390 U. S., at 52. The “force of the constitutional prohibition is [not] diminished merely because confession of a guilty purpose precedes the act which it is subsequently employed to evidence.” 390 U. S., at 54. The gambling registration and tax requirements were held to present substantial risks of self-incrimination and therefore to be unenforceable; imposition of criminal penalties for noncompliance was an impermissible burden on the exercise of the privilege.
Until Marchetti and Grosso, then, the registration and gambling tax provisions had the express approval of this Court; the Fifth Amendment provided no defense to a criminal prosecution for failure to comply. But as of January 29, 1968, the privilege was expanded to excuse noncompliance. The statutory requirement to register and file gambling tax returns was held to compel self-incrimination and the privilege became a complete defense to a criminal prosecution for failure to register and pay the related taxes. It followed that the registration and excise tax returns filed in response to the statutory command were compelled statements within the meaning of the Fifth Amendment and accordingly were inadmissible in evidence as part of the prosecution's case in chief. The question before us is whether the Marchetti-Grosso rule applies retroactively and invalidates Mackey’s conviction because his gambling excise tax returns were introduced against him at his trial for income tax evasion.
We have today reaffirmed the nonretroactivity of decisions overruling prior constructions of the Fourth Amendment. Williams v. United States and Elkanich v. United States, ante, p. 646. The decision in those cases represents the approach to the question of when to accord retroactive sweep to a new constitutional rule taken by this Court in the line of cases from Linkletter in 1965 to Desist in 1969. Among those cases were two which determined that earlier decisions extending the reach of the Fifth Amendment privilege against compelled self-incrimination would not be retroactively applied to invalidate prior convictions that in all respects conformed to the then-controlling law.
In Tehan v. Shott, 382 U. S. 406 (1966), the Court declined to apply the rule of Griffin v. California, 380 U. S. 609 (1965), to prisoners seeking collateral relief. Griffin had construed the Fifth Amendment to forbid comment on defendants’ failure to testify, thereby removing a burden from the exercise of the privilege against compulsory self-incrimination and further implementing its purpose. The basic purpose of the privilege, we said, was not related to “protecting the innocent from conviction,” 382 U. S., at 415; the privilege “is not an adjunct to the ascertainment of truth,” but is aimed at serving the complex of values on which it has historically rested. 382 U. S., at 416. Given this purpose, clear reliance on the pre-Griffin rules, and the frustration of state interests which retroactivity would have entailed, we refused relief to a state prisoner seeking collateral relief although the- prosecutor’s comment on his failure to take the stand at his trial would have infringed the new rule that was announced in Griffin and was being applied in contemporary trials.
Johnson v. New Jersey, 384 U. S. 719 (1966), reaffirmed this view of the Fifth Amendment by declining to apply the Miranda rules to cases pending on direct review as well as to those involving applications for collateral relief. Stating that the “prime purpose of these rulings is to guarantee full effectuation of the privilege against self-incrimination, the mainstay of our adversary system of criminal justice,” 384 U. S., at 729, the Court also recognized that the new rules to some extent did guard against the possibility of unreliable admissions given during custodial interrogation. Id., at 730. The question, however, was one of “probabilities.” The hazard of untrustworthy results in past trials was not sufficiently apparent to require retroactive application in view of the existing, well-defined remedies against the use of many involuntary confessions, the obvious fact that the new warnings had not been standard practice prior to Miranda, and the consequent disruption to the administration of the criminal law.
II
Guided by our decisions dealing with the retroactivity of new constitutional interpretations of the broad language of the Bill of Rights, we agree with the Court of Appeals that Marchetti and Orosso should not have any retroactive effect on Mackey’s conviction. Petitioner was convicted in strict accordance with then-applicable constitutional norms. Mackey would have a significant claim only if Marchetti and Grosso must be given full retroactive sweep. But in overruling Kahriger and Lewis, the Court’s purpose was to provide for a broader implementation of the Fifth Amendment privilege — a privilege that does not include at its core a concern for improving the reliability of the results reached at criminal trials. There is no indication in Marchetti or Grosso that one of the considerations which moved the Court to hold that the Congress could not constitutionally compel citizens to register as gamblers and file related tax returns was the probable unreliability of such statements once given. Petitioner has not advanced any objective considerations suggesting such unreliability. The wagering tax returns introduced in evidence at his trial have none of the characteristics, and hence none of the potential unreliability, of coerced confessions produced by “overt and obvious coercion.” Johnson, 384 U. S., at 730. Nor does Mackey suggest that his returns — made under oath — were inaccurate in any respect. Thus, a gambling excise tax return, like physical evidence seized in violation of a new interpretation of the Fourth Amendment, is concededly relevant and probative even though obtained by the Government through means since defined by this Court as constitutionally objectionable. As in Desist, Elkanich, and Williams, the result here should be that a pre-Marchetti trial in which the Government employed such evidence is not set aside through retroactive application of the new constitutional principle.
The short of the matter is that Marchetti and Grosso raise not the slightest doubt about the accuracy of the verdict of guilt returned here. Under these circumstances, the principles represented by Elkanich and Williams, as well as by Tehan and Johnson, must control. For Tehan and Johnson indicate that even though decisions reinterpreting the Fifth Amendment may create marginal doubts as to the accuracy of the results of past trials, the purposes of those decisions are adequately served by prospective application. Accordingly, the judgment of the Court of Appeals is affirmed.
It is so ordered.
Petitioner received a sentence of five years’ imprisonment and a fine of $10,000 on each count, the prison terms to be served concurrently.
This method of prosecution is discussed and approved in Holland v. United States, 348 U. S. 121 (1954); Friedberg v. United States, 348 U. S. 142 (1954); Smith v. United States, 348 U. S. 147 (1954); United States v. Calderon, 348 U. S. 160 (1954).
In rejecting petitioner’s application for relief under 28 U. S. C. § 2255, the District Judge so read the Court of Appeals’ earlier opinion. See App. 28.
The District Court advanced several reasons for denying petitioner’s application. See App. 27-38. Noting that with gambling excise tax returns “there is little danger of their unreliability other than their possible understatement of liability,” id., at 32, the District Judge held that Marchetti and Grosso should not be applied to petitioner’s case:
“An examination of these and other cases reveals no instance where the [Supreme] Court has given retroactive application to an exclusionary rule or other Constitutional guarantee where the reliability of the fact finding process had not been jeopardized. The briefs for [Mackey] have suggested none. In [petitioner] Mackey’s trial, the introduction of the wagering tax forms did not jeopardize the integrity of the trial except to the extent that they showed that he was engaged in illegal activities other than that charged. This possibility was raised by Mackey’s attorneys at the trial, and apparently on appeal, and both times the Courts held that there was no error.” Id., at 36.
We note in reference to the last point mentioned by the District Judge that at trial the court’s charge to the jury included several strong admonitions to the effect that the question of whether any business run by petitioner was legal or illegal was irrelevant to the offense charged in the indictment — failure to report income for five years. See Brief for the United States 11.
Linkletter v. Walker, 381 U. S. 618 (1965).
Desist v. United States, 394 U. S. 244 (1969).
Miranda v. Arizona, 384 U. S. 436 (1966).
See n. 4, 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:
|
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.
Pro se petitioner Roy A. Day requests leave to proceed in forma pauperis under Rule 39 of this Court. We deny this request pursuant to Rule 39.8. Day is allowed until November 2, 1993, within which to pay the docketing fees required by Rule 38 and to submit his petitions in compliance with this Court’s Rule 33. We also direct the Clerk not to accept any further petitions for certiorari from Day in noncriminal matters unless he pays the docketing fee required by Rule 38 and submits his petition in compliance with Rule 33.
Day is an abuser of this Court’s certiorari process. We first invoked Rule 39.8 to deny Day informa pauperis status last June. See In re Day, 509 U. S. 902 (1993). At that time he had filed 27 petitions in the past nine years. Although Day was granted informa pauperis status to file these petitions, all were denied without recorded dissent. Since we first denied him in forma pauperis status last June, he has filed eight more petitions for certiorari with this Court — all of them demonstrably frivolous.
As we have recognized, “[e]very paper filed with the Clerk of this Court, no matter how repetitious or frivolous, requires some portion of the institution’s limited resources. A part of the Court’s responsibility is to see that these resources are allocated in a way that promotes the interests of justice.” In re McDonald, 489 U. S. 180, 184 (1989) (per curiam). Consideration of Day’s repetitious and frivolous petitions for certiorari does not promote this end.
We have entered orders similar to the present one on previous occasions to prevent pro se petitioners from filing repetitious and frivolous requests for certiorari, see Martin v. District of Columbia Court of Appeals, 506 U. S. 1 (1992) (per curiam), and repetitious and frivolous requests for extraordinary relief. See In re Sindram, 498 U. S. 177 (1991) (per curiam); In re McDonald, supra.
Day’s refusal to heed our earlier warning requires us to take this step. His abuse of the writ of certiorari has been in noncriminal cases, and so we limit our sanction accordingly. The order therefore will not prevent Day from petitioning to challenge criminal sanctions which might be imposed on him. But it will free this Court’s limited resources to consider the claims of those, petitioners who have not abused our certiorari process.
It is so ordered.
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 Marshall
delivered the opinion of the Court.
Respondent was tried and convicted of robbery in the District Court for the District of Columbia. During cross-examination at trial the prosecutor asked respondent why he had not given the police his alibi when he was questioned shortly after his arrest. The trial court instructed the jury to disregard the colloquy but refused to declare a mistrial. The Court of Appeals for the District of Columbia Circuit reversed, holding that inquiry into respondent’s prior silence impermissibly prejudiced his defense and infringed upon his right to remain silent under Miranda v. Arizona, 384 U. S. 436, 468 n. 37 (1966). We granted certiorari, 419 U. S. 1045, because of a conflict among the Courts of Appeals over whether a defendant can be cross-examined about his silence during police interrogation, and because of the importance of this question to the administration of justice.
We find that the probative value of respondent’s pretrial silence in this case was outweighed by the prejudicial impact of admitting it into evidence. Affirming the judgment on this ground, we have no occasion to reach the broader constitutional question that supplied an alternative basis for the decision below.
I
On June 1, 1971, Lonnie Arrington reported to police that he had been attacked and robbed by a group of five men. Initially, he claimed that $65 had been stolen, but he later changed the amount to $96 after consulting with his wife. As the police were preparing to accompany Arrington through the neighborhood in search of the attackers, he observed two men and identified one of them as one of his assailants. When the police gave chase, the two men fled but one was immediately captured. The victim identified respondent Hale as one of the robbers.
Respondent was then arrested, taken to the police station, and advised of his right to remain silent. He was searched and found to be in possession of $158 in cash. An officer then asked: “Where did you get the money?” Hale made no response.
At trial respondent took the witness stand in his own defense. He acknowledged having met Arrington in a shoe store on the day in question. Hale stated that, after the meeting, he was approached by three men who inquired whether Arrington had any money, to which Hale replied he “didn’t know.” From there respondent claimed he went to a narcotics treatment center, where he remained until after the time of the robbery. According to his testimony he left the center with a friend who subsequently purchased narcotics. Shortly after the transaction they were approached by the police. Hale testified that he fled because he feared being found in the presence of a person carrying narcotics. He also insisted that his estranged wife had received her welfare check on that day and had given him approximately $150 to purchase some money orders for her as he had done on several prior occasions.
In an effort to impeach Hale’s explanation of his possession of the money, the prosecutor caused Hale to admit on cross-examination that he had not offered the exculpatory information to the police at the time of his arrest:
“Q. Did you in any way indicate [to the police] where that money came from?
“A. No, I didn’t.
“Q. Why not?
“A. I didn’t feel that it was necessary at the time.”
The Government takes the position that since the respondent chose to testify in his own behalf, it was permissible to impeach his credibility by proving that he had chosen to remain silent at the time of his arrest. For this proposition the Government relies heavily on this Court’s decision in Raffel v. United States, 271 U. S. 494 (1926). There, a second trial was required when the first jury failed to reach a verdict. In reliance on his privilege against compulsory self-incrimination, the accused declined to testify at his first trial. At the second trial, however, he took the stand in an effort to refute the testimony of a Government witness. Over objection, Raffel admitted that he had remained silent in the face of the same testimony at the earlier proceeding. Under these circumstances the Court concluded that Raffel’s silence at the first trial was inconsistent with his testimony at the second, and that his silence could be used to impeach the credibility of his later representations. The Government argues that silence during police interrogation is similarly probative and should therefore be admissible for impeachment purposes.
We cannot agree. The assumption of inconsistency underlying Raffel is absent here. Rather, we find the circumstances of this case closely parallel to those in Grunewald v. United States, 353 U. S. 391 (1957), and we conclude that the principles of that decision compel affirmance here.
II
A basic rule of evidence provides that prior inconsistent statements may be used to impeach the credibility of a witness. As a preliminary matter, however, the court must be persuaded that the statements are indeed inconsistent. 3A J. Wigmore, Evidence § 1040 (J. Chadbourn rev. 1970) (hereafter Wigmore). If the Government fails to establish a threshold inconsistency between silence at the police station and later exculpatory testimony at trial, proof of silence lacks any significant probative value and must therefore be excluded.
In most circumstances silence is so ambiguous that it is of little probative force. For example, silence is commonly thought to lack probative value on the question of whether a person has expressed tacit agreement or disagreement with contemporaneous statements of others. See 4 Wigmore § 1071. Silence gains more probative weight where it persists in the face of accusation, since it is assumed in such circumstances that the accused would be more likely than not to dispute an untrue accusation. Failure to contest an assertion, however, is considered evidence of acquiescence only if it would have been natural under the circumstances to object to the assertion in question. 3A iVigmore § 1042. The Raffel Court found that the circumstances of the earlier confrontation naturally called for a reply. Accordingly, the Court held that evidence of the prior silence of the accused was admissible. But the situation of an arrestee is very different, for he is under no duty to speak and, as in this case, has ordinarily been advised by government authorities only moments earlier that he has a right to remain silent, and that anything he does say can and will be used against him in court.
At the time of arrest and during custodial interrogation, innocent and guilty alike — perhaps particularly the innocent — may find the situation so intimidating that they may choose to stand mute. A variety of reasons may influence that decision. In these often emotional and confusing circumstances, a suspect may not have heard or fully understood the question, or may have felt there was no need to reply. See Traynor, The Devils of Due Process in Criminal Detection, Detention, and Trial, 33 U. Chi. L. Rev. 657, 676 (1966). He may have maintained silence out of fear or unwillingness to incriminate another. Or the arrestee may simply react with silence in response to the hostile and perhaps unfamiliar atmosphere surrounding his detention. In sum, the inherent pressures of in-custody interrogation exceed those of questioning before a grand jury and compound the difficulty of identifying the reason for silence.
Respondent, for example, had just been given the Miranda warnings and was particularly aware of his right to remain silent and the fact that anything he said could be used against him. Under these circumstances, his failure to offer an explanation during the custodial interrogation can as easily be taken to indicate reliance on the right to remain silent as to support an inference that the explanatory testimony was a later fabrication. There is simply nothing to indicate which interpretation is more probably correct.
Ill
Our analysis of the probative value of silence before police interrogators is similar to that employed in Grunewald v. United States, supra. In that case a witness before a grand jury investigating corruption in the Internal Revenue Service declined to answer a series of questions on the ground that the answers might tend to incriminate him. The witness, Max Halperin, was later indicted for conspiracy to defraud the United States. At trial he took the stand to testify in his own defense, and there responded to the same questions in a manner consistent with innocence. On cross-examination the prosecutor elicited, for purposes of impeachment, testimony concerning the defendant’s .earlier invocation of the Fifth Amendment on the same subject matter. The Court framed the issue of Halperin’s prior silence as an evidentiary problem and concluded that the circumstances surrounding Halperin’s appearance before the grand jury justified his reliance on the Fifth Amendment, imposed no mandate to speak, and presented valid reasons, other than culpability, for deferring comment. The Court ruled that Halperin’s prior silence was not so clearly inconsistent with his later testimony as to justify admission of evidence of such silence as evidence of a prior inconsistent “statement.”
In Grünewald the Court identified three factors relevant to determining whether silence was inconsistent with later exculpatory testimony: (1) repeated assertions of innocence before the grand jury; (2) the secretive nature of the tribunal in which the initial questioning occurred; and (3) the focus on petitioner as potential defendant at the time of the arrest, making it “natural for him to fear that he was being asked questions for the very purpose of providing evidence against himself.” 353 U. S., at 423.
Applying these factors here, it appears that this case is an even stronger one for exclusion of the evidence than Grünewald. First, the record reveals respondent’s repeated assertions of innocence during the proceedings; there is nothing in the record of respondent’s testimony inconsistent with his claim of innocence. Second, the forum in which the questioning of Hale took place was secretive and in addition lacked such minimal safeguards as the presence of public arbiters and a reporter, which were present in Grünewald. Even more than Halperin, respondent may well have been intimidated by the setting, or at the very least, he may have preferred to make any statements in more hospitable surroundings, in the presence of an attorney, or in open court. Third, Hale’s status as a “potential defendant” was even clearer than Halperin’s since Hale had been the subject of eyewitness identification and had been arrested on suspicion of having committed the offense.
The Government nonetheless contends that respondent’s silence at the time of his arrest is probative of the falsity of his explanation later proffered at trial because the incentive of immediate release and the opportunity for independent corroboration would have prompted an innocent suspect to explain away the incriminating circumstances. On the facts of this case, we cannot agree. Petitioner here had no reason to think that any explanation he might make would hasten his release. On the contrary, he had substantial indication that nothing he said would influence the police decision to retain him in custody. At the time of his arrest petitioner knew that the case against him was built on seemingly strong evidence — on an identification by the complainant, his flight at that time, and his possession of $158. In these circumstances he could not have expected the police to release him merely on the strength of his explanation. Hale’s prior contacts with the police and his participation in a narcotics rehabilitation program further diminished the likelihood of his release, irrespective of what he might say. In light of the many alternative explanations for his pretrial silence, we do not think it sufficiently probative of an inconsistency with his in-court testimony to warrant admission of evidence thereof.
IV
Not only is evidence of silence at the time of arrest generally not very probative of a defendant’s credibility, but it also has a significant potential for prejudice. The danger is that the jury is likely to assign much more weight to the defendant’s previous silence than is warranted. And permitting the defendant to explain the reasons for his silence is unlikely to overcome the strong negative inference that the jury is likely to draw from the fact that the defendant remained silent at the time of his arrest.
As we have stated before: “When the risk of confusion is so great as to upset the balance of advantage, the evidence goes out.” Shepard v. United States, 290 U. S. 96, 104 (1933). We now conclude that the respondent’s silence during police interrogation lacked significant probative value and that any reference to his silence under such circumstances carried with it an intolerably prejudicial impact.
Accordingly, we hold that under the circumstances of this case it was prejudicial error for the trial court to permit cross-examination of respondent concerning his silence during police interrogation, and we conclude, in the exercise of our supervisory authority over the lower federal courts, that Hale is entitled to a new trial.
The judgment below is
Affirmed.
Mr. Justice Blackmun concurs in the result.
Respondent was tried in Federal District Court prior to the effective date for the transfer of jurisdiction over D. C. Code offenses under the District of Columbia Court Reform and Criminal Procedure Act of 1970, Pub. L. 91-358, 84 Stat. 473.
Compare United States v. Semensohn, 421 F. 2d 1206, 1209, (CA2 1970); United States v. Brinson, 411 F. 2d 1057, 1060 (CA6 1969); Fowle v. United States, 410 F. 2d 48 (CA9 1969); and Johnson v. Patterson, 475 F. 2d 1066 (CA10), cert. denied, 414 U. S. 878 (1973), with United States ex rel. Burt v. New Jersey, 475 F. 2d 234 (CA3), cert. denied, 414 U. S. 938 (1973); and United States v. Ramirez, 441 F. 2d 950, 954 (CA5), cert. denied, 404 U. S. 869 (1971).
Immediately following the exchange, the court cautioned the jury that the questioning was improper and that they were to disregard it. The Court of Appeals held that the error was not cured by this instruction, and the Government does not contend in this Court that the error was harmless.
Since we do not reach the constitutional claim raised today, we need not decide whether the Raffel decision has survived Johnson v. United States, 318 U. S. 189 (1943), and Griffin v. California, 380 U. S. 609 (1965). See Grunewald v. United States, 353 U. S. 391, 425-426 (1957) (Black, J., concurring).
See Kamisar, Kauper’s “Judicial Examination of the Accused” Forty Years Later — Some Comments on a Remarkable Article, 73 Mich. L. Rev. 15, 34 n. 70 (1974).
“Innocent men are more likely to [remain silent] in secret proceedings, where they testify without advice of counsel and without opportunity for cross-examination, than in open court proceedings, where cross-examination and judicially supervised procedure provide safeguards for the establishing of the whole, as against the possibility of merely partial, truth.” Grunewald v. United States, 353 U. S., at 422-423.
We recognize that the question whether evidence is sufficiently inconsistent to be sent to the jury on the issue of credibility is ordinarily in the discretion of the trial court. “But where such evidentiary matter has grave constitutional overtones ... we feel justified in exercising this Court's supervisory control.” Grunewald v. United States, 353 U. S., at 423-424.
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:
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A
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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 writ of certiorari is dismissed as 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:
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I
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sc_issuearea
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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.
Per Ctjriam.
Petitioner’s participation in a plot to rob safe-deposit boxes of the Doral Beach Hotel in Miami Beach, Fla., violated the laws of both the State of Florida and the United States. He has been tried, convicted, and sentenced to imprisonment by both sovereigns. He claims that his federal conviction was obtained in violation of established federal policy against multiple prosecutions for the same offense and, for that reason, should be set aside. The Solicitor General agrees and submits that the Court should summarily “vacate the judgment of the court of appeals and remand the case to the district court with instructions to dismiss the indictment.” Based on our independent evaluation of the unusual circumstances disclosed by this record, we conclude that such summary disposition is appropriate.
In February 1973, petitioner was charged with state offenses arising out of the Doral Beach Hotel robbery. In March 1973, an indictment was returned in the United States District Court for the Southern District of Florida, charging him with conspiracy to affect interstate commerce by robbery in violation of the Hobbs Act, 18 U. S. C. § 1951. In May, petitioner was convicted of the state charges in the Dade County Circuit Court and sentenced to six years’ imprisonment. A subsequent federal trial ended in a mistrial. Thereafter, the District Court questioned Government counsel regarding the need for another trial in view of petitioner’s state convictions. Government counsel responded that he had been instructed by his superiors at the Department of Justice to pursue the federal prosecution vigorously because of their concern that the state convictions might be reversed on appeal. After a second jury trial, petitioner was convicted on the Hobbs Act charge; the District Court imposed a 12-year sentence to run concurrently with the state sentence.
On appeal to the United States Court of Appeals for the Fifth Circuit, petitioner argued that his conviction had been obtained in violation of a longstanding federal policy against multiple prosecutions for the same act. See Petite v. United States, 361 U. S. 529, 530 (1960). The Government acknowledged that its Petite policy had been violated and moved the Court of Appeals to remand the case to the District Court to permit it to seek a dismissal of the indictment. The Court of Appeals granted the motion to remand.
The Government then filed a motion to dismiss the indictment pursuant to Fed. Rule Crim. Proc. 48 (a). Noting that the Rule requires “leave of court,” the District Court denied the motion because (1) the motion was not made until after the trial had been completed; and (2) the prosecutor had acted in bad faith by representing to the District Court that he had been properly instructed to maintain the prosecution notwithstanding the fact that petitioner had already been convicted of a state offense. The Government, joined by petitioner and his codefendant Washington, appealed from the denial of the motion to dismiss.
A divided panel of the Fifth Circuit affirmed, In re Washington, 531 F. 2d 1297 (1976). The Court of Appeals then granted a petition for rehearing en banc and, by a vote of 7 to 6, reaffirmed the panel’s holding. In re Washington, 544 F. 2d 203 (1976). All members of the court agreed that the Government’s motion to dismiss was timely, but they disagreed on the question whether the prosecutor’s bad faith justified the District Court’s refusal to set aside defendant’s conviction.
The majority was of the view that the Government’s unclean hands gave the District Court adequate reason to deny it relief, and that the defendant had no right to have an otherwise valid conviction dismissed simply because the Justice Department violated its own procedures. The dissenters were of the view that the District Court’s inquiry should have been limited to the propriety of the Government’s motivation in seeking a dismissal; under their view, the earlier misconduct was irrelevant and could not justify the judicial imposition of multiple convictions on the defendant.
The policy described in the Petite case limits the federal prosecutor in the exercise of his discretion to initiate, or to withhold, prosecution for federal crimes. The policy is useful to the efficient management of limited Executive resources and encourages local responsibility in law enforcement. But it also serves the more important purpose of protecting the citizen from any unfairness that is associated with successive prosecutions based on the same conduct.
In this respect, the policy represents the Government’s response to repeated expressions of concern by Members of this Court. In United States v. Lanza, 260 U. S. 377, 383 (1922), for example, Mr. Chief Justice Taft quoted the following passage from Fox v. Ohio, 5 How. 410, 435 (1847):
“It is almost certain, that, in the benignant spirit in which the institutions both of the state and federal sys-terns are administered, an offender who should have suffered the penalties denounced by the one would not be subjected a second time to punishment by the other for acts essentially the same, unless indeed this might occur in instances of peculiar enormity, or where the public safety demanded extraordinary rigor.”
What has come to be known as the Petite policy was formulated by the Justice Department in direct response to this Court’s opinions in Bartkus v. Illinois, 359 U. S. 121 (1959), and Abbate v. United States, 359 U. S. 187 (1959), holding that the Constitution does not deny the State and Federal Governments the power to prosecute for the same act. As these decisions recognize, in our federal system the State and Federal Governments have legitimate, but not necessarily identical, interests in the prosecution of a person for acts made criminal under the laws of both. These cases reflect the concern that if the Double Jeopardy Clause were applied when the sovereign with the greater interest is not the first to proceed, the administration of criminal justice may suffer. Bartkus v. Illinois, supra, at 137; Abbate v. United States, supra, at 195. Yet mindful of the potential for abuse in a rule permitting duplicate prosecutions, the Court noted that “[t]he greatest self-restraint is necessary when that federal system yields results with which a court is in little sympathy.” Bartkus v. Illinois, supra, at 138.
In response to the Court’s continuing sensitivity to the fairness implications of the multiple prosecution power, the Justice Department adopted the policy of refusing to bring a federal prosecution following a state prosecution except when necessary to advance compelling interests of federal law enforcement. The Petite policy was designed to limit the exercise of the power to bring successive prosecutions for the same offense to situations comporting with the rationale for the existence of that power. Although not constitutionally mandated, this Executive policy serves to protect interests which, but for the “dual sovereignty” principle inherent in our federal system, would be embraced by the Double Jeopardy Clause. In light of the parallel purposes of the Government’s Petite policy and the fundamental constitutional guarantee against double jeopardy, the federal courts should be receptive, not circumspect, when the Government seeks leave to implement that policy.
Here, the Government filed a motion under Fed. Rule Crim. Proc. 48 (a) seeking “leave of court” to dismiss the federal charges against petitioner. Under the standard applied by the Court of Appeals, the District Court was empowered to withhold leave if the Government’s decision to terminate this prosecution clearly disserved the public interest. United States v. Cowan, 524 F. 2d 504, 513 (CA5 1975). Pursuant to the instructions of a superior at the Justice Department, Government trial counsel represented to the District Court that the United States had decided to vigorously prosecute the federal charges against petitioner in spite of the prior state prosecution. In fact, however, the federal prosecution had not been authorized as required by the Government’s Petite policy. The Court of Appeals considered the prosecutor’s representations incompatible with the public interest in preserving the integrity of the courts. The salient issue, however, is not whether the decision to maintain the federal prosecution was made in bad faith but rather whether the Government’s later efforts to terminate the prosecution were similarly tainted with impropriety. Our examination of the record has not disclosed (and we will not presume) bad faith on the part of the Government at the time it sought leave to dismiss the indictment against petitioner. The decision to terminate this prosecution, based as it was on the Petite policy, was motivated by considerations which cannot fairly be characterized as “clearly contrary to manifest public interest.” 524 F. 2d, at 513.
The overriding purpose of the Petite policy is to protect the individual from any unfairness associated with needless multiple prosecutions. The defendant, therefore, should receive the benefit of the policy whenever its application is urged by the Government. Without derogating from the concern expréssed by the Court of Appeals regarding the actions of certain Government officials at an earlier stage in this prosecution, we agree with the Solicitor General that “ [n] o action by the Department or the Court can now replace the waste of judicial and prosecutorial resources expended in obtaining petitioner’s conviction . . . [and] no societal interest would be vindicated by punishing further a defendant who has already been convicted and has received a substantial sentence in state court and who, the Department has determined, should not have been prosecuted by the federal government.”
It was, therefore, an abuse of the discretion of the District Court to refuse to grant the Government’s motion on the ground that the violation of the Petite policy in this case resulted from prosecutorial misconduct rather than inadvertence. The motion for leave to proceed in forma pauperis and the petition for writ of certiorari are granted. The judgment is vacated, and the case is remanded to the District Court for the purpose of dismissing the indictment.
It is so ordered.
Mr. Chief Justice Burger, dissents.
Memorandum for United States 9.
The state offenses were conspiracy to commit robbery, conspiracy to commit grand larceny, and carrying a concealed weapon.
Section 1951 provides in part:
“(a) Whoever in any way or degree . . . affects commerce ... by robbery ... or conspires so to do . . . shall be fined not more than $10,000 or imprisoned not more than twenty years, or both.”
He was sentenced to concurrent terms of five years’ imprisonment on the conspiracy to commit robbery and grand larceny counts and a consecutive term of one year’s imprisonment on the weapons count. On the State’s confession of error, petitioner’s conviction of conspiracy to commit grand larceny was reversed on appeal. His convictions on the other two counts were affirmed. See Scaldeferri v. State, 294 So. 2d 407 (Fla. App.), cert. denied sub nom. Pompeo v. State, 303 So. 2d 21 (Fla.), cert. denied sub nom. Washington v. Florida, 419 U. S. 993 (1974).
The Petite policy is most frequently applied against duplicating federal-state prosecutions. As stated by the Department of Justice, under that policy a federal trial following a state prosecution for the same act or acts is barred “unless the reasons are compelling.” A United States Attorney contemplating a federal prosecution in these circumstances is required to obtain authorization from an appropriate Assistant Attorney General. In this case, the Justice Department official who instructed trial counsel to insist upon a retrial had not obtained the requisite approval.
But, as the Petite case itself illustrates, the policy also encompasses successive federal prosecutions arising out of the same transaction. In that case, the Solicitor General represented that “it is the general policy of the Federal Government ‘that several offenses arising out of a single transaction should be alleged and tried together and should not be made the basis of multiple prosecutions, a policy dictated by considerations both of fairness to defendants and of efficient and orderly law enforcement.’ The Solicitor General on behalf of the Government represents this policy as closely related to that against duplicating federal-state prosecutions, which was formally defined by the Attorney General of the United States in a memorandum to the United States Attorneys. (Department of Justice Press Release, Apr. 6, 1959).” 361 U. S., at 530-531.
Rule 48 (a) states:
“The Attorney General or the United States attorney may by leave of court file a dismissal of an indictment, information or complaint and the prosecution shall thereupon terminate. Such a dismissal may not be filed during the trial without the consent of the defendant.”
See n. 5, supra.
The prior-authorization requirement in the Petite policy ensures that the Department of Justice will normally make the “compelling reasons” determination prior to commencement of the federal prosecution. On occasion, however, a prosecution is initiated and a conviction obtained in violation of the policy. When the Solicitor General has discovered such a violation in a case pending before this Court, he has sought to remedy it by moving to have the case remanded to allow the Government to dismiss the indictment. Exercising our power to afford relief which is “just under the circumstances,” 28 U. S. C. § 2106, we have granted the Government’s motion on several occasions. See Watts v. United States, 422 U. S. 1032 (1975); Ackerson v. United States, 419 U. S. 1099 (1975); Hayles v. United States, 419 U. S. 892 (1974); Cf. Redmond v. United States, 384 U. S. 264 (1966); Marakar v. United States, 370 U. S. 723 (1962); Petite v. United States, 361 U. S. 529 (1960).
The majority described the Government’s bad faith in the following terms:
“In this case, an unidentified, but responsible, official within the Department authorized a federal prosecution with full knowledge that such a prosecution was forbidden by the Petite Policy. For the Government to attempt to dismiss by arguing that no compelling reason now exists for a separate federal conviction, when the considerations that allegedly imply a lack of 'compelling reason’ were known as fully to the Government throughout both federal trials as now, does, for this court, constitute bad faith.” 544 F. 2d, at 208.
The majority stated:
“The fact that the Justice Department is now reconsidering its original decision to prosecute does not vest defendants with any right to have an otherwise valid conviction dismissed. . . . While a determination of such a motion obviously affects defendants, it is not a defendant’s interest in avoiding a validly obtained conviction that we weigh in our examination of the propriety of . . . [the District Court’s] order.” Id., at 209.
They stated:
“[T]he withholding of leave [to dismiss] in this case was not justified. The motive of the prosecutor in moving for dismissal was based upon the Petite Policy which is not contrary to the public interest. The prosecutor may have acted in the conduct of the entire litigation in a manner not consistent with the public interest, but his motion to dismiss should not be tainted with that prior activity.” Id., at 213 (emphasis in original).
The dissenters also questioned the logic of the majority’s “bad faith” rationale:
“[I]n what has been determined and, indeed, confessed to have been bad faith, the government persisted in a prosecution and obtained, as a result of that bad faith, convictions. The majority holds today that, in order not to 'invite future misconduct by the Government,’ we insist that the government be rewarded with the very convictions that it obtained through bad faith prosecutions and, we deny government counsel the right at long last to recant and in good faith dismiss the indictment.” Id., at 210-211.
In announcing the policy, Attorney General Rogers stated:
“Cooperation between federal and state prosecutive officers is essential if the gears of the federal and state systems are to mesh properly. We should continue to make every effort to cooperate with state and local authorities to the end that the trial occur in the jurisdiction, whether it be state or federal, where the public interest is best served. If this be determined accurately, and is followed by efficient and intelligent cooperation of state and federal law enforcement authorities, then consideration of a second prosecution very seldom should arise.” Dept, of Justice Press Release, Apr. 6, 1959, p. 3.
At the heart of the policy announced by Attorney General Rogers was the statement:
“It is our duty to observe not only the rulings of the Court but the spirit of the rulings as well. In effect, the Court said that although the rule of the Lanza case is sound law, enforcement officers should use care in applying it.
“Applied indiscriminately and with bad judgment it, like most rules of law, could cause considerable hardship. Applied wisely it is a rule that is in the public interest. Consequently — as the Court clearly indicated — those of us charged with law enforcement responsibilities have a particular duty to act wisely and with self-restraint in this area.” Ibid.
The words “leave of court” were inserted in Rule 48 (a) without explanation. While they obviously vest some discretion in the court, the circumstances in which that discretion may properly be exercised have not been delineated by this Court. The principal object of the “leave of court” requirement is apparently to protect a defendant against prosecu-torial harassment, e. g., charging, dismissing, and recharging, when, the Government moves to dismiss an indictment over the defendant’s objection. See, e. g., United States v. Cox, 342 F. 2d 167, 171 (CA5), cert. denied, sub nom. Cox v. Hauberg, 381 U. S. 935 (1965); Woodring v. United States, 311 F. 2d 417, 424 (CA8), cert. denied, sub nom. Felice v. United States, 373 U. S. 913 (1963). But the Rule has also been held to permit the court to deny a Government dismissal motion to which the defendant has consented if the motion is prompted by considerations clearly contrary to the public interest. See United States v. Cowan, 524 F. 2d 504 (CA5 1975); United States v. Ammidown, 162 U. S. App. D. C. 28, 33, 497 F. 2d 615, 620 (1973). It is unnecessary to decide whether the court has discretion under these circumstances, since, even assuming it does, the result in this case remains the same.
In reaching a contrary conclusion, the Court of Appeals relied heavily on the remarks of a Government attorney during oral argument. Attempting to rebut the charge that the “responsible person” in the Justice Department who authorized this prosecution showed bad faith by not seeking the approval of the Attorney General, the Government attorney apparently contended it would be proper to continue a federal prosecution until the integrity of a prior state conviction was assured and then to seek dismissal of the federal charges. If counsel’s argument represented the position of the United States, it would indeed mark a departure from the Petite policy. But we are persuaded that counsel’s overzealous attempt to rationalize the prior conduct of the prosecution did not signal a new Executive policy on multiple prosecutions. The Solicitor General unequivocally states that the Government has strictly adhered to the Petite policy since its announcement in 1959. Memorandum for United States 3, 7. The Solicitor General represents further that the Government sought dismissal of the indictment in this case because it discovered on appeal from petitioner’s federal conviction that the prosecution was initiated and maintained without the prior authorization required by the Petite policy. Id., at 3, 6-7. There is no suggestion in this case that the Assistant Attorney General charged with enforcement of the Petite policy was cognizant of the violation until shortly before the Government’s request for leave to dismiss the indictment. In these circumstances, we cannot accept the conclusion of the Court of Appeals that the Government’s decision to dismiss the indictment was made in bad faith.
The Court of Appeals thought it necessary to deprive petitioner of the policy’s benefit in order to deter future misconduct by Government attorneys. As did the dissenters below, we fail to see how rewarding those responsible for the Petite policy violation with a conviction serves to deter prosecutorial misconduct. Indeed, a result which leaves intact a conviction obtained through a prosecution tainted by bad faith may encourage repetition of the impropriety disclosed by the record in 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
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sc_issuearea
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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.
Per Curiam.
The writ of certiorari is dismissed as improvidently granted.
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:
|
I
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sc_issuearea
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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.
Mr. Justice Frankfurter
delivered the opinion of the Court.
On March 6, 1940, the National Labor Relations Board, on finding that the Donnelly Garment Company had engaged in labor practices condemned as “unfair” by the Wagner Act, issued an order against the Company “to effectuate the policies” of the Act. The Circuit Court of Appeals for the Eighth Circuit denied enforcement of the order and remanded the case to the Board. 123 F. 2d 215. After carrying out what it conceived to be the directions of the Court, the Board again found against the Company. The Court below denied enforcement of the Board’s second order “for want of due process in the proceedings upon which the order is based.” 151 F. 2d 854, 875. The correctness of this ruling is now before us, for we brought the case here, 327 U. S. 775, to rule on important issues in the administration of the Wagner Act. This protracted litigation has given rise to a swarm of questions. In view of the fact that the case comes to us after it has been twice before the Board and three times before the court below, on a record of thirteen volumes with a total of more than 5000 pages, even an earnest attempt at compactness cannot avoid a somewhat extended opinion.
The case presents limited legal phases of one of those bitter, unedifying conflicts with which American industrial history is unfortunately replete. For other litigation growing out of this strife, see 20 F. Supp. 767; 21 F. Supp. 807; 304 U. S. 243; 23 F. Supp. 998; 99 F. 2d 309; 119 F. 2d 892; 121 F. 2d 561; 47 F. Supp. 61; 47 F. Supp. 65; 47 F. Supp. 67; 55 F. Supp. 572; 55 F. Supp. 587; 147 F. 2d 246; 154 F. 2d 38. It has its roots in a campaign by the International Ladies’ Garment Workers’ Union (hereafter designated as International) to unionize the women’s garment industry in Kansas City, Missouri. Because of its importance, the Donnelly Garment Company (to be called Company for short) became the particular target of these unionizing efforts. These continued with varying intensity over a period of years but met with little success among the Company’s employees.
In 1938, International began proceedings before the Board charging the Company with a series of unfair labor practices in violation of § 8 (1), (2), (3) of the National Labor Relations Act, 49 Stat. 449, 29 U. S. C. §§ 151 et seq. The main charge was that the Company, to counteract the efforts of International, had stimulated the formation of a plant union, the Donnelly Garment Workers’ Union (hereafter called Union) and had dominated it through financial and other aid. Following the usual procedure there was a hearing before a trial examiner. At the hearing, the Examiner rejected an offer by the Company to prove, through the testimony of 1200 employees, that they had not been coerced by the Company to join Union, but that each of them had done so of his own free will, and that they had no knowledge of Company influence in the affairs of Union. The Examiner also excluded evidence to show that the formation of the Union followed strike threats and violence by International, successful against smaller competitors of the Company, to coerce the Company into a closed-shop agreement with International. To these and other less important exclusions the Company duly excepted on the submission of the Trial Examiner’s intermediate report. The Board upheld the Examiner’s rulings on evidence, accepted his findings of fact, and, with a qualification not here relevant, adopted his recommendations. Thereupon it issued the usual cease-and-desist order, and directed the disestablishment of Union and reimbursement to employees of the amount of the dues which the Company had checked off on behalf of Union (21 N. L. R. B. 164).
Review of this order came before the Circuit Court of Appeals on the Company’s petition to set it aside and on the Board’s cross-petition for its enforcement. On several contentions, the disposition of which is relevant to the questions now calling for decision, the Court sustained the Board. It found no basis for setting aside the proceedings as unfair on the claim that either the Examiner or the Board was biased. It held that the Board properly-limited the evidence to issues raised by the complaint, and since International was not on trial it found no impropriety in the exclusion of evidence offered to prove its misconduct. The Court did however find that the Company had been denied a fair hearing in not being allowed to present the testimony of its employees to the effect that Union was truly independent and that they had joined it voluntarily. The Court remanded the case to the Board “for further proceedings not inconsistent with the opinion of this Court.”
The Board thereupon set the case for a second hearing before the original Examiner. Insisting that he was biased and had prejudged as valueless “the evidence to be adduced at the pending hearing,” the Company moved for a new trial examiner. The Board denied the application and the case proceeded to hearing. This time the Examiner heard eleven of the 1200 employees named in the offer of proof rejected in the earlier proceeding, but declined to hear the rest on the ground that their testimony would be merely cumulative. He allowed the President of the Company, whom illness had kept from the earlier hearing, to testify fully. Otherwise, he received no evidence that had been available but was not offered at the earlier proceeding, and excluded all evidence of events subsequent to the termination of the first hearing. The Examiner’s findings and recommendations, in respects here material, were substantially the same as those he had previously made, and the Board, acting upon his intermediate report, issued virtually the same order. 50 N. L. R. B. 241. The Company again petitioned the Circuit Court of Appeals to set aside the order, and the Board again requested its enforcement. During the pendency of these proceedings, the Company invoked § 10 (e) of the Wagner Act and asked the Court leave to adduce before the Board evidence which it claimed had been erroneously excluded. This motion was not granted. Instead, as already noted, the Court denied the Board’s petition for enforcement “for want of due process in the proceedings upon which the order is based.” 151 F. 2d 854, 875. The Court set forth its views in a careful opinion of more than thirty pages in the printed record. There was also a concurring opinion, and a dissent.
The Court canvassed many items of evidence. As to some of the Board’s rulings which it disapproved, the Court stated explicitly that by themselves they would not have afforded sufficient ground for reversal. Rulings which individually would not invalidate an order of the Board do not in combination acquire the necessary strength to undo what the Board, acting under authority given it by Congress, has done. We do not find that in their combination these rulings amounted to unfairness. We must therefore consider one by one those objections which the Court deemed sufficient to vitiate the Board’s order. For the Court below did not suggest that the Board as a tribunal was so biased as to be incapable of fair judgment in this case. It found that such a finding against the Board was not justified.
First. The controlling basis of the Court’s finding of unfairness in the Board proceedings related to testimony proffered by the Company at the second hearing before the Examiner. This second hearing was not a new proceeding. It was a stage in a process consisting of the first proceeding before the Board, the remand resulting from review of the Board’s order in the Circuit Court of Appeals, and the second proceeding before the Board in response to this remand. The correctness of the Court’s judgment refusing enforcement of the Board’s second order must be judged in the light of the interrelation of the two proceedings before the Board, and the Board’s justifiable interpretation of the directions which it received upon remand of the first order. Indeed, the disposition of the present case turns decisively on the view that is taken of the Board’s interpretation of its duty under the Court’s mandate.
It becomes necessary therefore to revert to the precise terms of the Court’s mandate. The order was remanded by the Circuit Court of Appeals “to said Labor Board for further proceedings not inconsistent with the opinion of this Court.” The Court’s opinion yields this gloss upon its mandate:
“Our conclusion is that the petition of the Board for enforcement of the order under review must be denied. We think that the least that the Board can do, in order to cure the defects in its procedure caused by the failure of the Trial Examiner to receive admissible evidence, is to vacate the order and the findings and conclusions upon which it is based; to accord to the petitioners [the Company and the plant union] an opportunity to introduce all of the competent and material evidence which was rejected by the Trial Examiner; and to receive and consider such evidence together with all other competent and material evidence in the record before making new findings and a new order.” 123 F. 2d 215, 225.
The Board based its new order upon the record of the first proceeding, reopening the hearing only for the purpose of admitting the erroneously excluded testimony of the employees. In short, the Board did not understand the remand to call for a new trial. The Court, when called upon to construe it four years later, took a different view of the meaning of its decision of November, 1941: “It is, we think, apparent that what this Court, in effect, ruled was that the Company and the plant union were entitled to a new trial upon the evidence already taken and such competent and material evidence as might be proffered upon a further hearing.” 151 F. 2d 854, 856. From this point of view, the Court could readily conclude that the record which came to it “presents an incomplete picture.”
We have recognized that “the court that issues a mandate is normally the best judge of its content, on the general theory that the author of a document is ordinarily the authoritative interpreter of its purposes.” But, we continued, “it is not even true that a lower court’s interpretation of its mandate is controlling here. Compare United States v. Morgan, 307 U. S. 183. Therefore, we would not be foreclosed by the interpretation which the Court of Appeals gave to its mandate, even if it had been directed to a lower court.” Federal Communications Comm’n v. Pottsville Broadcasting Co., 309 U. S. 134, 141. Here, as in that case, a much deeper issue is involved. As we had occasion to point out in the Pottsville case, there are significant differences between the relations of an appellate court to a lower court and those of a court to a law-enforcing agency, like the Board, whose order is subject only to restricted judicial review. These differences may be particularly telling upon remand of an order to the agency. Due regard for these differences must guide us through the maze of details in this case.
In the context of the opinion remanding the Board’s original order and of the nature of the administrative process with which it is entrusted, the Board was justified in not deeming itself under duty to grant a “new trial” in the sense in which a lower court must start anew when an upper court directs such a new trial. There was no reference to a “new trial,” nor was any intimation given that such was the breadth of what the remand required. From the Court’s opinion there appears only a very restricted dissatisfaction with the original proceedings before the Board, calling for a correspondingly restricted correction. “The least that the Board can do,” wrote the court, “is ... to accord to the petitioners an opportunity to introduce all of the competent and material evidence which was rejected by the Trial Examiner; and to receive and consider such evidence together with all other competent and material evidence in the record before making new findings and a new order.” 123 F. 2d at 225. “The least that the Board can do” may well imply that the Board is authorized to draw on the wide scope of its statutory discretion. But to advise the Board of “the least that [it] can do” does not put the Board in default for not doing more. Due process does not afford a party the right to treat as a rehearsal a hearing on the issues for which the hearing was adequate. And the Wagner Act does not require that ground be covered a second time or piecemeal.
Second. Since in our view the remand did not call for a proceeding de novo, the Board was not required to reopen any issue as to which its ruling was left unassailed by the Circuit Court of Appeals in its first decision. We shall therefore consider the particular defects which the Circuit Court of Appeals found in the second hearing, by treating that hearing not as a new trial but as the sequel of the first hearing under a remand by the Circuit Court of Appeals for the limited purpose of correcting the prior erroneous exclusion of testimony.
(1) The Board’s decision that the Company had engaged in unfair labor practices to a large extent turned on the Company’s relation to the plant union. It is fair to infer that the lower court’s denial of enforcement of the Board’s order was influenced most by its finding that the Trial Examiner and the Board did not comply with the Court’s mandate on the first review regarding the proffer of testimony of the Company’s employees to the effect that they voluntarily organized and joined the Union and that, to their knowledge, its affairs were uninfluenced by the Company. At the second hearing the Examiner admitted the testimony of eleven such employees, excluding further oral testimony of the same nature as merely cumulative. The court below did not quarrel with confining this line of testimony to eleven witnesses. But it reached the view that neither the Examiner nor the Board took this testimony into account in reaching the findings on which the Board’s second order was based. It was principally from this that the Court concluded that the Company was denied the full hearing to secure which the case was remanded to the Board.
According to an early English judge, “The devil himself knoweth not the mind of man,” and a modern reviewing court is not much better equipped to lay bare unexposed mental processes. It is a grave responsibility to conclude that in admitting the testimony of the Company’s employees, the Board went through a mere pretense of obedience to the Court’s direction, and heard the testimony with a deaf ear and a closed mind. In light of the authority with which Congress has endowed the Board, and with due regard to the conscientiousness which we must attribute to another branch of the Government, we cannot reject its explicit avowal that it did take into account evidence which it should have considered unless an examination of the whole record puts its acceptance beyond reason. Since this matter is crucial, it is appropriate to quote fully the Board’s decision on the point:
“In remanding the case to the Board for further hearing, the Circuit Court directed that the respondent [the Company] and the D. G. W. U. [the plant union] be permitted to adduce the previously proffered testimony of respondent’s [the Company’s] employees to show, in substance, that they formed and joined the D. G. W. U. of their own free will and that they were not influenced, interfered with, or coerced by the respondent in choosing that organization as their bargaining representative. In compliance with the Court’s mandate and pursuant to the respective offers of proof submitted by the respondent and the D. G. W. U. at the original hearing, the Board permitted the introduction of such testimony. We have carefully considered all such evidence adduced by the respondent and the D. G. W. U. We find, however, that the testimony in question does not overcome more positive evidence in the record that the respondent committed acts of interference and assistance in the formation and administration of the D. G. W. U. which subjected that organization to the respondent’s domination and which removed from the employees’ selection of the D. G. W. U. the complete freedom of choice which the Act contemplates. Since we find the testimony here adduced totally unpersuasive that the employees voluntarily designated the D. G. W. U., we are moreover impelled to adhere to the opinion, derived from our experience in administration of the Act, that conclusionary evidence of this nature is immaterial to issues such as those presented in this case. A consideration of all the evidence convinces us, and we find, that the respondent dominated and interfered with the formation and administration of the D. G. W. U. and contributed support thereto; and that the respondent thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act.” 50 N. L. R. B. 241.
We cannot read this otherwise than as an assurance by the Board that it did not merely go through the motions of allowing the testimony of these witnesses to get into the record as an empty formality, but that it duly heeded the order of the Court and reflected upon the testimony. The Board judged of its worth, as it had a right to, in light of the mass of other testimony in the case, and found it unpersuasive. Had the Board said no more the court below could hardly have found disregard of its mandate. The Board’s skeptical expression regarding this kind of testimony hardly disproves obedience to the Court’s mandate. Even lower courts sometime indicate disagreement with a ruling they are bound to enforce. Out of repeated instances of hearing the same thing a generalization as to its worth will almost inevitably emerge in the thoughts of a tribunal. As to this sort of testimony, it has been observed that a feeling by employees “that they were under no sense of constraint , . . is a subtle thing, and the recognition of constraint may call for a high degree of introspective perception.” Judge Magruder in Bethlehem Shipbuilding Corp. v. National Labor Relations Board, 114 F. 2d 930, 937. We are not called upon to lay down a general rule of materiality regarding such testimony. Suffice it to say that the Board obeyed the decision of the Circuit Court of Appeals that the testimony of the Company’s employees regarding Union was to be adduced and considered. Its probative value was for the Board. See Pittsburgh Plate Glass Co. v. National Labor Relations Board, 313 U. S. 146, 163. And the Court did not rule that the rest of the record repelled the Board’s assurance that it “carefully considered” the evidence the Court bade it to consider. It expressly withheld consideration of the Board’s order on the basis of the whole record.
(2) The new testimony of the Donnelly employees led to rulings on evidence by the Examiner, approved by the Board, which in the view of the Court below contributed to render the hearing unfair. The testimony related to the offensive aspect of International’s unionizing efforts and the bearing of this upon the claim of Company that Union was quite independent and not the Company’s instrument. The employees were allowed to testify that they were antagonized by acts of violence on the part of International and that they sought self-protection in a union of their own, voluntarily formed. The Examiner limited this line of testimony to acts of violence within six months preceding the organization of Union. This was based on the notion that a time limit had to be drawn somewhere in ascertaining the effect of known violence in persuading Donnelly employees to form their own union, and that a period longer than six months was too remote, or, in any event, had not sufficient probative value. Surely this was a reasonable ruling by the hearing-tribunal. At any rate it was not so circumscribing of proof in establishing the issue toward which the evidence was directed as to call for correction. But it is urged that while the Company was so restricted on proof of this issue the Board allowed evidence further back calculated to show a continuous state of mind toward influencing employee association by the Company. By way of rebuttal to the employees’ testimony that the plant union of 1937 was a spontaneous effort of the employees wholly uninfluenced by the Company, the Board admitted evidence to show that the Company fostered a company union in 1935. It does not follow that the limitation of time on admissible evidence is the same regardless of the issue for which the evidence is tendered. Certainly we cannot say that it was not admissible to allow this evidence of company coercion in 1935 as bearing on the independence of the new plant union in 1937. And so we cannot find a solid enough ground to establish discriminatory treatment by the Board because on this issue it went back to 1935 whereas on the issue of the influence of International’s violence in the formation of the 1937 plant union, it drew the line at events six months prior thereto.
(3) While we think that the Board properly construed the scope of the remand not to require a retrial of issues canvassed at the first hearing, time does not stop still even for the administrative process. Change in circumstances may make relevant at the second hearing what was irrelevant at the first hearing. The Circuit Court of Appeals found such a change in circumstances in a decision of this Court rendered after the first review below. In its decision of November 6, 1941, the Circuit Court of Appeals sustained the exclusion by the Board of testimony to prove misdeeds by International. The tenor of its reasoning was that an inquiry into charges of unfair labor practices by the Company did not make relevant charges of misconduct against International, the complainant. The Board issued the order now challenged on June 9, 1943. In the meantime, on January 18, 1943, this Court decided National Labor Relations Board v. Indiana & Michigan Electric Co., 318 U. S. 9. That case, so the court below thought, required the admission at the second hearing of the offer of proof regarding International’s acts of violence.
We regard this as a misapplication of the Indiana & Michigan case. This case is not that case. They have in common an accusation of grave misconduct against a complainant before the Board. Otherwise, the circumstances of the two cases, and the legal issues they raise, are very different. The Indiana & Michigan case involved a proceeding under § 10 (e) of the National Labor Relations Act authorizing the Circuit Court of Appeals to order additional evidence to be taken before the Board when it is shown “to the satisfaction of the court that such additional evidence is material and that there were reasonable grounds for the failure to adduce such evidence” at the hearing. We had previously held that such an application “was addressed to the sound judicial discretion of the court.” Southport Petroleum Co. v. Labor Board, 315 U. S. 100, 104. Section 10 (e) in effect formulates a familiar principle regarding newly discovered evidence. Even without such explicitness this Court has, on occasion, not allowed administrative orders to stand where there has been a drastic change in circumstances. In Indiana & Michigan the offer of proof related to events subsequent to the Board’s hearing, tending to show acts of serious violence on behalf of a complaining union. The Board had refused to reopen the case and the Circuit Court of Appeals for the Sixth Circuit granted the application under § 10 (e). We held that, in the light of the circumstances before it, the Circuit Court of Appeals did not abuse its discretion in ordering additional evidence to be taken before the Board. The proffered testimony was held relevant on three grounds: (1) Inasmuch as the Board, by the very nature of its case load, must exercise discretion in entertaining complaints, the newly revealed misconduct on the part of the complainant might affect, not the jurisdiction of the Board, but the exercise of its power to entertain a charge; (2) the new evidence bore materially upon the credibility of some important witnesses before the Board; (3) the Board had attributed to the Company responsibility for the conduct of some of its supervisory employees, and the new evidence might lead the Board to conclude that their conduct was to be attributed to self-interest and not charged against the employer.
Here we have a totally different situation. We are not reviewing an allowable exercise of judicial discretion by the Circuit Court of Appeals in ordering the Board to hear newly discovered evidence. On review of its order, the Board cannot be compelled to admit evidence which it excluded unless such exclusion was clearly insupportable. The power to adduce additional evidence granted to the Circuit Court of Appeals by § 10 (e) cannot be employed to enlarge the statutory scope of judicial review. The short of the matter is that the Court deemed it reversible error on the part of the Board not to entertain testimony on a matter which the court deemed irrelevant to the issues at the first hearing. It did so because it interpreted the Indiana & Michigan case to hold that failure by the Board to allow a full-dress inquiry into the misconduct of a complainant, particularly if very serious, renders the proceedings unfair as a matter of law. We were not dealing with such an abstraction in the Indiana & Michigan case. Nothing short of such an abstraction will justify invalidation of the order in this case because the Board did not deal with the charges against International as a separate issue, or as though the International had been on trial. The only consideration affecting the behavior of a complainant that played a part in the decision in Indiana & Michigan and which may here be invoked, is the suggestion that the character of a complainant may rightfully influence the Board in entertaining a complaint. But the charges against International had in fact been brought to the attention of the Board even though not in the way in which International would have been tried had it been formally charged with crime. It would be unreal to deny that there was plenty of evidence in the record to apprise the Board of alleged misconduct by International if on that score it chose not to entertain charges of unfair labor practices against the company. In the light of the Board’s opinion, it would be doctrinaire to assume that it would have reached any other result if evidence of International’s misconduct had been more voluminous. Pittsburgh Plate Glass Co. v. National Labor Relations Board, supra. The two other respects in which newly discovered evidence as to violence was ordered to be heard in the Indiana & Michigan case are completely lacking here. Here we have not new evidence material to the credibility of important witnesses or relevant in assessing the responsibility by an employer for conduct of supervisory employees. The refusal of the Board in effect to try International did not impair the validity of the Board’s order.
Even in judicial trials, the whole tendency is to leave rulings as to the illuminating relevance of testimony largely to the discretion of the trial court that hears the evidence. See, e. g., Morgan, Foreword, American Law Institute Code of Evidence, p. 15. Courts of appeal are less and less inclined to base error on such rulings. Administrative tribunals are given even freer scope in the application of the conventional rules of evidence. See Tagg Bros. v. United States, 280 U. S. 420, 442. It is significant that the Wagner Act specifically provided that “the rules of evidence prevailing in courts of law or equity shall not be controlling.” § 10 (b).
Third. This brings us to the only other objection to a ruling of the Board made after the first hearing. On the first review, the court below rejected the Company’s contention that the Examiner was biased. 123 F. 2d at 219. On the second review, the Court was of opinion that the Board improperly denied the Company’s application for a new Examiner. It did so, apparently, not because it found actual bias on the part of the Examiner demonstrated at either hearing. The Court seemed to be moved by the generous feeling that a party ought not to be put to trial before an examiner who, by reason of his prior rulings and findings, may not be capable of exercising impartiality. Certainly it is not the rule of judicial administration that, statutory requirements apart, see Judicial Code § 21, 28 U. S. C. § 25, a judge is disqualified from sitting in a retrial because he was reversed on earlier rulings. We find no warrant for imposing upon administrative agencies a stiffer rule, whereby examiners would be disentitled to sit because they ruled strongly against a party in the first hearing. The Board might have gone beyond the legal compulsions and ordered the new evidence to be heard before a new Examiner who could report with a mind wholly free from prior litigious embroilments. The Board might have been well advised also to allow greater leeway in admitting evidence not strictly relevant. It takes time to avoid even the appearance of grievances. But it is time well spent, even though it is not easy to satisfy interested parties, and defeated litigants, no matter how fairly treated, do not always have the feeling that they have received justice. In any event, we are not the advisers of these agencies. And we have no right to upset their orders unless they fall afoul of legal requirements. Cf. Inland Empire Council v. Millis, 325 U. S. 697. We do not find that the Board’s order offends them.
Fourth. We have examined all the issues pressed here but we need not enlarge upon our conclusion that they are without merit. There remains the proper disposition of the case. Having found infirmities in the proceedings which led to the order, the Court below did not consider the sufficiency of the evidence to sustain the findings on which the order was based. This controversy has been so long in litigation that, other things being equal, it would be highly desirable finally to dispose of the whole case here. But other things are not equal. It is not the function of this Court to review in the first instance the sufficiency of evidence on which the Board’s order is based. Congress placed that function in the Circuit Court of Appeals. And this case is peculiarly not one in which we should do the unusual thing and pass on evidence without its prior consideration by the lower court. It is not for us to make an independent examination of this entire record. The demands of the work of this Court preclude an independent canvass of a record of thirteen volumes, containing more than 6000 pages. Two judges below who had gone over this mass of evidence reached opposite conclusions regarding its sufficiency to support the Board’s findings. For the determination of this issue we remand the case to the Circuit Court of Appeals.
Reversed and remanded.
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:
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G
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sc_issuearea
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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.
Mr. Justice Burton
delivered the opinion, of the Court..
The question before us is whether certain sums received in 1938 and 1941, by the. respondent, as a nonresident alien author not engaged in trade or business within, the United States and not having an office or place of business therein, were required by the Revenue Acts of the United States to be included in his gross income for federal tax purposes. Each of these sums had been paid to him in advance and respectively for an exclusive serial or book right throughout the United States in relation to a specified original story written by him and ready to be copyrighted. The answer turns upon the meaning of “gross income from sources within the United States” as that term was used, limited and defined in §§ 212 (a), 211 and 119 of the Revenue Act of 1938, and the Internal Revenue Code, as amended in 1940 and 1941. For the reasons hereinafter stated, we hold that these sums eách came within those kinds of gross income from sources within the United States that were referred to in those Acts as “rentals or royalties for the use of or for the privilege of using in the United States... copyrights,... and other like property,” and that, accordingly, each of these sums was taxable under one or the other of those Acts.
The respondent, Pelham G. Wodehouse, at the times material to this case, was a British subject residing in France. He was a nonresident alien of the United States not engaged in trade or business within the United States and not having an office or place of business therein during either the taxable year 1938 or 1941. He was a writer of serials, plays, short stories and other literary works published in the United States in the Saturday Evening Post, Cosmopolitan Magazine and other periodicals.
February 22, 1938, the Curtis Publishing Company (here called Curtis) accepted for publication in the Saturday Evening Post the respondent’s unpublished novel “The Silver Cow.” The story had been submitted to Curtis by the respondent’s literary agent, the Reynolds Agency, and, on that date, Curtis paid the agency $40,000 under an agreement reserving to Curtis the American serial rights in the story, including in such rights those in ■the United States, Canada and South America. The memorandum quoted in Appendix B, infra, p. 398, constituted the agreement. Also in 1938, the respondent received $5,000 from Doubleday, Doran & Company for the book rights in this story. The story was published serially in the Saturday Evening Post, July 9 to September 3, 1939.
Pursuant to a like agreement, the respondent received $40,000 from Curtis, December 13, 1938, for serial rights in and to his story “Uncle Fred in the Springtime.” It was published serially in the Saturday Evening Post, April 22 to May 27, 1939.
July 23, 1941, Hearst’s International Cosmopolitan Magazine, through the respondent’s same agent, paid the respondent $2,000 for “all American and Canadian serial rights (which include all American and Canadian magazine, digest, periodical and newspaper publishing rights)” to the respondent’s article entitled “My Years Behind Barbed Wire.” The agreement appears in Appendix C, infra, p. 400. Apparently this story was published shortly thereafter.
August 12, 1941, Curtis, tnrough the same-agent, paid the respondent $40,000 for the “North American (including Canadian) serial rights” to respondent’s novel entitled “Money in the Bank.” The agreement was in the form used by Curtis in 1938. The evidence does not state that this story was published but it shows that Curtis, pursuant to its agreements, took out a United Statés copyright on each of the respective stories named in the foregoing agreements. After each story’s serial publication, Curtis reassigned to the respondent, on the latter’s demand, all rights in and to the story excepting those rights which the respondent expressly had agreed that Curtis was to retain. The respective sums were thus paid to the respondent, in advance and in full, for the serial or book rights which he had made available. Eor United States income tax purposes, the respondent’s literary agent, or some other withholding agent, withheld from the respondent, or from his wife as his assignee, a part of each payment.
In 1944 the Commissioner of Internal Revenue, petitioner herein, gave the respondent notice of tax deficiencies assessed against him for the taxable years 1923, 1924, 1938, 1940 and 1941. In these assessments, among other items, the Commissioner claimed deficiencies in the respondent’s income tax payments based upon his above-described 1938 and 1941 receipts. The respondent, in a petition to the Tax Court for a. redetermination of such deficiencies, not only contested the additional taxes assessed against him, which were based upon the full amounts of those receipts, but he asked also for the refund to him of the amounts which had been withheld, for income tax purposes, from each such payment. The Tax Court entered judgment against him for additional taxes for 1938, 1940 and 1941, in the respective amounts of $11,806.71, $8,080.83 and $1,854.85. In speaking of the taxes for 1940 and 1941, the Tax Court said:
“The first issue, found also in the year 1938,- presents the question of the taxability of lump sum payments for serial rights to literáry works. Counsel for the petitioner [Wodehouse, the respondent here].concedes that substantially the same issue was raised and decided in Sax Rohmer, 5 T.,C. 183; aff'd., 153 Fed. (2d) 61; certiorari denied, 328 U. S. 862.
“In Sax Rohmer, supra, we held that the lump sum payments for serial rights were royalties and, as such, were taxable to the recipient. The arguinents advanced in the cases at bar follow the same pattern as those appearing in the Sax Rohmer case, as presented to this Court and. to the Circuit Court of Appeals. The petitioner’s contentions were rejected in both courts and for the same reasons stated ;n the opinions therein, they are rejected here.” 8' T. C. 637, 653.
As the respondent’s taxes for 1938 and 1941 had been paid to the Collector of Internal Revenue at Baltimore, Maryland, his petition for review of the Tax Court’s judgment for those years was filed in the United States Court of Appeals for the Fourth Circuit.. The judgment against him was there reversed, 166 F. 2d 986, one judge dissenting on the authority and reasoning of Rohmer v. Commissioner, 153 F. 2d 61 (C. A. 2d Cir.). Because of the resulting conflict between the Circuits and also because comparable issues as to this respondent’s taxes for 1940 were pending before the Court of Appeals for the Second Circuit, we granted certiorari. 335 U. S. 807. ’ '
The petitioner contends that receipts of the type before us long have been recognized as rentals or royalties paid for the use of or for the privilege of using in the United States, patents, copyrights and other like property. Keeping in mind that, before 1936, such receipts were expressly subject to withholding as part of the taxable-income of nonresident alien individuals, he contends that those receipts remained taxable and subject to withholding in 1938 and 1941, after the standards for taxation of such aliens had been made expressly coterminous with the standards for subjecting this part of their income to withholding procedures.
In opposition, the respondent argues, first, that each sum he received was a payment made to him in return for his sale of a property interest in a copyright and not a payment to him of a royalty for rights granted by him under the protection of his copyright. Being the proceeds of a sale by him of such a property interest, he concludes that those proceeds were not required to be included in his taxable gross income because the controlling Revenue Acts did not attempt to tax nonresident alien individuals, like himself, upon income from sales of property. Secondly, the respondent argues that, even if his receipts were to be treated as royalties, yet each was received in a single lump sum and not “annually” or “periodically,” and that, therefore, they did not come within his taxable gross income.
The petitioner replies that, in this case, we do not properly reach the fine questions of title, or of sales or copyright law, thus raised by the respondent as to the divisibility of a copyright or as to the sale of some interest in a copyright. The petitioner states that the issue here is one of statutory interpretation. It is confined primarily to the taxability of the respondent’s receipts within the broad, rather than narrow, language of certain Revenue Acts. Attention must be focused on those Revenue Acts. If their terms made these receipts taxable because of the general nature of the transactions out of which the receipts arise, namely, payments for the use of or for the privilege of using copyrights, then it is those statutory definitions,- properly read in the light of their context and of their legislative history, that must determine the taxability of the receipts. He argues that the language of the Revenue Acts does not condition the right of the United States to its revenue upon any fine point of property law but covers these receipts in any event. Treating the respondent's receipts simply as representing payments for the use of.or the privilege of using copyrights the petitioner argues that they constituted income that was subject both to withholding and to taxation in 1938 and 1941. He claims finally that the respondent cannot escape taxation of such receipts merely by showing that each payment was received by him -in a lump sum in advance for certain uses of a copyright, instead of in several payments to be made at intermediate dates during the life of the copyright.
I.
Sums received by a nonresident alien individual for the use of a copyright in the United States constituted gross income taxable to him under the Revenue Act of 1988 and the Internal Revenue Code.
Under the income tax laws of the United States, sums received by a nonresident alien author not engaged in trade or business within the United States and not having an office or place of business therein long have been required to be included in his gross income for our federal tax purposes. Such receipts have been an appropriate and readily collectible, subject of taxation. A review of the statutes, regulations, administrative practices and court decisions discloses this policy and, at least from a revenue standpoint, no reason has appeared for changing it.
Since the early days of our income tax levies, rentals and royalties paid for the use of or for the privilege of using in the United States, patents, copyrights and other like, property have been taxed to nonresident aliens and for many years at least a part of the tax has been withheld at the source of the income. To exempt this type of income from taxation in 1938 or 1941, in the face of this long record of its taxation, would require a clearness and positiveness of legislative determination to change the established procedure that, is entirely absent here.
The policy of this Court in this general field of statutory interpretation was stated in 1934 in a case which dealt with the taxation of a somewhat comparable form of income of a foreign corporation. In Helvering v. Stockholms Enskilda Bank, 293 U. S. 84, the question presented was that of the proper interpretation to be given to § 217 (a) (1) of the Revenue Act of 1926, c. 27, 44 Stat. 9, 30 (analogous to § 119 (a) (1) of the Revenue Act of 1938, 52 Stat. 503, now before us). Certain sums had been received by a foreign corporation from the United States Government in the form of interest upon a refund of an overpayment by that corporation of its income taxes. This Court held that such interest, in turn, constituted taxable gross income derived by the foreign corporation from a source within the United States, because it amounted to interest upon an interest-bearing obligation of a resident of the United States within the meaning of the Act. This interpretation was adopted in opposition to the foreign corporation’s argument that the payment should be exempted because it amounted to interest on one of the “obligations of the United States” and that interest on such an obligation was expressly exempted from taxation by § 213 (b) (4) of the Revenue Act of 1926 (analogous to § 22 (b) (4) of the Revenue Act of 1938). This Court distinguished between the meaning of the word “obligations” in the context of the different sections of the Act and stated the applicable general principles of statutory construction as follows:
“The general object of this act is to put money into the federal treasury; and there is manifest in the reach of its many provisions an intention on the part of Congress to bring about a generous attainment of that object by imposing a tax upon pretty much every sort of income subject to the federal power. Plainly, the payment in question constitutes income derived from a source within the United States; and the natural aim of Congress would be to' reach it. In Irwin v. Gavit, 268 U. S. 161, 166, this court, rejecting the contention that certain payments there involved did not constitute income, said: ‘If these payments properly may be called income by the common understanding of that word and the statute has failed to hit them it has missed so much of the general purpose that it expresses at the start. Congress intended to use its power to the full extent. Eisner v. Macomber, 252 U. S. 189, 203.’ Although Congress intended, as the court held in the Viscose case, supra [56 F. 2d 1033 (C. A. 3d Cir.)], to include interest on a. tax refund made to a domestic corporation, we are asked to deny such intention in respect of a competing foreign corporation.' But. we see nothing in the relationship of a foreign corporation to the United States, or in any other circumstance called to our attention, which fairly shows that such a discrimination was within the contemplation of Congress. On the.contrary, the natural conclusion is that if any discrimination had been intended it would have been made in favor of, and not against, the domestic corporation, which contributes in a much more substantial degree to the support of the people and government of the United States.” Id. at pp. 89-90.
And further:
“In the foregoing discussion, we have not been unmindful of the rule, frequently stated by this court, that taxing acts ‘are not to be extended by implica-, tion beyond the clear import of the language used/ and that doubts are to be resolved against the government and in favor of the taxpayer. The rule is a salutary one, but it does not apply here. The intention of the lawmaker controls in the construction of taxing acts as it does in the construction of other statutes, and that intention is to be ascertained, not by taking the word or clause in question from its setting and viewing it apart, but by considering it in connection with the context, the general purposés of the statute in which it is found,, the occasion and circumstances of its use, and other appropriate tests for the ascertainment of the legislative will. Compare Rein v. Lane, L. R. 2 Q. B. Cases 144, 151. The intention being thus disclosed, it is enough that the word or clause is reasonably susceptible of a meaning consonant therewith, whatever might be its meaning in another and different connection. We are not at liberty to reject the meaning so established and adopt another lying outside the intention of the legislature, simply because the latter would release the taxpayer or bear less heavily against him. To do so would be not to resolve a doubt in his favor, but to say that the statute does not mean what it means.” Id. at pp. 93-94.
A. These receipts unquestionably would have been taxed to a nonresident alien individual if received by him under the Revenue Act of 1934.'
The background and development of the particular provisions before us emphasize the congressional purpose to tax this type of income. They disclose the full familiarity of Congress with this general type of transaction. Throughout the history of our federal income taxes since the Sixteenth Amendment to our Constitution, the Revenue Acts have expressly subjected to taxation the income received by nonresident alien individuals from' sources within the United States. For example, there is no doubt that the receipts here in question would have been taxable to the respondent if they had been received by him under the Revenue Act of 1934, c. -277, 48 Stat. 680, et seq., and the present issue resolves itself largely into a determination of whether $uch receipts were re-, lieved from taxation by the Revenue Act of 1936, c. 690, 49 Stat. 1648, et seq.,- through certain changes in the income tax laws that were made by that Act and which were still in effect in 1938 and 1941.
Under the Revenue Act of 1934, the income of a nonresident alien individual Was taxed at the same rates as was the income of a resident citizen.(§§ 11 and 12) but his taxable gross income was limited wholly to that which he had received “from sources within the United States,” §211 (a). Such sources were described in § 119 of that Act, and the material portions of that Section have remained unchanged ever since. They ^ive their own definition of rentals and royalties.'These have been quoted from above and they are set forth in full in Appendix A, infra, p. 397. The Act of 1934 thus sought to include as taxable gross income any income which a nonresident alien individual received as royalties for the privilege of using any copyrights in the United States and also sought to tax his income from the sale of any personal property which he had produced (in whole or in part) outside the United States but had sold within the United States. § 119 (a) (4) and (éj (2). As a mechanism of collection, the Act also sought to withhold from nonresident alien individuals, at the source of payment, the entire normal tax of 4% computed upon numerous classifications of their income named in § 143 (b). This language is important in this case. It expressly included certain forms of interest and also "rent, salaries, wages, premiums, annuities, compensations, remuneratipns, emoluments, or other fixed or determinable annual or periodical gains, profits, and income, of any nonresident alien individual,... (Emphasis added.) While royalties were not mentioned specifically in this statutory withholding clause, they had been expressly listed in the Regulations, since long before 1934, so that there was no doubt that they were tó be subject to withholding as a matter of interpretation. It was equálly clear that income derived from a sale in the United States, of either real or personal property, was not included, either expressly or by implication or interpretation, in the income subject to a withholding of the tax on it at the' source of the income. The Regulations, since the Act of 1924 (U. S. Treas. Reg. 65, Art. 362 (1924)) to the present time, have contained decisive statements on these points. • Such, Regulations have been substantially identical with the following which appeared in Treasury Regulations 86, Article 143-2 (1934):
“Only fixed or determinable annual or periodical income is subject to withholding. The Act specifically includes in such income, interest, rent, salaries, wages, premiums, annuities, compensations, remunerations, and emoluments. But other kinds of income are included, as, for instance, royalties.
"... The income, derived from the sale in the United States of property, whether real or personal, is not fixed or determinable annual or periodical income.” (Emphasis added.)
Apart from these provisions requiring the withholding of taxes at the source of the income, the Revenue Acts have contained other provisions, in similar language, calling for the reporting to the Commissioner of Internal Revenue of material information as to certain income which might be taxable. This language has received an interpretation which is related to and consistent with that here given to the provisions as to withholding taxes.
These statutes and Regulations show that, under the Act of 1934, Congress sought to tax (and withhold all or part of the tax on) the income of a nonresident alien individual insofar as it was derived from payments for the use of or for the privilege of using copyrights'in the United States. It also sought to tax (although it could not generally withhold the tax on) any gain which the taxpayer derived from the sale of personal property produced by him without the United States but sold within the United States. Accordingly, if the receipts now before us had been received by the respondent under the Act of 1934, they would have been taxable whether they were treated as payments in the nature of royalties for the use of the copyrights under § 119 (a) or were treated as payments of a sale’s price for certain interests in copyrights under § 119 (e). The Regulations helpfully carried this analysis further. They showed that, while both forms of income were taxable, yet it was only the royalty payments (and not the sales’ proceeds) that were subject to the withholding procedure. A Treasury Decision made in 1933, under the Revenue Acts extending from 1921 to 1928, and a decision of the Court of Appeals for the Second Circuit made in 1938, under the Revenue Act of 1928, c. 852, 45 Stat. 791, sustain the above conclusions. The latter case was that of Sabatini v. Commissioner, 98 F. 2d 753 (C. A. 2d Cir.), later discussed and approved in Rohmer v. Commissioner, 153 F. 2d 61, 63 (C. A. 2d Cir.). Incidentally, these opinions declared not only that the taxes in question were imposed upon the receipts as royalties but that it made no difference whether such royalties were each received in lump sums in full payment in advance, to cover the use of the respective copyrights throughout their statutory lives, or whether the royalties were received from time to time and in lesser sums.
B. The Revenue Act of 1936 preserved the taxability of the several kinds of income of nonresident alien individuals which had been the subject of withholding at their respective sources, including receipts in the nature of, royalties for the use of copyrights in the, United States.
.The Revenue Act of 1936 did not change materially the statutory definition of gross income from sources within the United States under § 119. It did, however, amend § 211 (a) materially ih its description of the taxable income of nonresident alien individuals. These, amendments (1) substituted a special flat rate of 10% for the general normal tax and surtax rates, (2). required this entire special tax, in the usual case, to be withheld at the source of the taxable income, (3) limited the taxability of the income of each nonresident alien individual to those kinds of income to which the withholding provisions also applied, and (4) (except for the addition of dividends) inserted verbatim, as a new statement of the types of taxable income of -a nonresident alien individual (not engaged in trade or business within the United States' and not having an office or place of business. therein), the language that previously had been used to state the specific types of income to which the withholding procedure was to apply. See its § 143 (b) paralleling its amended § 211 (a). By thus restricting the income tax to those specific types of income to which the withholding procedure had previously applied, Congress automatically relieved nonresident alien individuals from the taxation of their income from certain sales of real Or personal property, previously taxed. This Amendment, on the other hand' retained and in-ereased the tax on the very kind of income that is before us. It also increased the portion of such income to be withheld at its source to meet the new and higher flat rate of tax.
The legislative history of the Revenue Act of 1936 confirms the special meaning thus apparent on its face. It emphasizes the policy which expressly marked the enactment of this Act, including particularly these Amendments. The practical situation was that it had beén difficult for United States tax officials to ascertain the taxable income (in the nature of capital gains) which had been derived from sales of property at a profit by nonresident alien individuals, or by foreign corporations, when the respective taxpayers were not engaged in trade or business within the United States and did not have an office or place of business therein. This difficulty was in contrast to the easej of computing and collecting a tax from certain other kinds of income, including payments for -the use of patents and copyrights, from which the United States income taxes were being, wholly or partially, withheld at the source. The Congressional Committee Reports expressed a. purpose of Congress to limit future taxes on nonresident alien individuals to those readily collectible. With a view eyidently to securing substantially as much revenue as before, Congress thereupon applied a new flat rate of 10% to nonresident alien individuals and of 15% to foreign corporations, the entire amount of this flat rate of tax to be withheld and collected at the source of the income. The reports referred also to increases in stock transfer taxes which might result from thus removing the income tax from profits of nonresident alien individuals on their stock sales.'Congress recognized a value and a convenience in thus turning to the accessible, fixed and determinable income of nonresident aliens. There is no dqubt that these steps sought to increase or at least to maintain the existing volume of revenue. No suggestion appears that Congress intended or wished to relieve from taxation the readily accessible and long-established source of revenue to be found in the payments made to nonresident, aliens for the usé of patents or copyrights in the United States. Much less was any suggestion made that lump sum advance payments of rentals or royalties should be exempted from taxation while at the same time smaller repeated payments of rentals or royalties would be taxed and collected at the source of the income. To have exempted these nonresident aliens from these readily collectible taxes derived from sources within the United States would have discriminated in their favor against résident citizens of the United States who would be required to pay their regular income tax on such income, if treated as royalties within the meaning of our gross income provisions, or at least to pay a tax upon them as capital gains, if treated as income from sales of capital within the meaning of our capital gains provisions. No such purpose to discriminate can be implied.
Accordingly, at the time in 1936 when these Amendments were being enacted into § 211 (a), the provisions for taxing the gross income of nonresident alien individuals under the Revenue Act of 1934 already had been long and officially interpreted as covering receipts from royalties as expressly and broadly defined in § 119 (a) and subjected to withholding at the- source of income under § 143 (b). The legislative history of the 1936 Amendments is, therefore, a refutation of any claim that Con-, gress, at that time, was seeking to exempt such taxpayers from those appropriate and readily collectible items. On the other hand, that.history shoyvs that Congress was seeking to continue to tax, and even to increase the tax upon, those kinds of income which had been found to be readily withholdable at their respective sources. Accordingly, whát Congress did was to incorporate the very language of the withholding provisions of § 143 (b) into the languáge of the taxing § 211 (a). The Regulations under § 143 (b), quoted above substantially as being in effect since 1924, had already settled that roy alties were included in § ll$'(b). The Treasury Bulletin also, showed that lump sum payments made in advance for limited rights under copyrights were included in the “royalties” thus subject to withholding and taxation. The type of transactions and the kind of payments were thus identified. The broad language there used is entitled to be interpreted in accordance with its plain mean- and established usage. Therefore," after the 1936 Amendments,.# became equally clear that these receipts in the nature of royalties which were previously withheld at their source were included in the sources of income specified in § 211 (a), but that profits from, sales of property were not included' in the sources of income specified in %-211 (a) any more than they had been under § 11$ (a). The decisions of the Court of Appeals of the Second Circuit in Sabatini v. Commissioner; supra, in 1938, in relation to the Revenue Act of 1928, and in Rohmer v. Commissioner,-supra, in 1946, in relation to the Internal Revenue Code/ as amended in 1940, reflected the same point of view.
None of these provisions of the Act of 1936 were changed by the Revenue Act of 1938, the Internal Revenue Code, or the 1940 or 1941 Amendments to that Code, except in relation to the size of the tax rates. The principal changes even in those rates were to provide higher taxes in the higher brackets, rather than to reduce the taxes on nonresident aliens.
II.
The receipt of the respective amounts by the respondent in single lump sums as payments in full, in advance, for certain rights under the respective copyrights did not exempt those receipts from taxation.
Once it has been determined that the receipts of the respondent woüld have been required to be included in his gross income for federal income tax purposes if they had been received in annual payments, or from time to time, during the life of the respective copyrights, it becomes equally clear tha'. the receipt of those same sums by. him in single lump sums as payments in full, in advance, for the same rights to be enjoyed throughout the entire life of the respective copyrights cannot, solely by reason of the consolidation of the payment into one sum, render it tax exempt. No Revenue Act cam be interpreted to reach such a result in the absence of inescapably clear provisions to that effect. There are none such here.
The argument for the exemption was suggested by the presence in §§211 (a) and 143 (b) of the words “annual” and “periodical:” If reád apart from their text and legislative history and supplemented by the gratuitous insertion after them of the word “payments,” they might support the limiting effect here argued for them. However, when taken in their context, and particularly in the light of the legislative history of those Acts, and the interpretation placed upon them by the Treasury Department and the lower courts, they have, no such meaning. Those words are merely generally descriptive of the character of the gains, profits and income which arise out of such relationships as those which produce readily with-holdable interest, rents, royalties and salaries, consisting wholly of income, ¿specially in contrast to gains, profits and income in the nature of capital gains from profitable sales of real or personal property.
In the instant case, each copyright which was to be obtained had its full, original life of 28 years to run after the advance payment was received by the author covering the use of or the privilege of using, certain rights under it. Fixed and determinable income, from a tax standpoint, may be received either in annual or other payments without altering in the least the need or the reasons for taxing such income or for withholding a part of it at its source. One advance payment to cover the entire 28-year period of a copyright comes within the reason and reach of the Revenue Acts as well as> or even better than, two or more partial payments of the same sum.
Article 143-2 of Treasury Regulations 101, issued under the Revenue Act of 1938, provided:
“The income need not be paid annually if it is paid periodically; that is to say, from time to time, whether or not at regular intervals. That the length of time during which the payments are to be made may be increased or diminished in accordance with someone’s will or with the happening of an event does not make the payments any the less determinable or periodical.”
Substantially this liberal language in the Regulations has been used in this connection since 1918. (U. S. Treas. Reg. 45, Art. 362 (1918).) Single lump sum payments of royalties were held to be taxable under the Revenue Acts of 1921, 1924, 1926 and 1928, I. T. 2735, XII-2 Cum. Bull. 131 (1933); under the Revenue Act of 1928, Sabatini v. Commissioner, supra; and under the Internal Revenue Code, as amended in 1940, Rohmer v. Commissioner, supra.
For the foregoing reasons, we hold that the receipts in question were required to be included in the gross income of the respondent for federal income tax purposes. The judgment of the Court of Appeals accordingly is reversed and remanded for further proceedings consistent with this opinion. L
D, ¿ _,, Reversed and remanded.
Me. Justice Douglas took no part in the consideration or decision of this case.
[For dissenting opinion of Mr. Justice Frankfurter, joined by Mr. Justice Murphy and Mr. Justice Jackson, see post, p. 401.]
Appendix A.
Material provisions of §§ 212 (a), 211 and 119 of the Revenue Act of 1938 and the Internal Revenue Code:
“SEC. 212. GROSS INCOME.
“(a) General Rule. — In the case of a nonresident alien individual gross income includes only the gross income from sources within the United States.” (Emphasis added.) 52 Stat. 528, and 53 Stat. 76,26 U. S. C. § 212 (a).
“SEC. 211. TAX ON NONRESIDENT ALIEN INDIVIDUALS.
“ (a) No United States Business or Office.—
“(1) General rule. — There shall be levied, collected, and paid for each taxable year, in lieu of the tax imposed by sections 11 and 12 [normal tax and surtax imposed generally upon individuals and applicable in the instant case, under paragraphs (a) (2) and (c), because the respondent’s gross income for each taxable year exceeded the allowable maximum there specified], upon the amount received, by every nonresident alien individual not engaged in trade or business within the United States and not having, an office or place of business therein, from sources within the United States as interest (except' interest on deposits with persons carrying on the.banking business), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income, a tax of 10 per centum of such amount,....
“(2) Aggregate ■ more than $21,600. — The tax imposed by paragraph (1) shall not apply to any individual if the aggregate amount received during the taxable year from the soúrces therein spécified is more than $21,600.
“(c) No United States Business or Office and Gross Income of More Than $21,600. — A nonresident alien individual not engaged in trade or business within the United States and not having an office or place of business therein who has a gross income for any taxable year "of more than $21,600 from the sources specified in subsection (a) (Í), shall be taxable-without regard to the provisions of subsection (a) (1), except that—.
“(1) The gross income shall include only income from the sources specified in subsection (a) (1);
.“(2) The deductions (other than the so-called ‘charitable deduction’. provided in section 213 (c)) shall be allowed only if and to the extent that they are properly allocable to the gross income from the sources specified in subsection (a) (|) ;
“(3) The aggregate of the normal tax 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:
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L
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sc_issuearea
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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 Brennan
delivered the opinion of the Court.
The question presented is whether a person who has not submitted a claim against a bankruptcy estate has a right to a jury trial when sued by the trustee in bankruptcy to recover an allegedly fraudulent monetary transfer. We hold that the Seventh Amendment entitles such a person to a trial by jury, notwithstanding Congress’ designation of fraudulent conveyance actions as “core proceedings” in 28 U. S. C. § 157(b)(2)(H) (1982 ed., Supp. V).
I
The Chase & Sanborn Corporation filed a petition for reorganization under Chapter 11 of the Bankruptcy Code in 1983. A plan of reorganization approved by the United States Bankruptcy Court for the Southern District of Florida vested in respondent Nordberg, the trustee in bankruptcy, causes of action for fraudulent conveyances. App. to Pet. for Cert. 37. In 1985, respondent filed suit against petitioners Granfinanciera, S. A., and Medex, Ltda., in the United States District Court for the Southern District of Florida. The complaint alleged that petitioners had received $1.7 million from Chase & Sanborn’s corporate predecessor within one year of the date its bankruptcy petition was filed, without receiving consideration or reasonably equivalent value in return. Id., at 39-40. Respondent sought to avoid what he alleged were constructively and actually fraudulent transfers and to recover damages, costs, expenses, and interest under 11 U. S. C. §§ 548(a)(1) and (a)(2), 550(a)(1) (1982 ed. and Supp. V). App. to Pet. for Cert. 41.
The District Court referred the proceedings to the Bankruptcy Court. Over five months later, and shortly before the Colombian Government nationalized Granfinanciera, respondent served a summons on petitioners in Bogota, Colombia. In their answer to the complaint following Granfinanciera’s nationalization, both petitioners requested a “trial by jury on all issues so triable. ” App. 7. The Bankruptcy Judge denied petitioners’ request for a jury trial, deeming a suit to recover a fraudulent transfer “a core action that originally, under the English common law, as I understand it, was a non-jury issue.” App. to Pet. for Cert. 34. Following a bench trial, the court dismissed with prejudice respondent’s actual fraud claim but entered judgment for respondent on the constructive fraud claim in the amount of $1,500,000 against Gran-financiera and $180,000 against Medex. Id., at 24-30. The District Court affirmed without discussing petitioners’ claim that they were entitled to a jury trial. Id., at 18-23.
The Court of Appeals for the Eleventh Circuit also affirmed. 835 F. 2d 1341 (1988). The court found that petitioners lacked a statutory right to a jury trial, because the constructive fraud provision under which suit was brought— 11 U. S. C. § 548(a)(2) (1982 ed., Supp. V) — contains no mention of a right to a jury trial, and 28 U. S. C. § 1411 (1982 ed., Supp. V) “affords jury trials only in personal injury or wrongful death suits.” 835 F. 2d, at 1348. The Court of Appeals further ruled that the Seventh Amendment supplied no right to a jury trial, because actions to recover fraudulent conveyances are equitable in nature, even when a plaintiff seeks only monetary relief, id., at 1348-1349, and because “bankruptcy itself is equitable in nature and thus bankruptcy proceedings are inherently equitable.” Id., at 1349. The court read our opinion in Katchen v. Landy, 382 U. S. 323 (1966), to say that “Congress may convert a creditor’s legal right into an equitable claim and displace any seventh amendment right to trial by jury,” and held that Congress had done so by designating fraudulent conveyance actions “core proceedings” triable by bankruptcy judges sitting without juries. 835 F. 2d, at 1349.
We granted certiorari to decide whether petitioners were entitled to a jury trial, 486 U. S. 1054 (1988), and now reverse.
II
Before considering petitioners’ claim to a jury trial, we must confront a preliminary argument. Respondent contends that the judgment below should be affirmed with respect to Granfinanciera — though not Medex — because Granfi-nanciera was a commercial instrumentality of the Colombian Government when it made its request for a jury trial. Respondent argues that the Seventh Amendment preserves only those jury trial rights recognized in England at common law in the late 18th century, and that foreign sovereigns and their instrumentalities were immune from suit at common law. Suits against foreign sovereigns are only possible, respondent asserts, in accordance with the Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U. S. C. §§ 1330, 1602-1611, and respondent reads § 1330(a) to prohibit trial by jury of a case against a foreign state. Respondent concludes that Granfinanciera has no right to a jury trial, regardless of the merits of Medex’s Seventh Amendment claim.
We decline to address this argument because respondent failed to raise it below and because the question it poses has not been adequately briefed and argued. Without cross-petitioning for certiorari, a prevailing party may, of course, “defend its judgment on any ground properly raised below whether or not that ground was relied upon, rejected, or even considered by the District Court or the Court of Appeals,” Washington v. Yakima Indian Nation, 439 U. S. 463, 476, n. 20 (1979), provided that an affirmance on the alternative ground would neither expand nor contract the rights of either party established by the judgment below. See, e. g., Blum v. Bacon, 457 U. S. 132, 137, n. 5 (1982); United States v. New York Telephone Co., 434 U. S. 159, 166, n. 8 (1977). Respondent’s present defense of the judgment, however, is not one he advanced below. Although “we could consider grounds supporting [the] judgment different from those on which the Court of Appeals rested its decision,” “where the ground presented here has not been raised below we exercise this authority ‘only in exceptional cases.’” Heckler v. Campbell, 461 U. S. 458, 468-469, n. 12 (1983), quoting McGoldrick v. Compagnie Generóle Transatlantique, 309 U. S. 430, 434 (1940).
This is not such an exceptional case. Not only do we lack guidance from the District Court or the Court of Appeals on this issue, but difficult questions remain whether a jury trial is available to a foreign state upon request under 28 U. S. C. § 1330 and, if not, under what circumstances a business enterprise that has since become an arm of a foreign state may be entitled to a jury trial. Compare Gould, Inc. v. Pechiney Ugine Kuhlmann, 853 F. 2d 445, 450 (CA6 1988) (jurisdiction under 28 U. S. C. § 1330 determined by party’s status when act complained of occurred); Morgan Guaranty Trust Co. of N. Y. v. Republic of Palau, 639 F. Supp. 706, 712-716 (SDNY 1986) (status at time complaint was filed is decisive for § 1330 jurisdiction), with Callejo v. Bancomer, S. A., 764 F. 2d 1101, 1106-1107 (CA5 1985) (FSIA applies even though bank was nationalized after suit was filed); Wolf v. Banco Nacional de Mexico, S. A., 739 F. 2d 1458, 1460 (CA9 1984) (same), cert. denied, 469 U. S. 1108 (1985). Moreover, petitioners alleged in their reply brief, without contradiction by respondent at oral argument, that affirmance on the ground that respondent now urges would “unquestionably enlarge the respondent’s rights under the circuit court’s decision and concomitantly decrease those of the petitioner” by “open[ing] up new areas of discovery in aid of execution” and by allowing respondent, for the first time, to recover any judgment he wins against Granfinanciera from Colombia’s central banking institutions and possibly those of other Colombian governmental instrumentalities. Reply Brief for Petitioners 19. Whatever the merits of these claims, their plausibility, coupled with respondent’s failure to offer rebuttal, furnishes an additional reason not to consider respondent’s novel argument in support of the judgment at this late stage in the litigation. We therefore leave for another day the questions respondent’s argument raises under the FSIA.
HH HH HH
Petitioners rest their claim to a jury trial on the Seventh Amendment alone. The Seventh Amendment provides: “In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved... We have consistently interpreted the phrase “Suits at common law” to refer to “suits in which legal rights were to be ascertained and determined, in contradistinction to those where equitable rights alone were recognized, and equitable remedies were administered.” Parsons v. Bedford, 3 Pet. 433, 447 (1830). Although “the thrust of the Amendment was to preserve the right to jury trial as it existed in 1791,” the Seventh Amendment also applies to actions brought to enforce statutory rights that are analogous to common-law causes of action ordinarily decided in English law courts in the late 18th century, as opposed to those customarily heard by courts of equity or admiralty. Curtis v. Loether, 415 U. S. 189, 193 (1974).
The form of our analysis is familiar. “First, we compare the statutory action to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity. Second, we examine the remedy sought and determine whether it is legal or equitable in nature.” Tull v. United States, 481 U. S. 412, 417-418 (1987) (citations omitted). The second stage of this analysis is more important than the first. Id., at 421. If, on balance, these two factors indicate that a party is entitled to a jury trial under the Seventh Amendment, we must decide whether Congress may assign and has assigned resolution of the relevant claim to a non-Article III adjudicative body that does not use a jury as factfinder.
A
There is no dispute that actions to recover preferential or fraudulent transfers were often brought at law in late 18th-century England. As we noted in Schoenthal v. Irving Trust Co., 287 U. S. 92, 94 (1932) (footnote omitted): “In England, long prior to the enactment of our first Judiciary Act, common law actions of trover and money had and received were resorted to for the recovery of preferential payments by bankrupts.” See, e. g., Smith v. Payne, 6 T. R. 152, 101 Eng. Rep. 484 (K. B. 1795) (trover); Barnes v. Freeland, 6 T. R. 80, 101 Eng. Rep. 447 (K. B. 1794) (trover); Smith v. Hodson, 4 T. R. 211, 100 Eng. Rep. 979 (K. B. 1791) (assumpsit; goods sold and delivered); Vernon v. Hanson, 2 T. R. 287, 100 Eng. Rep. 156 (K. B. 1788) (assumpsit; money had and received); Thompson v. Freeman, 1 T. R. 155, 99 Eng. Rep. 1026 (K. B. 1786) (trover); Rust v. Cooper, 2 Cowp. 629, 98 Eng. Rep. 1277 (K. B. 1777) (trover); Harman v. Fishar, 1 Cowp. 117, 98 Eng. Rep. 998 (K. B. 1774) (trover); Martin v. Pewtress, 4 Burr. 2477, 98 Eng. Rep. 299 (K. B. 1769) (trover); Alderson v. Temple, 4 Burr. 2235, 98 Eng. Rep. 165 (K. B. 1768) (trover). These actions, like all suits at law, were conducted before juries.
Respondent does not challenge this proposition or even contend that actions to recover fraudulent conveyances or preferential transfers were more than occasionally tried in courts of equity. He asserts only that courts of equity had concurrent jurisdiction with courts of law over fraudulent conveyance actions. Brief for Respondent 37-38. While respondent’s assertion that courts of equity sometimes provided relief in fraudulent conveyance actions is true, however, it hardly suffices to undermine petitioners’ submission that the present action for monetary relief would not have sounded in equity 200 years ago in England. In Parsons v. Bedford, supra, at 447 (emphasis added), we contrasted suits at law with “those where equitable rights alone were recognized” in holding that the Seventh Amendment right to a jury trial applies to all but the latter actions. Respondent adduces no authority to buttress the claim that suits to recover an allegedly fraudulent transfer of money, of the sort that he has brought, were typically or indeed ever entertained by English courts of equity when the Seventh Amendment was adopted. In fact, prior decisions of this Court, see, e. g., Buzard v. Houston, 119 U. S. 347, 352-353 (1886), and scholarly authority compel the contrary conclusion:
“[Wjhether the trustee’s suit should be at law or in equity is to be judged by the same standards that are applied to any other owner of property which is wrongfully withheld. If the subject matter is a chattel, and is still in the grantee’s possession, an action in trover or re-plevin would be the trustee’s remedy; and if the fraudulent transfer was of cash, the trustee’s action would be for money had and received. Such actions at law are as available to the trustee to-day as they were in the English courts of long ago. If, on the other hand, the subject matter is land or an intangible, or the trustee needs equitable aid for an accounting or the like, he may invoke the equitable process, and that also is beyond dispute.” 1 G. Glenn, Fraudulent Conveyances and Preferences § 98, pp. 183-184 (rev. ed. 1940) (footnotes omitted).
The two cases respondent discusses confirm this account of English practice. Ex parte Scudamore, 3 Ves. jun. 85, 30 Eng. Rep. 907 (Ch. 1796), involved the debtor’s assignment of his share of a law partnership’s receivables to repay a debt shortly before the debtor was declared bankrupt. Other creditors petitioned chancery for an order directing the debt- or’s law partner to hand over for general distribution among creditors the debtor’s current and future shares of the partnership’s receivables, which he held in trust for the assignee. The Chancellor refused to do so, finding the proposal inequitable. Instead, he directed the creditors to bring an action at law against the assignee if they thought themselves enti-tied to relief. Although this case demonstrates that fraudulent conveyance actions could be brought in equity, it does not show that suits to recover a definite sum of money would be decided by a court of equity when a petitioner did not seek distinctively equitable remedies. The creditors in Ex parte Scudamore asked the Chancellor to provide injunctive relief by ordering the debtor’s former law partner to convey to them the debtor’s share of the partnership’s receivables that came into his possession in the future, along with receivables he then held in trust for the debtor. To the extent that they asked the court to order relinquishment of a specific preferential transfer rather than ongoing equitable relief, the Chancellor dismissed their suit and noted that the proper means of recovery would be an action at law against the transferee. Respondent’s own cause of action is of precisely that sort.
Hobbs v. Hull, 1 Cox 445, 29 Eng. Rep. 1242 (Ch. 1788), also fails to advance respondent’s case. The assignees in bankruptcy there sued to set aside an alleged fraudulent conveyance of real estate in trust by a husband to his wife, in return for her relinquishment of a cause of action in divorce upon discovering his adultery. The court dismissed the suit, finding that the transfer was not fraudulent, and allowed the assignees, to bring an ejectment or other legal action in the law courts. The salient point is that the bankruptcy assignees sought the traditional equitable remedy of setting aside a conveyance of land in trust, rather than the recovery of money or goods, and that the court refused to decide their legal claim to ejectment once it had ruled that no equitable remedy would lie. The court’s sweeping statement that “Courts of Equity have most certainly been in the habit of exercising a concurrent jurisdiction with the Courts of Law on the statutes of Elizabeth respecting fraudulent conveyances,” id., at 445-446, 30 Eng. Rep., at 1242, is not supported by reference to any cases that sought the recovery of a fixed sum of money without the need for an accounting or other equitable relief. Nor has respondent repaired this deficit. We therefore conclude that respondent would have had to bring his action to recover an alleged fraudulent conveyance of a determinate sum of money at law in 18th-century England, and that a court of equity would not have adjudicated it.
B
The nature of the relief respondent seeks strongly supports our preliminary finding that the right he invokes should be denominated legal rather than equitable. Our decisions establish beyond peradventure that “[i]n cases of fraud or mistake, as under any other head of chancery jurisdiction, a court of the United States will not sustain a bill in equity to obtain only a decree for the payment of money by way of damages, when the like amount can be recovered at law in an action sounding in tort or for money had and received.” Buzard v. Houston, 119 U. S., at 352, citing Parkersburg v. Brown, 106 U. S. 487, 500 (1883); Ambler v. Choteau, 107 U. S. 586 (1883); Litchfield v. Ballou, 114 U. S. 190 (1885). See also Atlas Roofing Co. v. Occupational Safety and Health Review Comm’n, 430 U. S. 442, 454, n. 11 (1977) (“the otherwise legal issues of voidable preferences”); Pernell v. Southall Realty, 416 U. S. 363, 370 (1974) (“‘[WJhere an action is simply for the recovery... of a money judgment, the action is one at law’”), quoting Whitehead v. Shattuck, 138 U. S. 146, 151 (1891); Dairy Queen, Inc. v. Wood, 369 U. S. 469, 476 (1962) (“Petitioner’s contention... is that insofar as the complaint requests a money judgment it presents a claim which is unquestionably legal. We agree with that contention”); Gaines v. Miller, 111 U. S. 395, 397-398 (1884) (“Whenever one person has in his hands money equitably belonging to another, that other person may recover it by as-sumpsit for money had and received. The remedy at law is adequate and complete”) (citations omitted).
Indeed, in our view Schoenthal v. Irving Trust Co., 287 U. S. 92 (1932), removes all doubt that respondent’s cause of action should be characterized as legal rather than as equitable. In Schoenthal, the trustee in bankruptcy sued in equity to recover alleged preferential payments, claiming that it had no adequate remedy at law. As in this case, the recipients of the payments apparently did not file claims against the bankruptcy estate. The Court held that the suit had to proceed at law instead, because the long-settled rule that suits in equity will not be sustained where a complete remedy exists at law, then codified at 28 U. S. C. § 384, “serves to guard the right of trial by jury preserved by the Seventh Amendment and to that end it should be liberally construed.” 287 U. S., at 94. The Court found that the trustee’s suit — indistinguishable from respondent’s suit in all relevant respects — could not go forward in equity because an adequate remedy was available at law. There, as here, “[t]he preferences sued for were money payments of ascertained and definite amounts,” and “[t]he bill discloses no facts that call for an accounting or other equitable relief.” Id., at 95. Respondent’s fraudulent conveyance action plainly seeks relief traditionally provided by law courts or on the law side of courts having both legal and equitable dockets. Unless Congress may and has permissibly withdrawn jurisdiction over that action by courts of law and assigned it exclusively to non-Article III tribunals sitting without juries, the Seventh Amendment guarantees petitioners a jury trial upon request.
IV
Prior to passage of the Bankruptcy Reform Act of 1978, Pub. L. 95-598, 92 Stat. 2549 (1978 Act), “[sjuits to recover preferences constitute^] no part of the proceedings in bankruptcy.” Schoenthal v. Irving Trust Co., supra, at 94-95. Although related to bankruptcy proceedings, fraudulent conveyance and preference actions brought by a trustee in bankruptcy were deemed separate, plenary suits to which the Seventh Amendment applied. While the 1978 Act brought those actions within the jurisdiction of the bankruptcy courts, it preserved parties’ rights to trial by jury as they existed prior to the effective date of the 1978 Act. 28 U. S. C. § 1480(a) (repealed). The 1984 Amendments, however, designated fraudulent conveyance actions “core proceedings,” 28 U. S. C. § 157(b)(2)(H) (1982 ed., Supp. V), which bankruptcy judges may adjudicate and in which they may issue final judgments, § 157(b)(1), if a district court has referred the matter to them, § 157(a). We are not obliged to decide today whether bankruptcy courts may conduct jury trials in fraudulent conveyance suits brought by a trustee against a person who has not entered a claim against the estate, either in the rare procedural posture of this case, see supra, at 41, n. 3, or under the current statutory scheme, see 28 U. S. C. § 1411 (1982 ed., Supp. V). Nor need we decide whether, if Congress has authorized bankruptcy courts to hold jury trials in such actions, that authorization comports with Article III when non-Article III judges preside over the actions subject to review in, or withdrawal by, the district courts. We also need not consider whether jury trials conducted by a bankruptcy court would satisfy the Seventh Amendment’s command that “no fact tried by a jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law,” given that district courts may presently set aside clearly erroneous factual findings by bankruptcy courts. Bkrtcy. Rule 8013. The sole issue before us is whether the Seventh Amendment confers on petitioners a right to a jury trial in the face of Congress’ decision to allow a non-Article III tribunal to adjudicate the claims against them.
A
In Atlas Roofing, we noted that “when Congress creates new statutory ‘public rights,’ it may assign their adjudication to an administrative agency with which a jury trial would be incompatible, without violating the Seventh Amendment’s injunction that jury trial is to be ‘preserved’ in ‘suits at common law.’” 430 U. S., at 455 (footnote omitted). We emphasized, however, that Congress’ power to block application of the Seventh Amendment to a cause of action has limits. Congress may only deny trials by jury in actions at law, we said, in cases where “public rights” are litigated: “Our prior cases support administrative factfinding in only those situations involving ‘public rights,’ e. g., where the Government is involved in its sovereign capacity under an otherwise valid statute creating enforceable public rights. Wholly private tort, contract, and property cases, as well as a vast range of other cases, are not at all implicated.” Id., at 458.
We adhere to that general teaching. As we said in Atlas Roofing: “‘On the common law side of the federal courts, the aid of juries is not only deemed appropriate but is required by the Constitution itself.’” Id., at 450, n. 7, quoting Crowell v. Benson, 285 U. S. 22, 51 (1932). Congress may devise novel causes of action involving public rights free from the strictures of the Seventh Amendment if it assigns their adjudication to tribunals without statutory authority to employ juries as factfinders. But it lacks the power to strip parties contesting matters of private right of their constitutional right to a trial by jury. As we recognized in Atlas Roofing, to hold otherwise would be to permit Congress to eviscerate the Seventh Amendment’s guarantee by assigning to administrative agencies or courts of equity all causes of action not grounded in state law, whether they originate in a newly fashioned regulatory scheme or possess a long line of common-law forebears. 430 U. S., at 457-458. The Constitution nowhere grants Congress such puissant authority. “[Ljegal claims are not magically converted into equitable issues by their presentation to a court of equity,” Ross v. Bernhard, 396 U. S. 531, 538 (1970), nor can Congress conjure away the Seventh Amendment by mandating that traditional legal claims be brought there or taken to an administrative tribunal.
In certain situations, of course, Congress may fashion causes of action that are closely analogous to common-law claims and place them beyond the ambit of the Seventh Amendment by assigning their resolution to a forum in which jury trials are unavailable. See, e. g., Atlas Roofing, supra, at 450-461 (workplace safety regulations); Block v. Hirsh, 256 U. S. 135, 158 (1921) (temporary emergency regulation of rental real estate). See also Pernell v. Southall Realty, 416 U. S., at 382-383 (discussing cases); Murray’s Lessee v. Hoboken Land & Improvement Co., 18 How. 272, 284 (1856) (Congress “may or may not bring within the cognizance of the courts of the United States, as it may deem proper,” matters involving public rights). Congress’ power to do so is limited, however, just as its power to place adjudicative authority in non-Article III tribunals is circumscribed. See Thomas v. Union Carbide Agricultural Products Co., 473 U. S. 568, 589, 593-594 (1985); id., at 598-600 (Brennan, J., concurring in judgment); Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U. S. 50, 73-76 (1982) (opinion of Brennan, J.); id., at 91 (Rehnquist, J., concurring in judgment). Unless a legal cause of action involves “public rights,” Congress may not deprive parties litigating over such a right of the Seventh Amendment’s guarantee to a jury trial.
In Atlas Roofing, supra, at 458, we noted that Congress may effectively supplant a common-law cause of action carrying with it a right to a jury trial with a statutory cause of action shorn of a jury trial right if that statutory cause of action inheres in, or lies against, the Federal Government in its sovereign capacity. Our case law makes plain, however, that the class of “public rights” whose adjudication Congress may assign to administrative agencies or courts of equity sitting without juries is more expansive than Atlas Roofing's, discussion suggests. Indeed, our decisions point to the conclusion that, if a statutory cause of action is legal in nature, the question whether the Seventh Amendment permits Congress to assign its adjudication to a tribunal that does not employ juries as factfinders requires the same answer as the question whether Article III allows Congress to assign adjudication of that cause of action to a non-Article III tribunal. For if a statutory cause of action, such as respondent’s right to recover a fraudulent conveyance under 11 U. S. C. § 548(a)(2), is not a “public right” for Article III purposes, then Congress may not assign its adjudication to a specialized non-Article III court lacking “the essential attributes of the judicial power.” Crowell v. Benson, supra, at 51. And if the action must be tried under the auspices of an Article III court, then the Seventh Amendment affords the parties a right to a jury trial whenever the cause of action is legal in nature. Conversely, if Congress may assign the adjudication of a statutory cause of action to a non-Article III tribunal, then the Seventh Amendment poses no independent bar to the adjudication of that action by a nonjury factfinder. See, e. g., Atlas Roofing, supra, at 453-455, 460; Pernell v. Southall Realty, supra, at 383; Block v. Hirsh, supra, at 158. In addition to our Seventh Amendment precedents, we therefore rely on our decisions exploring the restrictions Article III places on Congress’ choice of adjudicative bodies to resolve disputes over statutory rights to determine whether petitioners are entitled to a jury trial.
In our most recent discussion of the “public rights” doctrine as it bears on Congress’ power to commit adjudication of a statutory cause of action to a non-Article III tribunal, we rejected the view that “a matter of public rights must at a minimum arise ‘between the government and others.’” Northern Pipeline Construction Co., supra, at 69 (opinion of Brennan, J.), quoting Ex parte Bakelite Corp., 279 U. S. 438, 451 (1929). We held, instead, that the Federal Government need not be a party for a case to revolve around “public rights.” Thomas v. Union Carbide Agricultural Products Co., 473 U. S., at 586; id., at 596-599 (Brennan, J., concurring in judgment). The crucial question, in cases not involving the Federal Government, is whether “Congress, acting for a valid legislative purpose pursuant to its constitutional powers under Article I, [has] create[d] a seemingly ‘private’ right that is so closely integrated into a public regulatory scheme as to be a matter appropriate for agency resolution with limited involvement by the Article III judiciary.” Id., at 593-594. See id., at 600 (Brennan, J., concurring in judgment) (challenged provision involves public rights because “the dispute arises in the context of a federal regulatory scheme that virtually occupies the field”). If a statutory right is not closely intertwined with a federal regulatory program Congress has power to enact, and if that right neither belongs to nor exists against the Federal Government, then it must be adjudicated by an Article III court. If the right is legal in nature, then it carries with it the Seventh Amendment’s guarantee of a jury trial.
B
Although the issue admits of some debate, a bankruptcy trustee’s right to recover a fraudulent conveyance under 11 U. S. C. § 548(a)(2) seems to us more accurately characterized as a private rather than a public right as we have used those terms in our Article III decisions. In Northern Pipeline Construction Co., 458 U. S., at 71, the plurality noted that the restructuring of debtor-creditor relations in bankruptcy “may well be a ‘public right.’”. But the plurality also emphasized that state-law causes of action for breach of contract or warranty are paradigmatic private rights,, even when asserted by an insolvent corporation in the midst of Chapter 11 reorganization proceedings. The plurality further said that “matters from their nature subject to ‘a suit at common law or in equity or admiralty’ ” lie at the “protected core” of Article III judicial power, id., at 71, n. 25; see id., at 90 (Rehnquist, J., concurring in judgment) — a point we reaffirmed in Thomas, supra, at 587. There can be little doubt that fraudulent conveyance actions by bankruptcy trustees — suits which, we said in Schoenthal v. Irving Trust Co., 287 U. S., at 94-95 (citation omitted), “constitute no part of the proceedings in bankruptcy but concern controversies arising out of it” — are quintessentially suits at common law that more nearly resemble state-law contract claims brought by a bankrupt corporation to augment the bankruptcy estate than they do creditors’ hierarchically ordered claims to a pro rata share of the bankruptcy res. See Gibson 1022-1025. They therefore appear matters of private rather than public right.
Our decision in Katchen v. Landy, 382 U. S. 323 (1966), under the Seventh Amendment rather than Article III, confirms this analysis. Petitioner, an officer of a bankrupt corporation, made payments from corporate funds within four months of bankruptcy on corporate notes on which he was an accommodation maker. When petitioner later filed claims against the bankruptcy estate, the trustee counterclaimed, arguing that the payments petitioner made constituted voidable preferences because they reduced his potential personal liability on the notes. We held that the bankruptcy court had jurisdiction to order petitioner to surrender the preferences and that it could rule on the trustee’s claim without according petitioner a jury trial. Our holding did not depend, however, on the fact that “[bankruptcy] courts are essentially courts of equity” because “they characteristically proceed in summary fashion to deal with the assets of the bankrupt they are administering.” Id., at 327. Notwithstanding the fact that bankruptcy courts “characteristically” supervised summary proceedings, they were statutorily invested with jurisdiction at law as well, and could also oversee plenary proceedings. See Atlas Roofing, 430 U. S., at 454, n. 11 (Katchen rested “on the ground that a bankruptcy court, exercising its summary jurisdiction, was a specialized court of equity”) (emphasis added); Pepper v. Litton, 308 U. S. 295, 304 (1939) (“[F]or many purposes ‘courts of bankruptcy are essentially courts of equity’ ”) (emphasis added). Our decision turned, rather, on the bankruptcy court’s having “actual or constructive possession” of the bankruptcy estate, 382 U. S., at 327, and its power and obligation to consider objections by the trustee in deciding whether to allow claims against the estate. Id., at 329-331. Citing Schoenthal v. Irving Trust Co., supra, approvingly, we expressly stated that, if petitioner had not submitted a claim to the bankruptcy court,
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:
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A
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sc_issuearea
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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.
Mr. Justice Stewart
delivered the opinion of the Court.
The respondent, Gaines Ted Huson, suffered a back injury while working on an artificial island drilling rig owned and operated by the petitioner, Chevron Oil Co., and located on the Outer Continental Shelf off the Gulf Coast of Louisiana. The injury occurred in December 1965. Allegedly, it was not until many months later that the injury was discovered to be a serious one. In January 1968 the respondent brought suit for damages against the petitioner in federal district court. The respondent’s delay in suing the petitioner ultimately brought his case to this Court.
The issue presented is whether the respondent’s action is time barred and, more particularly, whether state or federal law determines the timeliness of the action. That issue must be resolved under the Outer Continental Shelf Lands Act, 67 Stat. 462, 43 U. S. C. § 1331 et seq. (hereinafter “Lands Act”), which governs injuries occurring on fixed structures on the Outer Continental Shelf. When this lawsuit was initiated, there was a line of federal court decisions interpreting the Lands Act to make general admiralty law, including the equitable doctrine of laches, applicable to personal injury suits such as the respondent’s. The petitioner did not question the timeliness of the action as a matter of laches. While pretrial discovery proceedings were still under way, however, this Court announced its decision in Rodrigue v. Aetna Casualty & Surety Co., 395 U. S. 352. That decision entirely changed the complexion of this case. For it established that the Lands Act does not make admiralty law applicable to actions such as this one. Relying on Rodrigue, the District Court held that Louisiana’s one-year limitation on personal injury actions, rather than the admiralty doctrine of laches, must govern this case. It concluded, therefore, that the respondent's action was time barred and granted summary judgment for the petitioner.
On appeal, the respondent argued that Rodrigue should not be applied retroactively to bar actions filed before the date of its announcement. But the Court of Appeals declined to reach that question. Instead, it held that the interpretation of the Lands Act in Rodrigue does not compel application of the state statute of limitations or prevent application of the admiralty doctrine of laches. It concluded that the doctrine of laches should have been applied by the District Court and, therefore, reversed that court’s judgment and remanded the case for trial. 430 F. 2d 27. We granted certiorari to consider the Court of Appeals’ construction of the Lands Act and of Rodrigue. 402 U. S. 942. We hold that the Lands Act, as interpreted in Rodrigue, requires that the state statute of limitations be applied to personal injury actions. We affirm the judgment of the Court of Appeals, however, on the ground that Rodrigue should not be invoked to require application of the Louisiana time limitation retroactively to this case.
I
The Lands Act makes the Outer Continental Shelf, including fixed structures thereon, an area of exclusive federal jurisdiction, 43 U. S. C. § 1333 (a)(1). The Act extends the laws of the United States to this area, 43 U. S. C. § 1333 (a)(1), and provides that the laws of the adjacent State shall also apply “[t]o the extent that they are applicable and not inconsistent” with applicable federal laws, 43 U. S. C. § 1333 (a)(2). To the extent that a comprehensive body of federal law is applicable under § 1333 (a)(1), state law “inconsistent” with that law would be inapplicable under § 1333 (a)(2).
In Rodrigue, we clarified the scope of application of federal law and state law under § 1333 (a) (1) and § 1333 (a)(2). By rejecting the view that comprehensive admiralty law remedies apply under § 1333 (a)(1), we ^recognized that there exists a substantial “gap” in federal law. Thus, state law remedies are not “inconsistent” with applicable federal law. Accordingly, we held that, in order to provide a remedy for wrongful death, the “gap” must be filled with the applicable body of state law under § 1333 (a)(2).
The Court of Appeals acknowledged that Rodrigue clearly establishes that the remedy for personal injury, as for wrongful death, cannot be derived from admiralty law but must be governed by the law of the adjacent State, Louisiana. But the court held that Louisiana’s time limitation on personal injury actions need not be applied with the substantive remedy. It supported this holding by reference to the terms of § 1333 (a) (2) that limit the application of state law under the Lands Act. The Louisiana time limitation, the Court of Appeals reasoned, is not “applicable” of its own force and is “inconsistent” with the admiralty doctrine of laches. The court held that, despite the holding in Rodrigue, the laches doctrine is applicable as a matter of federal common law. We must disagree.
The Court of Appeals did not suggest that state statutes of limitations are per se inapplicable under § 1333 (a)(2). Rather, it focused on the peculiar nature of the Louisiana time limitation on personal injury actions found in Art. 3536, La. Civ. Code Ann. Article 3536 provides that personal injury actions shall be “prescribed” by one year. The Court of Appeals attached much significance to the fact that Art. 3536 “prescribes,” rather than “perempts,” such actions. Under Louisiana law, “prescription,” unlike “peremption,” bars the remedy but does not formally extinguish the right to recovery. See Page v. Cameron Iron Works, 259 F. 2d 420, 422-424; Istre v. Diamond M. Drilling Co., 226 So. 2d 779, 794-795 (La. App.); Succession of Pizzillo, 223 La. 328, 335, 65 So. 2d 783, 786. This characterization has importance under principles of the conflict of laws. It has been held, as a matter of Louisiana conflicts law, that mere “prescriptive” time limitations are not binding outside their own forum. See Fidelity & Casualty Co. v. C/B Mr. Kim, 345 F. 2d 45, 50; Kozan v. Comstock, 270 F. 2d 839, 841; Istre v. Diamond M. Drilling Co., supra, at 795. Reasoning from this principle of conflicts law, the Court of Appeals concluded that the “prescriptive” limitation is not “applicable” in a federal court adjudicating a claim under the Lands Act.
We hold, however, that the “prescriptive” nature of Art. 3536 does not undercut its applicability under the Lands Act. Under § 1333 (a) (2) of the Act, “[s]tate law bec[omes] federal law federally enforced.” Rodrigue v. Aetna Casualty & Surety Co., supra, at 365. It was the intent of Congress, expressed in the Senate Committee Report, in the Conference Report, and on the floor of the Senate, that state laws be “adopted” or “enacted” as federal law. See id., at 357-358. Thus a federal court applying Louisiana law under § 1333 (a) (2) of the Lands Act is applying it as federal law — as the law of the federal forum. Since the federal court is not, then, applying the law of another forum in the usual sense, ordinary conflict of laws principles have no relevance. Article 3536 is “applicable” in federal court under the Lands Act just as it would be applicable in a Louisiana court.
The policies underlying the federal absorption of state law in the Lands Act make this result particularly obvious. As we pointed out in Rodrigue, Congress recognized that “ 'the Federal Code was never designed to be a complete body of law in and of itself’ ” and thus that a comprehensive body of state law was needed. Id., at 358, 361. Congress also recognized that the “special relationship between the men working on these artificial islands and the adjacent shore to which they commute” favored application of state law with which these men and their attorneys would be familiar. Id., at 365; see id., at 363. If Congress’ goal was to provide a comprehensive and familiar body of law, it would defeat that goal to apply only certain aspects of a state personal injury remedy in federal court. A state time limitation upon a remedy is coordinated with the substance of the remedy and is no less applicable under the Lands Act.
The application of Louisiana’s Art. 3536 is, of course, subject to the absence of “inconsistent” and applicable federal law. The Court of Appeals acknowledged that Rodrigue forecloses direct applicability of the “inconsistent” laches doctrine through admiralty law. But, by applying laches as a matter of federal common law, it sought to reintroduce the doctrine through a back door. This approach subverts the congressional intent documented in Rodrigue, id., at 359-366, that admiralty doctrines should not apply under the Lands Act.
Moreover, the Court of Appeals’ approach amounts to an inappropriate creation of federal common law. Even when a federal statute creates a wholly federal right but specifies no particular statute of limitations to govern actions under the right, the general rule is to apply the state statute of limitations for analogous types of actions. See Auto Workers v. Hoosier Corp., 383 U. S. 696; Cope v. Anderson, 331 U. S. 461; Campbell v. Haverhill, 155 U. S. 610; Note, Federal Statutes Without Limitations Provisions, 53 Col. L. Rev. 68 (1953). A special federal statute of limitations is created, as a matter of federal common law, only when the need for uniformity is particularly great or when the nature of the federal right demands a particular sort of statute of limitations. See Holmberg v. Armbrecht, 327 U. S. 392; McAllister v. Magnolia Petroleum Co., 357 U. S. 221. But, under the Lands Act, there is not even such limited freedom to create a federal statute of limitations, for Congress specified that a comprehensive body of state law should be adopted by the federal courts in the absence of existing federal law. Congress specifically rejected national uniformity and specifically provided for the application of state remedies which demand state, not federal, statutes of limitation. Thus, Congress made clear provision for filling in the “gaps” in federal law; it did not intend that federal courts fill in those “gaps” themselves by creating new federal common law.
II
Although we hold that Louisiana’s one-year statute of limitations must be applied under the Lands Act as interpreted in Rodrigue, we do not blind ourselves to the fact that this is, in relevant respect, a pre-Rodrigue case. The respondent’s injury occurred more than three years before the announcement of our decision in Rodrigue. He instituted the present lawsuit more than one year before Rodrigue. Yet, if the Louisiana statute of limitations controls in this case, his action was time barred more than two years before Rodrigue. In these circumstances, we must consider the respondent’s argument that the state statute of limitations should be given nonretro-active application under Rodrigue.
In recent years, the nonretroactive application of judicial decisions has been most conspicuously considered in the area of the criminal process. E. g., Mackey v. United States, 401 U. S. 667; Hill v. California, 401 U. S. 797; Desist v. United States, 394 U. S. 244; Linkletter v. Walker, 381 U. S. 618. But the problem is by no means limited to that area. The earliest instances of nonretro-activity in the decisions of this Court — more than a century ago — came in cases of nonconstitutional, noncriminal state law. E. g., Gelpcke v. City of Dubuque, 1 Wall. 175; Havemeyer v. Iowa County, 3 Wall. 294; Railroad Co. v. McClure, 10 Wall. 511. It was in a noncriminal case that we first held that a state court may apply its decisions prospectively. Great Northern R. Co. v. Sunburst Oil & Refining Co., 287 U. S. 358. And, in the last few decades, we have recognized the doctrine of nonretroactivity outside the criminal area many times, in both constitutional and nonconstitutional cases. Cipriano v. City of Houma, 395 U. S. 701; Allen v. State Board of Elections, 393 U. S. 544; Hanover Shoe v. United Shoe Machinery Corp., 392 U. S. 481; Simpson v. Union Oil Co., 377 U. S. 13; England v. State Board of Medical Examiners, 375 U. S. 411; Chicot County Drainage Dist. v. Baxter State Bank, 308 U. S. 371.
In our cases dealing with the nonretroactivity question, we have generally considered three separate factors. First, the decision to be applied nonretroactively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied, see, e. g., Hanover Shoe v. United Shoe Machinery Corp., supra, at 496, or by deciding an issue of first impression whose resolution was not clearly foreshadowed, see, e. g., Allen v. State Board of Elections, supra, at 572. Second, it has been stressed that "we must... weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation.” Linkletter v. Walker, supra, at 629. Finally, we have weighed the inequity imposed by retroactive application, for “[w]here a decision of this Court could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the 'injustice or hardship’ by a holding of nonretroactivity.” Cipriano v. City of Houma, supra, at 706.
Upon consideration of each of these factors, we conclude that the Louisiana one-year statute of limitations should not be applied retroactively in the present case. Rodrigue was not only a case of first impression in this Court under the Lands Act, but it also effectively overruled a long line of decisions by the Court of Appeals for the Fifth Circuit holding that admiralty law, including the doctrine of laches, applies through the Lands Act. See, e. g., Pure Oil Co. v. Snipes, 293 F. 2d 60; Movible Offshore Co. v. Ousley, 346 F. 2d 870; Loffland Bros. Co. v. Roberts, 386 F. 2d 540. When the respondent was injured, for the next two years until he instituted his lawsuit, and for the ensuing year of pretrial proceedings, these Court of Appeals decisions represented the law governing his case. It cannot be assumed that he did or could foresee that this consistent interpretation of the Lands Act would be overturned. The most he could do was to rely on the law as it then was. “We should not indulge in the fiction that the law now announced has always been the law and, therefore, that those who did not avail themselves of it waived their rights.” Griffin v. Illinois, 351 U. S. 12, 26 (Frankfurter, J., concurring in judgment).
To hold that the respondent’s lawsuit is retroactively time barred would be anomalous indeed. A primary purpose underlying the absorption of state law as federal law in the Lands Act was to aid injured employees by affording them comprehensive and familiar remedies. Rodrigue v. Aetna Casualty & Surety Co., supra, at 361, 365. Yet retroactive application of the Louisiana statute of limitations to this case would deprive the respondent of any remedy whatsoever on the basis of superseding legal doctrine that was quite unforeseeable. To abruptly terminate this lawsuit that has proceeded through lengthy and, no doubt, costly discovery stages for a year would surely be inimical to the beneficent purpose of the Congress.
It would also produce the most “substantial inequitable results,” Cipriano v. City of Houma, supra, at 706, to hold that the respondent “slept on his rights” at a time when he could not have known the time limitation that the law imposed upon him. In Cipriano v. City of Houma, supra, we invoked the doctrine of nonretroactive application to protect property interests of “cities, bondholders, and others connected with municipal utilities”; and, in Allen v. State Board of Elections, supra, we invoked the doctrine to protect elections held under possibly discriminatory voting laws. Certainly, the respondent’s potential redress for his allegedly serious injury— an injury that may significantly undercut his future earning power — is entitled to similar protection. As in England v. State Board of Medical Examiners, supra, nonretroactive application here simply preserves his right to a day in court.
Both a devotion to the underlying purpose of the Lands Act’s absorption of state law and a weighing of the equities requires nonretroactive application of the state statute of limitations here. Accordingly, although holding that the opinion of the Court of Appeals reflects a misapprehension of Rodrigue, we affirm its judgment remanding this case to the trial court.
It is so ordered.
Mr. Justice Douglas.
Rodrigue v. Aetna Casualty & Surety Co., 395 U. S. 352, does not, with all respect, require reversal in this case. Accordingly, I would affirm the judgment of the Court of Appeals without reaching the question of the retroactivity of Rodrigue.
Rodrigue, like the present case, arose under the Outer Continental Shelf Lands Act, 67 Stat. 462, 43 U. S. C. § 1331 et seq. That Act created a federal cause of action for offshore injuries enforceable in the federal courts, but made state laws applicable. 43 U. S. C. § 1333 (a)(2).
In Rodrigue, La. Civ. Code Ann., Art. 2315 (1970) was relevant, which provides in part: “The right to recover all other damages caused by an offense or quasi offense, if the injured person dies, shall survive for a period of one year from the death of the deceased....”
In the present case Art. 3536 of the Code is applicable and it reads: “The following actions are also prescribed by one year:
“That for injurious words, whether verbal or written, and that for damages caused by animals, or resulting from offenses or quasi offenses.”
The latter limitation is “prescriptive” only, i. e., that while the Louisiana remedy is barred, the right is not. Under Art. 3536, the limitation runs only to the remedy and would not be applicable in another forum applying the substantive right. Istre v. Diamond M. Drilling Co., 226 So. 2d 779, 794-799 (La. App. 1969). Respondent, therefore, argues that the federal doctrine of laches is the only limitation upon his right of recovery and that it is inapplicable where, as here, there is no prejudice to the defendant and any delay in filing the lawsuit was reasonably excusable. See, e. g., Akers v. State Marine Lines, 344 F. 2d 217.
The Louisiana courts consider the distinction between peremptive and prescriptive limitations important; and by reason of the federal statute, making Louisiana law applicable, federal courts are bound by the distinction. Richards v. United States, 369 U. S. 1. As stated in Rodrigue the federal Act “supplemented gaps in the federal law with state law through the 'adoption of State law as the law of the United States.’ ” 396 U. S., at 357.
In Rodrigue — an action for wrongful death — the right is extinguished, if the action for recovery is not brought within a year of the death. Kenney v. Trinidad Corp., 349 F. 2d 832; Mejia v. United States, 152 F. 2d 686. Under Art. 3536 — which governs here — Louisiana law holds that it i's merely a “procedural restraint which bars the remedy, but does not extinguish the right.” Fidelity & Casualty Co. v. C/B Mr. Kim, 345 F. 2d 45, 50 (CA5 1965). See also Page v. Cameron Iron Works, 259 F. 2d 420, 422 (CA5 1958); Jackson v. Continental Southern Lines, 172 F. Supp. 809 (WD Ark. 1959); Succession of Pizzillo, 223 La. 328, 65 So. 2d 783 (1953); Devoe & Raynolds Co. v. Robinson, 109 So. 2d 226 (La. App. 1959).
A district court, sitting in diversity jurisdiction in Arkansas, applied these principles of Louisiana law and held — properly in my mind — that Art. 3536 did not bar an action filed more than one year after the injury complained of. Jackson v. Continental Southern Lines, supra. See also Page v. Cameron Iron Works, supra. That decision is in perfect harmony with long-established rules of conflict of laws. A different result should not obtain here where federal jurisdiction, 43 U. S. C. § 1333, flows from a head other than diversity.
Apart from traditional conflict of laws is the congressional mandate to apply state laws to these federal causes of action. If we are faithfully to apply the state law of Louisiana we would apply here not the Louisiana per-emption rule applied in Rodrigue but the Louisiana prescriptive rule applicable to the instant personal injury case.
Today’s decision conflicts with Levinson v. Deupree, 345 U. S. 648, where the District Court was enforcing in admiralty a state cause of action for wrongful death. Although procedural irregularities in the appointment of the administrator would have barred — under the state statute of limitations — an action in state court, we held that federal courts were free to formulate their own procedural rules. If we were to follow Levinson, we would not bind federal courts to state rules of procedure designed to have no application beyond the state forum for which they were created. Cf. Byrd v. Blue Ridge Electric Cooperative, 356 U. S. 525, 533-539; Angel v. Bullington, 330 U. S. 183, 192; Atkins v. Schmutz Manufacturing Co., 435 F. 2d 527 (CA4 1970); Note, 71 Col. L. Rev. 865 (1971).
Today’s decision also conflicts with our decision in Richards v. United States, supra. There, the Federal Tort Claims Act referred us to the local law for a rule of decision, just as Rodrigue and the Lands Act do in the present case. We concluded that the Act “require[d] application of the whole law of the State where the act or omission occurred,” 369 U. S., at 11, including its conflict of laws decision. If we were to follow Richards and Rodrigue in the present case, we would apply Louisiana’s prescriptive rule as it has been construed by Louisiana courts and not use it to bar an action in a different forum.
For in that other forum — here the federal district court — Louisiana law allows the federal court, consistently with conflict of laws, to apply a different limitation than Louisiana would apply in her own courts.
In Rodrigue, we said:
“The purpose of the Lands Act was to define a body of law applicable to the seabed, the subsoil, and the fixed structures such as those in question here on the outer Continental Shelf. That this law was to be federal law of the United States, applying state law only as federal law and then only when not inconsistent with applicable federal law, is made clear by the language of the Act.” 395 U. S., at 355-356.
We then concluded: “It is evident from this that federal law is ‘exclusive’ in its regulation of this area, and that state law is adopted only as surrogate federal law.” Id., at 357.
Since the federal court is not a Louisiana forum, the Louisiana law of prescription permits enforcement of this claim after Louisiana’s one-year statute has run. Therefore, if we are to be faithful to the federal scheme we must apply Louisiana law; and Louisiana law would not apply Rodrigue in a personal injury case where the suit is not brought in a Louisiana forum.
The Court of Appeals, speaking through our leading admiralty authority, Judge Brown, so held and went on to rule that in harmony with Louisiana’s prescriptive rule this personal injury suit was not barred under the laches doctrine familiar to maritime law.
This is not a stale claim and its assertion after the one-year period ran was not prejudicial; no prejudice was indeed pleaded. Cf. Holmberg v. Armbrecht, 327 U. S. 392.
One who reads this record will be impressed with the grave injustice of applying the Louisiana one-year statute as if it were peremptive, rather than prescriptive. Death comes with a finality lacking in some personal injury cases; and the rigid rule applied in Rodrigue can do no injustice. But personal injuries are often lingering and one may not know for months whether he is partially or permanently crippled, whether he must be retrained for wholly different work, and so on. In this case it took some months after the injury for respondent (1) to realize that he could not return to his old work, and (2) to discover the kind of work he could do.
If we followed Louisiana law, as Congress directed, we would affirm the judgment of the Court of Appeals, reflecting as it does good law and a measure of justice not always allowable when the rigidity of Rodrigue governs a case.
See infra, at 107.
The decision of the District Court is unreported (ED La., Civil Action No. 68-19D).
The respondent has made the same argument to this Court.
The full text of § 1333 (a) (1) and § 1333 (a) (2) reads:
“(a) (1) The Constitution and laws and civil and political jurisdiction of the United States are extended to the subsoil and seabed of the outer Continental Shelf and to all artificial islands and fixed structures which may be erected thereon for the purpose of exploring for, developing, removing, and transporting resources therefrom, to the same extent as if the outer Continental Shelf were an area of exclusive Federal jurisdiction located within a State: Provided, however, That mineral leases on the outer Continental Shelf shall be maintained or issued only under the provisions of this subchapter.
“(2) To the extent that they are applicable and not inconsistent with this subchapter or with other Federal laws and regulations of the Secretary now in effect or hereafter adopted, the civil and criminal laws of each adjacent State as of August 7, 1953 are declared to be the law of the United States for that portion of the subsoil and seabed of the outer Continental Shelf, and artificial islands and fixed structures erected thereon, which would be within the area of the State if its boundaries were extended seaward to the outer margin of the outer Continental Shelf, and the President shall determine and publish in the Federal Register such projected lines extending seaward and defining each such area. All of such applicable laws shall be administered and enforced by the appropriate officers and courts of the United States. State taxation laws shall not apply to the outer Continental Shelf.”
This is not to imply that a federal court adjudicating a claim under state law as absorbed in the Lands Act must function as it would in a diversity case. See Erie R. Co. v. Tompkins, 304 U. S. 64; Guaranty Trust Co. v. York, 326 U. S. 99; Levinson v. Deupree, 345 U. S. 648, 651. We hold only that the state statute of limitations is part of the law to be applied in federal court as it would be part of the law to be applied in a state court.
Here we are not dealing with mere “housekeeping rules” embodied in state law. Cf. Hanna v. Plumer, 380 U. S. 460, 473.
The Court of Appeals justified its creation of federal common law in this instance by suggesting that personal injury actions under the Lands Act are in a “quasi maritime area which is traditionally imbued with the laches doctrine and which presents a strong federal urge toward uniformity.” 430 F. 2d, at 32.
Contrary to the suggestion by Mr. Justice Douglas, our holding today is consonant with Levinson v. Deupree, supra, n. 5. Since Levinson involved a federal court’s obligation to adopt state procedural rules in an admiralty action, it has very limited relevance to the instant case, which involves an action under a statute which ousts admiralty law and specifically directs that state law shall be adopted as federal law. Moreover, Levinson held only that state “procedural niceties relating to amendments of pleadings” need not be applied by federal admiralty courts, and the opinion emphasized that it was not dealing with an important part of the state action, such as a statute of limitations. 345 U. S., at 651-652. As pointed out above, our holding today does not extend to such state “housekeeping rules.” See n. 6, supra.
Richards v. United States, 369 U. S. 1, also referred to by Mr. Justice Douglas, held that, under the Federal Tort Claims Act, a federal court must apply “the whole law of the State where the act or omission occurred.” Id., at 11. Insofar as Richards bears on the present case, it supports our holding that federal courts should not create interstitial federal common law when the Congress has directed that a whole body of state law shall apply.
These cases were decided in the era before Erie R. Co. v. Tompkins, supra, n. 5. The first case involving nonretroactive application of state law concerned interpretation of the Mississippi Constitution. Rowan v. Runnels, 5 How. 134.
We do not hold here that Rodrigue, in its entirety, must be applied nonretroactively. Rather, we hold.only that state statutes of limitations, applicable under Rodrigue’s interpretation of the Lands Act, should not be applied retroactively. Retroactive application of all state substantive remedies under Rodrigue would not work a comparable hardship or be so inconsistent with the purpose of the Lands Act.
Guillory v. Avoyelles R. Co., 104 La. 11, 15, 28 So. 899, 901 (1900):
“When a statute creates a right of action and stipulates the delay within which that right is to be executed, the delay thus fixed is not properly speaking one of prescription, but is one of peremption.
“Statutes of prescription simply bar the remedy. Statutes of per-emption destroy the cause of action itself. That is to say, after the limit of time expires the cause of action no longer exists; it is lost.”
G. Stumberg, Principles of Conflict of Laws 146-147 (3d ed. 1963):
“The traditional reaction in Conflict of Laws... has been that ordinarily limitation is procedural. This view was taken by the Dutch jurists, and where the question arises out of a general statute, it is the view generally accepted by Anglo-American courts. The result is that in the absence of a statute to the contrary in most jurisdictions, when the claim is based upon foreign facts, even though the foreign period of limitation has not run, the plaintiff may not recover if the time allowed for suit at the forum has expired. Conversely, if the foreign period has expired, suit may nevertheless be brought at the forum if the time specified there has not run.’’ (Footnotes omitted.)
Accord, Restatement of Conflict of Laws §§ 603-604 (1934); Restatement (Second) of Conflict of Laws §§ 142, 143 (1971); 3 J. Beale, Conflict of Laws § 584.1 (1935); B. Currie, Conflict of Laws 232-234, 255 (1963); A. Ehrenzweig, Conflict of Laws 428-436 (1962); H. Goodrich, Conflict of Laws 267 (4th ed. 1964); Ailes, Limitation of Actions and the Conflict of Laws, 31 Mich. L. Rev. 474 (1933); Comment, The Statute of Limitations and the Conflict of Laws, 28 Yale L. J. 492 (1919).
While still sitting on the Court of Appeals for the Second Circuit, Mr. Justice Harlan said:
“In actions where the rights of the parties are grounded upon the law of jurisdictions other than the forum, it is a well-settled conflict-of-laws rule that the forum will apply the foreign substantive law, but will follow its own rules of procedure.” Bournias v. Atlantic Maritime Co., 220 F. 2d 152, 154 (CA2 1955).
Mr. Justice Harlan went on to hold that a Panamanian statute of limitations was not applicable where a Panamanian statutory right was being enforced under the admiralty jurisdiction of the Federal District Court.
The majority supports its limitation on actions by saying that “we are not dealing with mere ‘housekeeping rules’ embodied in state law. Cf. Hanna v. Plumer, 380 U. S. 460, 473.” Ante, at 103 n. 6. This conclusion, however, is directly contrary to the characterization given the prescriptive limitation by Louisiana courts:
“... It is conceded by the five defendants-appellees that had plaintiff filed this suit in the federal court, the doctrine of laches would apply. The cases cited by plaintiff... were filed in the federal forum and are distinguished on this basis.
“But plaintiff chose the State forum. Plaintiff may have preferred some procedural advantages afforded in the State court, such as: agreement of only nine of twelve jurors needed; ability to call under cross-examination any employee of a party as opposed to the federal rule wherein the right to call witnesses under cross-examination is limited to executive or top supervisory personnel; no procedural vehicle provided for directed verdict or judgment n. o. v. in State court; or shorter delay in State court between filing petition and trial. Having chosen the State forum, he is bound by State procedural rules. The argument that uniformity requires us to import the Federal procedural law of laches rather than use the Louisiana procedural law of prescription, is unacceptable. If we adopt the federal procedural rule in this instance, it would logically follow that more Louisiana procedural rules will, for the same reason, be abandoned in the future. We hold that our State courts are bound to apply State procedural rules.” Istre v. Diamond M. Drilling Co., 226 So. 2d 779, 794.
The court then concluded, “The applicable Louisiana prescription statute, LSA-C.C. Art. 3536, is procedural.” Id., at 794 — 795.
The majority would limit Richards’ reasoning “that federal courts should not create interstitial federal common law when the Congress has directed that a whole body of state law shall apply.” Ante, at 105 n.
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.
State and federal courts must enforce the Federal Arbitration Act (FAA), 9 U. S. C. § 1 et seq., with respect to all arbitration agreements covered by that statute. Here, the Supreme Court of Appeals of West Virginia, by misreading and disregarding the precedents of this Court interpreting the FAA, did not follow controlling federal law implementing that basic principle. The state court held unenforceable all predispute arbitration agreements that apply to claims alleging personal injury or wrongful death against nursing homes.
The decision of the state court found the FAA’s coverage to be more limited than mandated by this Court’s previous cases. The decision of the State Supreme Court of Appeals must be vacated. When this Court has fulfilled its duty to interpret federal law, a state court may not contradict or fail to implement the rule so established. See U. S. Const., Art. VI, cl. 2.
I
This litigation involves three negligence suits against nursing homes in West Virginia. The suits were brought by Clayton Brown, Jeffrey Taylor, and Sharon Marchio. In each case, a family member of a patient requiring extensive nursing care had signed an agreement with a nursing home on behalf of the patient. The relevant parts of the agreements in Brown’s case and Taylor’s case were identical. The contracts included a clause requiring the parties to arbitrate all disputes, other than claims to collect late payments owed by the patient. The contracts included a provision holding the party filing the arbitration responsible for paying a filing fee in accordance with the Rules of the American Arbitration Association fee schedules. The agreement in Marchio’s case also included a clause requiring arbitration but made no exceptions to the arbitration requirement and did not mention filing fees.
In each of the three cases, a family member of a patient who had died sued the nursing home in state court, alleging that negligence caused injuries or harm resulting in death. A state trial court dismissed the suits by Brown and Taylor based on the agreements to arbitrate. The Supreme Court of Appeals of West Virginia consolidated those cases with Marchio’s, which was before the court on other issues.
In a decision concerning all three cases, the state court held that “as a matter of public policy under West Virginia law, an arbitration clause in a nursing home admission agreement adopted prior to an occurrence of negligence that results in a personal injury or wrongful death, shall not be enforced to compel arbitration of a dispute concerning the negligence.” Brown v. Genesis Healthcare Corp., 228 W. Va. 646, 688, 724 S. E. 2d 250, 292 (2011). The state court considered whether the state public policy was pre-empted by the FAA. The state court found unpersuasive this Court’s interpretation of the FAA, calling it “tendentious,” id., at 674, 724 S. E. 2d, at 278, and “created from whole cloth,” id., at 675, 724 S. E. 2d, at 279. It later concluded that “Congress did not intend for the FAA to be, in any way, applicable to personal injury or wrongful death suits that only collaterally derive from a written agreement that evidences a transaction affecting interstate commerce, particularly where the agreement involves a service that is a practical necessity for members of the public,” id., at 687, 724 S. E. 2d, at 291. The court thus concluded that the FAA does not pre-empt the state public policy against predispute arbitration agreements that apply to claims of personal injury or wrongful death against nursing homes.
The West Virginia court’s interpretation of the FAA was both incorrect and inconsistent with clear instruction in the precedents of this Court. The FAA provides that a “written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be 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. The statute’s text includes no exception for personal-injury or wrongful-death claims. It “requires courts to enforce the bargain of the parties to arbitrate.” Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 217 (1985). It “reflects an emphatic federal policy in favor of arbitral dispute resolution.” KPMG LLP v. Cocchi, ante, at 21 (per curiam) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S. 614, 631 (1985); internal quotation marks omitted).
As this Court reaffirmed last Term, “[w]hen state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA.” AT&T Mobility LLC v. Concepcion, 563 U. S. 333, 341 (2011). That rule resolves these cases. West Virginia’s prohibition against predispute agreements to arbitrate personal-injury or wrongful-death claims against nursing homes is a categorical rule prohibiting arbitration of a particular type of claim, and that rule is contrary to the terms and coverage of the FAA. See ibid. See also, e. g., Preston v. Ferrer, 552 U. S. 346, 356 (2008) (FAA pre-empts state law granting state commissioner exclusive jurisdiction to decide issue the parties agreed to arbitrate); Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U. S. 52, 56 (1995) (FAA pre-empts state law requiring judicial resolution of claims involving punitive damages); Perry v. Thomas, 482 U. S. 483, 491 (1987) (FAA pre-empts state-law requirement that litigants be provided a judicial forum for wage disputes); Southland Corp. v. Keating, 465 U. S. 1,10 (1984) (FAA preempts state financial investment statute’s prohibition of arbitration of claims brought under that statute).
1 — 1 1 — (
The West Virginia court proposed an alternativ[e]” holding that the particular arbitration clauses in Brown’s case and Taylor’s case were unconscionable. 228 W. Va., at 689-690, 691, 724 S. E. 2d, at 293-294, 295. See also id., at 693, 724 S. E. 2d, at 297 (not addressing the question whether the arbitration agreement in Marchio’s case is unenforceable for reasons other than public policy). It is unclear, however, to what degree the state court’s alternative holding was influenced by the invalid, categorical rule discussed above, the rule against predispute arbitration agreements. For example, in its discussion of the alternative holding, the state court found the arbitration clauses unconscionable in part because a predispute arbitration agreement that applies to claims of personal injury or wrongful death against nursing homes “clearly violates public policy.” Id., at 690, 724 S. E. 2d, at 294.
On remand, the West Virginia court must consider whether, absent that general public policy, the arbitration clauses in Brown’s case and Taylor’s case are unenforceable under state common-law principles that are not specific to arbitration and pre-empted by the FAA.
* * *
The petitions for certiorari are granted. The judgment of the Supreme Court of Appeals of West Virginia is vacated, and the cases are remanded for proceedings not inconsistent 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:
|
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.
Appellee’s draft Board rejected his claim to classification as a conscientious objector and classified him I-A. His appeals within the Selective Service System were unsuccessful. After he was ordered to report for induction he brought an action in the United States District Court for the Northern District of California seeking to have his induction enjoined and to have the rejection of his claim to conscientious objector classification declared improper on the grounds that it had no basis in fact, that the Board had misapplied the statutory definition of conscientious objector, and that the members of the Board were improperly motivated by hostility and bias against those who claim to be conscientious objectors. The District Court entered a preliminary injunction preventing appellee’s induction until after a determination of his claim on the merits.
In entering the preliminary injunction, the District Court held that it had jurisdiction to hear appellee’s claim despite § 10 (b) (3) of the Military Selective Service Act of 1967, 50 U. S. C. App. § 460 (b)(3) (1964 ed., Supp. Ill), which provides:
“No judicial review shall be made of the classification or processing of any registrant by local boards, appeal boards, or the President, except as a defense to a criminal prosecution instituted under section 12 of this title, after the registrant has responded either affirmatively or negatively to an order to report for induction, or for civilian work in the case of a registrant determined to be opposed to participation in war in any form: Provided, That such review shall go to the question of the jurisdiction herein reserved to local boards, appeal boards, and the President only when there is no basis in fact for the classification assigned to such registrant.”
Acknowledging that this statute if applicable would prevent pre-induction review of appellee’s classification, the District Court held that, so applied, § 10 (b) (3) was unconstitutional because to provide for judicial consideration of the lawfulness of the Board’s action only as a defense to a criminal prosecution would require that appellee pursue a “tortuous judicial adventure” so beset by “hazards” and “penalties” as to result “in no review at all.” The Government has appealed under 28 U. S. C. § 1252 which allows direct appeal to this Court of “an interlocutory or final judgment, decree or order of any court of the United States . . . holding an Act of Congress unconstitutional in any civil action ... to which the United States ... or any officer . . . thereof ... is a party.”
This Court has today, after full consideration, decided Oestereich v. Selective Service Bd., ante, p. 233. Because the result here is dictated by the principles enunciated in that case, it is appropriate to decide this case summarily, reversing the District Court.
In Oestereich the delinquency procedure by which the registrant was reclassified was without statutory basis and in conflict with petitioner’s rights explicitly established by the statute and not dependent upon an act of judgment by the Board. Oestereich, as a divinity student, was by statute unconditionally entitled to exemption. Here, by contrast, there is no doubt of the Board’s statutory authority to take action which appellee challenges, and that action inescapably involves a determination of fact and an exercise of judgment. By statute, classification as a conscientious objector is expressly conditioned on the registrant’s claim being “sustained by the local board.” 50 U. S. C. App. § 456 (j) (1964 ed., Supp. III).
Here the Board has exercised its statutory discretion to pass on a particular request for classification, “evaluating evidence and . . . determining whether a claimed exemption is deserved.” Oestereich v. Selective Service Bd., supra, at 238. A Local Board must make such a decision in respect of each of the many classification claims presented to it. To allow pre-induction judicial review of such determinations would be to permit precisely the kind of “litigious interruptions of procedures to provide necessary military manpower” (113 Cong. Rec. 15426 (report by Senator Russell on Conference Committee action)) which Congress sought to prevent when it enacted §10 (b)(3).
We find no constitutional objection to Congress’ thus requiring that assertion of a conscientious objector’s claims such as those advanced by appellee be deferred until after induction, if that is the course he chooses, whereupon habeas corpus would be an available remedy, or until defense of the criminal prosecution which would follow should he press his objections to his classification to the point of refusing to submit to induction. Estep v. United States, 327 U. S. 114 (1946); Falbo v. United States, 320 U. S. 549 (1944).
The motion of appellee for leave to proceed in forma pauperis is granted. The decision of the District Court is reversed, and the case remanded for issuance of an order dissolving the preliminary injunction and dismissing the action.
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.
Justice Alito
delivered the opinion of the Court.
The Privacy Act of 1974, codified in part at 5 U. S. C. §552a, contains a comprehensive and detailed set of requirements for the management of confidential records held by Executive Branch agencies. If an agency fails to comply with those requirements “in such a way as to have an adverse effect on an individual,” the Act authorizes the individual to bring a civil action against the agency. § 552a(g)(l)(D). For violations found to be “intentional or willful,” the United States is liable for “actual damages.” § 552a,(g)(4)(A). In this case, we must decide whether the term “actual damages,” as used in the Privacy Act, includes damages for mental or emotional distress. We hold that it does not.
I
The Federal Aviation Administration (FAA) requires pilots to obtain a pilot certificate and medical certificate as a precondition for operating an aircraft. 14 CFR §§ 61.3(a), (c) (2011). Pilots must periodically renew their medical certificates to ensure compliance with FAA medical standards. See § 61.23(d). When applying for renewal, pilots must disclose any illnesses, disabilities, or surgeries they have had, and they must identify any medications they are taking. See 14 CFR pt. 67.
Respondent Stanmore Cooper has been a private pilot since 1964. In 1985, he was diagnosed with a human immunodeficiency virus (HIV) infection and began taking antiret-roviral medication. At that time, the FAA did not issue medical certificates to persons with respondent’s condition. Knowing that he would not qualify for renewal of his medical certificate, respondent initially grounded himself and chose not to apply. In 1994, however, he applied for and received a medical certificate, but he did so without disclosing his HIV status or his medication. He renewed his certificate in 1998, 2000, 2002, and 2004, each time intentionally withholding information about his condition.
When respondent’s health deteriorated in 1995, he applied for long-term disability benefits under Title II of the Social Security Act, 42 U. S. C. § 401 et seq. To substantiate his claim, he disclosed his HIV status to the Social Security Administration (SSA), which awarded him benefits for the year from August 1995 to August 1996.
In 2002, the Department of Transportation (DOT), the FAA’s parent agency, launched a joint criminal investigation with the SSA, known as “Operation Safe Pilot,” to identify medically unfit individuals who had obtained FAA certifications to fly. The DOT gave the SSA a list of names and other identifying information of 45,000 licensed pilots in northern California. The SSA then compared the list with its own records of benefit recipients and compiled a spreadsheet, which it gave to the DOT.
The spreadsheet revealed that respondent had a current medical certificate but had also received disability benefits. After reviewing respondent’s FAA medical file and his SSA disability file, FAA flight surgeons determined in 2005 that the FAA would not have issued a medical certificate to respondent had it known his true medical condition.
When investigators confronted respondent with what had been discovered, he admitted that he had intentionally withheld from the FAA information about his HIV status and other relevant medical information. Because of these fraudulent omissions, the FAA revoked respondent’s pilot certificate, and he was indicted on three counts of making false statements to a Government agency, in violation of 18 U. S. C. § 1001. Respondent ultimately pleaded guilty to one count of making and delivering a false official writing, in violation of § 1018. He was sentenced to two years of probation and fined $1,000.
Claiming that the FAA, DOT, and SSA (hereinafter Government) violated the Privacy Act by sharing his records with one another, respondent filed suit in the United States District Court for the Northern District of California. He alleged that the unlawful disclosure to the DOT of his confidential medical information, including his HIV status, had caused him “humiliation, embarrassment, mental anguish, fear of social ostracism, and other severe emotional distress.” App. to Pet. for Cert. 120a. Notably, he did not allege any pecuniary or economic loss.
The District Court granted summary judgment against respondent. 816 F. Supp. 2d 778, 781 (2008). The court concluded that the Government had violated the Privacy Act and that there was a triable issue of fact as to whether the violation was intentional or willful. But the court held that respondent could not recover damages because he alleged only mental and emotional harm, not economic loss.. Finding that the term “actual damages” is “facially ambiguous,” id., at 791, and relying on the sovereign immunity canon, which provides that waivers of sovereign immunity must be strictly construed in favor of the Government, the court concluded that the Act does not authorize the recovery of damages from the Government for nonpecuniary mental or emotional harm.
The United States Court of Appeals for the Ninth Circuit reversed and remanded. 622 F. 3d 1016, 1024 (2010). The court acknowledged that the term “actual damages” is a “ ‘chameleon’ ” in that “its meaning changes with the specific statute in which it is found.” Id., at 1029. But the court nevertheless held that, as used in the Privacy Act, the term includes damages for mental and emotional distress. Looking to what it described as “[i]ntrinsic” and “[e]xtrinsic” sources, id., at 1028,1031, the court concluded that the meaning of “actual damages” in the Privacy Act is not ambiguous and that “a construction that limits recovery to pecuniary loss” is not “plausible,” id., at 1034.
The Government petitioned for rehearing or rehearing en banc, but a divided court denied the petition. Id., at 1019. The Government then petitioned for certiorari, and we granted review. 564 U. S. 1018 (2011).
i — I hH
Because respondent seeks to recover monetary compensation from the Government for mental and emotional harm, we must decide whether the civil remedies provision of the Privacy Act waives the Government’s sovereign immunity with respect to such a recovery.
A
We have said on many occasions that a waiver of sovereign immunity must be “unequivocally expressed” in statutory text. See, e. g., Lane v. Peña, 518 U. S. 187, 192 (1996); United States v. Nordic Village, Inc., 503 U. S. 30, 33 (1992); Irwin v. Department of Veterans Affairs, 498 U. S. 89, 95 (1990). Legislative history cannot supply a waiver that is not clearly evident from the language of the statute. Lane, supra, at 192. Any ambiguities in the statutory language are to be construed in favor of immunity, United States v. Williams, 514 U. S. 527, 531 (1995), so that the Government’s consent to be sued is never enlarged beyond what a fair reading of the text requires, Ruckelshaus v. Sierra Club, 463 U. S. 680, 685-686 (1983) (citing Eastern Transp. Co. v. United States, 272 U. S. 675, 686 (1927)). Ambiguity exists if there is a plausible interpretation of the statute that would not authorize money damages against the Government. Nordic Village, supra, at 34, 37.
The question that confronts us here is not whether Congress has consented to be sued for damages under the Privacy Act. That much is clear from the statute, which expressly authorizes recovery from the Government for “actual damages.” Rather, the question at issue concerns the scope of that waiver. For the same reason that we refuse to enforce a waiver that is not unambiguously expressed in the statute, we also construe any ambiguities in the scope of a waiver in favor of the sovereign. Lane, supra, at 192.
Although this canon of interpretation requires an unmistakable statutory expression of congressional intent to waive the Government’s immunity, Congress need not state its intent in any particular way. We have never required that Congress use magic words. To the contrary, we have observed that the sovereign immunity canon “is a tool for interpreting the law” and that it does not “displace] the other traditional tools of statutory construction.” Richlin Security Service Co. v. Chertoff, 553 U. S. 571, 589 (2008). What we thus require is that the scope of Congress’ waiver be clearly discernable from the statutory text in light of traditional interpretive tools. If it is not, then we take the interpretation most favorable to the Government.
B
The civil remedies provision of the Privacy Act provides that, for any “intentional or willful” refusal or failure to comply with the Act, the United States shall be liable for “actual damages sustained by the individual as a result of the refusal or failure, but in no case shall a person entitled to recovery receive less than the sum of $1,000.” 5 U. S. C. § 552a(g)(4)(A). Because Congress did not define “actual damages,” respondent urges us to rely on the ordinary meaning of the word “actual” as it is defined in standard general-purpose dictionaries. But as the Court of Appeals explained, “actual damages” is a legal term of art, 622 F. 3d. at 1028, and it is a “cardinal rule of statutory construction” that, when Congress employs a term of art, “ ‘it presumably knows and adopts the cluster of ideas that were attached to each borrowed word in the body of learning from which it was taken,’ ” Molzof v. United States, 502 U. S. 301, 307 (1992) (quoting Morissette v. United States, 342 U. S. 246, 263 (1952)).
Even as a legal term, however, the meaning of “actual damages” is far from clear. The latest edition of Black’s Law Dictionary available when Congress enacted the Privacy Act defined “actual damages” as “[r]eal, substantial and just damages, or the amount awarded to a complainant in compensation for his actual and real loss or injury, as opposed on the one hand to ‘nominal’ damages, and on the other to ‘exemplary’ or‘punitive’ damages.” Black’s Law Dictionary 467 (rev. 4th ed. 1968). But this general (and notably circular) definition is of little value here because, as the Court of Appeals accurately observed, the precise meaning of the term “changes with the specific statute in which it is found.” 622 F. 3d, at 1029.
The term is sometimes understood to include nonpecuniary harm. Take, for instance, some courts’ interpretations of the Fair Housing Act (FHA), 42 U.S. C. § 3613(c), and the Fair Credit Reporting Act (FCRA), 15 U. S. C. §§ 1681n, 1681o. A number of courts have construed “actual” damages in the remedial provisions of both statutes to include compensation for mental and emotional distress. See, e. g., Seaton v. Sky Realty Co., 491 F. 2d 634, 636-638 (CA7 1974) (authorizing compensatory damages under the FHA, 42 U. S. C. § 3612, the predecessor to § 3613, for humiliation); Steele v. Title Realty Co., 478 F. 2d 380, 384 (CA10 1973) (stating that damages under the FHA “are not limited to out-of-pocket losses but may include an award for emotional distress and humiliation”); Thompson v. San Antonio Retail Merchants Assn., 682 F. 2d 509, 513-514 (CA5 1982) (per curiam) (explaining that, “[e]ven when there are no out-of-pocket expenses, humiliation and mental distress do constitute recoverable elements of damage” under the FCRA); Millstone v. O’Hanlon Reports, Inc., 528 F. 2d 829, 834-835 (CA8 1976) (approving an award of damages under the FCRA for “loss of sleep, nervousness, frustration and mental anguish”).
In other contexts, however, the term has been used or construed more narrowly to authorize, damages for only pecuniary harm. In the wrongful-death provision of the Federal Tort Claims Act (FTCA), for example, Congress authorized “actual or compensatory damages, measured by the pecuniary injuries resulting from such death.” 28 U. S. C. § 2674, ¶2. At least one court has defined “actual damages” in the Copyright Act of 1909, 17 U. S. C. § 101(b) (1970 ed.), as “the extent to which the market value of a copyrighted work has been injured or destroyed by an infringement.” Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F. 2d 505, 512 (CA9 1985); see also Mackie v. Rieser, 296 F. 3d 909, 917 (CA9 2002) (holding that “ ‘hurt feelings’ over the nature of the infringement” have no place in the actual damages calculus). And some courts have construed “actual damages” in the Securities Exchange Act of 1934, 15 U. S. C. §78bb(a), to mean “some form of economic loss.” Ryan v. Foster & Marshall, Inc., 556 F. 2d 460, 464 (CA9 1977); see also Osofsky v. Zipf, 645 F. 2d 107, 111 (CA2 1981) (stating that the purpose of § 78bb(a) “is to compensate civil plaintiffs for economic loss suffered as a result of wrongs committed in violation of the 1934 Act”); Herpich v. Wallace, 430 F. 2d 792, 810 (CA5 1970) (noting that the “gist” of an action for damages under the Act is “economic injury”).
Because the term “actual damages” has this chameleon-like quality, we cannot rely on any all-purpose definition but must consider the particular context in which the term appears.
C
The Privacy Act directs agencies to establish safeguards to protect individuals against the disclosure of confidential records “which could result in substantial harm, embarrass-xnent, inconvenience, or unfairness to any individual on whom information is maintained.” 5 U. S. C. § 552a(e)(10); see also §2(b), 88 Stat. 1896 (stating that the “purpose of this Act is to provide certain safeguards for an individual against an invasion of personal privacy”). Because the Act serves interests similar to those protected by defamation and privacy torts, there is good reason to infer that Congress relied upon those torts in drafting the Act.
In Doe v. Chao, 540 U. S. 614 (2004), we held that the Privacy Act’s remedial provision authorizes plaintiffs to recover a guaranteed minimum award of $1,000 for violations of the Act, but only if they prove at least some “actual damages.” Id., at 620, 627; see § 552a(g)(4)(A). Although we did not address the meaning of “actual damages,” id., at 622, n. 5, 627, n. 12, we observed that the provision “parallels” the remedial scheme for the common-law torts of libel per quod and slander, under which plaintiffs can recover “general damages,” but only if they prove “special harm” (also known as “special damages”), id., at 625; see also 3 Restatement of Torts § 575, Comments a and b (1938) (hereinafter Restatement); D. Dobbs, Law of Remedies § 7.2, pp. 511-513 (1973) (hereinafter Dobbs). “Special damages” are limited to actual pecuniary loss, which must be specially pleaded and proved. 1 D. Haggard, Cooley on Torts §164, p. 580 (4th ed. 1932) (hereinafter Cooley). “General damages,” on the other hand, cover “loss of reputation, shame, mortification, injury to the feelings and the like and need not be alleged in detail and require no proof.” Id., § 164, at 579.
This parallel between the Privacy Act and the common-law torts of libel per quod and slander suggests the possibility that Congress intended the term “actual damages” in the Act to mean special damages. The basic idea is that Privacy Act victims, like victims of libel per quod or slander, are barred from any recovery unless they can first show actual— that is, pecuniary or material — harm. Upon showing some pecuniary harm, no matter how slight, they can recover the statutory minimum of $1,000, presumably for any unproven harm. That Congress would choose to use the term “actual damages” instead of “special damages” was not without precedent. The terms had occasionally been used interchangeably. See, e. g., Wetzel v. Gulf Oil Corp., 455 P. 2d 857, 862 (CA9 1972) (holding that plaintiff could not establish libel per quod because he “did not introduce any valid and sufficient evidence of actual damage”); Electric Furnace Corp. v. Deering Milliken Research Corp., 325 F. 2d 761, 765 (CA6 1963) (stating that “libel per quod standing alone without proof of actual damages... will not support a verdict for the plaintiff”); M & S Furniture Sales Co. v. Edward J. De Bartolo Corp., 249 Md. 540, 544, 241 A. 2d 126, 128 (1968) (“In the case of words or conduct actionable only per quod, the injurious effect must be established by allegations and proof of special damage and in such cases it is not only necessary to plead and show that the words or actions were defamatory, but it must also appear that such words or conduct caused actual damage”); Clementson v. Minnesota Tribune Co., 45 Minn. 303, 47 N. W. 781 (1891) (distinguishing “actual, or, as they are sometimes termed, ‘special/ damages” from “general damages — that is, damages not pecuniary in their' nature”).
Any doubt about the plausibility of construing “actual damages” in the Privacy Act synonymously with “special damages” is put to rest by Congress’ refusal to authorize “general damages.” In an uncodified section of the Act, Congress established the Privacy Protection Study Commission to consider, among other things, “whether the Federal Government should be liable for general damages.” § 5(c)(2)(B)(iii), 88 Stat. 1907, note following 5 U. S. C. § 552a, p. 84 (1970 ed., Supp. IV). As we explained in Doe, “Congress left the question of general damages... for another day.” 540 U. S., at 622. Although the Commission later recommended that general damages be allowed, ibid., n. 4, Congress never amended the Act to include them. For that reason, we held that it was “beyond serious doubt” that general damages are not available for violations of the Privacy Act. Id., at 622.
By authorizing recovery for “actual” but not for “general” damages, Congress made clear that it viewed those terms as mutually exclusive..In actions for defamation and related dignitary torts, two categories of compensatory damages are recoverable: general damages and special damages. Cooley § 164, at 579; see also 4 Restatement § 867, Comment d (1939) (noting that damages for interference with privacy “can be awarded in the same way in which general damages are given for defamation”). Because Congress declined to authorize “general damages,” we think it likely that Congress intended “actual damages” in the Privacy Act to mean special damages for proven pecuniary loss.
Not surprisingly, this interpretation was accepted by the Privacy Protection Study Commission, an expert body authorized by Congress and highly sensitive to the Act’s goals. The Commission understood “actual damages” in the Act to be “a synonym for special damages as that term is used in defamation cases.” Personal Privacy in an Information Society: The Report of the Privacy Protection Study Commission 530 (July 1977); see also ibid. (“The legislative history and language of the Act suggest that Congress meant to restrict recovery to specific pecuniary losses until the Commission could weigh the propriety of extending the standard of recovery”). Although we are not bound in any way by the Commission’s report, we think it confirms the reasonableness of interpreting “actual damages” in the unique context of the Privacy Act as the equivalent of special damages.
D
We do not claim that the contrary reading of the statute accepted by the Court of Appeals and advanced now by respondent is inconceivable. But because the Privacy Act waives, the Federal Government’s sovereign immunity, the question we must answer is whether it is plausible to read the statute, as the Government does, to authorize only damages for economic loss. Nordic Village, 503 U. S., at 34, 37. When waiving the Government’s sovereign immunity, Congress must speak unequivocally. Lane, 518 U. S., at 192. Here, we conclude that it did not. As a consequence, we adopt an interpretation of “actual damages” limited to proven pecuniary or economic harm. To do otherwise would expand the scope of Congress’ sovereign immunity waiver beyond what the statutory text clearly requires.
⅜-H HH ) — I
None of respondent’s contrary arguments suffices to overcome the sovereign immunity canon.
A
Respondent notes that the term “actual damages” has often been defined broadly in common-law cases, and in our own, to include all compensatory damages. See Brief for Respondent 18-25. For example, in Birdsall v. Coolidge, 93 U. S. 64 (1876), a patent infringement case, we observed that “[compensatory damages and actual damages mean the same thing.” Ibid. And in Gertz v. Robert Welch, Inc., 418 U. S. 323 (1974), we wrote that actual injury in the defamation context “is not limited to out-of-pocket loss” and that it customarily includes “impairment of reputation and standing in the community, personal humiliation, and mental anguish and suffering.” Id., at 350.
These cases and others cited by respondent stand for the unremarkable point that the term “actual damages” can include nonpecuniary loss. But this generic meaning does not establish with the requisite clarity that the Privacy Act, with its distinctive features, authorizes damages for mental and emotional distress. As we already explained, the term “actual damages” takes on different meanings in different contexts.
B
Respondent’s stronger argument is that the exclusion of “general damages” from the statute simply means that there can be no recovery for presumed damages. Privacy Act victims can still recover for mental and emotional distress, says respondent, so long as it is proved. See Brief for Respondent 54-56.
This argument is flawed because it suggests that ‘proven mental and emotional distress does not count as general damages. The term “general damages” is not limited to compensation for unproven injuries; it includes compensation for proven injuries as well. See 3 Restatement § 621, Comment a (noting that general damages compensate for “harm which... is proved, or, in the absence of proof, is assumed to have caused to [the plaintiff’s] reputation”). To be sure, specific proof of emotional harm is not required to recover general damages for dignitary torts. Dobbs §7.3, at 529. But it does not follow that general damages cannot be recovered for emotional harm that is actually proved.
Aside from the fact that general damages need not be proved, what distinguishes those damages, whether proved or not, from the only other category of compensatory damages available in the relevant common-law suits is the type of harm. In defamation and privacy cases, “the affront to the plaintiff’s dignity and the emotional harm done” are “called general damages, to distinguish them from proof of actual economic harm,” which is called “special damages.” Id., §3.2, at 139; see also supra, at 295-296, 298, and nn. 6, 7, 9. Therefore, the converse of general damages is special damages, not all proven damages, as respondent would have it. Because Congress removed “general damages” from the Act’s remedial provision, it is reasonable to infer that Congress foreclosed recovery for nonpecuniary harm, even if such harm can be proved, and instead waived the Government’s sovereign immunity only with respect to harm com-pensable as special damages.
C
Looking beyond the Privacy Act’s text, respondent points to the use of the term “actual” damages in the remedial provisions of the PHA, 42 U. S. C. § 3613(c), and the FCRA, 15 U. S. C. §§ 1681n, 1681o. As previously mentioned, courts have held that “actual” damages within the meaning of these statutes include compensation for mental and emotional distress. Supra, at 292-293. Citing the rule of construction that Congress intends the same language in similar statutes to have the same meaning, see Northcross v. Board of Ed. of Memphis City Schools, 412 U. S. 427, 428 (1973) (per curiam), respondent argues that the Privacy Act should also be interpreted as authorizing damages for mental and emotional distress. See Brief for Respondent 25-32.
Assuming for the sake of argument that these lower court decisions are correct, they provide only weak support for respondent’s argument here. Since the term “actual damages” can mean different things in different contexts, statutes other than the Privacy Act provide only limited interpretive aid, and that is especially true here. Neither the FHA nor the FCRA contains text that precisely mirrors the Privacy Act. In neither of those statutes did Congress specifically decline to authorize recovery for general damages as it did in the Privacy Act. Supra, at 297-298. And most importantly, none of the lower court cases interpreting the statutes, which respondent has cited, see Brief for Respondent 29-31, involves the sovereign immunity canon.
Respondent also points to the FTCA, but the FTCA’s general liability provision does not even use the term “actual damages.” It instead provides that the “United States shall be liable” for certain tort claims “in the same manner and to the same extent as a private individual” under relevant state law. 28 U. S. C. § 2674, ¶ 1. For that reason alone, the FTCA’s general liability provision is not a reliable source for interpreting the term “actual damages” in the Privacy Act. Nor does the FTCA’s wrongful-death provision — which authorizes “actual or compensatory damages, measured by the pecuniary injuries resulting from such death,” §2674, ¶2— prove that Congress understood the term “actual damages” in the Privacy Act to include nonpeeuniary mental and emotional harm. To the contrary, it proves that actual damages can be understood to entail only pecuniary harm depending on the context. Because the FTCA, like the FHA and FCRA, does not share the same text or design as the Privacy Act, it is not a fitting analog for construing the Act.
D
Finally, respondent argues that excluding damages for mental and emotional harm would lead to absurd results. Persons suffering relatively minor pecuniary loss would be entitled to recover $1,000, while others suffering only severe and debilitating mental or emotional distress would get nothing. See Brief for Respondent 33-35.
Contrary to respondent’s suggestion, however, there is nothing absurd about a scheme that limits the Government’s Privacy Act liability to harm that can be substantiated by proof of tangible economic loss. Respondent insists that such a scheme would frustrate the Privacy Act’s remedial purpose, but that ignores the fact that, by deliberately refusing to authorize general damages, Congress intended to cabin relief, not to maximize it.
* * *
In sum, applying traditional rules of construction, we hold that the Privacy Act does not unequivocally authorize an award of damages for mental or emotional distress. Accordingly, the Act does not waive the Federal Government’s sovereign immunity from liability for such harms. We therefore reverse the judgment of the United States Court of Appeals for the Ninth Circuit and remand the case for further proceedings consistent with this opinion.
It is so ordered.
Justice Kagan took no part in the consideration or decision of this case.
Justice Sotomayor, with whom Justice Ginsburg and Justice Breyer join, dissenting.
Congress enacted the Privacy Act. of 1974 for the stated purpose of safeguarding individual privacy against Government invasion. To that end, the Act provides a civil remedy entitling individuals adversely affected by certain agency misconduct to recover “actual damages” sustained as a result of the unlawful action.
Today the Court holds that “actual damages” is limited to pecuniary loss. Consequently, individuals can no longer recover what our precedents and common sense understand to be the primary, and often only, damages sustained as a result of an invasion of privacy, namely, mental or emotional distress. That result is at odds with the text, structure, and drafting history of the Act. And it cripples the Act’s core purpose of redressing and deterring violations of privacy interests. I respectfully dissent.
I
The majority concludes that “actual damages” in the civil-remedies provision of the Privacy Act allows recovery for pecuniary loss alone. But it concedes that its interpretation is not compelled by the plain text of the statute or otherwise required by any other traditional tool of statutory interpretation. And it candidly acknowledges that a contrary reading is not “inconceivable.” Ante, at 299. Yet because it considers its reading of “actual damages” to be “plausible,” the majority contends that the canon of sovereign immunity requires adoption of an interpretation most favorable to the Government. Ibid,.
The canon simply cannot bear the weight the majority ascribes it. “The sovereign immunity canon is just that — a canon of construction. It is a tool for interpreting the law, and we have never held that it displaces the other traditional tools of statutory construction.” Richlin Security Service Co. v. Chertoff, 553 U. S. 571, 589 (2008) (majority opinion of Alito, J.). Here, traditional tools of statutory construction — the statute’s text, structure, drafting history, and purpose — provide a clear answer: The term “actual damages” permits recovery for all injuries established by competent evidence in the record, whether pecuniary or nonpecuniary, and so encompasses damages for mental and emotional distress. There is no need to seek refuge in a canon of construction, see id., at 589-590 (declining to rely on canon as there is “no ambiguity left for us to construe” after application of “traditional tools of statutory construction,and considerations of stare decisis”), much less one that has been used so haphazardly in the Court’s history, see United States v. Nordic Village, Inc., 503 U. S. 30, 42 (1992) (Stevens, J., dissenting) (canon is “nothing but a judge-made rule that is sometimes favored and sometimes disfavored” (footnote omitted)) (collecting cases).
It bears emphasis that we have said repeatedly that, while “we should not take it upon ourselves to extend the waiver [of sovereign immunity] beyond that which Congress intended,” “[n]either... should we assume the authority to narrow the waiver that Congress intended.” United States v. Kubrick, 444 U. S. 111, 117-118 (1979) (emphasis added). See also, e. g., Block v. Neal, 460 U. S. 289, 298 (1983) (“The exemption of the sovereign from suit involves hardship enough where consent has been withheld. We are not to add to its rigor by refinement of construction where consent has been announced” (internal quotation marks omitted)). In the Privacy Act, Congress expressly authorized recovery of “actual damages” for certain intentional or willful agency misconduct. The Court should not “as a self-constituted guardian of the Treasury import immunity back into a statute designed to limit it.” Indian Towing Co. v. United States, 350 U. S. 61, 69 (1955).
H-1 HH
A
“In a statutory construction case, the beginning point must be the language of the statute, and when a statute speaks with clarity to an issue judicial inquiry into the statute’s meaning, in all but the most extraordinary circumstance, is finished.” Estate of Cowart v. Nicklos Drilling Co., 505 U. S. 469, 475 (1992). The language of the civil-remedies provision of the Privacy Act is clear.
At the time Congress drafted the Act, Black’s Law Dictionary defined “actual damages” as “[r]eal, substantial and just damages, or the amount awarded to a complainant in compensation for his actual and real loss or injury” and as “[slynonymous with ‘compensatory damages.’ ” Black’s Law Dictionary 467 (rev. 4th ed. 1968) (hereinafter Black’s). The majority claims this is a “general” and “notably circular” definition, ante, at 292, but it is unclear why. The definition is plain enough: “Actual damages” compensate for actual injury, and thus the term is synonymous with compensatory damages. See Black’s 467 (defining “compensatory damages” as damages that “will compensate the injured party for the injury sustained, and nothing more; such as will simply make good or replace the loss caused by the wrong or injury”). There is nothing circular about that definition. It is the definition this Court adopted more than a century ago when we recognized. that “[compensatory damages and actual damages mean the same thing; that is, that the damages shall be the result of the injury alleged and proved, and that the amount awarded shall be precisely commensurate with the injury suffered.” Birdsall v. Coolidge, 93 U. S. 64 (1876). It is the definition embraced in current legal dictionaries. See Black’s 445 (9th ed. 2009) (defining “actual damages” as “[a]n amount awarded to a complainant to compensate for a proven injury or loss; damages that repay actual losses.— Also termed compensatory damages; tangible damages; real damages” (italics omitted)). And it is the definition that accords with the plain and ordinary meaning of the term. See Webster’s Third New International Dictionary 22, 571 (2002) (defining “actual” as “existing in fact or reality” and “damages” as “compensation or satisfaction imposed by law for a wrong or injury caused by a violation of a legal right”). Thus, both as a term of art and in its plain meaning, “actual damages” connotes compensation for proven injuries or losses. Nothing in the use of that phrase indicates proven injuries need be pecuniary in nature.
The majority discards all this
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.
Justice Blackmun
delivered the opinion of the Court.
At issue here is the validity of regulations promulgated by the Department of Education pursuant to Title IX of the Education Amendments of 1972, Pub. L. 92-318, 86 Stat. 373, as amended, 20 U. S. C. § 1681 et seq. These regulations prohibit federally funded education programs from discriminating on the basis of gender with respect to employment.
I
Title IX proscribes gender discrimination in education programs or activities receiving federal financial assistance. 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. IV), Title IX, as amended, contains two core provisions. The first is a “program-specific” prohibition of gender discrimination:
“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....” § 901(a), 20 U. S. C. § 1681(a).
Nine statutory exceptions to § 901(a)’s coverage follow. See §§901(a)(1)-(9).
The second core provision relates to enforcement. Section 902, 20 U. S. C. § 1682, authorizes each agency awarding federal financial assistance to any education program to promulgate regulations ensuring that aid recipients adhere to § 901(a)’s mandate. The ultimate sanction for noncompliance is termination of federal funds or denial of future grants. Like § 901, § 902 is program-specific:
“[S]uch termination or refusal shall be limited to the particular political entity, or part thereof, or other recipient as to whom such a finding [of noncompliance] has been made, and shall be limited in its effect to the particular program, or part thereof, in which such noncompliance has been so found....”
In 1975, the Department of Health, Education, and Welfare (HEW) invoked its § 902 authority to issue regulations governing the operation of federally funded education programs. These regulations extend, for example, to policies involving admissions, textbooks, and athletics. See 34 CFR pt. 106 (1980). Interpreting the term “person” in § 901(a) to encompass employees as well as students, HEW included among the regulations a series entitled “Subpart E,” which deals with employment practices, ranging from job classifications to pregnancy leave. See 34 CFR §§ 106.51-106.61 (1980). Subpart E’s general introductory section provides:
“No person shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination in employment, or recruitment, consideration, or selection therefor, whether full-time or part-time, under any education program or activity operated by a recipient which receives or benefits from Federal financial assistance.” § 106.51(a)(1).
HH l — i
Petitioners are two Connecticut public school boards that brought separate suits challenging HEW’s authority to issue the Subpart E regulations. Petitioners contend that Title IX was not meant to reach the employment practices of educational institutions.
A. The North Haven case. The North Haven Board of Education (North Haven) receives federal funds for its education programs and activities and is therefore subject to Title IX’s prohibition of gender discrimination. Since the 1975-1976 school year, North Haven has devoted between 46.8% and 66.9% of its federal assistance to the salaries of its employees; this practice is expected to continue.
In January 1978, Elaine Dove, a tenured teacher in the North Haven public school system, filed a complaint with HEW, alleging that North Haven had violated Title IX by refusing to rehire her after a one-year maternity leave. In response to this complaint, HEW began to investigate the school board’s employment practices and sought from petitioner information concerning its policies on hiring, leaves of absence, seniority, and tenure. Asserting that HEW lacked authority to regulate employment practices under Title IX, North Haven refused to comply with the request.
When HEW then notified petitioner that it was considering administrative enforcement proceedings, North Haven brought this action in the United States District Court for the District of Connecticut. The complaint sought a declaratory judgment that the Subpart E regulations exceeded the authority conferred on HEW by Title IX, and an injunction prohibiting HEW from attempting to terminate the school district’s federal funds on the basis of those regulations. The parties filed cross-motions for summary judgment, and on April 24, 1979, the District Court granted North Haven’s motion. App. to Pet. for Cert. 51A. Agreeing with petitioner that Title IX was not intended to apply to employment practices, the court invalidated the employment regulations and permanently enjoined HEW from interfering with North Haven’s federal funds because of noncompliance with those regulations.
B. The Trumbull case. The Trumbull Board of Education (Trumbull) likewise receives financial support from the Federal Government and must therefore adhere to the requirements of Title IX and appropriate implementing regulations. In October 1977, HEW began investigating a complaint filed by respondent Linda Potz, a former guidance counselor in the Trumbull school district. Potz alleged that Trumbull had discriminated against her on the basis of gender with respect to job assignments, working conditions, and the failure to renew her contract. In September 1978, HEW notified Trumbull that it had violated Title IX and warned that corrective action, including respondent’s reinstatement, must be taken.
Trumbull then filed suit in the United States District Court for the District of Connecticut, contending that HEW’s Title IX employment regulations were invalid and seeking declaratory and injunctive relief. On the basis of its decision in North Haven, the District Court granted Trumbull’s motion for summary judgment on May 24, 1979. App. to Pet. for Cert. 76A. The court subsequently amended the judgment, on Trumbull’s request, to include injunctive and declaratory relief similar to that ordered in North Haven’s case. Id., at 77A, 91A-92A.
C. The appeal. The two cases were consolidated on appeal, and the Court of Appeals for the Second Circuit reversed. North Haven Bd. of Ed. v. Hufstedler, 629 F. 2d 773 (1980). Finding the language of § 901 inconclusive, the court examined the legislative history and concluded that the provision was intended to prohibit employment discrimination. The court also found the Subpart E regulations consistent with § 902, which the court read as directing only that “any termination of funds be limited to the particular program or programs in which noncompliance with § 901 is found....” 629 F. 2d, at 785 (emphasis added). Section 902, the Second Circuit held, does not circumscribe HEW’s authority to issue regulations prohibiting gender discrimination in employment and does not require the Department “to specify prior to termination which particular programs receiving financial assistance are covered by its regulations.” Ibid. Because HEW had not exercised its § 902 authority to terminate federal assistance to either North Haven or Trumbull, the court declined to decide whether HEW could do so in these cases. The court remanded the cases to the District Court to determine whether petitioners had violated the HEW regulations and, if so, what remedies were appropriate.
Because other federal courts have invalidated the employment regulations as unauthorized by Title IX, we granted certiorari to resolve the conflict. 450 U. S. 909 (1981).
HH > — 1
A
Our starting point in determining the scope of Title IX is, of course, the statutory language. See Greyhound Corp. v. Mt. Hood Stages, Inc., 437 U. S. 322, 330 (1978). Section 901(a)’s broad directive that “no person” may be discriminated against on the basis of gender appears, on its face, to include employees as well as students. Under that provision, employees, like other “persons,” may not be “excluded from participation in,” “denied the benefits of,” or “subjected to discrimination under” education programs receiving federal-financial support.
Employees who directly participate in federal programs or who directly benefit from federal grants, loans, or contracts clearly fall within the first two protective categories described in § 901(a). See Islesboro School Comm. v. Califano, 593 F. 2d 424, 426 (CA1), cert. denied, 444 U. S. 972 (1979). In addition, a female employee who works in a federally funded education program is “subjected to discrimination under” that program if she is paid a lower salary for like work, given less opportunity for promotion, or forced to work under more adverse conditions than are her male colleagues. See Dougherty Cty. School System v. Harris, 622 F. 2d 735, 737-738 (CA5 1980), cert. pending sub nom. Bell v. Dougherty Cty. School System, No. 80-1023.
There is no doubt that “if we are to give [Title IX] the scope that its origins dictate, we must accord it a sweep as broad as its language.” United States v. Price, 383 U. S. 787, 801 (1966); see also Griffin v. Breckenridge, 403 U. S. 88, 97 (1971); Daniel v. Paul, 395 U. S. 298, 307-308 (1969); Jones v. Alfred H. Mayer Co., 392 U. S. 409, 437 (1968); Piedmont & Northern R. Co. v. ICC, 286 U. S. 299, 311-312 (1932). Because § 901(a) neither expressly nor impliedly excludes employees from its reach, we should interpret the provision as covering and protecting these “persons” unless other considerations counsel to the contrary. After all, Congress easily could have substituted “student” or “beneficiary” for the word “person” if it had wished to restrict the scope of § 901(a).
Petitioners, however, point to the nine exceptions to §901(a)’s coverage set forth in §§ 901(a)(1)-(9). See n. 1, swpra. The exceptions, the school boards argue, are directed only at students, and thus indicate that § 901(a) similarly applies only to students. But the exceptions are not concerned solely with students and student activities: two of them exempt an entire class of institutions — religious and military schools — and are not limited to student-related activities at such schools. See §§ 901(a)(3), (4). Moreover, petitioners’ argument rests on an inference that is by no means compelled; in fact, the absence of a specific exclusion for employment among the list of exceptions tends to support the Court of Appeals’ conclusion that Title IX’s broad protection of “person[s]” does extend to employees of educational institutions. See Andrus v. Glover Construction Co., 446 U. S. 608, 616-617 (1980).
Although the statutory language thus seems to favor inclusion of employees, nevertheless, because Title IX does not expressly include or exclude employees from its scope, we turn to the Act’s legislative history for evidence as to whether Congress meant somehow to limit the expansive language of § 901.
B
In the early 1970’s, several attempts were made to enact legislation banning discrimination against women in the field of education. Although unsuccessful, these efforts included prohibitions against discriminatory employment practices.
In 1972, the provisions ultimately enacted as Title IX were introduced in the Senate by Senator Bayh during debate on the Education Amendments of 1972. In addition to prohibiting gender discrimination in federally funded education programs and threatening termination of federal assistance for noncompliance, the amendment included provisions extending the coverage of Title VII and the Equal Pay Act to educational institutions. Summarizing his proposal, Senator Bayh divided it into two parts — first, the forerunner of § 901(a), and then the extensions of Title VII and the Equal Pay Act:
“Amendment No. 874 is broad, but basically it closes loopholes in existing legislation relating to general education programs and employment resulting from those programs.... [T]he heart of this amendment is a provision banning sex discrimination in educational programs receiving Federal funds. The amendment would cover such crucial aspects as admissions procedures, scholarships, and faculty employment, with limited exceptions. Enforcement powers include fund termination provisions — and appropriate safeguards — parallel to those found in title VI of the 1964 Civil Rights Act. Other important provisions in the amendment would extend the equal employment opportunities provisions of title VII of the 1964 Civil Rights Act to educational institutions, and extend the Equal Pay for Equal Work Act to include executive, administrative and professional women.” 118 Cong. Rec. 5803 (1972) (emphasis added).
The Senator’s description of § 901(a), the “heart” of his amendment, indicates that it, as well as the Title VII and Equal Pay Act provisions, was aimed at discrimination in employment.
Similarly, in a prepared statement summarizing the amendment, Senator Bayh discussed the general prohibition against gender discrimination:
“Central to my amendment are sections 1001-1005, which would prohibit discrimination on the basis of sex in federally funded education programs....
“This portion of the amendment covers discrimination in all areas where abuse has been mentioned — employment practices for faculty and administrators, scholarship aid, admissions, access to programs within the institution such as vocational education classes, and so forth.” 118 Cong. Rec. 5807 (1972) (emphasis added).
Petitioners observe that the discussion of this portion of the amendment appears under the heading “A. Prohibition of Sex Discrimination in Federally Funded Education Programs,” while the provisions involving Title VII and the Equal Pay Act are summarized under the heading “B. Prohibition of Education-Related Employment Discrimination.” But we are not willing to ascribe any particular significance to these headings. The Title VII and Equal Pay Act portions of the Bayh amendment are more narrowly focused on employment discrimination than is the general ban on gender discrimination, and the headings reflect that difference. Especially in light of the explicit reference to employment practices in the description of the amendment’s general provision, however, the headings do not negate Senator Bayh’s intent that employees as well as students be protected by the first portion of his amendment.
The final piece of evidence from the Senate debate on the Bayh amendment appears during a colloquy between Senator Bayh and Senator Pell, chairman of the Senate Subcommittee on Education and floor manager of the education bill. In response to Senator Pell’s inquiry about the scope of the sections that in large part became §§ 901(a) and (b), Senator Bayh stated:
“As the Senator knows, we are dealing with three basically different types of discrimination here. We are dealing with discrimination in admission to an institution, discrimination of available services or studies within an institution once students are admitted, and discrimination in employment within an institution, as a member of a faculty or whatever.
“In the area of employment, we permit no exceptions.” Id., at 5812 (emphasis added).
Although the statements of one legislator made during debate may not be controlling, see, e. g., Chrysler Corp. v. Brown, 441 U. S. 281, 311 (1979), Senator Bayh’s remarks, as those of the sponsor of the language ultimately enacted, are an authoritative guide to the statute’s construction. See, e. g., FEA v. Algonquin SNG, Inc., 426 U. S. 548, 564 (1976) (such statements “deserv[e] to be accorded substantial weight.."); NLRB v. Fruit Packers, 377 U. S. 58, 66 (1964); Schwegmann Bros. v. Calvert Distillers Corp., 341 U. S. 384, 394-395 (1951). And, because §§ 901 and 902 originated as a floor amendment, no committee report discusses the provisions; Senator Bayh’s statements — which were made on the same day the amendment was passed, and some of which were prepared rather than spontaneous remarks— are the only authoritative indications of congressional intent regarding the scope of §§ 901 and 902.
The legislative history in the House is even more sparse. H. R. 7248, 92d Cong., 1st Sess. (1971), the Higher Education Act of 1971, contained, as part of its Title X, a general prohibition against gender discrimination in federally funded education programs that was identical to the corresponding section of the Bayh amendment and to § 901(a) as ultimately enacted. But § 1004 of Title X, like § 604 of Title VI, see 42 U. S. C. § 2000d-3, provided that nothing in Title X authorized action “by any department or agency with respect to any employment practice... except where a primary objective of the Federal financial assistance is to provide employment.” The debate on Title X included no discussion of this limitation. See 117 Cong. Rec. 39248-39263 (1971).
When the House and Senate versions of Title IX were submitted to the Conference Committee, § 1004 was deleted. The Conference Reports simply explained:
“[T]he House amendment, but not the Senate amendment, provided that nothing in the title authorizes action by any department or agency with respect to any employment practice of any employer, employment agency, or labor organization except where a primary objective of the Federal financial assistance is to provide employment. The House recedes.” S. Conf. Rep. No. 92-798, p. 221 (1972); H. R. Conf. Rep. No. 92-1085, p. 221 (1972).
Expressly a conscious choice, therefore, the omission of §1004 suggests that Congress intended that §901 prohibit gender discrimination in employment.
Petitioners and the dissent contend, however, that § 1004 was deleted in order to avoid an inconsistency: Title IX included provisions relating to the Equal Pay Act, which obviously concerned employment, and §1004 conflicted with those portions of the Act. See Sex Discrimination Regulations: Hearings before the Subcommittee on Postsecondary Education of the House Committee on Education and Labor, 94th Cong., 1st Sess., 409 (1975) (1975 Hearings) (remarks of Rep. O’Hara) (arguing that Title IX was a “cut and paste job,” using “a Xerox” of Title VI, and that § 1004 “got in through a drafting error”). As the Court of Appeals observed, however, the Conference Committee could easily have altered the wording of § 1004 to make clear that its limitation applied only to § 901 or could have noted in the Conference Reports that the omission was necessitated by the apparent inconsistency. Instead, by stating that “[t]he House recedes,” the Reports suggest that the Senate version of Title IX, which was intended to ban discriminatory employment practices, prevailed for substantive reasons. See Gulf Oil Corp. v. Copp Paving Co., 419 U. S. 186, 199-200 (1974) (deletion of a provision by a Conference Committee “militates against a judgment that Congress intended a result that it expressly declined to enact”); Schwegmann Bros. v. Calvert Distillers Corp., 341 U. S., at 391-392. Identical language — “The House recedes” or “The Senate recedes”— appears in the Conference Reports with respect to all other changes made in Title IX during the conference. See S. Conf. Rep. No. 92-798, pp. 221-222 (1972). See also 118 Cong. Rec. 18437 (1972) (letters printed in the record during the Senate debate on the Conference Report, which imply that employment discrimination is prohibited by § 901).
Petitioners insist additionally that a specific exclusion for employment, such as that contained in §1004, was unnecessary to limit the scope of § 901. Pointing out that Title IX was patterned after Title VI of the Civil Rights Act of 1964, the school boards contend that the addition of § 604 to Title VI was not viewed by Congress as diminishing the scope of the Act; rather, petitioners argue, it was agreed that Title VI would not prohibit employment discrimination even before § 604 made the exclusion explicit.
This focus on the history of Title VI — urged by petitioners and adopted by the dissent — is misplaced. It is Congress’ intention in 1972, not in 1964, that is of significance in interpreting Title IX. See Cannon v. University of Chicago, 441 U. S. 677, 710-711 (1979). The meaning and applicability of Title VI are useful guides in construing Title IX, therefore, only to the extent that the language and history of Title IX do not suggest a contrary interpretation. Moreover, whether § 604 clarified or altered the scope of Title VI, it is apparent that § 601 alone was not considered adequate to exclude employees from the statute’s coverage. If Congress had intended that Title IX have the same reach as Title VI, therefore, we assume that it would have enacted counterparts to both § 601 and § 604. For although two statutes may be similar in language and objective, we must not fail to give effect to the differences between them. See Lorillard v. Pons, 434 U. S. 575, 584-585 (1978).
In our view, the legislative history thus corroborates our reading of the statutory language and verifies the Court of Appeals’ conclusion that employment discrimination comes within the prohibition of Title IX.
C
The postenactment history of Title IX provides additional evidence of the intended scope of the Title and confirms Congress’ desire to ban employment discrimination in federally financed education programs. Following the passage of Title IX, Senator Bayh published in the Congressional Record a summary of the final version of the bill. That description expressly distinguishes Title VI of the Civil Rights Act of 1964 with respect to employment practices:
“Title VI... specifically excludes employment from coverage (except where the primary objective of the federal aid is to provide employment). There is no similar exemption for employment in the sex discrimination provisions relating to federally assisted education programs.” 118 Cong. Rec. 24684, n. 1 (1972) (first emphasis in original; second emphasis added).
See also 120 Cong. Rec. 89992 (1974) (remarks of Sen. Bayh).
Then, in June 1974, HEW published proposed Title IX regulations pursuant to §902. See 39 Fed. Reg. 22228 (1974). Included among these regulations was Subpart E, containing provisions prohibiting discriminatory employment practices in federally funded education programs. During the comment period, nearly 10,000 formal responses to the regulations were submitted, reputedly the most HEW had ever received on one of its proposals. See Salomone, Title IX and Employment Discrimination: A Wrong in Search of a Remedy, 9 J. Law & Ed. 433, 436 (1980). But not one suggested that §901 was not meant to prohibit discriminatory employment practices. See 1975 Hearings 479 (statement of Peter E. Holmes, Director of the Office for Civil Rights).
On June 4, 1975, HEW published its final Title IX regulations, see 40 Fed. Reg. 24128 (1975), and, as required by § 431(d)(1) of the General Education Provisions Act, Pub. L. 93-380, 88 Stat. 567, as amended, 20 U. S. C. § 1232(d)(1), submitted the regulations to Congress for review. This “laying before” provision was designed to afford Congress an opportunity to examine a regulation and, if it found the regulation “inconsistent with the Act from which it derives its authority to disapprove it in a concurrent resolution. If no such disapproval resolution was adopted within 45 days, the regulation would become effective.
Resolutions of disapproval were introduced in both Houses of Congress. The two Senate resolutions, which did not mention the employment regulations, were not acted upon. In the House, the Subcommittee on Postsecondary Education of the House Committee on Education and Labor held six days of hearings to determine whether the HEW regulations were “consistent with the law and with the intent of the Congress in enacting the law.” 1975 Hearings 1 (remarks of Rep. O’Hara). One witness expressed opposition to the employment regulations, interpreting the legislative history much as petitioners have. Id., at 406-408 (statement of Janet L. Kuhn); see also Kuhn, 65 Geo. L. J., at 49. Senator Bayh testified, however, that the regulations, “as the Congress mandated, call for equality in admissions... and in the case of teachers and other educational personnel, employment, pay and promotions.” 1975 Hearings 169. And HEW Secretary Weinberger stated that he did not see “any way you can find that employees do not participate in education programs and activities receiving Federal assistance, and, therefore, they are within the protected class....” Id., at 478. See also id., at 140 (statement of Jean Simmons, President, Federation of Organizations for Professional Women); 154-155 (statement of Rep. Carr); 164 (statement of Rep. Mink); 329 (statement of Dr. Bernice Sandler, Director, Project of the Status and Education of Women, Association of American Colleges).
Following the hearings, members of the Subcommittee on Postsecondary Education introduced concurrent resolutions disapproving certain portions of the HEW regulations, but not referring specifically to the employment regulations. H. R. Con. Res. 329, 94th Cong., 1st Sess. (1975); H. R. Con. Res. 330, 94th Cong., 1st Sess. (1975); see 121 Cong. Rec. 21687 (1975). Representatives Quie and Erlenborn introduced an amendment to H. R. Con. Res. 330 that explicitly sought to disapprove the employment regulations as inconsistent with Title IX. See Unpublished Amendment to H. R. Con. Res. 330, quoted in 629 F. 2d, at 783. Neither resolution was passed, and HEW’s regulations went into effect on July 21, 1975.
Admittedly, Congress’ failure to disapprove the HEW regulations does not necessarily demonstrate that it considered those regulations valid and consistent with the legislative intent. See § 431(d)(1) of the General Education Provisions Act (as amended approximately four months after the Title IX regulations went into effect), 20 U. S. C. § 1232(d)(1). But the postenactment history of Title IX does indicate that Congress was made aware of the Department’s interpretation of the Act and of the controversy surrounding the regulations governing employment, and it lends weight to the argument that coverage of employment discrimination was intended. See Sibbach v. Wilson & Co., 312 U. S. 1, 14-16 (1941); Comment, 1976 B. Y. U. L. Rev., at 153-157. And the relatively insubstantial interest given the resolutions of disapproval that were introduced seems particularly significant since Congress has proceeded to amend §901 when it has disagreed with HEW’s interpretation of the statute. While amending these other portions of §901, however, Congress has not seen fit to disturb the Subpart E regulations.
In fact, Congress has refused to pass bills that would have amended § 901 to limit its coverage of employment discrimination. On the day the 45-day review period for the HEW regulations expired, Senator Helms introduced a bill that would have added a provision to Title IX stating that “[n]othing in [§ 901] shall apply to employees of any educational institution subject to this title.” S. 2146, § 2(1), 94th Cong., 1st Sess. (1975); see 121 Cong. Rec. 23845-23847 (1975). No action was taken on the bill. Similarly, Senator McClure sponsored an amendment to S. 2657, 94th Cong., 2d Sess. (1976), the Education Amendments of 1976, which would have restricted the meaning of the term “educational program or activity” in § 901(a) to the “curriculum or graduation requirements of the institutions...” receiving federal funds. 122 Cong. Rec. 28136 (1976). Senator Bayh successfully opposed the amendment, in part on the ground that it “would exempt those areas of traditional discrimination against women that are the reason for the congressional enactment of title IX[,]” including “employment and employment benefits....” Id., at 28144. The McClure amendment was rejected. Id., at 28147.
Although postenactment developments cannot be accorded “the weight of contemporary legislative history, we would be remiss if we ignored these authoritative expressions concerning the scope and purpose of Title IX....” Cannon v. University of Chicago, 441 U. S., at 687, n. 7. Where “an agency’s statutory construction has been ‘fully brought to the attention of the public and the Congress,’ and the latter has not sought to alter that interpretation although it has amended the statute in other respects, then presumably the legislative intent has been correctly discerned.” United States v. Rutherford, 442 U. S. 544, 554, n. 10 (1979), quoting Apex Hosiery Co. v. Leader, 310 U. S. 469, 489 (1940). See also Cannon v. University of Chicago, 441 U. S., at 702-703; NLRB v. Bell Aerospace Co., 416 U. S. 267, 275 (1974); United States v. Bergh, 352 U. S. 40, 46-47 (1956). These subsequent events therefore lend credence to the Court of Appeals’ interpretation of Title IX.
E>
Although we agree with the Second Circuit’s conclusion that Title IX proscribes employment discrimination in federally funded education programs, we find that the Court of Appeals paid insufficient attention to the “program-specific” nature of the statute. The court acknowledged that, under § 902, termination of funds “shall be limited in its effect to the particular program, or part thereof, in which... noncompliance has been... found,” but implied that the Department’s authority to issue regulations is considerably broader. See 629 F. 2d, at 785-786. We disagree.
It is not only Title IX’s funding termination provision that is program-specific. The portion of § 902 authorizing the issuance of implementing regulations also provides:
“Each Federal department and agency which is empowered to extend Federal financial assistance to any education program or activity... 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.” (Emphasis added.)
Certainly, it makes little sense to interpret the statute, as respondents urge, to authorize an agency to promulgate rules that it cannot enforce. And § 901(a) itself has a similar program-specific focus: it forbids gender discrimination “under any education program or activity receiving Federal financial assistance....”
Title IX’s legislative history corroborates its general program-specificity. Congress failed to adopt proposals that would have prohibited all discriminatory practices of an institution that receives federal funds. See 117 Cong. Rec. 30155-30157, 30408 (1971) (Sen. Bayh’s 1971 amendment); H. R. 5191, 92d Cong., 1st Sess., § 1001(b) (1971) (administration proposal); 1970 Hearings 690-691 (Dept. of Justice’s proposed alternative to, § 805 of H. R. 16098); cf. Title IX, § 904 (proscribing discrimination against the blind by a recipient of federal assistance with no program-specific limitation). In contrast, Senator Bayh indicated that his 1972 amendment, which in large part was ultimately adopted, was program-specific. See 118 Cong. Rec. 5807 (1972) (observing that the amendment “prohibit[s] discrimination on the basis of sex in federally funded education programs,” and that “[t]he effect of termination of funds is limited to the particular entity and program in which such noncompliance has been found...”); cf. 117 Cong. Rec. 39256 (1971) (colloquies between Reps. Green and Waggoner and between Reps. Green and Steiger).
Finally, we note that language in §§ 601 and 602 of Title VI, virtually identical to that in §§ 901 and 902 and on which Title IX was modeled, has been interpreted as being program-specific. See Board, of Public Instruction v. Finch, 414 F. 2d 1068 (CA5 1969). We conclude, then, that an agency’s authority under Title IX both to promulgate regulations and to terminate funds is subject to the program-specific limitation of §§ 901 and 902. Cf. Cannon v. University of Chicago, 441 U. S., at 690-693.
Examining the employment regulations with this restriction in mind, we nevertheless reject petitioners’ contention that the regulations are facially invalid. Although their import is by no means unambiguous, we do not view them as inconsistent with Title IX’s program-specific character. The employment regulations do speak in general terms of an educational institution’s employment practices, but they are limited by the provision that states their general purpose: “to effectuate title IX... [,] which is designed to eliminate (with certain exceptions) discrimination on the basis of sex in any education program or activity receiving Federal financial assistance....” 34 CFR § 106.1 (1980) (emphasis added).
HEW’s comments accompanying publication of its final Title IX regulations confirm our view that Subpart E is consistent with the Act’s program-specificity. The Department recognized that § 902 limited its authority to terminate funds to particular programs that were found to have violated Title IX, and it continued:
“Therefore, an education program or activity or part thereof operated by a recipient of Federal financial assistance administered by the Department will be subject to the requirements of this regulation if it[] receives or benefits from such assistance. This interpretation is consistent with the only case specifically ruling on the language contained in title VI, which holds that Federal funds may be terminated under title VI upon a finding that they ‘are infected by a discriminatory environment.. Board of Public Instruction of Taylor County, Florida v. Finch, 414 F. 2d 1068, 1078-79 (5th Cir. 1969).” 40 Fed. Reg. 24128 (1975).
By expressly adopting the Fifth Circuit opinion construing Title VI as program-specific, HEW apparently indicated its intent that the Title IX regulations be interpreted in like fashion. So read, the regulations conform with the limitations Congress enacted in §§ 901 and 902.
Whether termination of petitioners’ federal funds is permissible under Title IX is a question that must be answered by the District Court in the first instance. Similarly, we do not undertake to define “program” in this opinion. Neither of the cases before us advanced beyond a motion for summary judgment, and the record therefore
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
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sc_issuearea
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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.
Mr. Justice Whittaker
delivered the opinion of the Court.
For the purpose of enabling a labor union of which he was then an officer to comply with § 9 (h) of the National Labor Relations Act, as amended, 29 U. S. C. § 169 (h), and hence to use the processes of the National Labor Relations Board, petitioner made on Decembér 9, and caused to be filed with the Board on December 11, 1952, an affidavit reciting, inter alia, “I am not a member of the Communist Party or affiliated with such Party.” Upon receipt of that affidavit and like ones of all other officers of the union, the Board advised the union that it had complied with § 9 (h) and could make use of the Board’s processes.
In November 1955, an indictment in two counts was returned against petitioner in the United States District Court for the Northern District of Illinois. The first count charged that, in violation of 18 U. S. C. § 1001, petitioner had falsely sworn, in the affidavit, that he was not a member of the Communist Party, and the second charged that, in violation of the same statute, he had also falsely sworn in that affidavit that he was not affiliated' with the Communist Party. A jury trial was had which resulted in a verdict of guilty on both counts, and the court sentenced petitioner to imprisonment. On appeal, the United States Court of Appeals for the Seventh Circuit originally affirmed, but, before the motion for rehearing was ruled, this Court’s decision in Jencks v. United States, 353 U. S. 657, came down, and, on the authority of that case, the court granted the motion for rehearing, reversed the judgment and remanded the case for a new trial. United States v. Killian, 246 F. 2d 77, 82. A new trial was had. It also resulted in a verdict of guilty on both counts, and petitioner was sentenced to imprisonment for five years on Count I, and for three years on Count II, the sentences to run concurrently. On appeal, the United States Court of Appeals for the Seventh Circuit affirmed, United States v. Killian, 275 F. 2d 561, and we granted certiorari limited to two questions, namely, (1) whether production of statements submitted by Government informer witnesses for their expenses, and the receipts executed by them for the payments, is required by 18 U. S. C. § 3500 when the Government offers at the trial to produce a list of the dates and.amounts of the payments, and (2) whether the instructions to the jury properly defined membership in and affiliation with the Communist Party. 365 U. S. 810.
The Government introduced evidence tending to show that petitioner was a member and active in the affairs of the Communist Party from 1949 through August 1953, but, inasmuch as there is not before us any question concerning the sufficiency of the evidence to make a sub-missible case for the jury, it is not necessary to review the evidence in detail.
I. The Document Production Questions.
Intelligent understanding of the document production questions presented requires a brief statement of their basis. They arose in connection with the testimony of Government witnesses Sullivan and Ondrejka.
On direct examination, Sullivan testified that he joined the Communist Party in 1948 at the request of the Federal Bureau of Investigation, and in October 1949 transferred his membership from Cincinnati, Ohio, to Madison, Wisconsin, where, by secret means, he made contact with local leaders of the Communist Party and became active in its affairs. In those activities, he met petitioner in December 1949. Petitioner was then the section organizer for the Party in Madison. Thereafter, Sullivan attended a number of secret Communist Party group meetings in Madison in 1949 and 1950 at which petitioner was present and acted as the spokesman and leader. Sullivan testified that he gave written reports to the F. B. I. respecting Party meetings and activities soon after they occurred.
At the close of Sullivan’s direct testimony, petitioner moved for production, for use in cross-examination, of all statements given by the witness to the F. B. I. relating to his direct testimony. The narrative statements were produced to the judge, in camera, who, after excising the parts that did not relate to the witness' direct testimony, handed them to petitioner’s counsel. On cross-examination, Sullivan testified that he was paid stipulated monthly amounts for his services, and was reimbursed for his expenses incurred in Communist Party activities, by the F. B. I., and that when he received the money he signed a receipt for it. His connection with the F. B. I. terminated in 1952.
After completing the cross-examination of the witness, petitioner again moved for production of all statements made by the witness to the F. B. I., without excision. The Government objected to the motion on the grounds that it had produced all of the witness’ statements that related to his direct testimony, and that there was no showing that the witness had given any other statements to the Government that related to his direct testimony. Thereupon, the court denied petitioner’s motion. Petitioner then moved to strike the testimony of the witness, and that motion, too, was denied.
On direct examination, Ondrejka testified that he joined the Communist Party at the request of the F. B. I. in October 1949 and remained a member of the Party until November 1953. He met petitioner at a Communist Party meeting in Milwaukee, Wisconsin, in January 1951, and thereafter attended many secret Communist Party meetings in Milwaukee where petitioner was present and active, and alsi > participated with petitioner in numerous Party activities, until August 1953, and knew petitioner to be a member of the Communist Party throughout that period. Ondrejka testified that he gave written reports to the F. B. I. respecting Party meetings and activities soon after they occurred.
At the conclusion of Ondrejka’s direct testimony, petitioner moved for production, for use in cross-examination, of all statements given by the witness to the F. B. I. The court ordered the Government to produce to the judge, in camera, “all statements that in any way affect the direct examination of the witness.” Accordingly, all of the narrative statements given by the witness to the Government relating to his direct testimony were produced to the judge, who, after excising such parts as did not relate to the witness’ direct testimony, delivered them to petitioner’s counsel. Petitioner then moved for production of all statements relating to the testimony of the witness, without excision. That motion was denied.
On cross-examination, Ondrejka testified that he was paid stipulated monthly amounts in cash for his services by the F. B. I., and, in addition, was reimbursed by the F. B. I. for his expenses, such as Communist Party dues, literature, contributions and travel, which he orally reported to an F. B. I. agent, who made notes thereof and later reimbursed him in cash. The court sustained the Government’s objection to a question asking whether Ondrejka signed receipts for the moneys paid to him in reimbursement for his expenses.
Petitioner then moved for production of all statements given by the witness to the F. B. I., whether written by the witness or by an F. B. I. agent as the result of interviews with the witness, which related to the witness’ testimony on cross-examination, including particularly reports by the witness of his reimbursable expenses and the receipts which he signed evidencing reimbursement for those expenses. The Government opposed production of the documents on the ground that they did not relate to the direct testimony of the witness. It further objected to producing Ondrejka’s reports of expenses, and the receipts he had signed when reimbursed for those expenses, on the grounds that they were administrative records of the F. B. I. and were immaterial and irrelevant, but the Government offered to produce a list showing the dates and amounts of the payments and whether they were for services or expenses. Petitioner refused to receive that proffered list. Thereupon, the court denied the motion. Petitioner then moved to strike all of Ondrejka’s testimony, and that motion, too, was denied.
Petitioner contends that his general demands for “all statements,” as well as his specific demand for the reports and receipts made by Ondrejka, encompassed, and the trial court erred to his prejudice in denying his motion to require the Government to produce, (1) the notes made by the F. B. I. agents covering Ondrejka’s oral reports of expenses and (2) the receipts signed by Sullivan and Ondrejka for moneys paid to them in reimbursement for expenses. He supports these contentions with an elaborate argument which we need not delineate because the Solicitor General now concedes that the F. B. I. notes of Ondrejka’s oral reports may have been “statements” within the meaning of 18 U. S. C. §3500 (e)(2), and he flatly concedes that the receipts signed by Sullivan and Ondrejka were “statements” within the meaning of § 3500.
However, the Solicitor General contends that on the actual facts — many of which are not incorporated in the record before us — petitioner is not entitled to, and that we should not on this incomplete and imperfect record order, a new trial, because the true facts are that the F. B. I. agents’ notes covering Ondrejka’s oral reports of expenses were not in existence at the time of the trial, and the receipts signed by Sullivan and Ondrejka do not “relate to” their direct testimony as required by § 3500, or, if it may be said that any of them do “relate to” their direct testimony, that the same information, in much greater detail, was given to petitioner in the witnesses’ narrative statements that were produced and delivered to his counsel at the trial, and hence if there was any error it was harmless.
More specifically, the Solicitor General tells us in his brief that, although the nature of the Government’s objections in the courts below implied that the agents’ notes were in existence, his interrogation of the F. B. I. agents has disclosed that, after they incorporated the data contained in their notes of Ondrejka’s oral reports into the receipts to be signed by him, the agents destroyed the notes in accord with their normal practice, and hence those notes were not in existence at the time of either of petitioner’s trials. Although the receipts are not contained in the record before us, the Solicitor General says that there are 124 of them and that a careful examination of them reveals that none of Sullivan’s receipts contains any itemization whatever of the nature of the reimbursed expenses, and thus they do not "relate to” anything mentioned in his direct testimony. With respect to Ondrejka’s receipts, the Solicitor General says that, although the Government inadvertently represented to the District Court and the Court of Appeals that the list, proffered to petitioner at the trial and showing the dates and amounts of payments made to Ondrejka, gave all of the information that was contained in the receipts, his examination has disclosed that nine of Ondrejka’s receipts do contain some itemization of the nature of his reimbursed expenses, but that only two of the nine can be said to “relate to” anything mentioned by Ondrejka on his direct examination, and that the same information, in greater detail, was contained in Ondrejka’s narrative statements that were produced and delivered to petitioner’s counsel at the trial..
For these reasons, the Solicitor General contends that, viewed upon the now known and readily available actual facts, no error, at least no prejudicial error, resulted from the nonproduction of the F. B. I. notes and the Sullivan and Ondrejka receipts at the trial. However, the Solicitor General recognizes that petitioner is not bound to accept his statement that the F. B. I. notes of Ondrejka’s oral reports of expenses were destroyed in accord with normal practice long prior to the trial, and that petitioner is entitled to an opportunity to examine the F. B. I. agents and other responsible Government officials on these matters which, of course, can be done only in the District Court. He recognizes, too, that his contentions with respect to the receipts signed by Sullivan and Ondrejka necessarily involve a detailed examination and comparison of the lengthy direct testimony of Sullivan and Ondrejka, the 124 receipts, the list showing the dates and amounts of payments to Ondrejka that was proffered to petitioner by the Government at the trial, and the numerous narrative statements by Sullivan and Ondrejka that were produced and delivered to petitioner at the trial, and he submits that this cannot appropriately be done in this Court, especially since neither the receipts nor the proffered list is contained in the present record, but can properly be done only in the District Court. He therefore asks us to vacate the judgment and remand the case to the District Court to hear these issues and to determine whether a new trial should be ordered or the judgment should be reinstated with the right in the petitioner, of course, to appeal from any such judgment to the Court of Appeals.
In opposition, petitioner argues that the claimed destruction of the agents’ notes admits the destruction of evidence that may have been helpful to him and deprives him of his rights under § 3500 and to due process of law, and therefore the judgment should be reversed. Alternatively, he argues that only he and his counsel could determine the uses that might have been made of the receipts had they been produced, and he concludes that it would not be possible for the District Court, on remand, to find that the failure to produce the receipts was nonprejudicial or harmless error, and that therefore he is entitled to a new trial.
As to petitioner’s contention that the claimed destruction of the agents’ notes admits the destruction of evidence, deprives him of legal rights and requires reversal of the judgment, it seems appropriate to observe that almost everything is evidence of something, but that does not mean that nothing can ever safely be destroyed. If the agents’ notes of Ondrejka's oral reports of expenses were made only for the purpose of transferring the data thereon to the receipts to be signed by Ondrejka, and if, after having served that purpose, they were destroyed by the agents in good faith and in accord with their normal practice, it would be clear that their destruction did not constitute an impermissible destruction of evidence nor deprive petitioner of any right. Those are the factual representations made by the Solicitor General. Whether they are true can be determined only upon a hearing in the District Court.
It is entirely clear that petitioner would not be entitled to a new trial because of the nonproduction of the agents’ notes if those notes were so destroyed and not in existence at the time of the trial. It is equally clear that, notwithstanding the fact that the Sullivan and Ondrejka receipts were “statements” within the meaning of § 3500 and were demanded under that section, petitioner would not be entitled to a new trial because of the nonproduction of those receipts if in truth they do not relate to the direct testimony of those witnesses inasmuch as § 3500 (c) requires “the court [to] excise the portions of [the] statement which do not relate to the subject matter of the testimony of the witness.” The Solicitor General represents that 115 of the 124 receipts signed by Sullivan and Ondrejka do not contain any itemization of the nature of the reimbursed expenses nor relate to the direct testimony of those witnesses. If those representations are true, petitioner would not be entitled to a new trial because of the nonproduction of those 115 receipts. Inasmuch as the receipts are not contained in the record before us, whether the Solicitor General’s representations are true can be determined only upon a hearing in the District Court.
But the Solicitor General finds that two of Ondrejka’s receipts may be said to relate to Ondrejka’s direct testimony. However, he says that the same information as they contain and much more on the same subjects was contained in Ondrejka’s narrative statements that were produced and delivered to petitioner at the trial, and therefore petitioner could not have been prejudiced by the nonproduction of those two receipts and is not entitled to a new trial on that account. It is true, as petitioner argues, that only the defense is in position to determine the precise uses that may be made of demanded documents, Jencks v. United States, 353 U. S. 657, 668, but that is not to say that the harmless error rule is never applicable in respect to the nonproduction of demanded documents. Upon very similar facts, we recently approved a holding that nonproduction of demanded documents was harmless error. Rosenberg v. United States, 360 U. S. 367. We there said: “Since the same information that would have been afforded had the document been given to defendant was already in the possession of the defense by way of the witness’ admissions while testifying, it would deny reason to entertain the belief that defendant could have been prejudiced by not having had opportunity to inspect the letter.” 360 U. S., at 371.
While, as we said in the Rosenberg case, supra, a “court should not confidently guess what defendant’s attorney might have found useful for impeachment purposes in withheld documents to which the defense is entitled..., when the very same information was possessed by defendant’s counsel as would have been available were error not committed [a court properly can find that] it would offend common sense and the fair administration of justice to order a new trial.” 360 U. S., at 371.
If it is true, as the Solicitor General represents, that the information contained on the two Ondrejka receipts had already been given to petitioner in Ondrejka’s narrative statements covering the same subjects, it is clear that the District Court properly could find that the error in failing to produce those two receipts was harmless.
Accordingly, we vacate the judgment and remand the cause to the District Court for a hearing confined to the issues raised by the Solicitor General’s representations as stated in this opinion. The District Court shall make findings of fact on those issues. If the District Court finds that the Solicitor General’s representations are true in all material respects, it shall enter a new final judgment based upon the record as supplemented by its findings, thereby preserving to petitioner the right to appeal to the Court of Appeals. If, on the other hand, the District Court finds that the Solicitor General’s representations are untrue in any material respect, it shall grant petitioner a new trial.
II. The Instructions to the Jury.
Whether the District Court, on remand, grants or denies a new trial, it is obvious that petitioner’s contentions respecting the court’s instructions to the jury will not be mooted and it seems necessary to decide them.
Because of the nature of some of petitioner’s contentions respecting the instructions, it seems appropriate to make clear just what was the charge upon which petitioner was convicted. He was not charged with criminality for being a member of or affiliated with the Communist Party, nor for participation in any criminal activities of or for the Communist Party. He was not charged with advocating or teaching the overthrow of the Government as was the case in Yates v. United States, 354 U. S. 298, or with knowing membership in an organization advocating the overthrow of the Government by force and violence as in Scales v. United States, 367 U. S. 203, and Noto v. United States, 367 U. S. 290. The charge was that, to enable a labor union of which he was an officer to comply with § 9 (h) of the National Labor Relations Act and thus be permitted to use the processes of the Labor' Board, petitioner, on December 11, 1952, knowingly made and caused to be transmitted to the Labor Board a false affidavit, saying he was not then a member of or affiliated with the Communist Party when in fact he was both a member of and affiliated with the Communist Party, and that those acts were made criminal and punishable by 18 U. S. C. § 1001.
Nothing in § 9 (h) or elsewhere in the National Labor Relations Act makes or purports to make criminal either membership in or affiliation with the Communist Party, American Communications Assn. v. Douds, 339 U. S. 382, 402, but § 1001 provides that “Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies... a material fact... or makes or uses any false writing or document knowing the same to contain any false... statement... shall be fined not more than $10,000 or imprisoned not more than five years, or both.” Petitioner was charged with and convicted for violating that statute — of knowingly making and transmitting to the Labor Board on December 11, 1952, an affidavit falsely swearing that he was not a member of or affiliated with the Communist Party — not for being a member of or affiliated with the Communist Party, nor for participating in any activities, lawful or unlawful, of the Communist Party, although, of course, determination of whether the affidavit was true or false requires a determination of whether petitioner was a member of or affiliated with the Communist Party on December 11, 1952. Neither is there any question here about the fact that the evidence was sufficient to make a submissible case for the jury and to support its verdict — notwithstanding petitioner’s tangential implications to the contrary. The questions here are simply whether the court’s instructions to the jury properly defined membership in and affiliation with the Communist Party.
Membership. Petitioner first contends that the instruction respecting membership should have defined “membership” as, and required a finding of, “a definite objective factual phenomenon” or a “specific formal act of joining” rather than, as was done, in the subjective terms of a state of mind. If petitioner is right in this contention it would follow, despite the fact the question is foreclosed against him here, that the evidence did not make a submissible case for the jury on Count I of the indictment and his motion for a directed verdict of acquittal on that count should have been granted, for there was no evidence of “a definite objective factual phenomenon [of joining]” or of “a specific formal act of joining.” Indeed, the very nature of the case — claimed membership in an underground or secretly operating organization whose membership records, if any, are not available to the Government— precludes the possibility of such evidence, and, if the rule were as petitioner contends, false affidavits of non-Communist Party membership could be made and submitted to the Labor Board with impunity. Membership in such a secretly operating organization is, to all but the organization and its member or members, necessarily subjective, and, although it must be proved by evidence of objective facts and circumstances having a rational tendency to show, and from which the jury may rationally and logically infer, the ultimate subjective fact of membership, it is, in the very nature of such a case, necessary that the court's instructions define membership in such an organization in subjective terms or not at all.
A similar question arising under § 9 (h) was presented in Jencks v. United States, 353 U. S. 657, but the Court’s opinion, turning on the document production question, did not reach it. However, Mr. Justice Burton’s separate concurring opinion, joined by Mr. Justice Harlan, 353 U. S., at 672, and, on the question here considered, also by Mr. Justice Frankfurter, 353 U. S., at 672, did reach the question. It found the membership defining instruction given in that case to be deficient because it “failed to emphasize to the jury the essential element of membership in an organized group — the desire of an individual to belong to the organization and a recognition by the organization that it considers him as a member.” 353 U. S., at 679. In the instant case, the District Court’s instruction to the jury defined membership to the jury in almost precisely that language (see note 5, sixth paragraph). Similar instructions in cases arising under § 9(h) have been held proper by every United States Court of Appeals that has passed upon the question. Fisher v. United States, 231 F. 2d 99, 107 (C. A. 9th Cir.); Lohman v. United States, 251 F. 2d 951, 954 (C. A. 6th Cir.); Lohman v. United States, 266 F. 2d 3 (C. A. 6th Cir.); Travis v. United States, 269 F. 2d 928, 942-943 (C. A. 10th Cir.). From these consistent holdings and upon principle, it seems clear that the instruction’s definition of. membership was not erroneous under Count I of the indictment.
Petitioner next contends that the court’s instruction failed to tell the jury precisely what objective circumstances would be sufficient to justify a finding of membership, and that the criteria which it told the jury they might consider in determining the question of membership were too indefinite to give the jury the necessary guidance. Although the ultimate fact of membership in such a case is almost necessarily a subjective one, it may be proved, as we have said, by objective facts and circumstances having a rational tendency to show, and from which the jury rationally and logically may find, the ultimate fact of membership. But, for the purpose of confining the jury’s considerations to the relevant evidence, it was proper for the court to outline the objective acts, shown in the evidence, which they might consider in determining the ultimate subjective fact of membership. Here, the court’s instruction, after telling the jury that intent is a state of mind and can only be determined by what an individual says and does, went on to say that in determining the issue as to whether the defendant was or was not a member of the Communist Party at the time alleged in the indictment the jury might take into consideration, as circumstances bearing on that question, the acts and statements of the defendant (see note 5, sixth paragraph), and in this connection they might take into consideration whether the defendant did the things set forth in the 12 numbered paragraphs that followed, which, it said, were some of the indicia of Communist Party membership (see note 5, eighth paragraph).
While the criteria specified in the numbered paragraphs of the challenged instruction were in substance 12 of the 14 criteria specified by Congress in § 5 of the Communist Control Act of 1954 (50 U. S. C. § 844) to be considered by a jury in determining Communist Party membership under that Act, it is unnecessary for us to determine in this case whether that section applies, by force of law, to prosecutions under 18 U. S. C. § 1001 for making a false affidavit to the Labor Board in purported compliance with § 9 (h) of the National Labor Relations Act, for it is obvious that those 12 criteria rationally tend to show, and were sufficient to enable a jury rationally and logically to find, the ultimate fact of membership, though subjective, and hence it was proper, independently of and wholly apart from § 5 of the Communist Control Act of 1954, to tell the jury, as this instruction did, that they might consider those criteria in determining whether the defendant was or was not a member of the Communist Party on the date charged in the indictment.
Similar criteria were contained in the membership instruction given in the Jencks case, supra, and the opinion of Mr. Justice Burton did not find any error in that aspect of the instruction. Very similar instructions telling the jury that they might consider such or similar criteria in determining the ultimate subjective fact of membership within the meaning of § 9 (h) have been consistently and uniformly approved, Hupman v. United States, 219 F. 2d 243 (C. A. 6th Cir.); Fisher v. United States, 231 F. 2d 99, 107 (C. A. 9th Cir.). In Travis v. United States, 247 F. 2d 130, 135, the United States Court of Appeals for the Tenth Circuit reversed because the membership instruction failed to specify and require the jury to consider such criteria in determining the question of membership. On retrial, the jury was instructed to consider virtually the same criteria of membership as was the jury in the instant case. The defendants were again convicted, and, on appeal, the Court of Appeals specifically approved the instruction. Travis v. United States, 269 F. 2d 928, 942-943.
We think there is no merit in petitioner’s contention that the instruction failed adequately to state the objective circumstances that might be considered by the jury in determining membership or that the criteria submitted were too indefinite to give the jury the necessary guidance.
Nor is there any merit in petitioner’s contention that those criteria allowed a finding of membership on a date other than that charged in the indictment. That contention fails to consider the whole charge, particularly the vital fact that the court repeatedly emphasized to the jury that the issue for them to determine was whether petitioner was or was not a member of the Communist Party on the date that he executed and transmitted the affidavit.
Petitioner, and the amici curiae, contend that § 5 of the Communist Control Act of 1954 (50 U. S. C. § 844) is constitutionally invalid in that it violates the First Amendment of the Constitution and denies due process because it permits a jury to base its finding of membership upon statements and acts that are protected by the First Amendment. They then argue that because the challenged instruction substantially adopted 12 of the 14 criteria mentioned in that section this instruction, too, was violative of the First Amendment and denied due process. We have no occasion here to consider the constitutionality of § 5 of the Communist Control Act of 1954 because, as we have said, the indicia which the challenged instruction told the jury to consider as circumstances bearing upon the issue of membership did rationally tend to show, and were sufficient, if believed, to enable the jury rationally and logically to find, the ultimate subjective fact of membership, wholly apart from' and independently of § 5 of the Communist Control Act of 1954. To petitioner’s argument that the submitted criteria permitted the jury to find membership from statements and acts that were wholly innocent in themselves or even protected by the First Amendment, it is enough to recall that nothing in § 9 (h) or elsewhere in the National Labor Relations Act makes or purports to make criminal either membership in or affiliation with the Communist Party, American Communications Assn. v. Douds, supra, 339 U. S., at 402, and that petitioner was not charged with criminality for being a member of or affiliated with the Communist Party, nor with participating in any criminal activities of or for the Communist Party, but only with having made and submitted to the Government an affidavit falsely swearing that he was not a member of or affiliated with the Communist Party in violation of 18 U. S. C. § 1001. It would be strange doctrine, indeed, to say that membership in the Communist Party — when, as here, a lawful status — cannot be proved by evidence of lawful acts and statements, but only by evidence of unlawful acts and statements.
Affiliation. We think the court’s instruction defining affiliation was correct under Count II of the indictment and in accord with all the precedents. A far less complete and definitive instruction on affiliation was given by the trial court in Jencks v. United States, supra, and was challenged in this Court. That instruction merely quoted dictionary definitions and then stated that “[a]filiation... means something less than membership but more than sympathy. Affiliation with the Communist Party may be proved by either circumstantial or direct evidence, or both.” See 353 U. S., at 679. The Court’s opinion, turning on the document production problem, did not reach that question. However the opinion of Mr. Justice Burton did reach the question. It did not find the instruction erroneous insofar as it went, but found it to be deficient because “It did not require a continuing course of conduct ‘on a fairly permanent basis’ ‘that could not be abruptly ended without giving at least reasonable cause for the charge of a breach of good faith,’ ” and thus “allowed the jury to convict petitioner on the basis of acts of intermittent cooperation.” 353 U. S., at 679-680. The instruction given in this case contained not only the definition given in the Jencks case (see note 13, paragraph one) but went on to embody almost exactly the expanded definition prescribed by Mr. Justice Burton (see note 13, paragraph two). The opinions of the Courts of Appeals have uniformly approved that definition. In Bryson v. United States, 238 F. 2d 657, 664, the United States Court of Appeals for the Ninth Circuit found an identical instruction to be “full and complete” and said that it “adequately informed the jury of the meaning of the term [affiliated with] and provided an adequate standard for evaluating the evidence.” In Lohman v. United States, 251 F. 2d 951, 954, the United States Court of Appeals for the Sixth Circuit, speaking through Judge, now Mr. Justice, Stewart, specifically approved the definition of “affiliated with” prescribed by Mr. Justice Burton’s opinion in the Jencks case; and in Travis v. United States, 247 F. 2d 130, 135, the United States Court of Appeals for the Tenth Circuit approved an almost identical instruction.
Petitioner contends that one may not be “affiliated with” the Communist Party, within the meaning of §9 (h), by any direct relationship with the Party, but only by being a member of another organization that is affiliated with the Party, and that the instruction was erroneous for failure so to advise the jury. If petitioner is right in this contention it would follow, despite the fact the question is foreclosed against him here, that the evidence did not make a submissible case for the jury on Count II of the indictment and his motion for a directed verdict of acquittal on that count should have been granted, for there was no evidence that petitioner was affiliated with the Communist Party through membership in some other organization. It is true that one may be “affiliated with” the Communist Party through membership in an organization that is affiliated with the Communist Party, American Communications Assn. v. Douds, supra, 339 U. S., at 406, 421, 450, but that is not to say one may not do so directly, and every decision that has considered the meaning of “affiliated with,” as used in § 9 (h), has held that one may be directly affiliated with the Communist Party. See Mr. Justice Burton's separate concurring opinion in Jencks v. United States, supra, 353 U. S., at 672, 679; and Bryson v. United States, supra, 238 F. 2d, at 664; Lohman v. United States, supra, 251 F. 2d, at 954; Travis v. United States, supra, 269 F. 2d, at 942.
In a manner similar to his attack upon the court’s instruction defining membership, petitioner contends that the instruction in question erroneously defined the phrase “affiliated with” only in subjective terms and without objective criteria. However, just as with regard to membership, affiliation, in relation to Count II in this case, is necessarily subjective. But the ultimate fact of affiliation, though subjective, may be proved by evidence of objective facts and circumstances having a rational tendency to show, and from which the jury may rationally and logically find, the ultimate fact of affiliation. It cannot be disputed here that there was such evidence at the trial. The court’s instruction told the jury that “[wjhether or not the defendant was affiliated with the Communist party... is a question of fact which you are to determine from all the evidence
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:
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C
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sc_issuearea
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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.
Mr. Justice Harlan
delivered the opinion of the Court.
We are called upon to decide whether the State of New York may, consistently with the Fourteenth Amendment, disbar an attorney who, relying on his state privilege against self-incrimination, has refused to answer material questions of a duly authorized investigating authority relating to alleged professional misconduct.
The issue arises in the context of the so-called Brooklyn “ambulance chasing” Judicial Inquiry which this Court had before it in Anonymous v. Baker, 360 U. S. 287. The origins, authority, and nature of the Inquiry have already been sufficiently described in our opinion in that case. There need only be added here that the purpose of the Inquiry, as reflected in the establishing order of the Appellate Division of the Supreme Court of the State of New York, Second Department, was twofold: “to expose all the evil practices [involved in the improper solicitation and handling of contingent-retainers in personal injury cases] with a view to enabling this court to adopt appropriate measures to eliminate them and to discipline those attorneys found to have engaged in them.” 9 App. Div. 2d 436, 437, 195 N. Y. S. 2d 990, 993.
For some years the Second Department has had a court rule “which requires that an attorney who makes contingent-fee agreements for his services in personal injury, wrongful death, property damage, and certain other kinds of cases, must file such agreements with the [Appellate Division] and, if he enters into five or more such agreements in any year, must give to the court in writing certain particulars as to how he came to be retained” (called “Statements of Retainer”). 7 N. Y. 2d 488, 493, 166 N. E. 2d 672, 674; see Rule 3 of the Special Rules Regulating the Conduct of Attorneys and Counselors at Law in the Second Judicial Department, Clevenger’s Practice Manual, p. 21-19 (1959). Principally as a result of the large number of Statements of Retainer filed by him during recent years, petitioner was called to testify and produce records before the Justice in charge of the Inquiry. Relying on his concededly available state privilege against self-incrimination, petitioner refused to produce the records called for and to answer some sixty other questions. The subject matter of such questions was summarized by the New York Court of Appeals in its opinion in this case (7 N. Y. 2d 488, 494, 166 N. E. 2d 672, 674-675), as follows:
. .. Those unanswered questions related to the identity of his law office partners, associates and employees, to his possession of the records of the cases described in his statements of retainer, to any destruction of such records, to his bank accounts, to his paying police officers or others for referring claimants to him, to his paying insurance company employees for referring cases to him, and to his promising to pay to any ‘lay person’ 10% of recoveries or settlements. He was asked — and refused to answer — as to whether he had made or agreed to make such payments to any of several named persons, as to whether he had hired or paid nonlawyers to arrange settlements of his cases with insurance companies and as to whether his partner or associate Rothenberg had been indicted for and had pleaded guilty to violations of sections 270-a and 270-d of the Penal Law which forbid the solicitation of legal business or the employment by lawyers of such solicitors. . . .”
After petitioner had refused to answer these questions, counsel for the Inquiry warned him that “serious consequences,” in the form of an exercise of the Appellate Division’s disciplinary power over attorneys practicing before it, might flow from his refusal to respond, even though that refusal was based on a claim of privilege. As the basis for his warning counsel referred to various provisions of the Canons of Professional Ethics and of the New York Penal Law. Petitioner was then given a further opportunity to respond to the unanswered questions, but he declined, preferring to rely upon his claim of privilege.
Thereafter the Justice in charge of the Inquiry recommended to the Appellate Division that petitioner be disciplined. The Appellate Division ordered respondent Hurley to file a petition for disciplinary action. The ensuing petition sought petitioner’s disbarment, alleging as grounds therefor:
“The refusal of . . . Albert Martin Cohen, to produce the records [called for by the Inquiry], and his refusal to answer the questions [summarized above], are in disregard and in violation of the inherent duty and obligation of respondent as a member of the legal profession in that, among other things, such refusals are contrary to the standards of candor and frankness that are required and expected of a lawyer to the Court; such refusals are in defiance of and flaunt [sic] the authority of the Court to inquire into and elicit information within respondent's knowledge relating to his conduct and practices as a lawyer; by his refusal to answer the aforesaid questions the respondent hindered and impeded the Judicial Inquiry that was ordered by this Court; by his refusals respondent withheld vital information bearing upon his conduct, character, fitness, integrity, trust and reliability as a member of the legal profession. . . .”
The Appellate Division ordered petitioner disbarred, saying (9 App. Div. 2d, at 448-449, 195 N. Y. S. 2d, at 1003):
“To avoid any possible doubt as to our position, we state again that the basis for any disciplinary action by this court is, not the fact that respondent has invoked his constitutional privilege against self incrimination, but rather the fact that he has deliberately refused to co-operate with the court in its efforts to expose unethical practices and in its efforts to determine incidentally whether he had committed any acts of professional misconduct which destroyed the character and fitness required of him as a condition to his retention of the privilege of remaining a member of the Bar.”
The New York Court of Appeals affirmed, Judge Fuld dissenting. 7 N. Y. 2d 488, 166 N. E. 2d 672. We granted certiorari because the case presented still another variant of the issues arising in the Konigsberg and Anastasio cases, ante, pp. 36, 82.
Starting from the undeniably correct premise that a State may not arbitrarily refuse a person permission to practice law, Konigsberg v. State Bar of California, 353 U. S. 252; Schware v. Board of Bar Examiners, 353 U. S. 232, petitioner’s claim that New York’s disbarment of him was capricious rests essentially on two propositions: (1) that the Fourteenth Amendment forbade the State from making his refusal to answer the Inquiry’s questions a per se ground for disbarment; (2) that in any event such a ground is not permissible when refusal to answer rests on a bona fide claim of a privilege against self-incrimination.
I.
The first contention must be rejected largely in light of our today’s opinions in the Konigsberg and Anastaplo cases, ante, pp. 36, 82. The fact that such refusal was here made a ground for disbarment, rather than for denial of admission to the bar, as in Konigsberg and Anastaplo, is not of constitutional moment. And there is no claim here either that the unanswered questions were not material or that petitioner was not duly warned of the consequences of his refusal to answer. By the same token those cases also dispose of petitioner’s basically similar contention that the State could proceed against him only by way of independent evidence of wrongdoing on his part.
We do not think it can be seriously contended that New York’s judicial inquiry was so devoid of rational justification that the mere act of compelling even unprivileged testimony was a deprivation of petitioner’s liberty without due process. History and policy combine to establish the presence of a substantial state interest in conducting an investigation of this kind. That interest is nothing less than the exertion of disciplinary powers which English and American courts (the former primarily through the Inns of Court) have for centuries possessed over members of the bar, incident to their broader responsibility for keeping the administration of justice and the standards of professional conduct unsullied. Not only is the practice of such judicial investigations long-established, but the subject matter of the present investigation does not lack a rational basis. It is no less true than trite that lawyers must operate in a three-fold capacity, as self-employed businessmen as it were, as trusted agents of their clients, and as assistants to the court in search of a just solution to disputes. It is certainly not beyond the realm of permissible state concerns to conclude that too much attention to the business of getting clients may be incompatible with a sufficient devotion to duties which a lawyer owes to the court, or that the “payment of awards to persons bringing in legal business” is inconsistent with the personally disinterested position a lawyer. should maintain.
Finally, it cannot by any stretch be considered that New York acted arbitrarily or irrationally in applying the disciplinary sanction of disbarment to the petitioner. Whát Mr. Justice Cardozo (then Chief Judge of the New York Court of Appeals) said in the Karlin case is enough to put an end to that contention:
“If a barrister was suspected of misconduct, the benchers of his inn might inquire of his behavior. We can hardly doubt that refusal to answer would have been followed by expulsion. There was thus little occasion for controversies as to discipline to be brought before the judges unless the benchers failed in the performance of their duties. In case they did fail, a supervisory power was ever in reserve. The inns . . . were subject ... to visitation by the judges .... Short shrift would there have been for the barrister who refused to make answer as to his professional behavior in defiance' of the visitors.” 248 N. Y., at 472-473, 162 N. E., at 490.
If more than long-lived practice is thought necessary to justify such a sanction, it is to be found in the fact that the denial of continued access to a position that can be misused is permissible to assure that the position may not be held without observance of the obligations lawfully imposed upon it. Revocation of a license for failure to fulfill similar obligations of a licensee is the very sanction which the Federal Government has adopted in a number of situations. See 12 U. S. C. § 481,47 U. S. C. §§ 308 (b), 312(a)(4).
II.
A different constitutional conclusion does not result from the fact that petitioner’s refusal was based on a good-faith assertion of his state privilege against self-incrimination. Because, from a federal standpoint, there can be no doubt that a State has great leeway in defining the reach of its own privilege against self-incrimination, we regard the scope of federal review here as being limited to the question whether arbitrary or discriminatory state action can be found in the consequences New York has attached to the exercise of the privilege in this instance.
Basic to consideration of this aspect of petitioner’s case is the fact that the State’s disbarment order was predicated not upon any unfavorable inference which it drew from petitioner’s assertion of the privilege, cf. Slochower v. Board of Higher Education, 350 U. S. 551, 557-558; Grunewald v. United States, 353 U. S. 391, 421, nor upon any purpose to penalize him for its exercise, but solely upon his refusal to discharge obligations which, as a lawyer, he owed to the court. The Court of Appeals stated:
“Of course, [petitioner] had the right to assert the privilege and to withhold the criminating answers. That right was his as it would be the right of any citizen and it was not denied to him. He could not be forced to waive his immunity .... But the question still remained as to whether he had broken the ‘condition’ oh which depended the ‘privilege’ of membership in the Bar . . . . ‘Whenever the condition is broken, the privilege is lost’ [citing Matter of Rouss, 221 N. Y. 81, 84-85, 116 N. E. 782, 783, Cardozo, J.]. Appellant as a citizen could not be denied any of the common rights of citizens. But he stood before the inquiry and before the Appellate Division in another quite different capacity, also. As a lawyer he was ‘an officer of the court, and, like the court itself, an instrument ... of justice’ [citing People ex rel. Karlin v. Culkin, 248 N. Y. 465, 470-471, 162 N. E. 487, 489, Cardozo, J.], with the inevitable consequences that the court which was charged with control and discipline of its officers had its own right to demand his full, honest and loyal co-operation in its investigations and to strike his name from the rolls if he refused to co-operate. Such ‘co-operation’ is a ‘phrase without reality’ as Chief Judge Cardozo wrote in People ex rel. Karlin v. Culkin (supra, p. 471) if a lawyer after refusing to answer pertinent questions about his professional conduct can retain his status and privileges as an officer of the court.” 7 N. Y. 2d, at 495, 166 N. E. 2d, at 675.
We do not think that it can be seriously contended that the unavailability of the state privilege in judicial inquiries of this type amounts to a distinction from criminal prosecutions so irrational as to suggest either' a denial of due process or a purposeful discrimination of the kind which violates the Equal Protection Clause of the Fourteenth Amendment. A State may rationally conclude that the consequence of disbarment is less drastic than that of a prison term for contempt, albeit arguments to the contrary can be made as well. It may also rationally conclude that procedures resulting in greater preventive certainty are warranted when what is involved is - the right to continue to occupy a position affording special opportunities for deleterious conduct — opportunities, indeed, created by the State’s original certification of the petitioner’s merit. In this regard all that New York has in effect held is that petitioner, by resort to a privilege against self-incrimination, can no more claim a right not to be disbarred for his refusal to answer with respect to matters within the competence of the Court’s supervisory powers over members of the bar, than could a trustee claim a right not to be removed from office for failure to render accounts which might incriminate him. Finally, where illegal or shady .practices on the part of some lawyers are suspected, New York could rationally conclude that the profession itself need not be subjected to the disrespect which would result from the publicity, delay, and possible ineffectiveness in their exposure and eradication that might follow could miscreants only be dealt with through ordinary investigatory and prosecutorial processes. “If the house is to be cleaned, it is .for those who occupy and govern it, rather than for strangers, to do the noisome work.” People ex rel. Karlin v. Culkin, 248 N. Y. 465, 480, 162 N. E. 487, 493 (Cardozo, J.).
These bases for affording a procedure in such judicial inquiries different from that in criminal prosecutions are more than enough to make wholly untenable a contention that there has here been a denial either of due process or of equal protection.
Although what has already been said disposes of this case, we take note, in conclusion, of two further considerations. First, it is suggested that the Fourteenth Amendment gave petitioner a federal constitutional right not to be required to incriminate himself in the state proceedings (although, apart from his claim of fundamental unfairness, the petitioner himself does not so contend, Note 1, supra). That proposition, however, was explicitly rejected by this Court, upon the fullest consideration, more than fifty years ago, Twining v. New Jersey, 211 U. S. 78, and such has been the position of the Court ever since. See Snyder v. Massachusetts, 291 U. S. 97; Brown v. Mississippi, 297 U. S. 278, 285; Palko v. Connecticut, 302 U. S. 319, 323-324; Adamson v. California, 332 U. S. 46; Knapp v. Schweitzer, 357 U. S. 371, 374. This is not to say, of course, that States have free rein either in the choice of means of forcing incriminatory testimony, or in the drawing of inferences from a refusal to testify on grounds of possible self-incrimination, no matter how objectionable-or irrational. But these decisions do establish, at the very least, that to make out a violation of the Fourteenth Amendment, something substantially more must be shown than that the state procedures involved have a tendency to discourage the withholding of self-incriminatory testimony.
It is, however, suggested that such additional factors are to be found in New York’s assertion of a power to grant a state privilege against self-incrimination without including within its sweep protection from disbarment of a lawyer who asserts this privilege during a judicial inquiry into his professional conduct. It is said that this gives rise to a pernicious doctrine whereby lawyers “may be separated into a special group upon which special burdens can be imposed even though such burdens are not and cannot be placed upon other groups.”
This argument wholly misconceives the issue and what the Court has held respecting it. The issue is not, of course, whether lawyers are entitled to due process of law in matters of this kind, but, rather, what process is constitutionally due them in such circumstances. We do not hold that lawyers, because of their special status in society, can therefore be deprived of constitutional rights assured to others, but only, as in all cases of this kind, that what procedures are fair, what state process is constitutionally due, what distinctions are consistent with the right to equal protection, all depend upon the particular situation presented, and that history is surely relevant to these inquiries. State banks may be subjected to periodic examinations that would violate the rights of some other kinds of business against unreasonable search and seizure. Compare 12 U. S. C. § 481 with Boyd v. United States, 116 U. S. 616. A state contractor can be deprived of even the rudiments of a hearing on the issue of whether the state executive department is contracting in accordance with applicable state law. Cf. Perkins v. Lukens Steel Co., 310 U. S. 113. The “right” to judicial review of agency determinations can be taken away from railroad employees in one situation but guaranteed to professional employees in other situations. Compare Switchmen’s Union of North America v. National Mediation Board, 320 U. S. 297, with Leedom v. Kyne, 358 U. S. 184. A state employee need no longer be entrusted with government property if he refuses to explain what has become of property with which he is charged though his refusal may be protected against a contempt sanction by a state or federal privilege against self-incrimination. Cf. Lerner v. Casey, 357 U. S. 468.
Clearly enough, factual distinctions are the determinative consideration upon the question of what process is due in each of these cases. Otherwise making state procedures vary solely on the basis of the given occupation would indeed be nothing less than a denial of equal protection to bankers, contractors, railroad employees, and government employees. On the basis of the factual distinctions that we have mentioned above, we consider that a State can constitutionally afford a different procedure— the present procedure — in these judicial investigations from that in criminal prosecutions.
Petitioner’s disbarment is not constitutionally infirm, and the Court of Appeals’ order must be
Affirmed.
N. Y. Const., Art. I, § 6. While petitioner, at his appearance before the investigating authority, also claimed a federal privilege not to testify, in his later response to the petition initiating disciplinary proceedings he relied solely upon “the privilege against self-incrimination guaranteed to all persons, lawyers or laymen alike, under Article I Section 6 of the New York State Constitution.” It is of course settled that a Fifth Amendment privilege was not available to petitioner in the present case. See, e. g., Knapp v. Schweitzer, 357 U. S. 371; Lerner v. Casey, 357 U. S. 468, 478. Nor do we understand it to be contended that the Fourteenth Amendment automatically precluded the State from exacting petitioner’s testimony and attaching consequences to his refusal to respond. Cf. Adamson v. California, 332 U. S. 46, 54; Palko v. Connecticut, 302 U. S. 319, 323-324; Twining v. New Jersey, 211 U. S. 78, 110-114. We take the petitioner’s position and the remittitur of the Court of Appeals as presenting under the Fourteenth Amendment only a broad claim of fundamental unfairness.
The following quotation from the respondent’s brief accurately reflects the record:
“During the period 1954 to 1958, inclusive, pursuant to the provisions of said Rule, petitioner, a specialist in negligence cases, filed 228 statements as to retainer in his own name. In addition, 76 such statements were filed in the firm name of Cohen & Rothenberg, thus indicating that petitioner and his law firm had been retained on a contingent basis in a total of 304 negligence cases in five years (R. 33-35). The inquiry therefore deemed it advisable to call petitioner as one of its witnesses.”
Section 90 of the New York Judiciary Law.
“. . . Canon 22 . . . requiring lawyers to be candid and frank when before the court, Canons 28 and 29 forbidding the payment of awards to persons bringing in legal business and requiring lawyers knowing of such practices to inform the court thereof, Canon 34 outlawing division of fees except with other lawyers . . . .” 7 N. Y. 2d 488, 494, 166 N. E. 2d 672, 675. Canons 29 and 34 of the New York Canons of Professional Ethics are found in McKinney N. Y. Laws, Judiciary Law, pp.” 774-775. Canons 22 and 28 are found in the 1959 “pocket part,” at pp. 210-211. They are similar in all respects to the correspondingly numbered Canons of Professional Ethics of the American Bar Association.
N. Y. Pen. Law §§ 270-a, 270-e, 270-d, 276, “all relating to soliciting and fee splitting.” 7 N. Y. 2d 488, 494, 166 N. E. 2d 672, 675.
Judge Fuld dissented on state constitutional grounds, reaching no federal questions.
“Even if the historical meaning of due process of law and the decisions of this court did not exclude the privilege from it, it would be going far to rate it as an immutable principle of justice which is the inalienable possession of every citizen of a free government. Salutary as the principle may seem to the great majority, it cannot be ranked with the right to hearing before condemnation, the immunity from arbitrary power not acting by general laws, and the inviolability of private property. The wisdom of the exemption has never been universally assented to since the days of Bentham; many doubt it to-day, and it is best defended not as an unchangeable principle of universal justice but as a law proved by experience to be expedient. See Wigmore, § 2251. It has no place in the jurisprudence of civilized and free countries outside the domain of the common law, and it is nowhere observed among our own people in the search for truth outside the administration of the law. It should, must and will be rigidly observed where it is secured by specific constitutional safeguards, but there is nothing in it which gives it a sanctity above and before constitutions themselves. Much might be said in favor of the view that the privilege was guaranteed against state impairment as a privilege and immunity of National citizenship, but, as has been shown, the decisions of this court have foreclosed that view. There seems to be no reason whatever, however, for straining the meaning of due process of law to include this privilege within it, because, perhaps, we may think it of great value. The States had guarded the privilege to the satisfaction of their own people up to the adoption of the Fourteenth Amendment. No reason is perceived why they cannot continue to do so. The power of their people ought, not to be fettered, their sense of responsibility lessened, and their capacity for sober and restrained self-government weakened by forced construction of the Federal Constitution. . . .” 211 U. S., at 113-114.
Hence, if any “constitutional privilege against self-incrimination” has here been made a “ ‘phrase without reality’ ” it can only have been a state privilege which this Court does not have jurisdiction to protect.
“The privilege against self-incrimination may be withdrawn and the accused put upon the stand as a witness for the state.” 291 U. S., at 105.
“California follows Anglo-American legal tradition in excusing defendants in criminal prosecutions from compulsory testimony. . . . That is a matter of legal policy and not because of the requirements of due process under the Fourteenth Amendment.” 332 U. S., at 54-55.
Of course it is not alone the early beginning of the practice of judicial inquiry into attorney practices which is significant upon the reasonableness of what transpired here. Rather it is the long life of that mode of procedure which bears upon that issue, in much the same way that a strong consensus of views in the States is relevant to a finding of fundamental unfairness. What is significant is that the practice we are now concerned with has survived the centuries which have seen the fall of all those iniquitous standards of which we are reminded, and which, incidentally, would be equally unconstitutional today if applied after a full criminal-type investigation and trial. While recognizing that the test was not exclusive, this Court stated many years ago:
“First. What is due process of law may be ascertained by an examination of those settled usages and modes of proceedings existing in the common and statute law of England before the emigration of our ancestors, and shown not to have been unsuited to their civil and political condition by having been acted on by them after the settlement of this country. This test was adopted by the court, speaking through Mr. Justice Curtis, in Murray v. Hoboken Land Co., 18 How. 272, 280 . . . .” Twining v. New Jersey, supra, at 100.
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 Warren
delivered the opinion of the Court.
In this case we are called upon again to interpret § 8 (d) of the National Labor Relations Act, as amended. See Mastro Plastics Corp. v. Labor Board, 350 U. S. 270. In particular we are concerned with §8 (d)(4), which provides that a party who wishes to modify or terminate a collective bargaining contract must continue “in full force and effect, without resorting to strike or lockout, all the terms and conditions of the existing contract for a period of sixty days after . . . notice [of his wish to modify or terminate] is given or until the expiration date of such contract, whichever occurs later.” Since § 8 (d) defines the duty to bargain collectively, a violation of § 8 (d) (4) constitutes a refusal to bargain, an unfair labor practice for employers, §8 (a) (5), and unions, § 8 (b)(3). The last sentence of § 8 (d) contains an additional sanction: an employee who strikes within the specified 60-day period loses his status as an employee for the purposes of §§ 8, 9 and 10 of the Act. The sole question presented by the petition for certiorari is:
Whether the requirement of this Section is satisfied where a contract provides for negotiation and adoption of modifications at an intermediate date during its term, and a strike in support of modification demands occurs after the date on which such modifications may become effective — and after the 60-day notice period has elapsed — but prior to the terminal date of the contract.
We are told by the Solicitor General that the question is of major importance in the negotiation and administration of hundreds of collective bargaining agreements throughout the country; that there is a decided trend among unions and employers to execute contracts of longer duration than formerly and to include provisions for reopening to negotiate changes during the contract term. Because of the importance of the question, we granted certiorari, 350 U. S. 986, to review a decision of the Court of Appeals for the Eighth Circuit to the effect that § 8 (d) (4) bans strikes to obtain modifications of a contract until the contract by its terms or by the action of the parties has terminated.
On October 23, 1950, respondent Lion Oil Co. and the Oil Workers International Union, CIO, entered into a contract which provided:
“This agreement shall remain in full force and effect for the period beginning October 23, 1950, and ending October 23, 1951, and thereafter until canceled in the manner hereinafter in this Article provided.
“This agreement may be canceled and terminated by the Company or the Union as of a date subsequent to October 23, 1951, by compliance with the following procedure:
“(a) If either party to this agreement desires to amend the terms of this agreement, it shall notify the other party in writing of its desire to that effect, by registered mail. No such notice shall be given prior to August 24, 1951. Within the period of 60 days, immediately following the date of the receipt of said notice by the party to which notice is so delivered, the Company and the Union shall attempt to agree as to the desired amendments to this agreement.
“(b) If an agreement with respect to amendment of this agreement has not been reached within the 60-day period mentioned in the sub-section immediately preceding, either party may terminate this agreement thereafter upon not less than sixty days’ written notice to the other. Any such notice of termination shall state the date upon which the termination of this agreement shall be effective.”
On August 24, 1951, the union served written notice on the company of its desire to modify the contract. Negotiations began on the contractual changes proposed by the union. The union members voted for a strike on February 14, 1952, but the strike, thrice postponed as negotiations continued, did not actually begin until April 30, 1952. The union never gave notice to terminate the contract as contemplated by the quoted contractual provision. Therefore, at all relevant times a collective bargaining agreement was in effect. On August 3, a new contract was executed, and the strikers began to return to work the following day. Certain actions of the company during the strike were the basis of unfair labor practice charges by the union upon which a complaint issued.
The Labor Board found that the company was guilty of unfair labor practices under §8 (a)(1), (3) and (5) of the Act. The company defended on the ground that the strike, because it occurred while the contract was in effect, was in violation of § 8 (d) (4). A majority of the Board rejected this defense, holding that
“The term 'expiration date’ as used in Section 8 (d)(4) . . . has a twofold meaning; it connotes not only the terminal date of a bargaining contract, but also an agreed date in the course of its existence when the parties can effect changes in its provisions.”
The Board held that since, under the contract in dispute, October 23, 1951, was such an “agreed date,” the notice given August 24 followed by a wait of more than 60 days satisfied the statute. The company was ordered to cease and desist and, affirmatively, to make whole employees found to have been discriminated against. 109 N. L. R. B. 680, 683.
On the company’s petition for review, the Court of Appeals set aside the Board’s order. 221 F. 2d 231. The court held that the “expiration date” of the contract was the date on which all rights and obligations under it would cease; that the second notice required to bring about this termination not having been given, the strike violated § 8 (d) (4) and the strikers therefore lost their status as employees entitled to the protection of the Act.
In Mastro Plastics Corp. v. Labor Board, supra, we had before us another provision of §8(d). What we said there in ruling out a narrowly literal construction of the words of the statute is equally apropos here. “If the above words are read in complete isolation from their context in the Act, such an interpretation is possible. However, Tn expounding a statute, we must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy.’ United States v. Boisdoré's Heirs, 8 How. 113, 122.” 350 U. S., at 285. Moreover, in Mastro Plastics we cautioned against accepting a construction that “would produce incongruous results.” Id., at 286.
That §8 (d)(4) is susceptible of various interpretations is apparent when § 8 (d) is read as a whole. Its ambiguity was recognized by the Joint Committee of Congress created by the very act of which § 8 (d) was a part to study the operation of the federal labor laws. Members of the National Labor Relations Board, the agency specially charged by Congress with effectuating the purposes of the national labor legislation, have expressed divergent views on the proper construction of § 8 (d) (4); none of them has taken the position adopted by the court below. In the face of this ambiguity it will not do simply to say Congress could' have made itself clearer and automatically equate' the phrase “expiration date” only with the date when a contract comes to an end.
We find our guide to the general context of the statute in Mastro Plastics. In that case we recognized a “dual purpose” in the Taft-Hartley Act — to substitute collective bargaining for economic warfare and to protect the right of employees to engage in concerted activities for their own benefit. 350 U. S., at 284. A construction which serves neither of these aims is to be avoided unless the words Congress has chosen clearly compel it. The restriction on employees’ concerted activities which would result from the construction placed upon § 8 (d) (4) by the Court of Appeals is obvious. Too, we think it would discourage the development of long-term bargaining relationships. Unions would be wary of entering into long-term contracts with machinery for reopening them for modification from time to time, if they thought the right to strike would be denied them for the entire term of such a contract, though they imposed no such limitations on themselves.
We do not believe that the language used by Congress requires any such result. Section 8 (d)(1) provides that no party to an existing collective bargaining contract “shall terminate or modify such contract, unless the party desiring such termination or modification — (1) serves a written notice upon the other party to the contract of the proposed termination or modification sixty days prior to the expiration date thereof . . . .” The phrase “expiration date” is repeated in §8 (d)(1) and again in the “whichever occurs later” clause of § 8 (d) (4) upon which this case turns. The use of the three words “termination,” “modification” and “expiration” is significant. We conceive that a notice of desired modification would typically be served in advance of the date when the contract by its own terms was subject to modification. Notice of desired termination would ordinarily precede the date when the contract would come to an end by its terms or would be automatically renewed in the absence of notice to terminate. Therefore we conclude that Congress meant by “expiration date” in § 8 (d) (1) to encompass both situations, and the same phrase in § 8 (d) (4) must carry the same meaning. “Expiration” has no such fixed and settled meaning as to make this an unduly strained reading.
Our conclusion is buttressed by a provision of § 8 (d) which was added by the Conference Committee.
“[T]he duties . . . imposed [by subsections (2), (3) and (4)] shall not be construed as requiring either party to discuss or agree to any modification of the terms and conditions contained in a contract for a fixed period, if such modification is to become effective before such terms and conditions can be reopened under the provisions of the contract.”
The negative implication seems clear: Congress recognized a duty to bargain over modifications when the contract itself contemplates such bargaining. It would be anomalous for Congress to recognize such a duty and at the same time deprive the union of the strike threat which, together with “the occasional strike itself, is the force depended upon to facilitate arriving at satisfactory settlements.”
Although a 1948 committee report is no part of the legislative history of a statute enacted in 1947, we note that the Joint Committee on Labor-Management Relations, made up of members of the Congress which passed the Taft-Hartley Act, in its final report reached the same conclusion we do:
“Reading section 8 (d) as a whole seems to lead to the conclusion that the act permits a strike, after a 60-day notice, in the middle of a contract which authorizes a reopening on wages. Use of the words ‘or modify’ and ‘or modification’ in the proviso, and use of ‘or modification’ in section 8 (d)(1), and the statement in the final paragraph of the section that the parties are not required to agree to any modification effective before the contract may be reopened under its terms, all seem to contemplate the right of either party to insist on changes in the contract if they have so provided. The right of the union would be an empty one without the right to strike after a 60-day notice.”
The contemporary legislative history manifests no real recognition of the problem before us. A reading of the committee reports and the floor debates alone could well lead to the conclusion that both the sponsors and the opponents of the bill saw in § 8 (d) (4) no more than a means for preventing “quickie” strikes by requiring a “cooling-off” period which would not in any circumstances exceed 60 days. But the language used in the statute goes beyond this limited purpose. Significance must be given to the clause, “or until the expiration date of such contract, whichever occurs later.” We believe our construction gives meaning to the congressional language which accords with the general purpose of the Act.
Applying that construction to the facts of this case, we hold that the notice and waiting requirements of § 8 (d) were fully satisfied. October 23, 1951, was the first date upon which- the contract by its terms was subject to amendment. Notice of proposed amendments was served 60 days in advance. The strike did not occur until long afterward. The fact that on October 23 the contract became terminable upon further notice by either party is immaterial. One thing the most authoritative legislative gloss on § 8 (d), the report of the Senate Committee, makes clear is that the statutory notice requirement operates wholly independently of whatever notice requirement the parties have fixed for themselves. The situation here is not different, so far as the applicability of the statute is concerned, from that of a fixed-term contract with a clause providing for reopening at some specific time.
Nor can we accept respondents' alternative contention that, even apart from § 8 (d), the strike was in breach of contract and the strikers were for that reason not entitled to relief at the hand of the Board. Respondents rely upon Labor Board v. Sands Mfg. Co., 306 U. S. 332. In Sands, as in this case, the contract did not contain an express no-strike clause. Employees there refused in the course of the contract to continue work “in accordance with their contract.” Id., at 344. The refusal occurred midway in a fixed-term contract which did not provide for modifications during its term. This Court sustained the propriety of the employer’s action in discharging the employees. Here the strike occurred at a time when the parties were bargaining over modifications after notice and in accordance with the terms of the contract. Where there has been no express waiver of the right to strike, a waiver of the right during such a period is not to be inferred. We do not believe that the two-phase provision for terminating this contract means that it was not within the contemplation of the parties that economic weapons might be used to support demands for modification before the notice to terminate was given.
The judgment below is reversed and the case remanded for proceedings in conformity with this opinion.
Reversed and remanded.
Mr. Justice Brennan took no part in the consideration or decision of this case.
“Sec. 8. . . .
“(d) For the purposes of this section, to bargain collectively is the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement, or any question arising thereunder, and the execution of a written contract incorporating any agreement reached if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a concession: Provided, That where there is in effect a collective-bargaining contract covering employees in an industry affecting commerce, the duty to bargain collectively shall also mean that no party to such contract shall terminate or modify such contract, unless the party desiring such termination or modification—
“(1) serves a written notice upon the other party to the contract of the proposed termination or modification sixty days prior to the expiration date thereof, or in the event such contract contains no expiration date, sixty days prior to the time it is proposed to make such termination or modification;
“ (2) offers to meet and confer with the other party for the purpose of negotiating a new contract or a contract containing the proposed modification;
"(3) notifies the Federal Mediation and Conciliation Service within thirty days after such notice of the existence of a dispute, and simultaneously therewith notifies any State or Territorial agency established to mediate and conciliate disputes within the State or Territory where the dispute occurred, provided no agreement has been reached by that time; and
“(4) continues in full force and effect, without resorting to strike or lock-out, all the terms and conditions of the existing contract for a period of sixty days after such notice is given or until the expiration date of such contract, whichever occurs later:
The duties imposed upon employers, employees, and labor organizations by paragraphs (2), (3), and (4) shall become inapplicable upon an intervening certification of the Board, under which the labor organization or individual, which is a party to the contract, has been superseded as or ceased to be the representative of the employees subject to the provisions of section 9 (a), and the duties so imposed shall not be construed as requiring either party to discuss or agree to any modification of the terms and conditions contained in a contract for a fixed period, if such modification is to become effective before such terms and conditions can be reopened under the provisions of the contract. Any employee who engages in a strike within the sixty-day period specified in this subsection shall lose his status as an employee of the employer engaged in the particular labor dispute, for the purposes of sections 8, 9, and 10 of this Act, as amended, but such loss of status for such employee shall terminate if and when he is reemployed by such employer." 61 Stat. 140, 142-143, 29 U. S. C. § 158 (d).
BNA, Collective Bargaining Negotiations and Contract Service, 36:301.
Copies of the notice were sent to the Federal Mediation and Conciliation Service and to the Arkansas Labor Commissioner to comply with § 8 (d) (2).
The only other case in the Courts of Appeals involving the question presented here is Local No. 3, United Packinghouse Workers v. Labor Board, 210 F. 2d 325, cert. denied, 348 U. S. 822, also decided by the Eighth Circuit. The court there construed § 8 (d) (4) as it did here, although on its facts the decision is reconcilable with the Board’s construction of the section in this case.
Joint Committee on Labor-Management Relations, Final Report, S. Rep. No. 986, Pt. 3, 80th Cong., 2d Sess. 62-63.
The Board’s original view in Wilson & Co., 89 N. L. R. B. 310, was that § 8 (d) permitted strikes in support of contract changes any time after 60 days’ notice. Member Peterson, concurring specially in the present case, adhered to that view. ' Member Murdock dissented on the same ground on which he had concurred specially in Wilson & Co., namely, that § 8 (d) applies only during the period around the termination of a contract.
Cf. § 13 of the Act: “Nothing in this Act, except as specifically provided fo.r herein, shall be construed so as either to interfere with or impede or diminish in any way the right to strike, or to affect the limitations or qualifications on that right.” 61 Stat. 151, 29 ü. S. C. §163.
H. R. Conf. Rep. No. 510, 80th Cong., 1st Sess. 35.
Subcommittee on Labor and Labor-Management Relations, Factors in Successful Collective Bargaining, S. Rep. under S. Res. 71, 82d Cong., 1st Sess. 7 (Committee Print).
S. Rep. No. 986, Pt. 3, 80th Cong., 2d Sess. 62. In 1949 Senator Taft, who was a member of the Joint Committee, introduced a clarifying amendment to § 8 (d). See S. Rep. No. 99, Pt. 2, 81st Cong., 1st Sess. 42 (minority report). The amendment, along with a group of others, passed the Senate, 95 Cong. Rec. 8717, but did not become law.
See S. Rep. No. 105, 80th Cong., 1st Sess. 24; id,., Pt. 2, pp. 21-22; H. R. Conf. Rep. No. 510, 80th Cong., 1st Sess. 34-35. See also 93 Cong. Rec. 3835, 3839, 4036, 4904-4905, 5005, 5014, 6385, 6389, 6444, 6503-6504, 7530.
The minority members of the Senate Committee which reported out the bill containing § 8 (d) did say that the effect of it was to incorporate no-strike clauses into labor contracts “by legislative fiat.” The context, however, makes it tolerably clear that they were referring to a ban on strikes during the 60-day notice period. S. Rep. No. 105, Pt. 2, 80th Cong., 1st Sess. 22.
Section 8 (d) originated in the Senate. The Committee said, “It should be noted that this section [§ 8 (d)] does not render inoperative the obligation to conform to notice provisions for longer periods, if the collective agreement so provides. Failure to give such notice, however, does not become an unfair labor practice if the 60-day provision is complied with.” S. Rep. No. 105, 80th Cong., 1st Sess. 24.
A no-strike clause was one of the company’s demands during the negotiations in 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:
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G
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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 1911 United States Senator Augustus O. Bacon executed a will that devised to the Mayor and Council of the City of Macon, Georgia, a tract of land which, after the death of the Senator’s wife and daughters, was to be used as “a park and pleasure ground” for white people only, the Senator stating in the will that while he had only the kindest feeling for the Negroes he was of the opinion that “in their social relations the two races (white and negro) should be forever separate.” The will provided that the park should be under the control of a Board of Managers of seven persons, all of whom were to be white. The city kept the park segregated for some years but in time let Negroes use it, taking the position that the park was a public facility which it could not constitutionally manage and maintain on a segregated basis.
Thereupon, individual members of the Board of Managers of the park brought this suit in a state court against the City of Macon and the trustees of certain residuary beneficiaries of Senator Bacon’s estate, asking that the city be removed as trustee and that the court appoint new trustees, to whom title to the park would be transferred. The city answered, alleging it could not legally enforce racial segregation in the park. The other defendants admitted the allegation and requested that the city be removed as trustee.
Several Negro citizens of Macon intervened, alleging that the racial limitation was contrary to the laws and public policy of the United States, and asking that the court refuse to appoint private trustees. Thereafter the city resigned as trustee and amended its answer accordingly. Moreover, other heirs of Senator Bacon intervened and they and the defendants other than the city asked for reversion of the trust property to the Bacon estate in the event that the prayer of the petition were denied.
The Georgia court accepted the resignation of the city as trustee and appointed three individuals as new trustees, finding it unnecessary to pass on the other claims of the heirs. On appeal by the Negro intervenors, the Supreme Court of Georgia affirmed, holding that Senator Bacon had the right to give and bequeath his property to a limited class, that charitable trusts are subject to supervision of a court of equity, and that the power to appoint new trustees so that the purpose of the trust would not fail was clear. 220 Ga. 280, 138 S. E. 2d 573. The case is here on a writ of certiorari. 380 U. S. 971.
There are two complementary principles to be reconciled in this case. One is the right of the individual to pick his own associates so as to express his preferences and dislikes, and to fashion his private life by joining such clubs and groups as he chooses. The other is the constitutional ban in the Equal Protection Clause of the Fourteenth Amendment against state-sponsored racial inequality, which of course bars a city from acting as trustee under a private will that serves the racial segregation cause. Pennsylvania v. Board of Trusts, 353 U. S. 230. A private golf club, however, restricted to either Negro or white membership is one expression of freedom of association. But a municipal golf course that serves only one race is state activity indicating a preference on a matter as to which the State must be neutral. What is “private” action and what is “state” action is not always easy to determine. See Burton v. Wilmington Parking Authority, 365 U. S. 715. Conduct that is formally “private” may bec'ome so entwined with governmental policies or so impregnated with a governmental character as to become subject to the constitutional limitations placed upon state action. The action of a city in serving as trustee of property under a private will serving the segregated cause is an obvious example. See Pennsylvania v. Board of Trusts, supra. A town may be privately owned and managed, but that does not necessarily allow the company to treat it as if it were wholly in the private sector. Thus we held in Marsh v. Alabama, 326 U. S. 501, that the exercise of constitutionally protected rights on the public streets of a company town could not be denied by the owner. A State is not justified, we said, in “permitting a corporation to govern a community of citizens so as to restrict their fundamental liberties Id., at 509. We have also held that where a State delegates an aspect of the elective process to private groups, they become subject to the same restraints as the State. Terry v. Adams, 345 U. S. 461. That is to say, when private individuals or groups are endowed by the State with powers or functions governmental in nature, they become agencies or instru-mentalities of the State and subject to its constitutional limitations.
Yet generalizations do not decide concrete cases. “Only by sifting facts and weighing circumstances” (Burton v. Wilmington Parking Authority, supra, at 722) can we determine whether the reach of the Fourteenth Amendment extends to a particular case. 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. Pierce v. Society of Sisters, 268 U. S. 510.
If a testator wanted to leave a school or center for the use of one race only and in no way implicated the State in the supervision, control, or management of that facility, we assume arguendo that no constitutional difficulty would be encountered.
This park, however, is in a different posture. For years it was an integral part of the City of Macon’s activities. From the pleadings we assume it was swept, manicured, watered, patrolled, and maintained by the city as a public facility for whites only, as well as granted tax exemption under Ga. Code Ann. § 92-201. The momentum it acquired as a public facility is certainly not dissipated ipso facto by the appointment of “private” trustees. So far as this record shows, there has been no change in municipal maintenance and concern over this facility. Whether these public characteristics will in time be dissipated is wholly conjectural. If the municipality remains entwined in the management or control of the park, it remains subject to the restraints of the Fourteenth Amendment just as the private utility in Public Utilities Comm’n v. Pollak, 343 U. S. 451, 462, remained subject to the Fifth Amendment because of the surveillance which federal agencies had over its affairs. We only hold that where the tradition of municipal control had become firmly established, we cannot take judicial notice that the mere substitution of trustees instantly transferred this park from the public to the private sector.
This conclusion is buttressed by the nature of the service rendered the community by a park. The service rendered even by a private park of this character is municipal in nature. It is open to every white person, there being no selective element other than race. Golf clubs, social centers, luncheon clubs, schools such as Tuskegee was at least in origin, and other like organizations in the private sector are often racially oriented. A park, on the other hand, is more like a fire department or police department that traditionally serves the community. Mass recreation through the use of parks is plainly in the public domain, Watson v. Memphis, 373 U. S. 526; and state courts that aid private parties to perform that public function on a segregated basis implicate the State in conduct proscribed by the Fourteenth Amendment. Like the streets of the company town in Marsh v. Alabama, supra, the elective process of Terry v. Adams, supra, and the transit system of Public Utilities Comm’n v. Pollak, supra, the predominant character and purpose of this park are municipal.
Under the circumstances of this case, we cannot but conclude that the public character of this park requires that it be treated as a public institution subject to the command of the Fourteenth Amendment, regardless of who now has title under state law. We may fairly assume that had the Georgia courts been of the view that even in private hands the park may not be operated for the public on a segregated basis, the resignation would not have been approved and private trustees appointed. We put the matter that way because on this record we cannot say that the transfer of title per se disentangled the park from segregation under the municipal regime that long controlled it.
Since the judgment below gives effect to that purpose, it must be and is
Reversed.
Mr. Justice White.
As Mr. Justice Black
emphasizes, this case comes to us in the very narrow context of a state court judgment accepting the resignation of a trustee and appointing successor trustees. The lower court judgment does not enjoin the new trustees to comply with the racial restriction in the trust, and there is therefore not presented for decision the question whether, should the trustees fail to exclude Negroes from the park, state judicial enforcement of the racial restriction would constitute discriminatory state action forbidden by the Equal Protection Clause of the Fourteenth Amendment. See Bell v. Maryland, 378 U. S. 226, 328-331 (dissenting opinion). But we do have properly before us, in my opinion, the question of whether the Fourteenth Amendment prohibits the new trustees from voluntarily excluding Negroes. This is so because decision of the state law questions in this case was not independent of that federal question. The city’s resignation, its acceptance by the state courts, and the appointment of new trustees were all based on the premise that the city could not, but private trustees could, obey the racial restriction in the trust without violation of the Federal Constitution. If that premise was incorrect, this Court should vacate the judgment below and remand for further consideration of the state law issues free from the compulsion of an erroneous view of federal law. Missouri ex rel. Southern R. Co. v. Mayfield, 340 U. S. 1, 5; Minnesota v. National Tea Co., 309 U. S. 551; State Tax Comm’n v. Van Cott, 306 U. S. 511.
That the Fourteenth Amendment prohibits operation of the park on a segregated basis so long as the city is trustee is of course not disputed. See cases cited by the majority, ante, n. 1. Whether the successor trustees may themselves operate the park on a segregated basis is the question. The majority holds that they may not. I agree, but for different reasons.
To a large extent the majority grounds its conclusion that exclusion of Negroes from the park after the change in trustees would be state action and thus violative of the Fourteenth Amendment on the existence of prior municipal involvement in the operation of the park.
“The momentum [the park] acquired as a public facility is certainly not dissipated ipso facto by the appointment of ‘private’ trustees. So far as this record shows, there has been no change in municipal maintenance and concern over this facility. Whether these public characteristics will in time be dissipated is wholly conjectural. . . . We only hold that where the tradition of municipal control had become firmly established, we cannot take judicial notice that the mere substitution of trustees instantly transferred this park from the public to the private sector.” Ante, at 301.
It is equally evident that the record does not show continued involvement of the city in the operation of the park — the record is silent on this point. On the contrary, the city’s interest would seem to lead it to cut all ties with the operation of the park. It must be as clear to the city as to this Court that if the city remains “entwined in the management or control of the park, it remains subject to the restraints of the Fourteenth Amendment,” ante, p. 301; and should segregation in the park be barred, the residuary beneficiaries would undoubtedly press their claim that failure of the trust purpose expressed in the racial restriction results in reversion of the park property. It seems unlikely that the city would act so as unnecessarily to jeopardize the continued existence of this centrally located park, which comprises about 100 acres and is one of the city’s largest parks.
That the city’s own interest might lead it to extricate itself at once from operation of the park does not, of course, necessarily mean that it has done so; and I am no more inclined than the majority to resolve this question by conjecture. I refer to possible inferences from the city’s self-interest solely to emphasize that the record affords absolutely no basis for inferring continued involvement of the city in the management and control of the park. What the majority has done is to raise a presumption of one fact by showing the absence of proof of the converse. To postulate in this manner that the city’s involvement has not been dissipated is simply a disguised form of conjecture and, I submit, is an insufficient basis for decision of this case.
I would nevertheless hold that the racial condition in the trust may not be given effect by the new trustees because, in my view, it is incurably tainted by discriminatory state legislation validating such a condition under state law. The state legislation to which I refer is §§ 69-504 and 69-505 of the Georgia Code, which were adopted in 1905, just six years before Senator Bacon’s will was executed. Sections 69-504 and 69-505 make lawful charitable trusts “dedicated in perpetuity to the public use as a park, pleasure ground, or for other public purpose” and provide that “the use of said park, pleasure ground, or other property so conveyed to said municipality [may] be limited to the white race only, or to white women and children only, or to the colored race only, or to colored women and children only, or to any other race, or to the women and children of any other race only . ...”
As this legislation does not compel a trust settlor to condition his grant upon use only by a racially designated class, the State cannot be said to have directly coerced private discrimination. Nevertheless, if the validity of the racial condition in Senator Bacon’s trust would have been in doubt but for the 1905 statute and if the statute removed such doubt only for racial restrictions, leaving the validity of nonracial restrictions still in question, the absence of coercive language in the legislation would not prevent application of the Fourteenth Amendment. For such a statute would depart from a policy of strict neutrality in matters of private discrimination by enlisting the State’s assistance only in aid of racial discrimination and would so involve the State in the private choice as to convert the infected private discrimination into state action subject to the Fourteenth Amendment. Compare Robinson v. Florida, 378 U. S. 153; Lombard v. Louisiana, 373 U. S. 267; Peterson v. City of Greenville, 373 U. S. 244. Although there are no Georgia decisions directly on the point and the question is therefore not free from doubt, the available authorities have led me to conclude that §§ 69-504 and 69-505 did involve the State in the private choice by favoring private racial discrimination over private discrimination based on grounds other than race.
Apart from §§ 69-504 and 69-505, the Georgia statute governing the determination of permissible objects of charitable trusts is § 108-203. This statute “almost copies the statute of 43d Elizabeth,” Newson v. Starke, 46 Ga. 88, 92 (1872), and has the effect of fully adopting in Georgia the common law of charities, Jones v. Habersham, 107 U. S. 174, 180. We may therefore expect general charitable trust principles to be as fully applicable in Georgia as elsewhere in the several States. Under such principles, there is grave doubt concerning whether a charitable trust for a park could be limited to the use of less than the whole public.
In the leading case of Commissioners for Special Purposes of Income Tax v. Pemsel, [1891] A. C. 531, 583, Lord Macnaghten established the classification of charitable trusts that, with some modifications, has since prevailed:
“ ‘Charity’ in its legal sense comprises four principal divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads.”
See also Restatement (Second), Trusts § 368 (1959). A more general test of what is charitable is whether the accomplishment of the trust purpose “is of such social interest to the community as to justify permitting property to be devoted to the purpose in perpetuity.” IV Scott on Trusts § 368, at 2629-2630 (2d ed. 1956). The first three categories identified by Lord Macnaghten designate trust purposes that have long been recognized as beneficial to the community as a whole — whether or not immediate benefit is restricted to a relatively small group — -and that therefore satisfy the general test stated by Professor Scott. See Restatement (Second), Trusts § 374, comment a (1959). But the present trust falls under the fourth category and can therefore be sustained as charitable only because the generality of user beneficiaries establishes that it is beneficial to the community. Otherwise a trust to establish a country club for the use of the residents of the wealthiest part of town would be charitable. Professor Scott states this principle as follows:
“As we have seen, a trust to promote the happiness or well-being of members of the community is charitable, although it is not a trust to relieve poverty, advance education, promote religion or protect health. In such a case, however, the trust must be for the benefit of the members of the community generally and not merely for the benefit of a class of persons.” IV Scott on Trusts § 375.2, at 2715 (2d ed. 1956). (Emphasis added.)
Accord, Trustees of New Castle Common v. Megginson, 1 Boyce 361, 376, 77 A. 565, 571 (Sup. Ct. Del. 1910) (trust for town common was charitable; “[i]t is public, because it relates to all the inhabitants of a particular community and not to any classification of such inhabitants, or to any group thereof separately from the other inhabitants by any distinction of race, creed, social rank, wealth, poverty, occupation, or business . . .”); Restatement, Trusts § 375, comments a and c (1935); Restatement (Second), Trusts § 375, comment.» (1959); see also Bogert on Trusts § 378 (2d ed. 1964). Apart from the present case, no Georgia cases dealing with trusts for general community purposes have been found, see Smith, The Validity of Charitable Gifts in Georgia, 1 Ga. B. J. 16, 26-27 (Feb. 1939), but the available Georgia authorities are consistent with the rule enunciated by Scott. Compare Bramblett v. Trust Co. of Georgia, 182 Ga. 87, 185 S. E. 72 (1936) (trust to establish “home for gentlewomen” not charitable), with Houston v. Mills Memorial Home, 202 Ga. 540, 43 S. E. 2d 680 (1947) (trust for Negro old folks’ home is charitable). On the whole, therefore, I conclude that prior to the 1905 legislation it would have been extremely doubtful whether § 108-203 authorized a trust for park purposes when a portion of the public was to be excluded from the park.
Sections 69-504 and 69-505 clearly permit exclusion of a portion of the public if such exclusion is on racial grounds. At the same time, those sections appear to make nonracial restrictions on the user of a park created by trust even more doubtful. Section 69-504 authorizes the conveyance of land “dedicated in perpetuity to the public use as a park” and also provides that such a conveyance may limit user on racial grounds. The natural construction of this provision would be that it authorizes a trust only for the use of the whole public or for the use of a racially designated subpart of the public, but not for the use of some other portion of the public such as men only or Irish persons only. Such an interpretation follows from the maxim expressio unius est exclusio alterius and from the dedication cases to which the majority refers, ante, at 300-301, n. 3, which indicate that the expression “dedicated in perpetuity to the public use as a park” means dedication to the public as a whole and not some portion of the public. See also Western Union Telegraph Co. v. Georgia R. & Banking Co., 227 F. 276, 285 (D. C. S. D. Ga. 1915). (“‘There can be no dedication, strictly speaking, to private uses, nor even to uses public in their nature, but the enjoyment of which is restricted to a limited part of the public.’ ”) One commentator has suggested that § 69-504 was intended to expand clause 4 of § 108-203, see note 2, supra, i. e., “to enlarge ‘public works’ or ‘public conveniences’ to include public parks or pleasure grounds . . . .” Smith, The Validity of Charitable Gifts in Georgia, 1 Ga. B. J. 16, 27 (Feb. 1939). On that assumption, the sole authority for holding gifts in trust for park purposes to be charitable would be § 69-504, and that section clearly makes nonracial restrictions on use of such parks more doubtful than racial restrictions. Even if § 69-504 is regarded as a clarification of prior law, rather than an addition to it, it has the same effect of casting doubt on the validity of nonracial restrictions.
This case must accordingly be viewed as one where the State has forbidden all private discrimination except racial discrimination. As a result, “the State through its regulations has become involved to such a significant extent” in bringing about the discriminatory provision in Senator Bacon’s trust that the racial restriction “must be held to reflect . . . state policy and therefore to violate the Fourteenth Amendment.” Robinson v. Florida, 378 U. S. 153, 156-157. For the reasons stated, I would vacate the judgment of the Georgia court and remand the case for further proceedings.
Watson v. Memphis, 373 U. S. 526. And see Mayor & City Council of Baltimore v. Dawson, 350 U. S. 877 (beaches and bathhouses) .
Holmes v. City of Atlanta, 350 U. S. 879; New Orleans Park Assn. v. Detiege, 358 U. S. 54.
It is argued that this park was a product of Georgia’s policy to allow charitable trusts of public facilities to be segregated. A Georgia statute permitted any person to grant a municipal corporation land in trust to the public use as a park on a racially segregated basis. Ga. Code Ann. § 69-504. And a companion measure authorized municipal corporations to accept such grants and to enforce the racial limitations. Id., § 69-505. This policy, it is urged, had a “coercive effect” (Lombard v. Louisiana, 373 U. S. 267, 273) implicating Georgia in racial discrimination, for without that legislative pattern for segregation a testator would have had to travel an uncertain course to reach that end. Before § 69-504 was enacted in 1905, an attempt to establish a trust such as this would have faced numerous difficulties. The pre-1905 statutory law did not expressly include parks as a proper subject of charitable trusts, although it was specific in other regards. See Ga. Code §4008 (1895). And Georgia’s public parks were conceived of as “dedicated” commons with an easement in favor of the general public. See Mayor & Council of Macon v. Franklin, 12 Ga. 239. The concept of dedication meant that the property was to benefit the public as a whole. Ford v. Harris, 95 Ga. 97, 101, 22 S. E. 144, 145; East Atlanta Land Co. v. Mower, 138 Ga. 380, 388, 75 S. E. 418, 422. It would have posed conceptual difficulties, to say the least, to dedicate land to the public as a whole, at the same time excluding the members of the Negro race. Cf. Brown v. Gunn, 75 Ga. 441, in which this point was disposed of only by finding that, on the particular facts of that case, there was no “dedication.” We think it likely that it was the very difficulties discussed here that § 69-504 was intended to eliminate. We do not, however, reach the question whether the State facilitated, through this legislative action, the establishment of segregated parks.
Ala. Laws 1880-1881, pp. 395-396; Ala. Laws, 1882-1883, pp. 392-393.
“69-504. Gifts for 'public parks or pleasure grounds. — Any person may, by appropriate conveyance, devise, give, or grant to any municipal corporation of this State, in fee simple or in trust, or to other persons as trustees, lands by said conveyance dedicated in perpetuity to the public use as a park, pleasure ground, or for other public purpose, and in said conveyance, by appropriate limitations and conditions, provide that the use of said park, pleasure ground, or other property so conveyed to said municipality shall be limited to the white race only, or to white women and children only, or to the colored race only, or to colored women and children only, or to any other race, or to the women and children of any other race only, that may be designated by said devisor or grantor; and any person may also, by such conveyance, devise, give, or grant in perpetuity to such corporations or persons other property, real or personal, for the development, improvement, and maintenance of said property.
“69-505. Municipality authorized to accept. — Any municipal corporation, or other persons natural or artificial, as trustees, to whom such devise, gift, or grant is made, may accept the same in behalf of and for the benefit of the class of persons named in the conveyance, and for their exclusive use and enjoyment; with the right to the municipality or trustees to improve, embellish, and ornament the land so granted as a public park, or for other public use as herein specified, and every municipal corporation to which such conveyance shall be made shall have power, by appropriate police provision, to protect the class of persons for whose benefit the devise or grant is made, in the exclusive used [sic] and enjoyment thereof.” Ga. Code Ann. §§69-504 and 69-505 (1957).
“108-203. Subjects of charity. — The following subjects are proper matters of charity for the jurisdiction of equity:
“1. Relief of aged, impotent, diseased, or poor people.
“2.'Every educational purpose.
“3. Religious instruction or worship.
“4. Construction or repair of public works, or highways, or other public conveniences.
“5. Promotion of any craft or persons engaging therein.
“6. Redemption or relief of prisoners or captives.
“7. Improvement or repair of cemeteries or tombstones.
“8. Other similar subjects, having for their object the relief of human suffering or the promotion of human civilization.” Ga. Code Ann. §108-203 (1959)..
This precise question had been mooted in England a few years before the 1905 Georgia enactment in the case of In re Christchurch Inclosure Act, 38 Ch. D. 520 (1888), aff’d, [1893] A. C. 1, and it appears the English rule may differ from the American rule. The Christchurch Inclosure Act gave tenants in certain cottages the right in a designated common to cut turf for fuel. In the case before the court, it was clear the act had to be given effect in some manner, but the court expressed great difficulty in giving it effect as creating a charitable trust. “For, although the occupiers of these cottages may have been, and perhaps were, poor people, the trust is not for the poor occupiers, but for all the then and future occupiers, whether poor or not. Moreover, the trust is not for the inhabitants of a parish or district, but only for some of such persons.” Id., at 530. Nevertheless, the court felt bound to hold such a trust was charitable on the authority of a dictum by Lord Selborne in Goodman v. Mayor of Saltash, 7 App. Cas. 633, 642 (1882) (trust for a fishery for the use of all “free inhabitants of ancient tenements” held charitable), that “[a] gift subject to a condition or trust for the benefit of the inhabitants of a parish or town, or of any particular class of such inhabitants, is (as I understand the law) a charitable trust ...” Lord Blackburn dissented in Goodman v. Mayor of Saltash, saying that “though there are many cases to the effect that a trust for public purposes, not confined to the poor, may be considered charitable for many purposes, I do not know of any that say that such a trust as is now supposed would be taken out of the rule against perpetuities . . . .” Id., at 662. No doubt Lord Sel-borne’s view of what constituted a trust for the benefit of the public generally was colored by feudal traditions and the long history of royal charters to the burghers, or “free inhabitants” of a town (in fact, the trust in Goodman v. Mayor of Saltash was a fictional one created by supposing the prior existence of such a charter, now lost), while the American rule enunciated by Scott is in keeping with the American democratic tradition, which in turn is reflected by the Georgia cases regarding dedication of land to public use discussed by the majority, ante, at 300-301, n. 3.
The trust in Mills Memorial Home was specifically recognized as charitable by § 108-203 (1) (“Relief of aged, impotent, diseased, or poor people”), see note 2, supra, while the trust in Bramblett would be classifiable as one to promote the happiness or well-being of members of the community at large and would thus be tested by the standard of generality stated by Professor Scott.
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 Brennan
delivered the opinion of the Court.
In these consolidated appeals, we consider whether appellees’ prosecution for burning a United States flag in violation of the Flag Protection Act of 1989 is consistent with the First Amendment. Applying our recent decision in Texas v. Johnson, 491 U. S. 397 (1989), the District Courts held that the Act cannot constitutionally be applied to appellees. We affirm.
I
In No. 89-1433, the United States prosecuted certain appellees for violating the Flag Protection Act of 1989, 103 Stat. 777, 18 U. S. C. § 700 (1988 ed. and Supp. I), by knowingly setting fire to several United States flags on the steps of the United States Capitol while protesting various aspects of the Government’s domestic and foreign policy. In No. 89-1434, the United States prosecuted other appellees for violating the Act by knowingly setting fire to a United States flag in Seattle while protesting the Act’s passage. In each case, the respective appellees moved to dismiss the flag-burning charge on the ground that the Act, both on its face and as applied, violates the First Amendment. Both the United States District Court for the Western District of Washington, 731 F. Supp. 415 (1990), and the United States District Court for the District of Columbia, 731 F. Supp. 1123 (1990), following Johnson, supra, held the Act unconstitutional as applied to appellees and dismissed the charges. The United States appealed both decisions directly to this Court pursuant to 18 U. S. C. § 700(d) (1982 ed., Supp. I). We noted probable jurisdiction and consolidated the two cases. 494 U. S. 1063 (1990).
II
Last Term in Johnson, we held that a Texas statute criminalizing the desecration of venerated objects, including the United States flag, was unconstitutional as applied to an individual who had set such a flag on fire during a political demonstration. The Texas statute provided that “[a] person commits an offense if he intentionally or knowingly desecrates . . . [a] national flag,” where “desecrate” meant to “deface, damage, or otherwise physically mistreat in a way that the actor knows will seriously offend one or more persons likely to observe or discover his action.” Tex. Penal Code Ann. § 42.09 (1989). We first held that Johnson’s flag burning was “conduct 'sufficiently imbued with elements of communication’ to implicate the First Amendment.” 491 U. S., at 406 (citation omitted). We next considered and rejected the State’s contention that, under United States v. O’Brien, 391 U. S. 367 (1968), we ought to apply the deferential standard with which we have reviewed Government regulations of conduct containing both speech and nonspeech elements where “the governmental interest is unrelated to the suppression of free expression.” Id., at 377. We reasoned that the State’s asserted interest “in preserving the flag as a symbol of nationhood and national unity,” was an interest “related ‘to the suppression of free expression’ within the meaning of O’Brien” because the State’s concern with protecting the flag’s symbolic meaning is implicated “only when a person’s treatment of the flag communicates some message.” Johnson, supra, at 410. We therefore subjected the statute to “‘the most exacting scrutiny,”’ 491 U. S., at 412, quoting Boos v. Barry, 485 U. S. 312, 321 (1988), and we concluded that the State’s asserted interests could not justify the infringement on the demonstrator’s First Amendment rights.
After our decision in Johnson, Congress passed the Flag Protection Act of 1989. The Act provides in relevant part:
“(a)(1) Whoever knowingly mutilates, defaces, physically defiles, burns, maintains on the floor or ground, or tramples upon any flag of the United States shall be fined under this title or imprisoned for not more than one year, or both.
“(2) This subsection does not prohibit any conduct consisting of the disposal of a flag when it has become worn or soiled.
“(b) As used in this section, the term ‘flag of the United States’ means any flag of the United States, or any part thereof, made of any substance, of any size, in a form that is commonly displayed.” 18 U. S. C. § 700 (1988 ed., Supp. I).
The Government concedes in these cases, as it must, that appellees’ flag burning constituted expressive conduct, Brief for United States 28; see Johnson, 491 U. S., at 405-406, but invites us to reconsider our rejection in Johnson of the claim that flag burning as a mode of expression, like obscenity or “fighting words,” does not enjoy the full protection of the First Amendment. Cf. Chaplinsky v. New Hampshire, 315 U. S. 568, 572 (1942). This we decline to do. The only remaining question is whether the Flag Protection Act is sufficiently distinct from the Texas statute that it may constitutionally be applied to proscribe appellees’ expressive conduct.
The Government contends that the Flag Protection Act is constitutional because, unlike the statute addressed in Johnson, the Act does not target expressive conduct on the basis of the content of its message. The Government asserts an interest in “protecting] the physical integrity of the flag under all circumstances” in order to safeguard the flag’s identity “‘as the unique and unalloyed symbol of the Nation.’” Brief for United States 28, 29. The Act proscribes conduct (other than disposal) that damages or mistreats a flag, without regard to the actor’s motive, his intended message, or the likely effects of his conduct on onlookers. By contrast, the Texas statute expressly prohibited only those acts of physical flag desecration “that the actor knows will seriously offend” onlookers, and the former federal statute prohibited only those acts of desecration that “cas[t] contempt upon” the flag.
Although the Flag Protection Act contains no explicit content-based limitation on the scope of prohibited conduct, it is nevertheless clear that the Government’s asserted interest is “related ‘to the suppression of free expression,’” 491 U. S., at 410, and concerned with the content of such expression. The Government’s interest in protecting the “physical integrity” of a privately owned flag rests upon a perceived need to preserve the flag’s status as a symbol of our Nation and certain national ideals. But the mere destruction or disfigurement of a particular physical manifestation of the symbol, without more, does not diminish or otherwise affect the symbol itself in any way. For example, the secret destruction of a flag in one’s own basement would not threaten the flag’s recognized meaning. Rather, the Government’s desire to preserve the flag as a symbol for certain national ideals is implicated “only when a person’s treatment of the flag communicates [a] message” to others that is inconsistent with those ideals. Ibid.
Moreover, the precise language of the Act’s prohibitions confirms Congress’ interest in the communicative impact of flag destruction. The Act criminalizes the conduct of anyone who “knowingly mutilates, defaces, physically defiles, burns, maintains on the floor or ground, or tramples upon any flag.” 18 U. S. C. § 700(a)(1) (1988 ed., Supp. I). Each of the specified terms—with the possible exception of “burns”—unmistakably connotes disrespectful treatment of the flag and suggests a focus on those acts likely to damage the flag’s symbolic value. And the explicit exemption in § 700(a)(2) for disposal of “worn or soiled” flags protects certain acts traditionally associated with patriotic respect for the flag.
As we explained in Johnson, supra, at 416-417: “[I]f we were to hold that a State may forbid flag burning wherever it is likely to endanger the flag’s symbolic role, but allow it wherever burning a flag promotes that role—as where, for example, a person ceremoniously burns a dirty flag—we would be . . . permitting a State to ‘prescribe what shall be orthodox’ by saying that one may burn the flag to convey one’s attitude toward it and its referents only if one does not endanger the flag’s representation of nationhood and national unity.” Although Congress cast the Flag Protection Act of 1989 in somewhat broader terms than the Texas statute at issue in Johnson, the Act still suffers from the same fundamental flaw: It suppresses expression out of concern for its likely communicative impact. Despite the Act’s wider scope, its restriction on expression cannot be “‘justified without reference to the content of the regulated speech.’” Boos, 485 U. S., at 320 (emphasis omitted) (citation omitted); see Spence v. Washington, 418 U. S. 405, 414, nn. 8, 9 (1974) (State’s interest in protecting flag’s symbolic value is directly related to suppression of expression and thus O’Brien test is inapplicable even where statute declared “simply . . . that nothing may be affixed to or superimposed on a United States flag”). The Act therefore must be subjected to “the most exacting scrutiny,” Boos, supra, at 321, and for the reasons stated in Johnson, 491 U. S., at 413-415, the Government’s interest cannot justify its infringement on First Amendment rights. We decline the Government’s invitation to reassess this conclusion in light of Congress’ recent recognition of a purported “national consensus” favoring a prohibition on flag burning. Brief for United States 27. Even assuming such a consensus exists, any suggestion that the Government’s interest in suppressing speech becomes more weighty as popular opposition to that speech grows is foreign to the First Amendment.
Ill
“‘National unity as an end which officials may foster by persuasion and example is not in question.’” Johnson, supra, at 418, quoting West Virginia Board of Education v. Barnette, 319 U. S. 624, 640 (1943). Government may create national symbols, promote them, and encourage their respectful treatment. But the Flag Protection Act of 1989 goes well beyond this by criminally proscribing expressive conduct because of its likely communicative impact.
We are aware that desecration of the flag is deeply offensive to many. But the same might be said, for example, of virulent ethnic and religious epithets, see Terminiello v. Chicago, 337 U. S. 1 (1949), vulgar repudiations of the draft, see Cohen v. California, 403 U. S. 15 (1971), and scurrilous caricatures, see Hustler Magazine, Inc. v. Falwell, 485 U. S. 46 (1988). “If there is a bedrock principle underlying the First Amendment, it is that the Government may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable.” Johnson, supra, at 414. Punishing desecration of the flag dilutes the very freedom that makes this emblem so revered, and worth revering. The judgments of the District Courts are
Affirmed.
The Seattle appellees were also charged with causing willful injury to federal property in violation of 18 U. S. C. §§ 1361 and 1362. This charge remains pending before the District Court, and nothing in today’s decision affects the constitutionality of this prosecution. See n. 5, infra.
“(1) An appeal may be taken directly to the Supreme Court of the United States from any interlocutory or final judgment, decree, or order issued by a United States district court ruling upon the constitutionality of subsection (a).
“(2) The Supreme Court shall, if it has not previously ruled on the question, accept jurisdiction over the appeal and advance on the docket and expedite to the greatest extent possible.” 18 U. S. C. § 700(d) (1988 ed., Supp. I).
The Act replaced the then-existing federal flag-burning statute, which Congress perceived might be unconstitutional in light of Johnson. Former 18 U. S. C. § 700(a) prohibited “knowingly casting] contempt upon any flag of the United States by publicly mutilating, defacing, defiling, burning, or trampling upon it.”
We deal here with concededly political speech and have no occasion to pass on the validity of laws regulating commercial exploitation of the image of the United States flag. See Texas v. Johnson, 491 U. S. 397, 415-416, n. 10 (1989); cf. Halter v. Nebraska, 205 U. S. 34 (1907).
Today’s decision does not affect the extent to which the Government’s interest in protecting publicly owned flags might justify special measures on their behalf. See Spence v. Washington, 418 U. S. 405, 408-409 (1974); cf. Johnson, supra, at 412-413, n. 8.
Aside from the flag’s association with particular ideals, at some irreducible level the flag is emblematic of the Nation as a sovereign entity. The Government’s amici assert that it has a legitimate nonspeech-related interest in safeguarding this “eminently practical legal aspect of the flag, as an incident of sovereignty.” Brief for the Speaker and Leadership Group of the U. S. House of Representatives as Amici Curiae 25. This interest has firm historical roots: “While the symbolic role of the flag is now well-established, the flag was an important incident of sovereignty before it was used for symbolic purposes by patriots and others. When the nation’s founders first determined to adopt a national flag, they intended to serve specific functions relating to our status as a sovereign nation.” Id., at 9; see id., at 5 (noting “flag’s ‘historic function’ for such sovereign purposes as marking ‘our national presence in schools, public buildings, battleships and airplanes’ ”) (citation omitted).
We concede that the Government has a legitimate interest in preserving the flag’s function as an “incident of sovereignty,” though we need not address today the extent to which this interest may justify any laws regulating conduct that would thwart this core function, as might a commercial or like appropriation of the image of the United States flag. Amici do not, and cannot, explain how a statute that penalizes anyone who knowingly burns, mutilates, or defiles any American flag is designed to advance this asserted interest in maintaining the association between the flag and the Nation. Burning a flag does not threaten to interfere with this association in any way; indeed, the flag burner’s message depends in part on the viewer’s ability to make this very association.
For example, “defile” is defined as “to make filthy; to corrupt the purity or perfection of; to rob of chastity; to make ceremonially unclean; tarnish, dishonor.” Webster’s Third New International Dictionary 592 (1976). “Trample” is defined as “to tread heavily so as to bruise, crush, or injure; to inflict injury or destruction: have a contemptuous or ruthless attitude.” Id., at 2425.
The Act also does not prohibit flying a flag in a storm or other conduct that threatens the physical integrity of the flag, albeit in an indirect manner unlikely to communicate disrespect.
See, e. g., 36 U. S. C. §§173-177 (suggesting manner in which flag ought to be displayed).
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.
PER CURIAM.
Under Simmons v. South Carolina, 512 U.S. 154, 114 S.Ct. 2187, 129 L.Ed.2d 133 (1994), and its progeny, "where a capital defendant's future dangerousness is at issue, and the only sentencing alternative to death available to the jury is life imprisonment without possibility of parole," the Due Process Clause "entitles the defendant 'to inform the jury of [his] parole ineligibility, either by a jury instruction or in arguments by counsel.' " Shafer v. South Carolina, 532 U.S. 36, 39, 121 S.Ct. 1263, 149 L.Ed.2d 178 (2001) (quoting Ramdass v. Angelone, 530 U.S. 156, 165, 120 S.Ct. 2113, 147 L.Ed.2d 125 (2000) (plurality opinion)). In the decision below, the Arizona Supreme Court found that the State had put petitioner Shawn Patrick Lynch's future dangerousness at issue during his capital sentencing proceeding and acknowledged that Lynch's only alternative sentence to death was life imprisonment without parole. 238 Ariz. 84, 103, 357 P.3d 119, 138 (2015). But the court nonetheless concluded that Lynch had no right to inform the jury of his parole ineligibility. Ibid. The judgment is reversed.
A jury convicted Lynch of first-degree murder, kidnapping, armed robbery, and burglary for the 2001 killing of James Panzarella. The State sought the death penalty. Before Lynch's penalty phase trial began, Arizona moved to prevent his counsel from informing the jury that the only alternative sentence to death was life without the possibility of parole. App. K to Pet. for Cert. The court granted the motion.
Lynch's first penalty phase jury failed to reach a unanimous verdict. A second jury was convened and sentenced Lynch to death. On appeal, the Arizona Supreme Court vacated the sentence because the jury instructions improperly described Arizona law. The court did not address Lynch's alternative argument that the trial court had violated Simmons . On remand, a third penalty phase jury sentenced Lynch to death.
The Arizona Supreme Court affirmed, this time considering and rejecting Lynch's Simmons claim. The court agreed that, during the third penalty phase, "[t]he State suggested ... that Lynch could be dangerous." 238 Ariz., at 103, 357 P.3d, at 138. The court also recognized that Lynch was parole ineligible: Under Arizona law, "parole is available only to individuals who committed a felony before January 1, 1994," and Lynch committed his crimes in 2001. Ibid. (citing Ariz.Rev.Stat. Ann. § 41-1604.09(I) ). Nevertheless, while "[a]n instruction that parole is not currently available would be correct," the court held that "the failure to give the Simmons instruction was not error." 238 Ariz., at 103, 357 P.3d, at 138.
That conclusion conflicts with this Court's precedents. In Simmons, as here, a capital defendant was ineligible for parole under state law. 512 U.S., at 156, 114 S.Ct. 2187 (plurality opinion). During the penalty phase, the State argued that the jurors should consider the defendant's future dangerousness when determining the proper punishment. Id., at 157, 114 S.Ct. 2187. But the trial court refused to permit defense counsel to tell the jury that the only alternative sentence to death was life without parole. Id., at 157, 160, 114 S.Ct. 2187. The Court reversed, reasoning that due process entitled the defendant to rebut the prosecution's argument that he posed a future danger by informing his sentencing jury that he is parole ineligible. Id., at 161-162, 114 S.Ct. 2187 ; id., at 178, 114 S.Ct. 2187 (O'CONNOR, J., concurring in judgment). The Court's opinions reiterated that holding in Ramdass, Shafer, and Kelly v. South Carolina, 534 U.S. 246, 122 S.Ct. 726, 151 L.Ed.2d 670 (2002).
The Arizona Supreme Court thought Arizona's sentencing law sufficiently different from the others this Court had considered that Simmons did not apply. It relied on the fact that, under state law, Lynch could have received a life sentence that would have made him eligible for "release" after 25 years. 238 Ariz., at 103-104, 357 P.3d, at 138-139 ; § 13-751(A). But under state law, the only kind of release for which Lynch would have been eligible-as the State does not contest-is executive clemency. See Pet. for Cert. 22; 238 Ariz., at 103-104, 357 P.3d, at 138-139. And Simmons expressly rejected the argument that the possibility of clemency diminishes a capital defendant's right to inform a jury of his parole ineligibility.
There, South Carolina had argued that the defendant need not be allowed to present this information to the jury "because future exigencies," including "commutation [and] clemency," could one day "allow [him] to be released into society." 512 U.S., at 166, 114 S.Ct. 2187 (plurality opinion). The Court disagreed: "To the extent that the State opposes even a simple parole-ineligibility instruction because of hypothetical future developments, the argument has little force." Ibid. ; id., at 177, 114 S.Ct. 2187 (opinion of O'CONNOR, J.) (explaining that the defendant had a right "to bring his parole ineligibility to the jury's attention" and that the State could respond with "truthful information regarding the availability of commutation, pardon, and the like").
The State responds that Simmons " 'applies only to instances where, as a legal matter, there is no possibility of parole.' " Brief in Opposition 11 (quoting Ramdass, 530 U.S., at 169, 120 S.Ct. 2113 (plurality opinion)). Notwithstanding the fact that Arizona law currently prevents all felons who committed their offenses after 1993 from obtaining parole, 238 Ariz., at 103, 357 P.3d, at 138, Arizona reasons that "nothing prevents the legislature from creating a parole system in the future for which [Lynch] would have been eligible had the court sentenced him to life with the possibility of release after 25 years." Brief in Opposition 12.
This Court's precedents also foreclose that argument. Simmons said that the potential for future "legislative reform" could not justify refusing a parole-ineligibility instruction. 512 U.S., at 166, 114 S.Ct. 2187 (plurality opinion). If it were otherwise, a State could always argue that its legislature might pass a law rendering the defendant parole eligible. Accordingly, as this Court later explained, "the dispositive fact in Simmons was that the defendant conclusively established his parole ineligibility under state law at the time of his trial." Ramdass, supra, at 171, 120 S.Ct. 2113 (plurality opinion). In this case, the Arizona Supreme Court confirmed that parole was unavailable to Lynch under its law. Simmons and its progeny establish Lynch's right to inform his jury of that fact.
The petition for writ of certiorari and the motion for leave to proceed in forma pauperis are granted. The judgment of the Arizona Supreme Court is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
Justice THOMAS, with whom Justice ALITO joins, dissenting.
Petitioner Shawn Patrick Lynch and his co-conspirator, Michael Sehwani, met their victim, James Panzarella, at a Scottsdale bar on March 24, 2001. The three went back to Panzarella's house early the next morning. Around 5 a.m., Sehwani called an escort service. The escort and her bodyguard arrived soon after. Sehwani paid her $300 with two checks from Panzarella's checkbook after spending an hour with her in the bedroom. Lynch and Sehwani then left the house with Panzarella's credit and debit cards and embarked on a spending spree.
The afternoon of March 25, someone found Panzarella's body bound to a metal chair in his kitchen. His throat was slit. Blood surrounded him on the tile floor. The house was in disarray. Police discovered a hunting knife in the bedroom. A knife was also missing from the kitchen's knifeblock. And there were some receipts from Lynch and Sehwani's spending spree.
Police found Lynch and Sehwani at a motel two days after the killing. They had spent the days with Panzarella's credit and debit cards buying cigarettes, matches, gas, clothing, and Everlast shoes, renting movies at one of the motels where they spent an afternoon, and making cash withdrawals. When police found the pair, Sehwani wore the Everlast shoes, and Lynch's shoes were stained with Panzarella's blood. A sweater, also stained with his blood, was in the back seat of their truck, as were Panzarella's car keys.
A jury convicted Lynch of first-degree murder, kidnaping, armed robbery, and burglary, and ultimately sentenced him to death. But today, the Court decides that sentence is no good because the state trial court prohibited the parties from telling the jury that Arizona had abolished parole. Ante, at 1818 - 1819; see Ariz.Rev.Stat. Ann. § 41-1604.09(I) (1999). The Court holds that this limitation on Lynch's sentencing proceeding violated Simmons v. South Carolina, 512 U.S. 154, 114 S.Ct. 2187, 129 L.Ed.2d 133 (1994). Under Simmons, "[w]here the State puts the defendant's future dangerousness in issue, and the only available alternative sentence to death is life imprisonment without possibility of parole, due process entitles the defendant to inform the capital sentencing jury-by either argument or instruction-that he is parole ineligible." Id., at 178, 114 S.Ct. 2187 (O'CONNOR, J., concurring in judgment).
Today's summary reversal perpetuates the Court's error in Simmons . See Kelly v. South Carolina, 534 U.S. 246, 262, 122 S.Ct. 726, 151 L.Ed.2d 670 (2002) (THOMAS, J., dissenting); Shafer v. South Carolina, 532 U.S. 36, 58, 121 S.Ct. 1263, 149 L.Ed.2d 178 (2001) (THOMAS, J., dissenting). As in Simmons, it is the "sheer depravity of [the defendant's] crimes, rather than any specific fear for the future, which induced the ... jury to conclude that the death penalty was justice." 512 U.S., at 181, 114 S.Ct. 2187 (SCALIA, J., dissenting). In Simmons, for example, the defendant beat and raped three elderly women-one of them his own grandmother-before brutally killing a fourth. See ibid. The notion that a jury's decision to impose a death sentence "would have been altered by information on the current state of the law concerning parole (which could of course be amended) is ... farfetched," to say the least. Id., at 184, 114 S.Ct. 2187.
Worse, today's decision imposes a magic-words requirement. Unlike Simmons, in which there was "no instruction at all" about the meaning of life imprisonment except that the term should be construed according to its " '[plain] and ordinary meaning,' " id., at 160, 166, 114 S.Ct. 2187 (plurality opinion), here there was an instruction about the nature of the alternative life sentences that the trial court could impose:
"If your verdict is that the Defendant should be sentenced to death, he will be sentenced to death. If your verdict is that the Defendant should be sentenced to life, he will not be sentenced to death, and the court will sentence him to either life without the possibility of release until at least 25 calendar years in prison are served, or 'natural life,' which means the Defendant would never be released from prison." App. S to Pet. for Cert. 18.
That instruction parallels the Arizona statute governing Lynch's sentencing proceedings. That statute prescribed that defendants not sentenced to death could receive either a life sentence with the possibility of early release or a "natural life" sentence: "If the court does not sentence the defendant to natural life, the defendant shall not be released on any basis until the completion of the service of twenty-five calendar years," but a defendant sentenced to "natural life" will "not be released on any basis for the remainder of the defendant's natural life." Ariz.Rev.Stat. Ann. § 13-703(A) (2001).
Even though the trial court's instruction was a correct recitation of Arizona law, the Court holds that Simmons requires more. The Court laments that (at least for now) Arizona's only form of early release in Arizona is executive clemency. Ante, at 1819. So the Court demands that the Arizona instruction specify that "the possibility of release" does not (at least for now) include parole. Due process, the Court holds, requires the court to tell the jury that if a defendant sentenced to life with the possibility of early release in 25 years were to seek early release today, he would be ineligible for parole under Arizona law. Ante, at 1819 - 1820. Nonsense. The Due Process Clause does not compel such "micromanage[ment of] state sentencing proceedings." Shafer, supra, at 58, 121 S.Ct. 1263 (THOMAS, J., dissenting).
Today's decision-issued without full briefing and argument and based on Simmons, a fractured decision of this Court that did not produce a majority opinion-is a remarkably aggressive use of our power to review the States' highest courts. The trial court accurately told the jury that Lynch could receive a life sentence with or without the possibility of early release, and that should suffice.
I respectfully dissent.
Sehwani ultimately pleaded guilty to first-degree murder and theft and received a sentence of natural life without the possibility of early release plus one year. See 225 Ariz. 27, 33, n. 4, 234 P.3d 595, 601, n. 4 (2010).
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:
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A
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sc_issuearea
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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 Stevens
delivered the opinion of the Court.
Pursuant to a well-publicized plan, a group of lawyers agreed not to represent indigent criminal defendants in the District of Columbia Superior Court until the District of Columbia government increased the lawyers’ compensation. The questions presented are whether the lawyers’ concerted conduct violated §5 of the Federal Trade Commission Act and, if so, whether it was nevertheless protected by the First Amendment to the Constitution.
I — I
The burden of providing competent counsel to indigent defendants in the District of Columbia is substantial. During 1982, court-appointed counsel represented the defendant in approximately 25,000 cases. In the most serious felony cases, representation was generally provided by full-time employees of the District’s Public Defender System (PDS). Less serious felony and misdemeanor cases constituted about 85 percent of the total caseload. In these cases, lawyers in private practice were appointed and compensated pursuant to the District of Columbia Criminal Justice Act (CJA).
Although over 1,200 lawyers have registered for CJA appointments, relatively few actually apply for such work on a regular basis. In 1982, most appointments went to approximately 100 lawyers who are described as “CJA regulars.” These lawyers derive almost all of their income from representing indigents. In 1982, the total fees paid to CJA lawyers amounted to $4,579,572.
In 1974, the District created a Joint Committee on Judicial Administration with authority to establish rates of compensation for CJA lawyers not exceeding the rates established by the federal Criminal Justice Act of 1964. After 1970, the federal Act provided for fees of $30 per hour for court time and $20 per hour for out-of-court time. See 84 Stat. 916, codified at 18 U. S. C. §3006A (1970 ed.). These rates accordingly capped the rates payable to the District’s CJA lawyers, and could not be exceeded absent amendment to either the federal statute or the District Code.
Bar organizations began as early as 1975 to express concern about the low fees paid to CJA lawyers. Beginning in 1982, respondents, the Superior Court Trial Lawyers Association (SCTLA) and its officers, and other bar groups sought to persuade the District to increase CJA rates to at least $35 per hour. Despite what appeared to be uniform support for the bill, it did not pass. It is also true, however, that nothing in the record indicates that the low fees caused any actual shortage of CJA lawyers or denied effective representation to defendants.
In early August 1983, in a meeting with officers of SCTLA, the Mayor expressed his sympathy but firmly indicated that no money was available to fund an increase. The events giving rise to this litigation then ensued.
At an SCTLA meeting, the CJA lawyers voted to form a “strike committee.” The eight members of that committee promptly met and informally agreed “that the only viable way of getting an increase in fees was to stop signing up to take new CJA appointments, and that the boycott should aim for a $45 out-of-court and $55 in-court rate schedule.” In re Superior Court Trial Lawyers Assn., 107 F. T. C. 510, 538 (1986).
On August 11, 1983, about 100 CJA lawyers met and resolved not to accept any new cases after September 6 if legislation providing for an increase in their fees had not passed by that date. Immediately following the meeting, they prepared (and most of them signed) a petition stating:
“We, the undersigned private criminal lawyers practicing in the Superior Court of the District of Columbia, agree that unless we are granted a substantial increase in our hourly rate we will cease accepting new appointments under the Criminal Justice Act.” 272 U. S. App. D. C. 272, 276, 856 F. 2d 226, 230 (1988).
On September 6, 1983, about 90 percent of the CJA regulars refused to accept any new assignments. Thereafter, SCTLA arranged a series of events to attract the attention of the news media and to obtain additional support. These events were well publicized and did engender favorable editorial comment, but the Administrative Law Judge (ALJ) found that “there is no credible evidence that the District’s eventual capitulation to the demands of the CJA lawyers was made in response to public pressure, or, for that matter, that this publicity campaign actually engendered any significant measure of public pressure.” 107 F. T. C., at 543.
As the participating CJA lawyers had anticipated, their refusal to take new assignments had a severe impact on the District’s criminal justice system. The massive flow of new cases did not abate, and the need for prompt investigation and preparation did not ease. As the ALJ found, “there was no one to replace the CJA regulars, and makeshift measures were totally inadequate. A few days after the September 6 deadline, PDS was swamped with cases. The handful of CJA regulars who continued to take cases were soon overloaded. The overall response of the uptown lawyers to the PDS call for help was feeble, reflecting their universal distaste for criminal law, their special aversion for compelled in-digency representation, the near epidemic siege of self-doubt about their ability to handle cases in this field, and their underlying support for the demands of the CJA lawyers. Most of the law student volunteers initially observed the boycott, and later all law student volunteers were limited (as they usually are) to a relatively few minor misdemeanors.” Id., at 544 (footnotes omitted).
Within 10 days, the key figures in the District’s criminal justice system “became convinced that the system was on the brink of collapse because of the refusal of CJA lawyers to take on new cases.” Ibid. On September 15, they hand-delivered a letter to the Mayor describing why the situation was expected to “reach a crisis point” by early the next week and urging the immediate enactment of a bill increasing all CJA rates to $35 per hour. The Mayor promptly met with members of the strike committee and offered to support an immediate temporary increase to the $35 level as well as a subsequent permanent increase to $45 an hour for out-of-court time and $55 for in-court time.
At noon on September 19, 1983, over 100 CJA lawyers attended an SCTLA meeting and voted to accept the $35 offer and end the boycott. The city council’s Judiciary Committee convened at 2 o’clock that afternoon. The committee recommended legislation increasing CJA fees to $35, and the council unanimously passed the bill on September 20. On September 21, the CJA regulars began to accept new assignments and the crisis subsided.
II
The Federal Trade Commission (FTC) filed a complaint against SCTLA and four of its officers (respondents) alleging that they had “entered into an agreement among themselves and with other lawyers to restrain trade by refusing to compete for or accept new appointments under the CJA program beginning on September 6, 1983, unless and until the District of Columbia increased the fees offered under the CJA program.” Id., at 511. The complaint alleged that virtually all of the attorneys who regularly compete for or accept new appointments under the CJA program had joined the agreement. The FTC characterized respondents’ conduct as “a conspiracy to fix prices and to conduct a boycott” and concluded that they were engaged in “unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act.”
After a 3-week hearing, the ALJ found that the facts alleged in the complaint had been proved, and rejected each of respondents’ three legal defenses — that the boycott was adequately justified by the public interest in obtaining better legal representation for indigent defendants; that as a method of petitioning for legislative change it was exempt from the antitrust laws under our decision in Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U. S. 127 (1961); and that it was a form of political action protected by the First Amendment under our decision in NAACP v. Claiborne Hardware Co., 458 U. S. 886 (1982). The ALJ nevertheless concluded that the complaint should be dismissed because the District officials, who presumably represented the victim of the boycott, recognized that its net effect was beneficial. The increase in fees would attract more CJA lawyers, enabling them to reduce their caseloads and provide better representation for their clients. “I see no point,” he concluded, “in striving resolutely for an antitrust triumph in this sensitive area when the particular case can be disposed of on a more pragmatic basis — there was no harm done.” 107 F. T. C., at 561.
The ALJ’s pragmatic moderation found no favor with the FTC. Like the ALJ, the FTC rejected each of respondents’ defenses. It held that their “coercive, concerted refusal to deal” had the “purpose and effect of raising prices” and was illegal per se. Id., at 573. Unlike the ALJ, the FTC refused to conclude that the boycott was harmless, noting that the “boycott forced the city government to increase the CJA fees from a level that had been sufficient to obtain an adequate supply of CJA lawyers to a level satisfactory to the respondents. The city must, as a result of the boycott, spend an additional $4 million to $5 million a year to obtain legal services for indigents. We find that these are substantial anticompetitive effects resulting from the respondents’ conduct.” Id., at 577. Finally, the FTC determined that the record did not support the AL J’s conclusion that the District supported the boycott. The FTC also held that such support would not in any event excuse respondents’ antitrust violations. Accordingly,. it entered a cease-and-desist order “to prohibit the respondents from initiating another boycott... whenever they become dissatisfied with the results or pace of the city’s legislative process.” Id., at 602.
The Court of Appeals vacated the FTC order and remanded for a determination whether respondents possessed “significant market power.” The court began its analysis by recognizing that absent any special First Amendment protection, the boycott “constituted a classic restraint of trade within the meaning of Section 1 of the Sherman Act.” 272 U. S. App. D. C., at 280, 856 F. 2d, at 234. The Court of Appeals was not persuaded by respondents’ reliance on Claiborne Hardware or Noerr, or by their argument that the boycott was justified because it was designed to improve the quality of representation for indigent defendants. It concluded, however, that “the SCTLA boycott did contain an element of expression warranting First Amendment protection.” 272 U. S. App. D. C., at 294, 856 F. 2d, at 248. It noted that boycotts have historically been used as a dramatic means of expression and that respondents intended to convey a political message to the public at large. It therefore concluded that under United States v. O’Brien, 391 U. S. 367 (1968), a restriction on this form of expression could not be justified unless it is no greater than is essential to an important governmental interest. - This test, the court reasoned, could not be satisfied by the application of an otherwise appropriate per se rule, but instead required the enforcement agency to “prove rather than presume that the evil against which the Sherman Act is directed looms in the conduct it condemns.” 272 U. S. App. D. C., at 296, 856 F. 2d, at 250.
Because of our concern about the implications of the Court of Appeals’ unique holding, we granted the FTC’s petition for certiorari as well as respondents’ cross-petition. 490 U. S. 1019 (1989).
We consider first the cross-petition, which contends that respondents’ boycott is outside the scope of the Sherman Act or is immunized from antitrust regulation by the First Amendment. We then turn to the FTC’s petition.
Ill
Reasonable lawyers may differ about the wisdom of this enforcement proceeding. The dissent from the decision to file the complaint so demonstrates. So, too, do the creative conclusions of the AL J and the Court of Appeals. Respondents’ boycott may well have served a cause that was worthwhile and unpopular. We may assume that the preboycott rates were unreasonably low, and that the increase has produced better legal representation for indigent defendants. Moreover, given that neither indigent criminal defendants nor the lawyers who represent them command any special appeal with the electorate, we may also assume that without the boycott there would have been no increase in District CJA fees at least until the Congress amended the federal statute. These assumptions do not control the case, for it is not our task to pass upon the social utility or political wisdom of price-fixing agreements.
As the ALJ, the FTC, and the Court of Appeals all agreed, respondents’ boycott “constituted a classic restraint of trade within the meaning of Section 1 of the Sherman Act.” 272 U. S. App. D. C., at 280, 856 F. 2d, at 234. As such, it also violated the prohibition against unfair methods of competition in § 5 of the FTC Act. See FTC v. Cement Institute, 333 U. S. 683, 694 (1948). Prior to the boycott CJA lawyers were in competition with one another, each deciding independently whether and how often to offer to provide services to the District at CJA rates. The agreement among the CJA lawyers was designed to obtain higher prices for their services and was implemented by a concerted refusal to serve an important customer in the market for legal services and, indeed, the only customer in the market for the particular services that CJA regulars offered. “This constriction of supply is the essence of ‘price-fixing/ whether it be accomplished by agreeing upon a price, which will decrease the quantity demanded, or by agreeing upon an output, which will increase the price offered.” 272 U. S. App. D. C., at 280, 856 F. 2d, at 234. The horizontal arrangement among these competitors was unquestionably a “naked restraint” on price and output. See National Collegiate Athletic Assn. v. Board, of Regents of Univ. of Okla., 468 U. S. 85, 110 (1984).
It is, of course, true that the city purchases respondents’ services because it has a constitutional duty to provide representation to indigent defendants. It is likewise true that the quality of representation may improve when rates are increased. Yet neither of these facts is an acceptable justification for an otherwise unlawful restraint of trade. As we have remarked before, the “Sherman Act reflects a legislative judgment that ultimately competition will produce not only lower prices, but also better goods and services.” National Society of Professional Engineers v. United States, 435 U. S. 679, 695 (1978). This judgment “recognizes that all elements of a bargain — quality, service, safety, and durability — and not just the immediate cost, are favorably affected by the free opportunity to select among alternative offers.” Ibid. That is equally so when the quality of legal advocacy, rather than engineering design, is at issue.
The social justifications proffered for respondents’ restraint of trade thus do not make it any less unlawful. The statutory policy underlying the Sherman Act “precludes inquiry into the question whether competition is good or bad.” Ibid. Respondents’ argument, like that made by the petitioners in Professional Engineers, ultimately asks us to find that their boycott is permissible because the price it seeks to set is reasonable. But it was settled shortly after the Sherman Act was passed that it “is no excuse that the prices fixed are themselves reasonable. See, e. g., United States v. Trenton Potteries Co., 273 U. S. 392, 397-398 (1927); United States v. Trans-Missouri Freight Assn., 166 U. S. 290, 340-341 (1897).” Catalano, Inc. v. Target Sales, Inc., 446 U. S. 643, 647 (1980). Respondents’ agreement is not outside the coverage of the Sherman Act simply because its objective was the enactment of favorable legislation.
Our decision in Noerr in no way detracts from this conclusion. In Noerr, we “considered whether the Sherman Act prohibited a publicity campaign waged by railroads” and “designed to foster the adoption of laws destructive of the trucking business, to create an atmosphere of distaste for truckers among the general public, and to impair the relationships existing between truckers and their customers.” Claiborne Hardware, 458 U. S., at 913. Interpreting the Sherman Act in the light of the First Amendment’s Petition Clause, the Court noted that “at least insofar as the railroads’ campaign was directed toward obtaining governmental action, its legality was not at all affected by any. anticompetitive purpose it may have had.” 365 U. S., at 139-140.
It of course remains true that “no violation of the Act can be predicated upon mere attempts to influence the passage or enforcement of laws,” id., at 135, even if the defendants’ sole purpose is to impose a restraint upon the trade of their competitors, id., at 138-140. But in the Noerr case the alleged restraint of trade was the intended consequence of public action; in this case the boycott was the means by which respondents sought to obtain favorable legislation. The restraint of trade that was implemented while the boycott lasted would have had precisely the same anticompetitive consequences during that period even if no legislation had been enacted. In Noerr, the desired legislation would have created the restraint on the truckers’ competition; in this case the emergency legislative response to the boycott put an end to the restraint.
Indeed, respondents’ theory of Noerr was largely disposed of by our opinion in Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U. S. 492 (1988). We held that the Noerr doctrine does not extend to “every concerted effort that is genuinely intended to influence governmental action.” 486 U. S., at 503. We explained:
“If all such conduct were immunized then, for example, competitors would be free to enter into horizontal price agreements as long as they wished to propose that price as an appropriate level for governmental ratemaking or price supports. But see Georgia v. Pennsylvania R. Co. 324 U. S. 439, 456-463 (1945). Horizontal conspiracies or boycotts designed to exact higher prices or other economic advantages from the government would be immunized on the ground that they are genuinely intended to influence the government to agree to the conspirators’ terms. But see Georgia v. Evans, 316 U. S. 159 (1942). Firms could claim immunity for boycotts or horizontal output restrictions on the ground that they are intended to dramatize the plight of their industry and spur legislative action.” Ibid.
IV
SCTLA argues that if its conduct would otherwise be prohibited by the Sherman Act and the Federal Trade Commission Act, it is nonetheless protected by the First Amendment rights recognized in NAACP v. Claiborne Hardware Co., 458 U. S. 886 (1982). That case arose after black citizens boycotted white merchants in Claiborne County, Mississippi. The white merchants sued under state law to recover losses from the boycott. We found that the “right of the States to regulate economic activity could not justify a complete prohibition against a nonviolent, politically motivated boycott designed to force governmental and economic change and to effectuate rights guaranteed by the Constitution itself.” Id., at 914. We accordingly held that “the nonviolent elements of petitioners’ activities are entitled to the protection of the First Amendment.” Id., at 915.
SCTLA contends that because it, like the boycotters in Claiborne Hardware, sought to vindicate constitutional rights, it should enjoy a similar First Amendment protection. It is, of course, clear that the association’s efforts to publicize the boycott, to explain the merits of its cause, and to lobby District officials to enact favorable legislation — like similar activities in Claiborne Hardware — were activities that were fully protected by the First Amendment. But nothing in the FTC’s order would curtail such activities, and nothing in the FTC’s reasoning condemned any of those activities.
The activity that the FTC order prohibits is a concerted refusal by CJA lawyers to accept any further assignments until they receive an increase in their compensation; the undenied objective of their boycott was an economic advantage for those who agreed to participate. It is true that the Claiborne Hardware case also involved a boycott. That boycott, however, differs in a decisive respect. Those who joined the Claiborne Hardware boycott sought no special advantage for themselves. They were black citizens in Port Gibson, Mississippi, who had been the victims of political, social, and economic discrimination for many years. They sought only the equal respect and equal treatment to which they were constitutionally entitled. They struggled “to change a social order that had consistently treated them as second class citizens.” Id., at 912. As we observed, the campaign was not intended “to destroy legitimate competition.” Id., at 914. Equality and freedom are preconditions of the free market, and not commodities to be haggled over within it.
The same cannot be said of attorney’s fees. As we recently pointed out, our reasoning in Claiborne Hardware is not applicable to a boycott conducted by business competitors who “stand to profit financially from a lessening of competition in the boycotted market.” Allied Tube & Conduit Corp. v. Indian Head, Inc., supra, at 508. No matter how altruistic the motives of respondents may have been, it is -undisputed that their immediate objective was to increase the price that they would be paid for their services. Such an economic boycott is well within the category that was expressly distinguished in the Claiborne Hardware opinion itself. 458 U. S., at 914-915.
Only after recognizing the well-settled validity of prohibitions against various economic boycotts did we conclude in Claiborne Hardware that “peaceful, political activity such as that found in the [Mississippi] boycott” are entitled to constitutional protection. We reaffirmed the government’s “power to regulate [such] economic activity.” Id., at 912-913. This conclusion applies with special force when a clear objective of the boycott is to economically advantage the participants.
V
Respondents’ concerted action in refusing to accept further CJA assignments until their fees were increased was thus a plain violation of the antitrust laws. The exceptions derived from Noerr and Claiborne Hardware have no application to respondents’ boycott. For these reasons we reject the arguments made by respondents in the cross-petition.
The Court of Appeals, however, crafted a new exception to the per se rules, and it is this exception which provoked the FTC’s petition to this Court. The Court of Appeals derived its exception from United States v. O’Brien, 391 U. S. 367 (1968). In that case O’Brien had burned his Selective Service registration certificate on the steps of the South Boston Courthouse. He did so before a sizable crowd and with the purpose of advocating his antiwar beliefs. We affirmed his conviction. We held that the governmental interest in regulating the “nonspeech element” of his conduct adequately justified the incidental restriction on First Amendment freedoms. Specifically, we concluded that the statute’s incidental restriction on O’Brien’s freedom of expression was no greater than necessary to further the Government’s interest in requiring registrants to have valid certificates continually available.
However, the Court of Appeals held that, in light of O’Brien, the expressive component of respondents’ boycott compelled courts to apply the antitrust laws “prudently and with sensitivity,” 272 U. S. App. D. C., at 279-280, 856 F. 2d, at 233-234, with a “special solicitude for the First Amendment rights” of respondents. The Court of Appeals concluded that the governmental interest in prohibiting boycotts is not sufficient to justify a restriction on the communicative element of the boycott unless the FTC can prove, and not merely presume, that the boycotters have market power. Because the Court of Appeals imposed this special requirement upon the government, it ruled that per se antitrust analysis was inapplicable to boycotts having an expressive component.
There are at least two critical flaws in the Court of Appeals’ antitrust analysis: it exaggerates the significance of the expressive component in respondents’ boycott and it denigrates the importance of the rule of law that respondents violated. Implicit in the conclusion of the Court of Appeals are unstated assumptions that most economic boycotts do not have an expressive component, and that the categorical prohibitions against price fixing and boycotts are merely rules of “administrative convenience” that do not serve any substantial governmental interest unless the price-fixing competitors actually possess market power.
It would not much matter to the outcome of this case if these flawed assumptions were sound. O’Brien would offer respondents no protection even if their boycott were uniquely expressive and even if the purpose of the per se rules were purely that of administrative efficiency. We have recognized that the government’s interest in adhering to a uniform rule may sometimes satisfy the O’Brien test even if making an exception to the rule in a particular case might cause no serious damage. United States v. Albertini, 472 U. S. 675, 688 (1985) (“The First Amendment does not bar application of a neutral regulation that incidentally burdens speech merely because a party contends that allowing an exception in the particular case will not threaten important government interests”). The administrative efficiency interests in antitrust regulation are unusually compelling. The per se rules avoid “the necessity for an incredibly complicated and prolonged economic investigation into the entire history of the industry involved, as well as related industries, in an effort to determine at large whether a particular restraint has been unreasonable.” Northern Pacific R. Co. v. United States, 356 U. S. 1, 5 (1958). If small parties “were allowed to prove lack of market power, all parties would have that right, thus introducing the enormous complexities of market definition into every price-fixing case.” R. Bork, The Antitrust Paradox 269 (1978). For these reasons, it is at least possible that the Claiborne Hardware doctrine, which itself rests in part upon O’Brien, exhausts O’Brien’s application to the antitrust statutes.
In any event, however, we cannot accept the Court of Appeals’ characterization of this boycott or the antitrust laws. Every concerted refusal to do business with a potential customer or supplier has an expressive component. At one level, the competitors must exchange their views about their objectives and the means of obtaining them. The most blatant, naked price-fixing agreement is a product of communication, but that is surely not a reason for viewing it with special solicitude. At another level, after the terms of the boycotters’ demands have been agreed upon, they must be communicated to its target: “[W]e will not do business until you do what we ask.” That expressive component of the boycott conducted by these respondents is surely not unique. On the contrary, it is the hallmark of every effective boycott.
At a third level, the boycotters may communicate with third parties to enlist public support for their objectives; to the extent that the boycott is newsworthy, it will facilitate the expression of the boycotters’ ideas. But this level of expression is not an element of the boycott. Publicity may be generated by any other activity that is sufficiently newsworthy. Some activities, including the boycott here, may be newsworthy precisely for the reasons that they are prohibited: the harms they produce are matters of public concern. Certainly that is no reason for removing the prohibition.
In sum, there is thus nothing unique about the “expressive component” of respondents’ boycott. A rule that requires courts to apply the antitrust laws “prudently and with sensitivity” whenever an economic boycott has an “expressive component” would create a gaping hole in the fabric of those laws. Respondents’ boycott thus has no special characteristics meriting an exemption from the per se rules of antitrust law.
Equally important is the second error implicit in respondents’ claim to immunity from the per se rules. In its opinion, the Court of Appeals assumed that the antitrust laws permit, but do not require, the condemnation of price fixing and boycotts without proof of market power. The opinion further assumed that the per se rule prohibiting such activity “is only a rule of 'administrative convenience and efficiency,’ not a statutory command.” 272 U. S. App. D. C., at 295, 856 F. 2d, at 249. This statement contains two errors. The per se rules are, of course, the product of judicial interpretations of the Sherman Act, but the rules nevertheless have the same force and effect as any other statutory commands. Moreover, while the per se rule against price fixing and boycotts is indeed justified in part by “administrative convenience,” the Court of Appeals erred in describing the prohibition as justified only by such concerns. The per se rules also reflect a longstanding judgment that the prohibited practices by their nature have “a substantial potential for impact on competition.” Jefferson Parish Hospital District No. 2 v. Hyde, 466 U. S. 2, 16 (1984).
As we explained in Professional Engineers, the rule of reason in antitrust law generates
“two complementary categories of antitrust analysis. In the first category are agreements whose nature and necessary effect are so plainly anticompetitive that no elaborate study of the industry is needed to establish their illegality — they are ‘illegal per se.’ In the second category are agreements whose competitive effect can only be evaluated by analyzing the facts peculiar to the business, the history of the restraint, and the reasons why it was imposed.” 435 U. S., at 692.
“Once experience with a particular kind of restraint enables the Court to predict with confidence that the rule of reason will condemn it, it has applied a conclusive presumption that the restraint is unreasonable.” Arizona v. Maricopa County Medical Society, 457 U. S. 332, 344 (1982).
The per se rules in antitrust law serve purposes analogous to per se restrictions upon, for example, stunt flying in congested areas or speeding. Laws prohibiting stunt flying or setting speed limits are justified by the State’s interest in protecting human life and property. Perhaps most violations of such rules actually cause no harm. No doubt many experienced drivers and pilots can operate much more safely, even at prohibited speeds, than the average citizen.
If the especially skilled drivers and pilots were to paint messages on their cars, or attach streamers to their planes, their conduct would have an expressive component. High speeds and unusual maneuvers would help to draw attention to their messages. Yet the laws may nonetheless be enforced against these skilled persons without proof that their conduct was actually harmful or dangerous.
In part, the justification for these per se rules is rooted in administrative convenience. They are also supported, however, by the observation that every speeder and every stunt pilot poses some threat to the community. An unpredictable event may overwhelm the skills of the best driver or pilot, even if the proposed course of action was entirely prudent when initiated. A bad driver going slowly may be more dangerous that a good driver going quickly, but a good driver who obeys the law is safer still.
So it is with boycotts and price fixing. Every such horizontal arrangement among competitors poses some threat to the free market. A small participant in the market is, obviously, less likely to cause persistent damage than a large participant. Other participants in the market may act quickly and effectively to take the small participant’s place. For reasons including market inertia and information failures, however, a small conspirator may be able to impede competition over some period of time. Given an appropriate set of circumstances and some luck, the period can be long enough to inflict real injury upon particular consumers or competitors.
As Justice Douglas observed in an oft-quoted footnote to his United States v. Socony-Vacuum Oil Co., 310 U. S. 150 (1940), opinion:
“Price-fixing agreements may or may not be aimed at complete elimination of price competition. The group making those agreements may or may not have power to control the market. But the fact that the group cannot control the market prices does not necessarily mean that the agreement as to prices has no utility to the members of the combination. The effectiveness of price-fixing agreements is dependent on many factors, such as competitive tactics, position in the industry, the formula underlying pricing policies. Whatever economic justification particular price-fixing agreements may be thought to have, the law does not permit an inquiry into their reasonableness. They are all banned because of their actual or potential threat to the central nervous system of the economy.” Id., at 225-226, n. 59.
See also Maricopa County Medical Society, 457 U. S., at 351, and n. 23.
Of course, some boycotts and some price-fixing agreements are more pernicious than others; some are only partly successful, and some may only succeed when they are buttressed by other causative factors, such as political influence. But an assumption that, absent proof of market power, the boycott disclosed by this record was totally harmless — when overwhelming testimony demonstrated that it almost produced a crisis in the administration of criminal justice in the District and when it achieved its economic goal — is flatly inconsistent with the clear course of our antitrust jurisprudence. Conspirators need not achieve the dimensions of a monopoly, or even a degree of market power any greater than that already disclosed by this record, to warrant condemnation under the antitrust laws.
<1 HH
The judgment of the Court of Appeals is accordingly reversed insofar as that court held the per se rules inapplicable to the lawyers’ boycott. The case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Section 5(a)(1) of the Federal Trade Commission Act, 38 Stat. 719, as amended, 15 U. S. C. § 45(a)(1), provides:
“Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful.”
The First Amendment to the Constitution provides:
“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”
D. C. Code §§ 11-2601 — 11-2609 (1981). In a small number of cases, the indigent defendants were represented by third-year law students or private counsel serving without compensation.
As the Administrative Law Judge (ALJ) noted:
“Because of the nature of CJA practice — its long hours away from the office (assuming the CJA lawyer has an office), the deadlines of Superior Court, and the problem of meeting deadlines in other courts — CJA regulars ordinarily do not take civil cases, nor do they usually appear on the criminal side of U. S. District court.” In re Superior Court Trial Lawyers Assn., 107 F. T. C. 510, 522, n. 54 (1986).
The ALJ found that “at most” 13 of the CJA regulars continued to take assignments. 107 F. T. C., at 542, n. 173.
It is not clear how much of this finding by the ALJ was accepted by the Federal Trade Commission (FTC or Commission). The Court of Appeals suggested that the finding was implicitly rejected by the Commission because not expressly accepted. See 272 U. S. App. D. C. 272, 297, 856 F. 2d 226, 251 (1988). We do not rely upon the finding, and need not decide whether the Commission did indeed reject it. We note, however, that the Commission endorsed findings attributing the District’s eventual change of position to a crisis resulting from the lawyers’ exercise of power. 107 F. T. C.,
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
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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.
■ Section 2 (c) of the Clayton Act, as amended by the Robinson-Patman Act, makes it unlawful for “any person” to make an allowance in lieu of “brokerage” to the “other party to such transaction.” The question is whether that prohibition is applicable to the following transactions by respondent.
Respondent is a broker or sales representative for a number of principals who sell food products. One of the principals is Canada Foods Ltd., a processor of apple concentrate and other products. Respondent agreed to act for the Canada Foods for a 5% commission. Other brokers working for the same principal were promised a 4% commission. Respondent’s commission was higher because it stocked merchandise in advance of sales. Canada Foods established a price for its 1954 pack of apple concentrate at $1.30 per gallon in 50-gallon drums and authorized its brokers to negotiate sales at that price.
The J. M. Smucker Co., a buyer, negotiated with another broker, Phipps, also working for Canada Foods, for apple concentrate. Smucker wanted a lower price than $1.30 but Canada Foods would not agree. Smucker finally offered $1.25 for a 500-gallon purchase. That was turned down by Canada Foods, acting through Phipps. Canada Foods took the position that the only way the price could be lowered would be through reduction in brokerage. About the same time respondent was negotiating with Smucker. Canada Foods told respondent what it had told Phipps, that the price to the buyer could be reduced only if the brokerage were cut; and it added that it would make the sale at $1.25 — the buyer’s bid — if respondent would agree to reduce its brokerage from 5% to 3%. Respondent agreed and the sale was consummated at that price and for that brokerage. The reduced price of $1.25 was thereafter granted Smucker on subsequent sales. But on sales to all other customers, whether through respondent or other brokers, the price continued to be $1.30 and in each instance respondent received the full 5% commission. Only on sales through respondent to Smucker were the selling price and the brokerage reduced.
The customary brokerage fee of 5% to respondent would have been $2,036.84. The actual brokerage of 3% received by respondent was $1,222.11. The reduction of brokerage was $814.73 which is 50% of the total price reduction of $1,629.47 granted by Canada Foods to Smucker.
The Commission charged respondent with violating § 2 (c) of the Act, and after a hearing and the making of findings entered a cease-and-desist order against respondent. The Court of Appeals, while not questioning the findings of fact of the Commission, reversed. 261 F. 2d 725. The case is here on writ of certiorari, 360 U. S. 908.
The Robinson-Patman Act was enacted in 1936 to curb and prohibit all devices by which large buyers gained discriminatory preferences over smaller ones by virtue of their greater purchasing power. A lengthy investigation revealed that large chain buyers were obtaining competitive advantages in several ways other than direct price concessions and were thus avoiding the impact of the Clayton Act. One of the favorite means of obtaining an indirect price concession was by setting up “dummy” brokers who were employed by the buyer and who, in many cases, rendered no services. The large buyers demanded that the seller pay “brokerage” to these fictitious brokers who then turned it over to their employer. This practice was one of the chief targets of § 2 (c) of the Act. But it was not the only means by which the brokerage function was abused and Congress in its wisdom phrased § 2 (c) broadly, not only to cover the other methods then in existence but all other means by which brokerage could be used to effect price discrimination.
The particular evil at which § 2 (c) is aimed can be as easily perpetrated by a seller’s broker as by the seller himself. The seller and his broker can of course agree on any brokerage fee that they wish. Yet when they agree upon one, only to reduce it when necessary to meet the demands of a favored buyer, they use the reduction in brokerage to undermine the policy of § 2 (c). The seller’s broker is clearly “any person” as the words are used in § 2 (c) — as clearly such as a buyer’s broker.
It is urged that the seller is free to pass on to the buyer in the form of a price reduction any differential between his ordinary brokerage expense and the brokerage commission which he pays on a particular sale because § 2 (a) of the Act permits price differentials based on savings in selling costs resulting from differing methods of distribution. From this premise it is reasoned that a seller’s broker should not be held to have violated § 2 (c) for having done that which is permitted under § 2 (a). We need not decide the validity of that premise, because the fact that a transaction may not violate one section of the Act does not answer the question whether another section has been violated. Section 2 (c), with which we are here concerned, is independent of § 2 (a) and was enacted by Congress because § 2 (a) was not considered adequate to deal with abuses of the brokerage function.
Before the Act was passed the large buyers, who maintained their own elaborate purchasing departments and therefore did not need the services of a seller’s broker because they bought their merchandise directly from the seller, demanded and received allowances reflecting these savings in the cost of distribution. In many cases they required that "brokerage” be paid to their own purchasing agents. After the Act was passed they discarded the fagade of “brokerage” and merely received a price reduction equivalent to the seller’s ordinary brokerage expenses in sales to other customers. When haled before the Commission, they protested that the transaction was not.covered by § 2 (c) but, since it was a price reduction, was governed by §2 (a). They also argued that because no brokerage services were needed or used in sales to them, they were entitled to a price differential reflecting this cost saving. Congress had anticipated such a contention by the “in lieu thereof” provision. Accordingly, the Commission and the courts early rejected the contention that such a price reduction was lawful because the buyer’s purchasing organization had saved the seller the amount of his ordinary brokerage expense.
In Great Atlantic & Pacific Tea Co. v. Federal Trade Comm’n, 106 F. 2d 667 (C. A. 3d Cir. 1939), a buyer sought to evade § 2 (c) by accepting price reductions equivalent to the seller’s normal brokerage payments. The court upheld the Commission’s view that the price reduction was an allowance in lieu of brokerage under § 2 (c) and was prohibited even though, in fact, the seller had “saved” his brokerage expense by dealing directly with the select buyer. The buyer also sought to justify its price reduction on the ground that it had rendered valuable services to the seller. The court rejected this argument also. Although that court’s interpretation of the “services rendered” exception in § 2 (c) has been criticized/ its conclusion that the price reduction was an allowance in lieu of brokerage within the meaning of § 2 (c) has been followed and accepted.
We are asked to distinguish these precedents on the ground that there is no claim by the present buyer that the price reduction, concededly based in part on a saving to the seller of part of his regular brokerage cost on the particular sale, was justified by the elimination of services normally performed by the seller or his broker. There is no evidence that the buyer rendered any services to the seller or to the respondent nor that anything in its method of dealing justified its getting a discriminatory price by means of a reduced brokerage charge. We would have quite a different case if there were such evidence and we need not explore the applicability of § 2 (c) to such circumstances. One thing is clear — the absence of such evidence and the absence of a claim that the rendition of services or savings in distribution costs justified the allowance does not support the view that § 2 (c) has not been violated.
The fact that the buyer was not aware that its favored price was based in part on a discriminatory reduction in respondent’s brokerage commission is immaterial. The Act is aimed at price discrimination, not conspiracy. The buyer’s intent might be relevant were he charged with receiving an allowance in violation of § 2 (c). But certainly it has no bearing on whether the respondent has violated the law. The powerful buyer who demands a price concession is concerned only with getting it. He does not care whether it comes from the seller, the seller’s broker, or both.
Congress enacted the Robinson-Patman Act to prevent sellers and sellers’ brokers from yielding to the economic pressures of a large buying organization by granting unfair preferences in connection with the sale of.goods. The form in which the buyer pressure is exerted is immaterial and proof of its existence is not required. It is rare that the motive in yielding to a buyer’s demands is not the “necessity” for making the sale. An “independent” broker is not likely to be independent of the buyer’s coercive .bargaining power. He, like the seller, is constrained to favor the buyers with the most purchasing power. If respondent merely paid over part of his commission to the buyer, he clearly would have violated the Act. We see no distinction of substance between the two transactions. In each case the seller and his broker make a concession to the buyer as a consequence of his economic power. In both cases the result is that the buyer has received a discriminatory price. In both cases the seller’s broker reduces his usual brokerage fee to get a particular contract. There is no difference in economic effect between the seller’s broker splitting his brokerage commission with the buyer and his yielding part of the brokerage to the seller to be passed on to the buyer in the form of a lower price.
We conclude that the statute clearly applies to payments or allowances by a seller’s broker to the buyer, whether made directly to the buyer, or indirectly, through the seller. The allowances proscribed by § 2 (c) are those made by “any person” which, as we have said, clearly encompasses a seller’s broker. The respondent was a necessary party to the price reduction granted the buyer. His yielding of part of his brokerage to be passed on to the buyer was a sine qua non of the price reduction. This is not to say that every reduction in price, coupled with a reduction in brokerage, automatically compels the conclusion that an allowance “in lieu” of brokerage has been granted. As the Commission itself has made clear, whether such a reduction is tantamount to a discriminatory payment of brokerage depends on the circumstances of each case. Main Fish Co., Inc., 53 F. T. C. 88. Nor does this “fuse” provisions of § 2 (a), which permits the defense of cost justification, with those of § 2 (c) which does not; it but realistically interprets the prohibitions of § 2 (c) as including an independent broker’s allowance of a reduced brokerage to obtain a particular order.
It is suggested that reversal of this case would establish an irrevocable floor under commission rates. We think that view has no foundation in fact or in law. Both before and after the sales to Smucker, respondent continued to charge the usual 5% on sales to other buyers. There is nothing in the Act, nor is there anything in this case, to require him to continue to charge 5% on sales to all customers. A price reduction based upon alleged savings in brokerage expenses is an “allowance in lieu of brokerage” when given only to favored customers. Had respondent, for example, agreed to accept a 3% commission on all sales to all buyers there plainly would be no room for finding that the price reductions were violations of § 2 (c). Neither the legislative history nor the purposes of the Act would require such an absurd result, and neither the Commission nor the courts have ever suggested it. Here, however, the reduction in brokerage was made to obtain this particular order and this order only and therefore was clearly discriminatory.
The applicability of § 2 (e) to sellers’ brokers under circumstances not distinguishable in principle from the present case is supported by a 20-year-old administrative interpretation. Beginning in 1940, four years after the Act was passed, the Commission restrained the practice of brokers who, whether buying and selling on their own account or acting on behalf of the seller, sold goods to purchasers who bought through them direct at a reduced price reflecting the savings made by the elimination of the services of a local broker. This practice was held to be a violation of § 2 (c), not § 2 (a).
If we held that § 2 (c) is not applicable here, we would disregard the history which we have delineated, overturn a settled administrative practice, and approve a construction that is hostile to the statutory scheme — one that would leave a large loophole in the Act. Any doubts as to the wisdom of the economic theory embodied in the statute are questions for Congress to resolve.
Reversed.
Section 2 (c) makes it unlawful for “any person ... to pay or grant . . . anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods . . . either to the other party to such transaction or to an . . . intermediary therein . . . (Emphasis supplied.) 49 Stat. 1527.
See Final Report on the Chain-Store Investigation, S. Doc. No. 4, 74th Cong., 1st Sess. (1935).
Section 2 of the Clayton Act as originally enacted in 1914 (38 Stat. 730) applied only to price discriminations the effect of which was to “substantially lessen competition or tend to create a monopoly.” This section was modified and retained in § 2 (a) as amended by the Robinson-Patman Act. See note 7, infra.
See S. Rep. No. 1502, 74th Cong., 2d Sess., p. 7; H. R. Rep. No. 2287, 74th Cong., 2d Sess., pp. 14-15; Federal Trade Comm'n v. Simplicity Pattern Co., 360 U. S. 55, 69.
In the Final Report on the Chain-Store Investigation, note 2, supra, Congress had before it examples not only of large buyers demanding the payment of brokerage to their agents but also instances where buyers demanded discounts, allowances, or outright price reductions based on the theory that fewer brokerage services were needed in sales to these particular buyers, or that no brokerage services were necessary at all. Id., at 25, 63. These transactions were described in the report as the giving of “allowances in lieu of brokerage” (id., at 62) or “discount [s] in lieu of brokerage,” Id., at 27.
The Report of the House Judiciary Committee described the brokerage provision as dealing “with the abuse of the brokerage function for purposes of oppressive discrimination.” H. R. Rep. No. 2287, 74th Cong., 2d Sess., p. 14. And although not mentioned in the Committee Reports, the debates on the bill show clearly that § 2 (c) was intended to proscribe other practices such as the “bribing” of a seller’s broker by the buyer. See 80 Cong. Rec. 7759-7760, 8111-8112.
Section 2 (a), 15 U. S. C. § 13 (a), provides, in relevant part: “It shall be unlawful for any person engaged in commerce ... to discriminate in price between different purchasers of commodities of like grade and quality . . . where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly ... or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them: Provided, That nothing . . . shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are . . . sold or delivered.”
The bill as reported from the Senate Committee excepted savings in brokerage from the cost proviso in § 2 (a). S. E,ep. No. 1502, 74th Cong., 2d Sess., p. 5. Yet when the bill was finally passed, the reference to brokerage in § 2 (a) had been deleted. This was done, according to the Conference Report, “for the reason that the matter of brokerage is dealt with in a subsequent subsection of the bill.” H. R. Conf. Rep. No. 2951, 74th Cong., 2d Sess., p. 6. By striking the words “other than brokerage” from § 2 (a) we think Congress showed both an intention that “legitimacy” of brokerage be governed entirely by § 2 (c) and an understanding that the language of § 2 (c) was sufficiently broad to cover allowances to buyers in the form of price concessions which reflect a differential in brokerage costs. The legislative history is barren of any indication that a change in substance was intended by this deletion. Indeed, the Conference Report clearly precludes any other inference.
The brokerage clause in the bill was originally directed only at outright commission payments by sellers to buyers’ agents. The Senate added the phrases “or any allowance or discount in lieu thereof,” and “either to the other party to such transaction [or his intermediary].” S. Rep. No. 15,02, 74th Cong., 2d Sess., p. 7. “This phrasing of the law was obviously designed to prevent evasion of the restriction through a mere modification of the form of the sales contract. It was assumed that large buyers would seek to convert the brokerage which they had hitherto received into an outright price reduction.” Zorn and Feldman, Business Under the New Price Laws (1937), 219.
The Commission has held that a price reduction to favored buyers, who bought direct without the intervention of a broker, which was equivalent to brokerage currently paid by the seller to its brokers for sales to other customers was a violation of § 2 (c). It has issued cease-and-desist orders against buyers in, e. g., The Great Atlantic & Pacific Tea Co., 26 F. T. C. 486 (1938), aff’d 106 F. 2d 667 (C. A. 3d Cir. 1939); General Grocer Co., 33 F. T. C. 377 (1941); Giant Tiger Corporation, 33 F. T. C. 830 (1941); UCO Food Corporation, 33 F. T. C. 924 (1941); R. C. Williams & Co., 33 F. T. C. 1182 (1941); A. Krasne, Inc., 34 F. T. C. 121 (1941); and against sellers in Ramsdell Packing Co., 32 F. T. C. 1187 (1941); The Union Malleable Mfg. Co., 52 F. T. C. 408 (1955). See also several memorandum decisions reported in 32 F. T. C. 1192, 1193 (1941).
Great Atlantic & Pacific Tea Co. v. Federal Trade Comm’n, 106 F. 2d 667 (C. A. 3d Cir. 1939); Southgate Brokerage Co. v. Federal Trade Comm’n, 150 F. 2d 607 (C. A. 4th Cir. 1945) (buyer’s broker buying and selling on his own behalf).
See Report of the Attorney General’s National Committee to Study the Antitrust Laws (1955) 192, 193; Oppenheim, Federal Antitrust Legislation: Guideposts to a Revised National Antitrust Policy, 50 Mich. L. Rev. 1139, 1207, n. 178; Rowe, Price Discrimination, Competition, and Confusion: Another Look at Robinson-Patman, 60 Yale L. J. 929, 957-958.
Southgate Brokerage Co. v. Federal Trade Comm’n, supra, note 11. See also cases cited, note 10, supra.
In speaking of these interpretations of § 2 (c), a leading authority said:
"Here too the Commission and the court have applied the Congressional intent with precision. If Congress envisaged the evil as the transmission of brokerage commissions to the buyer, then to permit the buyer to get the same thing under 2 (a) in another form and name would deprive 2 (c) of all substance.” Oppenheim, Administration of the Brokerage Provision of the Robinson-Patman Act, 8 Geo. Wash. L. Rev. 511, 535.
See Oliver Bros. v. Federal Trade Comm’n, 102 F. 2d 763, 770 (C. A. 4th Cir.).
The Conference Report states that § 2 (c) “prohibits the direct or indirect payment of brokerage except for such services rendered.” (Italics supplied.) H. R. Conf. Rep. No. 2951, 74th Cong., 2d Sess., p. 7.
Several writers, including one of the coauthors of the Act, have viewed § 2 (c) as covering payments or allowances by sellers’ brokers for the benefit of particular buyers. See Patman, The Robinson-Pat-man Act (1938), 102, 108; Austin, Price Discrimination and Related Problems Under the Robinson-Patman Act, Am. L. Inst. (rev. ed. 1953), 108. (See also 2d rev. ed., 1959, 116); Oppenheim, Administration of the Brokerage Provision of the Robinson-Patman Act, 8 Geo. Wash. L. Rev. 511, 544 (1940); Edwards, The Price Discrimination Law (1959), 104. As Patman, op. cit., supra, at 102, states respecting seller’s brokerage, “To waive the cost of the brokerage or commission to one purchaser and assess it against another represents an unfair discrimination between the purchasers, is an attempt to divorce one item of cost from the rest when, in fact, they all make up the whole, and permits a practice to gain foothold which may increase in such proportions as to demoralize the industry of which it is a part.”
Cf. Robinson v. Stanley Home Products, Inc., 272 F. 2d 601 (C. A. 1st Cir.), where it was held that § 2 (c) was not violated by a seller who eliminated the services of a broker entirely, converted to direct selling, and thereafter reduced his prices.
See Albert W. Sisk & Son, 31 F. T. C. 1543 (1940); C. F. Unruh Brokerage Co., 31 F. T. C. 1557 (1940); C. G. Reaburn & Co., 31 F. T. C. 1565 (1940); William Silver & Co., 31 F. T. C. 1589 (1940); H. M. Ruff & Son, 31 F. T. C. 1573 (1940); Thomas Roberts & Co., 31 F. T. C. 1551 (1940); American Brokerage Co., 31 F. T. C. 1581 (1940); W. E. Robinson & Co., 32 F. T. C. 370 (1941); Custom House Packing Corp., 43 F. T. C. 164 (1946).
We need not view this administrative practice as laying down an absolute rule that § 2 (c) is violated by the passing on of savings in broker’s commissions to direct buyers, for here, as we have emphasized, the “savings” in brokerage were passed on to a single buyer who was not shown in any way to have deserved favored treatment.
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:
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H
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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.
Federal law vests in the Secretary of Agriculture the authority to make emergency loans to farmers who suffer economic losses as a result of a natural disaster. See Consolidated Farm and Rural Development Act (Act), §§321-330, 75 Stat. 311, as amended, 7 U. S. C. §§1961-1971. Pursuant to an agency rule, the Secretary required loan applicants suffering from disasters occurring between December 26, 1972, and April 20, 1973, to file their applications by April 2, 1974. 39 Fed. Reg. 7569 (1974) (later codified at 7 CFR § 1832.82(a) (1975)). That rule embodied a statutory command to keep the loan program open at least until that date. Pub. L. 93-237, 87 Stat. 1025. The question presented is whether a federal court has the remedial authority to reopen this long-terminated loan program on the basis of its finding that the Secretary, in alleged violation of another rule, failed adequately to notify affected farmers of the program’s availability and terms.
M
In early April 1973 torrential rams struck 13 counties m the northern part of Florida. Initial estimates, which were later sharply reduced, projected that resulting crop and property losses would be in excess of $3 million. In light of the scope of these anticipated losses, on May 26, 1973, President Nixon declared the region a major disaster area. 38 Fed. Reg. 14800 (1973). See Disaster Relief Act of 1970, Pub. L. 91-606, 84 Stat. 1744 (repealed or transferred 1974). As a result of this declaration, the Secretary of Agriculture came under a statutory obligation to “make loans” to qualifying individuals in the region. 7 U. S. C. § 1961(b) (1970 ed., Supp. III).
At the time of the declaration, the federal disaster relief program, like much of the rest of the Federal Government, had become embroiled in a budgetary dispute between the Executive and Legislative Branches. In 1972, Congress had passed Pub. L. 92-385, 86 Stat. 554, which authorized emergency loans under terms far more generous than those available under later versions of the Act. Under the 1972 law as implemented by the Secretary, loans carried a 1% interest rate and were not conditioned upon the unavailability of alternative sources of credit. In addition, the Secretary was directed to forgive outright up to $5,000 of the principal of the loan. On December 27, 1972, as part of a larger, administrationwide effort to control what were viewed as excessive congressional appropriations, the Secretary directed that regional Farmers Home Administration (FmHA) officials effectively cease processing loan applications. See generally Berends v. Butz, 357 F. Supp. 143 (Minn. 1973); Impoundment of Appropriated Funds by the President: Joint Hearings before the Ad Hoc Subcommittee on Impoundment of Funds of the Senate Committee on Government Operations of the Senate Committee on the Judiciary, 93d Cong., 1st Sess., 532 (1973). Aware that the “forgiveness features and low interest rates provided for by Public Law 92-385” had contributed to the unilateral executive decision to curtail the program, Congress attempted to resolve the crisis by repealing those provisions. S. Rep. No. 93-85, p. 1 (1973). Public Law 93-24, 87 Stat. 24, which became effective on April 20, 1973, set the interest rate on emergency loans at 5%, limited the availability of loans to those unable to obtain credit from other sources, and eliminated entirely the provision that had previously allowed for cancellation of a portion of the principal. A grandfather clause provided that the terms of the earlier act, Pub. L. 92-385, would remain applicable to disasters designated between January 1 and December 27, 1972.
Left unclear, however, was the status of disasters occurring during the 4-month period between December 27, 1972, and April 20,1973, the effective date of Pub. L. 93-24. Congress resolved this uncertainty by passing Pub. L. 93-237, the provision at the center of this case. Section 4 of the new Act provided that, “[notwithstanding the provisions of Public Law 93-24,” loans “with respect to natural disasters which occurred” during this interim period would be governed by the more generous terms of Pub. L. 92-385. In addition, § 10(c) provided that the deadline for applying for a loan would be extended 90 days beyond the date of the enactment of Pub. L. 93-237. This 90-day extension supplanted the established regulatory policy of the Secretary to accept loan applications for crop losses only if filed within nine months of the formal disaster declaration. (For physical losses the deadline was 60 days.) According to the Conference Report, the purpose of the extension was to make sure that the FmHA’s “administratively set deadlines” took into account the confusion among farmers concerning the numerous changes in federal disaster relief law in the recent past. S. Conf. Rep. No. 93-363, p. 6 (1973). The bill was signed into law on January 2,1974. Thus, the congressionally mandated 90-day period for loans under Pub. L. 93-237 expired on April 2, 1974.
The Florida flood coincided with this period of confusion in the administration of federal disaster relief. Between May 26, 1973 (the date the disaster was declared), and January 2, 1974 (the date Pub. L. 93-237 became law), the loan program was administered pursuant to the terms of Pub. L. 93-24. Accordingly, during this initial loan period, farmers had nine months, or until February 26,1974, to submit applications for emergency loans. At the time of the May 26, 1973, Presidential disaster declaration, and throughout the initial loan period, FmHA rules required the agency to follow certain procedures designed to notify potential borrowers of the availability of disaster relief. 7 CFR § 1832.3(a)(1) (1973). In addition to a general obligation to “make such public announcements as appear appropriate,” the regulations required the FmHA County Supervisor to inform various local officials and “agricultural lenders” of “the assistance available under [the] program.” Ibid,. It is undisputed that during the initial loan period no applications were filed.
On February 15, 1974, approximately six weeks after the enactment of Pub. L. 93-237, the FmHA issued instructions to its staff concerning the implementation of the new emergency loan program. App. to Pet. for Cert. 48a. Shortly thereafter, the Secretary published these instructions without material change in the Federal Register. 39 Fed. Reg. 7569 (1974) (later codified at 7 CFR §§ 1832.81-1832.92 (1975)). The Federal Register publication set out in detail the terms and conditions of the new program, including the 1% interest rate, the $5,000 forgiveness provision, and the absence of any requirement that the applicant demonstrate the unavailability of other credit. 39 Fed. Reg. 7571 (1974). The regulation also specified that “the termination date for acceptance of applications . . . will be April 2, 1974.” Id., at 7570.
Also included in the staff instructions were directions that “State Directors and County Supervisors . . . inform the news media, including newspapers, radio, and television in the affected counties of the provisions of P. L. 93-237.” App. to Pet. for Cert. 49a (later published as § 1832.82(a) of the “Special Emergency Loan Policies . . . Implementing Applicable Provisions of Public Law 93-237,” 39 Fed. Reg. 7569 (1974)). Attached to the instructions was a suggested news release. App. to Pet. for Cert. 50a-51a. The release explained that farmers who had not yet received an emergency loan could apply for such a loan at the local FmHA office. Although not setting out the details of the new program, the model release did state that “loan applications will be taken under the terms of a new law (P. L. 93-237) enacted January 2, 1974.” Id., at 51a. Consistent with these instructions, the State FmHA director forwarded the sample news release to local agency offices. Those offices in turn sent copies to the local media, and, on at least two occasions, the releases were carried in newspapers in the north Florida disaster area. Record, Defendants’ Exhibits 10-12. During this second loan period, that is, the period between the enactment of Pub. L. 93-237 and the expiration of the 90-day deadline on April 2, 1974, no more than four farmers from the Florida disaster area applied for emergency loans.
On August 19, 1976, respondent Payne, a north Florida farmer, instituted the present action in the United States District Court for the Middle District of Florida. Although he had received actual notice of the special 1974 emergency loan program, he sought to represent a class of approximately 2,500 farmers who had been eligible for loans under that program but, because of lack of notice, had not been aware of their eligibility. Contending that the FmHA’s failure to publicize the program more fully violated the agency’s own regulations and deprived them of property without due process of law, respondents sought an injunction directing the FmHA to reopen the loan program under the terms prevailing during the period “up to and including April 2, 1974.” Complaint 6.
The District Court certified the class and granted the requested relief. In a variety of different ways, the court found, the FmHA had failed to give adequate notice of the availability of loans. Most of the notice deficiencies specifically found by the court occurred during the initial loan period. It found, for example, that a number of farmers had left a June 1973 meeting with the incorrect impression that they were ineligible for loans, that FmHA officials knew of this misimpression, and that they failed to correct it. The court also found that press releases describing the terms of both the initial and new loan programs were incomplete. Finally, the court determined that, in violation of the specific requirements of 7 CFR § 1832.3(a)(1) (1973), the FmHA had failed to notify various state and county officials of the availability of emergency loans. The District Court did not allude to the specific notice requirements promulgated by the agency in connection with the implementation of Pub. L. 93-237. See 39 Fed. Reg. 7569 (1974) (§ 1832.82(a)). Apparently assuming, however, that the earlier notice requirements contained in 7 CFR § 1832.3(a)(1) (1973) continued to apply during the new loan period, the court held that the agency’s failure to adhere to these requirements required it to reopen the new loan program for a 60-day period extending from April 15, 1981, to June 15, 1981. In particular, the court premised the remedy on the FmHA’s failure “to make such public announcements as appear appropriate.” Ibid.
The Court of Appeals for the Eleventh Circuit affirmed, but on different grounds. Payne v. Block, 714 F. 2d 1510 (1983). It accepted the District Court’s various findings concerning the FmHA’s failure to comply with the notice requirements set out in 7 CFR § 1832.3(a)(1) (1973). Those findings, however, “pertain[ed] only peripherally” to its decision to affirm. 714 F. 2d, at 1519. Regardless of any violations of 7 CFR § 1832.3(a)(1), the court concluded, the FmHA had failed to comply with its self-imposed obligation to notify the public of the new loan program. The agency had announced in the Federal Register that it would “inform the news media ... of the provisions of P. L. 93-237.” 39 Fed. Reg. 7570 (1974) (§ 1832.82(a)). This it had not done, the court believed, because the news releases announcing the new loan program had failed to explain its generous terms. In view of the established proposition that agencies are duty bound to adhere to their own procedures, the court held, the most appropriate remedy for the violation was an injunction directing the agency to reopen the loan program. In reaching this conclusion, the Court of Appeals rejected the Government’s argument that the April 2, 1974, application deadline was required by an Act of Congress and, therefore, beyond the authority of the District Court to expand. In the court’s view, Pub. L. 93-237 had merely required the FmHA to extend its administratively set deadline for 90 days. Nothing in the Act, however, divested the agency of discretion to extend it further.
The Secretary sought review in this Court, and we granted the petition for certiorari, vacated the judgment below, and remanded for reconsideration in light of our decision in Heckler v. Community Health Services of Crawford County, Inc., 467 U. S. 51 (1984). Block v. Payne, 469 U. S. 807 (1984). In Community Health Services, the Court held that, even assuming that principles of equitable estoppel ever applied against the Government, “a private party surely cannot prevail [on that theory] without at least demonstrating that the traditional elements of estoppel are present.” 467 U. S., at 61. The Court of Appeals, observing that petitioners’ liability was premised not on a theory of equitable estoppel but on the agency’s failure to follow its own regulations, adhered to its prior views and reinstated its decision. Block v. Payne, 751 F. 2d 1191 (1985).
Because the decision below exposes the Federal Government to substantial potential liability and because its reasoning implicates important questions about a federal court’s remedial powers, we again granted certiorari. Block v. Payne, 474 U. S. 815 (1985). We now reverse.
1 — 1 1 — 1
The Secretary s principal argument in this Court is that the remedy granted below shares all of the essential characteristics of an equitable estoppel against the Government and, accordingly, should be analyzed on those terms. We acknowledge that the practical effect of the injunction requiring the reopening of the loan program is to estop the FmHA from relying on the validly promulgated regulatory deadline as a basis for refusing to process further loan applications. And we readily agree that, had respondents sought relief on an equitable estoppel theory, they could not prevail. As we observed only recently, even assuming that the Government is ever subject to estoppel, a “private party surely cannot prevail without at least demonstrating that the traditional elements of an estoppel are present.” Heckler v. Community Health Services of Crawford County, Inc., 467 U. S., at 61. An essential element of any estoppel is detrimental reliance on the adverse party’s misrepresentations, id., at 69 (citing 3 J. Pomeroy, Equity Jurisprudence § 805, p. 192 (S. Symons ed. 1941)); and neither the named plaintiffs, much less the 2,500 members of the class they represent, have sought to demonstrate such reliance. Moreover, the only misconduct specifically found by the District Court was the failure to give effective notice of information that, at least with respect to the second loan period, was concededly published in the Federal Register. Our cases leave no doubt that “failure to fully publicize the rights . . . accorded” by an Act of Congress does not “give rise to an estoppel against the Government.” INS v. Hibi, 414 U. S. 5, 8-9 (1973) (per curiam). See also Heckler v. Community Health Services of Crawford County, Inc., supra, at 63 (“[T]hose who deal with the Government are expected to know the law”); Federal Crop Ins. Corp. v. Merrill, 332 U. S. 380, 384 (1947).
As the Court of Appeals correctly observed, however, respondents’ inability to satisfy the stringent requirements of common-law estoppel does not independently decide the case. Indeed, beginning with their initial complaint and throughout the course of the litigation, respondents have never sought to rely on estoppel as a basis for recovery. Their theory instead, and the theory on which the lower courts granted the injunction, is that the Administrative Procedure Act (APA), 5 U. S. C. § 551 et seq., authorizes this kind of relief to remedy the FmHA’s alleged failure to comply with its duly promulgated notice regulations. It may well be that some of the same concerns that limit the application of equitable estoppel against the Government bear on the appropriateness of awarding other remedies that have a close substantive resemblance to an estoppel. We reject, however, petitioners’ suggestion that any remedy that can be analogized to an equitable estoppel is necessarily invalid, regardless of the source of the cause of action, unless the plaintiff succeeds in proving all the elements of common-law estoppel. Cf. Honda v. Clark, 386 U. S. 484, 494-495 (1967). Indeed, any other rule has the potential for divesting the courts of the remedial authority specifically envisioned by Congress under the APA. If, for example, a farmer had filed a loan application prior to the expiration of the loan deadline and a court determined that the denial of the application after the deadline’s expiration was “arbitrary, capricious [and] not in accordance with law,” 5 U. S. C. §706(2)(A), the appropriate remedy under the APA would be to direct that the application be granted or reconsidered. Although this would, in a sense, estop the Government from applying the deadline, we have never suggested that the applicant would be under an obligation to satisfy the requirements of proving an equitable estoppel to obtain the relief specifically available under the APA.
The question before us then is not whether the Secretary should be estopped from applying the deadline, but whether the relief afforded by the District Court was appropriate under the APA. Respondents contend that the notice regulations, having been promulgated pursuant to the Secretary’s delegated rulemaking authority, had the force and effect of law and therefore were binding on the agency. To remedy this noncompliance, they suggest, the District Court had the authority under 5 U. S. C. § 706 to “compe[l] ‘action unlawfully withheld’ [notice] and ‘set aside agency action’ [application of the deadline] found to be ‘without observance of procedures required by law.’” Brief for Respondents 21 (quoting 5 U. S. C. §706) (bracketed material in original).
To prevail on this theory, respondents must clear at least three substantial hurdles. At the outset, not all agency publications are of binding force, Schweiker v. Hansen, 450 U. S. 785, 789 (1981); and it remains to be shown that the notice provisions, which began life as unpublished staff instructions, are the kind of agency law the violation of which is remediable at all. Second, an agency’s power is no greater than that delegated to it by Congress. Thus, even assuming that Pub. L. 93-237 left the Secretary some discretion to extend the 90-day deadline beyond April 2, 1974, it would hardly be an abuse of that discretion to refuse to do so many years after the disaster had receded if such an extension would be inconsistent with the intent of Congress. Finally, the “agency action” respondents seek to have set aside is the “application of the deadline.” Yet, with the exception of respondent Payne, who clearly has no standing, there is no allegation that any member of the class has ever applied for a loan. Although the APA includes “failure to act” in its definition of reviewable agency action, 5 U. S. C. § 551(13), it is far from clear that relief under the APA is appropriate when the allegedly aggrieved party has failed entirely to present its claim to the agency. Cf. Mathews v. Eldridge, 424 U. S. 319, 328 (1976).
We need not, however, definitively resolve any of these issues. Nor need we confront the Secretary’s broader contention that it is in all instances inappropriate for a court, reviewing for agency compliance with the APA, to set aside one validly promulgated regulation to remedy an alleged violation of another entirely independent one. An essential predicate of the relief granted below is that the FmHA in fact failed to comply with its own rules. As we now explain, the Court of Appeals’ conclusion that the FmHA violated its self-imposed obligation to give notice of the loan program is insupportable.
The Court of Appeals relied exclusively on the FmHA’s purported violation of § 1832.82(a), the'new notice provision, to uphold the injunction directing the Secretary to reopen the loan program. Although the agency did issue press releases, the court reasoned, its failure to describe the generous terms of the new program breached its regulatory obligation to “‘inform the news media ... of the provisions of P. L. No. 93-237.’” 714 F. 2d, at 1520, quoting 39 Fed. Reg. 7570 (1974) (emphasis supplied by Court of Appeals).
This reasoning is demonstrably incorrect. Public Law 93-237 itself said nothing at all about the availability of a reduced interest rate, the possibility of partial forgiveness of the loan principal, or the elimination of the requirement that credit be unavailable from other sources. It merely stated that “[notwithstanding the provisions of Public Law 93-24,” loans with respect to disasters occurring prior to April 20, 1973, would be administered under Pub. L. 92-385. Thus, the statement in the news release that “loan applications will be taken under the terms of a new law (P. L. 93-237) enacted January 2, 1974,” though not a model of clarity, was no less informative than were the “provisions” of the Act the release was endeavoring to describe. App. to Pet. for Cert. 51a; 7 CFR § 1832.82(a) (1975).
Moreover, the Court of Appeals’ holding runs roughshod over the established proposition that an agency’s construction of its own regulations is entitled to substantial deference. United States v. Larionoff, 431 U. S. 864, 872 (1977); Udall v. Tallman, 380 U. S. 1, 16-17 (1965). The publicity directive that was later codified at 7 CFR § 1832.82(a) (1975) was originally issued as a staff instruction designed to describe the procedures for implementing Pub. L. 93-237. App. to Pet. for Cert. 48a-49a. Accompanying the instruction was a sample press release identical in all pertinent respects to those sent to the media in the area of the Florida disaster. Id., at 50a-51a. Because the suggested release obviously reflected the agency’s contemporaneous understanding of the scope of the publicity directive, it is logically untenable to suggest that the agency violated the directive by issuing press releases modeled explicitly on the sample.
The Court of Appeals specifically disclaimed any reliance on 7 CFR § 1832.3(a)(1) (1973), the Secretary’s previous publicity directive, to support its affirmance of the District Court’s judgment. As they are entitled to do, however, respondents now defend that judgment on the alternative theory that the agency’s violation of this earlier notice provision warranted the remedy of an injunction reopening the loan program. We find this theory no more supportable than that relied on by the Court of Appeals. As an initial matter, any violations of this regulation that occurred during the first loan period are plainly irrelevant. Starting with their complaint, and throughout the course of this lengthy litigation, respondents have sought to have the loan program reopened under the more generous terms available under Pub. L. 93-237: And such was the relief granted by the District Court. App. to Pet. for Cert. 45a. As a simple matter of causation, any failure to inform respondents about the old loan program cannot support the remedy of requiring the FmHA to process loan applications under the “terms and benefits” available under the new one. Ibid.
Nor do we believe that any noncompliance with the terms of 7 CFR § 1832.3 during the second loan period would justify the District Court’s remedy. Although the District Court did find that this provision had been violated during the initial loan period, it is far from clear from the face of its opinion that it found any such violations during the second period. Even assuming such findings, however, we agree with the conclusion of the Court of Appeals for the Ninth Circuit that the notice provisions of 7 CFR § 1832.3 were no longer applicable during the period after the enactment of Pub. L. 93-237, at least with respect to disasters declared prior to the date the new law came into force. See Emergency Disaster Loan Assn., Inc. v. Block, 653 F. 2d 1267, 1270 (1981).
By its terms, § 1832.3(a) requires only notice of the loan program in place at the time of the Presidential disaster declaration. See also §1832.92 (1975) (describing §1832.3 as setting out procedures for reporting natural disaster designations). Accordingly, its plain language casts serious doubt on respondents’ assumption that it was also intended to serve as a means of giving notice of midcourse changes in the terms of the loan program long after the disaster had been declared.
Any ambiguity about the regulation’s reach is dispelled by the history of Pub. L. 93-237 itself. As the Court of Appeals recognized, Congress was acutely aware of confusion in the administration of the Nation’s disaster relief laws when it enacted Pub. L. 93-237. 714 F. 2d, at 1516-1517. S. Conf. Rep. No. 93-363, p. 6 (1973). A central objective of the new Act was to correct this confusion by clarifying the credit terms available during this period and by requiring the Secretary to extend the application deadline to compensate for prior “uncertainties]” in the law. Ibid. Consistent with that objective, the Secretary announced in the Federal Register the new procedures the agency would follow to “implement] applicable provisions of Public Law 93-237.” 39 Fed. Reg. 7569 (1974). These procedures, which included the notice provision later codified at 7 CFR § 1832.82(a), were designed to “supplement] and modif[y]” the procedures that had been in place under the old regime, including 7 CFR § 1832.3(a). While this language is ambiguous, the regulatory history strongly suggests that in adopting notice procedures specifically geared to the new law, the Secretary intended for those procedures to be the principal mechanism for spreading the word about Pub. L. 93-237 in areas in which a disaster had already been declared. Aware of Congress’ belief that prior efforts to implement the old program had failed, this history suggests, the Secretary sought to take a different tack to assure effective implementation of the new one — notification of the media pursuant to § 1832.82.
This interpretation is confirmed by § 1832.92, also adopted as part of the FmHA’s efforts to implement Pub. L. 93-237. 39 Fed. Reg. 7575 (1974). There, the Secretary specifically provided that for any “new” disaster designations, notice should be given pursuant to § 1832.3. There is no mention whatever of § 1832.3 in the balance of the regulations dealing with disasters that had already been declared at the time the regulation was published. A fair inference from this omission is that for disasters, such as the Florida flood, that had already been declared at the time of the enactment of Pub. L. 93-237, the Secretary intended that § 1832.82(a), rather than § 1832.3, provide the appropriate mechanism for notifying affected farmers about the new loan program. Accordingly, any failure to follow the old notice provisions during the second loan period was entirely consistent with the Secretary’s intended approach and provides no permissible basis for ordering the new program reopened.
HH HH I — I
We conclude, therefore, that the lower courts erred m holding that the Secretary’s conduct violated the only notice procedures relevant to the implementation of Pub. L. 93-237. Accordingly, even assuming, arguendo, that reopening the loan program would have been an appropriate remedy had the relevant regulations been violated, awarding that relief was clearly improper in light of the FmHA’s compliance with its own procedures. Nor can the relief be supported on the theory, not addressed by either court below, that inadequate notice of the loan program deprived respondents of property without due process of law. We have never held that applicants for benefits, as distinct from those already receiving them, have a legitimate claim of entitlement protected by the Due Process Clause of the Fifth or Fourteenth Amendment. Walters v. National Assn. of Radiation Survivors, 473 U. S. 305, 320, n. 8 (1985). Even on the assumption that they do, however, the notice published in the Federal Register, as well as that afforded by the Secretary in full compliance with his own procedures, was more than ample to satisfy any due process concerns. See 44 U. S. C. §1507 (Publication in Federal Register “is sufficient to give notice of the contents of the document to a person subject to or affected by it”).
Accordingly, the judgment of the Court of Appeals is reversed.
It is so ordered.
Title 7 CFR § 1832.3 (1973) provides in pertinent part:
“(a) [W]here there is a Presidential major disaster declaration, the National Office will notify the State Director and the Finance Office of the name of the counties . . . eligible for Federal assistance under the declaration, and the period during which [emergency] loans will be made based on the major disaster. The State Director will notify the appropriate County Supervisors immediately, and instruct them to make [emergency] loans available .... The State Director will also notify the State USDA Defense Board Chairman and will make such public announcements as appear appropriate.
“(1) Immediately upon receiving notice about counties under his jurisdiction, the County Supervisor will notify the appropriate County USDA Defense Board Chairman and make such public announcements as appear appropriate about the availability of [loans]. Also, the County Supervisor will explain to other agricultural lenders in the area the assistance available under this program.”
Pursuant to 6 U. S. C. §§553(b)(B) and (d)(3), the agency dispensed with notice and comment, explaining that any delay in implementing the provisions of Pub. L. 93-237 would be contrary to the public interest. 39 Fed. Reg. 7569 (1974).
The publicity directions, but not the model news release, were later published in the Federal Register, id., at 7570, and the Code of Federal Regulations, 7 CFR § 1832.82(a) (1975).
The District Court also directed the FmHA to give appropriate notice of the loan program. The Secretary concedes that compelling notice was within the remedial authority of the court if, in fact, adequate notice had not been given previously. The issue is, in any event, moot since all members of respondent class now clearly have notice of the provisions of Pub. L. 93-237.
The Secretary has abandoned his claim that the statute itself expressly disabled the Secretary from extending the deadline beyond April 2, 1974. See S. Conf. Rep. No. 93-363, p. 6 (1973) (describing Pub. L. No. 93-237 as requiring the Secretary to “extend” the “administratively set deadlin[e]” by 90 days).
Because Payne had actual notice of the new loan program and actually applied for a loan, the Secretary argued in the Court of Appeals that Payne lacked standing to complain that the publicity was inadequate. The Court of Appeals granted a limited remand, and the District Court entered an amended final judgment naming as class representative another class member who allegedly had not received notice of the program. App. to Pet. for Cert. 46a-47a.
Justice Stevens makes much of the fact that the new regulation was not issued until February 27, 1974, several weeks after Pub. L. 93-237 was signed into law. In his view, this delay violated the command of § 1832.3(a) to provide notice “immediately.” This reasoning is flawed in several respects. First, it entirely ignores our conclusion that, by its terms, § 1832.3 was simply inapplicable to the new loan program. Second, even if somehow applicable, § 1832.3 requires the State Director to provide “immediat[e]” notification to County Supervisors only after he himself has received notice from the “National Office”; and it is undisputed that the Secretary did not issue staff instructions until February 15, 1974. Finally, it is far from clear that a time lag of a mere few weeks between the enactment of a new law and the issuance of implementing regulations fails to qualify as “immediate” action within the meaning of the pertinent regulation.
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:
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D
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sc_issuearea
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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.
Mr. Justice Blackmun
delivered the opinion of the Court.
Section 337 (a) of the Internal Revenue Code of 1954, 26 U. S. C. § 337 (a), provides, with stated exceptions, for the nonrecognition of gain or loss from a corporation’s “sale or exchange” of property that takes place during the 12-month period following the corporation’s adoption of a plan of complete liquidation that is effectuated within that period. The issue in this case is whether, when a fire destroys corporate property prior to the adoption of a plan of complete liquidation, but the fire insurance proceeds are received after the plan’s adoption, the gain realized is or is not to be recognized to the corporation.
I
The facts are not contested. Taxpayer, Central Tablet Manufacturing Company, an Ohio corporation, for many years prior to May 14, 1966, was engaged at Columbus, Ohio, in the manufacture and sale of writing tablets, school supplies, art materials, and related items. It filed its federal income tax returns on the accrual basis of accounting and for the fiscal year ended October 31.
On August 13, 1965, a majority of the taxpayer’s production and maintenance employees went on strike. As a consequence, production was reduced to about 5% of normal volume. On September 10, during the strike, an accidental fire largely destroyed the taxpayer’s plant, its manufacturing equipment and machinery, and its business offices. The damage was never repaired, the strike was never settled, and the taxpayer never again engaged in manufacturing.
At the time of the fire, the taxpayer carried fire and extended coverage insurance on its building, machinery, and inventory. It also carried business interruption insurance. Negotiations relating to the taxpayer’s claim for business interruption loss began about October 8, 1965, and those on its claims for building and personal property losses began about November 1. There was dispute as to the estimated period of loss to be covered by the business interruption insurance; as to the probable duration of the strike had the fire not taken place; as to the applicability of the building policy’s coinsurance clause; as to the extent of the equipment loss due to the fire rather than to rain; as to the value of the building and equipment at the time of the fire; and as to the cost of repair of repairable machinery and equipment. The threshold liability of the insurance carriers, however, despite their not unusual rejection of the initial formal proofs of claim, was never seriously questioned.
Eight months after the fire, at a special meeting on May 14, 1966, the shareholders of Central Tablet decided to dissolve the corporation and adopted a plan of dissolution and complete liquidation pursuant to Ohio Rev. Code Ann. § 1701.86 (1964). App. 38. About six days later, the taxpayer and the insurers settled the building claim; payment of that claim was received in mid-June. In August, the taxpayer settled its personal property claim and received payment on it in November. On May 3, 1967, all assets remaining after liquidating distributions to the shareholders were conveyed to a Columbus bank in trust for the shareholders pending the payment of taxes and the collection of remaining insurance and other claims. On the same date, the taxpayer filed a certificate of dissolution with the Ohio Secretary of State. Ohio Rev. Code Ann. §§ 1701.86 (H) and (I) (1964). All this was accomplished within 12 months of the adoption of the plan on May 14,1966.
The business interruption claim was settled in August 1967 and payment thereof was received in September of that year.
The fire insurance proceeds exceeded the taxpayer’s adjusted income tax basis in the insured property. Gain, therefore, was realized and ordinarily would be recognized and taxed to the corporation. § 1033 (a) (3) of the 1954 Code, 26 U. S. C. § 1033 (a) (3); Tobias v. Commissioner, 40 T. C. 84, 95 (1963). The taxpayer, however, resorting to § 337 (a), did not report this gain or any part of the business interruption insurance payment in its income tax returns for fiscal 1965 or for any other year. In January 1968, upon audit, the Internal Revenue Service asserted a deficiency in the taxpayer’s income tax for fiscal 1965. This was attributable to the Service’s inclusion in gross income for that year of (a) capital gain equal to the excess of the fire insurance proceeds over adjusted basis, (b) fiscal 1965’s pro rata share of the business interruption insurance payment, and (c) an amount not at issue here. A deficiency in the taxpayer’s fiscal 1963 tax was also asserted; this was attributable to a decrease in operating loss carryback from fiscal 1966 because of adjustments in the treatment of the insurance proceeds. The taxpayer paid the deficiencies, filed claims for refund, and, in due time, instituted the present action in federal court to recover the amounts so paid.
The District Court followed the decision in United States v. Morton, 387 F. 2d 441 (CA8 1968), which concerned a taxpayer on the cash, rather than the accrual, basis, and held that § 337 (a) was available to the taxpayer. 339 F. Supp. 1134 (SD Ohio 1972). Judgment for the taxpayer was entered. On appeal, the United States Court of Appeals for the Sixth Circuit, refusing to follow Morton, reversed and remanded. 481 F. 2d 954 (1973). In view of the indicated conflict in the decisions of the Eighth and Sixth Circuits, we granted certiorari. 414 U. S. 1111 (1973).
II
The only issue before us is whether § 337 (a) has application in a situation where, as here, the involuntary conversion occasioned by the fire preceded the adoption of the plan of complete liquidation. This depends upon whether the “sale or exchange,” referred to in § 337 (a), took place when the fire occurred or only at some post-plan point, such as the subsequent settlement of the insurance claims, or their payment.
Stated simply, it is the position of the Government that the fire was a single destructive event that effected the conversion (and, therefore, the “sale or exchange”) prior to the adoption of the plan of liquidation, thereby rendering § 337 (a) inapplicable. It is the position of the taxpayer, on the other hand, that the fire was not such a single destructive event at all, but was only the initial incident in a series of events — the fire; the preparation and filing of proofs of claim; their preliminary rejection; the negotiations; ultimate dollar agreement by way of settlement; the preparation and submission of final proofs of claim; their formal acceptance; and payment — that stretched over a period of time and came to a meaningful conclusion only after the adoption of the plan, and that, consequently, § 337 (a) ' is applicable.
In order to keep this narrow issue in perspective, it is desirable and necessary to examine the background and the history of § 337.
A corporation is a taxable entity separate and distinct from its shareholders. Ordinarily, a capital gain realized by the corporation is taxable to it. The shareholders, of course, benefit by that realization of gain and the consequent increase in their corporation’s assets. The value of their shares, in theory, is thereby enhanced. This increment in value, however, is not taxed at that point to the shareholder. His taxable transaction occurs when he disposes of his shares. The capital gain realized by the corporation, and taxed to it, may be said to be subject to a “second” tax later, that is, when the shareholder disposes of his shares. There is nothing unusual about this. It is a reality of tax law, and it is due to the separateness of the corporation and the shareholder as taxable entities.
This “double tax” possibility took on technical aspects, however, when the capital gain was realized at about the time of, or in connection with, a corporation’s liquidation. If liquidation was deemed to have taken place subsequent to the sale or exchange, there was a “second” tax to the shareholder in addition to the tax on the gain to the corporation. On the other hand, because a corporation itself realizes no gain for income tax purposes upon the mere liquidation and distribution of its assets to shareholders, § 311 of the 1954 Code, 26 U. S. C. § 311; see General Utilities Co. v. Helvering, 296 U. S. 200 (1935), if the liquidation was deemed to have preceded the sale or exchange of the asset, there was no “first” tax to the corporation. Thus, the timing of the gain transaction, in relation to the corporation’s liquidation, had important tax consequence's. See generally B. Bittker & J. Eustice, Federal Income Taxation of Corporations and Shareholders 11-53 (3d ed. 1971). In short, before § 337 came into the Internal Revenue Code, the overall income tax burden for the liquidating corporate taxpayer and its shareholders was less if the corporation clearly made its distribution of assets prior to the sale or exchange of any of them at a gain.
All this seemed simple and straightforward. The application of the rule, however, as fact situations varied, engendered profound confusion which was enhanced by two decisions by this Court approximately 25 years ago. In Commissioner v. Court Holding Co., 324 U. S. 331 (1945), the Court held that a liquidating corporation could not escape taxation on the gain realized from the sale of its sole asset if the corporation itself had arranged the sale prior to liquidation and distribution of the asset to the shareholders. This was so even though the sale was consummated after the distribution. Subsequently, in United States v. Cumberland Public Service Co., 338 U. S. 451 (1950), the Court reached exactly the opposite conclusion in a case where the shareholders, rather than the corporation, had negotiated the sale of the distributed assets and, prior to the corporation’s liquidation, had been in touch with the purchaser and had offered to acquire the property and sell it to the purchaser. Mr. Justice Black, who wrote for a unanimous court in both cases, recognized that “the distinction between sales by a corporation as compared with distribution in kind followed by shareholder sales may be particularly shadowy and artificial when the corporation is closely held,” id., at 454-455, but the Court, nonetheless, determined that the distinction was mandated by the Code:
“The oddities in tax consequences that emerge from the tax provisions here controlling appear to be inherent in the present tax pattern. For a corporation is taxed if it sells all its physical properties and distributes the cash proceeds as liquidating dividends, yet is not taxed if that property is distributed in kind and is then sold by the shareholders. In both instances the interest of the shareholders in the business has been transferred to the purchaser. . . . Congress having determined that different tax consequences shall flow from different methods by which the shareholders of a closely held corporation may dispose of corporate property, we accept its mandate.” Id., at 455-456.
These two cases obviously created a situation where the tax consequences were dependent upon the resolution of often indistinct facts as to whether the negotiations leading to the sale had been conducted by the corporation or by the shareholders. Particularly in the case of a closely held corporation, where there was little, if any, significant difference between management and ownership, this analytical formalism was unsatisfactory and, indeed, was a trap for the unwary. S. Rep. No. 1622, 83d Cong., 2d Sess., 49 (1954); H. R. Rep. No. 1337, 83d Cong., 2d Sess., a106 (1954). See Cary, The Effect of Taxation on Selling Out a Corporate Business for Cash, 45 Ill. L. Rev. 423 (1950).
It was in direct response to the Court Holding-Cumberland confusion and disparate treatment that Congress produced § 337 of the Internal Revenue Code of 1954. The report of the House Committee on Ways and Means on the bill (H. R. 8300) which became the 1954 Code explained the purpose of § 337:
“Your committee’s bill eliminates questions arising as a result of the necessity of determining whether a corporation in process of liquidating made a sale of assets or whether the shareholder receiving the assets made the sale. Compare Commissioner v. Court Holding Company (324 U. S. 331), with U. S. v. Cumberland Public Service Company (338 U. S. 451). This last decision indicates that if the distributee actually makes the sale after receipt of the property then there will be no tax on the sale at the corporate level. In order to eliminate questions resulting only from formalities, your committee has provided that if a corporation in process of liquidation sells assets there will be no tax at the corporate level, but any gain realized will be taxed to the dis-tributee-shareholder, as ordinary income or capital gain depending on the character of the asset sold.” H. R. Rep. No. 1337, 83d Cong., 2d Sess., 38-39 (1954).
See also id., at a106-a109, where it was said, at a106: “Your committee intends in section [337] to provide a definitive rule which will eliminate any uncertainty.” See S. Rep. No. 1622, 83d Cong., 2d Sess., 48-49, 258-260 (1954).
There is nothing in the legislative history indicating that § 337 was enacted in ordér to eliminate “double taxation” as such. Rather, the statute was designed to eliminate the formalistic distinctions recognized and perhaps encouraged by the decisions in Court Holding and Cumberland. See Kovey, When Will Section 337 Shield Fire Loss Proceeds? A Current Look at a Burning Issue, 39 J. Taxation 258, 259 n. 2 (1973); Note, Tax-Free Sales in Liquidation Under Section 337, 76 Harv. L. Rev. 780 (1963). See also West Street-Erie Boulevard Corp. v. United States, 411 F. 2d 738, 740-741 (CA2 1969). The statute was meant to establish a strict but clear rule, with a specified time limitation, upon which planners might rely and which would serve to bring certainty and stability into the corporation liquidation area. The taxpayer here recognizes this statutory purpose. Brief for Petitioner 6-7; Tr. of Oral Arg. 3 — 4.
Inasmuch as § 337 was drafted to meet and deal with the Court Holding-Cumberland situation, where there had been a sale, the statute on its face relates only to “the sale or exchange” of property. It is not surprising, therefore, that further confusion resulted when the Internal Revenue Service found itself confronted by liquidating corporate taxpayers who sought § 337 (a) treatment for casualty gains. Following the Court's decision in Helvering v. William Flaccus Oak Leather Co., 313 U. S. 247 (1941), the Internal Revenue Service at first refused to consider § 337 as applicable to a casualty situation at all. Rev. Rul. 56-372, 1956-2 Cum. Bull. 187. When this was rejected in the courts, the Service reversed its position and treated an involuntary conversion that occurred after adoption of a plan of complete liquidation as a “sale or exchange” with resulting nonrecognition. Rev. Rui. 64-100, 1964-1 Cum. Bull. (Part I) 130.
It is at this point that the issue of the instant case emerges and comes into focus. Although it is now settled that an involuntary conversion by fire is a sale or exchange under § 337 (a), the question that is determinative here remains unresolved: When does the involuntary conversion by a preplan fire take place? Since the statute prescribes a strict 12-month postplan period, it is crucial for the taxpayer that the conversion be deemed to have occurred after the plan of liquidation was adopted.
Ill
Predictably, the taxpayer analogizes the involuntary conversion to a true sale, and it argues that the conversion does not occur until settlement is reached and the insurance obligations are finally determined and paid. This essentially is the reasoning employed in the Morton case.
There is nothing to indicate that Congress considered this problem when § 337 (a) was adopted. The fact that attention was invariably focused on an actual sale would indicate that the casualty situation was not legislatively anticipated. Towanda Textiles, Inc. v. United States, 149 Ct. Cl. 123, 129, 180 F. Supp. 373, 376 (1960). Recourse to legislative history, therefore, is somewhat circumstantial in nature. There is, however, one guiding fact, namely, the above-mentioned clear purpose of Congress, in its enactment of § 337 (a), to avoid the Court Holding-Cumberland formalities.
The taxpayer’s analogy to the ordinary sale transaction has some superficial appeal. It fails, however, to give sufficient consideration to the underlying purpose of §337 (a). To be sure, under normal circumstances, a true sale is not complete until the mutual obligations (if not the precise terms) are fixed. The Internal Revenue Service has recognized this explicitly in the Regulations by making § 337 (a) available where a sale is negotiated by the corporation prior to the adoption of the plan but is not completed until after the plan is adopted. Treas. Reg. § 1.337-2 (a). This merely acknowledges that the parties are free to avoid an executory sales contract until it is made final. If the transaction is not completed until after the plan of liquidation is adopted, the corporation is rightfully entitled to § 337 (a) treatment. This result is fully consistent with the aim of Congress to avoid the factual determination that led to the Court Hólding-Cumberland dichotomy. The fact that the corporation and its shareholders are given this limited opportunity to plan, preliminary and prior to liquidation, for disposal of assets does not mean that the Congress intended to make this opportunity available in every conceivable fact situation.
With a fire loss, the obligation to pay arises upon the fire. Unlike an executory contract to sell, the casualty cannot be rescinded. Details, including even the basic question of liability, may be contested, but the fundamental contractual obligation that precipitates the transformation from tangible property into a chose in action consisting of a claim for insurance proceeds is fixed by the fire. Although the parties remain free to arrive at an acceptable settlement, the obligation itself has come into being, and it is the value of the insured property at that point that governs the claim. In other words, the terms of the obligation cannot be changed unilaterally by the insurer once the fire has occurred.
The fact that the ultimate extent of the gain may not be known or final settlement reached until some later time does not prevent the occurrence of a “sale or exchange” even in the context of a normal commercial transaction. See, e. g., Burnet v. Logan, 283 U. S. 404 (1931). The taxpayer’s efforts to draw an analogy to a true sale is therefore of limited utility. See Note, Involuntary Conversions and § 337 of the Internal Revenue Code, 31 Wash. & Lee L. Rev. 417, 427-428 (1974).
When the casualty occurs during the 12-month period after the plan of liquidation is adopted, § 337 (a)’s applicability follows as a matter of course. The presence of § 337 (a) creates an expectation in the liquidating corporation that it will not be taxed on gains from sales or exchanges of corporate assets during the 12-month period. The taxpayer corporation then need not be concerned with the formalities of sale and disposal in order to avoid tax on capital gains. Put another way, once the plan is adopted, corporate property is colored with the reasonable expectation that if it is sold or exchanged within 12 months, any resulting gain will not be taxed to the corporation. It follows that if, after the plan is adopted, property is destroyed by casualty, with consequent replacement by insurance proceeds, § 337 (a) treatment is available. The property colored by the expectation has been replaced by insurance proceeds.
When, however, the casualty occurs prior to the adoption of the plan and the corporation’s commitment to liquidate, none of these considerations attaches. Moreover, there is nothing in the purpose of § 337 which dictates the extension of its benefits to this preplan situation. Before the adoption of the plan the corporation has no expectation of avoiding tax if it disposes of property at a gain. The corporation, of course, is the beneficiary of the insurance, and both at the time the policy is executed and at the time of the fire, the destroyed property is an asset of the corporation. Prior to the adoption of the plan, § 337 (a)’s “expectation” simply is not present. For all practical purposes, the disposal of Central Tablet's insured property occurred at the time of its fire. At that time the taxpayer possessed all incidents of ownership. It had evidenced no intention to liquidate. The fire was irremediable. Regardless of the formalities and negotiations that prefaced the actual insurance settlements, the property was parted with at the time of its destruction. When the casualty occurs prior to the corporation’s committing itself to liquidation, no Court Holding-Cumberland problem is presented.
IV
This interpretation is fully consistent with the manner in which condemnation, the other principal form of involuntary conversion, is treated under § 337. In condemnation, the legally operative event for purposes of the statute is the passage of title under federal or state law, as the case may be, to the condemning authority. This means that in many jurisdictions the “sale or exchange” under § 337 (a) occurs prior to the determination of the amount of condemnation compensation and, indeed, possibly without advance warning to the corporation owner. Rev. Rui. 59-108, 1959-1 Cum. Bull. 72. It has been uniformly recognized that a corporate taxpayer may not avail itself of § 337 (a) where its plan of liquidation is adopted after title has passed by way of condemnation even where no settlement as to condemnation price has been reached or where the corporation had no advance notice of the proposed taking. Covered Wagon, Inc. v. Commissioner, 369 F. 2d 629, 633-635 (CA8 1966); Likins-Foster Honolulu Corp. v. Commissioner, 417 F. 2d 285 (CA10 1969), cert. denied, 397 U. S. 987 (1970); Dwight v. United States, 328 F. 2d 973 (CA2 1964); Wendell v. Commissioner, 326 F. 2d 600 (CA2 1964). The taxpayer’s position here would favor the casualty taxpayer over the condemnation taxpayer.
Although perhaps not an exact parallel, the one date in the casualty loss situation analogous to the passage of title in the condemnation context is the date of the casualty. The fire is the event which fixes the legal obligation to pay the insurance proceeds. As with a non-qualifying preplan condemnation, the fire is the single irrevocable event of significance, and it occurs when title and control over the property are in the corporation. The chose in action against the insurer arises at that time. This is unlike the executory sales contract consummated after the adoption of a plan; there, either of the parties is free unilaterally to avoid whatever preliminary agreement had been reached at the preliquidation negotiations. As with condemnation, the involuntary character of the fire distinguishes it from the normal sale, and, as with condemnation, for purposes of § 337 (a), it is irrelevant that the precise dollar amount of the insurer’s obligation remains uncertain. In the casualty situation, the owner of the insured property is deprived of aspects of ownership when the fire occurs in much the same way as the owner of condemned property is deprived at the time title passes. In each case the triggering event is involuntary and irrevocable. Because of the statutorily imposed chronology, the event operates to prevent the corporation’s receiving the favorable treatment of §337 (a). As the Court Holding decision exemplifies, “This may appear a harsh result, but if it is to be corrected Congress must act; the courts have no power to do so.” Dwight v. United States, 328 F. 2d, at 974.
y
Again, although not precisely parallel and certainly not controlling, concluding that the “sale or exchange” takes place at the time of the fire is consistent with the accepted method for determining the holding period of destroyed property in the ascertainment of its long- or short-term capital gain or loss consequences. Where property is destroyed, the holding period terminates at the moment of destruction. Rose v. United States, 229 F. Supp. 298 (SD Cal. 1964); Steele v. United States, 52-2 U. S. Tax Cas. ¶ 9451 (SD Fla. 1952); see Draper v. Commissioner, 32 T. C. 545, 548-549 (1959). Cf. Comment, Extending Section 337 to Liquidations Triggered by the Involuntary Conversion of Corporate Assets, 62 Geo. L. J. 1203, 1213 n. 55 (1974). Were we to accept the taxpayer’s argument, we would be left with the anomalous situation of having the “sale” take place after the holding period has terminated for capital gain or loss purposes.
VI
The situation presented by the instant case has been brought to the attention of Congress with the suggestion that the nonrecognition treatment provided by § 337 (a) be extended to preplan involuntary conversions. Congress, however, has not acted on this suggestion. It, of course, has provided some tax relief to the victim of a casualty gain by permitting nonrecognition of the gain if the victim-taxpayer uses the proceeds to replace the destroyed property in a specified manner. § 1033 (a) (3) of the 1954 Code, 26 U. S. C. § 1033 (a)(3). But Congress has never disclosed an intention to permit the corporate victim of a casualty with ensuing gain to have the option of liquidating after the casualty occurs and obtaining the benefit of nonrecognition under § 337 (a). If this is desirable policy, it is for the Congress, not the courts, to effectuate. The fact that a tax-oriented and tax-knowledgeable corporation in theory could utilize § 1033 (a) (3) and rebuild with its insurance proceeds without being taxed for the gain, and then adopt a plan of liquidation, surely does not change the result. Tax consequences follow what has taken place, not what might have taken place. Commissioner v. National Alfalfa Dehydrating & Milling Co., 417 U. S. 134, 148-149 (1974).
Had Congress enacted § 337 for the avowed purpose of freeing a corporation from tax on gains whenever it decides to liquidate, the result, here might well be different. Section 337, however, was not designed to accomplish that broad result. As has been noted, § 337 was designed for the limited purpose of avoiding the technical and formalistic determination of control as between the corporation and the shareholders. By the enactment of § 337 (a), the benefit of any existing doubt in that context was given to the corporate taxpayer. But § 337 (a) is narrowly and specifLally drawn. It applies only to a complete liquidation and then only to one fully accomplished in a specified short time. It has no application to a sale or exchange before the adoption of the plan or to one more than 12 months after the adoption. If the statute’s precise conditions are not fulfilled, the tax consequences that normally prevail will ensue. Indeed, the statute is not always beneficial, for it operates to make a loss as well as a gain on the sale or exchange nonrecognizable.
The judgment of the Court of Appeals is affirmed.
It is so ordered.
Ҥ 337. Gain or loss on sales or exchanges in connection with certain liquidations.
“(a) General rule.
“If—
“(1) a corporation adopts a plan of complete liquidation on or after June 22, 1954, and
“(2) within the 12-month period beginning on the date of the adoption of such plan, all of the assets of the corporation are distributed in complete liquidation, less 'assets retained to meet claims, “then no gain or loss shall be recognized to such corporation from the sale or exchange by it of property within such 12-month period.” 26 U. S. C. §337 (a).
The deficiencies, including interest, amounted to $70,051.30 for fiscal 1965 and $11,930.30 for fiscal 1963.
Kinney v. United States, 73-1 U. S. Tax Cas. ¶ 9140 (ND Cal. 1972), decided before the Sixth Circuit’s ruling in the present case, and now on appeal to the Ninth Circuit, also followed Morton. The corporate taxpayer in Kinney was on the accrual basis.
Because the District Court ruled that § 337 (a) had application to Central Tablet’s situation, there was no occasion for it to determine in what taxable year the gain to the corporation accrued if it were ultimately decided that § 337 (a) was not applicable. That question remains for resolution upon remand. We intimate no view as to that issue. See generally 2 J. Mertens, Law of Federal Income Taxation § 12.65 and p. 236 (Malone rev. 1967).
In Flaccus the Court held that fire insurance proceeds did not result in gain from a “sale or exchange” of capital assets within the meaning of § 117 (d) of the Revenue Act of 1934, 48 Stat. 715. This result was overcome statutorily by the enactment of § 151 (b) of the Revenue Act of 1942, 56 Stat. 846, now carried over into § 1231 (a) of the 1954 Code, 26 U. S. C. § 1231 (a).
Towanda Textiles, Inc. v. United States, 149 Ct. Cl. 123, 180 F. Supp. 373 (1960); Kent Mfg. Corp. v. Commissioner, 288 F. 2d 812 (CA4 1961). In each of these cases the court relied upon the Flac-cws-inspired statutory amendment, referred to in the preceding footnote, for its conclusion that an involuntary conversion was covered by § 337 (a). In Towanda the Court of Claims permitted § 337 (a) treatment where both the fire and the settlement occurred during the 12-month period following the adoption of .the plan of liquidation. It observed, “It is not conceivable that Congress would have drawn a distinction between a gain from a voluntary conversion and an involuntary one, had the possibility of an involuntary conversion during liquidation come to its attention” (emphasis supplied). 149 Ct. Cl., at 129, 180 F. Supp., at 376. In Kent, the Fourth Circuit disallowed § 337 (a) treatment where both the fire and the settlement took place prior to the adoption of a plan of liquidation. 288 F. 2d, at 816. (It upheld that taxpayer's argument, however, that the casualty gain there sustained was entitled to nonrecognition specially provided under § 392 (b) of the 1954 Code.) Neither case presented the factual sequence of the case before us.
The Regulations make the date of the sale dependent “primarily upon the intent of the parties to be gathered from the terms of the contract and the surrounding circumstances.” § 1.337-2 (a). They provide that an “executory contract to sell is to be distinguished from a contract of sale.” This distinction recognizes the significance of the point in time where the parties can no longer opt out of a transaction. Certainly, a fire insurer has no right to opt out of its coverage and basic liability after the fire takes place; in this respect, the executory contract situation referred to in the Regulations is distinguishable.
For tax purposes, the formality of filing a proof of claim usually does not change the substance of this conclusion. In any event, the formalities were observed here. The insurer’s adjuster was in attendance even while the fire was in progress. App. 42. Notice was immediately given the insurance companies and proofs of loss were promptly submitted. Id., at 13-14. Negotiations began within a month. The adjusters, in making the not uncommon rejection of initial proofs of claim, denied the extent, but hardly the fact, of coverage. Id., at 14^15.
In 1959 the Advisory Group made the following recommendation to the House Committee on Ways and Means:
“The advisory group considers it appropriate and desirable to extend the nonrecognition treatment provided by section 337 (a) to all involuntary conversions. Since an involuntary conversion cannot be foreseen and it is impractical to require adoption of the liquidation plan on or before the day of the conversion, it is proposed, as to such conversions, to relax the strict requirements of the section with respect to the time of adoption of the liquidation plan. Since the time of receipt of the proceeds of an involuntary conversion may depend on factors beyond the control of the corporation and receipt within a 12-month period is often impossible, it is proposed also to relax the distribution requirements with respect to such conversions. Accordingly, it is recommended that an involuntary conversion within the meaning of section 1033 be considered a sale or exchange for purposes of section 337, and that the requirements of paragraph (1) (B) regarding the time of distribution, and the requirement of paragraph (1) that the sale or exchange occur within the 12-month period referred to therein, be considered satisfied if such 12-month period begins not later than 60 days after the disposition of the converted property, as defined in section 1033 (a) (2), and the proceeds of the conversion are distributed within such 12-month period or within 60 days after the receipt thereof by the corporation, whichever is later.” Hearings on Advisory Group Recommendations on Subchapters C, J, and K of the Internal Revenue Code before the House Committee on Ways and Means, 86th Cong., 1st Sess., 532 (1959). It is true that this recommendation was made before the Internal Revenue Service had recognized a casualty as a “sale or exchange,” within the language of § 337 (a), and that the Service has adopted at least part of the recommendation without congressional action. Nonetheless, the Advisory Group clearly recognized that even if the involuntary conversion were a “sale or exchange,” § 337 (a) did not reach the conversion that occurred prior to the adoption of the plan of liquidation, and it proposed “to relax the strict requirements of the section” with respect 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:
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L
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sc_issuearea
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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 Scalia
delivered the opinion of the Court.
The question presented is whether a constitutionally deficient reasonable-doubt instruction may be harmless error.
I
Petitioner was charged with first-degree murder in the course of committing an armed robbery at a New Orleans bar. His alleged accomplice in the crime, a convicted felon named Michael Hillhouse, testifying at the trial pursuant to a grant of immunity, identified petitioner as the murderer. Although several other people were in the bar at the time of the robbery, only one testified at trial. This witness, who had been unable to identify either Hillhouse or petitioner at a physical lineup, testified that they committed the robbery, and that she saw petitioner hold a gun to the victim’s head. There was other circumstantial evidence supporting the conclusion that petitioner was the triggerman. 596 So. 2d 177, 180-181 (La. 1992). In closing argument, defense counsel argued that there was reasonable doubt as to both the identity of the murderer and his intent.
In his instructions to the jury, the trial judge gave a definition of “reasonable doubt” that was, as the State conceded below, essentially identical to the one held unconstitutional in Cage v. Louisiana, 498 U. S. 39 (1990) (per curiam). See 596 So. 2d, at 185, and n. 3. The jury found petitioner guilty of first-degree murder and subsequently recommended that he be sentenced to death. The trial court agreed. On direct appeal, the Supreme Court of Louisiana held, consistent with its opinion on remand from our decision in Cage, State v. Cage, 583 So. 2d 1125, cert. denied, 502 U. S. 874 (1991), that the erroneous instruction was harmless beyond a reasonable doubt. 596 So. 2d, at 186. It therefore upheld the conviction, though remanding for a new sentencing hearing because of ineffectiveness of counsel in the sentencing phase. We granted certiorari, 506 U. S. 939 (1992).
II
The Sixth Amendment provides that “[i]n all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury . . ..” In Duncan v. Louisiana, 391 U. S. 145, 149 (1968), we found this right to trial by jury in serious criminal cases to be “fundamental to the American scheme of justice,” and therefore applicable in state proceedings. The right includes, of course, as its most important element, the right to have the jury, rather than the judge, reach the requisite finding of “guilty.” See Sparf v. United States, 156 U. S. 51, 105-106 (1895). Thus, although a judge may direct a verdict for the defendant if the evidence is legally insufficient to establish guilt, he may not direct a verdict for the State, no matter how overwhelming the evidence. Ibid. See also United States v. Martin Linen Supply Co., 430 U. S. 564, 572-573 (1977); Carpenters v. United States, 330 U. S. 395, 410 (1947).
What the factfinder must determine to return a verdict of guilty is prescribed by the Due Process Clause. The prosecution bears the burden of proving all elements of the offense charged, see, e. g., Patterson v. New York, 432 U. S. 197, 210 (1977); Leland v. Oregon, 343 U. S. 790, 795 (1952), and must persuade the factfinder “beyond a reasonable doubt” of the facts necessary to establish each of those elements, see, e. g., In re Winship, 397 U. S. 358, 364 (1970); Cool v. United States, 409 U. S. 100, 104 (1972) (per curiam). This beyond-a-reasonable-doubt requirement, which was adhered to by virtually all common-law jurisdictions, applies in state as well as federal proceedings. Winship, supra.
It is self-evident, we think, that the Fifth Amendment requirement of proof beyond a reasonable doubt and the Sixth Amendment requirement of a jury verdict are interrelated. It would not satisfy the Sixth Amendment to have a jury determine that the defendant is probably guilty, and then leave it up to the judge to determine (as Winship requires) whether he is guilty beyond a reasonable doubt. In other words, the jury verdict required by the Sixth Amendment is a jury verdict of guilty beyond a reasonable doubt. Our per curiam opinion in Cage, which we accept as controlling, held that an instruction of the sort given here does not produce such a verdict. Petitioner’s Sixth Amendment right to jury trial was therefore denied.
Ill
In Chapman v. California, 386 U. S. 18 (1967), we rejected the view that all federal constitutional errors in the course of a criminal trial require reversal. We held that the Fifth Amendment violation of prosecutorial comment upon the defendant’s failure to testify would not require reversal of the conviction if the State could show “beyond a reasonable doubt that the error complained of did not contribute to the verdict obtained.” Id., at 24. The Chapman standard recognizes that “certain constitutional errors, no less than other errors, may have been ‘harmless’ in terms of their effect on the factfinding process at trial.” Delaware v. Van Arsdall, 475 U. S. 673, 681 (1986). Although most constitutional errors have been held amenable to harmless-error analysis, see Arizona v. Fulminante, 499 U. S. 279, 306-307 (1991) (opinion of Rehnquist, C. J., for the Court) (collecting examples), some will always invalidate the conviction. Id., at 309-310 (citing, inter alia, Gideon v. Wainwright, 372 U. S. 335 (1963) (total deprivation of the right to counsel); Turney v. Ohio, 273 U. S. 510 (1927) (trial by a biased judge); McKaskle v. Wiggins, 465 U. S. 168 (1984) (right to self-representation)). The question in the present case is to which category the present error belongs.
Chapman itself suggests the answer. Consistent with the jury-trial guarantee, the question it instructs the reviewing court to consider is not what effect the constitutional error might generally be expected to have upon a reasonable jury, but rather what effect it had upon the guilty verdict in the case at hand. See Chapman, supra, at 24 (analyzing effect of error on “verdict obtained”). Harmless-error review looks, we have said, to the basis on which “the jury actually rested its verdict.” Yates v. Evatt, 500 U. S. 391, 404 (1991) (emphasis added). The inquiry, in other words, is not whether, in a trial that occurred without the error, a guilty verdict would surely have been rendered, but whether the guilty verdict actually rendered in this trial was surely unattributable to the error. That must be so, because to hypothesize a guilty verdict that was never in fact rendered — no matter how inescapable the findings to support that verdict might be — would violate the jury-trial guarantee. See Rose v. Clark, 478 U. S. 570, 578 (1986); id., at 593 (Blackmun, J., dissenting); Pope v. Illinois, 481 U. S. 497, 509-510 (1987) (Stevens, J., dissenting).
Once the proper role of an appellate court engaged in the Chapman inquiry is understood, the illogic of harmless-error review in the present case becomes evident. Since, for the reasons described above, there has been no jury verdict within the meaning of the Sixth Amendment, the entire premise of Chapman review is simply absent. There being no jury verdict of guilty-beyond-a-reasonable-doubt, the question whether the same verdict of guilty-beyond-a-reasonable-doubt would have been rendered absent the constitutional error is utterly meaningless. There is no object, so to speak, upon which harmless-error scrutiny can operate. The most an appellate court can conclude is that a jury would surely have found petitioner guilty beyond a reasonable doubt — not that the jury’s actual finding of guilty beyond a reasonable doubt would surely not have been different absent the constitutional error. That is not enough. See Yates, supra, at 413-414 (Scalia, J., concurring in part and concurring in judgment). The Sixth Amendment requires more than appellate speculation about a hypothetical jury’s action, or else directed verdicts for the State would be sustainable on appeal; it requires an actual jury finding of guilty. See Bollenbach v. United States, 326 U. S. 607, 614 (1946).
Insofar as the possibility of harmless-error review is concerned, the jury-instruction error in this case is quite different from the jury-instruction error of erecting a presumption regarding an element of the offense. A mandatory presumption — for example, the presumption that a person intends the ordinary consequences of his voluntary acts — violates the Fourteenth Amendment, because it may relieve the State of its burden of proving all elements of the offense. Sandstrom v. Montana, 442 U. S. 510 (1979); Francis v. Franklin, 471 U. S. 307 (1985). But “[w]hen a jury is instructed to presume malice from predicate facts, it still must find the existence of those facts beyond a reasonable doubt.” Rose v. Clark, supra, at 580. And when the latter facts “are so closely related to the ultimate fact to be presumed that no rational jury could find those facts without also finding that ultimate fact, making those findings is functionally equivalent to finding the element required to be presumed.” Carella v. California, 491 U. S. 263, 271 (1989) (Scalia, J., concurring in judgment). See also Pope, supra, at 504 (Scalia, J., concurring). A reviewing court may thus be able to conclude that the presumption played no significant role in the finding of guilt beyond a reasonable doubt. Yates, supra, at 402-406. But the essential connection to a “beyond a reasonable doubt” factual finding cannot be made where the instructional error consists of a misdescription of the burden of proof, which vitiates all the jury’s findings. A reviewing court can only engage in pure speculation — its view of what a reasonable jury would have done. And when it does that, “the wrong entity judge[s] the defendant guilty.” Rose, supra, at 578.
Another mode of analysis leads to the same conclusion that harmless-error analysis does not apply: In Fulminante, we distinguished between, on the one hand, “structural defects in the constitution of the trial mechanism, which defy analysis by ‘harmless-error’ standards,” 499 U. S., at 309, and, on the other hand, trial errors which occur “during the presentation of the ease to the jury, and which may therefore be quantitatively assessed in the context of other evidence presented,” id., at 307-308. Denial of the right to a jury verdict of guilt beyond a reasonable doubt is certainly an error of the former sort, the jury guarantee being a “basic proteetio[n]” whose precise effects are unmeasurable, but without which a criminal trial cannot reliably serve its function, Rose, supra, at 577. The right to trial by jury reflects, we have said, “a profound judgment about the way in which law should be enforced and justice administered.” Duncan v. Louisiana, 391 U. S., at 155. The deprivation of that right, with consequences that are necessarily unquantifiable and indeterminate, unquestionably qualifies as “structural error.”
The judgment of the Supreme Court of Louisiana is reversed, and the case is remanded for proceedings not inconsistent with this opinion.
It is so ordered.
The State has argued in this Court that the Cage standard for review of jury instructions, which looked to whether a jury “could have” applied the instructions in a manner inconsistent with the Constitution, was contradicted in Boyde v. California, 494 U. S. 370, 380 (1990), and disapproved in Estelle v. McGuire, 502 U. S. 62, 72-73, n. 4 (1991). In view of the question presented and the State's failure to raise this issue below, we do not consider whether the instruction given here would survive review under the Boyde standard. See Granfinanciera, S. A v. Nordberg, 492 U. S. 33, 38-39 (1989); Washington v. Confederated Bands and Tribes of Yakima Nation, 439 U. S. 463, 476, n. 20 (1979).
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.
Chief Justice Roberts
delivered the opinion of the Court.
Federal courts have exclusive jurisdiction over cases “arising under any Act of Congress relating to patents.” 28 U. S. C. § 1338(a). The question presented is whether a state law claim alleging legal malpractice in the handling of a patent case must be brought in federal court.
I
In the early 1990⅛, respondent Vernon Minton developed a computer program and telecommunications network designed to facilitate securities trading. In March 1995, he leased the system—known as the Texas Computer Exchange Network, or TEXCEN—to R. M. Stark & Co., a securities brokerage. A little over a year later, he applied for a patent for an interactive securities trading system that was based substantially on TEXCEN. The U. S. Patent and Trademark Office issued the patent in January 2000.
Patent in hand, Minton filed a patent infringement suit in Federal District Court against the National Association of Securities Dealers, Inc. (NASD), and the NASDAQ Stock Market, Inc. He was represented by Jerry Gunn and the other petitioners. NASD and NASDAQ moved for summary judgment on the ground that Minton’s patent was invalid under the “on sale” bar, 35 U. S. C. § 102(b). That provision specifies that an inventor is not entitled to a patent if “the invention was ... on sale in [the United States], more than one year prior to the date of the application,” and Min-ton had leased TEXCEN to Stark more than one year prior to filing his patent application. Rejecting Minton’s argument that there were differences between TEXCEN and the patented system that precluded application of the on-sale bar, the District Court granted the summary judgment motion and declared Minton’s patent invalid. Minton v. National Assn. of Securities Dealers, Inc., 226 F. Supp. 2d 845, 873, 883-884 (ED Tex. 2002).
Minton then filed a motion for reconsideration in the District Court, arguing for the first time that the lease agreement with Stark was part of ongoing testing of TEXCEN and therefore fell within the “experimental use” exception to the on-sale bar. See generally Pfaff v. Wells Electronics, Inc., 525 U. S. 55, 64 (1998) (describing the exception). The District Court denied the motion. Minton v. National Assn. of Securities Dealers, Inc., No. 9:00-cv-00019 (ED Tex., July 15, 2002).
Minton appealed to the U. S. Court of Appeals for the Federal Circuit. That court affirmed, concluding that the District Court had appropriately held Minton’s experimental-use argument waived. See Minton v. National Assn. of Securities Dealers, Inc., 336 F. 3d 1373, 1379-1380 (CA Fed. 2003).
Minton, convinced that his attorneys’ failure to raise the experimental-use argument earlier had cost him the lawsuit and led to invalidation of his patent, brought this malpractice action in Texas state court. His former lawyers defended on the ground that the lease to Stark was not, in fact, for an experimental use, and that therefore Minton’s patent infringement claims would have failed even if the experimental-use argument had been timely raised. The trial court agreed, holding that Minton had put forward “less than a scintilla of proof” that the lease had been for an experimental purpose. App. 213. It accordingly granted summary judgment to Gunn and the other lawyer defendants.
On appeal, Minton raised a new argument: Because his legal malpractice claim was based on an alleged error in a patent case, it “arisjes] under” federal patent law for purposes of 28 U. S. C. § 1338(a). And because, under § 1338(a), “[n]o State court shall have jurisdiction over any claim for relief arising under any Act of Congress relating to patents,” the Texas court—where Minton had originally brought his malpractice claim—lacked subject matter jurisdiction to decide the case. Accordingly, Minton argued, the trial court’s order should be vacated and the case dismissed, leaving Min-ton free to start over in the Federal District Court.
A divided panel of the Court of Appeals of Texas rejected Minton’s argument. Applying the test we articulated in Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U. S. 308, 314 (2005), it held that the federal interests implicated by Minton’s state law claim were not sufficiently substantial to trigger § 1338 “arising under” jurisdiction. It also held that finding exclusive federal jurisdiction over state legal malpractice actions would, contrary to Grable’s commands, disturb the balance of federal and state judicial responsibilities. Proceeding to the merits of Minton’s malpractice claim, the Court of Appeals affirmed the trial court’s determination that Minton had failed to establish experimental use and that arguments on that ground therefore would not have saved his infringement suit.
The Supreme Court of Texas reversed, relying heavily on a pair of cases from the U. S. Court of Appeals for the Federal Circuit. 355 S. W. 3d 634, 641-642 (2011) (discussing Air Measurement Technologies, Inc. v. Akin Gump Strauss Hauer & Feld, L. L. P., 504 F. 3d 1262 (2007); Immunocept, LLC v. Fulbright & Jaworski, LLP, 504 F. 3d 1281 (2007)). The court concluded that Minton’s claim involved “a substantial federal issue” within the meaning of Grable “because the success of Minton’s malpractice claim is reliant upon the viability of the experimental use exception as a defense to the on-sale bar.” 355 S. W. 3d, at 644. Adjudication of Min-ton’s claim in federal court was consistent with the appropriate balance between federal and state judicial responsibilities, it held, because “the federal government and patent litigants have an interest in the uniform application of patent law by courts well-versed in that subject matter.” Id., at 646 (citing Immunocept, supra, at 1285-1286; Air Measurement Technologies, supra, at 1272).
Justice Guzman, joined by Justices Medina and Willett, dissented. The dissenting justices would have held that the federal issue was neither substantial nor disputed, and that maintaining the proper balance of responsibility between state and federal courts precluded relegating state legal malpractice claims to federal court.
We granted certiorari. Post, p. 936.
II
“Federal courts are courts of limited jurisdiction, possessing “only that power authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of America, 511 U. S. 375, 377 (1994). There is no dispute that the Constitution permits Congress to extend federal court jurisdiction to a case such as this one, see Osborn v. Bank of United States, 9 Wheat. 738, 823-824 (1824); the question is whether Congress has done so, see Powell v. McCormack, 395 U. S. 486, 515-516 (1969).
As relevant here, Congress has authorized the federal district courts to exercise original jurisdiction in “all civil actions arising under the Constitution, laws, or treaties of the United States,” 28 U. S. C. § 1331, and, more particularly, over “any civil action arising under any Act of Congress relating to patents,” § 1338(a). Adhering to the demands of “[linguistic consistency,” we have interpreted the phrase “arising under” in both sections identically, applying our § 1331 and § 1338(a) precedents interchangeably. See Christianson v. Colt Industries Operating Corp., 486 U. S. 800, 808-809 (1988). For cases falling within the patent specific arising under jurisdiction of § 1338(a), however, Congress has not only provided for federal jurisdiction but also eliminated state jurisdiction, decreeing that “[n]o State court shall have jurisdiction over any claim for relief arising under any Act of Congress relating to patents.” § 1338(a). To determine whether jurisdiction was proper in the Texas courts, therefore, we must determine whether it would have been proper in a federal district court—whether, that is, the case “aris[es] under any Act of Congress relating to patents.”
For statutory purposes, a case can “aris[e] under” federal law in two ways. Most directly, a case arises under federal law when federal law creates the cause of action asserted. See American Well Works Co. v. Layne & Bowler Co., 241 U. S. 257, 260 (1916) (“A suit arises under the law that creates the cause of action”). As a rule of inclusion, this “creation” test admits of only extremely rare exceptions, see, e. g., Shoshone Mining Co. v. Rutter, 177 U. S. 505 (1900), and accounts for the vast bulk of suits that arise under federal law, see Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U. S. 1, 9 (1983). Minton’s original patent infringement suit against NASD and NASDAQ, for example, arose under federal law in this manner because it was authorized by 35 U. S. C. §§271, 281.
But even where a claim finds its origins in state rather than federal law—as Minton’s legal malpractice claim indisputably does—we have identified a “special and small category” of cases in which arising under jurisdiction still lies. Empire HealthChoice Assurance, Inc. v. McVeigh, 547 U. S. 677, 699 (2006). In outlining the contours of this slim category, we do not paint on a blank canvas. Unfortunately, the canvas looks like one that Jaekson Pollock got to first. See 13D C. Wright, A. Miller, E. Cooper, & R. Freer, Federal Practice and Procedure § 3562, pp. 175-176 (3d ed. 2008) (reviewing general confusion on question).
In an effort to bring some order to this unruly doctrine several Terms ago, we condensed our prior cases into the following inquiry: Does the “state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities?” Grable, 545 U. S., at 314. That is, federal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress. Where all four of these requirements are met, we held, jurisdiction is proper because there is a “serious federal interest in claiming the advantages thought to be inherent in a federal forum,” which can be vindicated without disrupting Congress’s intended division of labor between state and federal courts. Id., at 313-314.
I—I HH h-H
Applying Grable’s inquiry here, it is clear that Mintons legal malpractice claim does not arise under federal patent law. Indeed, for the reasons we discuss, we are comfortable concluding that state legal malpractice claims based on underlying patent matters will rarely, if ever, arise under .federal patent law for purposes of § 1338(a). Although such eases may necessarily raise disputed questions of patent law, those cases are by their nature unlikely to have the sort of significance for the federal system necessary to establish jurisdiction.
A
To begin, we acknowledge that resolution of a federal patent question is “necessary” to Minton’s case. Under Texas law, a plaintiff alleging legal malpractice must establish four elements: (1) that the defendant attorney owed the plaintiff a duty; (2) that the attorney breached that duty; (3) that the breach was the proximate cause of the plaintiffs injury; and (4) that damages occurred. See Alexander v. Turtur & Associates, Inc., 146 S. W. 3d 113, 117 (Tex. 2004). In cases like this one, in which the attorney’s alleged error came in failing to make a particular argument, the causation element requires a “case within a ease” analysis of whether, had the argument been made, the outcome of the earlier litigation would have been different. 355 S. W. 3d, at 639; see 4 R. Mallen & J. Smith, Legal Malpractice §37:15, pp. 1509-1520 (2012). To prevail on his legal malpractice claim, therefore, Minton must show that he would have prevailed in his federal patent infringement case if only petitioners had timely made an experimental-use argument on his behalf. 355 S. W. 3d, at 644. That will necessarily require application of patent law to the facts of Minton’s case.
B
The federal issue is also “actually disputed” here—indeed, on the merits, it is the central point of dispute. Minton argues that the experimental-use exception properly applied to his lease to Stark, saving his patent from the on-sale bar; petitioners argue that it did not. This is just the sort of “ ‘dispute ... respecting the . . . effect of [federal] law’ ” that Grable envisioned. 545 U. S., at 313 (quoting Shulthis v. McDougal, 225 U. S. 561, 569 (1912)).
c
Minton’s argument founders on Grable’s next requirement, however, for the federal issue in this case is not substantial in the relevant sense. In reaching the opposite conclusion, the Supreme Court of Texas focused on the importance of the issue to the plaintiff’s case and to the parties before it. 355 S. W. 3d, at 644 (“because the success of Minton’s malpractice claim is reliant upon the viability of the experimental use exception as a defense to the on-sale bar, we hold that it is a substantial federal issue”); see also Air Measurement Technologies, 504 F. 3d, at 1272 (“the issue is substantial, for it is a necessary element of the malpractice case”). As our past cases show, however, it is not enough that the federal issue be significant to the particular parties in the immediate suit; that will always be true when the state claim “necessarily raise[s]” a disputed federal issue, as Grable separately requires. The substantiality inquiry under Grable looks instead to the importance of the issue to the federal system as a whole.
In Grable itself, for example, the Internal Revenue Service had seized property from the plaintiff and sold it to satisfy the plaintiff’s federal tax delinquency. 545 U. S., at 310-311. Five years later, the plaintiff filed a state law quiet title action against the third party that had purchased the property, alleging that the Internal Revenue Service had failed to comply with certain federally imposed notice requirements, so that the seizure and sale were invalid. Ibid. In holding that the case arose under federal law, we primarily focused not on the interests of the litigants themselves, but rather on the broader significance of the notice question for the Federal Government. We emphasized the Government’s “strong interest” in being able to recover delinquent taxes through seizure and sale of property, which in turn “require[d] clear terms of notice to allow buyers ... to satisfy themselves that the Service has touched the bases necessary for good title.” Id., at 315. The Government’s “direct interest in the availability of a federal forum to vindicate its own administrative action” made the question “an important issue of federal law that sensibly belong[ed] in a federal court.” Ibid.
A second illustration of the sort of substantiality we require comes from Smith v. Kansas City Title & Trust Co., 255 U. S. 180 (1921), which Grable described as “[t]he classic example” of a state claim arising under federal law. 545 U. S., at 312. In Smith, the plaintiff argued that the defendant bank could not purchase certain bonds issued by the Federal Government because the Government had acted unconstitutionally in issuing them. 255 U. S., at 198. We held that the case arose under federal law, because the “decision depends upon the determination” of “the constitutional validity of an act of Congress which is directly drawn in question.” Id., at 201. Again, the relevant point was not the importance of the question to the parties alone but rather the importance more generally of a determination that the Government “securities were issued under an unconstitutional law, and hence of no validity.” Ibid.) see also Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U. S. 804, 814, n. 12 (1986).
Here, the federal issue carries no such significance. Because of the backward-looking nature of a legal malpractice claim, the question is posed in a merely hypothetical sense: 7/Minton’s lawyers had raised a timely experimental-use argument, would the result in the patent infringement proceeding have been different? No matter how the state courts resolve that hypothetical “case within a case,” it will not change the real-world result of the prior federal patent litigation. Minton’s patent will remain invalid.
Nor will allowing state courts to resolve these cases undermine “the development of a uniform body of [patent] law.” Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U. S. 141, 162 (1989). Congress ensured such uniformity by vesting exclusive jurisdiction over actual patent cases in the federal district courts and exclusive appellate jurisdiction in the Federal Circuit. See 28 U. S. C. §§ 1338(a), 1295(a)(1). In resolving the nonhypothetical patent questions those cases present, the federal courts are of course not bound by state court case-within-a-case patent rulings. See Tafflin v. Levitt, 493 U. S. 455, 465 (1990). In any event, the state court case-within-a-case inquiry asks what would have happened in the prior federal proceeding if a particular argument had been made. In answering that question, state courts can be expected to hew closely to the pertinent federal precedents. It is those precedents, after all, that would have applied had the argument been made. Cf. ibid. (“State courts adjudicating civil RICO claims will ... be guided by federal court interpretations of the relevant federal criminal statutes, just as federal courts sitting in diversity are guided by state court interpretations of state law”).
As for more novel questions of patent law that may arise for the first time in a state court “case within a case,” they will at some point be decided by a federal court in the context of an actual patent case, with review in the Federal Circuit. If the question arises frequently, it will soon be resolved within the federal system, laying to rest any contrary state court precedent; if it does not arise frequently, it is unlikely to implicate substantial federal interests. The present case is “poles apart from Grable,” in which a state court’s resolution of the federal question “would be controlling in numerous other cases.” Empire HealthChoice Assurance, Inc., 547 U. S., at 700.
Minton also suggests that state courts’ answers to hypothetical patent questions can sometimes have real-world effect on other patents through issue preclusion. Brief for Respondent 33-36. Minton, for example, has filed what is known as a “continuation patent” application related to his original patent. See 35 U. S. C. § 120; 4A D. Chisum, Patents § 13.03 (2005) (describing continuation applications). He argues that, in evaluating this separate application, the patent examiner could be bound by the Texas trial court’s interpretation of the scope of Minton’s original patent. See Brief for Respondent 35-36. If is unclear whether this is true. The Patent and Trademark Office’s Manual of Patent Examining Procedure provides that res judicata is a proper ground for rejecting a patent “only when the earlier decision was a decision of the Board of Appeals” or certain federal reviewing courts, giving no indication that state court decisions would have preclusive effect. See Dept, of Commerce, Patent and Trademark Office, Manual of Patent Examining Procedure §706.03(w), p. 700-79 (rev. 8th ed. 2012); 35 U. S. C. §§ 134(a), 141,145; Reply Brief 9-10. In fact, Minton has not identified any case finding such preclusive effect based on a state court decision. But even assuming that a state court’s case-within-a-case adjudication may be preclu-sive under some circumstances, the result would be limited to the parties and patents that had been before the state court. Such “fact-bound and situation-specific” effects are not sufficient to establish federal arising under jurisdiction. Empire HealthChoice Assurance, Inc., supra, at 701.
Nor can we accept the suggestion that the federal courts’ greater familiarity with patent law means that legal malpractice cases like this one belong in federal court. See Air Measurement Technologies, 504 F. 3d, at 1272 (“The litigants will also benefit from federal judges who have experience in claim construction and infringement matters”); 355 S. W. 3d, at 646 (“patent litigants have an interest in the uniform application of patent law by courts well-versed in that subject matter”). It is true that a similar interest was among those we considered in Grable. 545 U. S., at 314. But the possibility that a state court will incorrectly resolve a state claim is not, by itself, enough to trigger the federal courts’ exclusive patent jurisdiction, even if the potential error finds its root in a misunderstanding of patent law.
There is no doubt that resolution of a patent issue in the context of a state legal malpractice action can be vitally important to the particular parties in that case. But something more, demonstrating that the question is significant to the federal system as a whole, is needed. That is missing here.
D
It follows from the foregoing that Grable’s fourth requirement is also not met. That requirement is concerned with the appropriate “balance of federal and state judicial responsibilities.” Ibid. We have already explained the absence of a substantial federal issue within the meaning of Grable. The States, on the other hand, have “a special responsibility for maintaining standards among members of the licensed professions.” Ohralik v. Ohio State Bar Assn., 436 U. S. 447, 460 (1978). Their “interest... in regulating lawyers is especially great since lawyers are essential to the primary governmental function of administering justice, and have historically been officers of the courts.” Goldfarb v. Virginia State Bar, 421 U. S. 773, 792 (1975) (internal quotation marks omitted). We have no reason to suppose that Congress—in establishing exclusive federal jurisdiction over patent cases—meant to bar from state courts state legal malpractice claims simply because they require resolution of a hypothetical patent issue.
* * ⅜
As we recognized a century ago, “[t]he Federal courts have exclusive jurisdiction of all cases arising under the patent laws, but not of all questions in which a patent may be the subject-matter of the controversy.” New Marshall Engine Co. v. Marshall Engine Co., 223 U. S. 473, 478 (1912). In this case, although the state courts must answer a question of patent law to resolve Minton's legal malpractice claim, their answer will have no broader effects. It will not stand as binding precedent for any future patent claim; it will not even affect the validity of Minton’s patent. Accordingly, there is no “serious federal interest in claiming the advantages thought to be inherent in a federal forum,” Grable, supra, at 313. Section 1338(a) does not deprive the state courts of subject matter jurisdiction.
The judgment of the Supreme Court of Texas is reversed, and the case is remanded for further proceedings not inconsistent 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:
|
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 Harlan
delivered the opinion of the Court.
We review from the standpoint of its validity under the Federal Constitution a judgment of civil contempt entered against petitioner, the National Association for the Advancement of Colored People, in the courts of Alabama. The question presented is whether Alabama, consistently with the Due Process Clause of the Fourteenth Amendment, can compel petitioner to reveal to the State’s Attorney General the names and addresses of all its Alabama members and agents, without regard to their positions or functions in the Association. The judgment of contempt was based upon petitioner’s refusal to comply fully with a court order requiring in part the production of membership lists. Petitioner’s claim is that the order, in the circumstances shown by this record, violated rights assured to petitioner and its members under the Constitution.
Alabama has a statute similar to those of many other States which requires a foreign corporation, except as exempted, to qualify before doing business by filing its corporate charter with the Secretary of State and designating a place of business and an agent to receive service of process. The statute imposes a finé on a corporation transacting intrastate business before qualifying and provides for criminal prosecution of officers of such a corporation. Ala. Code, 1940, Tit. 10, §§ 192-198. The National Association for the Advancement of Colored People is a nonprofit membership corporation organized under the laws of New York. Its purposes, fostered on a nationwide basis, are those indicated by its name, and it operates through chartered affiliates which are independent unincorporated associations, with membership therein equivalent to membership in petitioner. The first Alabama affiliates were chartered in 1918. Since that time the aims of the Association have been advanced through activities of its affiliates, and in 1951 the Association itself opened a regional office in Alabama, at which it employed two supervisory persons and one clerical worker. The Association has never complied with the qualification statute, from which it considered itself exempt.
In 1956 the Attorney General of Alabama brought an equity suit in the State Circuit Court, Montgomery County, to enjoin the Association from conducting further activities within, and to oust it from, the State. Among other things the bill in equity alleged that the Association had opened a regional office and had organized-various affiliates in Alabama; had recruited members and solicited contributions within the State; had given financial support and furnished legal assistance to Negro students seeking admission to the state university; and had supported a Negro boycott of the bus lines in Montgomery to compel the seating of passengers without regard to race. The bill recited that the Association, by continuing to do business in Alabama without complying with the qualification statute, was “. . . causing irreparable injury to the property and civil rights of the residents and citizens of the State of Alabama for which criminal prosecution and civil actions at law afford no adequate relief . . . On the day the complaint was filed, the Circuit Court issued ex parte an order restraining the Association, pendente lite, from engaging in further activities within the State and forbidding it to take any steps to qualify itself to do business therein.
Petitioner demurred to the allegations of the bill and moved to dissolve the restraining order. It contended that its activities did not subject it to the qualification requirements of the statute and that in any event what the State sought to accomplish by its suit would violate rights to freedom of speech and assembly guaranteed under the Fourteenth Amendment to the Constitution of the United States. Before the date set for a hearing on this motion, the State moved for the production of a large number of the Association’s records and papers, including bank statements, leases, deeds, and records containing the names and addresses of all Alabama “members” and “agents” of the Association. It alleged that all such documents were necessary for adequate preparation for the hearing, in view of petitioner’s denial of the conduct of intrastate business within the meaning of the qualification statute. Over petitioner’s objections, the court ordered the production, of a substantial part of the requested records, including the membership lists, and postponed the hearing on the restraining order to a date later than the time ordered for production.
Thereafter petitioner filed its answer to the bill in equity. It admitted its Alabama activities substantially as alleged in the complaint and that it had not qualified to do business in the State. Although still disclaiming the statute’s application to it, petitioner offered to qualify if the bar from qualification made part of the restraining order were lifted, and it submitted with the answer an executed set of the forms required by the statute. However petitioner did not comply with the production order, and for this failure was adjudged in civil contempt and fined $10,000. The contempt judgment provided that the fine would be subject to reduction or remission if compliance were forthcoming within five days but otherwise would be increased to $100,000.
At the end of the five-day period petitioner produced substantially all the data called for by the production order except its membership lists, as to which it contended that Alabama could not constitutionally compel disclosure, and moved to modify or vacate the contempt judgment, or stay its execution pending appellate review. This motion was denied. While a similar stay application, which was later denied, was pending before the Supreme Court of Alabama, the Circuit Court made a further order adjudging petitioner in continuing contempt and increasing the fine already imposed to $100,000. Under Alabama law, see Jacoby v. Goetter, Weil & Co., 74 Ala. 427, the effect of the contempt adjudication was to foreclose petitioner from obtaining a hearing on the merits of the underlying ouster action, or from taking any steps to dissolve the temporary restraining order which had been issued ex parte, until it purged itself of contempt. But cf. Harrison v. St. Louis & S. F. R. Co., 232 U. S. 318; Hovey v. Elliott, 167 U. S. 409.
The State Supreme Court thereafter twice dismissed petitions for certiorari to review this final contempt judgment, the first time, 91 So. 2d 221, for insufficiency of the petition’s allegations and the second time on procedural grounds. 265 Ala. 349, 91 So. 2d 214. We granted certiorari because of the importance of the constitutional questions presented. 353 U. S. 972.
1 — 1
We address ourselves first to respondent’s contention that we lack jurisdiction because the denial of certiorari by the Supreme Court of Alabama rests on an independent nonfederal ground, namely, that petitioner in applying for certiorari had pursued the wrong appellate remedy under state law. Respondent recognizes that our jurisdiction is not defeated if the nonfederal ground relied on by the state court is “without any fair or substantial support,” Ward v. Board of County Commissioners, 253 U. S. 17, 22. It thus becomes our duty to ascertain, “. . . in order that constitutional guaranties may appropriately be enforced, whether the asserted non-federal ground independently and adequately supports the judgment.” Abie State Bank v. Bryan, 282 U. S. 765, 773.
The Alabama Supreme Court held that it could not consider the constitutional issues underlying the contempt judgment which related to the power of the State to order production of membership lists because review by certiorari was limited to instances “. . . where the court lacked jurisdiction of the proceeding, or where on the face of it the order disobeyed was void, or where procedural requirements with respect to citation for contempt and the like were not observed, or where the fact of contempt is not sustained . . . .” 265 Ala., at 353, 91 So. 2d, at 217. The proper means for petitioner to obtain review of the judgment in light of its constitutional claims, said the court, was by way of mandamus to quash the discovery order prior to the contempt adjudication. Because of petitioner’s failure to pursue this remedy, its challenge to the contempt order was restricted to the above grounds. Apparently not deeming the constitutional objections to draw into question whether “on the face of it the order disobeyed was void,” the court found no infirmity in the contempt judgment under this limited scope of review. At the same time it did go on to consider petitioner’s constitutional challenge to the order to produce membership lists but found it untenable since membership lists were not privileged against disclosure pursuant to reasonable state demands and since the privilege against self-incrimination was not available to corporations.
We are unable to reconcile the procedural holding of the Alabama Supreme Court in the present case with its past unambiguous holdings as to the scope of review available upon a writ of certiorari addressed to a contempt judgment. As early as 1909 that court said in such a case, Ex parte Dickens, 162 Ala. 272, at 276, 279-280, 50 So. 218, at 220, 221:
“Originally, on certiorari, only the question of jurisdiction was inquired into; but this limit has been removed, and now the court ‘examines the law questions involved in the case which may affect its merits.’...
“. . . [T]he judgment of this court is that the proper way to review the action of the court in cases of this kind is by certiorari, and not by appeal.
“We think that certiorari is a better remedy than mandamus, because the office of a ‘mandamus’ is to require the lower court or judge to act, and not ‘to correct error or to reverse judicial action,’. . . whereas, in a proceeding by certiorari, errors of law in the judicial action of the lower court may be inquired into and corrected.”
This statement was in full accord with the earlier case of Ex parte Boscowitz, 84 Ala. 463, 4 So. 279, and the practice in the later Alabama cases, until we reach the present one, appears to have been entirely consistent with this rule. See Ex parte Wheeler, 231 Ala. 356, 358, 165 So. 74, 75-76; Ex parte Blakey, 240 Ala. 517, 199 So. 857; Ex parte Sellers, 250 Ala. 87, 88, 33 So. 2d 349, 350. For example, in Ex parte Morris, 252 Ala. 551, 42 So. 2d 17, decided as late- as 1949, the petitioner had been held in contempt for his refusal to obey a court order to produce names of members of the Ku Klux Klan. On writ of certiorari, constitutional grounds were urged in part for reversal of the contempt conviction. In denying the writ of certiorari, the Supreme Court concluded that petitioner had been accorded due process, and in explaining its denial the court considered and rejected various constitutional claims relating to the validity of the order. There was no intimation that the petitioner had selected an inappropriate form of appellate review to obtain consideration of all questions of law raised by a contempt judgment.
The Alabama cases do indicate, as was said in the opinion below, that an order requiring production of evidence “. . . may be reviewed on petition for mandamus.” 265 Ala., at 353, 91 So. 2d, at 217. (Italics added.) See Ex parte Hart, 240 Ala. 642, 200 So. 783; cf. Ex parte Driver, 255 Ala. 118, 50 So. 2d 413. But we can discover nothing in the prior state cases which suggests that mandamus is the exclusive remedy for reviewing court orders after disobedience of them has led to contempt judgments. Nor, so far as we can find, do any of these prior decisions indicate that the validity of such orders can be drawn in question by way of certiorari only in instances where a defendant had no opportunity to apply for mandamus. Although the opinion below suggests no such distinction, the State now argues that this was in fact the situation in all of the earlier certiorari cases, because there the contempt adjudications, unlike here, had followed almost immediately the disobedience to the court orders. Even if that is indeed the rationale of the Alabama Supreme Court’s present decision, such a local procedural rule, although it may now appear in retrospect to form part of a consistent pattern of procedures to obtain appellate review, cannot avail the State here, because petitioner could not fairly be deemed to have been apprised of its existence. Novelty in procedural requirements cannot be permitted to thwart review in this Court applied for by those who, in justified reliance upon prior decisions, seek vindication in state courts of their federal constitutional rights. Cf. Brinkerhoff-Faris Co. v. Hill, 281 U. S. 673.
That there was justified reliance here is further indicated by what the Alabama Supreme Court said in disposing of petitioner’s motion for a stay of the first contempt judgment in this case. This motion, which was filed prior to the final contempt judgment and which stressed constitutional issues, recited that “[t]he only way in which the [Association] can seek a review of the validity of the order upon which the adjudication of contempt is based [is] by filing a petition for Writ of Certiorari in this Court.” In denying the motion, 265 Ala. 356, 357, 91 So. 2d 220, 221, the Supreme Court stated:
“It is the established rule of this Court that the proper method of reviewing a judgment for civil contempt of the kind here involved is by a petition for common law writ of certiorari ....
“But the petitioner here has not applied for writ of certiorari, and we do not feel that the petition [for a stay] presently before us warrants our interference with the judgment of the Circuit Court of Montgomery County here sought to be stayed.”
We hold that this Court has jurisdiction to entertain petitioner’s federal claims.
II.
The Association both urges that it is constitutionally entitled to resist official inquiry into its membership lists, and that it may assert, on behalf of its members, a right personal to them to be protected from compelled disclosure by the State of their affiliation with the Association as revealed by the membership lists. We think that petitioner argues more appropriately the rights of its members, and that its nexus with them is sufficient to permit that it act as their representative before this Court. In so concluding, we reject respondent’s argument that the Association lacks standing to assert here constitutional rights pertaining to the members, who are not of course parties to the litigation.
To limit the breadth of issues which must be dealt with in particular litigation, this Court has generally insisted that parties rely only on constitutional rights which are personal to themselves. Tileston v. Ullman, 318 U. S. 44; Robertson and Kirkham, Jurisdiction of the Supreme Court (1951 ed.), § 298. This rule is related to the broader doctrine that constitutional adjudication should where possible be avoided. See Ashwander v. Tennessee Valley Authority, 297 U. S. 288, 346-348 (concurring opinion). The principle is not disrespected where constitutional rights of persons who are not immediately before the Court could not be effectively vindicated except through an appropriate representative before the Court. See Barrows v. Jackson, 346 U. S. 249, 255-259; Joint Anti-Fascist Refugee Committee v. McGrath, 341 U. S. 123, 183-187 (concurring opinion).
If petitioner’s rank-and-file members are constitutionally entitled to withhold their connection with the Association despite the production order, it is manifest that this right is properly assertable by the Association. To require that it be claimed by the members themselves would result in nullification of the right at the very moment of its assertion. Petitioner is the appropriate party to assert these rights, because it and its members are in every practical sense identical. The Association, which provides in- its constitution that “[a]ny person who is in accordance with [its] principles and policies . . .” may become a member, is but the medium through which its individual members seek to make more effective the expression of their own views. The reasonable likelihood that the Association itself through diminished financial support and membership may be adversely affected if production is compelled is a further factor pointing towards our holding that petitioner has standing to complain of the production order on behalf of its members. Cf. Pierce v. Society of Sisters, 268 U. S. 510, 534-536.
III.
We thus reach petitioner’s claim that the production order in the state litigation trespasses upon fundamental freedoms protected by the Due Process Clause of the Fourteenth Amendment. Petitioner argues that in view of the facts and circumstances shown in the record, the effect of compelled disclosure of the membership lists will be to abridge the rights of its rank-and-file members to engage in lawful association in support of their common, beliefs. It contends that governmental action which, although not directly suppressing association, nevertheless carries this consequence, can be justified only upon some overriding valid interest of the State.
Effective advocacy of both public and private points of view, particularly controversial ones, is undeniably enhanced by group association, as this Court has more than once recognized by remarking upon the close nexus between the freedoms of speech and assembly. De Jonge v. Oregon, 299 U. S. 353, 364; Thomas v. Collins, 323 U. S. 516, 530. It is beyond debate that freedom to engage in association for the advancement' of beliefs and ideas is an inseparable aspect of the “liberty” assured by the Due Process Clause of the Fourteenth Amendment, which embraces freedom of speech. See Gitlow v. New York, 268 U. S. 652, 666; Palko v. Connecticut, 302 U. S. 319, 324; Cantwell v. Connecticut, 310 U. S. 296, 303; Staub v. City of Baxley, 355 U. S. 313, 321. Of course, it is immaterial whether the beliefs sought to be advanced by association pertain to political, economic, religious or cultural matters, and state action which may have the effect of curtailing the freedom to associate is subject to the closest scrutiny.
The fact that Alabama,- so far as is relevant to the validity of the contempt judgment presently under review, has taken no direct action, cf. De Jonge v. Oregon, supra; Near v. Minnesota, 283 U. S. 697, to restrict the right of petitioner’s members to associate freely, does not end inquiry into the effect of the production order. See American Communications Assn. v. Douds, 339 U. S. 382, 402. In the domain of these indispensable liberties, whether of speech, press, or association, the decisions of this Court recognize that abridgment of such rights, even though unintended, may inevitably follow from varied forms of governmental action. Thus in Douds, the Court stressed that the legislation there challenged, which on its face sought to regulate labor unions and to secure stability in interstate commerce, would have the practical effect “of discouraging” the .exercise of constitutionally protected political rights, 339 U. S., at 393, and it upheld the statute only after concluding that the reasons advanced for its enactment were constitutionally sufficient to justify its possible deterrent effect upon such freedoms. Similar recognition of possible unconstitutional intimidation of the free exercise of the right to advocate underlay this Court’s narrow construction of the authority of a congressional committee investigating lobbying and of an Act regulating lobbying, although in neither case was there an effort to suppress speech. United States v. Rumely, 345 U. S. 41, 46-47; United States v. Harriss, 347 U. S. 612, 625-626. The governmental action challenged may appear to be totally unrelated to protected liberties. Statutes imposing taxes upon rather than prohibiting particular activity have been struck down when perceived to have the consequence of unduly curtailing the liberty of freedom of press assured under the Fourteenth Amendment. Grosjean v. American Press Co., 297 U. S. 233; Murdock v. Pennsylvania, 319 U. S. 105.
It is hardly a novel perception that compelled disclosure of affiliation with groups engaged in advocacy may constitute as effective a restraint on freedom of association as the forms of governmental action in the cases above were thought likely to produce upon the particular constitutional rights there involved. This Court has recognized the vital relationship between freedom to associate and privacy in one’s associations. When referring to the varied forms of governmental action which might interfere with freedom of assembly, it said in American Communications Assn. v. Douds, supra, at 402: “A requirement that adherents of particular religious faiths or political parties wear identifying arm-bands, for example, is obviously of this nature.” Compelled disclosure of membership in an organization engaged in advocacy of particular beliefs is of the same order. Inviolability of privacy in group association may in many circumstances be indispensable to preservation of freedom of association, particularly where a group espouses dissident beliefs. Cf. United States v. Rumely, supra, at 56-58 (concurring opinion).
We think that the production order, in the respects here drawn in question, must be regarded as entailing the likelihood of a substantial restraint upon the exercise by petitioner’s members of their right to freedom of association. Petitioner has made an uncontroverted showing that on past occasions revelation of the identity of its rank-and-file members has exposed these members to economic reprisal, loss of employment, threat of physical coercion, and other manifestations of public hostility. Under these circumstances, we think it apparent that compelled disclosure of petitioner’s Alabama membership is likely to affect adversely the ability of petitioner and its members to pursue their collective effort to foster beliefs which they admittedly have the right to advocate, in that it may induce members to withdraw from the Association and dissuade others from joining it because of fear of exposure of their beliefs shown through their associations and of the consequences of this exposure.
It is not sufficient to answer, as the State does here, that whatever repressive effect compulsory disclosure of names of petitioner’s members may have upon participation by Alabama citizens in petitioner’s activities follows not from state action but from private community pressures. The crucial factor is the interplay of governmental and private action, for it is only after the initial exertion of state power represented by the production order that private action takes hold.
We turn to the final question whether Alabama has demonstrated an interest in obtaining the disclosures it seeks from petitioner which is sufficient to justify the deterrent effect which we have concluded these disclosures may well have on the free exercise by petitioner’s members of their constitutionally protected right of association. See American Communications Assn. v. Douds, supra, at 400; Schneider v. State, 308 U. S. 147, 161. Such a ". . . subordinating interest of the State must be compelling,” Sweezy v. New Hampshire, 354 U. S. 234, 265 (concurring opinion). It is not of moment that the State has here acted solely through its judicial branch, for whether legislative or judicial, it is still the application of state power which we are asked to scrutinize.
It is important to bear in mind that petitioner asserts no right to absolute immunity from state investigation, and no right to disregard Alabama’s laws. As shown by its substantial compliance with the production order, petitioner does not deny Alabama’s right to obtain from it such information as the State desires concerning the purposes of the Association and its activities within the State. Petitioner has not objected to divulging the identity of its members who are employed by or hold official positions with it. It has urged the rights solely of its ordinary rank- and-file members. This is therefore not analogous to a case involving the interest of a State in protecting its citizens in their dealings with paid solicitors or agents of foreign corporations by requiring identification. See Cantwell v. Connecticut, supra, at 306; Thomas v. Collins, supra, at 538.
Whether there was "justification” in this instance turns solely on the substantiality of Alabama’s interest in obtaining the membership lists. During the course of a hearing before the Alabama Circuit Court on a motion of petitioner to set aside the production order, the State Attorney General presented at length, under examination by petitioner, the State’s reason for requesting the membership lists. The exclusive purpose was to determine whether petitioner was conducting intrastate business in violation of the Alabama foreign corporation registration statute, and the membership lists were expected to help resolve this question. The issues in the litigation commenced by Alabama by its bill in equity were whether the character of petitioner and its activities in Alabama had been such as to maké petitioner subject to the registration statute, and whether the extent of petitioner’s activities without qualifying suggested its permanent ouster from the State. Without intimating the slightest view upon the merits of these issues, we' are unable to perceive that the disclosure of the names of petitioner’s rank-and-file members has a substantial bearing on either of them. As matters stand in the state court, petitioner (1) has admitted its presence and conduct of activities in Alabama since 1918; (2) has offered to comply in all respects with the state qualification statute, although preserving its contention that the statute does not apply to it; and (3) has apparently complied satisfactorily with the production order, except for the membership lists, by furnishing the Attorney General with varied business records, its charter and statement of purposes, the names of all of its directors and officers, and with the total number of its Alabama members and the amount of their dues. These last items would not on this record appear subject to constitutional challenge and have been furnished, but whatever interest the State may have in obtaining names of ordinary members has not been shown to be sufficient to overcome petitioner’s constitutional objections to the production order.
From what, has already been said, we think it apparent that Bryant v. Zimmerman, 278 U. S. 63, cannot be relied on in support of the State’s position, for that case involved markedly different considerations in terms of the interest of the State in obtaining disclosure. There, this Court upheld, as applied to a member of a local chapter of the Ku Klux Klan, a New York statute requiring any unincorporated association which demanded an oath as a condition to membership to file with state officials copies of its “. . . constitution, by-laws, rules, regulations and oath of membership, together with a roster of its membership and a list of its officers for the current year.” N. Y. Laws 1923, c. 664, §§ 53, 56. In its opinion, the Court took care to emphasize the nature of the organization which New York sought to regulate. The decision was based on the particular character of the Klan’s activities, involving acts of unlawful intimidation and violence, which the Court assumed was before the state legislature when it enacted the statute, and of which the Court itself took judicial notice. Furthermore, the situation before us is significantly different from that in Bryant, because the organization there had made no effort to comply with any of the requirements of New York’s statute but rather had refused to furnish the State with any information as to its local activities.
We hold that the immunity from state scrutiny of membership lists which the Association claims on behalf of its members is here so related to the right of the members to pursue their lawful private interests privately and to associate freely with others in so doing as to come within the protection of the Fourteenth Amendment. And we conclude that Alabama has fallen short of showing a controlling justification for the deterrent effect on the free enjoyment of the right to associate which disclosure of membership lists is likely to have. Accordingly, the judgment of civil contempt and the $100,000 fine which resulted from petitioner’s refusal to comply with the production order in this respect must fall.
IV.
Petitioner joins with, its attack upon the production order a challenge to the constitutionality of the State’s ex parte temporary restraining order preventing it from soliciting support in Alabama, and it asserts that the Fourteenth Amendment precludes such state action. But as noted above, petitioner has never received a hearing on the merits of the ouster suit, and we do not consider these questions properly here. The Supreme Court of Alabama noted in its denial of the petition for certiorari that such petition raised solely a question pertinent to the contempt adjudication. “The ultimate aim and purpose of the litigation is to determine the right of the state to enjoin petitioners from doing business in Alabama. That question, however, is not before us in this proceeding.” 265 Ala., at 352, 91 So. 2d, at 216. The proper method for raising questions in the state appellate courts pertinent to the underlying suit for an injunction appears to be by appeal, after a hearing on the merits and final judgment by the lower state court. Only from the disposition of such an appeal can review be sought here.
For the reasons stated, the judgment of the Supreme Court of Alabama must be reversed and the case remanded for proceedings not inconsistent with this opinion.
Reversed.
The Certificate of Incorporation of the Association provides that its "... principal objects . . . are voluntarily to promote equality of rights and eradicate caste or race prejudice among the citizens of the United States; to advance the interest of colored citizens; to secure for them impartial suffrage; and to increase their opportunities for securing justice in the courts, education for their children, employment according to their ability, and complete equality before the 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:
|
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 Blackmun
delivered the opinion of the Court.
The issue in this case is whether Illinois has provided constitutionally adequate procedures for suspending or revoking the license of a driver who repeatedly has been convicted of traffic offenses. The statute and administrative regulations provide for an initial summary decision based on official records, with a full administrative hearing available only after the suspension or revocation has taken effect.
I
The case centers on § 6-206 of the Illinois Driver Licensing Law (c. 6 of the Illinois Vehicle Code). The section is entitled “Discretionary authority to suspend or revoke license or permit.” It empowers the Secretary of State to act “without preliminary hearing upon a showing by his records or other sufficient evidence” that a driver’s conduct falls into any one of 18 enumerated categories. Ill. Rev. Stat., c. 95%, § 6-206 (a) (1975). Pursuant to his rulemaking authority under this law, § 6-211 (a), the Secretary has adopted administrative regulations that further define the bases and procedures for discretionary suspensions. These regulations generally provide for an initial summary determination based on the individual’s driving record. The Secretary has established a comprehensive system of assigning “points” for various kinds of traffic offenses, depending on severity, to provide an objective means of evaluating driving records.
One of the statutorily enumerated circumstances justifying license suspension or revocation is conviction of three moving traffic offenses within a 12-month period. § 6-206 (a) (2). This is one of the instances where the Secretary, by regulation, has provided a method for determining the sanction according to the driver’s accumulated “points.”
Another circumstance, specified in the statute, supporting suspension or revocation is where a licensee
“[h]as been repeatedly involved as a driver in motor vehicle collisions or has been repeatedly convicted of offenses against laws and ordinances regulating the movement of traffic, to a degree which indicates lack of ability to exercise ordinary and reasonable care in the safe operation of a motor vehicle or disrespect for the traffic laws and the safety of other persons upon the highway.” § 6-206 (a)(3).
Here again the Secretary has limited his broad statutory discretion by an administrative regulation. This regulation allows suspension or revocation, where sufficient points have been accumulated to warrant a second suspension within a 5-year period. The regulation concludes flatly: “A person who has been suspended thrice within a 10 year period shall be revoked.”
Section 6-206 (c)(1) requires the Secretary “immediately” to provide written notice of a discretionary suspension or revocation under this statute, but no prior hearing is required. Within 20 days of his receiving a written request from the licensee, the Secretary must schedule a full evidentiary hearing for a date “as early as practical” in either Sangamon County or Cook County, as the licensee may specify. § 2-118 (a). The final decision of the Secretary after such hearing is subject to judicial review in the Illinois courts. § 2-118 (e). In addition, a person whose license is suspended or revoked may obtain a restricted permit for commercial use or in case of hardship. §§ 6-206 (c) (2) and (3).
II
Appellee Love, a resident of Chicago, is employed as a truck-driver. His license was suspended in November 1969, under § 6-206 (a) (2), for three convictions within a 12-month period. He was then convicted of a charge of driving while his license was suspended, and consequently another suspension was imposed in March 1970 pursuant to § 6-303 (b). Appellee received no further citation until August 1974, when he was arrested twice for speeding. He was convicted of both charges and then received a third speeding citation in February 1975. On March 27, he was notified by letter that he would lose his driving privileges if convicted of a third offense. On March 31 appellee was convicted of the third speeding charge.
On June 3, appellee received a notice that his license was revoked effective June 6. The stated authority for the revocation was § 6-206 (a) (3); the explanation, following the language of the statute, was:
“This action has been taken as a result of: Your having been repeatedly convicted of offenses against laws and ordinances regulating the movement of traffic, to a degree which indicates disrespect for the traffic laws.” App. 13.
Appellee, then aged 25, made no request for an administrative hearing. Instead, he filed this purported class action on June 5 against the Illinois Secretary of State in the United States District Court for the Northern District of Illinois. His complaint sought a declaratory judgment that § 6-206 (a) (3) was unconstitutional, an injunction against enforcement of the statute, and damages. Appellee’s application for a temporary restraining order was granted on condition that he apply for a hardship driving permit. He applied for that permit on June 10, and it was issued on July 25.
A three-judge District Court was convened to consider appellee’s claim that the Illinois statute was unconstitutional. On cross-motions for summary judgment, the court held that a license cannot constitutionally be suspended or revoked under § 6-206 (a)(3) until after a hearing is held to determine whether the licensee meets the statutory criteria of “lack of ability to exercise ordinary and reasonable care in the safe operation of a motor vehicle or disrespect for the traffic laws and the safety of other persons upon the highway.” The court regarded such a prior hearing as mandated by this Court’s decision in Bell v. Burson, 402 U. S. 535 (1971). Accordingly, the court granted judgment for appellee and enjoined the Secretary of State from enforcing § 6-206 (a)(3). The Secretary appealed, and we noted probable jurisdiction sub nom. Howlett v. Love, 429 U. S. 813 (1976).
Ill
It is clear that the Due Process Clause applies to the deprivation of a driver’s license by the State:
“Suspension of issued licenses . . . involves state action that adjudicates important interests of the licensees. In such cases the licenses are not to be taken away without that procedural due process required by the Fourteenth Amendment.” Bell v. Burson, 402 U. S., at 539.
It is equally clear that a licensee in Illinois eventually can obtain all the safeguards procedural due process could be thought to require before a discretionary suspension or revocation becomes final. Appellee does not challenge the adequacy of the administrative hearing, noted above, available under § 2-118. The only question is one of timing. This case thus presents an issue similar to that considered only last Term in Mathews v. Eldridge, 424 U. S. 319, 333 (1976), namely, “the extent to which due process requires an evidentiary hearing prior to the deprivation of some type of property interest even if such a hearing is provided thereafter.” We may analyze the present case, too, in terms of the factors considered in Eldridge:
“[Identification of the specific dictates of due process generally requires consideration of three distinct factors: first, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and probable value, if any, of additional or substitute procedural safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.” Id., at 335.
The private interest affected by the decision here is the granted license to operate a motor vehicle. Unlike the social security recipients in Eldridge, who at least could obtain retroactive payments if their claims were subsequently sustained, a licensee is not made entirely whole if his suspension or revocation is later vacated. On the other hand, a driver’s license may not be so vital and essential as are social insurance payments on which the recipient may depend for his very subsistence. See Goldberg v. Kelly, 397 U. S. 254, 264 (1970). The Illinois statute includes special provisions for hardship and for holders of commercial licenses, who are those most likely to be affected by the deprival of driving privileges. See n. 7, supra. We therefore conclude that the nature of the private interest here is not so great as to require us “to depart from the ordinary principle, established by our decisions, that something less than an evidentiary hearing is sufficient prior to adverse administrative action.” Mathews v. Eldridge, 424 U. S., at 343. See Arnett v. Kennedy, 416 U. S. 134 (1974).
Moreover, the risk of an erroneous deprivation in the absence of a prior hearing is not great. Under the Secretary’s regulations, suspension and revocation decisions are largely automatic. Of course, there is the possibility of clerical error, but written objection will bring a matter of that kind to the Secretary’s attention. In this case appellee had the opportunity for a full judicial hearing in connection with each of the traffic convictions on which the Secretary’s decision was based. Appellee has not challenged the validity of those convictions or the adequacy of his procedural rights at the time they were determined. Tr. of Oral Arg. 41, 47. Since appellee does not dispute the factual basis for the Secretary’s decision, he is really asserting the right to appear in person only to argue that the Secretary should show leniency and depart from his own regulations. Such an appearance might make the licensee feel that he has received more personal attention, but it would not serve to protect any substantive rights. We conclude that requiring additional procedures would be unlikely to have significant value in reducing the number of erroneous deprivations.
Finally, the substantial public interest in administrative efficiency would be impeded by the availability of a pretermination hearing in every case. Giving licensees the choice thus automatically to obtain a delay in the effectiveness of a suspension or revocation would encourage drivers routinely to request full administrative hearings. See Mathews v. Eldridge, 424 U. S., at 347. Far more substantial than the administrative burden, however, is the important public interest in safety on the roads and highways, and in the prompt removal of a safety hazard. See Perez v. Campbell, 402 U. S. 637, 657, 671 (1971) (opinion concurring in part and dissenting in part). This factor fully distinguishes Bell v. Burson, supra, where the “only purpose” of the Georgia statute there under consideration was “to obtain security from which to pay any judgments against the licensee resulting from the accident.” 402 U. S., at 540. In contrast, the Illinois statute at issue in the instant case is designed to keep off the roads those drivers who are unable or unwilling to respect traffic rules and the safety of others.
We conclude that the public interests present under the circumstances of this case are sufficiently visible and weighty for the State to make its summary initial decision effective without a predecision administrative hearing.
The present case is a good illustration of the fact that procedural due process in the administrative setting does not always require application of the judicial model. When a governmental official is given the power to make discretionary decisions under a broad statutory standard, case-by-case decisionmaking may not be the best way to assure fairness. Here the Secretary commendably sought to define the statutory standard narrowly by the use of his rulemaking authority. The decision to use objective rules in this case provides drivers with more precise notice of what conduct will be sanctioned and promotes equality of treatment among similarly situated drivers. The approach taken by the District Court would have the contrary result of reducing the fairness of the system, by requiring a necessarily subjective inquiry in each case as to a driver’s “disrespect” or “lack of ability to exercise ordinary and reasonable care.”
The second count of appellee’s complaint challenged § 6-206 (a) (3) on the grounds of vagueness and inadequacy of standards. The three-judge court did not reach the issue. App. 22. We regard the claim, in the light of Love’s record, as frivolous.
The judgment of the District Court is reversed.
It is so ordered.
Mr. Justice Rehnquist took no part in the consideration or decision of this case.
Section 6-211 (a): “The Secretary of State shall administer the provisions of this Chapter and may make and enforce rules and regulations relating to its administration.”
Rule 6-206 (a) (1975) provides in part:
“The Secretary of State is authorized to exercise discretionary authority to suspend or revoke the license or permit of any person without a preliminary hearing, or to decline to suspend or revoke such driving privileges. In making a determination of the action to be taken, the Secretary of State shall take into consideration the severity of the offense and conviction, the number of offenses and convictions, and prior suspensions or revocations on the abstract of the driver’s record. The Secretary may also take into consideration the points accumulated by the driver and noted on his driving record.
“For the purpose of this Rule and its companion rules, a conviction is the final adjudication of ‘guilty’ by a court of competent jurisdiction, either after a bench trial, trial by jury, plea of guilty, order of forfeiture, or default, as reported to the Secretary of State, and the Secretary of State is not authorized to consider or inquire into the facts and circumstances surrounding the conviction.”
The statute authorizes suspension or revocation where a licensee
“[h]as been convicted of not less than 3 offenses against traffic regulations governing the movement of vehicles with the exception of those offenses excluded under the provisions of Section 6-204 (2), committed within any 12 month period so as to indicate the disrespect for traffic laws and a disregard for the safety of other persons on the highways; conviction upon 3 charges of violation of Section 11-601 of this Act committed within a period of 12 months shall be deemed grounds for the revocation or suspension of a license or permit under this Section, provided that no such revocation or suspension shall be entered more than 6 months subsequent to the date of conviction of the 3rd offense.” 111. Rev. Stat. c. 95%, §6-206 (a) (2) (1975).
Rule 6-206 (a)2 (1975) provides:
“A person who has been convicted of three (3) or more offenses against traffic regulations, governing the movement of vehicles, with the exception of those offenses excluded under provisions of Section 6-204 (2) and whose violations have occurred within a twelve (12) month period may be suspended as follows:
“Number of points Action
20 to 44 Suspension up to 2 months
45 to 74 Suspension up to 3 months
75 to 89 Suspension up to 6 months
90 to 99 Suspension up to 9 months
100 to 109 Suspension up to 12 months
Over 110 Revocation for not less than 12 months.
“A person who has accumulated sufficient points to warrant a second suspension within a 10-year period may be either suspended or revoked, depending on the number of points. In the event of a second suspension in the 10-year period, the length of suspension, determined by the point total, is doubled to arrive at the type and duration of action.”
Rule 6-206 (a)3 (1975) provides:
“A person repeatedly involved in collisions or convictions to a degree which indicates the lack of ability to exercise ordinary and reasonable care in the safe operation of a motor vehicle, or whose record indicates disrespect for traffic laws and the safety of other persons on the highway, and who has accumulated sufficient points to warrant a second suspension within a 5 year period, may either be suspended or revoked by the Secretary of State, based upon the number of points in his record. A person who has been suspended thrice within a 10 year period shall be revoked.”
Section 6-206 (c) (1): “Upon suspending or revoking the license or permit of any person as authorized in this Section, the Secretary of State shall immediately notify such person in writing of the order revoking or suspending the license or permit. Such notice to be deposited in the United States mail, postage prepaid, to the last known address of such person.”
The statutory provision regarding commercial licenses provides that a suspension shall not deny “a person’s license to drive a commercial vehicle only as an occupation . . . unless 5 offenses were committed, at least 2 of which occurred while operating a commercial vehicle in connection with his regular occupation.” The statute places the burden on the commercial driver whose license is suspended to submit an affidavit to the Secretary within 25 days, setting forth facts establishing his eligibility for relief under this section. A commercial driver may obtain the same relief by requesting an administrative hearing in lieu of submitting an affidavit. In any event, the driver must return his license to the Secretary and in its place is issued a permit to drive only a commercial vehicle in his regular occupation. § 6-206 (c) (2).
Any driver whose license is suspended or revoked, in order to “relieve undue hardship,” may apply for a restricted permit to drive between his residence and his place of employment “or within other proper limits.” §6-206 (c) (3).
Appellee’s March speeding conviction was his third within a 12-month period, and thus § 6-206 (a) (2) authorized suspension of his license. That suspension, however, would have been appellee’s third within a 10-year period. The Secretary therefore proceeded directly under Rule 6-206 (a) 3, which makes revocation mandatory under such circumstances. The District Court treated this procedure as functionally equivalent to suspension under § 6-206 (a) (2), followed by mandatory revocation under Rule 6-206 (a)3. See App. 20 n. 2.
The class was never certified.
Appellee also contends that a prior hearing would avoid erroneous deprivation of a license where the commercial driver or hardship exceptions are applicable. See n. 7, supra. It is clear, however, that these statutory provisions contemplate relief only after the initial decision to suspend or revoke is made, and the licensee has the burden of demonstrating his eligibility for the relief. An initial suspension or revocation, therefore, is not “erroneous” even if the licensee subsequently qualifies for relief as a commercial driver or hardship case.
Since Bell v. Burson was decided, courts have sustained suspension or revocation of driving privileges, without prior hearing, where earlier convictions were on the record. See, e. g., Cox v. Hjelle, 207 N. W. 2d 266, 269-270 (N. D. 1973); Stauffer v. Weedlun, 188 Neb. 105, 195 N. W. 2d 218, appeal dismissed, 409 U. S. 972 (1972); Horodner v. Fisher, 38 N. Y. 2d 680, 345 N. E. 2d 571, appeal dismissed, 429 U. S. 802 (1976); Wright v. Malloy, 373 F. Supp. 1011, 1018-1019 (Vt.), summarily aff’d, 419 U. S. 987 (1974); Scott v. Hill, 407 F. Supp. 301, 304 (ED Va. 1076).
See K. Davis, Discretionary Justice, c. Ill, 52-96 (1969). The promulgation of rules may be of particular value when it is necessary for administrative decisions to be made summarily. See Freedman, Summary Action by Administrative Agencies, 40 U. Chi. L. Rev. 1, 44-49 (1972).
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 Ginsburg
delivered the opinion of the Court.
Federal preemption prescriptions relating to motor carriers, contained in 49 U. S. C. § 14501(c) (1994 ed., Supp. V), specifically save to States “safety regulatory authority . . . with respect to motor vehicles,” § 14501(c)(2)(A). This case presents the question whether the state power preserved in § 14501(c)(2)(A) may be delegated to municipalities, permitting them to exercise safety regulatory authority over local tow-truck operations.
The federal legislation preempts provisions by “a State [or] political subdivision of a State . . . related to a price, route, or service of any motor carrier ... with respect to the transportation of property.” § 14501(c)(1). As an exception to this general rule, Congress provided that the preemption directive “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” § 14501(c)(2)(A). Section 14501(c)(l)’s statement of the general rule explicitly includes “State[s]” and their “political subdivision^].” The exception for safety regulation, however, specifies only “State[s]” and does not mention “political subdivision^].” § 14501(c)(2)(A).
We hold that § 14501(c) does not bar a State from delegating to municipalities and other local units the State’s authority to establish safety regulations governing motor carriers of property, including tow trucks. A locality, as § 14501(c) recognizes, is a “political subdivision” of the State. Ordinarily, a political subdivision may exercise whatever portion of state power the State, under its own constitution and laws, chooses to delegate to the subdivision. Absent a clear statement to the contrary, Congress’ reference to the “regulatory authority of a State” should be read to preserve, not preempt, the traditional prerogative of the States to delegate their authority to their constituent parts.
I
The Interstate Commerce Act, as amended by the Federal Aviation Administration Authorization Act of 1994,108 Stat. 1606, and the ICC Termination Act of 1995, 109 Stat. 899, generally preempts state and local regulation “related to a price, route, or service of any motor carrier ... with respect to the transportation of property”; enumerated matters, however, are not covered by the preemption provision. The Act prescribes:
“(1) General Rule. — Except as provided in paragraphs (2) and (3), a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.
“(2) Matters not covered — Paragraph (1)—
“(A) shall not restrict the safety regulatory authority of a State with respect to motor vehicles ... or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization;
“(B) does not apply to the transportation of household goods; and
“(C) does not apply to the authority of a State or a political subdivision of a State to enact or enforce a law, regulation, or other provision relating to the price of for-hire motor vehicle transportation by a tow truck, if such transportation is performed without the prior consent or authorization of the owner or operator of the motor vehicle.
“(3) State standard transportation PRACTICES —
“(A) Continuation. — [Section 14501(c)(1)] shall not affect any authority of a State, political subdivision of a State, or political authority of 2 or more States to enact or enforce a law, regulation, or other provision, with respect to the intrastate transportation of property by motor carriers, related to — [inter alia] uniform cargo liability rules ... if such law, regulation, or provision meets [various enumerated] requirements.” 49 U. S. C. § 14501(c).
Tow trucks, all parties to this case agree, are “motor carrier[s] of property” falling within § 14501(c)’s compass. This reading is corroborated by § 14501(c)(2)(C), which relates to nonconsensual tows, e. g., of illegally parked or abandoned vehicles. That provision plainly indicates that tow trucks qualify as “motor carrier[s] of property”; it exempts from federal preemption state and local regulation of “the price of for-hire motor vehicle transportation by a tow truck” when the towing “is performed without the prior consent ... of the [towed vehicle’s] owner or operator.”
Petitioner, the City of Columbus, Ohio (City), extensively regulates the operation of any tow truck that seeks to pick up vehicles within city limits. Columbus’ regulations require tow-truck operators to obtain city licenses, submit to city inspections, meet city standards for insurance and rec-ordkeeping, and conform their vehicles to the City’s detailed equipment requirements. See Columbus, Ohio, City Code §§ 549.02-549.06 (1991); App. to Pet. for Cert. 37a-52a.
Plaintiff-respondent Ours Garage and Wrecker Service, Inc., joined by a trade association of tow-truck operators, the Towing and Recovery Association of Ohio (TRAO), brought suit in Federal District Court against the City of Columbus and two city officials to enjoin enforcement of the City’s tow-truck regulations. The complaint alleged that Columbus' regulations were preempted by § 14501(c)(1). On cross-motions for summary judgment, the District Court ruled for the plaintiffs; the court declared the City’s tow-truck regulations preempted and enjoined their enforcement. Columbus and its officials appealed to the United States Court of Appeals for the Sixth Circuit.
During the pendency of Columbus’ appeal, the Sixth Circuit decided Petrey v. Toledo, 246 F. 3d 548 (2001). Petrey held that city of Toledo tow-truck regulations, resembling those of Columbus, were preempted by § 14501(c). The court observed first that § 14501(c)(l)’s preemption rule explicitly applies to “a State [or] political subdivision of a State,” while the exception for safety regulations, § 14501(c)(2)(A), refers only to the “authority of a State.” The contrast in statutory language indicated to the court that Congress meant to limit the safety exception to States alone. Id., at 563. This reading, the court further reasoned, was consistent with Congress’ deregulatory purpose. “Congress intended to encourage market forces ... through the elimination of a myriad of complicated and potentially conflicting state regulations,” the court observed; “yet another level of regulation at the local level,” the court inferred, “would be disfavored.” Ibid.
Eleven weeks after rendering its judgment in Petrey, the Sixth Circuit decided this case. Holding Petrey dispositive, the appeals court affirmed the District Court’s injunction against enforcement of Columbus’ tow-truck regulations. 257 F. 3d 506, 507-508 (2001).
The Courts of Appeals have divided on the question whether § 14501(c)(2)(A)’s safety regulation exception to preemption encompasses municipal regulations. Compare Petrey, 246 F. 3d 548; Stucky v. San Antonio, 260 F. 3d 424 (CA5 2001); Tocher v. Santa Ana, 219 F. 3d 1040, 1051 (CA9 2000); and R. Mayer of Atlanta, Inc. v. Atlanta, 158 F. 3d 538 (CA11 1998) (all holding that local safety and insurance regulations are preempted), with Ace Auto Body & Towing, Ltd. v. New York, 171 F. 3d 765 (CA2 1999) (holding that local safety and insurance regulations are not preempted). We granted certiorari to resolve the conflict, see 534 U. S. 1073 (2002), and now reverse the Sixth Circuit’s judgment.
II
We begin our consideration of the question presented with an observation that is beyond genuine debate. Had 49 U. S. C. § 14501(c) contained no reference at all to “political subdivision's] of a State,” the preemption provision’s exception for exercises of the “safety regulatory authority of a State,” § 14501(c)(2)(A), undoubtedly would have embraced both state and local regulation. Accord, post, at 445 (Scalia, J., dissenting). The Court’s decision in Wisconsin Public Intervenor v. Mortier, 501 U. S. 597 (1991), would have been definitive. There the Court considered a provision of the Federal Insecticide, Fungicide, and Rodenticide Act authorizing a “State [to] regulate the sale or use of any federally registered pesticide or device in the State,” 7 U. S. C. § 136v(a); the provision was “silent with reference to local governments.” 501 U. S., at 607. “Mere silence,” we held, “cannot suffice to establish a clear and manifest purpose to pre-empt local authority.” Ibid, (internal quotation marks omitted).
As Justice White stated for the Court in Mortier, “[wjhen considering pre-emption, ‘we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.’” Id., at 605 (quoting Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230 (1947)). Furthermore, Justice White explained:
“The principle is well settled that local governmental units are created as convenient agencies for exercising such of the governmental powers of the State as may be entrusted to them in its absolute discretion. The exclusion of political subdivisions cannot be inferred from the express authorization to the States because political subdivisions are components of the very entity the statute empowers.” 501 U. S., at 607-608 (internal quotation marks, citations, and alterations omitted).
This case is a closer call than Mortier. Here, the general preemption provision, § 14501(c)(1) — from which § 14501(c) (2)(A) excepts “the safety regulatory authority of a State”— explicitly preempts regulation both by “a State” and by a “political subdivision of a State.” The exception for state safety regulation is the first in a series of four statutory exceptions to the preemption rule. The third exception in the series, covering regulation of prices for nonconsensual tow-truck services, matches the general preemption provision; it explicitly applies to the “authority of a State or a political subdivision of a State.” § 14501(c)(2)(C). States and their political subdivisions are likewise linked in almost every other provision of §14501. See §§ 14501(a), 14501(b)(1), 14501(e)(3)(A), 14501(c)(3)(B), 14501(c)(3)(C).
Respondents Ours Garage and TRAO, in line with several Courts of Appeals, home in on the statute’s repeated references to both States and their political subdivisions; in contrast, they urge, the singularly bare reference to “[s]tate” authority in § 14501(c)(2)(A)’s exception for safety regulation must mean that Congress intended to limit the exception to States alone. See Brief for Respondents 15-16,26-29. Respondents rely particularly on Russello v. United States, 464 U. S. 16 (1983). In that case, we observed: “Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” Id., at 23 (internal quotation marks omitted) (cited in Petrey, 246 F. 3d, at 561; Stucky, 260 F. 3d, at 441; and Tocher, 219 F. 3d, at 1051). The dissent asserts the same argument vigorously. In its words: “The only conceivable reason” for the separate enumeration of States and their political subdivisions in § 14501(c)(1) is to “establish . . . two separate categories of state power — state power exercised through political subdivisions and state power exercised by the State directly— that are later treated differently in the exceptions to the rule.” Post, at 445.
We acknowledge that § 14501(c)’s “disparate inclusion [and] exclusion” of the words “political subdivisions” support an argument of some force, one that could not have been made in Mortier. Nevertheless, reading § 14501(c)’s set of exceptions in combination, and with a view to the basic tenets of our federal system pivotal in Mortier, we conclude that the statute does not provide the requisite “clear and manifest indication that Congress sought to supplant local authority.” 501 U. S., at 611.
Respondents Ours Garage and TRAO, as just noted, contrast the first statutory exception to § 14501(c)’s preemption rule, i. e., the exception preserving “the safety regulatory authority of a State,” § 14501(c)(2)(A), with the third exception, preserving the “authority of a State or a political subdivision to enact or enforce a law, regulation, or other provision relating to the price” charged for nonconsensual towing, § 14501(c)(2)(C). See Brief for Respondents 15-16. The nonconsensual towing exception tracks the language and structure of the general preemption rule, omitting only the reference to a “political authority of 2 or more States.” Similarly styled, the fourth exception, for carrier-requested regulations in areas such as “uniform cargo liability” and antitrust immunity, § 14501(c)(3), completely parallels the wording of § 14501(c)(1): It provides that preemption “shall not affect any authority of a State, political subdivision of a State, or political authority of 2 or more States to enact or enforce a law, regulation, or other provision” in those areas.
The safety exception of § 14501(c)(2)(A), however, does not borrow language from § 14501(c)(1). It simply states that preemption “shall not restrict the safety regulatory authority of a State.” Notably, the second statutory exception, on which respondents train no attention, is stated with similar economy. That exception mentions neither States nor political subdivisions; it simply says that the general preemption rule, § 14501(c)(1), “does not apply to the transportation of household goods,” § 14501(c)(2)(B). Yet it is abundantly clear that, notwithstanding this difference in verbal formulation, § 14501(c)(2)(B), like its neighbor § 14501(c)(2)(C), permits both state and local regulation. Accord, post, at 446 (Scalia, J., dissenting).
The inclusion of the phrase “the authority of a State or a political subdivision of a State to enact or enforce a law, regulation, or other provision” no doubt synchronizes the nonconsensual towing provision with § 14501(c)(l)’s main rule. The parallel structure of §§ 14501(c)(1) and 14501(c)(2)(C) does not imply, however, that § 14501(c)(2)(A)’s concise statement must be read to use the term “State” restrictively. Respondents’ inference from the absence of “political subdivision of a State” in § 14501(c)(2)(A) would be more persuasive if the omission were the sole difference in the expression of the general rule and the safety exception. In contrast to §§ 14501(c)(2)(C) and (c)(3), however, neither the safety exception nor the household-goods exception refers to the “authority ... to enact or enforce a law, regulation, or other provision.” The Russello presumption — that the presence of a phrase in one provision and its absence in another reveals Congress’ design — grows weaker with each difference in the formulation of the provisions under inspection.
Respondents’ restrictive reading of the term “State,” we note, introduces an interpretive conundrum of another kind. Section 14501(c)(1) preempts the power of both States and localities to “enact or enforce a law, regulation, or other provision.” (Emphasis added.) Those conjoined words travel together. If, as Ours Garage and TRAO argue, the safety exception of § 14501(c)(2)(A) reaches only States, then localities are preempted not only from enacting, but equally from enforcing, safety regulations governing motor carriers of property — even if those regulations are enacted by the state legislature. It is unlikely that Congress would preserve States’ power to enact safety rules and, at the same time, bar the ordinary method by which States enforce such rules— through their local instrumentalities.
Finally, we reiterate, reading the term “State” as used in §14501 to exclude political subdivisions would yield a decision at odds with our federal system’s traditional comprehension of “the safety regulatory authority of a State,” § 14501(c)(2)(A). To repeat the essential observation made in Mortier: “The principle is well settled that local governmental units are created as convenient agencies for exercising such of the governmental powers of the State as may be entrusted to them in its absolute discretion.” 501 U. S., at 607-608 (internal quotation marks and alterations omitted). Whether and how to use that discretion is a question central to state self-government. See, e. g., Holt Civic Club v. Tuscaloosa, 439 U. S. 60, 71 (1978) (States enjoy “extraordinarily wide latitude ... in creating various types of political subdivisions and conferring authority upon them”).
In Ohio, as in other States, the delegation of governing authority from State to local unit has long occupied the attention of the State’s lawmakers. See D. Wilcox, Municipal Government in Michigan and Ohio: A Study in the Relations of City and Commonwealth 52-54, 63 (1896) (citing Ohio Const., Art. XIII (1851)). The Ohio Constitution currently grants municipalities within the State general authority “to exercise all powers of local self-government and to adopt and enforce within their limits such local police, sanitary and other similar regulations, as are not in conflict with the general laws.” Art. XVIII, §3. Ohio’s Legislature has enacted several statutes empowering cities to regulate motor vehicles and highways. See, e.g., Ohio Rev. Code Ann. §715.22 (Anderson 2000) (municipality may regulate motor vehicles and highways); § 723.01 (“Municipal corporations shall have special power to regulate the use of the streets.”). Particularly relevant here, Ohio has exempted tow trucks from the State’s regulation of motor carriers, § 4921.02(A)(8), thus leaving tow-truck regulation largely to the cities, Cincinnati v. Reed, 27 Ohio App. 3d 115, 500 N. E. 2d 333 (1985).
It is the expressed intent of § 14501(c)(2)(A) that the preemption rule of § 14501(c)(1) “not restrict” the existing “safety regulatory authority of a State.” Compare § 14501(c)(2)(A) with §§ 14501(c)(2)(B) and (C) (preemption “does not apply” to state or local power to regulate in particular areas), and § 14501(c)(3) (preemption rule “shall not affect” multistate, state, or local authority to regulate particular areas at the behest of carriers). Preemption analysis “start[s] with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.” Medtronic, Inc. v. Lohr, 518 U. S. 470, 485 (1996) (internal quotation marks and citation omitted). Section 14501(c)(2)(A) seeks to save from preemption state power “in a field which the States have traditionally occupied.” Ibid, (internal quotation marks and citation omitted). A saving provision of that order is hardly comparable to exercises of congressional spending authority that, as a condition for receipt of funds, explicitly restrict the prerogative of States to entrust governance of a matter to localities. Such programs typically make uniform statewide regulation a condition of funding, or, conversely, provide funds to localities on the condition that they be spent at that level in accordance with federal prescriptions and without state interference. See, e. g., 23 U. S. C. § 153 (grants to support traffic safety conditioned on a motorcycle helmet law that applies “throughout the State”); § 158 (highway grants withheld unless “State has in effect a law” setting the drinking age at 21); 42 U. S. C. § 1396a(a)(l) (Medicaid grants available only if a State ensures that its plan for medical assistance is “in effect in all political subdivisions of the State, and, if administered by them, be mandatory upon them”); Lawrence County v. Lead-Deadwood School Dist. No. 40-1, 469 U. S. 256, 270 (1985) (State may not restrict local use of funds that the United States makes available to localities to spend at their discretion).
This case, by contrast, deals not with States’ voluntary agreements to relinquish authority vis-á-vis their political subdivisions in exchange for federal funds, but with preemption stemming from Congress’ power to regulate commerce, in a field where States have traditionally allowed localities to address local concerns. Congress’ clear purpose in § 14501(e)(2)(A) is to ensure that its preemption of States’ economic authority over motor carriers of property, § 14501(c)(1), “not restrict” the preexisting and traditional state police power over safety. That power typically includes the choice to delegate the State’s “safety regulatory authority” to localities. Forcing a State to refrain from doing so would effectively “restrict” that very authority. Absent a basis more reliable than statutory language insufficient to demonstrate a “clear and manifest purpose” to the contrary, federal courts should resist attribution to Congress of a design to disturb a State’s decision on the division of authority between the State’s central and local units over safety on municipal streets and roads.
III
The Court of Appeals supported its reading of § 14501(c)(2)(A) to disallow delegation from State to city in part by reference to the statute’s deregulatory purpose. See Petrey, 246 F. 3d, at 563; accord, Stucky, 260 F. 3d, at 444-446; Tocher, 219 F. 3d, at 1048, 1051; R. Mayer, 158 F. 3d, at 546. We now turn to that justification.
The Conference Report on the Federal Aviation Administration Authorization Act of 1994 observed that “[s]tate economic regulation of motor carrier operations ... is a huge problem for national and regional carriers attempting to conduct a standard way of doing business.” H. R. Conf. Rep. No. 103-677, p. 87 (1994). Carrying more weight, in the Act itself Congress reported its finding that “the regulation of intrastate transportation of property by the States” unreasonably burdened free trade, interstate commerce, and American consumers. Pub. L. 103-305, § 601(a)(1), 108 Stat. 1605. Congress therefore concluded that “certain aspects of the State regulatory process should be preempted.” § 601(a)(2). These declarations of deregulatory purpose, however, do not justify interpreting through a deregulatory prism “aspects of the State regulatory process” that Congress determined should not be preempted.
A congressional decision to enact both a general policy that furthers a particular goal and a specific exception that might tend against that goal does not invariably call for the narrowest possible construction of the exception. Such a construction is surely resistible here, for § 14501(c)(l)’s preemption rule and § 14501(c)(2)(A)’s safety exception to it do not necessarily conflict. The problem to which the congressional conferees attended was “[sjtate economic regulation”; the exemption in question is for state safety regulation. Corroboratively, the measure’s legislative history shows that the deregulatory aim of the legislation had been endorsed by a key interest group — the American Trucking Association— subject to “some conditions that would allow regulatory protection to continue for non-economic factors, such as ... insurance [and] safety.” H. R. Conf. Rep. No. 103-677, at 88. The conferees believed that the legislation “addressed] these conditions.” Ibid.; see also Ace Auto Body, 171 F. 3d, at 776.
The construction of § 14501 that respondents Ours Garage and TRAO advocate, moreover, does not guarantee uniform regulation. On respondents’ reading as on petitioners’, a State could, without affront to the statute, pass discrete, nonuniform safety regulations applicable to each of its several constituent municipalities. Ohio thus could adopt the Columbus regulations to govern in that city, the Toledo regulations to govern there, and so on down the line. See Tr. of Oral Arg. 37-38. Indeed, because § 14501(c)(2)(A) refers only to “political” subdivisions, nothing in the statute’s text would impede a State from creating an administrative agency organized into local offices, each of which could craft local rules suitable to its assigned jurisdiction. There is no reason to suppose that Congress meant to stop the States from spreading their authority among municipalities unless they employ such artificial or inefficient schemes.
Furthermore, 49 U. S. C. §31141 (1994 ed.) affords the Secretary of Transportation a means to prevent the safety exception from overwhelming the lawmakers’ deregulatory purpose. That provision authorizes the Secretary to void any “State law or regulation on commercial motor vehicle safety” that, in the Secretary’s judgment, “has no safety benefit . . . [or] would cause an unreasonable burden on interstate commerce.” §§ 31141(a), (c)(4); see also §31132(8) (“‘State law’ includes [for the purposes of §31141] a law enacted by a political subdivision of a State”); §31132(9) (parallel definition of “State regulation”). Under this authority, the Secretary can invalidate local safety regulations upon finding that their content or multiplicity threatens to clog the avenues of commerce.
We reiterate that § 14501(c)(2)(A) shields from preemption only “safety regulatory authority” (and “authority of a State to regulate ... with regard to minimum amounts of financial responsibility relating to insurance requirements”). Local regulation of prices, routes, or services of tow trucks that is not genuinely responsive to safety concerns garners no exemption from § 14501(c)(l)’s preemption rule.
* * *
For the reasons stated, we hold that § 14501(c)(2)(A) spares from preemption local as well as state regulation. We express no opinion, however, on the question whether Columbus’ particular regulations, in whole or in part, qualify as exercises of “safety regulatory authority” or otherwise fall within § 14501(c)(2)(A)’s compass. This question, which was not reached by the Court of Appeals, remains open on remand.
The judgment of the United States 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.
The court excepted regulations governing the city’s own purchase of towing services, which it held fell within the “municipal proprietor” exception applicable to federal preemption rules. See Petrey, 246 F. 3d, at 558-559.
The dissent insists that § 14501(c)(2)(B) is irrelevant because its phrasing “ha[s] nothing to do with the issue of separating state and local authority.” Post, at 446 (emphasis deleted). We ultimately draw the same conclusion, of course, regarding the phrasing of the safety exception in § 14501(c)(2)(A). The dissent, although it urges that “we should take seriously the references to States and subdivisions of States where they appear,” post, at 447, rests upon the fact that subdivisions of States do not appear in the safety exception — as they also do not in the household-goods exception of § 14501(c)(2)(B). That § 14501(c)(2) comprises three exceptions, each differently stated, seems to us indeed relevant to the interpretive weight that may be attached to the variation among them.
Faced with this argument, the dissent is converted, however temporarily, to the view that “federal interference with the ‘historic powers of the States’ must be evinced by a ‘plain statement.’ ” Post, at 450, n. 4 (quoting Gregory v. Ashcroft, 501 U. S. 452, 461 (1991)). The dissent finds no plain statement in § 14501(c)(l)’s prohibition on local enforcement because it can be read to mean only that “a political subdivision may not enact new laws or enforce its previously enacted laws” relating to motor carriage of property. Post, at 450, n. 4. This is by no means the most natural reading of the preemption provision. The suggestion of the dissent is that, as applied to localities, § 14501(c)(1) preempts only local enforcement of locally enacted laws. See ibid. This interpretation raises the startling possibility that, although § 14501(c)(1) prohibits both States and localities from “enactflng]” new laws, it permits localities (but not States) to enforce previously enacted state laws relating to motor carriage of property.
Nor, the dissent’s suggestion notwithstanding, see post, at 448, is § 14501 similar to the Clean Air Act, which mandates that States undertake an environmental planning process that of necessity cannot respect local political boundaries. See 42 U. S. C. §§ 7407(c), 7410(a)(1) (1994 ed.) (States must develop implementation plans for air quality in each of its “air quality control region[s],” whose borders are defined by the Administrator of the Environmental Protection Agency based not upon local jurisdictional lines but upon criteria she “deems necessary or appropriate for the attainment ... of [national] ambient air quality standards”); cf. 33 U. S. C. § 1313(d)(1)(A) (under the Clean Water Act, each State must develop pollution abatement plans based upon a “priority ranking” of all “waters within its boundaries for which... effluent limitations ... are not stringent enough to implement [applicable] water quality standard[s]”). Even so, States may delegate implementation authority under the Clean Air Act to their political subdivisions, subject to the requirement that the State bear ultimate oversight responsibility. See § 7410(a)(2)(E)(iii) (State must provide “necessary assurances that, where the State has relied on a local or regional government, agency, or instrumentality for the implementation of any [state] plan provision, the State has responsibility for ensuring adequate implementation of such plan provision”).
Nor was it reached in Petrey v. Toledo, 246 F. 3d 548 (CA6 2001), which the Sixth Circuit stated “controls the disposition of this case,” 257 F. 3d 506, 508 (2001). See Petrey, 246 F. 3d, at 563-564.
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.
Opinion of the Court by
MR. Justice Douglas,
announced by Mr. Justice Reed.
This case and United States v. Urbuteit, post, p. 355, decided this day, are here on certiorari to resolve a conflict among the circuits in the construction of the Federal Food, Drug, and Cosmetic Act of June 25, 1938. 52 Stat. 1040, 21 U. S. C. § 301 et seq.
Kordel was charged by informations containing twenty counts of introducing or delivering for introduction into interstate commerce misbranded drugs. He was tried without a jury, found guilty, and fined two hundred dollars on each count. 66 F. Supp. 538. This judgment was affirmed on appeal. 164 F. 2d 913.
Kordel writes and lectures on health foods from information derived from studies in public and private libraries. Since 1941 he has been marketing his own health food products, which appear to be compounds of various vitamins, minerals and herbs. The alleged misbranding consists of statements in circulars or pamphlets distributed to consumers by the vendors of the products, relating to their efficacy. The petitioner supplies these pamphlets as well as the products to the vendors. Some of the literature was displayed in stores in which the petitioner’s products were on sale. Some of it was given away with the sale of products; some sold independently of the drugs; and some mailed to customers by the vendors.
It is undisputed that petitioner shipped or caused to be shipped in interstate commerce both the drugs and the literature. Seven of the counts charged that the drugs and literature were shipped in the same cartons. The literature involved in the other counts was shipped separately from the drugs and at different times — both before and after the shipments of the drugs with which they were associated. The question whether the separate shipment of the literature saved the drugs from being misbranded within the meaning of the Act presents the main issue in the case.
Section 301 (a) of the Act prohibits the introduction into interstate commerce of any drug that is adulterated or misbranded. It is misbranded according to § 502 (a) if its “labeling is false or misleading in any particular” and unless the labeling bears “adequate directions for use.” § 502 (f). The term labeling is defined in § 201 (m) to mean “all labels and other written, printed, or graphic matter (1) upon any article or any of its containers or wrappers, or (2) accompanying such article.” Section 303 makes the violation of any of the provisions of § 301 a crime.
In this case the drugs and the literature had a common origin and a common destination. The literature was used in the sale of the drugs. It explained their uses. Nowhere else was the purchaser advised how to use them. It constituted an essential supplement to the label attached to the package. Thus the products and the literature were interdependent, as the Court of Appeals observed.
It would take an extremely narrow reading of the Act to hold that these drugs were not misbranded. A criminal law is not to be read expansively to include what is not plainly embraced within the language of the statute (United States v. Resnick, 299 U. S. 207; Kraus & Bros. v. United States, 327 U. S. 614, 621-622), since the purpose fairly to apprise men of the boundaries of the prohibited action would then be defeated. United States v. Sullivan, 332 U. S. 689, 693; Winters v. New York, 333 U. S. 507. But there is no canon against using common sense in reading a criminal law, so that strained and technical constructions do not defeat its purpose by creating exceptions from or loopholes in it. See Roschen v. Ward, 279 U. S. 337, 339.
It would, indeed, create an obviously wide loophole to hold that these drugs would be misbranded if the literature had been shipped in the same container but not misbranded if the literature left in the next or in the preceding mail. The high purpose of the Act to protect consumers who under present conditions are largely unable to protect themselves in this field would then be easily defeated. The administrative agency charged with its enforcement has not given the Act any such restricted construction. The textual structure of the Act is not agreeable to it. Accordingly, we conclude that the phrase “accompanying such article” is not restricted to labels that are on or in the article or package that is transported.
The first clause of § 201 (m) — all labels “upon any article or any of its containers or wrappers” — clearly embraces advertising or descriptive matter that goes with the package in which the articles are transported. The second clause — “accompanying such article”- — -has no specific reference to packages, containers or their contents as did a predecessor statute. See Seven Cases v. United States, 239 U. S. 510, 513, 515. It plainly includes what is contained within the package whether or not it is “upon” the article or its wrapper or container. But the second clause does not say “accompanying such article in the package or container,” and we see no reason for reading the additional words into the text.
One article or thing is accompanied by another when it supplements or explains it, in the manner that a committee report of the Congress accompanies a bill. No physical attachment one to the other is necessary. It is the textual relationship that is significant. The analogy to the present case is obvious. We need not labor the point.
The false and misleading literature in the present case was designed for use in the distribution and sale of the drug, and it was so used. The fact that it went in a different mail was wholly irrelevant whether we judge the transaction by purpose or result. And to say that the prior or subsequent shipment of the literature disproves that it “is” misbranded when introduced into commerce within the meaning of § 301 (a), is to overlook the integrated nature of the transactions established in this case.
Moreover, the fact that some of the booklets carried a selling price is immaterial on the facts shown here. As stated by the Court of Appeals, the booklets and drugs were nonetheless interdependent; they were parts of an integrated distribution program. The Act cannot be circumvented by the easy device of a “sale” of the advertising matter where the advertising performs the function of labeling.
Petitioner points out that in the evolution of the Act the ban on false advertising was eliminated, the control over it being transferred to the Federal Trade Commission. 52 Stat. 114, 15 U. S. C. §55 (a). We have searched the legislative history in vain, however, to find any indication that Congress had the purpose to eliminate from the Act advertising which performs the function of labeling. Every labeling is in a sense an advertisement. The advertising which we have here performs the same function as it would if it were on the article or on the containers or wrappers. As we have said, physical attachment or contiguity is unnecessary under § 201 (m) (2).
There is a suggestion that the offense in this case falls under § 301 (k) of the Act which includes misbranding of a drug while it is held for sale after shipment in interstate commerce. Since the informations contain no such charge, it is therefore claimed that the judgment must be reversed. We do not agree. Section 301 (k) has a broad sweep, not restricted to those who introduce or deliver for introduction drugs in interstate commerce. See United States v. Sullivan, supra. Nor is it confined to adulteration or misbranding as is § 301 (a). Id. It is, however, restricted to cases where the article is held for sale after shipment in interstate commerce; and, unlike § 301 (a), it does not reach situations where the manufacturer sells directly to the consumer. Cf. United States v. Urbuteit, supra. Hence we conclude that we do not disturb the statutory scheme when we refuse to take from § 301 (a) what is fairly included in it in order to leave the matter wholly to the service of § 301 (k). The reach of § 301 (a) is in this respect longer. Such a transfer to § 301 (k) would create a new hiatus in the Act and thus disturb the pattern which we discern in it.
We have considered the other objections tendered by petitioner and find them without merit.
Affirmed.
Section 301 in relevant part reads as follows:
“The following acts and the causing thereof are hereby prohibited:
“(a) The introduction or delivery for introduction into interstate commerce of any food, drug, device, or cosmetic that is adulterated or misbranded.
“ (b) The adulteration or misbranding of any food, drug, device, or cosmetic in interstate commerce.
"(c) The receipt in interstate commerce of any food, drug, device, or cosmetic that is adulterated or misbranded, and the delivery or proffered delivery thereof for pay or otherwise.
“(k) The alteration, mutilation, destruction, obliteration, or removal of the whole or any part of the labeling of, or the doing of any other act with respect to, a food, drug, device, or cosmetic, if such act is done while such article is held for sale after shipment in interstate commerce and results in such article being misbranded.”
The term label is defined as “a display of written, printed, or graphic matter upon the immediate container of any article.” §201 (k).
“Sec. 303. (a) Any person who violates any of the provisions of section 301 shall be guilty of a misdemeanor and shall on conviction thereof be subject to imprisonment for not more than one year, or a fine of not more than $1,000, or both such imprisonment and fine; but if the violation is committed after a conviction of such person under this section has become final such person shall be subject to imprisonment for not more than three years, or a fine of not more than $10,000, or both such imprisonment and fine.
“(b) Notwithstanding the provisions of subsection (a) of this section, in case of a violation of any of the provisions of section 301, with intent to defraud or mislead, the penalty shall be imprisonment for not more than three years, or a fine of not more than $10,000, or both such imprisonment and fine.”
The informations, in charging violations of § 301 (a), did not allege that the acts committed were done “with intent to defraud.” Hence the maximum penalty was imprisonment for not more than a year, or a fine of not more than $1,000, or both. Prosecution by information was therefore authorized by the statute (see Duke v. United States, 301 U. S. 492) and by Rule 7 (a) of the Federal Rules of Criminal Procedure.
See United States v. Dotterweich, 320 U. S. 277, 280; United States v. Sullivan, supra, p. 696.
See § 701 and § 201 (c); 1940 Reorg. Plan No. IV, § 12, 54 Stat. 231, 5 U. S. C. § 133 (u).
The Federal Security Agency by regulation (21 C. F. R. Cum. Supp. § 2.2) has ruled:
“Labeling includes all written, printed, or graphic matter accompanying an article at any time while such article is in interstate commerce or held for sale after shipment or delivery in interstate commerce.”
See note 1, supra.
The purpose of § 301 (k) was described in H. R. Rep. No. 2139, 75th Cong., 3d Sess. 3 (1938), as follows:
“In order to extend the protection of consumers contemplated by the law to the full extent constitutionally possible, paragraph (k) has been inserted prohibiting the changing of labels so as to misbrand articles held for sale after interstate shipment.”
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 Fortas
delivered the opinion of the Court.
In 1953, in a civil suit brought by the United States, the District Court for the District of Massachusetts held that appellee had violated § 2 of the Sherman Antitrust Act by monopolizing the manufacture of shoe machinery. The court found that “(1) defendant has, and exercises, such overwhelming strength in the shoe machinery market that it controls that market, (2) this strength excludes some potential, and limits some actual, competition, and (3) this strength is not attributable solely to defendant’s ability, economies of scale, research, natural advantages, and adaptation to inevitable economic laws.” United States v. United Shoe Machinery Corp., 110 F. Supp. 295, 343 (1953). The court did not order the relief requested by the Government— that appellee be dissolved into three separate shoe machinery manufacturing companies. Rather, the court imposed a variety of restrictions and conditions designed “to recreate a competitive market.” Appellee appealed to this Court, which affirmed the decision of the District Court. United Shoe Machinery Corp. v. United States, 347 U. S. 521 (1954).
The decree of the District Court, entered on February 18, 1953, and subsequently modified on July 12 and September 17, 1954, provided in paragraph 18 that:
“On [January 1, 1965] both parties shall report to this Court the effect of this decree, and may then petition for its modification, in view of its effect in establishing workable competition. If either party takes advantage of this paragraph by filing a petition, each such petition shall be accompanied by affidavits setting forth the then structure of the shoe machinery market and defendant’s power within that market.” 110 F. Supp., at 354.
Pursuant to this provision, the Government reported to the District Court on January 1, 1965, that appellee continued to dominate the shoe machinery market, that workable competition had not been established in that market, and that additional relief was accordingly necessary. The Government asked that appellee be required to submit to the Court a plan, pursuant to which United's business would be reconstituted so as to form two fully competing companies in the shoe machinery market. It also requested “such other and further relief as may be necessary to establish workable competition in the shoe machinery market.”
The District Court, after a hearing, denied the Government's petition. It held that under United States v. Swift & Co., 286 U. S. 106 (1932), its power to modify the original decree was limited to cases involving “(1) a clear showing of (2) grievous wrong (3) evoked by new and unforeseen conditions.” United States v. United Shoe Machinery Corp., 266 F. Supp. 328, 330 (1967). Analyzing its 1953 decree, as amended, the court said that the object of the decree was “not to restore so-called workable competition but to move toward establishing it,” and that “the 1953 decree has operated in the manner and with the effect intended. It has put in motion forces which, aided by new technology, have eroded United’s power and already dissipated much of the effect of United’s monopolization.” 266 F. Supp., at 330, 334. Accordingly, in view of the stringent requirements of Swift as the court construed that decision, the District Court denied the Government’s petition.
From this decision the Government appealed to this Court. We noted probable jurisdiction. 389 U. S. 967 (1967). We reverse.
I.
The District Court misconceived the thrust of this Court’s decision in Swift. That case in no way restricts the District Court’s power to grant the relief requested by the Government in the present case. In Swift, a consent decree had been entered in 1920 ordering a measure of divestiture by and imposing a variety of restraints upon the defendant meat packers. In 1930, after various unsuccessful attempts to secure modification or vacation of the decree, the packers filed a petition “to modify the consent decree and to adapt its restraints to the needs of a new day,” as Justice Cardozo phrased it. 286 U. S., at 113. The lower court granted a measure of relief and the United States appealed. This Court reversed. It emphasized the power of a court of equity “to modify an injunction in adaptation to changed conditions though it was entered by consent.” Id., at 114. The question, it held, is “whether enough has been shown to justify its exercise.” Id., at 115. After reviewing the evidence, the Court concluded that the danger of monopoly and of the elimination of competition which led to the initial government complaint and the decree had not been removed and that, although in some respects the decree had been effectuated, there was still a danger of unlawful restraints of trade. The Court’s language, quoted and relied on by the trial court here, to the effect that “nothing less than a clear showing of grievous wrong evoked by new and unforeseen conditions should lead us to change,” id., at 119, the decree, must, of course, be read in light of this context. Swift teaches that a decree may be changed upon an appropriate showing, and it holds that it may not be changed in the interests of the defendants if the purposes of the litigation as incorporated in the decree (the elimination of monopoly and restrictive practices) have not been fully achieved.
The present case is the obverse of the situation in Swift if the Government’s allegations are proved. Here, the Government claims that the provisions of the decree were specifically designed to achieve the establishment of “workable competition” by various means and that the decree has failed to accomplish this result. Because time and experience have demonstrated this fact, according to the Government, it seeks modification of the decree. Nothing in Swift precludes this. In Swift, the defendants sought relief not to achieve the purposes of the provisions of the decree, but to escape their impact. Accordingly, we conclude that the District Court erred in denying the Government’s petition “on the authority of United States v. Swift & Co., 286 U. S. 106, 119.” 266 F. Supp., at 334.
II.
Decision as to the Government’s petition to modify the decree in the present case must be based upon the specific facts and circumstances that are presented. In urging affirmance of the 1953 decision, the Government advised this Court that, in framing the decree, the District Court had “proceeded on the premise that relatively mild remedies should be tried as a first resort, and that the possibility of more drastic measures should be held in abeyance.” Brief of the United States, No. 394, 1953 Term, 155. Paragraph 18 of the decree appeared to be in confirmation of this statement since it expressly required a report after 10 years of experience under the decree and contemplated that petitions for modification might be filed “in view of [the decree’s] effect in establishing workable competition.” Paragraph 18 then specifically provided that any such petition would have to be accompanied by “affidavits setting forth the then structure of the shoe machinery market and defendant’s power within that market.”
These specifications were peculiarly apt because this is a monopoly case under § 2 of the Sherman Act and because the decree was shaped in response to findings of monopolization of the shoe machinery market. That the purpose of the 1953 decree was to eliminate this unlawful market domination was made clear beyond question by the District Court’s statement at the beginning of the section of its opinion dealing with relief. This read as follows:
“Where a defendant has monopolized commerce in violation of § 2, the principal objects of the decrees are to extirpate practices that have caused or may hereafter cause monopolization, and to restore workable competition in the market.” 110 F. Supp., at 346-347.
It is of course established that, in a § 2 case, upon appropriate findings of violation, it is the duty of the court to prescribe relief which will terminate the illegal monopoly, deny to the defendant the fruits of its statutory violation, and ensure that there remain no practices likely to result in monopolization in the future. See, e. g., United States v. Grinnell Corp., 384 U. S. 563, 577 (1966); Schitne Theatres v. United States, 334 U. S. 110, 128-129 (1948). The trial court is charged with inescapable responsibility to achieve this objective, although it may, if circumstances warrant, accept a formula for achieving the result by means less drastic than immediate dissolution or divestiture. The decree in the present case was carefully devised within the limits of this principle. Measures short of divestiture were prescribed with provisions for review and possible revision after 10 years.
The District Court has now denied the Government’s petition for modification of the decree on the ground that the decree is “still working at its long-range task of freeing the market from all consequences of United’s monopolization and keeping the door wide open for the arrival of an adequately provided challenger.” 266 F. Supp., at 334. According to the court, this was the intended effect of the decree.
If the decree had not contained paragraph 18 — if it had been silent as to the time for submitting reports and, if necessary, petitions for modification — and if after 10 years it were shown that the decree had not achieved the adequate relief to which the Government is entitled in a § 2 case, it would have been the duty of the court to modify the decree so as to assure the complete extirpation of the illegal monopoly. The court’s power to do this is clear. See, e. g., United States v. Swift & Co., 286 U. S. 106 (1932); Chrysler Corp. v. United States, 316 U. S. 556 (1942). Its duty is implicit in the findings of violation of § 2 and in the decisions of this Court as to the type of remedy which must be prescribed.
We find nothing in the 1953 decree, as amended, or in the District Court’s opinion relating thereto which presents an obstacle or embarrassment to the application of this principle in the present case. If the decree has not, after 10 years, achieved its “principal objects,” namely, “to extirpate practices that have caused or may hereafter cause monopolization, and to restore workable competition in the market” — the time has come to prescribe other, and if necessary more definitive, means to achieve the result. A decade is enough. Even if we should assume that paragraph 18, as the District Court now states, had only the limited purpose of calling for a 10-year report as to whether the decree was “gradually eroding United’s 1953 power to monopolize the market,” 266 F. Supp., at 330, its specific provisions did not exhaust the District Court’s power. Relief in a Sherman Act case “should put an end to the combination and deprive the defendants of any of the benefits of the illegal conduct, and break up or render impotent the monopoly power found to be in violation of the Act.” United States v. Grinnell Corp., 384 U. S. 563, 577 (1966). See also United States v. United States Gypsum Co., 340 U. S. 76, 88-90 (1950); United States v. E. I. du Pont de Nemours & Co., 366 U. S. 316, 326 (1961). The District Court should proceed to determine whether the relief in this case has met the standards which this Court has prescribed. If it has not, the District Court should modify the decree so as to achieve the required result with all appropriate expedition.
It is so ordered.
Mr. Justice Marshall took no part in the consideration or decision of this case.
Some of the major provisions of the decree were as follows: United was enjoined from further monopolization; it was ordered to offer for sale all types of machines (previously only leased) at “such terms ... as do not make it substantially more advantageous for a shoe factory to lease rather than to buy a machine”; if United continued leasing it was required to lease for no more than five-year terms under certain specified conditions; it was not to refuse a prospective customer’s request to lease or buy a machine “except for good cause”; it was to submit a plan for disposing of certain sectors of its business; it was to grant to any applicant, except a deliberate infringer, a nonexclusive license under any or all patents held by it on reasonable nondiscriminatory royalty terms; it was not to acquire any patents or patent applications except those acquired by reason of bona fide employment of the inventor, nor was it to acquire patents or patent applications under exclusive license; it was not to acquire any second-hand shoe machinery or any shoe machinery manufacturer or a manufacturer or distributor of supplies for shoe factories.
A petition by appellee, seeking to be relieved of certain restrictions contained in the original decree, was similarly denied. The judgment in this regard is not before us, since appellee has not appealed to this Court.
In paragraph 23 of the original decree jurisdiction was expressly retained “for the purpose of enabling either of the parties to apply to this Court at any time for such further orders and directions as may be appropriate for the correction, construction, or carrying out of this Decree, and to set aside the Decree and take further proceedings if future developments justify that course in the appropriate enforcement of the Anti-Trust Act.” 110 F. Supp., at 354.
In rejecting the suggestion that United be forbidden to lease on any terms, the District Court stated specifically that it “agrees that it would be undesirable, at least until milder remedies have been tried, to direct United to abolish leasing forthwith.” 110 F. Supp., at 349.
We emphasize that there is no issue here regarding the timing of the Government’s petition for modification. No claim is made that the Government has petitioned for modification before the running of a reasonable period during which the effects of the original decree have become clear. Moreover, the Government may claim, persuasively, that paragraph 18 of the original decree specifically contemplated that the Government would petition when it did.
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.
Petitioner appealed his conviction for murder to the Georgia Supreme Court where he sought reversal on the ground, among others, that the evidence relevant to his claim of systematic exclusion of Negroes from the grand and petit juries drawn in the county established a prima facie case of the denial of equal protection within our decision in Whitus v. Georgia, 385 U. S. 545. The Georgia Supreme Court affirmed the conviction stating that Whitus was distinguishable because “public officers are presumed to have discharged their sworn official duties. . . . Under the testimony in this case we can not assume that the jury commissioners did not eliminate prospective jurors on the basis of their competency to serve, rather than because of racial discrimination.” 223 Ga. 157, 162, 154 S. E. 2d 228, 232.
We hold that the burden upon the State to explain “the disparity between the percentage of Negroes on the tax digest and those on the venires,” Whitus, supra, at 552, was not met by the Georgia Supreme Court’s reliance on the stated presumptions. See Arnold v. North Carolina, 376 U. S. 773; Eubanks v. Louisiana, 356 U. S. 584; Williams v. Georgia, 349 U. S. 375; Avery v. Georgia, 345 U. S. 559; Cassell v. Texas, 339 U. S. 282; Norris v. Alabama, 294 U. S. 587. We therefore reverse the judgment of the Georgia Supreme Court and remand for further proceedings not inconsistent with our opinion.
It is so ordered.
The record supports the following comparison of the salient facts in Whitus and in petitioner’s case:
Over 21 population Whitus 42.6% Negro men Petitioner’s case 30.7% Negro
Jury Commissioners White (apparently) White
Source of juror names Tax Digests separated and identified as to race 3 Tax Digests, two of which separated and identified as to race
Taxpayers 27.1% Negro 19.7% Negro
Negro jurors 9.1% grand jury venire 7.8% petit jury venire 5.0% of jury list and box (1 Negro was on the grand jury which in-dieted petitioner)
Rebuttal evidence by State None None
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 Stewart
delivered the opinion of the Court.
This litigation began when the petitioners filed a complaint in the United States District Court for the Southern District of Mississippi, seeking compensatory and punitive damages and alleging, in substantial part, as follows:
“2. The plaintiffs are Negro citizens of the United States and residents of Kemper County, Mississippi. ...
“3. The defendants, Lavon Breckenridge and James Calvin Breckenridge, are white adult citizens of the United States residing in DeKalb, Kemper County, Mississippi.
“4. On July 2, 1966, the . . . plaintiffs . . . were passengers in an automobile belonging to and operated by R. G. Grady of Memphis, Tennessee. They were travelling upon the federal, state and local highways in and about DeKalb, Mississippi, performing various errands and visiting friends.
“5. On July 2, 1966 defendants, acting under a mistaken belief that R. G. Grady was a worker for Civil Rights for Negroes, wilfully and maliciously conspired, planned, and agreed to block the passage of said plaintiffs in said automobile upon the public highways, to stop and detain them and to assault, beat and injure them with deadly weapons. Their purpose was to prevent said plaintiffs and other Negro-Americans, through such force, violence and intimidation, from seeking the equal protection of the laws and from enjoying the equal rights, privileges and. immunities of citizens under' the laws of the United States and the State of Mississippi, including but not limited to their rights to freedom of speech, movement, association and assembly; their right to petition their government for redress of their grievances; their rights to be secure in their persons and their homes; and their rights no; to beenslaved nor deprived of life and liberty other than by due process of law.
“6. Pursuant to their conspiracy, defendants drove their truck into the path of Grady’s automobile and blocked its passage over the public road. Both defendants then forced Grady and said plaintiffs to get out of Grady’s automobile and prevented said plaintiffs from escaping while defendant James Calvin Breckenridge clubbed Giady with a blackjack, pipe or other kind of club by pointing firearms at said plaintiffs and uttering threats to kill and ^injure them if defendants’ orders were not obeyed, thereby terrorizing them to the utmost , degree and depriving them of their liberty.
“7. Pursuant to their conspiracy, defendants wil-fully, intentionally, and maliciously menaced and assaulted each of the said plaintiffs by pointing firearms and wielding deadly blackjacks, pipes or other kind of clubs, while uttering threats to kill and injure said plaintiffs, causing them to become stricken with fear of immediate injury and death and. to suffer extreme terror, mental anguish and emotional and physical distress.
“8. Pursuant to defendants’ conspiracy, defendant James Calvin Breckenridge then wilfully, intentionally and maliciously clubbed each of said plaintiffs on and about the head, severely injuring all of them, while both defendants continued to assault said plaintiffs and prevent their escape by pointing.their firearms at them.
“12. By their conspiracy and acts pursuant thereto, the defendants have wilfully and maliciously, directly and indirectly, intimidated and prevented the . . . plaintiffs . . . and other Negro-Americans from enjoying and exercising their rights, privileges and immunities as citizens of the United States and the State .of Mississippi, including but not limited to, their rights to freedom of speech, movement, association and assembly; the right to petition their government for redress of grievances; their right to be secure in their person; their right not to be enslaved nor deprived of fife, liberty or property other than by due process of law, and their rights to travel the public highways without restraint in the same terms as white citizens in Kemper County, Mississippi . . . .”
The jurisdiction of the federal court was invoked under the language of Rev. Stat. § 1980, 42 U. S. C. § 1985 (3), which provides:
“If two or more persons in any State or Territory conspire or go in disguise on the highway or on the premises of another, for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws .[and] in any case of conspiracy set forth in this section, if one or more persons engaged therein do, or cause to be done, any act m furtherance, of the object of such conspiracy, whereby another is injured in his person or property, or deprived of having and exercising any right or privilege of a citizen of the United States, the party so injured or deprived may have an action for the recovery of damages, occasioned .by such injury or deprivation, against any one or more of the conspirators.”
The District Court dismissed the complaint for failure to state a cause of action, relying on the' authority of this Court’s opinion in Collins v. Hardyman, 341 U. S. 651, which in effect construed the above language of § 1985 (3) as reaching only conspiracies under color of state law. The Court of Appeals for the Fifth Circuit affirmed the judgment of dismissal. 410 F. 2d 817. Judge Goldberg’s thorough opinion for that court expressed “serious doubts” as to the “continued vitality” of Collins v. Hardyman, id., at 823, and stated that “it would not surprise us if Collins v. Hardyman were disapproved and if § 1985 (3) were held to embrace private conspiracies tc interfere with rights of national citizenship/’ id., at 825-826 (footnote omitted), but concluded that “[s]ince we may not adopt what the Supreme Court has expressly rejected, we obediently abide' the mandate in Collins,” id., at 826-827. We granted certiorari, 397 U. S. 1074, to consider questions going to the scope and constitutionality of 42 U. S. C. § 1985 (3).
I
Collins v. Hardyman was decided 20 years ago. The complaint in that case alleged that the plaintiffs were members of a political club that had scheduled a meeting to adopt a resolution opposing the Marshall Plan, and to send copies of the resolution to appropriate federal officials; that the defendants conspired to deprive the plaintiffs of their rights as citizens of the United States peaceably to assemble and to equal privileges and immunities under the laws of the United States; that, in furtherance of the conspiracy, the defendants proceeded to the meeting sité and, by threats and violence, broke up the meeting, thus interfering with the right of the plaintiffs to petition the Government for the redress of grievances; and that the defendants did not interfere or conspire to interfere with the meetings of other political groups with whose opinions the defendants agreed. The Court held that this complaint did not state a cause of action under § 1985 (3):
“The complaint makes no claim that the conspiracy or the overt acts involved any action by state officials, or that defendants even pretended to act under color of state law. It is not shown that defendants had or claimed any protection or immunity from the law of the State, or that' they in fact enjoyed such because of any act or omission by state authorities.” 341 U. S., at 655.
“What we have here is not a conspiracy to affect in any way these plaintiffs’ equality of protection by the law, or their equality of privileges and immunities under the law. There is not the slightest allegation that defendants were conscious of or trying to influence the law, or were endeavoring to obstruct or. interfere with it. . . . Such private discrimination is not inequality before the law unless there is some manipulation of the law or its agencies to give sanction or sanctuary for doing so.” Id., at 661.
The Court was careful to make clear that it was decid- • ing no constitutional question, but simply construing the language of the statute, or more precisely, determining the applicability of the statute to the facts alleged in the complaint:
“We say nothing of the power of Congress to authorize such civil actions as respondents have commenced or otherwise to redress such grievances as they assert. We think that Congress has not, in the narrow class of conspiracies defined by this statute, included the conspiracy charged here. We therefore reach no constitutional questions.” Id., at 662.
Nonetheless, the Court made equally clear that the construction it gave to the statute was influenced by the constitutional problems that it thought would have otherwise been engendered:
“It is apparent that, if this complaint meets the requirements of this Act, it raises constitutional problems of the first magnitude that, in the light of history, are not without difficulty. These would include issues as- to congressional power under and apart from the Fourteenth Amendment, the reserved power of the States, the content of rights derived from national as distinguished from state citizenship, and the question of separability of the Act in its application to those two classes of rights.” Id., at 659.
Mr. Justice Burton filed a dissenting opinion, joined by Mr. Justice Black and Mr. Justice Douglas. The dissenters thought that (<[t]he language of the statute refutes the suggestion that action under color of state law is a necessary ingredient of the cause of action which it recognizes.” Id., at 663. Further,, the dissenters found no constitutional difficulty in according to the statutory words their apparent meaning:
“Congress certainly has the power to create a federal cause of action in favor of persons injured by private individuals through the abridgment of federally created constitutional rights. It seems to me that Congress has done just this in [§ 1985 (3)]. This is not inconsistent with the principle underlying the Fourteenth Amendment. That amendment prohibits the respective' states from making laws abridging the privileges or immunities of citizens of the United States or denying to any person within the jurisdiction of a state the equal protection of the laws. Cases holding that those clauses are directed only at state action are not authority for the contention that Congress may not pass laws supporting rights which exist apart from the Fourteenth Amendment.” Id., at 664.
HH 1 — I
Whether or not Collins v. Hardyman was correctly decided on its own facts is a question with which we need not here be concerned. But it is clear, in the light of the evolution of decisional law in the years that have passed since that case was decided, that many of the constitutional problems there perceived simply do not exist. Little reason remains, therefore, not to accord to the words of the statute their apparent meaning. .That meaning is confirmed by judicial construction of related laws, by the structural setting of § 1985 (3) itself, and by its legislative history. And a fair reading of the allegations of the complaint in this case clearly brings them within this meaning of the statutory language. As so construed, and as applied to this complaint, we have no doubt that the statute was within the constitutional power of Congress to enact.
W h-1 ( — I
We turn, then, to an examination of the meaning of § 1985 (3). On their face, the words of the statute fully encompass the conduct of private persons. The provision speaks simply of “two or more persons in any State or Territory” who “conspire or go in disguise on the highway or on the premises of another.” Going in disguise, in particular, is in this context an activity so little associated with official action and so commonly connected .with private marauders that this clause could almost never be applicable under the artificially restrictive construction of Collins. And since the “going in disguise” aspect must include private action, it is hard to see how the conspiracy aspect, joined by a disjunctive, could be read to require the involvement of state officers.
The provision continues, specifying the motivation required “for the purpose of depriving, either directly or indirectly, any person or- class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws.” This language is, of course,, similar to that of § 1 of the Fourteenth Amendment, which in terms speaks only to the States, and judicial thinking about what can constitute an equal protection deprivation has, because of, the Amendment’s wording, focused almost entirely upon identifying the requisite “state action” and defining the offending forms of state law and official conduct. A century of Fourteenth Amendment adjudication has, in other words, made it understandably difficult to conceive of what might constitute a deprivation of the equal protection of the laws by private persons. Yet there is nothing inherent in the phrase that requires the action working the deprivation to come from the State. See, e. g., United States v. Harris, 106 U. S. 629, 643. Indeed, the failure to mention any such requisite can be viewed as an important indication of congressional intent to speak in § 1986 (3) of all deprivations of “equal protection of the laws” and “equal privileges and immunities under the laws,” whatever their source.
The approach of this Court to other Reconstruction civil rights statutes in the years since Collins has been to “accord [them] a sweep as broad as [their] language.” United States v. Price, 383 U. S. 787, 801; Jones v. Alfred H. Mayer Co., 392 U. S. 409, 437. Moreover, very similar language in cffisely related statutes has early and late received an interpretation quite inconsistent with that given to § 1986 (3) in Collins. In construing the exact criminal counterpart of § 1986 (3), the Court in United States v. Harris, supra, observed that the statute- was “not limited to take effect only in case- [of state action] ,” id., at 639, but “was framed to protect from invasion by private persons, the equal privileges and immunities under the laws, of all persons and classes of persons,” id., at 637. In United States v. Williams, 341 U. S. 70, the Court considered the closest remaining criminal analogue to § 1985 (3), 18 U. S. C. § 241. Mr. Justice Frankfurter’s plurality opinion, without contravention from the concurrence or dissent, con-clhded that “if language is to carry any meaning at all it must be clear that the principal purpose of [§ 241], unlike [18 U. S. C. § 242], was to reach private action rather than officers of a State acting under its authority. Men who 'go in disguise upon 'the public highway, or upon the premises of another’ are not likely to be acting in official capacities.” 341 U. S., at 76. “Nothing in [the] terms [of § 241] indicates that color of State law was to be relevant to prosecution under it.” Id., at 78 (footnote omitted).
A like construction of § 1985 (3) is reinforced when examination is broadened to take in its companion statutory -provisions. There appear to be three possible forms for a state action limitation on § 1985 (3) — that there must be action under color of state law, that there must be interference with or influence upon state authorities, or that there must be a private conspiracy so massive and effective that it supplants those authorities and thus satisfies the state action requirement. The Congress that passed the Civil Rights Act of 1871, 17 Stat. 13, § 2 of which is the parent of § 1985 (3), dealt with each of these three situations in explicit terms in other parts of the same Act. An element of the cause’ of action established by the first section, now 42 U. S. C. § 1983, is that the deprivation complained of must have been inflicted under color of state law. To read any such requirement into § 1985 (3) would thus deprive that section of all independent effect. As for interference with state officials, § 1985 (3) itself contains another clause dealing explicitly with that situation. And § 3 of the 1871 Act provided for military action at the command of the President should massive private lawlessness render state authorities powerless to protect the federal rights of classes of citizens, such a situation being defined by the Act as constituting a state denial of equal protection. 17 Stat. 14. Given the existence of these three provisions, it is almost impossible to believe that Congress intended, in the dissimilar language of the portion of § 1985 (3) now before us, simply to duplicate the coverage of one or more of them.
The final area of inquiry into the meaning of § 1985 (3) lies in its legislative history. As originally introduced in the 42d Congress, the section was solely a criminal provision outlawing certain conspiratorial acts done with intent “to do any act in violation of the rights, privileges, or immunities of another person . . . Cong. Globe, 42d Cong., 1st Sess., App. 68 (1871). Introducing the bill, the House sponsor, Representative Shellabarger, stressed, that “the United States always has assumed to enforce, as against' the States, and also persons, every one of the provisions of the Constitution.” Id., at App. 69 (emphasis supplied). The enormous sweep of the original language led to pressures for amendment, in the course of which the present civil remedy was added. The explanations of the added language centered entirely on the animus or motivation that would be required, and there was no suggestion whatever that liability would not be imposed for purely private conspiracies. Representative Willard, draftsman of the limiting amendment, said that his version “provid[ed] that the essence of the crime should consist in the intent to deprive a person of the equal protection of the laws and of equal privileges and immunities under the laws; in other words, that the Constitution secured, and was only intended to secure, equality of rights and immunities, and that we could only punish by United States laws a denial of that equality.” Id., at App. 188. Representative Shella-barger’s explanation of the amendment was very similar: “The object of the amendment is ... to confine the authority of this law to the prevention of deprivations which shall attack the equality of rights of American citizens; that any violation of the right, the animus and effect of which is to strike down the citizen, to the end that he may not enjoy equality of rights as contrasted with his and other citizens’ rights, shall be within the scope of the remedies of this section.” Id., at 478.
Other supporters of the bill were even more explicit in their insistence upon coverage of private action. Shortly before the amendment was introduced, Representative Shanks urged, “I do not want to see [this measure] so amended that there shall be taken out of it the frank assertion of the power of the natiorial Government to protect life, liberty, and property, irrespective of the act'of the State.” Id., at App. 141. At about the. same time, Representative Coburn asked: “Shall we deal with individuals, or with the State as a State? If we can deal with individuals, that is a less radical course, and works less interference with local governments. . . . It would seem more accordant with reason that the easier, more direct, and more certain method of dealing with individual criminals was preferable, and that the more thorough method of superseding State authority should only be resorted to when the deprivation of rights and the condition of.outlawry was so general as to prevail in all quarters in defiance of or by permission of the local government.” Id., at 459. After the amendment had been proposed in the House, Senator Pool insisted in support of the bill during Senate debate that “Congress must deal with individuals, not States. It must punish the offender against the rights of the citizen . . . .” Id., at 608.
It is thus evident that all indicators — text, companion provisions, and legislative history — point unwaveringly to § 1985.(3)’s coverage of private conspiracies. That the statute was meant to reach private action does not, however, mean that it was intended to apply to all tortious, conspiratorial interferences with the rights of others. For, though the supporters of the legislation insisted on coverage of private conspiracies, they were equally emphatic that they did not believe, in the words of Representative Cook, “that Congress has a right to punish an assault and battery when committed by two or moré persons within a State.” Id., at 485. The constitutional shoals that would lie in the path of interpreting § 1985 (3) as a general federal tort law can be avoided by giving full effect to the congressional purpose — by requiring, as. an element of the cause of action, the kind of invidiously discriminatory motivation stressed by the sponsors of the limiting amendment. See the remarks of Representatives Willard and Shellabarger, quoted supra, at 100. The language requiring intent to deprive of equal protection, or equal privileges and immunities, means that there must be some racial, or perhaps .otherwise class-based, invidiously discriminatory animus behind the conspirators’ action. The conspiracy, in other words, must aim at a deprivation of the equal enjoyment of rights secured by the law to all.
IV
We return to the petitioners’ complaint to determine whether it states a cause of action under § 1985 (3) as so construed. To come within the legislation a. complaint must allege that the defendants did .(1) “conspire or go in disguise on the highway or on the premises of another” (2) “for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws.” It must then assert that one or more of the conspirators (3) did, or caused to be done, “any act. in furtherance of the object of [the] conspiracy,” whereby another was (4a) “injured in his person or property” or (4b) “deprived of having and exercising any right or privilege of a citizen of the United States.”
The complaint fully alleges, with particulars, that the respondents conspired to carry out the assault. It further asserts that “[t]heir purpose was to prevent [the] plaintiffs and other Negro-Americans, through . . . force, violence and intimidation, from seeking the equal protection of the laws and from enjoying the equal rights, privileges and immunities of citizens under the laws of the United States and the State of Mississippi,” including a long list of enumerated rights such as free speech, assembly, association, and movement. The complaint further alleges that the respondents were “acting under a mistaken belief that R. G. Grady was a worker for Civil Rights for Negroes.” These allegations clearly support the requisite animus to deprive the petitioners of the equal enjoyment of legal rights because of their •race. The claims of detention, threats, and battery amply satisfy the requirement of acts done in furtherance of the conspiracy. Finally, the petitioners — whether or not the nonparty Grady was the main or only target of the conspiracy — allege personal injury resulting from those, .acts. The complaint, then, states a cause of action under § 1985 (3). Indeed, the conduct here alleged lies so ulose to the core of the .coverage intended by Congress ' that it is hard to conceive of wholly private conduct that ■ would come within the statute if this does not. • We must, accordingly, consider whether Congress had constitutional power to enact a statute that imposes liability under federal law for the conduct alleged in this complaint.
V
The constitutionality of § 1985 (3) might once have appeared to have been settled adversely by United States v. Harris, 106 U. S. 629, and Baldwin v. Franks, 120 U. S. 678, which held unconstitutional its criminal counterpart, then § 5519 of the Revised Statutes. The Court in those cases, however, followed a severability rule that required invalidation of an entire statute if any part of it was unconstitutionally overbroad, unless its different parts could be read as wholly independent provisions. E. g., Baldwin v. Franks, supra, at 685. This Court has long since firmly rejected that rule in such cases as United States v. Raines, 362 U. S. 17, 20-24. Consequently, we need not find the language of § 1985 (3) now before us Constitutional in all its possible applications in order to uphold its facial constitutionality and its application to the complaint in this case.
That § 1985 (3) reaches private conspiracies to deprive others of legal rights can, of itself, cause no doubts of its constitutionality. It has long been settled that 18 U. S. C. § 241, a criminal statute of far broader phrasing (see n. 4, supra), reaches wholly private conspiracies and is constitutional. E. g., In re Quarles, 158 U. S. 532; Logan v. United States, 144 U. S. 263, 293-295; United States v. Waddell, 112 U. S. 76, 77-81; Ex parte Yarbrough, 110 U. S. 651. See generally Twining v. New Jersey, 211 U. S. 78, 97-98. Our inquiry, therefore, need go only to identifying a source of congressional power to reach the private conspiracy alleged by the complaint, in this case. .
A
Even as it struck down Rev. Stat. §5519 in United States v. Harris, the Court indicated that parts of its coverage would, if severable, be constitutional under the Thirteenth Amendment. 106 U. S., at 640-641. And surely there has never been any doubt of the power of Congress to impose liability on private persons under § 2 of that amendment, “for the amendment is not a mere prohibition of State laws .establishing or upholding slavery, but an absolute declaration that slavery or involuntary servitude shall not exist in any part of the United States.” Civil Rights Cases, 109 U. S. 3, 20. See also id., at 23; Clyatt V. United States, 197 U. S. 207, 216, 218; Jones v. Alfred H. Mayer Co., 392 U. S., at 437-440. Not only may Congress impose such liability, but the varieties of private conduct that it may make criminally punishable or civilly remediable extend far beyond the actual imposition of slavery or involuntary servitude. By the Thirteenth Amendment, we committed ourselves as a Nation to the proposition that the former slaves and their descendants should be forever free. To keep that promise, “Congress has the power under the Thirteenth Amendment rationally to determine what are the badges and the incidents of slavery, and the authority to translate that determination into effective legislation.” Jones v. Alfred H. Mayer Co., supra, at 440. We can only conclude that Congress was wholly within its powers under § 2 of the Thirteenth Amendment in creating a statutory cause of action for Negro citizens who have been the victims of conspiratorial, racially discriminatory private action aimed at depriving them of the basic rights that the law secures to all free men.
B
Our cases have firmly established that the right of interstate travel is constitutionally protected, does not necessarily rest on the Fourteenth Amendment, and is assertable against private as well as governmental interference. Shapiro v. Thompson, 394 U. S. 618, 629-631; id., at 642-644 (concurring opinion); United States v. Guest, 383 U. S. 745, 757-760 and n. 17; Twining v. New Jersey, 211 U. S. 78, 97; Slaughter-House Cases, 16 Wall. 36, 79-80; Crandall v. Nevada, 6 Wall. 35, 44, 48-49; Passenger Cases, 7 How. 283, 492 (Taney, . C. J., dissenting). The “right to pass freely from State to State” has been explicitly recognized as “among the rights and privileges of National citizenship.” Twining v. New Jersey, supra, at 97. That right, like other rights of national citizenship, is within the power of Congress to protect by appropriate legislation. E. g., United States v. Guest, supra, at 759 ; United States v. Classic, 313 U. S. 299, 314-315; Ex parte Yarbrough, 110 U. S. 651; Oregon v. Mitchell, 400 U. S. 112, 285-287 (concurring and dissenting opinion).
The complaint in this case alleged that the petitioners “were travelling upon the federal, state and local highways in and about” DeKalb, Kemper County, Mississippi. Kemper County is on the Mississippi-Alabama border. One of the results of the conspiracy, according to the complaint, was to prevent the petitioners and other Negroes from exercising their “rights to travel the public highways without restraint in the same terms as white citizens in Kemper County, Mississippi.” Finally, the conspiracy was alleged to have been inspired by the respondents5 erroneous belief that Grady, a Tennessean, was a worker for Negro civil rights. Under these allegations it is open to the petitioners to prove at trial that they had been engaging in interstate travel or intended to do so, that their federal right to travel interstate was one of the rights meant to be discriminatorily impaired by the conspiracy, that the conspirators intended to drive out-of-state civil rights workers from the State, or that they meant to deter the petitioners from associating with such persons. This and other evidence could make it clear that the petitioners had suffered from conduct that Congress may reach under its power to protect the right of interstate travel.
c
In identifying these two constitutional sources of congressional power, we do not imply the absence of any other. More specifically, the allegations of the complaint in this case have not required consideration of the scope of the power of Congress under § 5 of the Fourteenth Amendment. By the same token, since the allegations of the complaint bring this cause of action so close to the constitutionally authorized core of the statute, there has been no occasion here to trace out its constitutionally permissible periphery.
The judgment is reversed, and the case is remanded to the United States District Court for the Southern District of Mississippi for further proceedings consistent with this opinion.
It is so ordered.
Tbe statute was then 8 U. S. C. § 47 (3) (1946 ed.).
“We do not say that no conspiracy by private individuals could be of such magnitude and effect as to work a deprivation of equal protection of the laws, or of equal privileges and immunities under laws. . . . But here nothing of that sort appears. We have a case of a lawless political brawl, precipitated by a handful of white citizens against other white citizens.” 341 U. S., at 662.
“No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”
“If two or more persons conspire to injure, oppress, threaten, or intimidate any citizen in the free exercise or enjoyment of any right or privilege secured to him by the Constitution or laws of the United States, or because of his having so exercised the same; or
“If two or more persons go in disguise on the highway, or on the premises of another, with intent to prevent or hinder his free exercise or enjoyment of any right or privilege so secured—
“Théy shall be fined not more than $5,000 or imprisoned not more-than ten years, or both.”
The penalty section was amended in 1968. See 18 U. S. C. § 241 (1964 ed., Supp. V) .
This last was suggested in Collins v. Hardyman. See n. 2, supra.
“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 of the United States or other person within the jurisdiction thereof 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.”
“If two or more persons in any State or Territory conspire or go in disguise on the highway or on the premises of another ... for the purpose of preventing or hindering the constituted authorities of any State or Territory from giving or securing to all persons within such State or Territory the equal protection of the laws . . . .”
The conspiracy and disguise language of what finally became' § 1985 (3) appears to have been borrowed from the parent of 18 U. S. C. § 241. See Cong. Globe, 41st Cong., 2d Sess., 3611-3613 (1870).
We need not decide, given the facts of this case, whether a conspiracy motivated by invidiously discriminatory intent other than racial bias would be actionable under the portion of § 1985 (3) before us. Cf. Cong. Globe, 42d Cong., 1st Sess., 567 (1871) (remarks of Sen. Edmunds):
The motivation requirement introduced by the word “equal” into the portion of § 1985 (3) before us must.not be confused with the-test of “specific intent to deprive a person of a federal right made definite by decision or other rule of law” articulated by the plurality opinion in Screws v. United, States, 325 U. S. 91, 103, for prosecutions under 18 U. S. C. § 242. Section 1985 (3), unlike § 242, contains no specific requirement of “wilfulness.” Cf. Monroe v. Pape, 365 U. S. 167, 187. The motivation aspect of § 1985 (3) focuses not on scienter in relation to deprivation of rights but on invidiously. discriminatory animus. •
Rev. Stat. § 5519 was repealed in 1909. 35 Stat. 1154.
See Katzenbach v. Morgan, 384 U. S. 641; Oregon v. Mitchell, 400 U. S. 112, 135 (opinion of Douglas, J.), 229 (opinion of Brennan, White, and Marshall, JJ.); United States v. Guest, 383 U. S. 745, 761 (Clark, J., concurring), 774 (Brennan, J., concurring and dissenting).
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
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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 Murphy
delivered the opinion of the Court.
The problem here is whether temporary members of the Volunteer Port Security Force of the Coast Guard Reserve are entitled to veterans’ preference in federal employment by virtue of the Veterans’ Preference Act of 1944.
Pursuant to § 207 of the Coast Guard Auxiliary and Reserve Act of 1941, approximately 70,000 persons were enrolled as temporary members of the Coast Guard Reserve. The Reserve was a military organization established as a component part of the Coast Guard “to enable that service to perform such extraordinary duties as may be necessitated by emergency conditions.” The Coast Guard, in turn, was created as a military service and constitutes “a branch of the land and naval forces of the United States.” On November 1, 1941, the President directed that the Coast Guard operate as part of the Navy subject to the orders of the Secretary of the Navy.
Of the various classifications of temporary members of the Coast Guard Reserve, the largest was known as the Volunteer Port Security Force. Service therein was purely voluntary and was devoted to such activities as the patrol and guarding of harbors, waterfronts, docks, bridges, ships and industrial shore establishments. The members of this force took the oath of allegiance required of the regular members of the Coast Guard. They were enrolled “for the duration of the war upon the completion of which you will be disenrolled unless the period of your enrollment is sooner terminated by Coast Guard authority.” In actual practice, however, the members were usually permitted to leave the Force at any time by making a request to the commanding officer of the unit to which they were assigned. They were given a “Certificate of Disenrollment” upon severance from the Force, honorable discharges and mustering-out pay not being provided.
Members of the Volunteer Port Security Force were obligated to be on active duty “only as directed by competent authority for a minimum of 12 hours per week.” It does not appear that their active duty exceeded that amount to any substantial degree. Because of the small number of hours of service, most members were able to continue their regular civilian employment with little or no interference. They could not be transferred from the cities in which they lived without their consent. Efforts were made by the Coast Guard to assign the 12-hour weekly duty periods to fit the convenience of the members. And many of them were disenrolled at their own request upon representations that their duty assignments conflicted with their civilian employment. They could also be excused from duty if they found it temporarily inconvenient.
These members performed their duties without pay. In most cases, however, they received an allowance for uniforms; and in some instances they received food or subsistence allowance while on active duty. Military status attached to them only during periods when they were actually engaged on active duty or en route to and from such duty. While on active duty they wore their uniforms, were subject to the usual Coast Guard discipline and were vested with the same authority as members of the regular Coast Guard of similar rank.
At all times the members of the Volunteer Port Security Force remained subject to the Selective Training and Service Act of 1940. They were required to register and were liable for induction into the regular armed forces. In fact, many of them did enlist or were drafted into those forces, thereby necessitating their disenrollment as temporary members of the Coast Guard Reserve. If illness or disease occurred while on duty, they were accorded the same hospital treatment as members of the regular Coast Guard. But if they were injured or killed in the line of duty, they were entitled only to the benefits prescribed by law for civilian employees of the United States. Moreover, they were ineligible for the benefits of National Service Life Insurance.
Respondent Cohen enrolled on April 13, 1944, as a member of the Volunteer Port Security Force and was assigned to duty with the Captain of the Port, Washington, D. C. He performed his part-time duties without compensation and without interruption to his regular employment as a civilian economist in the War Department. He was disenrolled on September 5, 1945, having served on active duty on 58 days for a total service of 398 hours. Respondent Hubickey was enrolled in the Force on October 18, 1944, and was assigned to duty with the Captain of the Port, Philadelphia, Pa. He too performed his part-time duties without compensation and without interference with his regular work as a civilian naval architect in the Navy Department. On September 30, 1945, he was disenrolled, having served on active duty on 32 days for a total service of 250 hours.
On April 4, 1944, before the passage of the Veterans’ Preference Act, the Civil Service Commission had ruled that the duties performed by those enrolled in the Volunteer Port Security Force entitled them to veterans’ preference in federal employment under the then existing preference laws. But on November 4, 1944, after the enactment of the statute in question and pursuant to a recommendation of the Acting Secretary of the Navy, the Commission changed this ruling and decided that such duties did not entitle one to veterans’ preference under the terms of the statute.
The two respondents were denied veterans’ preference in their government employment in accordance with the Commission’s second ruling. Due to general reductions in force, respondent Cohen was discharged from the War Department and respondent Hubickey was notified that he would be discharged from the Navy Department. They then brought these actions to compel the members of the Commission to classify them as preference eligibles; •they also asked the court to adjudge and declare them entitled to the status of preference eligibles under the provisions of the Veterans’ Preference Act. The District Court granted summary judgments in their favor. 69 F. Supp. 54. The Court of Appeals affirmed, one justice dissenting. 160 F. 2d 915. We brought the cases here on certiorari, the problem raised being one of importance in the administration of the Veterans’ Preference Act.
The pertinent portion of the Veterans’ Preference Act is to be found near the end of § 2. That establishes preference in government employment for “those ex-servicemen and women who have served on active duty in any branch of the armed forces of the United States, during any war, . . . and have been separated therefrom under honorable conditions.”
Respondents claim that their service with the Volunteer Port Security Force brings them squarely within this statutory provision, hence entitling them to veterans’ preference. It is undisputed, of course, that they did serve part-time on active duty in a branch of the armed forces of the United States during World War II and that they were separated therefrom under honorable conditions. The crucial question is whether they thereby are “ex-servicemen” within the meaning of this particular statute. On that score, respondents urge that this term must be given its ordinary and literal meaning so as to refer to all those who performed military service. The length or continuity of active duty and the presence or absence of compensation become immaterial from respondents’ point of view; the mere performance of some type of military service is thought to be sufficient. Since respondents concededly did perform military service while on intermittent active duty with the Volunteer Port Security Force, the conclusion is reached that they are “ex-servicemen” within the contemplation of this statute. Resort to the legislative history and other secondary sources is said to be unwarranted, so clear and obvious is the meaning of that term.
In our opinion, however, the term “ex-servicemen” has no single, precise definition which permits us to read and apply that term without help from the context in which it appears and the purpose for which it was inserted in the statute. Ex-servicemen are indeed those who have performed military service. And they may include those who have served on active duty only part-time and without compensation. But this designation may also be confined to a more definite and narrow class of individuals who performed military service, to those whose full time and efforts were at the disposal of military authorities and whose compensation included military pay and allowances. Such ex-servicemen are those who completely disassociated themselves from their civilian status and their civilian employment during the period of their military service, suffering in many cases financial hardship and separation from home and family. They formed the great bulk of the regular armed forces during World War II. In the popular mind, they were typified by the full-fledged soldier, sailor, marine or coast guardsman. Our problem, of course, is whether Congress used the term “ex-servicemen” in the broad or narrow sense when it enacted the Veterans' Preference Act. And the answer to that problem is to be determined by an examination of the statutory scheme rather than by reliance upon dictionary definitions.
The Veterans’ Preference Act was enacted in 1944 to aid in the readjustment and rehabilitation of World War II veterans. It was felt that the problems of these returning veterans were particularly acute and merited special consideration. Their normal employment and mode of life had been seriously disrupted by their service in the armed forces and it was thought that they could not be expected to resume their regular activities without reemployment and rehabilitation aids. The Federal Government, in its capacity as an employer, determined to take the lead in such a program. The Veterans’ Preference Act was accordingly adopted, creating special preference and protection for returning veterans at every stage of federal employment.
Throughout the legislative reports and debates leading to the birth of this statute is evident a consistent desire to help only those who had sacrificed their normal pursuits and surroundings to aid in the struggle to which this nation had dedicated itself. It was the veterans or ex-servicemen who had been completely divorced from their civilian employment by reason of their full-time service with the armed forces who were the objects of Congressional solicitude. Reemployment and rehabilitation were considered to be necessary only as to them.
There is nothing to indicate that the legislative mind in this instance was directed toward granting special benefits or rewards to those who performed military service without interference with their normal employment and mode of life. As to them, assistance in reemployment and rehabilitation was thought unnecessary. Their civilian employment status remained unchanged by reason of their military service. And since their civilian life was substantially unaltered, there was no problem of aiding their readjustment back to such a life. Indeed, to have given them preference rights solely because of their part-time military service would have been inconsistent with the professed aims of the statutory framers. Such preference would have diluted the benefits conferred on those ex-servicemen who had made full-scale sacrifices; and it would have been inequitable to the many civilians who also had participated voluntarily in essential war and defense activities but who had not been directly connected with a branch of the armed forces.
It is true that § 2 of the Act establishes preference eligibility for the unmarried widows of deceased ex-servicemen despite the fact that these widows may have continued their normal civilian employment during the war. But the preference rights thereby granted are derivative in nature. They are conferred on the widows because of the dislocation and severance from civil life which their deceased husbands suffered while performing full-time military duties and in partial substitution for the loss in family earning power occasioned by their husbands’ deaths. Congress felt that this was one way of expressing the moral obligation and the debt of gratitude which this nation was thought to owe these widows. Such a provision certainly affords no basis for widening the concept of “ex-servicemen” beyond that which we have indicated. The widows of ex-servicemen are in a special category which cannot be compared, in terms of sacrifice or need for reemployment and rehabilitation, with any group of individuals who performed part-time military duties.
In the light of the very clear purpose which Congress had in mind in adopting the Veterans’ Preference Act, we are constrained to define the term “ex-servicemen,” for the purposes of this particular statute, as relating only to those who performed military service on full-time active duty with military pay and allowances, thereby dislocating the fabric of their normal economic and social life. It thus becomes obvious that respondents’ service with the Volunteer Port Security Force of the Coast Guard Reserve cannot qualify them as “ex-servicemen” entitled to veterans’ preference under this enactment. They continued their normal civilian employment with the War Department and the Navy Department during the war, employment which suffered as little as possible from their military service; they served on active duty for only relatively short periods each week and could be disenrolled at their own request; they received no military pay and very few allowances; they could not be transferred away from their homes without their consent. They were therefore able to retain the essential elements of their civilian life. As to them, there was no problem of reemployment or rehabilitation caused by their military service. They are not among the “ex-servicemen” whom Congress desired to assist by means of the Veterans’ Preference Act.
One other matter remains. Respondents claim, and the Court of Appeals held, that they acquired vested preference rights under § 18 of the Act. In pertinent part, § 18 provides that “this Act shall not be construed to take away from any preference eligible any rights heretofore granted to, or possessed by, him under any existing law, Executive order, civil-service rule or regulation, of any department of the Government or officer thereof.” It is said that the Civil Service Commission’s ruling of April 4, 1944, extending preference rights under the then existing laws to those who had performed service with the Volunteer Port Security Force, gave respondents vested rights which were preserved by § 18 when the Veterans’ Preference Act was subsequently enacted.
This contention is without substance. Veterans’ preference rights by their very nature do not accrue until one has become a veteran through separation from the armed forces. On June 27,1944, when the Veterans’ Preference Act became law, neither of the respondents had as yet disenrolled from the Volunteer Port Security Force. In fact, respondent Hubickey had not even enrolled by that date. Thus they could not be classed as veterans or ex-servicemen, whatever definition be given those terms, on June 27, 1944, and they could not have earned any veterans’ preference rights prior to that date. The Commission’s ruling of April 4, 1944, did no more than inform respondents that they would be entitled to veterans’ preference upon disenrollment, provided such ruling was lawful and still in effect. It did not purport to give them preference rights as of April 4, 1944, or to cause those rights to accrue before disenrollment. Since they did not possess and had not been granted any such rights under prior law, respondents were completely unaffected by the provisions of § 18. That section was primarily designed to perpetuate preferences granted earlier to veterans who had served in the armed forces during peacetime and who were then in government employment or on civil-service registers. Respondents were obviously not veterans of that type.
Reversed.
Mr. Justice Douglas dissents.
58 Stat. 387, 5 U. S. C. (Supp. V, 1946) § 851.
55 Stat. 9, 12, as amended, 14 U. S. C. (Supp. V, 1946) § 307.
§ 201 of the Coast Guard Auxiliary and Reserve Act of 1941, 55 Stat. 9,11, as amended, 14 U. S. C. (Supp. V, 1946) § 301.
55 Stat. 585,14U.S. C. § 1.
Executive Order No. 8929,6 Fed. Reg. 5581.
The other classifications were: (1) Full-time active duty with military pay and allowances; (2) Pilots without pay and allowances other than for uniforms, but paid by their own companies; (3) Officers of Great Lakes vessels without pay and allowances other than for uniforms, but paid by their own companies; (4) Coast Guard police without pay and allowances; (5) Civil Service employees of the Coast Guard enrolled for full-time active duty without pay other than compensation for their civilian positions.
From the form entitled “Temporary Member of Coast Guard Reserve — Enrollment and Active Duty Assignment.”
Ibid. It also appears from this form that those mentioned in classifications (2) and (5) in footnote 6, supra, were subject to call at all times. Apparently the other classifications, including the Volunteer Port Security Force, were not subject to such a call.
Circular Letter No. 4145 to Regional Directors and Division Chiefs of the Commission. This provided that active duty performed by temporary members of the Coast Guard Reserve, whether full-time, part-time, or intermittently, either with or without pay, including Government employees enrolled without pay other than the compensation of their civilian positions, constituted active duty, as distinguished from training duty and entitled the member performing such duty to preference benefits under the then existing preference laws.
Departmental Circular No. 508 to Heads of Departments and Independent Establishments. This modified the earlier ruling and provided that only those temporary Coast Guard Reservists performing full-time duty with pay and allowances at shore stations or aboard Coast Guard vessels were entitled to preference under the Veterans’ Preference Act of 1944.
Respondents point out that the word “serviceman” is defined as “One who has performed military service.” Webster’s New International Dictionary, 2d ed. (1942).
“I believe that the Federal Government, functioning in its capacity as an employer, should take the lead in assuring those who are in the armed services that when they return special consideration will be given to them in their efforts to obtain employment. It is absolutely impossible to take millions of our young men out of their normal pursuits for the purpose of fighting to preserve the Nation, and then expect them to resume their normal activities without having any special consideration shown them.
“The problems of readjustment will be difficult for all of us. They will be particularly difficult for those who have spent months and even years at the battle fronts all over the world. Surely a grateful nation will want to express its gratitude in deeds as well as in words.”
Letter from the President to Rep. Ramspeck, quoted in H. R. Rep. No. 1289,78th Cong., 2d Sess., p. 5.
H. R. Rep. No. 1289, 78th Cong., 2d Sess.; S. Rep. No. 907, 78th Cong., 2d Sess.; 90 Cong. Rec. 3501-3507. The House report stated (p. 3): “Private employers and corporations, as well as State, county, and municipal governments, have been urged through the selective-service law and otherwise to afford reemployment to veterans when they leave the armed forces. Your committee feels that the Federal Government should set the pace, and that this proposal is an essentia] part of the reemployment and rehabilitation program.” The Senate report stated (p. 1): “The committee believes that in view of the fact that members of the armed forces rapidly are being returned to civilian life, the bill should be enacted without delay.”
The same observations apply to the provision in § 2 giving veterans’ preference to the wives of ex-servicemen who have a service-connected disability and who themselves have been unable to qualify for any civil-service appointment. See also 62 Stat. 3, extending veterans’ preference benefits to the widowed mothers of deceased or permanently and totally disabled ex-servicemen. H. R. Rep. No. 697, 80th Cong., 1st Sess.; S. Rep. No. 480,80th Cong., 1st Sess.
The view we take of this matter coincides with that expressed by the supporters of H. R. 1389, 80th Cong., 1st Sess. That bill, as amended, proposed to change § 2 of the Veterans’ Preference Act by providing that “ ‘active duty’ in any branch of the armed forces of the United States shall mean active full-time duty with military pay and allowances in any branch of the armed forces during any campaign or expedition (for which a campaign badge has been authorized).”
Hearings were held before the House Committee on Post Office and Civil Service. The bill was unanimously reported out by the committee, H. R. Rep. No. 465, 80th Cong., 1st Sess., and was adopted by voice vote by the House of Representatives, 93 Cong. Rec. 7315— 7318. A unanimous Senate Committee on Civil Service also reported the bill favorably, S. Rep. No. 396, 80th Cong., 1st Sess., but the Senate adjourned without considering the bill.
The proponents of the bill and the two committees considered it as a clarification of the original Congressional intent as to the meaning of “ex-servicemen.” It was stated that the country owes a debt of gratitude to the temporary Coast Guard Reservists, “but they are not to be classed as ex-servicemen, who were actually uprooted from their civilian occupations and subjected to the rigors of full-time military training and combat. It is to the latter group that Congress intended to provide employment preference in Government service.” 93 Cong. Rec. 7315. The need for clarification of § 2 was said to be the confusion created by the lower court decisions in the instant cases.
See S. Rep. No. 907, 78th Cong., 2d Sess., p. 2; H. R. Rep. No. 1289, 78th Cong., 2d Sess., p. 3. The Veterans’ Preference Act does not grant benefits to future peacetime veterans.
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
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sc_issuearea
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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.
Per Curiam.
A pretrial order entered by the District Court of Oklahoma County enjoined members of the news media from “publishing, broadcasting, or disseminating, in any manner, the name or picture of [a] minor child” in connection with a juvenile proceeding involving that child then pending in that court. On application for prohibition and mandamus challenging the. order as a prior restraint on the press violative of the First and Fourteenth Amendments, the Supreme Court of the State of Oklahoma sustained the order. This Court entered a stay pending the timely filing and disposition of a petition for certiorari. 429 U. S. 967 (1976). We now grant the petition for certiorari and reverse the decision below.
A railroad switchman was fatally shot on July 26, 1976. On July 29, 1976, an 11-year-old boy, Larry Donnell Brewer, appeared at a detention hearing in Oklahoma County Juvenile Court on charges filed by state juvenile authorities alleging delinquency by second-degree murder in the shooting of this switchman. Reporters, including one from petitioner’s newspapers, were present in the courtroom during the hearing and learned the juvenile’s name. As the boy was escorted from the courthouse to a vehicle, one of petitioner’s photographers took his picture. Thereafter, a number of stories using the boy’s name and photograph were printed in newspapers within the county, including petitioner’s three newspapers in Oklahoma City; radio stations broadcast his name and television stations showed film footage of him and identified him by name.
On August 3, 1976, the juvenile was arraigned at a closed hearing, at which the judge entered the pretrial order involved in this case. Additional news reports identifying the juvenile appeared on August 4 and 5. On August 16, the District Court denied petitioner’s motion to quash the order. The Oklahoma Supreme Court then denied petitioner’s writ of prohibition and mandamus, relying on Oklahoma statutes providing that juvenile proceedings are to be held in private "unless specifically ordered by the judge to be conducted in public,” and that juvenile records are open to public inspection “only by order of the court to persons having a legitimate interest therein.” Okla. Stat. Ann., Tit. 10, §§ 1111, 1125 (Supp. 1976).
As we noted in entering our stay of the pretrial order, petitioner does not challenge the constitutionality of the Oklahoma statutes relied on by the court below. Petitioner asks us only to hold that the First and Fourteenth Amendments will not permit a state court to prohibit the publication of widely disseminated information obtained at court proceedings which were in fact open to the public. We think this result is compelled by our recent decisions in Nebraska Press Assn. v. Stuart, 427 U. S. 539 (1976), and Cox Broadcasting Corp. v. Cohn, 420 U. S. 469 (1975).
In Cox Broadcasting the Court held that a State could not impose sanctions on the accurate publication of the name of a rape victim “which was publicly revealed in connection with the prosecution of the crime.” Id., at 471. There, a reporter learned the identity of the victim from an examination of indictments made available by a clerk for his inspection in the courtroom during a recess of court proceedings against the alleged rapists. The Court expressly refrained from intimating a view on any constitutional questions arising from a state policy of denying the public or the press access to official records of juvenile proceedings, id., at 496 n. 26, but made clear that the press may not be prohibited from “truthfully publishing information released to the public in official court records.” Id., at 496.
This principle was reaffirmed last Term in Nebraska Press Assn. v. Stuart, supra, which held unconstitutional an order prohibiting the press from publishing certain information tending to show the guilt of a defendant in an impending criminal trial. In Part VI-D of its opinion, the Court focused on the information covered by the order that had been adduced as evidence in a preliminary hearing open to the public and the press; we concluded that, to the extent the order prohibited the publication of such evidence, “it plainly violated settled principles,” 427 U. S., at 568, citing Cox Broad casting Corp. v. Cohn, supra; Sheppard v. Maxwell, 384 U. S. 333, 362-363 (1966) (“[T]here is nothing that proscribes the press from reporting events that transpire in the courtroom”) ; and Craig v. Harney, 331 U. S. 367, 374 (1947) (“Those who see and hear what transpired [in the courtroom] can report it with impunity”). The Court noted that under state law the trial court was permitted in certain circumstances to close pretrial proceedings to the public, but indicated that such an option did not allow the trial judge to suppress publication of information from the hearing if the public was allowed to attend: “[O]nce a public hearing had been held, what transpired there could not be subject to prior restraint.” 427 U. S., at 568.
The court below found the rationale of these decisions to be inapplicable here because a state statute provided for closed juvenile hearings unless specifically opened to the public by court order and because “there is no indication that the judge distinctly and expressly ordered the hearing to be public.” We think Cox and Nebraska Press are controlling nonetheless. Whether or not the trial judge expressly made such an order, members of the press were in fact present at the hearing with the full knowledge of the presiding judge, the prosecutor, and the defense counsel. No objection was made to the presence of the press in the courtroom or to the photographing of the juvenile as he left the courthouse. There is no evidence that petitioner acquired the information unlawfully or even without the State's implicit approval. The name and picture of the juvenile here were “publicly revealed in connection with the prosecution of the crime,” 420 U. S., at 471, much as the name of the rape victim in Cox Broadcasting was placed in the public domain. Under these circumstances, the District Court’s order abridges the freedom of the press in violation of the First and Fourteenth Amendments.
The petition for certiorari is granted, and the judgment is
Reversed.
In addition to enjoining publication of the name and picture of the juvenile, the order also enjoined law enforcement officials, juvenile authorities, and prosecution and defense counsel “from disclosing any information or making any comments concerning” the delinquency proceeding pending against the juvenile. Petitioner does not now challenge the restraints on counsel (which were rescinded in a modification of the order on August 5) or on public officials.
In Cox Broadcasting the Court quoted the following description by the reporter of the manner in which the name of the rape victim was revealed to him:
“ ‘[D]uring a recess of the said trial, I approached the clerk of the court, who was sitting directly in front of the bench, and requested to see a copy of the indictments. In open court, I was handed the indictments, both the murder and the rape indictments, and was allowed to examine fully this document. . . . Moreover, no attempt was made by the clerk or anyone else to withhold the name and identity of the victim from me or from anyone else and the said indictments apparently were available for public inspection upon request.’ ” 420 U. S., at 473 n. 3.
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:
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C
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sc_issuearea
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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.
Mr. Justice Minton
delivered the opinion of the Court.
Appellee was indicted on eight counts in the District Court for the Eastern District of Wisconsin for violation of § 213 of the Criminal Code of 1909, 35 Stat. 1129-1130, 18 U. S. C. § 336. The District Court granted appellee’s motion to dismiss the indictment, and the United States appealed directly to this Court, pursuant to 18 U. S. C. (Supp. IV) § 3731. The pertinent provisions of the statute, upon which the indictment was based were as follows:
“No letter, package, postal card, or circular concerning any lottery ... or similar scheme offering prizes dependent in whole or in part upon lot or chance . . . shall be deposited in or carried by the mails .... Whoeyer shall knowingly deposit . . . anything to be . . . delivered by mail in violation of . . . this section . . . shall be fined ... or imprisoned . . . .”
The first count of the indictment charged that:
“Perry Halseth, knowingly, wilfully and unlawfully did cause to be delivered by mail to Miss Lucia Brown a circular letter concerning a lottery or scheme offering a prize dependent upon lot or chance . . . .”
The other counts were identical except as to the name of the addressee and the point of delivery.
For the purpose of the motion to dismiss, the parties stipulated as to particularity that a letter, a circular, an order blank, and a punchboard were sent to the addressee by mail. The letter subtly indicated how the addressee might obtain a radio free by selling the chances on the punchboard and how certain lucky numbers would reward the purchaser with prizes of a radio and three Rolpoint ball pens. The punchboard contained an illustration of merchandise to be won. No merchandise was sent with the mailing. If the addressee desired to put the scheme into operation, the merchandise could be obtained by sending the full amount in cash, or by a down payment of $2.00 with the order and the balance payable on delivery, or by a C. O. D. shipment. The punchboard also informed the addressee that merchandise c’ould be “purchased” from appellee at any time.
The District Court held that even , if these stipulated facts had been alleged in the indictment and accepted as true for the purpose of the motion to dismiss, still the indictment did not state an offense because the mailing did not concern an existing lottery or scheme to obtain prizes by lot or chance. The question therefore is whether the mailing of gambling paraphernalia that may be used to set up a lottery or similar scheme is a violation of the statute.
The statute on which the indictment is based was passed in 1909, and since that time no reported case has been found construing it. However, in cases construing analogous lottery statutes, old in our law, the courts have held that they apply only to existing lotteries or schemes.
In France v. United States, 164 U. S. 676, a lottery had been conducted in Kentucky. After the drawing was over, persons who were interested in the outcome-and who had taken money to the operators of the lottery for chances purchased were returning across the state line to Ohio; they had in their possessidn the official print of the lucky number that had been drawn, slips that corresponded with the lucky number, known as “hit slips,” and money which was to be given to winners. They were arrested and charged with a conspiracy to violate a statute which prohibited the carrying across state lines of “any paper, certificate, or instrument purporting to be or represent a ticket, chance, share, or interest in or dependent upon the event of a lottery ...,” (28 Stat. 963). In holding that the defendants had not violated the statute this Court said:
“The lottery had already been drawn; the papers carried by the messengers were not then dependent upon the event of any lottery. . . .
“There is no contradiction in the testimony, and the government admits and assumes that the drawing in regard to which these papers contained any information had already taken place in Kentucky, and it was the result of that drawing only that was on its way in the hands of messengers to the agents of the lottery in Cincinnati.
“The statute does not cover the transaction, and however reprehensible the acts of the plaintiffs in error may be thought to be, we cannot sustain a conviction on that ground. Although the objection is a narrow one, yet the statute being highly penal, rendering its violator liable to-fine and imprisonment, we are compelled to construe it strictly. Full effect is given to the statute by holding that the language applies only to that kind of a paper which depends upon a lottery the drawing of which has not yet taken place, and which paper purports to be a certificate, etc., as described in the act. If it be urged that the act of these plaintiffs in error is within the reason of the statute, the answer must be that it is so far outside of its language that to include.it within the statute would be to legislate and not to construe legislation.” 164 U. S. at 682-683.
In the instant case, too, the statute is penal and must be strictly construed.- We hold tjiat the words “concerning any lottery” mean an existing, going lottery -or gambling-scheme. The mailing does not purport to concern any existing lottery, and neither the addressee nor the appellee was engaged in the operation of" a lottery or similar scheme. The lottery or scheme would come into existence only if the addressee put the paraphernalia into operation. The mere mailing of information concerning such schemes and how they may be set up or the mailing of paraphernalia for such schemes does not violate the statute in question. In fact, the Post Office Department itself did not regard the statute as covering the activity complained of here. Beginning in 1915, the Department has sought to amend the statute without success.
Congress has had before it many times the question, of what gambling devices and paraphernalia it would exclude from the mails and interstate commerce, and only recently has it passed an act concerning the subjéct. Act of January 2, 1951, P. L. No. 906, 64 Stat. 1134, 15 U. S. C. § 1171. If punchboards are to be added to the category of devices to be excluded, it is for Congress to make the addition.
The judgment is
Affirmed.
Mr. Justice Douglas and Mr. Justice Burton dissent.
Actually, four counts were based on material relating to radios and pens and four to cameras and a telescope; but since the nature of the mailings was the same, we consider only the material relating to radios and pens.
France v. United States, 164 U. S. 676; Francis v. United States, 188 U. S. 375; United States v. Irvine, 156 F. 376.
Report of the Postmaster General 72 (1915).
Hearings of April, May and June 1950, House Committee on Interstate and Foreign Commerce on S. 3357 and H. R. 6736, 81st Cong., 2d Sess. 259-260.
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:
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A
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sc_issuearea
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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 Ginsburg
delivered the opinion of the Court.
For certain federal drug offenses, the Controlled Substances Act mandates a minimum sentence of imprisonment for ten years. 21 U. S. C. § 841(b)(1)(A). That minimum doubles to 20 years for defendants previously convicted of a “felony drug offense.” Ibid. The question in this case is whether a state drug offense classified as a misdemeanor, but punishable by more than one year’s imprisonment, is a “felony drug offense” as that term is used in § 841(b)(1)(A).
Two statutory definitions figure in our decision. Section 802(13) defines the unadorned term “felony” to mean any “offense classified by applicable Federal or State law as a felony.” Section 802(44) defines the compound term “felony drug offense” to mean an offense involving specified drugs that is “punishable by imprisonment for more than one year under any law of the United States or of a State or foreign country.”
The term “felony drug offense” contained in § 841(b)(l)(A)’s provision for a 20-year minimum sentence, we hold, is defined exclusively by § 802(44) and does not incorporate § 802(13)’s definition of “felony.” A state drug offense punishable by more than one year therefore qualifies as a “felony drug offense,” even if state law classifies the offense as a misdemeanor.
I
Petitioner Keith Lavon Burgess pleaded guilty in the United States District Court for the District of South Carolina to conspiracy to possess with intent to distribute 50 grams or more of cocaine base in violation of 21 U. S. C. §§ 841(a) and 846. A violation of § 841(a) involving that quantity of cocaine base ordinarily carries a mandatory minimum sentence of ten years. § 841(b)(1)(A). The minimum sentence increases to 20 years, however, if the crime follows a prior conviction for a “felony drug offense.” Ibid.
Burgess had previously been convicted of possessing cocaine in violation of S. C. Code Ann. § 44-53-370(c) and (d)(1) (2002 and Supp. 2007). Although that offense carried a maximum sentence of two years’ imprisonment, South Carolina classified it as a misdemeanor. § 44-53-370(d)(l). Burgess’ prior South Carolina conviction, the Government urged, raised the minimum sentence for his federal conviction to 20 years. The enhancement was mandatory, the Government maintained, because Congress defined “felony drug offense” to include state cocaine offenses “punishable by imprisonment for more than one year.” 21 U. S. C. §802(44).
Burgess contested the enhancement of his federal sentence. The term “felony drug offense,” he argued, incorporates the term “felony,” a word separately defined in § 802(13) to mean “any Federal or State offense classified by applicable Federal or State law as a felony.” A prior drug offense does not rank as a “felony drug offense,” he contended, unless it is (1) classified as a felony under the law of the punishing jurisdiction, per § 802(13); and (2) punishable by more than one year’s imprisonment, per § 802(44).
Rejecting Burgess’ argument, the District Court ruled that § 802(44) alone controls the meaning of “felony drug offense” as that term is used in § 841(b)(1)(A). Although the District Court’s ruling subjected Burgess to a 20-year minimum sentence, the Government moved for a downward departure based on Burgess’ substantial assistance in another prosecution. See 18 U. S. C. § 3553(e) (2000 ed., Supp. V). The court granted the motion and sentenced Burgess to 156 months’ imprisonment followed by ten years’ supervised release.
The United States Court of Appeals for the Fourth Circuit affirmed. The “‘commonsense way to interpret “felony drug offense,” ’ ” that court said, “ ‘is by reference to the definition in §802(44).’” 478 F. 3d 658, 662 (2007) (quoting United States v. Roberson, 459 F. 3d 39, 52 (CAI 2006)). The Fourth Circuit found nothing in the “plain language or statutory scheme ... to indicate that Congress intended ‘felony drug offense’ also to incorporate the definition [of ‘felony’] in § 802(13).” 478 F. 3d, at 662.
Burgess, proceeding pro se, petitioned for a writ of certiorari. We granted the writ, 552 U. S. 1074 (2007), to resolve a split among the Circuits on the question Burgess presents: Does a drug crime classified as a misdemeanor by state law, but punishable by more than one year’s imprisonment, rank as a “felony drug offense” under 21 U. S. C. § 841(b)(1)(A)? Compare 478 F. 3d 658 (case below) and Roberson, 459 F. 3d 39 (§ 802(44) provides exclusive definition of “felony drug offense”), with United States v. West, 393 F. 3d 1302 (CADC 2005) (both § 802(13) and § 802(44) limit meaning of “felony drug offense”).
II
A
The Controlled Substances Act (CSA), 21 U. S. C. §801 et seq., contains two definitions central to the dispute before us; they bear repetition in full. Section 802(13) provides:
“The term ‘felony’ means any Federal or State offense classified by applicable Federal or State law as a felony.”
Section 802(44) states:
“The term ‘felony drug offense’ means an offense that is punishable by imprisonment for more than one year under any law of the United States or of a State or foreign country that prohibits or restricts conduct relating to narcotic drugs, marihuana, anabolic steroids, or depressant or stimulant substances.”
Burgess argues here, as he did below, that “felony drug offense,” as used in § 841(b)(1)(A), should be construed to incorporate both the definition of “felony” in § 802(13) and the definition of “felony drug offense” in §802(44). Under his reading, the § 841(b)(1)(A) enhancement is triggered only when the prior conviction is both “classified by applicable Federal or State law as a felony,” § 802(13), and “punishable by imprisonment for more than one year,” §802(44).
The Government, in contrast, reads §802(44) to provide the exclusive definition of “felony drug offense.” Under the Government’s reading, all defendants whose prior drug crimes were punishable by more than one year in prison would be subject to the § 841(b)(1)(A) enhancement, regardless of the punishing jurisdiction’s classification of the offense.
The Government’s reading, we are convinced, correctly interprets the statutory text and context. Section 802(44) defines the precise phrase used in § 841(b)(1)(A) — “felony drug offense.” “Statutory definitions control the meaning of statutory words ... in the usual case.” Lawson v. Suwannee Fruit & S. S. Co., 386 U. S. 198, 201 (1949). See also Stenberg v. Carhart, 530 U. S. 914, 942 (2000) (“When a statute includes an explicit definition, we must follow that definition . . . .”); 2A N. Singer & J. Singer, Sutherland on Statutory Construction §47:7, pp. 298-299, and nn. 2-3 (7th ed. 2007) (hereinafter Singer).
The CSA, to be sure, also defines the term “felony.” The language and structure of the statute, however, indicate that Congress used the phrase “felony drug offense” as a term of art defined by §802(44) without reference to §802(13). First, Congress stated that “[t]he term ‘felony drug offense’ means an offense that is punishable by imprisonment for more than one year.” §802(44) (emphasis added). “As a rule, [a] definition which declares what a term ‘means’ . . . excludes any meaning that is not stated.” Colautti v. Franklin, 439 U. S. 379, 392-393, n. 10 (1979) (some internal quotation marks omitted). See also Groman v. Commissioner, 302 U. S. 82, 86 (1937); 2A Singer §47:7, p. 306, and n. 20.
Second, the term “felony” is commonly defined to mean a crime punishable by imprisonment for more than one year. See, e. g., 18 U. S. C. § 3559(a) (classifying crimes with a maximum term of more than one year as felonies); Black’s Law Dictionary 651 (8th ed. 2004) (defining “felony” as “[a] serious crime usu[ally] punishable by imprisonment for more than one year or by death”). Section 802(44)’s definition of “felony drug offense” as “an offense ... punishable by imprisonment for more than one year,” in short, leaves no blank to be filled by §802(13) or any other definition of “felony.”
Third, if Congress wanted “felony drug offense” to incorporate the definition of “felony” in § 802(13), it easily could have written §802(44) to state: “The term ‘felony drug offense’ means a felony that is punishable by imprisonment for more than one year . . . .” See Roberson, 459 F. 3d, at 52. Congress has often used that drafting technique — i. e., repeating a discretely defined word — when it intends to incorporate the definition of a particular word into the definition of a compound expression. See, e. g., 15 U. S. C. § 1672(a)-(b) (defining “earnings” and then defining “disposable earnings” as “that part of the earnings” meeting certain criteria); 18 U. S. C. § 1956(c)(3)-(4) (defining “transaction” and then defining “financial transaction” as “a transaction which” meets other criteria); § 1961(1), (5) (2000 ed. and Supp. V) (defining “racketeering activity” and then defining “pattern of racketeering activity” to require “at least two acts of racketeering activity”).
Fourth, our reading avoids anomalies that would arise if both 21 U. S. C. § 802(13) and § 802(44) governed application of the sentencing enhancement in § 841(b)(1)(A). Notably, §802(44) includes foreign offenses punishable by more than one year, while § 802(13) includes only federal and state offenses. Incorporation of §802(13) into § 841(b)(1)(A) would exclude enhancement based on a foreign offense, notwithstanding the express inclusion of foreign offenses in § 802(44)’s definition of “felony drug offense.” Furthermore, some States and many foreign jurisdictions do not label offenses as felonies or misdemeanors. See N. J. Stat. Ann. § 2C:l-4 (West 2005); Me. Rev. Stat. Ann., Tit. 17-A, §1252 (Supp. 2007); Brief for United States 35. Burgess’ compound definition of “felony drug offense” leaves unanswered the appropriate classification of drug convictions in those jurisdictions. See, e. g., United States v. Brown, 937 F. 2d 68, 70 (CA2 1991) (relying on New Jersey common law to determine that the State classifies offenses punishable by more than one year as felonies). No such uncertainty arises under the precise definition Congress provided in §802(44).
Finally, reading § 802(44) as the exclusive definition of “felony drug offense” hardly renders § 802(13) extraneous. Section 802(13) serves to define “felony” for many CSA provisions using that unadorned term. See, e.g., §§ 824(a)(2) (revocation of license to manufacture controlled substances upon conviction of a felony), 843(b) (use of a communication facility to commit a felony), 843(d)(l)-(2) (sentencing enhancements), 843(e) (prohibition on engaging in transactions involving listed chemicals upon conviction of a felony involving those chemicals), 848(c)(1) (definition of “continuing criminal enterprise”), 848(e)(1)(B) (mandatory minimum term for killing a law enforcement officer to avoid prosecution for a felony), 853(d) (rebuttable presumption that property acquired during commission of certain felonies is subject to criminal forfeiture), 878(a)(3) (authority to make warrantless arrest where there is probable cause to believe a felony has been committed).
B
The drafting history of the CSA reinforces our reading of §802(44) as the exclusive definition of “felony drug offense.” In 1988, Congress first used the term “felony drug offense” to describe the type of prior conviction that would trigger a 20-year mandatory minimum sentence under § 841(b)(1)(A). See National Narcotics Leadership Act, Pub. L. 100-690, § 6452(a), 102 Stat. 4371. The 1988 definition of the term was placed within § 841(b)(1)(A) itself; the definition covered “an offense that is a felony under any . . . Federal law . . . or . . . any law of a State or a foreign country” prohibiting or restricting conduct relating to certain types of drugs. § 6452(a)(2), ibid But in 1994, Congress amended the definition, replacing “an offense that is a felony under . . . any law of a State,” ibid, (emphasis added), with “an offense that is punishable by imprisonment for more than one year under any law ... of a State,” Violent Crime Control and Law Enforcement Act, Pub. L. 103-322, § 90105(c)-(d), 108 Stat. 1988 (emphasis added). In lieu of incorporation within § 841(b)(1)(A), the new definition was placed in a discrete §802 definition section. Ibid.
This alteration lends considerable support to our reading of the statute. Before 1994, the definition of “felony drug offense” depended on the vagaries of state-law classifications of offenses as felonies or misdemeanors. The 1994 amendments replaced that definition with a uniform federal standard based on the authorized length of imprisonment. By recognizing §802(44) as the exclusive definition of “felony drug offense,” our reading serves an evident purpose of the 1994 revision: to bring a measure of uniformity to the application of § 841(b)(1)(A) by eliminating disparities based on divergent state classifications of offenses.
By contrast, Burgess reads the 1994 alteration as merely adding a length-of-imprisonment requirement to a definition that already required — and, he contends, continues to require — designation of an offense as a felony by the punishing jurisdiction. That view, however, is difficult to square with Congress’ deletion of the word “felony” and substitution of the phrase “punishable by imprisonment for more than one year.”
If Burgess were correct, moreover, the sole effect of the 1994 change would have been to exclude from the compass of § 841(b)(1)(A) the few drug offenses classified as felonies under the law of the punishing jurisdiction but subject to a sentence of one year or less. See Tr. of Oral Arg. 6-8. See also Brief for Petitioner 15 (purpose of 1994 alteration was to eliminate enhancement for “truly minor offenses” nonetheless classified as felonies). Burgess concedes that under his reading of the statute “the language that Congress added [in 1994] has very little practical effect,” but defends his interpretation on the ground that Congress labeled the changes “conforming amendments.” Tr. of Oral Arg. 8. See also 108 Stat. 1987; Brief for Petitioner 12.
Burgess places more weight on the “Conforming Amendments” caption than it can bear. Congress did not disavow any intent to make substantive changes; rather, the amendments were “conforming” because they harmonized sentencing provisions in the CSA and the Controlled Substances Import and Export Act, 84 Stat. 1285, 21 U. S. C. § 951 et seq. Treating the amendments as nonsubstantive would be inconsistent with their text, not to mention Burgess’ own view that §802(44) added a new length-of-imprisonment requirement to the definition of “felony drug offense.”
In sum, the 1994 alteration replaced a patchwork of state and foreign classifications with a uniform federal standard based on the authorized term of imprisonment. Burgess’ argument that Congress added something — the definition now in §802(44) — but subtracted nothing encounters formidable impediments: the text and history of the statute.
C
Burgess urges us to apply the rule of lenity in determining whether the term “felony drug offense” incorporates §802(13)’s definition of “felony.” “[T]he touchstone of the rule of lenity is statutory ambiguity.” Bifulco v. United States, 447 U. S. 381, 387 (1980) (internal quotation marks omitted). “The rule comes into operation at the end of the process of construing what Congress has expressed,” Callanan v. United States, 364 U. S. 587,596 (1961), and “applies only when, after consulting traditional canons of statutory construction, we are left with an ambiguous statute,” United States v. Shabani, 513 U. S. 10, 17 (1994). Here, Congress expressly defined the term “felony drug offense.” The definition is coherent, complete, and by all signs exclusive. Accordingly, there is no ambiguity for the rule of lenity to resolve.
For the reasons stated, the judgment of the Court of Appeals for the Fourth Circuit is
Affirmed.
Although Title 21 of the United States Code has not been enacted as positive law, we refer to it rather than the underlying provisions of the Controlled Substances Act, 84 Stat. 1242, as amended, 21 U. S. C. §801 et seq., for the sake of simplicity. The relevant provisions of Title 21 have not changed from the time of Burgess’ offense, and all citations are to the 2000 edition through Supplement V.
Burgess received a one-year suspended sentence for his South Carolina conviction, but does not dispute that the offense was “punishable by imprisonment for more than one year.” §802(44) (emphasis added).
Burgess offers four examples of defined words nested within defined phrases where, he asserts, the definition of the word is embraced within the phrase, although the word is not repeated in the definition of the phrase. See Reply Brief 11-12; Tr. of Oral Arg. 6,11-12. In all but one of these examples, however, the definition of the phrase is introduced by the word “includes.” See 2 U. S. C. § 1301(4), (6), (7); 18 U. S. C. § 2266(3)-(4). “[T]he word ‘includes’ is usually a term of enlargement, and not of limitation.” 2A Singer §47:7, p. 305 (some internal quotation marks omitted). Thus “[a] term whose statutory definition declares what it ‘includes’ is more susceptible to extension of meaning . . . than where” — as in §802(44) — “the definition declares what a term ‘means.’ ” Ibid. See also Groman v. Commissioner, 302 U. S. 82, 86 (1937) (“[W]hen an exclusive definition is intended the word ‘means’ is employed,... whereas here the word used is ‘includes.’”).
Burgess’ fourth example is also inapposite. The definition of “debtor’s principal residence” in the Bankruptcy Code, he notes, does not repeat the word “debtor,” itself a discretely defined term. See 11 U. S. C. § 101(13), (13A) (2000 ed., Supp. V). Section 101(13A) states: “The term ‘debtor’s principal residence’ — (A) means a residential structure, including incidental property, without regard to whether that structure is attached to real property; and (B) includes an individual condominium or cooperative unit, a mobile or manufactured home, or trailer.” That definition, unlike 21 U. S. C. § 802(44), is incomplete on its face because nothing in the definition of “debtor’s principal residence” elucidates the word “debtor’s.” Given that void and 11 U. S. C. § 101(13A)’s placement in the Bankruptcy Code, it is reasonable to assume that Congress wanted courts to read the phrase “debtor’s principal residence” in light of the separate definition of “debtor.” Indeed, a contrary reading would yield the absurd result that every residential structure is a “debtor’s principal residence.”
At most, therefore, Burgess’ fourth example illustrates the importance of considering context in applying canons of statutory construction. There may well be other examples lurking in the United States Code of nested terms that draw their meaning from two different statutory provisions without repeating one term in the definition of the other. But “felony drug offense” is not among them.
The fall definition stated:
“For purposes of this subparagraph, the term 'felony drug offense’ means an offense that is a felony under any provision of this title or any other Federal law that prohibits or restricts conduct relating to narcotic drugs, marihuana, or depressant or stimulant substances or a felony under any law of a State or a foreign country that prohibits or restricts conduct relating to narcotic drugs, marihuana, or depressant or stimulant substances.” National Narcotics Leadership Act of 1988, Pub. L. 100-690, § 6452(a)(2), 102 Stat. 4371.
The examples provided by Burgess of such atypical categorization, Brief for Petitioner 22, all carry maximum sentences of exactly one year. See Ariz. Rev. Stat. Ann. §§ 13-701(0(5) (West 2001), 13-3405(B)(1) (West Supp. 2007); Ohio Rev. Code Ann. §§ 2925.11(C) (Lexis 2007 Cum. Supp.), 2929.14(A)(5) (Lexis Supp. 2007); N. C. Gen. Stat. Ann. §§ 15A-1340.17, 90-95(d) (Lexis 2007).
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:
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A
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sc_issuearea
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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 Stevens
delivered the opinion of the Court.
In 1983 and thereafter the Florida Legislature enacted a series of statutes authorizing the department of corrections to award early release credits to prison inmates when the population of the state prison system exceeded predetermined levels. The question presented by this case is whether a 1992 statute canceling such credits for certain classes of offenders after they had been awarded — indeed, after they had resulted in the prisoners’ release from custody — violates the Ex Post Facto Clause of the Federal Constitution.
I
In 1986 petitioner pleaded nolo contendere to a charge of attempted murder and received a sentence of 22'years (8,030 days) in prison. In 1992 the Florida Department of Corrections released him from prison based on its determination that he had accumulated five different types of early release credits totaling 5,668 days. Of that total, 1,860 days were “provisional credits” awarded as a result of prison overcrowding. Shortly after petitioner’s release, the state attorney general issued an opinion interpreting a 1992 statute as having retroactively canceled all provisional credits awarded to inmates convicted of murder or attempted murder. Petitioner was therefore rearrested and returned to custody. His new release date was set for May 19, 1998.
In 1994 petitioner filed a petition for a writ of habeas corpus alleging that the retroactive cancellation of provisional credits violated the Ex Post Facto Clause. Relying on Eleventh Circuit and Florida precedent holding that the revocation of provisional credits did not violate the Ex Post Facto Clause because their sole purpose was to alleviate prison overcrowding, the Magistrate Judge recommended dismissal of the petition. The District Court adopted that recommendation, dismissed the petition, and denied a certificate of probable cause. The Court of Appeals for the Eleventh Circuit also denied a certificate of probable cause in an unpublished order. Because the Court of Appeals for the Tenth Circuit reached a different conclusion on similar facts, Arnold v. Cody, 951 F. 2d 280 (1991), we granted certiorari to resolve the conflict. 517 U. S. 1186 (1996).
Motivated largely by the overcrowded condition of the entire Florida prison system, in 1983 the state legislature enacted the Correctional Reform Act of 1983, a comprehensive revision of the State’s sentencing laws. The Act authorized generous awards of early release credits including “basic gain-time” at the rate of 10 days for each .month, “up to 20 days of incentive gain time, which shall be credited and applied monthly,” and additional deductions of “meritorious gain-time of from 1 to 60 days.” See 1983 Fla. Laws, ch. 83-131, §8. The Act also created an emergency procedure to be followed “whenever the population of the state correctional system exceeds 98 percent of the lawful capacity of the system for males or females, or both.” §5(1). When such an emergency was declared, “the sentences of all inmates in the system who are eligible to earn gain-time shall be reduced by the credit of up to 30 days gain-time in 5-day increments as may be necessary to reduce the inmate population to 97 percent of lawful capacity.” § 5(2).
In the ensuing years, the Florida Legislature modified the overcrowding gain-time system. In 1987 the legislature raised the threshold for awarding emergency release credits from 98% to 99% of capacity. At the same time, the legislature authorized a new form of overcrowding credit, administrative gain-time, with a 98% threshold, which authorized up to a maximum of 60 days additional gain-time to inmates already earning incentive gain-time. Inmates serving sentences for certain offenses were ineligible for the awards. In 1988 the legislature repealed the administrative gain-time provision, and replaced it with a provisional credits system. The language of the provisional credits statute was virtually identical to that of the administrative gain-time statute — it also authorized up to 60 days of gain-time but was triggered when the inmate population reached 97.5% of capacity. In addition, the legislature expanded the list of offenders who were ineligible for the awards.
Having received overcrowding gain-time under the administrative gain-time and provisional credits statutes, as well as basic and incentive gain-time, petitioner was released from prison in 1992. That same year, the legislature canceled provisional overcrowding credits for certain classes of inmates, including those convicted of attempted murder. As a result of that action, credits for 2,789 inmates who were still in custody were canceled, and rearrest warrants were issued for 164 offenders who had been released. Petitioner was in the latter class.
Respondents contend that the cancellation of petitioner’s provisional credits did not violate the Ex Post Facto Clause for two reasons: (1) Because the credits had been issued as part of administrative procedures designed to alleviate overcrowding, they were not an integral part of petitioner’s punishment; and (2) in petitioner’s case, the specific overcrowding credits had been awarded pursuant to statutes enacted after the date of his offense rather than pursuant to the 1983 statute. We consider the arguments separately.
I — I h-< h-H
The presumption against the retroactive application of new laws is an essential thread in the mantle of protection that the law affords the individual citizen. That presumption “is deeply rooted in our jurisprudence, and embodies a legal doctrine centuries older than our Republic.” Landgraf v. USI Film Products, 511 U. S. 244, 265 (1994). This doctrine finds expression in several provisions of our Constitution. The specific prohibition on ex post facto laws is only one aspect of the broader constitutional protection against arbitrary changes in the law. In both the civil and the criminal context, the Constitution places limits on the sovereign’s ability to use its lawmaking power to modify bargains it has made with its subjects. The basic principle is one that protects not only the rich and the powerful, United States v. Winstar Corp., 518 U. S. 839 (1996), but also the indigent defendant engaged in negotiations that may lead to an acknowledgment of guilt and a suitable punishment.
Article I, § 10, of the Federal Constitution provides that "[n]o State shall... pass any ... ex post facto Law.” In his opinion for the Court in Beazell v. Ohio, 269 U. S. 167 (1925), Justice Stone explained:
“The constitutional prohibition and the judicial interpretation of it rest upon the notion that laws, whatever their form, which purport to make innocent acts criminal after the event, or to aggravate an offense, are harsh and oppressive, and that the criminal quality attributable to an act, either by the legal definition of the offense or by the nature or amount of the punishment imposed for its commission, should not be altered by legislative enactment, after the fact, to the disadvantage of the accused.” Id., at 170.
The bulk of our ex post facto jurisprudence has involved claims that a law has inflicted “a greater punishment, than the law annexed to the crime, when committed.” Calder v. Bull, 3 Dall. 386, 390 (1798) (emphasis deleted). We have explained that such laws implicate the central concerns of the Ex Post Facto Clause: “the lack of fair notice and governmental restraint when the legislature increases punishment beyond what was prescribed when the crime was consummated.” Weaver v. Graham, 450 U. S. 24, 30 (1981).
To fall within the ex post facto prohibition, a law must be retrospective — that is, “it must apply to events occurring before its enactment” — and it “must disadvantage the offender affected by it,” id., at 29, by altering the definition of criminal conduct or increasing the punishment for the crime, see Collins v. Youngblood, 497 U. S. 37, 50 (1990). In this case the operation of the 1992 statute to effect the cancellation of overcrowding credits and the consequent reincar-eeration of petitioner was clearly retrospective. The narrow issue that we must decide is thus whether those consequences disadvantaged petitioner by increasing his punishment.
In arguing that the cancellation of overcrowding credits inflicts greater punishment, petitioner relies primarily on our decision in Weaver v. Graham, in which we considered whether retroactively decreasing the amount of gain-time awarded for an inmate’s good behavior violated the Ex Post Facto Clause. In that case the petitioner had pleaded guilty to second-degree murder and had been sentenced to prison for 15 years. At the time of Weaver’s plea, Florida law provided credits contingent on the good conduct of the prisoner of 5 days per month for the first two years of his sentence, 10 days per month for the third and fourth years, and 15 days per month thereafter. The law therefore provided him with an opportunity to be released after serving less than nine years of his sentence. In 1978 the Florida Legislature enacted a new formula for computing gain-time; instead of 5, 10, and 15 days per month, it authorized only 3, 6, and 9 days. The new statute did not withdraw any credits already awarded to Weaver, but by curtailing the availability of future credits it effectively postponed the date when he would become eligible for early release. Because the statute made the punishment for crimes committed before its enactment “more onerous,” we unanimously concluded that it ran “afoul of the prohibition against ex post facto laws.” 450 U. S., at 36.
According to petitioner, although this case involves overcrowding credits, it is essentially like Weaver because the issuance of these credits was dependent on an inmate’s good conduct. Respondents, on the other hand, submit that Weaver is not controlling because it was the overcrowded condition of the prison system, rather than the character of the prisoner’s conduct, that gave rise to the award. In our view, both of these submissions place undue emphasis on the legislature’s subjective intent in granting the credits rather than on the consequences of their revocation.
In arriving at our holding in Weaver, we relied not on the subjective motivation of the legislature in enacting the gain-time credits, but rather on whether objectively the new statute “lengthened] the period that someone in petitioner’s position must spend in prison.” Id., at 33. Similarly, in this case, the fact that the generous gain-time provisions in Florida’s 1983 statute were motivated more by the interest in avoiding overcrowding than by a desire to reward good behavior is not relevant to the essential inquiry demanded by the Ex Post Facto Clause: whether the cancellation of 1,860 days of accumulated provisional credits had the effect of lengthening petitioner’s period of incarceration.
In our post-Weaver cases, we have also considered whether the legislature’s action lengthened the sentence without examining the purposes behind the original sentencing scheme. In Miller v. Florida, 482 U. S. 423 (1987), we unanimously concluded that a revision in Florida’s sentencing guidelines that went into effect between the date of petitioner’s offense and the date of his conviction violated the Ex Post Facto Clause. Our determination that the new guideline was “ ‘more onerous than the prior law,’ ” id., at 431 (quoting Dobbert v. Florida, 432 U. S. 282, 294 (1977)), rested entirely on an objective appraisal of the impact of the ehange on the length of the offender’s presumptive sentence. 482 U. S., at 431 (“Looking only at the change in primary offense points, the revised guidelines law clearly disadvantages petitioner and similarly situated defendants”).
In California Dept. of Corrections v. Morales, 514 U. S. 499 (1995), we also relied entirely on objective considerations to support our conclusion that an amendment to California’s parole procedures that decreased the frequency of parole hearings for certain offenders had not made any “change in the ‘quantum of punishment,’ ” id., at 508. The amendment at issue in Morales allowed the parole board, after holding an initial parole hearing, to defer for up to three years subsequent parole suitability hearings for prisoners convicted of multiple murders if the board found that it was unreasonable to expect that parole would be granted at a hearing during the subsequent years. We stated that the relevant inquiry is whether the “change alters the definition of criminal conduct or increases the penalty by which a crime is punishable.” Id., at 507, n. 3. After making that inquiry, we found that “there is no reason to conclude that the amendment will have any effect on any prisoner’s actual term of confinement.” Id., at 512. Our holding rested squarely on the conclusion that “a prisoner’s ultimate date of release would be entirely unaffected by the change in the timing of suitability hearings.” Id., at 513. Although we held that “speculative and attenuated possibilities]” of increasing the measure of punishment do not implicate the Ex Post Facto Clause, id., at 509, the bulk of our analysis focused on the effect of the law on the inmate’s sentence.
We did not imply in Morales, as respondents contend, that the constitutionality of retroactive changes in the quantum of punishment depended on the purpose behind the parole sentencing system. The only mention of legislative purpose in Morales was in the following passage:
“In contrast to the laws at issue in Lindsey [v. Washington, 301 U. S. 397 (1937)], Weaver, and Miller (which had the purpose and effect of enhancing the range of available prison terms, see Miller, supra, at 433-434), the evident focus of the California amendment was merely ‘“‘to relieve the [Board] from the costly and time-consuming responsibility of scheduling parole hearings”” for prisoners who have no reasonable chance of being released. In re Jackson, 39 Cal. 3d 464, 473, 703 P. 2d 100, 106 (1985) (quoting legislative history).” Id., at 507.
Thus, we concluded, the change at issue had neither the purpose nor the effect of increasing the quantum of punishment. Whether such a purpose alone would be a sufficient basis for concluding that a law violated the Ex Post Facto Clause when it actually had no such effect is a question .the Court has never addressed. Moreover, in Morales our statements regarding purpose did not refer to the purpose behind the creation of the original sentencing scheme; they referred instead to the question whether, in changing that sentencing scheme, the legislature intended to lengthen the inmate’s sentence. To the extent that any purpose might be relevant in this case, it would only be the purpose behind the legislature’s 1992 enactment of the offense-based exclusion. Here, unlike in Morales, there is no evidence that the legislature’s change in the sentencing scheme was merely to save time or money. Rather, it is quite obvious that the retrospective change was intended to prevent the early release of prisoners convicted of murder-related offenses who had accumulated overcrowding credits.
Respondents also argue that the retroactive cancellation of overcrowding credits is permissible because overcrowding gain-time — unlike the incentive gain-time at issue in Weaver which is used to encourage good prison behavior and prisoner rehabilitation — “b[ears] no relationship to the original penalty assigned the crime or the actual penalty calculated under the sentencing guidelines.” Brief for Respondent Mathis 20. To the extent that respondents’ argument rests on the notion that overcrowding gain-time is not “in some technical sense part of the sentence,” Weaver, 450 U. S., at 32, this argument is foreclosed by our precedents. As we recognized in Weaver, retroactive alteration of parole or early release provisions, like the retroactive application of provisions that govern initial sentencing, implicates the Ex Post Facto Clause because such credits are “one determinant of petitioner’s prison term ... and ... [the petitioner’s] effective sentence is altered once this determinant is changed.” Ibid. We explained in Weaver that the removal of such provisions can constitute an increase in punishment, because a “prisoner’s eligibility for reduced imprisonment is a significant factor entering into both the defendant’s decision to plea bargain and the judge’s calculation of the sentence to be imposed.” Ibid.
Respondents argue that this reasoning does not apply to overcrowding credits because, when petitioner pleaded nolo contendere, he could not reasonably have expected to receive any such credits.. The State, after all, could have alleviated the overcrowding problem in various ways: It could have built more prisons; it could have paroled a large category of nonviolent offenders; or it might have discontinued prosecution of some classes of victimless crimes. Respondents thus argue that the 1992 statute does not violate the Ex Post Facto Clause because, like the California amendment at issue in Morales, it “create[d] only the most speculative and attenuated possibility of producing the prohibited effect of increasing the measure of punishment for covered crimes.” 514 U. S., at 509. Given the fact that this petitioner was actually awarded 1,860 days of provisional credits and the fact that those credits were retroactively canceled as a result of the 1992 amendment, we find this argument singularly unpersuasive. In this case, unlike in Morales, the actual course of events makes it unnecessary to speculate about what might have happened. The 1992 statute has unquestionably disadvantaged petitioner because it resulted in his rearrest and prolonged his imprisonment. Unlike the California amendment at issue in Morales, the 1992 Florida statute did more than simply remove a mechanism that created an opportunity for early release for a class of prisoners whose release was unlikely; rather, it made ineligible for early release a class of prisoners who were previously eligible — including some, like petitioner, who had actually been released.
> HH
Although it does not appear that respondents advanced this argument in the papers filed in the District Court, the Court of Appeals, or in their brief in opposition to the petition for certiorari in this Court, they now argue that petitioner is not entitled to relief because his overcrowding credits were awarded pursuant to statutes enacted after the date of his offense rather than pursuant to the 1983 statute. We disagree.
The overcrowding statute in effect at the time of petitioner’s crime was modified in subsequent years, but its basic elements remained the same: The statute provided for reductions in a prisoner’s sentence when the population of the prison system exceeded a certain percentage of lawful capacity. At the time of petitioner’s sentence in 1986, the emergency gain-time statute was in effect. Under that statute, when the prison population reached 98% of lawful capacity, the secretary of the department of corrections was required to advise the Governor and, after receiving the Governor’s verification of the capacity certification, to declare a state of emergency whereupon the sentences of all eligible inmates “shall be reduced by the credit of up to 30 days gain-time, in 5-day increments, as may be necessary to reduce the inmate population to 97 percent of lawful capacity.” Fla. Stat. §944.598(2) (1983).
The later statutes slightly modified the procedures outlined in the 1983 statute. The administrative gain-time statute enacted in 1987 (after petitioner’s plea of nolo con-tendere) provided that the secretary, after certification to the Governor, “may grant up to a maximum of 60 days administrative gain-time.” Fla. Stat § 944.276(1). Unlike the emergency gain-time statute, the administrative gain-time statute made the issuance of gain-time discretionary, and it contained certain offense-based exclusions. The provisional credits provision was enacted to replace administrative gain-time and is essentially the same, except that it provides for the issuance of gain-time when the prison reaches 97.5% of lawful capacity, rather than 98%. Fla. Stat. §944.277 (1988). See Griffin v. Singletary, 638 So. 2d 500 (Fla. 1994).
The changes in the series of statutes authorizing the award of overcrowding gain-time do not affect petitioner’s core ex post facto claim. Petitioner could have accumulated gain-time under the emergency gain-time provision in much the same manner as he did under the provisional credits statute. We recognize, however, that although the differences in the statutes did not affect petitioner’s central entitlement to gain-time, they may have affected the precise amount of gain-time he received. Between 1988 and 1992, the provisional credits were authorized when the prison reached 97.5% capacity rather than 98% capacity as under the emergency gain-time statute. If the prison population did not exceed 98% of capacity between 1988 and 1992, and if petitioner received provisional credits during those years, there is force to the argument that the cancellation of that portion of the 1,860-day total did not violate the Ex Post Facto Clause. Because this point was not adequately developed earlier in the proceeding, and because it may not in any event affect petitioner’s entitlement to release, we leave it open for further consideration on remand.
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.
The total included: <1) a 170-day credit for time spent in jail prior to his conviction; (2) “basic gain-time” of 2,640 days; (3) “additional [incentive] gain-time” of 958 days; (4) “administrative gain-time” of 335 days; and (5) “provisional credits” of 1,860 days. Disciplinary action resulted in a forfeiture of 295 days.
Hock v. Singletary, 41 F. 3d 1470 (1995).
Dugger v. Rodrick, 584 So. 2d 2 (Fla. 1991), cert. denied sum nom. Rodrick v. Singletary, 502 U. S. 1037 (1992).
Petitioner did not advance his ex post facto claim in the District Court respondents challenged his failure to exhaust his state remedies, but do not appear to have raised the exhaustion issue in the Court of Appeals; nor have they raised it in this Court. Presumably they are satisfied, as we are, that exhaustion would have been futile. The Florida Supreme Court, in Dugger v. Rodrick, 584 So. 2d 2 (1991), held that retrospective application of the provisional credits statute’s offense-based exclusion did not violate the Ex Post Facto Clause. The court reasoned that overcrowding credits, unlike basic gain-time or incentive gain-time, were merely “procedural” and did not create any substantive rights. Relying on Dugger, the Florida Supreme Court held in Griffin v. Singletary, 638 So. 2d 500 (1994), that cancellation of provisional credits actually awarded to a prisoner did not violate the Ex Post Facto Clause. Respondents have not suggested any reason why the Florida courts would have decided petitioner’s case differently.
In 1980 the Florida Department of Corrections consented to the entry of a decree establishing a limit on the prison population that could not be exceeded without court approval. See Costello v. Wainwright, 489 F. Supp. 1100 (MD Fla. 1980). In 1982 a special session of the legislature created a Corrections Overcrowding Task Force, which drafted the 1983 legislation.
1983 Fla. Laws, ch. 83-131.
Section 8 amended §944.275 of the Florida Statutes.
Section 5, in pertinent part, provides:
“(1) The Department of Corrections shall advise the Governor of the existence of a state of emergency in the state correctional system whenever the population of the state correctional system exceeds 98 percent of the lawful capacity of the system for males or females, or both. In conveying this information, the secretary of the department shall certify the rated design capacity, maximum capacity, lawful capacity, system maximum capacity, and current population of the state correctional system. When the Governor verifies such certification by letter, the secretary shall declare a state of emergency.
“(2) Following the declaration of a state of emergency, the sentences of all inmates in the system who are eligible to earn gain-time shall be reduced by the credit of up to 30 days gain-time in 5-day increments as may be necessary to reduce the inmate population to 97 percent of lawful capacity.” 1983 Fla. Laws, ch. 83-131, §5.
1988 Fla. Laws, eh. 88-122, § 5. The provisional credits statute was repealed in 1993. 1993 Fla. Laws, ch. 93-406, §§32, 35. The only overcrowding credit system in place today in Florida is the “control release” provision, first enacted in 1989, which authorizes release from incarceration rather than gain-time to control prison population. See Fla. Stat. §947.146 (Supp. 1992).
See Fla. Op. Atty. Gen. 92-96 (1992), reprinted in Lodging, p. 53; Griffin v. Singletary, 638 So. 2d, at 501. In 1989 the Florida Legislature amended the provisional credits statute to render those convicted of certain murder offenses, including attempted murder, ineligible for provisional credits. Fla. Stat. § 944.277 (1989). The Florida Department of Corrections interpreted the 1989 amendments, and subsequent amendments enacted in 1990 and 1991 which contained the same exclusion, to apply prospectively. The 1992 amendment at issue in this case was originally interpreted by the department of corrections to apply only prospectively, but the subsequent 1992 opinion by the attorney general concluded that the statute applied retroactively.
Department of Corrections Letter of July 9, 1996, App. to Brief for Florida Public Defender Association, Inc., as Amicus Curiae. The petitioner’s administrative gain-time credits were also canceled, but he does not challenge that action.
«The ex posi ]?acto Clause flatly prohibits retroactive application of penal legislation. Article I, §10, el. 1, prohibits States from passing another type of retroactive legislation, laws ‘impairing the Obligation of Contracts.’ The Fifth Amendment’s Takings Clause prevents the Legislature (and other government actors) from depriving private persons of vested property rights except for a ‘public use’ and upon payment of ‘just compensation.’ The prohibitions on ‘Bills of Attainder’ in Art. I, §§ 9-10, prohibit legislatures from singling out disfavored persons and meting out summary punishment for past conduct. See, e. g., United States v. Brown, 381 U. S. 437, 456-462 (1965). The Due Process Clause also protects the interests in fair notice and repose that may be compromised by retroactive legislation ....” Landgraf v. USI Film Products, 511 U. S., at 266 (footnote omitted).
This case falls in the third of the four categories of ex post facto laws described by Justice Chase: “1st. Every law that makes an action done before the passing of the law, and which was innocent when done, criminal; and punishes such action. 2d. Every law that aggravates a crime, or makes it greater than it was, when committed. 3d. Every law that changes the punishment, and inflicts a greater punishment, than the law annexed to the crime, when committed. 4th. Every law that alters the legal rules of evidence, and receives less, or different, testimony, than the law required at the time of the commission of the offence, in order to convict the offender.” Calder v. Bull, 3 Dall., at 390 (emphasis deleted).
Later in the opinion we restated the test in similar language: “In evaluating the constitutionality of the 1981 amendment, we must determine whether it produces a sufficient risk of increasing the measure of punishment attached to the covered crimes.” California Dept. of Corrections v. Morales, 514 U. S., at 509.
Indeed, the attorney general issued the 1992 opinion interpreting the statute to apply retroactively in response to concerns about the release of a notorious sex offender and murderer. See Fla. Op. Atty. Gen. 92-96, at 283, reprinted in Lodging, at 53.
The support for our conclusion in Morales that the Act was merely speculative has no counterpart in this case. In Morales, we first relied on the fact that the amendment affected a class of prisoners — multiple murderers — who had little chance of being released on parole. Second, we found that the amendment did not alter the date of the prisoner’s initial parole suitability hearing, and therefore only affected those initially deemed unsuitable for parole. Lastly, we recognized that the parole board “retain[ed] the authority to tailor the frequency of subsequent suitability hearings to the particular circumstances of the individual prisoner.” 514 U. S., at 511. Simply put, we rejected the inmate’s claim in Morales, because it could not be said with any certainty that the amended statutory scheme was more “onerous” than at the time of the crime. See id., at 509-510 (quoting Dobbert v. Florida, 432 U. S. 282, 294 (1977), for “refusing to accept ‘speculation’ that the effective punishment under a new statutory scheme would be ‘more onerous’ than under the old one”).
We note that respondents do not argue, as the Magistrate Judge found, that the revocation of overcrowding credits is constitutional because such an act is merely “procedural.” Thére is no merit to this argument in any case. We explained in Dobbert v. Florida, 432 U. S. 282 (1977), that a procedural statute is one that “simply alter[s] the methods employed in determining” whether the punishment is “to be imposed” rather than “ehang[ing]. . . the quantum of punishment attached to the crime.” Id.,. at 293-294. Because the 1992 law did not change the method of determining the sentence, but rather lengthened the sentences of certain prisoners by making them ineligible for early release, it was not merely procedural.
Respondent Attorney General Butterworth suggests that under the emergency gain-time statute, the maximum award petitioner could have realized was 30 days of emergency gain-time. Therefore, according to the attorney general, it is unlikely that the gain-time statute would have had any effect on petitioner’s sentence. We do not agree that the statute lends itself to such a reading. The statute required the department of corrections to advise the Governor “whenever the population of the state correctional system exceeds 98 percent of lawful capacity.” Fla. Stat. §944.598(1) (1983) (emphasis added). The duty to grant up to 30 days gain-time in 5-day increments was continuing until the inmate population reached 97% of lawful capacity. If the inmate population were to rise again to 98%, the Secretary was required to issue additional gain-time.
Moreover, the attorney general’s reading of the emergency gain-time statute would also limit the award of gain-time under the administrative gain-time and provisional credits statute. These statutes contain wording similar to the emergency gain-time statute, see Fla. Stat. § 944.276(1) (1987); Fla. Stat. §944.277(1) (1989), yet the State has not interpreted the statutes to limit the award of gain-time to a total of 60 days.
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:
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A
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sc_issuearea
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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.
Mr. Justice Stewart
delivered the opinion of the Court.
In April of 1972 a three-judge United States District Court for the Southern District of New York declared unconstitutional New York's Mandated Services Act, 1970 N. Y. Laws, ch. 138, which authorized fixed payments to nonpublic schools as reimbursement for the cost of certain recordkeeping and testing services required by state law. Committee for Public Education & Religious Liberty v. Levitt, 342 F. Supp. 439. The court’s order permanently enjoined any payments under the Act, including reimbursement for expenses that schools had already incurred in the last half of the 1971-1972 school year. This Court subsequently affirmed that judgment. Levitt v. Committee for Public Education, 413 U. S. 472.
In June 1972 the New York State Legislature responded to the District Court’s order by enacting ch. 996 of the 1972 N. Y. Laws. The Act “recognize [d] a moral obligation to provide a remedy whereby . . . schools may recover the complete amount of expenses incurred by them prior to June thirteenth [, 1972,] in reliance on” the invalidated ch. 138, and conferred jurisdiction on the New York Court of Claims “to hear, audit and determine” the claims of nonprofit private schools for such expenses. Thus the Act explicitly authorized what the District Court’s injunction had prohibited: reimbursement to sectarian schools for their expenses of performing state-mandated services through the 1971-1972 academic year.
The appellee, Cathedral Academy, sued under ch. 996 in the Court of Claims, and the State defended on the ground that the Act was unconstitutional. The Court of Claims agreed that ch. 996 violated the First and Fourteenth Amendments, and dismissed Cathedral Academy’s suit. 77 Misc. 2d 977, 354 N. Y. S. 2d 370. The Appellate Division affirmed, 47 App. Div. 2d 390, 366 N. Y. S. 2d 900, but the New York Court of Appeals, adopting a dissenting opinion in the Appellate Division, reversed and remanded the case to the Court of Claims for determination of the amount of the Academy’s claim. 39 N. Y. 2d 1021, 355 N. E. 2d 300. An appeal was taken to this Court, and we postponed further consideration of the question of our appellate jurisdiction until the hearing on the merits. 429 U. S. 1089. We conclude that the Court of Appeals’ decision finally determined the federal constitutional issue and is ripe for appellate review in this Court under 28 U. S. C. § 1257 (2).
I
The state courts and the parties have all considered this case to be controlled by the principles established in Lemon v. Kurtzman, 411 U. S. 192 (Lemon II), which concerned the permissible scope of a Federal District Court’s injunction forbidding payments to sectarian schools under an unconstitutional state statute. Previously in that same litigation we had declared unconstitutional a Pennsylvania statute authorizing payments to sectarian schools for specific secular services provided under contract with the State, and remanded the case to the trial court for entry of an appropriate decree. Lemon v. Kurtzman, 403 U. S. 602 (Lemon I). On remand, the District Court enjoined payments under the statute for any services performed after the date of this Court’s decision, but did not prohibit payments for services provided before that date. 348 F. Supp. 300, 301 n. 1 (ED Pa.). In Lemon II this Court affirmed the trial court’s denial of retroactive injunctive relief against the State, noting that “in constitutional adjudication as elsewhere, equitable remedies are a special blend of what is necessary, what is fair, and what is workable.” 411 U. S., at 200 (footnote omitted).
The primary constitutional evil that the Lemon II injunction was intended to rectify was the excessive governmental entanglement inherent in Pennsylvania’s elaborate procedures for ensuring that “educational services to be reimbursed by the State were kept free of religious influences.” Id., at 202. The payments themselves were assumed to be constitutionally permissible, since they were not to be directly supportive of any sectarian activities. Because the State’s supervision had long since been completed with respect to expenses already incurred, the proposed payments were held to pose no continued threat of excessive entanglement. Two other problems having “constitutional overtones” — the impact of a final audit and the effect of funding even the entirely nonreligious activities of a sectarian school — threatened minimal harm “only once under special circumstances that will not recur.” Ibid.
In this context this Court held that the unique flexibility of equity permitted the trial court to weigh the “remote possibility of constitutional harm from allowing the State to keep its bargain” against the substantial reliance of the schools that had incurred expenses at the express invitation of the State. The District Court, “applying familiar equitable principles,” could properly decline to enter an injunction that would do little if anything to advance constitutional interests while working considerable hardship on the schools. Cf. Hecht Co. v. Bowles, 321 U. S. 321.
In the present case, however, the District Court did not limit its decree as the court had done in Lemon II, but instead expressly enjoined payments for amounts “heretofore or hereafter expended.” See n. 1, supra (emphasis supplied). The state legislature thus took action inconsistent with the court’s order when it passed ch. 996 upon its own determination that, because schools like the Academy had relied to their detriment on the State’s promise of payment under ch. 138, the equities of the case demanded retroactive reimbursement. To approve the enactment of ch. 996 would thus expand the reasoning of Lemon II to hold that a state legislature may effectively modify a federal court’s injunction whenever a balancing of constitutional equities might conceivably have justified the court’s granting similar relief in the first place. But cf. Wright v. Council of City of Emporia, 407 U. S. 451, 467. This rule would mean that every such unconstitutional statute, like every dog, gets one bite, if anyone has relied on the statute to his detriment. Nothing in Lemon II, whose concern was to “examine the District Court’s evaluation of the proper means of implementing an equitable decree,” 411 U. S., at 200, suggests such a broad general principle.
But whether ch. 996 is viewed as an attempt at legislative equity or simply as a law authorizing payments from public funds to sectarian schools, the dispositive question is whether the payments it authorizes offend the First and Fourteenth Amendments.
II
The law at issue here, ch. 996, authorizes reimbursement for expenses incurred by the schools during the specified time period
“in rendering services for examination and inspection in connection with administration, grading. and the compiling and reporting of the results of tests and examinations, maintenance of records of pupil enrollment and reporting thereon, maintenance of pupil health records, recording of personnel qualifications and characteristics and the preparation and submission to the state of various other reports required by law or regulation.”
It expressly states that the basis for the legislation is the State’s representation in the now invalidated ch. 138 that such expenses would be reimbursed. Thus, while ch. 996 provides for only one payment rather than many, and changes the method of administering the payments, nothing on the face of the statute indicates that payments under ch. 996 would differ in any substantial way from those authorized under ch. 138.
Unlike the constitutional defect in the state law before us in Lemon I, the constitutional invalidity of ch. 138 lay in the payment itself, rather than in the process of its administration. The New York statute was held to be constitutionally invalid because “the aid that [would] be devoted to secular functions [was] not identifiable and separable from aid to sectarian activities.” Levitt v. Committee for Public Education, 413 U. S., at 480. This was so both because there was no assurance that the lump-sum payments reflected actual expenditures for mandated services, and because there was an impermissible risk of religious indoctrination inherent in some of the required services themselves. We noted in particular the “substantial risk that . . . examinations, prepared by teachers under the authority of religious institutions, will be drafted with an eye, unconsciously or otherwise, to inculcate students in the religious precepts of the sponsoring church.” Ibid. Thus it can hardly be doubted that if ch. 996 authorizes payments for the identical services that were to be reimbursed under ch. 138, it is for the identical reasons invalid.
The Academy argues, however, that the Court of Appeals has construed the statute to require a detailed audit in the Court of Claims to “establish whether or not the amounts claimed for mandated services constitute a furtherance of the religious purposes of the claimant.” 47 App. Div. 2d, at 397, 366 N. Y. S. 2d, at 906. This language is said to require the Court of Claims to review in detail all expenditures for which reimbursement is claimed, including all teacher-prepared tests, in order to assure that state funds are not given for sectarian activities. We find nothing in the opinions of the state courts to indicate that such an audit is authorized under ch. 996.
But even if such an audit were contemplated, we agree with the appellant that this sort of detailed inquiry into the subtle implications of in-class examinations and other teaching activities would itself constitute a significant encroachment on the protections of the First and Fourteenth Amendments. In order to prove their claims for reimbursement, sectarian schools would be placed in the position of trying to disprove any religious content in various classroom materials. In order to fulfill its duty to resist any possibly unconstitutional payment, see n. 2, supra, the State as defendant would have to undertake a search for religious meaning in every classroom examination offered in support of a claim. And to decide the case, the Court of Claims would be cast in the role of arbiter of the essentially religious dispute.
The prospect of church and state litigating in court about what does or does not have religious meaning touches the very core of the constitutional guarantee against religious establishment, and it cannot be dismissed by saying it will happen only once. Cf. Presbyterian Church v. Blue Hull Mem. Presb. Church, 393 U. S. 440. When it is considered that ch. 996 contemplates claims by approximately 2,000 schools in amounts totaling over $11 million, the constitutional violation is clear.
For the reasons stated, we hold that ch. 996 is unconstitutional because it will of necessity either have the primary effect of aiding religion, see Levitt v. Committee for Public Education, supra, or will result in excessive state involvement in religious affairs. See Lemon I, 403 U. S. 602.
Ill
But even assuming, as the New York Court of Appeals did, that under Lemon II a degree of constitutional infirmity may be tolerated in a state law if other equitable considerations predominate, we cannot agree that the equities support what the state legislature has done in ch. 996.
In Lemon II the constitutional vice of excessive entanglement was an accomplished fact that could not be undone by enjoining payments for expenses previously incurred. And precisely because past practices had clearly identified permissibly reimbursable secular expenses, an additional single payment was held not to threaten the additional constitutional harm of state support to religious activities. By contrast, ch. 996 amounts to a new and independently significant infringement of the First and Fourteenth Amendments.
Moreover the Academy’s detrimental reliance on the promise of ch. 138 was materially different from the reliance of the schools in Lemon II. Unlike the Pennsylvania schools, the Academy was required by pre-existing state law to perform the services reimbursed under ch. 138. In essence, the Academy could have relied on ch. 138 only by spending its own funds for nonmandated, and perhaps sectarian, activities that it might not otherwise have been able to afford. While this Court has never held that freeing private funds for sectarian uses invalidates otherwise secular aid to religious institutions, see Roemer v. Maryland Public Works Board, 426 U. S. 736, 747, and n. 14 (plurality opinion), it is quite another matter to accord positive weight to such a reliance interest in the balance against a measurable constitutional violation.
Accordingly, the judgment of the New York Court of Appeals is reversed, and the case is remanded to that court for further proceedings not inconsistent with this opinion.
It is so ordered.
The Chief Justice and Me. Justice Rehnquist believe that this case is controlled by the principles established in Lemon v. Kurtzman, 411 U. S. 192 (1973), and would therefore affirm the judgment of the Court of Appeals of New York.
The order permanently enjoined “all persons acting for or on behalf of the State of New York . . . from making any payments or disbursements out of State funds pursuant to the provisions of Chapter 138 of the New York Laws of 1970, in payment for or reimbursement of any moneys heretofore or hereafter expended by nonpublic elementary and secondary schools.” No. 70 Civ. 3251 (June 1, 1972).
At oral argument the Assistant Solicitor General of New York said that the State of New York frequently defends against claims for payment on the ground that the enabling Act authorizing suit in the Court of Claims is unconstitutional.
The dissenting judges in the Court of Appeals voted to affirm on the majority opinion in the Appellate Division. 39 N. Y. 2d, at 1022, 355 N. E. 2d 300. We shall refer to the dissenting opinion of Justice Herlihy in the Appellate Division, 47 App. Div. 2d 396, 366 N. Y. S. 2d 905, adopted by the majority in the Court of Appeals, as the opinion of the Court of Appeals.
It is clear that the New York Court of Appeals has finally determined that under the principles established in Lemon v. Kurtzman, 411 U. S. 192 (Lemon II), the Academy and other schools in similar positions are entitled to prove claims for reimbursement under ch. 996. While the Court of Appeals remanded for an audit in the Court of Claims to determine the amount of the Academy’s claim, and while the precise scope of the audit is unclear, we conclude for the reasons stated in Part II of the text below that no possible developments on remand could sufficiently minimize the risk of future constitutional harm to justify relief even under Lemon IPs balancing of constitutional and equitable considerations. Since further proceedings cannot remove or otherwise affect this threshold federal issue, the Court of Appeals’ decision is final for purposes of review in this Court. See Cox Broadcasting Corp. v. Cohn, 420 U. S. 469, 478-480.
The Court of Claims dismissed the Academy’s claim in part because it found no “enforceable standards or guidelines” in ch. 996 “which would enable this Court to separate and apportion the single per-pupil allotment among the various allowed purposes.” 77 Misc. 2d, at 985, 354 N. Y. S. 2d, at 378. Thus it did not believe that ch. 996 authorized it to reimburse schools only for clearly secular expenses, such as the cost of maintaining attendance and medical records, while refusing payments for other “allowed purposes” such as in-class examinations that this Court had held impermissible. The opinion of the Court of Appeals does not contradict this interpretation.
While the language quoted in the text is somewhat ambiguous, it appears that the Court of Appeals interpreted ch. 996 to require an audit similar to the post-audit contemplated in Lemon II, in which “the burden will be upon the claimant to prove that the items of its claims are in fact solely for mandated services . . . .” 47 App. Div. 2d, at 400, 366 N. Y. S. 2d, at 908. As was made clear in Levitt v. Committee for Public Education, 413 U. S. 472, however, limiting reimbursement to mandated services would not fully address the constitutional objections to ch. 138, since it would provide no assurance against reimbursement for sectarian mandated services. Thus, a post-audit like the one contemplated in Lemon II, which the Court characterized as a “ministerial 'cleanup’ function,” 411 U. S., at 202, would not in this case exclude payments that impermissibly aided religious purposes.
The parties have considered the Academy’s claim a test of the constitutionality of ch. 996. Claims filed by other schools have been stayed in the Court of Claims pending the resolution 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:
|
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.
Chief Justice Rehnquist
delivered the opinion of the Court.
Unlike its federal counterpart, the California Arbitration Act, Cal. Civ. Proc. Code Ann. §1280 et seq. (West 1982), contains a provision allowing a court to stay arbitration pending resolution of related litigation. We hold that application of the California statute is not pre-empted by the Federal Arbitration Act (FAA or Act), 9 U. S. C. §1 et seq., in a case where the parties have agreed that their arbitration agreement will be governed by the law of California.
Appellant Volt Information Sciences, Inc. (Volt), and ap-pellee Board of Trustees of Leland Stanford Junior University (Stanford) entered into a construction contract under which Volt was to install a system of electrical conduits on the Stanford campus. The contract contained an agreement to arbitrate all disputes between the parties “arising out of or relating to this contract or the breach thereof.” The contract also contained a choice-of-law clause providing that “[t]he Contract shall be governed by the law of the place where the Project is located.” App. 37. During the course of the project, a dispute developed regarding compensation for extra work, and Volt made a formal demand for arbitration. Stanford responded by filing an action against Volt in California Superior Court, alleging fraud and breach of contract; in the same action, Stanford also sought indemnity from two other companies involved in the construction project, with whom it did not have arbitration agreements. Volt petitioned the Superior Court to compel arbitration of the dispute. Stanford in turn moved to stay arbitration pursuant to Cal. Civ. Proc. Code Ann. § 1281.2(c) (West 1982), which permits a court to stay arbitration pending resolution of related litigation between a party to the arbitration agreement and third parties not bound by it, where “there is a possibility of conflicting rulings on a common issue of law or fact.” The Superior Court denied Volt’s motion to compel arbitration and stayed the arbitration proceedings pending the outcome of the litigation on the authority of § 1281.2(c). App. 59-60.
The California Court of Appeal affirmed. The court acknowledged that the parties’ contract involved interstate commerce, that the FAA governs contracts in interstate commerce, and that the FAA contains no provision permitting a court to stay arbitration pending resolution of related litigation involving third parties not bound by the arbitration agreement. App. 64-65. However, the court held that by specifying that their contract would be governed by “ ‘the law of the place where the project is located,’” the parties had incorporated the California rules of arbitration, including § 1281.2(c), into their arbitration agreement. Id., at 65. Finally, the court rejected Volt’s contention that, even if the parties had agreed to arbitrate under the California rules, application of § 1281.2(c) here was nonetheless pre-empted by the FAA because the contract involved interstate commerce. Id., at 68-80.
The court reasoned that the purpose of the FAA was “ ‘not [to] mandate the arbitration of all claims, but merely the enforcement ... of privately negotiated arbitration agreements.’” Id., at 70 (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 219 (1985)). While the FAA therefore pre-empts application of state laws which render arbitration agreements unenforceable, “[i]t does not follow, however, that the federal law has preclusive effect in a case where the parties have chosen in their [arbitration] agreement to abide by state rules.” App. 71. To the contrary, because “[t]he thrust of the federal law is that arbitration is strictly a matter of contract,” ibid., the parties to an arbitration agreement should be “at liberty to choose the terms under which they will arbitrate.” Id., at 72. Where, as here, the parties have chosen in their agreement to abide by the state rules of arbitration, application of the FAA to prevent enforcement of those rules would actually be “inimical to the policies underlying state and federal arbitration law,” id., at 73, because it would “force the parties to arbitrate in a manner contrary to their agreement.” Id., at 65. The California Supreme Court denied Volt’s petition for discretionary review. Id., at 87. We postponed consideration of our jurisdiction to the hearing on the merits. 485 U. S. 976 (1988). We now hold that we have appellate jurisdiction and affirm.
Appellant devotes the bulk of its argument to convincing us that the Court of Appeal erred in interpreting the choice-of-law clause to mean that the parties had incorporated the California rules of arbitration into their arbitration agreement. See Brief for Appellant 66-96. Appellant acknowledges, as it must, that the interpretation of private contracts is ordinarily a question of state law, which this Court does not sit to review. See id., at 26, 29. But appellant nonetheless maintains that we should set aside the Court of Appeal’s interpretation of this particular contractual provision for two principal reasons.
Appellant first suggests that the Court of Appeal’s construction of the choice-of-law clause was in effect a finding that appellant had “waived” its “federally guaranteed right to compel arbitration of the parties’ dispute,” a waiver whose validity must be judged by reference to federal rather than state law. Id., at 17, 30-36. This argument fundamentally misconceives the nature of the rights created by the FAA. The Act was designed “to overrule the judiciary’s longstanding refusal to enforce agreements to arbitrate,” Byrd, supra, at 219-220, and place such agreements “ ‘upon the same footing as other contracts,’” Scherk v. Alberto-Culver Co., 417 U. S. 506, 511 (1974) (quoting H. R. Rep. No. 96, 68th Cong., 1st Sess., 1, 2 (1924)). Section 2 of the Act therefore declares that a written agreement to arbitrate in any contract involving interstate commerce or a maritime transaction “shall be 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, and § 4 allows a party to such an arbitration agreement to “petition any United States district court... for an order directing that such arbitration proceed in the manner provided for in such agreement.”
But §4 of the FAA does not confer a right to compel arbitration of any dispute at any time; it confers only the right to obtain an order directing that “arbitration proceed in the manner provided for in [the parties’] agreement.” 9 U. S. C. §4 (emphasis added). Here the Court of Appeal found that, by incorporating the California rules of arbitration into their agreement, the parties had agreed that arbitration would not proceed in situations which fell within the scope of Calif. Code Civ. Proc. Ann. § 1281.2(c) (West 1982). This was not a finding that appellant had “waived” an FAA-guaranteed right to compel arbitration of this dispute, but a finding that it had no such right in the first place, because the parties’ agreement did not require arbitration to proceed in this situation. Accordingly, appellant’s contention that the contract interpretation issue presented here involves the “waiver” of a federal right is without merit.
Second, appellant argues that we should set aside the Court of Appeal’s construction of the choice-of-law clause because it violates the settled federal rule that questions of arbitrability in contracts subject to the FAA must be resolved with a healthy regard for the federal policy favoring arbitration. Brief for Appellant 49-52; id., at 92-96, citing Moses H. Cone Memorial Hospital v. Mercury Construction Carp., 460 U. S. 1, 24-25 (1983) (§2 of the FAA “create[s] a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act,” which requires that “questions of arbitrability ... be addressed with a healthy regard for the federal policy favoring arbitration,” and that “any doubts concerning the scope of arbitrable issues ... be resolved in favor of arbitration”); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S. 614, 626 (1985) (in construing an arbitration agreement within the coverage of the FAA, “as with any other contract, the parties’ intentions control, but those intentions are generously construed as to issues of arbitrability”). These cases of course establish that, in applying general state-law principles of contract interpretation to the interpretation of an arbitration agreement within the scope of the Act, see Perry v. Thomas, 482 U. S. 483, 493, n. 9 (1987), due regard must be given to the federal policy favoring arbitration, and ambiguities as to the scope of the arbitration clause itself resolved in favor of arbitration.
But we do not think the Court of Appeal offended the Moses H. Cone principle by interpreting the choice-of-law provision to mean that the parties intended the California rules of arbitration, including the § 1281.2(c) stay provision, to apply to their arbitration agreement. There is no federal policy favoring arbitration under a certain set of procedural rules; the federal policy is simply to ensure the enforceability, according to their terms, of private agreements to arbitrate. Interpreting a choice-of-law clause to make applicable state rules governing the conduct of arbitration — rules which are manifestly designed to encourage resort to the arbitral process — simply does not offend the rule of liberal construction set forth in Moses H. Cone, nor does it offend any other policy embodied in the FAA.
The question remains whether, assuming the choice-of-law clause meant what the Court of Appeal found it to mean, application of Cal. Civ. Proc. Code Ann. § 1281.2(c) is nonetheless pre-empted by the FAA to the extent it is used to stay arbitration under this contract involving interstate commerce. It is undisputed that this contract falls within the coverage of the FAA, since it involves interstate commerce, and that the FAA contains no provision authorizing a stay of' arbitration in this situation. Appellee contends, however, that §§3 and 4 of the FAA, which are the specific sections claimed to conflict with the California statute at issue here, are not applicable in this state-court proceeding and thus cannot pre-empt application of the California statute. See Brief for Appellee 43-50. While the argument is not without some merit, we need not resolve it to decide this case, for we conclude that even if §§ 3 and 4 of the FAA are fully applicable in state-court proceedings, they do not prevent application of Cal. Civ. Proc. Code Ann. § 1281.2(c) to stay arbitration where, as here, the parties have agreed to arbitrate in accordance with California law.
The FAA contains no express pre-emptive provision, nor does it reflect a congressional intent to occupy the entire field of arbitration. See Bernhardt v. Polygraphic Co., 350 U. S. 198 (1956) (upholding application of state arbitration law to arbitration provision in contract not covered by the FAA). But even when Congress has not completely displaced state regulation in an area, state law may nonetheless be preempted to the extent that it actually conflicts with federal law — that is, to the extent that it “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Hines v. Davidowitz, 312 U. S. 52, 67 (1941). The question before us, therefore, is whether application of Cal. Civ. Proc. Code Ann. § 1281.2(c) to stay arbitration under this contract in interstate commerce, in accordance with the terms of the arbitration agreement itself, would undermine the goals and policies of the FAA. We conclude that it would not.
The FAA was designed “to overrule the judiciary’s longstanding refusal to enforce agreements to arbitrate,” Dean Witter Reynolds Inc. v. Byrd, 470 U. S., at 219-220, and to place such agreements “ ‘upon the same footing as other contracts,’” Scherk v. Alberto-Culver Co., 417 U. S., at 511 (quoting H. R. Rep. No. 96, 68th Cong., 1st Sess., 1, 2 (1924)). While Congress was no doubt aware that the Act would encourage the expeditious resolution of disputes, its passage “was motivated, first and foremost, by a congressional desire to enforce agreements into which parties had entered.” Byrd, 470 U. S., at 220. Accordingly, we have recognized that the FAA does not require parties to arbitrate when they have not agreed to do so, see id., at 219 (the Act “does not mandate the arbitration of all claims”), nor does it prevent parties who do agree to arbitrate from excluding certain claims from the scope of their arbitration agreement, see Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S., at 628 (citing Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S. 395, 406 (1967)). It simply requires courts to enforce privately negotiated agreements to arbitrate, like other contracts, in accordance with their terms. See Prima Paint, supra, at 404, n. 12 (the Act was designed “to make arbitration agreements as enforceable as other contracts, but not more so”).
In recognition of Congress’ principal purpose of ensuring that private arbitration agreements are enforced according to their terms, we have held that the FAA pre-empts state laws which “require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration.” Southland Corp. v. Keating, 465 U. S. 1, 10 (1984). See, e. g., id., at 10-16 (finding pre-empted a state statute which rendered agreements to arbitrate certain franchise claims unenforceable); Perry v. Thomas, 482 U. S., at 490 (finding pre-empted a state statute which rendered unenforceable private agreements to arbitrate certain wage collection claims). But it does not follow that the FAA prevents the enforcement of agreements to arbitrate under different rules than those set forth in the Act itself. Indeed, such a result would be quite inimical to the FAA’s primary-purpose of ensuring that private agreements to arbitrate are enforced according to their terms. Arbitration under the Act is a matter of consent, not coercion, and parties are generally free to structure their arbitration agreements as they see fit. Just as they may limit by contract the issues which they will arbitrate, see Mitsubishi, supra, at 628, so too may they specify by contract the rules under which that arbitration will be conducted. Where, as here, the parties have agreed to abide by state rules of arbitration, enforcing those rules according to the terms of the agreement is fully consistent with the goals of the FAA, even if the result is that arbitration is stayed where the Act would otherwise permit it to go forward. By permitting the courts to “rigorously enforce” such agreements according to their terms, see Byrd, supra, at 221, we give effect to the contractual rights and expectations of the parties, without doing violence to the policies behind by the FAA.
The judgment of the Court of Appeals is
Affirmed.
Justice O’Connor took no part in the. consideration or decision of this case.
The arbitration clause read in full as follows:
“All claims, disputes and other matters in question between the parties to this contract, arising out of or relating to this contract or the breach thereof, shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then prevailing unless the parties mutually agreed [sic] otherwise. . . . This agreement to arbitrate . . . shall be specifically enforceable under the prevailing arbitration law.” App. 40.
Volt’s motion to compel was apparently brought pursuant to §4 of the FAA, 9 U. S. C. § 4, and the parallel provision of the California Arbitration Act, Cal. Civ. Proc. Code Ann. § 1281.2 (West 1982); the motion cited both Acts as authority, but did not specify the particular sections upon which reliance was placed. App. 45-46. Volt also asked the court to stay the Superior Court litigation until the arbitration was completed, presumably pursuant to § 3 of the FAA, 9 U. S. C. § 3, and the parallel provision of the California Arbitration Act, Cal. Civ. Proc. Code Ann. § 1281.2(c)(3) (West 1982). App. 45-46.
Section 1281.2(c) provides, in pertinent part, that when a court determines that “[a] party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact[,] . . . the court (1) may refuse to enforce the arbitration agreement and may order intervention or joinder of all parties in a single action or special proceeding; (2) may order intervention or joinder as to all or only certain issues; (3) may order arbitration among the parties who have agreed to arbitration and stay the pending court action or special proceeding pending the outcome of the arbitration proceeding; or (4) may stay arbitration pending the outcome of the court action or special proceeding.”
Under 28 U. S. C. §1257(2), this Court has appellate jurisdiction to review a final judgment rendered by the highest court of a State in which a decision could be had “where is drawn in question the validity of a statute of any state on the ground of its being repugnant to the Constitution, treaties or laws of the United States, and the decision is in favor of its validity.” Here appellant explicitly drew in question the validity of Cal. Civ. Proc. Code Ann. § 1281.2(c) (West 1982) on federal grounds, contending that the statute, as applied to stay arbitration of this dispute, was pre-empted by the FAA and thus invalid under the Supremacy Clause. Because the California Court of Appeal upheld application of the statute against this challenge, our appellate jurisdiction would seem to be assured. See Longshoremen v. Davis, 476 U. S. 380, 387, n. 8 (1986) (§ 1257(2) jurisdiction exists when a state statute is upheld against a claim that its application to a particular set of facts is pre-empted by federal law); McCarty v. McCarty, 453 U. S. 210, 219-220, n. 12 (1981) (same). Appellee contends, however, that § 1257(2) jurisdiction does not exist because the Court of Appeal’s decision did not directly .address the validity of the statute itself, but “simply uph[eld] the validity of the parties’ agreement,” which in turn required application of the statute. Brief for Appellee 4. Because an agreement is not a “statute,” appellee argues, the Court of Appeal’s decision is not one from which an appeal under § 1257(2) will lie. Id., at 4-5.
We disagree. Our decisions establish that “a state statute is sustained within the meaning of § 1257(2) when a state court holds it applicable to a particular set of facts as against the contention that such application is invalid on federal grounds.” Japan Line, Ltd. v. Comity of Los Angeles, 441 U. S. 434, 441 (1979) (citing Cohen v. California, 403 U. S. 15, 17-18 (1971); Warren Trading Post Co. v. Arizona Tax Comm'n, 380 U. S. 685, 686, and n. 1 (1965); Bantam Books, Inc. v. Sullivan, 372 U. S. 58, 61, n. 3 (1963); Dahnke-Walker Milling Co. v. Bondurant, 257 U. S. 282, 288-290 (1921)), regardless of “the particular grounds or reasons on which the [state court’s] decision is put.” Id., at 289. In this case, appellant contended before the Court of Appeal that even if the contract required application of Cal. Civ. Proc. Code Ann. § 1281.2(c) (West 1982), the California statute, as applied to stay arbitration under this contract in interstate commerce, so conflicted with the FAA that it was invalid under the Supremacy Clause. The Court of Appeal upheld application of the statute against this chai-lenge, and under Dahnke-Walker and its progeny, that was sufficient to bring the case within the terms of § 1257(2), even though the court’s decision may have been premised on its interpretation of the contract.
Unlike the dissent, see post at 486-487, we think the California arbitration rules which the parties have incorporated into their contract generally foster the federal policy favoring arbitration. As indicated, the FAA itself contains no provision designed to deal with the special practical problems that arise in multiparty contractual disputes when some or all of the contracts at issue include agreements to arbitrate. California has taken the lead in fashioning a legislative response to this problem, by giving courts authority to consolidate or stay arbitration proceedings in these situations in order to minimize the potential for contradictory judgments. See Calif. Civ. Proc. Code Ann. § 1281.2(c).
While we have held that the FAA’s “substantive” provisions —§§ 1 and 2 — are applicable in state as well as federal court, see Southland Corp. v. Keating, 465 U. S. 1, 12 (1984), we have never held that §§3 and 4, which by their terms appear to apply only to proceedings in federal court, see 9 U. S. C. § 3 (referring to proceedings “brought in any of the courts of the United States”); § 4 (referring to “any United States district court”), are nonetheless applicable in state court. See Southland Corp v. Keating, supra, at 16, n. 10 (expressly reserving the question whether “§§ 3 and 4 of the Arbitration Act apply to proceedings in state courts”); see also id., at 29 (O’Connor, J., dissenting) (§§ 3 and 4 of the FAA apply only in federal court).
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.
The judgment of the Court of Appeals is reversed and the case remanded to that court for the entry of a decree enforcing the Board’s order. The refusal of the Court of Appeals to enforce that order because the Board’s notices of election contained a minor and unconfusing mistake in the employer’s corporate name, was plain error. It was well within the Board’s province to find, as it did, upon the record before it that this occurrence had not affected the fairness of the representation election, particularly in the absence of any contrary showing by the employer, upon whom the burden of proof rested in this respect. That finding should have been accepted by the Court of Appeals. In the absence of proof by the employer that there has been prejudice to the fairness of the election such trivial irregularities of administrative procedure do not afford a basis for denying enforcement to an otherwise valid Board order.
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 Ginsburg
delivered the opinion of the Court.
The Federal Employees Health Benefits Act of 1959 (FEHBA), 5 U. S. C. §8901 et seq. (2000 ed. and Supp. III), establishes a comprehensive program of health insurance for federal employees. The Act authorizes the Office of Personnel Management (OPM) to contract with private carriers to offer federal employees an array of health-care plans. See § 8902(a) (2000 ed.). Largest of the plans for which OPM has contracted, annually since 1960, is the Blue Cross Blue Shield Service Benefit Plan (Plan), administered by local Blue Cross Blue Shield companies. This case concerns the proper forum for reimbursement claims when a Plan beneficiary, injured in an accident, whose medical bills have been paid by the Plan administrator, recovers damages (unaided by the carrier-administrator) in a state-court tort action against a third party alleged to have caused the accident.
FEHBA contains a preemption clause, §8902(m)(1), displacing state law on issues relating to “coverage or benefits” afforded by health-care plans. The Act contains no provision addressing the subrogation or reimbursement rights of carriers. Successive annual contracts between OPM and the Blue Cross Blue Shield Association (BCBSA) have obligated the carrier to make “a reasonable effort” to recoup amounts paid for medical care. App. 95, 125. The statement of benefits distributed by the carrier alerts enrollees that all recoveries they receive “must be used to reimburse the Plan for benefits paid.” Id., at 132; see also id., at 146, 152.
The instant case originated when the administrator of a Plan beneficiary’s estate pursued tort litigation in state court against parties alleged to have caused the beneficiary’s injuries. The carrier had notice of the state-court action, but took no part in it. When the tort action terminated in a settlement, the carrier filed suit in federal court seeking reimbursement of the full amount it had paid for the beneficiary’s medical care. The question presented is whether 28 U. S. C. § 1331 (authorizing jurisdiction over “civil actions arising under the... laws... of the United States”) encompasses the carrier’s action. We hold it does not.
FEHBA itself provides for federal-court jurisdiction only in actions against the United States. Congress could decide and provide that reimbursement claims of the kind here involved warrant the exercise of federal-court jurisdiction. But claims of this genre, seeking recovery from the proceeds of state-court litigation, are the sort ordinarily resolved in state courts. Federal courts should await a clear signal from Congress before treating such auxiliary claims as “arising under” the laws of the United States.
I
FEHBA assigns to OPM responsibility for negotiating and regulating health-benefits plans for federal employees. See 5 U. S. C. § 8902(a). OPM contracts with carriers, FEHBA instructs, “shall contain a detailed statement of benefits offered and shall include such máximums, limitations, exclusions, and other definitions of benefits as [OPM] considers necessary or desirable.” § 8902(d). Pursuant to FEHBA, OPM entered into a contract in 1960 with the BCBSA to establish a nationwide fee-for-service health plan, the terms of which are renegotiated annually. As FEHBA prescribes, the Federal Government pays about 75% of the premiums; the enrollee pays the rest. § 8906(b). Premiums thus shared are deposited in a special Treasury Fund, the Federal Employees Health Benefits Fund, § 8909(a). Carriers draw against the Fund to pay for covered health-care benefits. Ibid.; see also 48 CFR § 1632.170(b) (2005).
The contract between OPM and the BCBSA provides: “By enrolling or accepting services under this contract, [enrollees and their eligible dependents] are obligated to all terms, conditions, and provisions of this contract.” App. 90. An appended brochure sets out the benefits the carrier shall provide, see id., at 89, and the carrier’s subrogation and recovery rights, see id., at 100. Each enrollee, as FEHBA directs, receives a statement of benefits conveying information about the Plan’s coverage and conditions. 5 U. S. C. § 8907(b). Concerning reimbursement and subrogation, matters FEHBA itself does not address, the BCBSA Plan’s statement of benefits reads in part:
“If another person or entity... causes you to suffer an injury or illness, and if we pay benefits for that injury or illness, you must agree to the following:
“All recoveries you obtain (whether by lawsuit, settlement, or otherwise), no matter how described or designated, must be used to reimburse us in full for benefits we paid. Our share of any recovery extends only to the amount of benefits we have paid or will pay to you or, if applicable, to your heirs, administrators, successors, or assignees.
“If you do not seek damages for your illness or injury, you must permit us to initiate recovery on your behalf (including the right to bring suit in your name). This is called subrogation.
“If we pursue a recovery of the benefits we have paid, you must cooperate in doing what is reasonably necessary to assist us. You must not take any action that may prejudice our rights to recover.” App. 165.
If the participant does not voluntarily reimburse the Plan, the contract requires the carrier to make a “reasonable effort to seek recovery of amounts... it is entitled to recover in cases... brought to its attention.” Id., at 95, 125. Pursuant to the OPM-BCBSA master contract, reimbursements obtained by the carrier must be returned to the Treasury Fund. See id., at 92, 118-119.
FEHBA contains a preemption provision, which originally provided:
“The provisions of any contract under this chapter which relate to the nature or extent of coverage or benefits (including payments with respect to benefits) shall supersede and preempt any State or local law, or any regulation issued thereunder, which relates to health insurance or plans to the extent that such law or regulation is inconsistent with such contractual provisions.” 5 U. S. C. § 8902(m)(1) (1994 ed.).
To ensure uniform coverage and benefits under plans OPM negotiates for federal employees, see H. R. Rep. No. 95-282, p. 1 (1977), § 8902(m)(1) preempted “State laws or regulations which specify types of medical care, providers of care, extent of benefits, coverage of family members, age limits for family members, or other matters relating to health benefits or coverage,” id., at 4-5 (noting that some States mandated coverage for services not included in federal plans, for example, chiropractic services). In 1998, Congress amended §8902(m)(1) by deleting the words “to the extent that such law or regulation is inconsistent with such contractual provisions.” Thus, under §8902(m)(l) as it now reads, state law — whether consistent or inconsistent with federal plan provisions — is displaced on matters of “coverage or benefits.”
FEHBA contains but one provision addressed to federal-court jurisdiction. That provision vests in federal district courts “original jurisdiction, concurrent with the United States Court of Federal Claims, of a civil action or claim against the United States founded on this chapter.” §8912. The purpose of this provision — evident from its reference to the Court of Federal Claims — was to carve out an exception to the statutory rule that claims brought against the United States and exceeding $10,000 must originate in the Court of Federal Claims. See 28 U. S. C. § 1346(a)(2) (establishing district courts’ jurisdiction, concurrent with the Court of Federal Claims, over claims against the United States that do not exceed $10,000); see also S. Rep. No. 1654, 83d Cong., 2d Sess., 4-5 (1954) (commenting, with respect to an identical provision in the Federal Employees’ Group Life Insurance Act, 5 U. S. C. § 8715, that the provision “would extend the jurisdiction of United States district courts above the $10,000 limitation now in effect”).
Under a 1995 OPM regulation, suits contesting final OPM action denying health benefits “must be brought against OPM and not against the carrier or carrier’s subcontractors.” 5 CFR § 890.107(c) (2005). While this regulation channels disputes over coverage or benefits into federal court by designating a United States agency (OPM) sole defendant, no law opens federal courts to carriers seeking reimbursement from beneficiaries or recovery from tortfeasors. Cf. 29 U. S. C. § 1132(e)(1) (provision of the Employee Retirement Income Security Act (ERISA) vesting in federal district courts “exclusive jurisdiction of civil actions under this sub-chapter”). And nothing in FEHBA’s text prescribes a federal rule of decision for a carrier’s claim against its insured or an alleged tortfeasor to share in the proceeds of a state-court tort action.
II
Petitioner Empire HealthChoice Assurance, Inc., doing business as Empire Blue Cross Blue Shield (Empire), is the entity that administers the BCBSA Plan as it applies to federal employees in New York State. Respondent Denise Finn McVeigh (McVeigh) is the administrator of the estate of Joseph E. McVeigh (Decedent), a former enrollee in the Plan. The Decedent was injured in an accident in 1997. Plan payments for the medical care he received between 1997 and his death in 2001 amounted to $157,309. McVeigh, on behalf of herself, the Decedent, and a minor child, commenced tort litigation in state court against parties alleged to have caused Decedent’s injuries. On learning that the parties to the state-court litigation had agreed to settle the tort claims, Empire sought to recover the $157,309 it had paid out for the Decedent’s medical care. Of the $3,175,000 for which the settlement provided, McVeigh, in response to Empire’s asserted reimbursement right, agreed to place $100,000 in escrow.
Empire then filed suit in the United States District Court for the Southern District of New York, alleging that McVeigh was in breach of the reimbursement provision of the Plan. As relief, Empire demanded $157,309, with no offset for attorney’s fees or other litigation costs McVeigh incurred in pursuing the state-court settlement. McVeigh moved to dismiss on various grounds, among them, lack of subject-matter jurisdiction. See 396 F. 3d 136, 139 (CA2 2005). Answering McVeigh’s motion, Empire urged that the District Court had jurisdiction under 28 U. S. C. § 1331 because federal common law governed its reimbursement claim. In the alternative, Empire asserted that the Plan itself constituted federal law. See 396 F. 3d, at 140. The District Court rejected both arguments and granted McVeigh’s motion to dismiss for want of subject-matter jurisdiction. Ibid.
A divided panel of the Court of Appeals for the Second Circuit affirmed, holding that “Empire’s clai[m] arise[s] under state law.” Id., at 150. FEHBA’s text, the court observed, contains no authorization for carriers “to vindicate [in federal court] their rights [against enrollees] under FEHBAauthorized contracts”; therefore, the court concluded, “federal jurisdiction exists over this dispute only if federal common law governs Empire’s claims.” Id., at 140. Quoting Boyle v. United Technologies Corp., 487 U. S. 500, 507, 508 (1988), the appeals court stated that courts may create federal common law only when “the operation of state law would (1) ‘significantly] conflict’ with (2) ‘uniquely federal interest^].’ ” 396 F. 3d, at 140.
Empire maintained that its contract-derived claim against McVeigh implicated “‘uniquely federal interest^],’” because (1) reimbursement directly affects the United States Treasury and the cost of providing health benefits to federal employees; and (2) Congress had expressed its interest in maintaining uniformity among the States on matters relating to federal health-plan benefits. Id., at 141. The court acknowledged that the case involved distinctly federal interests, but found that Empire had not identified “specific ways in which the operation of state contract law, or indeed of other laws of general application, would conflict materially with the federal policies underlying FEHBA in the circumstances presented.” Id., at 150 (Sack, J., concurring); see id., at 142.
The Court of Appeals next considered and rejected Empire’s argument that FEHBA’s preemption provision, 5 U. S. C. §8902(m)(1), independently conferred federal jurisdiction. 396 F. 3d, at 145-149. That provision, the court observed, is “a limited preemption clause that the instant dispute does not trigger.” Id., at 145. Unlike §8912, which “authorizes] federal jurisdiction over FEHBA-related... claims ‘against the United States,’” the court noted, § 8902(m)(1) “makes no reference to a federal right of action [in] or to federal jurisdiction [over]” the contract-derived reimbursement claim here at issue. 396 F. 3d, at 145, and n. 7.
Judge Raggi dissented. Id., at 151. In her view, FEHBA’s preemption provision, § 8902(m)(1), as amended in 1998, both calls for the application of uniform federal common law to terms in a FEHBA plan and establishes federal jurisdiction over Empire’s complaint.
We granted certiorari, 546 U. S. 1085 (2005), to resolve a conflict among lower federal courts concerning the proper forum for claims of the kind Empire asserts. Compare Blue Cross & Blue Shield of Ill. v. Cruz, 396 F. 3d 793, 799-800 (CA7 2005) (upholding federal-jurisdiction), Caudill v. Blue Cross & Blue Shield of N. C., 999 F. 2d 74, 77 (CA4 1993) (same), and Medcenters Health Care v. Ochs, 854 F. Supp. 589, 593, and n. 3 (Minn. 1993) (same), aff’d, 26 F. 3d 865 (CA8 1994), with Goepel v. National Postal Mail Handlers Union, 36 F. 3d 306, 314-315 (CA3 1994) (rejecting federal jurisdiction), and 396 F. 3d, at 139 (decision below) (same).
Ill
Title 28 U. S. C. § 1331 vests in federal district courts “original jurisdiction” over “all civil actions arising under the Constitution, laws, or treaties of the United States.” A case “aris[es] under” federal law within the meaning of § 1331, this Court has said, if “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.” Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U. S. 1, 27-28 (1983).
Empire and the United States, as amicus curiae, present two principal arguments in support of federal-question jurisdiction. Emphasizing our opinion in Jackson Transit Authority v. Transit Union, 457 U. S. 15, 22 (1982), and cases cited therein, they urge that Empire’s complaint raises a federal claim because it seeks to vindicate a contractual right contemplated by a federal statute, a right that Congress intended to be federal in nature. See Brief for Petitioner 14-31; Brief for United States 12-23. FEHBA’s preemption provision, Empire and the United States contend, demonstrates Congress’ intent in this regard. The United States argues, alternatively, that there is federal jurisdiction here, as demonstrated by our recent decision in Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U. S. 308 (2005), because “federal law is a necessary element of [Empire’s] claim.” Brief for United States 25; accord Brief for Petitioner 41, n. 5. We address these arguments in turn. But first, we respond to the dissent’s view that Empire and the United States have engaged in unnecessary labor, for Clearfield Trust Co. v. United States, 318 U. S. 363 (1943), provides “a basis for federal jurisdiction” in this case. Post, at 702.
A
Clearfield is indeed a pathmarking precedent on the authority of federal courts to fashion uniform federal common law on issues of national concern. See Friendly, In Praise of Erie — and of the New Federal Common Law, 39 N. Y. U. L. Rev. 383, 409-410 (1964). But the dissent is mistaken in supposing that the Clearfield doctrine covers this case. Clearfield was a suit by the United States to recover from a bank the amount paid on a Government check on which the payee’s name had been forged. 318 U. S., at 365. Because the United States was the plaintiff, federal-court jurisdiction was solidly grounded. See ibid. (“This suit was instituted... by the United States..., the jurisdiction of the federal District Court being invoked pursuant to the provisions of § 24(1) of the Judicial Code, 28 U. S. C. § 41(1),” now contained in 28 U. S. C. §§ 1332, 1345, 1359). The case presented a vertical choice-of-law issue: Did state law under Erie R. Co. v. Tompkins, 304 U. S. 64 (1938), or a court-fashioned federal rule of decision (federal common law) determine the merits of the controversy? The Court held that “[t]he rights and duties of the United States on commercial paper which it issues are governed by federal rather than [state] law.” 318 U. S., at 366.
In post-Clearfield decisions, and with the benefit of enlightened commentary, see, e. g., Friendly, supra, at 410, the Court has “made clear that uniform federal law need not be applied to all questions in federal government litigation, even in cases involving government contracts,” R. Fallon, D. Meltzer, & D. Shapiro, Hart and Wechsler’s The Federal Courts and the Federal System 700 (5th ed. 2003) (hereinafter Hart and Wechsler). “[T]he prudent course,” we have recognized, is often “to adopt the readymade body of state law as the federal rule of decision until Congress strikes a different accommodation.” United States v. Kimbell Foods, Inc., 440 U. S. 715, 740 (1979).
Later, in Boyle, the Court telescoped the appropriate inquiry, focusing it on the straightforward question whether the relevant federal interest warrants displacement of state law. See 487 U. S., at 507, n. 3. Referring simply to “the displacement of state law,” the Court recognized that prior cases had treated discretely (1) the competence of federal courts to formulate a federal rule of decision, and (2) the appropriateness of declaring a federal rule rather than borrowing, incorporating, or adopting state law in point. The Court preferred “the more modest terminology,” questioning whether “the distinction between displacement of state law and displacement of federal law’s incorporation of state law ever makes a practical difference.” Ibid. Boyle made two further observations here significant. First, Boyle explained, the involvement of “an area of uniquely federal interest... establishes a necessary, not a sufficient, condition for the displacement of state law.” Id., at 507. Second, in some cases, an “entire body of state law” may conflict with the federal interest and therefore require replacement. Id., at 508. But in others, the conflict is confined, and “only particular elements of state law are superseded.” Ibid.
The dissent describes this case as pervasively federal, post, at 702, and “the provisions... here [as] just a few scattered islands in a sea of federal contractual provisions,” post, at 709. But there is nothing “scattered” about the provisions on reimbursement and subrogation in the OPMBCBSA master contract. See supra, at 684-685. Those provisions are linked together and depend upon a recovery from a third party under terms and conditions ordinarily governed by state law. See infra, at 698. The Court of Appeals, whose decision we review, trained on the matter of reimbursement, not, as the dissent does, on FEHBAauthorized contracts at large. So focused, the appeals court determined that Empire has not demonstrated a “significant conflict... between an identifiable federal policy or interest and the operation of state law.” 396 F. 3d, at 150 (Sack, J., concurring) (quoting Boyle, 487 U. S., at 507); see 396 F. 3d, at 140-141. Unless and until that showing is made, there is no cause to displace state law, much less to lodge this case in federal court.
B
We take up next Empire’s Jackson Transit-derived argument, which is, essentially, a more tailored variation of the theme sounded in the dissent. It is undisputed that Congress has not expressly created a federal right of action enabling insurance carriers like Empire to sue health-care beneficiaries in federal court to enforce reimbursement rights under contracts contemplated by FEHBA. Empire and the United States nevertheless argue that, under our 1982 opinion in Jackson Transit, Empire’s claim for reimbursement, arising under the contract between OPM and the BCBSA, “states a federal claim” because Congress intended all rights and duties stemming from that contract to be “federal in nature.” Brief for United States as Amicus Curiae 12; see Brief for Petitioner 18-29. We are not persuaded by this argument.
The reliance placed by Empire and the United States on Jackson Transit is surprising, for that decision held there was no federal jurisdiction over the claim in suit. The federal statute there involved, § 13(c) of the Urban Mass Transportation Act of 1964 (UMTA), 78 Stat. 307 (then codified at 49 U. S. C. § 1609(c) (1976 ed.)), conditioned a governmental unit’s receipt of federal funds to acquire a privately owned transit company on preservation of collective-bargaining rights enjoyed by the acquired company’s employees. 457 U. S., at 17-18. The city of Jackson, Tennessee, with federal financial assistance, acquired a failing private bus company and turned it into a public entity, the Jackson Transit Authority. Id., at 18. To satisfy the condition on federal aid, the transit authority entered into a “§ 13(c) agreement” with the union that represented the private company’s employees, and the Secretary of Labor certified that agreement as “fair and equitable.” Ibid, (internal quotation marks omitted).
For several years thereafter, the transit authority covered its unionized workers in a series of collective-bargaining agreements. Eventually, however, the Authority notified the union that it would no longer adhere to collective-bargaining undertakings. Id., at 19. The union commenced suit in federal court alleging breach of the § 13(c) agreement and of the latest collective-bargaining agreement. Ibid. This Court determined that the case did not arise under federal law, but was instead “governed by state law [to be] applied in state cour[t].” Id., at 29.
The Court acknowledged in Jackson Transit that “on several occasions [we had] determined that a plaintiff stated a federal claim when he sued to vindicate contractual rights set forth by federal statutes, [even though] the relevant statutes lacked express provisions creating federal causes of action.” Id., at 22 (emphasis added) (citing Machinists v. Central Airlines, Inc., 372 U. S. 682 (1963) (union had a federal right of action to enforce an airline-adjustment-board award included in a collective-bargaining contract pursuant to a provision of the Railway Labor Act); Norfolk & Western R. Co. v. Nemitz, 404 U. S. 37 (1971) (railroad’s employees stated federal claims when they sought to enforce assurances made by the railroad to secure Interstate Commerce Commission approval of a consolidation under a provision of the Interstate Commerce Act); Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U. S. 11, 18-19 (1979) (permitting federal suit for rescission of a contract declared void by a provision of the Investment Advisers Act of 1940)). But prior decisions, we said, “d[id] not dictate the result in [the Jackson Transit] case,” for in each case, “the critical factor” in determining “the scope of rights and remedies under a federal statute... is the congressional intent behind the particular provision at issue.” 457 U. S., at 22.
“In some ways,” the Jackson Transit Court said, the UMTA “seem[ed] to make § 13(c) agreements and collective-bargaining contracts creatures of federal law.” Id., at 23. In this regard, the Court noted, § 13(c)
“demanded] ‘fair and equitable arrangements’ as prerequisites for federal aid; it required] the approval of the Secretary of Labor for those arrangements; it specified] five different varieties of protective provisions that must be included among the § 13(c) arrangements; and it expressly incorporated] the protective arrangements into the grant contract between the recipient and the Federal Government.” Ibid. (quoting 49 U. S. C. § 1609(c) (1976 ed.)).
But there were countervailing considerations. The Court observed that “labor relations between local governments and their employees are the subject of a longstanding statutory exemption from the National Labor Relations Act.” 457 U. S., at 23. “Section 13(c),” the Court continued, “evinced] no congressional intent to upset the decision in the [NLRA] to permit state law to govern the relationships between local governmental entities and the unions representing their employees.” Id., at 23-24. Legislative history was corroborative. “A consistent theme,” the Court found, “[ran] throughout the consideration of § 13(c): Congress intended that labor relations between transit workers and local governments would be controlled by state law.” Id., at 24. We therefore held that the union had come to the wrong forum. Congress had indeed provided for § 13(c) agreements and collective-bargaining contracts stemming from them, but in the Court’s judgment, the union’s proper recourse for enforcement of those contracts was a suit in state court.
Measured against the Court’s discussion in Jackson Transit about when a claim arises under federal law, Empire’s contract-derived claim for reimbursement is not a “creatur[e] of federal law.” Id., at 23. True, distinctly federal interests are involved. Principally, reimbursements are credited to a federal fund, and the OPM-BCBSA master contract could be described as “federal in nature” because it is negotiated by a federal agency and concerns federal employees. See supra, at 683-684. But, as in Jackson Transit, countervailing considerations control. Among them, the reimbursement right in question, predicated on a FEHBA-authorized contract, is not a prescription of federal law. See supra, at 684. And, of prime importance, “Congress considered jurisdictional issues in enacting FEHBA[,]... conferring] federal jurisdiction where it found it necessary to do so.” 396 F. 3d, at 145, n. 7.
FEHBA’s jurisdictional provision, 5 U. S. C. § 8912, opens the federal district-court door to civil actions “against the United States.” See supra, at 686. OPM’s regulation, 5 CFR §890.107(c) (2005), instructs enrollees who seek to challenge benefit denials to proceed in court against OPM “and not against the carrier or carrier’s subcontractors.” See ibid. Read together, these prescriptions “ensur[e] that suits brought by beneficiaries for denial of benefits will land in federal court.” 396 F. 3d, at 145, n. 7. Had Congress found it necessary or proper to extend federal jurisdiction further,, in particular, to encompass contract-derived reimbursement claims between carriers and insured workers, it would have been easy enough for Congress to say so. Cf. 29 U. S. C. § 1132(a)(3) (authorizing suit in federal court “by a participant, beneficiary, or fiduciary” of a pension or health plan governed by ERISA to gain redress for violations of “this subchapter or the terms of the plan”). We have no warrant to expand Congress’ jurisdictional grant “by judicial decree.” See Kokkonen v. Guardian Life Ins. Co. of America, 511 U. S. 375, 377 (1994).
Jackson Transit, Empire points out, referred to decisions “demonstrating] that... private parties in appropriate cases may sue in federal court to enforce contractual rights created by federal statutes.” 457 U. S., at 22. See Brief for Petitioner 15. This case, however, involves no right created by federal statute. As just reiterated, while the OPM-BCBSA master contract provides for reimbursement, FEHBA’s text itself contains no provision addressing the reimbursement or subrogation rights of carriers.
Nor do we read 5 U. S. C. § 8902(m)(l), FEHBA’s preemption prescription, see supra, at 685-686, as a jurisdiction-conferring provision. That choice-of-law prescription is unusual in that it renders preemptive contract terms in health insurance plans, not provisions enacted by Congress. See 396 F. 3d, at 143-145; id., at 151 (Sack, J., concurring). A prescription of that unusual order warrants cautious interpretation.
Section 8902(m)(1) is a puzzling measure, open to more than one construction, and no prior decision seems to us precisely on point. Reading the reimbursement clause in the master OPM-BCBSA contract as a condition or limitation on “benefits” received by a federal employee, the clause could be ranked among “[contract] terms... relating] to... coverage or benefits” and “payments with respect to benefits,” thus falling within § 8902(m)(1)’s compass. See Brief for United States as Amicus Curiae 20; Reply Brief 8-9. On the other hand, a claim for reimbursement ordinarily arises long after “coverage” and “benefits” questions have been resolved, and corresponding “payments with respect to benefits” have been made to care providers or the insured. With that consideration in view, §8902(m)(1)’s words may be read to refer to contract terms relating to the beneficiary’s entitlement (or lack thereof) to Plan payment for certain healthcare services he or she has received, and not to terms relating to the carrier’s postpayments right to reimbursement. See Brief for Julia Cruz as Amicus Curiae 10,11.
To decide this case, we need not choose between those plausible constructions. If contract-based reimbursement claims are not covered by FEHBA’s preemption provision, then federal jurisdiction clearly does not exist. But even if FEHBA’s preemption provision reaches contract-based reimbursement claims, that provision is not sufficiently broad to confer federal jurisdiction. If Congress intends a preemption instruction completely to displace ordinarily applicable state law, and to confer federal jurisdiction thereby, it may be expected to make that atypical intention clear. Cf. Columbus v. Ours Garage & Wrecker Service, Inc., 536 U. S. 424, 432-433 (2002) (citing Wisconsin Public Intervenor v. Mortier, 501 U. S. 597, 605 (1991)). Congress has not done so here.
Section 8902(m)(1)’s text does not purport to render inoperative any and all state laws that in some way bear on federal employee-benefit plans. Cf. 29 U. S. C. § 1144(a) (portions of ERISA “supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan”). And, as just observed, see supra, at 697, given that §8902(m)(1) declares no federal law preemptive, but instead, terms of an OPM-BCBSA negotiated contract, a modest reading of the provision is in order. Furthermore, a reimbursement right of the kind Empire here asserts stems from a personal-injury recovery, and the claim underlying that recovery is plainly governed by state law. We are not prepared to say, based on the presentations made in this case, that under § 8902(m)(l), an OPM-BCBSA contract term would displace every condition state law places on that recovery.
As earlier observed, the BCBSA Plan’s statement of benefits links together the carrier’s right to reimbursement from the insured and its right to subrogation. See supra, at 684-685. Empire’s subrogation right allows the carrier, once it has paid an insured’s medical expenses, to recover directly from a third party responsible for the insured’s injury or illness. See 16 G. Couch, Cyclopedia of Insurance Law § 61:1 (2d ed. 1982). Had Empire taken that course, no access to a federal forum could have been predicated on the OPMBCBSA contract right. The tortfeasors’ liability, whether to the insured or the insurer, would be governed not by an agreement to which the tortfeasors are strangers, but by state law, and § 8902(m)(1) would have no sway.
In sum, the presentations before us fail to establish that §8902(m)(1) leaves no room for any state law potentially bearing on federal employee-benefit plans in general, or carrier-reimbursement claims in particular. Accordingly, we extract from §8902(m)(1) no prescription for federal-court jurisdiction.
C
We turn finally to the argument that Empire’s reimbursement claim, even if it does not qualify as a “cause of action created by federal law,” nevertheless arises under federal law for § 1331 purposes, because federal law is “a necessary element of the [carrier’s] claim for relief.” Brief for United States as Amicus Curiae 25-26 (quoting Grable, 545 U. S., at 312, and Jones v. R. R. Donnelley & Sons Co., 541 U. S. 369, 376 (2004)). This case, we are satisfied, does not fit within the special and small category in which the United States would place it. We first describe Grable, a recent decision that the United States identifies as exemplary, and then explain why this case does not resemble that one.
Grable involved real property belonging to Grable & Sons Metal Products, Inc. (Grable), which the Internal Revenue Service (IRS) seized to satisfy a federal tax deficiency. 545 U. S., at 310. Grable received notice of the seizure by certified mail
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
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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 Scalia
delivered the opinion of the Court.
The question before us in this case is whether the Director of the Office of Workers’ Compensation Programs in the United States Department of Labor has standing under § 21(c) of the Longshore and Harbor Workers’ Compensation Act (LHWCA or Act), 44 Stat. 1424, as amended, 33 U. S. C. § 901 et seq., to seek judicial review of decisions by the Benefits Review Board that in the Director’s view deny claimants compensation to which they are entitled.
I
On October 24, 1984, Jackie Harcum, an employee of respondent Newport News Shipbuilding and Dry Dock Co., was working in the bilge of a steam barge when a piece of metal grating fell and struck him in the lower back. His injury required surgery to remove a herniated disc, and caused prolonged disability. Respondent paid Harcum benefits under the LHWCA until he returned to light-duty work in April 1987. In November 1987, Harcum returned to his regular department under medical restrictions. He proved unable to perform essential tasks, however, and the company terminated his employment in May 1988. Harcum ultimately found work elsewhere, and started his new job in February 1989.
Harcum filed a claim for further benefits under the LHWCA. Respondent contested the claim, and the dispute was referred to an Administrative Law Judge (ALJ). One of the issues was whether Harcum was entitled to benefits for total disability, or instead only for partial disability, from the date he stopped work for respondent until he began his new job. “Disability” under the LHWCA means “incapacity because of injury to earn the wages which the employee was receiving at the time of injury in the same or any other employment.” 33 U. S. C. § 902(10).
After a hearing on October 20, 1989, the AU determined that Harcum was partially, rather than totally, disabled when he left respondent’s employ, and that he was therefore owed only partial-disability benefits for the interval of his unemployment. On appeal, the Benefits Review Board affirmed the ALJ’s judgment, and also ruled that under 33 U. S. C. § 908(f), the company was entitled to cease payments to Harcum after 104 weeks, after which time the LHWCA special fund would be liable for disbursements pursuant to § 944.
The Director petitioned the United States Court of Appeals for the Fourth Circuit for review of both aspects of the Board’s ruling. Harcum did not seek review and, while not opposing the Director’s pursuit of the action, expressly declined to intervene on his own behalf in response to an inquiry by the Court of Appeals. The Court of Appeals sua sponte raised the question whether the Director had standing to appeal the Board’s order. 8 F. 3d 175 (1993). It concluded that she did not have standing with regard to that aspect of the order denying Harcum’s claim for full-disability compensation, since she was not “adversely affected or aggrieved” by that decision within the meaning of § 21(c) of the Act, 33 U. S. C. § 921(c). We granted the Director’s petition for certiorari. 512 U. S. 1287 (1994).
II
The LHWCA provides for compensation of workers injured or killed while employed on the navigable waters or adjoining, shipping-related land areas of the United States. 33 U. S. C. § 903. With the exception of those duties imposed by §§ 919(d), 921(b), and 941, the Secretary of Labor has delegated all responsibilities of the Department with respect to administration of the LHWCA to the Director of the Office of Workers’ Compensation Programs (OWCP). 20 CFR §§ 701.201 and 701.202 (1994); 52 Fed. Reg. 48466 (1987). For ease of exposition, the Director will hereinafter be referred to as the statutory recipient of those responsibilities.
A worker seeking compensation under the Act must file a claim with an OWCP district director. 33 U. S. C. § 919(a); 20 CFR §§ 701.301(a) and 702.105 (1994). If the district director cannot resolve the claim informally, 20 CFR § 702.311, it is referred to an ALJ authorized to issue a compensation order, § 702.316; 33 U. S. C. § 919(d). The ALJ’s decision is reviewable by the Benefits Review Board, whose members are appointed by the Secretary. § 921(b)(1). The Board’s decision is in turn appealable to a United States court of appeals, at the instance of “[a]ny person adversely affected or aggrieved by” the Board’s order. § 921(c).
With regard to claims that proceed to ALJ hearings, the Act does not by its terms make the Director a party to the proceedings, or grant her authority to prosecute appeals to the Board, or thence to the federal courts of appeals. The Director argues that she nonetheless had standing to petition the Fourth Circuit for review of the Board’s order, because she is a “person adversely affected or aggrieved” under § 921(c). Specifically, she contends the Board’s decision injures her because it impairs her ability to achieve the Act’s purposes and to perform the administrative duties the Act prescribes.
The phrase “person adversely affected or aggrieved” is a term of art used in many statutes to designate those who have standing to challenge or appeal an agency decision, within the agency or before the courts. See, e. g., federal Communications Act of 1934, 47 U. S. C. § 402(b)(6); Occupational Safety and Health Act of 1970, 29 U. S. C. § 660(a); Federal Mine Safety and Health Act of 1977, 30 U. S. C. § 816. The terms “adversely affected” and “aggrieved,” alone or in combination, have a long history in federal administrative law, dating back at least to the federal Communications Act of 1934, § 402(b)(2) (codified, as amended, 47 U. S. C. § 402(b)(6)). They were already familiar terms in 1946, when they were embodied within the judicial review provision of the Administrative Procedure Act (APA), 5 U. S. C. § 702, which entitles “[a] person . . . adversely affected or aggrieved by agency action within the meaning of a relevant statute” to judicial review. In that provision, the qualification “within the meaning of a relevant statute” is not an addition to what “adversely affected or aggrieved” alone conveys; but is rather an acknowledgment of the fact that what constitutes adverse effect or aggrievement varies from statute to statute. As the United States Department of Justice, Attorney General’s Manual on the Administrative Procedure Act (1947) put it, “The determination of who is ‘adversely affected or aggrieved ... within the meaning of any relevant statute’ has ‘been marked out largely by the gradual judicial process of inclusion and exclusion, aided at times by the courts’ judgment as to the probable legislative intent derived from the spirit of the statutory scheme.’ ” Id., at 96 (citation omitted). We have thus interpreted § 702 as requiring a litigant to show, at the outset of the case, that he is injured in fact by agency action and that the interest he seeks to vindicate is arguably within the “zone of interests to be protected or regulated by the statute” in question. Association of Data Processing Service Organizations, Inc. v. Camp, 397 U. S. 150, 153 (1970); see also Clarke v. Securities Industry Assn., 479 U. S. 388, 395-396 (1987).
Given the long lineage of the text in question, it is significant that counsel have cited to us no case, neither in this Court nor in the courts of appeals, neither under the APA nor under individual statutory-review provisions such as the present one, which holds that, without benefit of specific authorization to appeal, an agency, in its regulatory or policy-making capacity, is “adversely affected” or “aggrieved.” Cf. Director, Office of Workers’ Compensation Programs v. Perini North River Associates, 459 U. S. 297, 302-305 (1983) (noting the issue of whether the Director has standing under § 921(c), but finding it unnecessary to reach the question). There are cases in which an agency has been held to be adversely affected or aggrieved in what might be called its nongovernmental capacity — that is, in its capacity as a member of the market group that the statute was meant to protect. For example, in United States v. ICC, 337 U. S. 426 (1949), we held that the United States had standing to sue the Interstate Commerce Commission (ICC) in federal court to overturn a Commission order that denied the Government recovery of damages for an allegedly unlawful railroad rate. The Government, we said, “is not less entitled than any other shipper to invoke administrative and judicial protection.” Id., at 430. But the status of the Government as a statutory beneficiary or market participant must be sharply distinguished from the status of the Government as regulator or administrator.
The latter status would be at issue if — to use an example that continues the ICC analogy — the Environmental Protection Agency sued to overturn an ICC order establishing high tariffs for the transportation of recyclable materials. Cf. United States v. Students Challenging Regulatory Agency Procedures (SCRAP), 412 U. S. 669 (1973). Or if the Department of Transportation, to further a policy of encouraging so-called “telecommuting” in order to reduce traffic congestion, sued as a “party aggrieved” under 28 U. S. C. § 2344, to reverse the Federal Communications Commission’s approval of rate increases on second phone lines used for modems. We are aware of no case in which such a “policy interest” by an agency has sufficed to confer standing under an “adversely affected or aggrieved” statute or any other general review provision. To acknowledge the general adequacy of such an interest would put the federal courts into the regular business of deciding intrabranch and intraagency policy disputes — a role that would be most inappropriate.
That an agency in its governmental capacity is not “adversely affected or aggrieved” is strongly suggested, as well, by two aspects of the United States Code: First, the fact that the Code’s general judicial review provision, contained in the APA, does not include agencies within the category of “person adversely affected or aggrieved.” See 5 U. S. C. § 551(2) (excepting agencies from the definition of “person”). Since, as we suggested in United States v. ICC, the APA provision reflects “the general legislative pattern of administrative and judicial relationships,” 337 U. S., at 433-434, it indicates that even under specific “adversely affected or aggrieved” statutes (there were a number extant when the APA was adopted) agencies as such normally do not have standing. And second, the United States Code displays throughout that when an agency in its governmental capacity is meant to have standing, Congress says so. The LHWCA’s silence regarding the Secretary’s ability to take an appeal is significant when laid beside other provisions of law. See, e. g., Black Lung Benefits Act (BLBA), 30 U. S. C. § 932(k) (“The Secretary shall be a party in any proceeding relative to [a] claim for benefits”); Title VII of the Civil Rights Act of 1964, 42 U. S. C. § 2000e-5(f)(1) (authorizing the Attorney General to initiate civil actions against private employers) and § 2000e-4(g)(6) (authorizing the Equal Employment Opportunities Commission to “intervene in a civil action brought ... by an aggrieved party . . .”); Employee Retirement Income Security Act of 1974, 29 U. S. C. § 1132(a)(2) (granting Secretary power to initiate various civil actions under the Act). It is particularly illuminating to compare the LHWCA with the Occupational Safety and Health Act of 1970 (OSHA), 29 U. S. C. § 651 et seq. Section 660(a) of OSHA is virtually identical to § 921(c): It allows “[a]ny person adversely affected or aggrieved” by an order of the Occupational Safety and Health Review Commission (a body distinct from the Secretary, as the Benefits Review Board is) to petition for review in the courts of appeals. OSHA, however, further contains a § 660(b), which expressly grants such petitioning authority to the Secretary — suggesting, of course, that the Secretary would not be considered “adversely affected or aggrieved” under § 660(a), and should not be considered so under § 921(c).
All of the foregoing indicates that the phrase “person adversely affected or aggrieved” does not refer to an agency acting in its governmental capacity. Of course the text of a particular statute could make clear that the phrase is being used in a peculiar sense. But the Director points to no such text in the LHWCA, and relies solely upon the mere existence and impairment of her governmental interest. If that alone could ever suffice to contradict the normal meaning of the phrase (which is doubtful), it would have to be an interest of an extraordinary nature, extraordinarily impaired. As we proceed to discuss, that is not present here.
Ill
The LHWCA assigns four broad areas of responsibility to the Director: (1) supervising, administering, and making rules and regulations for calculation of benefits and processing of claims, 33 U. S. C. §§ 906, 908-910, 914, 919, 930, and 939; (2) supervising, administering, and making rules and regulations for provision of medical care to covered workers, §907; (3) assisting claimants with processing claims and receiving medical and vocational rehabilitation, § 939(c); and (4) enforcing compensation orders and administering payments to and disbursements from the special fund established by the Act for the payment of certain benefits, §§ 921(d) and 944. The Director does not assert that the Board’s decision hampers her performance of these express statutory responsibilities. She claims only two categories of interest that are affected, neither of which remotely suggests that she has authority to appeal Board determinations.
• First, the Director claims that because the LHWCA “has many of the elements of social insurance, and as such is designed to promote the public interest,” Brief for Petitioner 17, she has standing to “advance in federal court the public interest in ensuring adequate compensation payments to claimants,” id., at 18. It is doubtful, to begin with, that the goal of the LHWCA is simply the support of disabled workers. In fact, we have said that, because “the LHWCA represents a compromise between the competing interests of disabled laborers and their employers,” it “is not correct to interpret the Act as guaranteeing a completely adequate remedy for all covered disabilities.” Potomac Elec. Power Co. v. Director, Office of Workers’ Compensation Programs, 449 U. S. 268, 282 (1980). The LHWCA is a scheme for fair and efficient resolution of a class of private disputes, managed and arbitered by the Government. It represents a “quid pro quo between employer and employee. Employers relinquish certain legal rights which the law affords to them and so, in turn, do the employees.” 1 M. Norris, The Law of Maritime Personal Injuries §4.1, p. 106 (4th ed. 1990) (emphasis added).
But even assuming the single-minded, compensate-the-employee goal that the Director posits, there is nothing to suggest that the Director has been given authority to pursue that goal in the courts. Agencies do not automatically have standing to sue for actions that frustrate the purposes of their statutes. The Interior Department, being charged with the duty to “protect persons and property within areas of the National Park System,” 16 U. S. C. § 1a-6(a), does not thereby have authority to intervene in suits for assault brought by campers; or (more precisely) to bring a suit for assault when the camper declines to do so. What the Director must establish here is such a clear and distinctive responsibility for employee compensation as to overcome the universal assumption that “person adversely affected or aggrieved” leaves private interests (even those favored by public policy) to be litigated by private parties. That we are unable to find. The Director is not the designated champion of employees within this statutory scheme. To the contrary, one of her principal roles is to serve as the broker of informal settlements between employers and employees. 33 U. S. C. § 914(h). She is charged, moreover, with providing “information and assistance” regarding the program to all persons covered by the Act, including employers. §§ 902(1), 939(c). To be sure, she has discretion under § 939(c) to provide “legal assistance in processing a claim” if it is requested (a provision that is perhaps of little consequence, since the Act provides attorney’s fees to successful claimants, see § 928); but that authority, which is discretionary with her and contingent upon a request by the claimant, does not evidence the duty and power, when the claimant is satisfied with his award, to contest the award on her own.
The Director argues that her standing to pursue the public’s interest in adequate compensation of claimants is supported by our decisions in Heckman v. United States, 224 U. S. 413 (1912), Moe v. Confederated Salish and Kootenai Tribes of Flathead Reservation, 425 U. S. 463 (1976), Pasa dena City Bd. of Ed. v. Spangler, 427 U. S. 424 (1976), and General Telephone Co. of Northwest v. EEOC, 446 U. S. 318 (1980). Brief for Petitioner 18. None of those cases is apposite. Heckman and Moe pertain to the United States’ standing to represent the interests of Indians; the former holds, see 224 U. S., at 437, and the latter indicates in dictum, see 425 U. S., at 474, n. 13, that the Government’s status as guardian confers standing. The third case, Spangler, supra, at 427, based standing of the United States upon an explicit provision of Title IX of the Civil Rights Act of 1964 authorizing suit, 42 U. S. C. § 2000h-2, and the last, General Telephone Co., supra, at 325, based standing of the Equal Employment Opportunity Commission (EEOC) upon a specific provision of Title VII of the Civil Rights Act of 1964 authorizing suit, 42 U. S. C. § 2000e-5(f)(1). Those two cases certainly establish that Congress could have conferred standing upon the Director without infringing Article III of the Constitution; but they do not at all establish that Congress did so. In fact, General Telephone Co. suggests just the opposite, since it describes how, prior to the 1972 amendment specifically giving the EEOC authority to sue, only the “aggrieved person” could bring suit, even though the EEOC was authorized to use “ ‘informal methods of conference, conciliation, and persuasion’” to eliminate unlawful employment practices, 446 U. S., at 325 — an authority similar to the Director’s informal settlement authority here.
The second category of interest claimed to be affected by erroneous Board rulings is the Director’s ability to fulfill “important administrative and enforcement responsibilities.” Brief for Petitioner 18. The Director fails, however, to identify any specific statutory duties that an erroneous Board ruling interferes with, reciting instead conjectural harms to abstract and remote concerns. She contends, for example, that “incorrect claim determinations by the Board frustrate [her] duty to administer and enforce the statutory scheme in a uniform manner.” Id., at 18-19. But it is impossible to understand how a duty of uniform administration and enforcement by the Director (presumably arising out of the prohibition of arbitrary action reflected in 5 U. S. C. § 706) hinges upon correct adjudication by someone else. The Director does not (and we think cannot) explain, for example, how an erroneous decision by the Board affects her ability to process the underlying claim, §919, provide information and assistance regarding coverage, compensation, and procedures, § 939(c), enforce the final award, § 921(d), or perform any other required task in a “uniform” manner.
If the correctness of adjudications were essential to the Director’s performance of her assigned duties, Congress would presumably have done what it has done with many other agencies: made adjudication her responsibility. In fact, however, it has taken pains to remove adjudication from her realm. The LHWCA Amendments of 1972, 86 Stat. 1251, assigned administration to the Director, 33 U. S. C. § 939(a); assigned initial adjudication to ALJ’s, § 919(d); and created the Board to consider appeals from ALJ decisions, § 921. The assertion that proper adjudication is essential to proper performance of the Director’s functions is quite simply contrary to the whole structure of the Act. To make an implausible argument even worse, the Director must acknowledge that her lack of control over the adjudicative process does not even deprive her of the power to resolve legal ambiguities in the statute. She retains the rulemaking power, see § 939(a), which means that if her problem with the present decision of the Board is that it has established an erroneous rule of law, see Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984), she has full power to alter that rule. See Estate of Cowart v. Nicklos Drilling Co., 505 U. S. 469, 476 (1992) (“[T]he [Board] is not entitled to any special deference”). Her only possible complaint, then, is that she does not agree with the outcome of this particular case. The Director also claims that precluding her from seeking review of erroneous Board rulings “would reduce the incentive for employers to view the Director’s informal resolution efforts as authoritative, because the employer could proceed to a higher level of review from which the Director could not appeal.” Brief for Petitioner 19. This argument assumes that her informal resolution efforts are supposed to be “authoritative.” We doubt that. The structure of the statute suggests that they are supposed to be facilitative — a service to both parties, rather than an imposition upon either of them. But even if the opposite were true, we doubt that the unlikely prospect that the Director will appeal when the claimant does not will have much of an impact upon whether the employer chooses to spurn the Director’s settlement proposal and roll the dice before the Board. The statutory requirement of adverse effect or aggrievement must be based upon “something more than an ingenious academic exercise in the conceivable.” United States v. SCRAP, 412 U. S., at 688.
The Director seeks to derive support for her position from Congress’ later enactment of the BLBA in 1978, but it seems to us that the BLBA militates precisely against her position. The BLBA expressly provides that “[t]he Secretary shall be a party in any proceeding relative to a claim for benefits under this part.” 30 U. S. C. § 932(k). The Director argues that since the Secretary is explicitly made a party under the BLBA, she must be meant to be a party under the LHWCA as well. That is not a form of reasoning we are familiar with. The normal conclusion one would derive from putting these statutes side by side is this: When, in a legislative scheme of this sort, Congress wants the Secretary to have standing, it says so.
Finally, the Director retreats to that last redoubt of losing causes, the proposition that the statute at hand should be liberally construed to achieve its purposes, see, e. g., Northeast Marine Terminal Co. v. Caputo, 432 U. S. 249, 268 (1977). That principle may be invoked, in case of ambiguity, to find present rather than absent elements that are essential to operation of a legislative scheme; but it does not add features that will achieve the statutory “purposes” more effectively. Every statute purposes, not only to achieve certain ends, but also to achieve them by particular means — and there is often a considerable legislative battle over what those means ought to be. The withholding of agency authority is as significant as the granting of it, and we have no right to play favorites between the two. Construing the LHWCA as liberally as can be, we cannot find that the Director is “adversely affected or aggrieved” within the meaning of § 921(c).
* * *
For these reasons, the judgment of the United States Court of Appeals for the Fourth Circuit is affirmed.
So ordered.
The court found that, as administrator of the §944 special fund, the Director did have standing to appeal the Board’s decision to grant respondent relief under § 908(f). That ruling is not before us, and we express no view upon it.
In addition to not reaching the § 921(c) question, Perini also took as a given (because it had been conceded below) the answer to another question: whether the Director (rather than the Benefits Review Board) is the proper party respondent to an appeal from the Board’s determination. See 459 U. S., at 304, n. 13. Obviously, an agency’s entitlement to party respondent status does not necessarily imply that agency’s standing to appeal: The National Labor Relations Board, for example, is always the party respondent to an employer or employee appeal, but cannot initiate an appeal from its own determination. 29 U. S. C. §§ 152(1), 160(f). Indeed, it can be argued, as amici in this case have done, that if the Director is the proper party respondent in the court of appeals (as her regulations assert, see 20 CFR § 802.410 (1994)), in initiating an appeal she would end up on both sides of the ease. See Brief for National Association of Waterfront Employers et al. as Amici Curiae 17, n. 14. Our opinion today intimates no view on the party-respondent question.
United States v. ICC accorded the United States standing despite the facts that (1) the Interstate Commerce Act contained no specific judicial review provision, and (2) the APA’s general judicial review provision (“person adversely affected or aggrieved”) excludes agencies from the definition of “person.” See infra, at 129. It would thus appear that an agency suing in what might be termed a nongovernmental capacity escapes that definitional limitation. The LHWCA likewise contains a definition of “person” that does not specifically include agencies. 33 U. S. C. § 902(1). We chose not to rely upon that provision in this opinion because it seemed more likely to sweep in the question of the Director’s authority to appeal Board rulings that are adverse to the § 944 special fund, which deserves separate attention. It is possible that the Director’s status as manager of the privately financed fund removes her from the “person” limitation, just as it may remove her from the more general limitation that agencies qua agencies are not “adversely affected or aggrieved.” We leave those issues to be resolved in a case where the Director’s relationship to the fund is immediately before us.
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 of the Court of Appeals of Alabama is reversed. Cole v. Arkansas, 333 U. S. 196; Williams v. Georgia, 349 U. S. 375.
Mr. Justice White 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.
Justice O’Connor
delivered the opinion of the Court.
This ease requires us to decide whether the Confrontation Clause of the Sixth Amendment categorically prohibits a child witness in a child abuse case from testifying against a defendant at trial, outside the defendant’s physical presence, by one-way closed circuit television.
HH
In October 1986, a Howard County grand jury charged respondent, Sandra Ann Craig, with child abuse, first and second degree sexual offenses, perverted sexual practice, assault, and battery. The named victim in each count was a 6-year-old girl who, from August 1984 to June 1986, had attended a kindergarten and prekindergarten center owned and operated by Craig.
In March 1987, before the case went to trial, the State sought to invoke a Maryland statutory procedure that permits a judge to receive, by one-way closed circuit television, the testimony of a child witness who is alleged to be a victim of child abuse. To invoke the procedure, the trial judge must first “determin[e] that testimony by the child victim in the courtroom will result in the child suffering serious emotional distress such that the child cannot reasonably communicate.” Md. Cts. & Jud. Proc. Code Ann. § 9-102(a)(l)(ii) (1989). Once the procedure is invoked, the child witness, prosecutor, and defense counsel withdraw to a separate room; the judge, jury, and defendant remain in the courtroom. The child witness is then examined and cross-examined in the separate room, while a video monitor records and displays the witness’ testimony to those in the courtroom. During this time the witness cannot see the defendant. The defendant remains in electronic communication with defense counsel, and objections may be made and ruled on as if the witness were testifying in the courtroom.
In support of its motion invoking the one-way closed circuit television procedure, the State presented expert testimony that the named victim, as well as a number of other children who were alleged to have been sexually abused by Craig, would suffer “serious emotional distress such that [they could not] reasonably communicate,” § 9-102(a)(l)(ii), if required to testify in the courtroom. App. 7-59. The Maryland Court of Appeals characterized the evidence as follows:
“The expert testimony in each case suggested that each child would have some or considerable difficulty in testifying in Craig’s presence. For example, as to one child, the expert said that what ‘would cause him the most anxiety would be to testify in front of Mrs. Craig....’ The child ‘wouldn’t be able to communicate effectively.’ As to another, an expert said she ‘would probably stop talking and she would withdraw and curl up.’ With respect to two others, the testimony was that one would ‘become highly agitated, that he may refuse to talk or if he did talk, that he would choose his subject regardless of the questions’ while the other would ‘become extremely timid and unwilling to talk.’” 316 Md. 551, 568-569, 560 A. 2d 1120, 1128-1129 (1989).
Craig objected to the use of the procedure on Confrontation Clause grounds, but the trial court rejected that contention, concluding that although the statute “take[s] away the right of the defendant to be face to face with his or her accuser,” the defendant retains the “essence of the right of confrontation,” including the right to observe, cross-examine, and have the jury view the demeanor of the witness. App. 65-66. The trial court further found that, “based upon the evidence presented... the testimony of each of these children in a courtroom will result in each child suffering serious emotional distress... such that each of these children cannot reasonably communicate.” Id., at 66. The trial court then found the named victim and three other children competent to testify and accordingly permitted them to testify against Craig via the one-way closed circuit television procedure. The jury convicted Craig on all counts, and the Maryland Court of Special Appeals affirmed the convictions, 76 Md. App. 250, 544 A. 2d 784 (1988).
The Court of Appeals of Maryland reversed and remanded for a new trial. 316 Md. 551, 560 A. 2d 1120 (1989). The Court of Appeals rejected Craig’s argument that the Confrontation Clause requires in all cases a face-to-face courtroom encounter between the accused and his accusers, id., at 556-562, 560 A. 2d at 1122-1125, but concluded:
“[U]nder § 9 — 102(a)(l)(ii), the operative ‘serious emotional distress’ which renders a child victim unable to ‘reasonably communicate’ must be determined to arise, at least primarily, from face-to-face confrontation with the defendant. Thus, we construe the phrase ‘in the courtroom’ as meaning, for sixth amendment and [state constitution] confrontation purposes, ‘in the courtroom in the presence of the defendant.’ Unless prevention of ‘eyeball-to-eyeball’ confrontation is necessary to obtain the trial testimony of the child, the defendant cannot be denied that right.” Id., at 566, 560 A. 2d, at 1127.
Reviewing the trial court’s finding and the evidence presented in support of the § 9-102 procedure, the Court of Appeals held that, “as [it] read Coy [v. Iowa, 487 U. S. 1012 (1988)], the showing made by the State was insufficient to reach the high threshold required by that case before § 9-102 may be invoked.” Id., at 554-555, 560 A. 2d, at 1121 (footnote omitted).
We granted certiorari to resolve the important Confrontation Clause issues raised by this case. 493 U. S. 104 (1990).
I — I I — I
The Confrontation Clause of the Sixth Amendment, made applicable to the States through the Fourteenth Amendment, provides: “In all criminal prosecutions, the accused shall enjoy the right... to be confronted with the witnesses against him.”
We observed in Coy v. Iowa that “the Confrontation Clause guarantees the defendant a face-to-face meeting with witnesses appearing before the trier of fact.” 487 U. S., at 1016 (citing Kentucky v. Stincer, 482 U. S. 730, 748, 749-750 (1987) (Marshall, J., dissenting)); see also Pennsylvania v. Ritchie, 480 U. S. 39, 51 (1987) (plurality opinion); California v. Green, 399 U. S. 149, 157 (1970); Snyder v. Massachusetts, 291 U. S. 97, 106 (1934); Dowdell v. United States, 221 U. S. 325, 330 (1911); Kirby v. United States, 174 U. S. 47, 55 (1899); Mattox v. United States, 156 U. S. 237, 244 (1895). This interpretation derives not only from the literal text of the Clause, but also from our understanding of its historical roots. See Coy, supra, at 1015-1016; Mattox, supra, at 242 (Confrontation Clause intended to prevent conviction by affidavit); Green, supra, at 156 (same); cf. 3 J. Story, Commentaries on the Constitution § 1785, p. 662 (1833).
We have never held, however, that the Confrontation Clause guarantees criminal defendants the absolute right to a face-to-face meeting with witnesses against them at trial. Indeed, in Coy v. Iowa, we expressly “le[ft] for another day... the question whether any exceptions exist” to the “irreducible literal meaning of the Clause: ‘a right to meet face to face all those who appear and give evidence at trial.’” 487 U. S., at 1021 (quoting Green, supra, at 175 (Harlan, J., concurring)). The procedure challenged in Coy involved the placement of a screen that prevented two child witnesses in a child abuse case from seeing the defendant as they testified against him at trial. See 487 U. S., at 1014-1015. In holding that the use of this procedure violated the defendant’s right to confront witnesses against him, we suggested that any exception to the right “would surely be allowed only when necessary to further an important public policy” —! e., only upon a showing of something more than the generalized, “legislatively imposed presumption of trauma” underlying the statute at issue in that case. Id., at 1021; see also id., at 1025 (O’Connor, J., concurring). We concluded that “[s]ince there ha[d] been no individualized findings that these particular witnesses needed special protection, the judgment [in the case before us] could not be sustained by any conceivable exception.” Id., at 1021. Because the trial court in this case made individualized findings that each of the child witnesses needed special protection, this case requires us to decide the question reserved in Coy.
The central concern of the Confrontation Clause is to ensure the reliability of the evidence against a criminal defendant by subjecting it to rigorous testing in the context of an adversary proceeding before the trier of fact. The word “confront,” after all, also means a clashing of forces or ideas, thus carrying with it the notion of adversariness. As we noted in our earliest case interpreting the Clause:
“The primary object of the constitutional provision in question was to prevent depositions or ex parte affidavits, such as were sometimes admitted in civil cases, being used against the prisoner in lieu of a personal examination and cross-examination of the witness in which the accused has an opportunity, not only of testing the recollection and sifting the conscience of the witness, but of compelling him to stand face to face with the jury in order that they may look at him, and judge by his demeanor upon the stand and the manner in which he gives his testimony whether he is worthy of belief.” Mattox, supra, at 242-243.
As this description indicates, the right guaranteed by the Confrontation-Clause includes not only a “personal examination,” 156 U. S., at 242, but also “(1) insures that the witness will give his statements under oath — thus impressing him with the seriousness of the matter and guarding against the lie by the possibility of a penalty for perjury; (2) forces the witness to submit to cross-examination, the ‘greatest legal engine ever invented for the discovery of truth’; [and] (3) permits the jury that is to decide the defendant’s fate to observe the demeanor of the witness in making his statement, thus aiding the jury in assessing his credibility.” Green, supra, at 158 (footnote omitted).
The combined effect of these elements of confrontation— physical presence, oath, cross-examination, and observation of demeanor by the trier of fact — serves the purposes of the Confrontation Clause by ensuring that evidence admitted against an accused is reliable and subject to the rigorous adversarial testing that is the norm of Anglo-American criminal proceedings. See Stincer, supra, at 739 (“[T]he right to confrontation is a functional one for the purpose of promoting reliability in a criminal trial”); Dutton v. Evans, 400 U. S. 74, 89 (1970) (plurality opinion) (“[T]he mission of the Confrontation Clause is to advance a practical concern for the accuracy of the truth-determining process in criminal trials by assuring that ‘the trier of fact [has] a satisfactory basis for evaluating the truth of the [testimony]’”); Lee v. Illinois, 476 U. S. 530, 540 (1986) (confrontation guarantee serves “symbolic goals” and “promotes reliability”); see also Faretta v. California, 422 U. S. 806, 818 (1975) (Sixth Amendment “constitutionalizes the right in an adversary criminal trial to make a defense as we know it”); Strickland v. Washington, 466 U. S. 668, 684-685 (1984).
We have recognized, for example, that face-to-face confrontation enhances the accuracy of factfinding by reducing the risk that a witness will wrongfully implicate an innocent person. See Coy, supra, at 1019-1020 (“It is always more difficult to tell a lie about a person ‘to his face’ than ‘behind his back.’... That face-to-face presence may, unfortunately, upset the truthful rape victim or abused child; but by the same token it may confound and undo the false accuser, or reveal the child coached by a malevolent adult”); Ohio v. Roberts, 448 U. S. 56, 63, n. 6 (1980); see also 3 W. Blackstone, Commentaries *373-*374. We have also noted the strong symbolic purpose served by requiring adverse witnesses at trial to testify in the accused’s presence. See Coy, 487 U. S., at 1017 (“[T]here is something deep in human nature that regards face-to-face confrontation between accused and accuser as ‘essential to a fair trial in a criminal prosecution’ ”) (quoting Pointer v. Texas, 380 U. S. 400, 404 (1965)).
Although face-to-face confrontation forms “the core of the values furthered by the Confrontation Clause,” Green, 399 U. S., at 157, we have nevertheless recognized that it is not the sine qua non of the confrontation right. See Delaware v. Fensterer, 474 U. S. 15, 22 (1985) (per curiam) (“[T]he Confrontation Clause is generally satisfied when the defense is given a full and fair opportunity to probe and expose [testimonial] infirmities [such as forgetfulness, confusion, or evasion] through cross-examination, thereby calling to the attention of the factfinder the reasons for giving scant weight to the witness’ testimony”); Roberts, supra, at 69 (oath, cross-examination, and demeanor provide “all that the Sixth Amendment demands: ‘substantial compliance with the purposes behind the confrontation requirement’”) (quoting Green, supra, at 166); see also Stincer, 482 U. S., at 739-744 (confrontation right not violated by exclusion of defendant from competency hearing of child witnesses, where defendant had opportunity for full and effective cross-examination at trial); Davis v. Alaska, 415 U. S. 308, 315-316 (1974); Douglas v. Alabama, 380 U. S. 415, 418 (1965); Pointer, supra, at 406-407; 5 J. Wigmore, Evidence § 1395, p. 150 (J. Chadbourn rev. 1974).
For this reason, we have never insisted on an actual face-to-face encounter at trial in every instance in which testimony is admitted against a defendant. Instead, we have repeatedly held that the Clause permits, where necessary, the admission of certain hearsay statements against a defendant despite the defendant’s inability to confront the declarant at trial. See, e. g., Mattox, 156 U. S., at 243 (“[T]here could be nothing more directly contrary to the letter of the provision in question than the admission of dying declarations”); Pointer, supra, at 407 (noting exceptions to the confrontation right for dying declarations and “other analogous situations”). In Mattox, for example, we held that the testimony of a Government witness at a former trial against the defendant, where the witness was fully cross-examined but had died after the first trial, was admissible in evidence against the defendant at his second trial. See 156 U. S., at 240-244. We explained:
“There is doubtless reason for saying that... if notes of [the witness’] testimony are permitted to be read, [the defendant] is deprived of the advantage of that personal presence of the witness before the jury which the law has designed for his protection. But general rules of law of this kind, however beneficent in their operation and valuable to the accused, must occasionally give way to considerations of public policy and the necessities of the case. To say that a criminal, after having once been convicted by the testimony of a certain witness, should go scot free simply because death has closed the mouth of that witness, would be carrying his constitutional protection to an unwarrantable extent. The law in its wisdom declares that the rights of the public shall not be wholly sacrificed in order that an incidental benefit may be preserved to the accused.” Id., at 243.
We have accordingly stated that a literal reading of the Confrontation Clause would “abrogate virtually every hearsay exception, a result long rejected as unintended and too extreme.” Roberts, 448 U. S., at 63. Thus, in certain narrow circumstances, “competing interests, if ‘closely examined,’ may warrant dispensing with confrontation at trial.” Id., at 64 (quoting Chambers v. Mississippi, 410 U. S. 284, 295 (1973), and citing Mattox, supra). We have recently held, for example, that hearsay statements of nontestifying co-conspirators may be admitted against a defendant despite the lack of any face-to-face encounter with the accused. See Bourjaily v. United States, 483 U. S. 171 (1987); United States v. Inadi, 475 U. S. 387 (1986). Given our hearsay cases, the word “confronted,” as used in the Confrontation Clause, cannot simply mean face-to-face confrontation, for the Clause would then, contrary to our cases, prohibit the admission of any accusatory hearsay statement made by an absent declarant — a declarant who is undoubtedly as much a “witness against” a defendant as one who actually testifies at trial.
In sum, our precedents establish that “the Confrontation Clause reflects a preference for face-to-face confrontation at trial,” Roberts, supra, at 63 (emphasis added; footnote omitted), a preference that “must occasionally give way to considerations of public policy and the necessities of the case,” Mattox, supra, at 243. “[W]e have attempted to harmonize the goal of the Clause — placing limits on the kind of evidence that may be received against a defendant — with a societal interest in accurate factfinding, which may require consideration of out-of-court statements.” Bourjaily, supra, at 182. We have accordingly interpreted the Confrontation Clause in a manner sensitive to its purposes and sensitive to the necessities of trial and the adversary process. See, e. g., Kirby, 174 U. S., at 61 (“It is scarcely necessary to say that to the rule that an accused is entitled to be confronted with witnesses against him the admission of dying declarations is an exception which arises from the necessity of the case”); Chambers, supra, at 295 (“Of course, the right to confront and to cross-examine is not absolute and may, in appropriate cases, bow to accommodate other legitimate interests in the criminal trial process”). Thus, though we reaffirm the importance of face-to-face confrontation with witnesses appearing at trial, we cannot say that such confrontation is an indispensable element of the Sixth Amendment’s guarantee of the right to confront one’s accusers. Indeed, one commentator has noted that “[i]t is all but universally assumed that there are circumstances that excuse compliance with the right of confrontation.” Graham, The Right of Confrontation and the Hearsay Rule: Sir Walter Raleigh Loses Another One, 8 Crim. L. Bull. 99, 107-108 (1972).
This interpretation of the Confrontation Clause is consistent with our cases holding that other Sixth Amendment rights must also be interpreted in the context of the necessities of trial and the adversary process. See, e. g., Illinois v. Allen, 397 U. S. 337, 342-343 (1970) (right to be present at trial not violated where trial judge removed defendant for disruptive behavior); Ritchie, 480 U. S., at 51-54 (plurality opinion) (right to cross-examination not violated where State denied defendant access to investigative files); Taylor v. Illinois, 484 U. S. 400, 410-416 (1988) (right to compulsory process not violated where trial judge precluded testimony of a surprise defense witness); Perry v. Leeke, 488 U. S. 272, 280-285 (1989) (right to effective assistance of counsel not violated where trial judge prevented testifying defendant from conferring with counsel during a short break in testimony). We see no reason to treat the face-to-face component of the confrontation right any differently, and indeed we think it would be anomalous to do so.
That the face-to-face confrontation requirement is not absolute does not, of course, mean that it may easily be dispensed with. As we suggested in Coy, our precedents confirm that a defendant’s right to confront accusatory witnesses may be satisfied absent a physical, face-to-face confrontation at trial only where denial of such confrontation is necessary to further an important public policy and only where the reliability of the testimony is otherwise assured. See 487 U. S., at 1021 (citing Roberts, supra, at 64; Chambers, supra, at 295); Coy, supra, at 1025 (O’Connor, J., concurring).
III
Maryland's statutory procedure, when invoked, prevents a child witness from seeing the defendant as he or she testifies against the defendant at trial. We find it significant, however, that Maryland’s procedure preserves all of the other elements of the confrontation right: The child witness must be competent to testify and must testify under oath; the defendant retains full opportunity for contemporaneous cross-examination; and the judge, jury, and defendant are able to view (albeit by video monitor) the demeanor (and body) of the witness as he or she testifies. Although we are mindful of the many subtle effects face-to-face confrontation may have on an adversary criminal proceeding, the presence of these other elements of confrontation — oath, cross-examination, and observation of the witness’ demeanor — adequately ensures that the testimony is both reliable and subject to rigorous adversarial testing in a manner functionally equivalent to that accorded live, in-person testimony. These safeguards of reliability and adversariness render the use of such a procedure a far cry from the undisputed prohibition of the Confrontation Clause: trial by ex parte affidavit or inquisition, see Mattox, 156 U. S., at 242; see also Green, 399 U. S., at 179 (Harlan, J., concurring) (“[T]he Confrontation Clause was meant to constitutionalize a barrier against flagrant abuses, trials by anonymous accusers, and absentee witnesses”). Rather, we think these elements of effective confrontation not only permit a defendant to “confound and undo the false accuser, or reveal the child coached by a malevolent adult,” Coy, supra, at 1020, but may well aid a defendant in eliciting favorable testimony from the child witness. Indeed, to the extent the child witness’ testimony may be said to be technically given out of court (though we do not so hold), these assurances of reliability and adversariness are far greater than those required for admission of hearsay testimony under the Confrontation Clause. See Roberts, 448 U. S., at 66. We are therefore confident that use of the one-way closed circuit television procedure, where necessary to further an important state interest, does not impinge upon the truth-seeking or symbolic purposes of the Confrontation Clause.
The critical inquiry in this case, therefore, is whether use of the procedure is necessary to further an important state interest. The State contends that it has a substantial interest in protecting children who are allegedly victims of child abuse from the trauma of testifying against the alleged perpetrator and that its statutory procedure for receiving testimony from such witnesses is necessary to further that interest.
We have of course recognized that a State’s interest in “the protection of minor victims of sex crimes from further trauma and embarrassment” is a “compelling” one. Globe Newspaper Co. v. Superior Court of Norfolk County, 457 U. S. 596, 607 (1982); see also New York v. Ferber, 458 U. S. 747, 756-757 (1982); FCC v. Pacifica Foundation, 438 U. S. 726, 749-750 (1978); Ginsberg v. New York, 390 U. S. 629, 640 (1968); Prince v. Massachusetts, 321 U. S. 158, 168 (1944). “[W]e have sustained legislation aimed at protecting the physical and emotional well-being of youth even when the laws have operated in the sensitive area of constitutionally protected rights.” Ferber, supra, at 757. In Globe Newspaper, for example, we held that a State’s interest in the physical and psychological well-being of a minor victim was sufficiently weighty to justify depriving the press and public of their constitutional right to attend criminal trials, where the trial court makes a case-specific finding that closure of the trial is necessary to protect the welfare of the minor. See 457 U. S., at 608-609. This Term, in Osborne v. Ohio, 495 U. S. 103 (1990), we upheld a state statute that proscribed the possession and viewing of child pornography, reaffirming that “‘[i]t is evident beyond the need for elaboration that a State’s interest in “safeguarding the physical and psychological well-being of a minor” is “compelling.”’” Id., at 109 (quoting Ferber, supra, at 756-757).
We likewise conclude today that a State’s interest in the physical and psychological well-being of child abuse victims may be sufficiently important to outweigh, at least in some cases, a defendant’s right to face his or her accusers in court. That a significant majority of States have enacted statutes to protect child witnesses from the trauma of giving testimony in child abuse cases attests to the widespread belief in the importance of such a public policy. See Coy, 487 U. S., at 1022-1023 (O’Connor, J., concurring) (“Many States have determined that a child victim may suffer trauma from exposure to the harsh atmosphere of the typical courtroom and have undertaken to shield the child through a variety of ameliorative measures”). Thirty-seven States, for example, permit the use of videotaped testimony of sexually abused children; 24 States have authorized the use of one-way closed circuit television testimony in child abuse cases; and 8 States authorize the use of a two-way system in which the child witness is permitted to see the courtroom and the defendant on a video monitor and in which the jury and judge are permitted to view the child during the testimony.
The statute at issue in this case, for example, was specifically intended “to safeguard the physical and psychological well-being of child victims by avoiding, or at least minimizing, the emotional trauma produced by testifying.” Wildermuth v. State, 310 Md. 496, 518, 530 A. 2d 275, 286 (1987). The Wildermuth court noted:
“In Maryland, the Governor’s Task Force on Child Abuse in its Interim Report (Nov. 1984) documented the existence of the [child abuse] problem in our State. Interim Report at 1. It brought the picture up to date in its Final Report (Dec. 1985). In the first six months of 1985, investigations of child abuse were 12 percent more numerous than during the same period of 1984. In 1979 4,615 cases of child abuse were investigated; in 1984, 8,321. Final Report at iii. In its Interim Report at 2, the Commission proposed legislation that, with some changes, became § 9-102. The proposal was ‘aimed at alleviating the trauma to a child victim in the courtroom atmosphere by allowing the child’s testimony to be obtained outside of the courtroom.’ Id., at 2. This would both protect the child and enhance the public interest by encouraging effective prosecution of the alleged abuser.” Id., at 517, 530 A. 2d, at 285.
Given the State’s traditional and “‘transcendent interest in protecting the welfare of children,’” Ginsberg, 390 U. S., at 640 (citation omitted), and buttressed by the growing body of academic literature documenting the psychological trauma suffered by child abuse victims who must testify in court, see Brief for American Psychological Association as Amicus Curiae 7-13; G. Goodman et al., Emotional Effects of Criminal Court Testimony on Child Sexual Assault Victims, Final Report to the National Institute of Justice (presented as conference paper at annual convention of American Psychological Assn., Aug. 1989), we will not second-guess the considered judgment of the Maryland Legislature regarding the importance of its interest in protecting child abuse victims from the emotional trauma of testifying. Accordingly, we hold that, if the State makes an adequate showing of necessity, the state interest in protecting child witnesses from the trauma of testifying in a child abuse case is sufficiently important to justify the use of a special procedure that permits a child witness in such cases to testify at trial against a defendant in the absence of face-to-face confrontation with the defendant.
The requisite finding of necessity must of course be a case-specific one: The trial court must hear evidence and determine whether use of the one-way closed circuit television procedure is necessary to protect the welfare of the particular child witness who seeks to testify. See Globe Newspaper Co., 457 U. S., at 608-609 (compelling interest in protecting child victims does not justify a mandatory trial closure rule); Coy, 487 U. S., at 1021; id., at 1025 (O’Connor, J., concurring); see also Hochheiser v. Superior Court, 161 Cal. App. 3d 777, 793, 208 Cal. Rptr. 273, 283 (1984). The trial court must also find that the child witness would be traumatized, not by the courtroom generally, but by the presence of the defendant. See, e. g., State v. Wilhite, 160 Ariz. 228, 772 P. 2d 582 (1989); State v. Bonello, 210 Conn. 51, 554 A. 2d 277 (1989); State v. Davidson, 764 S. W. 2d 731 (Mo. App. 1989); Commonwealth v. Ludwig, 366 Pa. Super. 361, 531 A. 2d 459 (1987). Denial of face-to-face confrontation is not needed to further the state interest in protecting the child witness from trauma unless it is the presence of the defendant that causes the trauma. In other words, if the state interest were merely the interest in protecting child witnesses from courtroom trauma generally, denial of face-to-face confrontation would be unnecessary because the child could be permitted to testify in less intimidating surroundings, albeit with the defendant present. Finally, the trial court must find that the emotional distress suffered by the child witness in the presence of the defendant is more than de minimis, i. e., more than “mere nervousness or excitement or some reluctance to testify,” Wildermuth, supra, at 524, 530 A. 2d, at 289; see also State v. Mannion, 19 Utah 505, 511-512, 57 P. 542, 543-544 (1899). We need not decide the minimum showing of emotional trauma required for use of the special procedure, however, because the Maryland statute, which requires a determination that the child witness will suffer “serious emotional distress such that the child cannot reasonably communicate,” § 9 — 102(a)(l)(ii), clearly suffices to meet constitutional standards.
To be sure, face-to-face confrontation may be said to cause trauma for the very purpose of eliciting truth, cf. Coy, supra, at 1019-1020, but we think that the use of Maryland’s special procedure, where necessary to further the important state interest in preventing trauma to child witnesses in child abuse cases, adequately ensures the accuracy of the testimony and preserves the adversary nature of the trial. See supra, at 851-852. Indeed, where face-to-face confrontation causes significant emotional distress in a child witness, there is evidence that such confrontation would in fact disserve the Confrontation Clause’s truth-seeking goal. See, e. g., Coy, supra, at 1032 (Blackmun, J., dissenting) (face-to-face confrontation “may so overwhelm the child as to prevent the possibility of effective testimony, thereby undermining the truth-finding function of the trial itself”); Brief for American Psychological Association as Amicus Curiae 18-24; State v. Sheppard, 197 N. J. Super. 411, 416, 484 A. 2d 1330, 1332 (1984); Goodman & Helgeson, Child Sexual Assault: Children’s Memory and the Law, 40 U. Miami L. Rev. 181, 203-204 (1985); Note, Videotaping Children’s Testimony: An Empirical View, 85 Mich. L. Rev. 809, 813-820 (1987).
In sum, we conclude that where necessary to protect a child witness from trauma that would be caused by testifying in the physical presence of the defendant, at least where such trauma would impair the child’s ability to communicate, the Confrontation Clause does not prohibit use of a procedure that, despite the absence of face-to-face confrontation, ensures the reliability of the evidence by subjecting it to rigorous adversarial testing and thereby preserves the essence of effective confrontation. Because there is no dispute that the child witnesses in this case testified under oath, were subject to full cross-examination, and were able to be observed by the judge, jury, and defendant as they testified, we conclude that, to the extent that a proper finding of necessity has been made, the admission of such testimony would be consonant with the Confrontation Clause.
IV
The Maryland Court of Appeals held, as we do today, that although face-to-face confrontation is not an absolute constitutional requirement, it may be abridged only where there is a ‘“case-specific finding of necessity.”’ 316 Md., at 564, 560 A. 2d, at 1126 (quoting Coy, supra, at 1025 (O’Connor, J., concurring)). Given this latter requirement, the Court of Appeals reasoned that “[t]he question of whether a child is unavailable to testify... should not be asked in terms of inability to testify in the ordinary courtroom setting, but in the much narrower terms of the witness’s inability to testify in the presence of the accused.” 316 Md., at 564, 560 A. 2d, at 1126 (footnote omitted). “[T]he determinative inquiry required to preclude face-to-face confrontation is the effect of the presence of the defendant on the witness or the witness’s testimony.” Id., at 565, 560 A. 2d, at 1127. The Court of Appeals accordingly concluded that, as a prerequisite to use of the § 9-102 procedure, the Confrontation Clause requires the trial court to make a specific finding that testimony by the child in the courtroom in the presence of the defendant would result in the child suffering serious emotional distress such that the child could not reasonably communicate. Id., at 566, 560 A. 2d, at
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:
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A
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sc_issuearea
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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.
Chief Justice Burger
delivered the opinion of the Court.
The question presented by these appeals is whether the assignment by Congress to the Comptroller General of the United States of certain functions under the Balanced Budget and Emergency Deficit Control Act of 1985 violates the doctrine of separation of powers.
i — i
a>
On December 12, 1985, the President signed into law the Balanced Budget and Emergency Deficit Control Act of 1985, Pub. L. 99-177, 99 Stat. 1038, 2 U. S. C. §901 et seq. (1982 ed., Supp. Ill), popularly known as the “Gramm-Rudman-Hollings Act.” The purpose of the Act is to eliminate the federal budget deficit. To that end, the Act sets a “maximum deficit amount” for federal spending for each of fiscal years 1986 through 1991. The size of that maximum deficit amount progressively reduces to zero in fiscal year 1991. If in any fiscal year the federal budget deficit exceeds the maximum deficit amount by more than a specified sum, the Act requires across-the-board cuts in federal spending to reach the targeted deficit level, with half of the cuts made to defense programs and the other half made to nondefense programs. The Act exempts certain priority programs from these cuts. § 255.
These “automatic” reductions are accomplished through a rather complicated procedure, spelled out in §251, the so-called “reporting provisions” of the Act. Each year, the Directors of the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO) independently estimate the amount of the federal budget deficit for the upcoming fiscal year. If that deficit exceeds the maximum targeted deficit amount for that fiscal year by more than a specified, amount, the Directors of OMB and CBO independently calculate, on a program-by-program basis, the budget reductions necessary to ensure that the deficit does not exceed the maximum deficit amount. The Act then requires the Directors to report jointly their deficit estimates and budget reduction calculations to the Comptroller General.
The Comptroller General, after reviewing the Directors’ reports, then reports his conclusions to the President. § 251(b). The President in turn must issue a “sequestration” order mandating the spending reductions specified by the Comptroller General. § 252. There follows a period during which Congress may by legislation reduce spending to obviate, in whole or in part, the need for the sequestration order. If such reductions are not enacted, the sequestration order becomes effective and the spending reductions included in that order are made.
Anticipating constitutional challenge to these procedures, the Act also contains a “fallback” deficit reduction process to take effect “[i]n the event that any of the reporting procedures described in section 251 are invalidated.” § 274(f). Under these provisions, the report prepared by the Directors of OMB and the CBO is submitted directly to a specially created Temporary Joint Committee on Deficit Reduction, which must report in five days to both Houses a joint resolution setting forth the content of the Directors’ report. Congress then must vote on the resolution under special rules, which render amendments out of order. If the resolution is passed and signed by the President, it then serves as the basis for a Presidential sequestration order.
B
Within hours of the President’s signing of the Act, Congressman Synar, who had voted against the Act, filed a complaint seeking declaratory relief that the Act was unconstitutional. Eleven other Members later joined Congressman Synar’s suit. A virtually identical lawsuit was also filed by the National Treasury Employees Union. The Union alleged that its members had been injured as a result of the Act’s automatic spending reduction provisions, which have suspended certain cost-of-living benefit increases to the Union’s members.
A three-judge District Court, appointed pursuant to 2 U. S. C. § 922(a)(5) (1982 ed., Supp. III), invalidated the reporting provisions. Synar v. United States, 626 F. Supp. 1374 (DC 1986) (Scalia, Johnson, and Gasch, JJ.). The District Court concluded that the Union had standing to challenge the Act since the members of the Union had suffered actual injury by suspension of certain benefit increases. The District Court also concluded that Congressman Synar and his fellow Members had standing under the so-called “congressional standing” doctrine. See Barnes v. Kline, 245 U. S. App. D. C. 1, 21, 759 F. 2d 21, 41 (1985), cert. granted sub nom. Burke v. Barnes, 475 U. S. 1044 (1986).
The District Court next rejected appellees’ challenge that the Act violated the delegation doctrine. The court expressed no doubt that the Act delegated broad authority, but delegation of similarly broad authority has been upheld in past cases. The District Court observed that in Yakus v. United States, 321 U. S. 414, 420 (1944), this Court upheld a statute that delegated to an unelected “Price Administrator” the power “to promulgate regulations fixing prices of commodities.” Moreover, in the District Court’s view, the Act adequately confined the exercise of administrative discretion. The District Court concluded that “the totality of the Act’s standards, definitions, context, and reference to past administrative practice provides an adequate ‘intelligible principle’ to guide and confine administrative decisionmaking.” 626 F. Supp., at 1389.
Although the District Court concluded that the Act survived a delegation doctrine challenge, it held that the role of the Comptroller General in the deficit reduction process violated the constitutionally imposed separation of powers. The court first explained that the Comptroller General exercises executive functions under the Act. However, the Comptroller General, while appointed by the President with the advice and consent of the Senate, is removable not by the President but only by a joint resolution of Congress or by impeachment. The District Court reasoned that this arrangement could not be sustained under this Court’s decisions in Myers v. United States, 272 U. S. 52 (1926), and Humphrey’s Executor v. United States, 295 U. S. 602 (1935). Under the separation of powers established by the Framers of the Constitution, the court concluded, Congress may not retain the power of removal over an officer performing executive functions. The congressional removal power created a “here-and-now subservience” of the Comptroller General to Congress. 626 F. Supp., at 1392. The District Court therefore held that
“since the powers conferred upon the Comptroller General as part of the automatic deficit reduction process are executive powers, which cannot constitutionally be exercised by an officer removable by Congress, those powers cannot be exercised and therefore the automatic deficit reduction process to which they are are central cannot be implemented.” Id., at 1403.
Appeals were taken directly to this Court pursuant to § 274(b) of the Act. We noted probable jurisdiction and expedited consideration of the appeals. 475 U. S. 1009 (1986). We affirm.
II
A threshold issue is whether the Members of Congress, members of the National Treasury Employees Union, or the Union itself have standing to challenge the constitutionality of the Act in question. It is clear that members of the Union, one of whom is an appellee here, will sustain injury by not receiving a scheduled increase in benefits. See § 252(a)(6)(C)(i); 626 F. Supp., at 1381. This is sufficient to confer standing under § 274(a)(2) and Article III. We therefore need not consider the standing issue as to the Union or Members of Congress. See Secretary of Interior v. California, 464 U. S. 312, 319, n. 3 (1984). Cf. Automobile Workers v. Brock, 477 U. S. 274 (1986); Barnes v. Kline, supra. Accordingly, we turn to the merits of the case.
III
We noted recently that “[t]he Constitution sought to divide the delegated powers of the new Federal Government into three defined categories, Legislative, Executive, and Judicial.” INS v. Chadha, 462 U. S. 919, 951 (1983). The declared purpose of separating and dividing the powers of government, of course, was- to “diffus[e] power the better to secure liberty.” Youngstown Sheet & Tube Co. v. Sawyer, 343 U. S. 579, 635 (1952) (Jackson, J., concurring). Justice Jackson’s words echo the famous warning of Montesquieu, quoted by James Madison in The Federalist No. 47, that “ ‘there can be no liberty where the legislative and executive powers are united in the same person, or body of magistrates’... The Federalist No. 47, p. 325 (J. Cooke ed. 1961).
Even a cursory examination of the Constitution reveals the influence of Montesquieu’s thesis that checks and balances were the foundation of a structure of government that would protect liberty. The Framers provided a vigorous Legislative Branch and a separate and wholly independent Executive Branch, with each branch responsible ultimately to the people. The Framers also provided for a Judicial Branch equally independent with “[t]he judicial Power... extending] to all Cases, in Law and Equity, arising under this Constitution, and the Laws of the United States.” Art. III, § 2.
Other, more subtle,' examples of separated powers are evident as well. Unlike parliamentary systems such as that of Great Britain, no person who is an officer of the United States may serve as a Member of the Congress. Art. I, § 6. Moreover, unlike parliamentary systems, the President, under Article II, is responsible not to the Congress but to the people, subject only to impeachment proceedings which are exercised by the two Houses as representatives of the people. Art. II, § 4. And even in the impeachment of a President the presiding officer of the ultimate tribunal is not a member of the Legislative Branch, but the Chief Justice of the United States. Art. I, § 3.
That this system of division and separation of powers produces conflicts, confusion, and discordance at times is inherent, but it was deliberately so structured to assure full, vigorous, and open debate on the great issues affecting the people and to provide avenues for the operation of checks on the exercise of governmental power.
The Constitution does not contemplate an active role for Congress in the supervision of officers charged with the execution of the laws it enacts. The President appoints “Officers of the United States” with the “Advice and Consent of the Senate... Art. II, § 2. Once the appointment has been made and confirmed, however, the Constitution explicitly provides for removal of Officers of the United States by Congress only upon impeachment by the House of Representatives and conviction by the Senate. An impeachment by the House and trial by the Senate can rest only on “Treason, Bribery or other high Crimes and Misdemeanors.” Art. II, § 4. A direct congressional role in the removal of officers charged with the execution of the laws beyond this limited one is inconsistent with separation of powers.
This was made clear in debate in the First Congress in 1789. When Congress considered an amendment to a bill establishing the Department of Foreign Affairs, the debate centered around whether the Congress “should recognize and declare the power of the President under the Constitution to remove the Secretary of Foreign Affairs without the advice and consent of the Senate.” Myers, 272 U. S., at 114. James Madison urged rejection of a congressional role in the removal of Executive Branch officers, other than by impeachment, saying in debate:
“Perhaps there was no argument urged with more success, or more plausibly grounded against the Constitution, under which we are now deliberating, than that founded on the mingling of the Executive and Legislative branches of the Government in one body. It has been objected, that the Senate have too much of the Executive power even, by having a control over the President in the appointment to office. Now, shall we extend this connexion between the Legislative and Executive departments, which will strengthen the objection, and diminish the responsibility we have in the head of the Executive?” 1 Annals of Cong. 380 (1789).
Madison’s position ultimately prevailed, and a congressional role in the removal process was rejected. This “Decision of 1789” provides “contemporaneous and weighty evidence” of the Constitution’s meaning since many of the Members of the First Congress “had taken part in framing that instrument.” Marsh v. Chambers, 463 U. S. 783, 790 (1983).
. This Court first directly addressed this issue in Myers v. United States, 272 U. S. 52 (1925). At issue in Myers was a statute providing that certain postmasters could be removed only “by and with the advice and consent of the Senate.” The President removed one such Postmaster without Senate approval, and a lawsuit ensued. Chief Justice Taft, writing for the Court, declared the statute unconstitutional on the ground that for Congress to “draw to itself, or to either branch of it, the power to remove or the right to participate in the exercise of that power... would be... to infringe the constitutional principle of the separation of governmental powers.” Id., at 161.
A decade later, in Humphrey’s Executor v. United States, 295 U. S. 602 (1935), relied upon heavily by appellants, a Federal Trade Commissioner who had been removed by the President sought backpay. Humphrey’s Executor involved an issue not presented either in the Myers case or in this case — i. e., the power of Congress to limit the President’s powers of removal of a Federal Trade Commissioner. 295 U. S., at 630. The relevant statute permitted removal “by the President,” but only “for inefficiency, neglect of duty, or malfeasance in office.” Justice Sutherland, speaking for the Court, upheld the statute, holding that “illimitable power of removal is not possessed by the President [with respect to Federal Trade Commissioners].” Id., at 628-629. The Court distinguished Myers, reaffirming its holding that congressional participation in the removal of executive officers is unconstitutional. Justice Sutherland’s opinion for the Court also underscored the crucial role of separated powers in our system:
“The fundamental necessity of maintaining each of the three general departments of government entirely free from the control or coercive influence, direct or indirect, of either of the others, has often been stressed and is hardly open to serious question. So much is implied in the very fact of the separation of the powers of these departments by the Constitution; and in the rule which recognizes their essential co-equality.” 295 U. S., at 629-630.
The Court reached a similar result in Wiener v. United States, 357 U. S. 349 (1958), concluding that, under Humphrey’s Executor, the President did not have unrestrained removal authority over a member of the War Claims Commission.
In light of these precedents, we conclude that Congress cannot reserve for itself the power of removal of an officer charged with the execution of the laws except by impeachment. To permit the execution of the laws to be vested in an officer answerable only to Congress would, in practical terms, reserve in Congress control over the execution of the laws. As the District Court observed: “Once an officer is appointed, it is only the authority that can remove him, and not the authority that appointed him, that he must fear and, in the performance of his functions, obey.” 626 F. Supp., at 1401. The structure of the Constitution does not permit Congress to execute the laws; it follows that Congress cannot grant to an officer under its control what it does not possess.
Our decision in INS v. Chadha, 462 U. S. 919 (1983), supports this conclusion. In Chadha, we struck down a one-House “legislative veto” provision by which each House of Congress retained the power to reverse a decision Congress had expressly authorized the Attorney General to make:
“Disagreement with the Attorney General’s decision on Chadha’s deportation — that is, Congress’ decision to deport Chadha — no less than Congress’ original choice to delegate to the Attorney General the authority to make that decision, involves determinations of policy that Congress can implement in only one way; bicameral passage followed by presentment to the President. Congress must abide by its delegation of authority until that delegation is legislatively altered or revoked.” Id., at 964-955.
To permit an officer controlled by Congress to execute the laws would be, in essence, to permit a congressional veto. Congress could simply remove, or threaten to remove, an officer for executing the laws in any fashion found to be unsatisfactory to Congress. This kind of congressional control over the execution of the laws, Chadha makes clear, is constitutionally impermissible.
The dangers of congressional usurpation of Executive Branch functions have long been recognized. “[T]he debates of the Constitutional Convention, and the Federalist Papers, are replete with expressions of fear that the Legislative Branch of the National Government will aggrandize itself at the expense of the other two branches.” Buckley v. Valeo, 424 U. S. 1, 129 (1976). Indeed, we also have observed only recently that “[t]he hydraulic pressure inherent within each of the separate Branches to exceed the outer limits of its power, even to accomplish desirable objectives, must be resisted.” Chadha, supra, at 951. With these principles in mind, we turn to consideration of whether the Comptroller General is controlled by Congress.
I — I <J
Appellants urge that the Comptroller General performs his duties independently and is not subservient to Congress. We agree with the District Court that this contention does not bear close scrutiny.
The critical factor lies in the provisions of the statute defining the Comptroller General’s office relating to remov-ability. Although the Comptroller General is nominated by the President from a list of three individuals recommended by the Speaker of the House of Representatives and the President pro tempore of the Senate, see 31 U. S. C. § 703(a)(2), and confirmed by the Senate, he is removable only at the initiative of Congress. He may be removed not only by impeachment but also by joint resolution of Congress “at any time” resting on any one of the following bases:
“(i) permanent disability;
“(ii) inefficiency;
“(iii) neglect of duty;
“(iv) malfeasance; or
“(v) a felony or conduct involving moral turpitude.”
31 U. S. C. §703(e)(1)B.
This provision was included, as one Congressman explained in urging passage of the Act, because Congress “felt that [the Comptroller General] should be brought under the sole control of Congress, so that Congress at any moment when it found he was inefficient and was not carrying on the duties of his office as he should and as the Congress expected, could remove him without the long, tedious process of a trial by impeachment.” 61 Cong. Rec. 1081 (1921).
The removal provision was an important part of the legislative scheme, as a number of Congressmen recognized. Representative Hawley commented: “[H]e is our officer, in a measure, getting information for us.... If he does not do his work properly, we, as practically his employers, ought to be able to discharge him from his office.” 58 Cong. Rec. 7136 (1919). Representative Sisson observed that the removal provisions would give “[t]he Congress of the United States... absolute control of the man’s destiny in office.” 61 Cong. Rec. 987 (1921). The ultimate design was to “give the legislative branch of the Government control of the audit, not through the power of appointment, but through the power of removal.” 58 Cong. Rec. 7211 (1919) (Rep. Temple).
Justice White contends: “The statute does not permit anyone to remove the Comptroller at will; removal is permitted only for specified cause, with the existence of cause to be determined by Congress following a hearing. Any removal under the statute would presumably be subject to post-termination judicial review to ensure that a hearing had in fact been held and that the finding of cause for removal was not arbitrary.” Post, at 770. That observation by the dissenter rests on at least two arguable premises: (a) that the enumeration of certain specified causes of removal excludes the possibility of removal for other causes, cf. Shurtleff v. United States, 189 U. S. 311, 315-316 (1903); and (b) that any removal would be subject to judicial review, a position that appellants were unwilling to endorse.
Glossing over these difficulties, the dissent’s assessment of the statute fails to recognize the breadth of the grounds for removal. The statute permits removal for “inefficiency,” “neglect of duty,” or “malfeasance.” These terms are very broad and, as interpreted by Congress, could sustain removal of a Comptroller General for any number of actual or perceived transgressions of the legislative will. The Constitutional Convention chose to permit impeachment of executive officers only for “Treason, Bribery, or other high Crimes and Misdemeanors.” It rejected language that would have permitted impeachment for “maladministration,” with Madison arguing that “[s]o vague a term will be equivalent to a tenure during pleasure of the Senate.” 2 M. Farrand, Records of the Federal Convention of 1787, p. 550 (1911).
We need not decide whether “inefficiency” or “malfeasance” are terms as broad as “maladministration” in order to reject the dissent’s position that removing the Comptroller General requires “a feat of bipartisanship more difficult than that required to impeach and convict.” Post, at 771 (White, J., dissenting). Surely no one would seriously suggest that judicial independence would be strengthened by allowing removal of federal judges only by a joint resolution finding “inefficiency,” “neglect of duty,” or “malfeasance.”
Justice White, however, assures us that “[rjealistic consideration” of the “practical result of the removal provision,” post, at 774, 773, reveals that the Comptroller General is unlikely to be removed by Congress. The separated powers of our Government cannot be permitted to turn on judicial assessment of whether an officer exercising executive power is on good terms with Congress. The Framers recognized that, in the long term, structural protections against abuse of power were critical to preserving liberty. In constitutional terms, the removal powers over the Comptroller General’s office dictate that he will be subservient to Congress.
This much said, we must also add that the dissent is simply in error to suggest that the political realities reveal that the Comptroller General is free from influence by Congress. The Comptroller General heads the General Accounting Office (GAO), “an instrumentality of the United States Government independent of the executive departments,” 31 U. S. C. § 702(a), which was created by Congress in 1921 as part of the Budget and Accounting Act of 1921, 42 Stat. 23. Congress created the office because it believed that it “needed an officer, responsible to it alone, to check upon the application of public funds in accordance with appropriations.” H. Mansfield, The Comptroller General: A Study in the Law and Practice of Financial Administration 65 (1939).
It is clear that Congress has consistently viewed the Comptroller General as an officer of the Legislative Branch. The Reorganization Acts of 1945 and 1949, for example, both stated that the Comptroller General and the GAO are “a part of the legislative branch of the Government.” 59 Stat. 616; 63 Stat. 205. Similarly, in the Accounting and Auditing Act of 1950, Congress required the Comptroller General to conduct audits “as an agent of the Congress.” 64 Stat. 835.
Over the years, the Comptrollers General have also viewed themselves as part of the Legislative Branch. In one of the early Annual Reports of Comptroller General, the official seal of his office was described as reflecting
“the independence of judgment to be exercised by the General Accounting Office, subject to the control of the legislative branch.... The combination represents an agency of the Congress independent of other authority auditing and checking the expenditures of the Government as required by law and subjecting any questions arising in that connection to quasi-judicial determination.” GAO Ann. Rep. 5-6 (1924).
Later, Comptroller General Warren, who had been a Member of Congress for 15 years before being appointed Comptroller General, testified: “During most of my public life,... I have been a member of the legislative branch. Even now, although heading a great agency, it is an agency of the Congress, and I am an agent of the Congress.” To Provide for Reorganizing of Agencies of the Government: Hearings on H. R. 3325 before the House Committee on Expenditures, 79th Cong., 1st Sess., 69 (1945) (emphasis added). And, in one conflict during Comptroller General McCarl’s tenure, he asserted his independence of the Executive Branch, stating:
“Congress... is... the only authority to which there lies an appeal from the decision of this office....
. I may not accept the opinion of any official, inclusive of the Attorney General, as controlling my duty under the law.” 2 Comp. Gen. 784, 786-787 (1923) (disregarding conclusion of the Attorney General, 33 Op. Atty. Gen. 476 (1923), with respect to interpretation of compensation statute).
Against this background, we see no escape from the conclusion that, because Congress has retained removal authority over the Comptroller General, he may not be entrusted with executive powers. The remaining question is whether the Comptroller General has been assigned such powers in the Balanced Budget and Emergency Deficit Control Act of 1985.
V
The primary responsibility of the Comptroller General under the instant Act is the preparation of a “report.” This report must contain detailed estimates of projected federal revenues and expenditures. The report must also specify the reductions, if any, necessary to reduce the deficit to the target for the appropriate fiscal year. The reductions must be set forth on a program-by-program basis.
In preparing the report, the Comptroller General is to have “due regard” for the estimates and reductions set forth in a joint report submitted to him by the Director of CBO and the Director of OMB, the President’s fiscal and budgetary adviser. However, the Act plainly contemplates that the Comptroller General will exercise his independent judgment and evaluation with respect to those estimates. The Act also provides that the Comptroller General’s report “shall explain fully any differences between the contents of such report and the report of the Directors.” § 251(b)(2).
Appellants suggest that the duties assigned to the Comptroller General in the Act are essentially ministerial and mechanical so that their performance does not constitute “execution of the law” in a meaningful sense. On the contrary, we view these functions as plainly entailing execution of the law in constitutional terms. Interpreting a law enacted by Congress to implement the legislative mandate is the very essence of “execution” of the law. Under §251, the Comptroller General must exercise judgment concerning facts that affect the application of the Act. He must also interpret the provisions of the Act to determine precisely what budgetary calculations are required. Decisions of that kind are typically made by officers charged with executing a statute.
The executive nature of the Comptroller General’s functions under the Act is revealed in § 252(a)(3) which gives the Comptroller General the ultimate authority to determine the budget cuts to be made. Indeed, the Comptroller General commands the President himself to carry out, without the slightest variation (with exceptions not relevant to the constitutional issues presented), the directive of the Comptroller General as to the budget reductions:
“The [Presidential] order must provide for reductions in the manner specified in section 251(a)(3), must incorporate the provisions of the [Comptroller General’s] report submitted under section 251(b), and must be consistent with such report in all respects. The President may not modify or recalculate any of the estimates, determinations, specifications, bases, amounts, or percentages set forth in the report submitted under section 251(b) in determining the reductions to be specified in the order with respect to programs, projects, and activities, or with respect to budget activities, within an account....” § 252(a)(3) (emphasis added).
See also § 251(d)(3)(A).
Congress of course initially determined the content of the Balanced Budget and Emergency Deficit Control Act; and undoubtedly the content of the Act determines the nature of the executive duty. However, as Chadha makes clear, once Congress makes its choice in enacting legislation, its participation ends. Congress can thereafter control the execution of its enactment only indirectly — by passing new legislation. Chadha, 462 U. S., at 968. By placing the responsibility for execution of the Balanced Budget and Emergency Deficit Control Act in the hands of an officer who is subject to removal only by itself, Congress in effect has retained control over the execution of the Act and has intruded into the executive function. The Constitution does not permit such intrusion.
VI
We now turn to the final issue of remedy. Appellants urge that rather than striking down § 251 and invalidating the significant power Congress vested in the Comptroller General to meet a national fiscal emergency, we should take the lesser course of nullifying the statutory provisions of the 1921 Act that authorizes Congress to remove the Comptroller General. At oral argument, counsel for the Comptroller General suggested that this might make the Comptroller General removable by the President. All appellants urge that Congress would prefer invalidation of the removal provisions rather than invalidation of § 261 of the Balanced Budget and Emergency Deficit Control Act.
Severance at this late date of the removal provisions enacted 65 years ago would significantly alter the Comptroller General’s office, possibly by making him subservient to the Executive Branch. Recasting the Comptroller General as an officer of the Executive Branch would accordingly alter the balance that Congress had in mind in drafting the Budget and Accounting Act of 1921 and the Balanced Budget and Emergency Deficit Control Act, to say nothing of the wide array of other tasks and duties Congress has assigned the Comptroller General in other statutes. Thus appellants’ argument would require this Court to undertake a weighing of the importance Congress attached to the removal provisions in the Budget and Accounting Act of 1921 as well as in other subsequent enactments against the importance it placed on the Balanced Budget and Emergency Deficit Control Act of 1985.
Fortunately this is a thicket we need not enter. The language of the Balanced Budget and Emergency Deficit Control Act itself settles the issue. In § 274(f), Congress has explicitly provided “fallback” provisions in the Act that take effect “[i]n the event... any of the reporting procedures described in section 251 are invalidated.” § 274(f)(1) (emphasis added). The fallback provisions are ‘“fully operative as a law/” Buckley v. Valeo, 424 U. S., at 108 (quoting Champlin Refining Co. v. Corporation Comm’n of Oklahoma, 286 U. S. 210, 234 (1932)). Assuming that appellants are correct in urging that this matter must be resolved on the basis of congressional intent, the intent appears to have been for § 274(f) to be given effect in this situation. Indeed, striking the removal provisions would lead to a statute that Congress would probably have refused to adopt. As the District Court concluded:
“[T]he grant of authority to the Comptroller General was a carefully considered protection against what the House conceived to be the pro-executive bias of the OMB. It is doubtful that the automatic deficit reduction process would have passed without such protection, and doubtful that the protection would have been considered present if the Comptroller General were not removable by Congress itself....” 626 F. Supp., at 1394.
Accordingly, rather than perform the type of creative and imaginative statutory surgery urged by appellants, our holding simply permits the fallback provisions to come into play.
VII
No one can doubt that Congress and the President are confronted with fiscal and economic problems of unprecedented magnitude, but “the fact that a given law or procedure is efficient, convenient, and useful in facilitating functions of government, standing alone, will not save it if it is contrary to the Constitution. Convenience and efficiency are not the primary objectives — or the hallmarks — of democratic government....” Chadha, supra, at 944.
We conclude that the District Court correctly held that the powers vested in the Comptroller General under § 251 violate the command of the Constitution that the Congress play no direct role in the execution of the laws. Accordingly, the judgment and order of the District Court are affirmed.
Our judgment is stayed for a period not to exceed 60 days to permit Congress to implement the fallback provisions.
It is so ordered.
In his signing statement, the President expressed his view that the Act was constitutionally defective because of the Comptroller General’s ability to exercise supervisory authority over the President. Statement on Signing H. J. Res. 372 Into Law, 21 Weekly Comp. of Pres. Doc. 1491 (1985).
An individual member of the Union was later added as a plaintiff. See 475 U. S. 1094 (1986).
The First Congress included 20 Members who had been delegates to the Philadelphia Convention:
IN THE SENATE
Richard Bassett (Delaware)
Pierce Butler (South Carolina)
Oliver Ellsworth (Connecticut)
William Few (Georgia)
William Samuel Johnson (Connecticut)
Rufus King (New York)
John Langdon (New Hampshire)
Robert Morris (Pennsylvania)
William Paterson (New Jersey)
George Read (Delaware)
Caleb Strong (Massachusetts)
IN THE HOUSE
Abraham Baldwin (Georgia)
Daniel Carroll (Maryland)
George Clymer (Pennsylvania)
Thomas FitzSimons (Pennsylvania)
Elbridge Gerry (Massachusetts)
Nicholas Gilman (New Hampshire)
James Madison (Virginia)
Roger Sherman (Connecticut)
Hugh Williamson (North Carolina)
Appellants therefore are wide of the mark in arguing that an affirmance in this case requires easting doubt on the status of “independent” agencies because no issues involving such agencies are presented here. The statutes establishing independent agencies typically specify either that the agency members are removable by the President for specified causes, see, e. g., 15 U. S. C. §41 (members of the Federal Trade Commission may be removed by the President “for inefficiency, neglect of duty, or malfeasance in office”), or else do not specify a removal procedure, see, e. g.,2 U. S. C. § 437c (Federal Election Commission). This case involves nothing like these statutes, but rather a statute that provides for direct congressional involvement over the decision to remove the Comptroller General. Appellants have referred us to no independent agency whose members are removable by the Congress for certain causes short of impeachable offenses, as is the Comptroller General, see Part IV, infra.
We reject appellants’ argument that consideration of the effect of a removal provision is not “ripe” until that provision is actually used. As the District Court concluded, “it is the Comptroller General’s presumed desire to avoid removal by pleasing Congress, which creates the here-and-now subservience to another branch that raises separation-of-powers problems.” Synar v. United States, 626 F. Supp. 1374, 1392 (DC 1986). The Impeachment Clause of the Constitution
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. Justice Minton
delivered the opinion of the Court.
On March 16, 1951, a one-count indictment was returned in the United States District Court for the District of Massachusetts against the appellees, Beacon Brass Company, a corporation, and Maurice Feinberg, its president and treasurer. The indictment charged that in violation of § 145 (b) of the Internal Revenue Code, 40 Stat. 1085, as amended, 26 U. S. C. § 145 (b), the appel-lees had willfully attempted to evade taxes by making false statements to Treasury representatives on October 24, 1945, “for the purpose of supporting, ratifying, confirming and concealing the fraudulent and incorrect statements and representations made in the corporate tax return of said Beacon Brass Co., Inc., for the fiscal period ending October 31, 1944, filed on or about January 5, 1945 . . . Section 145 (b) provides in pertinent part:
“[A]ny person who willfully attempts in any manner to evade or defeat any tax imposed by this chapter or the payment thereof, shall, in addition to other penalties provided by law, be guilty of a felony ... .” (Emphasis supplied.)
The six-year limitation period, 43 Stat. 341, 342, as amended, 26 U. S. C. § 3748 (a) (2), applicable to offenses under this statute, had expired on a charge for filing a false tax return in January 1945, but it had not expired on a charge of making false statements to Treasury employees in October 1945. The District Court viewed the indictment as charging the separate crimes of filing a false return and making subsequent false statements to Treasury representatives, and dismissed the indictment as duplicitous.
On September 14, 1951, a second indictment was returned against the appellees which repeated the charge that in violation of § 145 (b) they “did wilfully and knowingly attempt to defeat and evade a large part of the taxes due and owing by the said corporation ... by making certain false and fraudulent statements and representations, at a hearing and conference before representatives and employees of the United States Treasury Department, on or about October 24, 1945 . . . .” Reference to the allegedly false return filed in January 1945 was omitted, and instead it was charged that the false statements were made “for the purpose of concealing additional unreported net income . . .
Section 35 (A) of the Criminal Code, 18 U. S. C. (1946 ed.) § 80 (now 18 U. S. C. (Supp. V) § 1001) makes it unlawful to “knowingly and willfully . . . make . . . any false or fraudulent statements or representations . . . in any matter within the jurisdiction of any department or agency of the United States . . . .” Obviously, at the times of the indictments here, the three-year limitation period, 18 U. S. C. (Supp. V) § 3282, for violations of this statute had expired as to statements made in October 1945. The District Court concluded that since § 35 (A) deals specifically with false statements, Congress must be presumed to have intended that the making of false statements should be punishable only under § 35 (A). Therefore, the District Court dismissed the indictment on the ground that it failed to charge an offense under 26 U. S. C. § 145 (b). 106 F. Supp. 510. We noted probable jurisdiction of the United States' appeal taken under authority of 18 U. S. C. (Supp. V) § 3731.
We have before us two statutes, each of which proscribes conduct not covered by the other, but which overlap in a narrow area illustrated by the instant case. At least where different proof is required for each offense, a single act or transaction may violate more than one criminal statute. United States v. Noveck, 273 U. S. 202, 206; Gavieres v. United States, 220 U. S. 338. Unlike § 35 (A), § 145 (b) requires proof that the false statements were made in a willful effort to evade taxes. The purpose to evade taxes is crucial under this section. The language of § 145 (b) which outlaws willful attempts to evade taxes “in any manner” is clearly broad enough to include false statements made to Treasury representatives for the purpose of concealing unreported income. Cf. Spies v. United States, 317 U. S. 492, 499. The question raised by the decision below is whether by enacting a statute specifically outlawing all false statements in matters under the jurisdiction of agencies of the United States, Congress intended thereby to exclude the making of false statements from the scope of § 145 (b).
We do not believe that Congress intended to require the tax-enforcement authorities to deal differently with false statements than with other methods of tax evasion. By providing that the sanctions of § 145 (b) should be “in addition to other penalties provided by law,” Congress recognized that some methods of attempting to evade taxes would violate other statutes as well. See Taylor v. United States, 179 F. 2d 640, 644. Moreover, since no distinction is made in § 35 (A) between written and oral statements, the reasoning of the court below would be equally applicable to false tax returns which are, of course, false written statements. But the Courts of Appeals have uniformly applied § 145 (b) to attempts to evade taxes by filing false returns. E. g., Gaunt v. United States, 184 F. 2d 284, 288; Taylor v. United States, supra, at 643-644. Further support for our conclusion can be found in United States v. Noveck, supra, where this Court rejected the contention that the enactment of § 145 (b) impliedly repealed the general perjury statute insofar as that statute applied to false tax returns made under oath. Cf. United States v. Gilliland, 312 U. S. 86, 93, 95-96. Finally, the enactment of other statutes expressly outlawing false statements in particular contexts, e. g., 18 U. S. C. (Supp. V) §§ 1010, 1014, negates the assumption — which was the foundation of the decision of the court below — that Congress intended the making of false statements to be punishable only under § 35 (A).
The appellees contend that the acts charged constitute only one crime of tax evasion which was complete when the allegedly false tax return was filed. On the basis of this contention, appellees seek to sustain the decision below on the grounds that the six-year statute of limitations had run, and that the dismissal of the first indictment is res judicata and a bar to the second indictment for the same offense. We do not consider these questions because our jurisdiction on this appeal is limited to review of the District Court’s construction of the statute in the light of the facts alleged in the indictment. 18 U. S. C. (Supp. V) § 3731; United States v. Borden Co., 308 U. S. 188, 206-207.
The judgment of the District Court is reversed, and the cause is remanded for further proceedings not inconsistent with this opinion.
Reversed.
Mr. Justice Black is of the opinion that the District Court reached the right result and would affirm its judgment.
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.
Me. Justice Black
delivered the opinion of the Court.
Petitioner Nicholas Stiróne was indicted and convicted in a federal court for unlawfully interfering with interstate commerce in violation of the Hobbs Act. The crucial question here is whether he was convicted of an offense not charged in the indictment.
So far as relevant' to this question the indictment charged the following:
From 1951’ until 1953, a man by the name of William G. Rider had a contract to supply ready-mixed concrete from his plant in Pennsylvania to be used for the erection of a steel-processing plant at Allenport, Pennsylvania. For the purpose of performing this contract Rider
“caused supplies and materials [Sand] to move in interstate commerce between various points in the United States and the site of his plant for the manufacture or mixing of ready mixed concrete, and more particularly, from outside the State of Pennsylvania into the State of Pennsylvania.”
The indictment went on to charge that Stirone, using his influential union position,
“did . . . unlawfully obstruct, delay [and] affect interstate commerce between the several states of the United States and the movement of the aforesaid materials and supplies in such commerce, by extortion ... of $31,274.13 . . . induced by fear and by the wrongful use of threats of labor disputes and threats of the loss of, and obstruction and prevention of, performance of his contract to supply ready mixed concrete.”
The district judge, oyer, petitioner’s objection as to its materiality and relevancy, permitted the Government to offer evidence of an effect on interstate commerce not only in sand brought into Pennsylvania from other States but also in-steel shipments from the steel plant in Pennsylvania into Michigan and Kentucky. Again over petitioner’s objection the trial judge charged the jury that so far as the interstate commerce aspect of the case was concerned, Stirone’s guilt could be rested either on a finding that (1) sand used to make the concrete “had been shipped from another state into Pennsylvania” or (2) “Mr. Rider’s concrete, was used for constructing a mill which would manufacture articles of steel to be shipped in interstate commerce . . .” from Pennsylvania into other States. On motion of petitioner for arrest of judgment, acquittal or new trial, the District Court held that “A sufficient foundation for introduction of both kinds of proof was. laid in the indictment.” 168 F. Supp. 490, 495. The Court of Appeals affirmed, all the judges agreeing that interference with the sand- movements into Pennsylvania was barred by the Hobbs Act. 262 F. 2d 571. Judge Hastie and Chief Judge Biggs disagreed with , the court’s holding that Stirone, could be tried and convicted for interference with the possible, future shipments of steel from Pennsylvania to Michigan and Kentucky. 262 F. 2d, at 578, 580. They were of opinion that no interference with interstate steel shipments was charged in the indictment and that in any event it is an unreasonable extension of the Act to make a federal offense out of extortion from a man merely because he is supplying concrete to build a mill which after construction will produce steel, a part of which may, if processed, move in interstate commerce.
We agree with the Court of Appeals that Rider’s dependence on shipments of sand from outside Pennsylvania to carry on his ready-mixed concrete business entitled him to the Hobbs Act’s protection against'interruption or stoppage of his commerce in sand by extortion of the kind that the jury found the petitioner had committed here. That Act speaks in broad language, manifesting a purpose to use all the constitutional power Congress has to punish interference with interstate commerce by extortion, robbery or physical' violence. The Act outlaws such interference “in any way or degree.” 18 U. S. C. § 1951 (a). Had Rider’s business been hindered or destroyed, interstate movements of sand to him would have slackened or stopped. The trial jury was entitled to find that- commerce was saved from such a blockage by Rider’s compliance with Stirone’s coercive and illegal demands. It was to free commerce from such destructive burdens that the Hobbs Act was passed. United States v. Green, 350 U. S. 415, 420.
Whether prospective steel shipments from the new steel mills would bé enough, alone, to bring this transaction under the Act is a more difficult question. We need not decide this, however, since we agree with the dissenting judges in the Court of Appeals that it was error to submit that question to the jury and that the error cannot be dismissed as merely an insignificant-variance between allegation and proof and thus harmless error as in Berger v. United States, 295 U. S. 78. The crime charged here is a felony and the Fifth Amendment'requires that prosecution be begun by indictment.
Ever since Ex parte Bain, 121 U. S. 1, was decided in 1887 it has been the rule that after an indictment-has been returned its charges may not be broadened through amendment except by the grand jury itself. In that case, the court ordered that some specific and relevant allegations the grand jury had charged be stricken from the indictment só that Bain might be convicted without proof of those particular allegations. In holding that this could not be doné, Mr. Justice Miller, speaking for the Court, said:
“If it lies within the province of a court to change the charging part of an indictment to suit its own notions of what it ought to have been, or what the grand jury would probably have made it if their attention had been called to suggested changes, the great importance which the common law attaches to an indictment by a grand jury, as a prerequisite to a prisoner’s trial for a crime, and without which the Constitution says 'no person shall be held to answer,’ may be frittered away until its value is almost destroyed.” 121 U. S. 1, 10.
The Court went on to hold in Bain:
“that after the indictment was changed it-was no longer the indictment of the grand jury who presented it. Any other doctrine would place the rights of the citizen, which were intended to be protected by the constitutional provision, at the mercy or control of the court or prosecuting attorney . . . .” 121 U. S. 1, 13.
The Bain case, which has never been disapproved, stands for the rule that a court cannot permit a defendant to be tried on charges that are not made in the indictment against him. See also United States v. Norris, 281 U. S. 619, 622. Cf. Clyatt v. United States, 197 U. S. 207, 219, 220. Yet the court did permit that in this case. The indictment here cannot fairly be read as charging interference with movements of steel from Pennsylvania to other States nor does the Court of Appeals appear to have so-read it. The grand jury which found this indictment was satisfied to charge that Stirone’s conduct interfered with interstate importation of sand. But neither,this nor any other court can know that the grand jury would have been willing to charge that Stirone’s conduct would interfere with interstate exportation of steel from a mill later to be built with Rider’s concrete. And it cannot be said with certainty that with a new basis for conviction added, Stirone was convicted solely on the charge made in the indictment the grand jury returned. Although the trial court did not'permit a formal amendment of the indictment, the.effect' of what it did was the same. And the addition charging interference with steel exports here is neither trivial, useless, nor innocuous. Compare Ford v. United States, 273 U. S. 593, 602; Goto v. Lane, 265 U. S. 393, 402. While there was a variance in the sense of a variation between pleading and proof, that variation here destroyed the defendant’s substantial right to be tried only on charges presented in an indictment returned by a grand jury. Deprivation of such a basic right is far too serious to be treated as nothing more than a variance and then dismissed as harmless error. Compare Berger v. United States, 295 U. S. 78. The very purpose of the requirement that a man be indicted by grand jury is to limit his jeopardy to offenses charged by a group of his fellow citizens acting independently of. either prosecuting attorney or judge. Thus the basic, protection the grand jury was designed to afford is defeated by a device or method which subjects the defendant to prosecution for interference with interstate commerce which the grand jury did not charge.
Here, as the trial court, charged the jury, there are two essential elements of a Hobbs Act crime: interference with commerce, and extortion. Both elements have to be-charged. Neither is surplusage and neither can be treated as surplusage. The charge that interstate commerce is affected is critical since the Federal Government’s jurisr-diction of this crime rests only on that interference. It follows that when only one particular kind of commerce is charged to have been burdened a conviction must rest on that charge and not another, even though it be assumed that under an indictment drawn in general terms a conviction might rest upon a showing that commerce of one kind or another had been burdened. The right to have the grand jury make the charge on its own judgment is a substantial right'which cannot be taken away with or without court amendment. Here, as in the Bain case, we cannot know whether the grand jury would have included in its indictment a charge that commerce in steel from a nonexistent steel mill had been interfered with. Yet because of the court’s admission of evidence and under its charge this might have been the basis upon which the trial jury convicted petitioher. If so, he was convicted on a charge the grand jury never made against him. This was fatal error. Cf. Cole v. Arkansas, 333 U. S. 196: De Jonge v. Oregon, 299 U. S. 353.
Reversed.
62 Stat. 793, 18 U. S. C. § 1951.
“(a) Whoever in any way or degree obstructs; delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion or attempts or conspires so to do, or commits or threatens physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section shall be fined not more than $10,000 or imprisoned not more than twenty years, or both.
“ (b) As used in this section—
“ (2)' The term ‘extortion’ means the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right."
Bain was indicted for making a false statement “with intent to deceive the Comptroller of the Currency and the agent appointed to examine the affairs of said association ...” After sustaining demurrers of Bain to the indictment, the trial court went on to say that “thereupon, on motion of the United States, by counsel, the court orders that the indictment be amended by striking out the words 'the Comptroller of the Currency and’ therein contained.” By this amendment it was intended to permit conviction of Bain without proof that he had deceived the Comptroller as the grand jury had-charged.
“Yet the institution [the grand jury] was adopted in this country, and is continued from considerations similar to those which give to it its chief value in England, and is designed as a means, not only of. bringing to trial persons accused of public offences upon just grounds, but also as a means of protecting the citizen against unfounded accusation, whether it comes from government, or be prompted by partisan passion or private enmity. No person shall be required, according to the' fundamental law of the country, except in the cases mentioned, to answer for any of the higher crimes unless this body, consisting of not less than sixteen nor more than twenty-three good and lawful men, selected from the body of the district, shall declare, upon careful deliberation, under the solemnity of an oath, that there is good reason for his accusation and trial.” Ex parte Bain, 121 U. S. 1, 11. See also Costello v. United States, 360 U. S. 359, 362, 363, n. 6.
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.
Petitioner, Bennie Brooks, was convicted of participating in a riot in the Florida prison where he was an inmate and was sentenced to a term of nine years and eight months to run consecutively with the sentence he was already serving. His conviction was affirmed without opinion by the Florida District Court of Appeal, First District, and his petition for writ of certiorari filed in the Florida Supreme Court was dismissed, also without opinión.
The disturbance in the prison occurred on May 27, 1965. The same day Brooks was ordered confined in a punishment cell for 35 days with two other prisoners also accused of the rioting. Brooks says the cell was 7 feet long and 6% feet wide; a witness for the State testified it was 6 feet longer. This minor difference aside, the parties agree that the punishment cell had no external window, that it contained no bed or other furnishings or facilities except a hole flush with the floor which served as a commode, and that during the first 14 days he lived in this cell Brooks’ only contact with the outside was an unspecified number of interviews with the prison’s investigating officer. It is also agreed that while so confined Brooks was fed a “restricted diet” consisting, according to the testimony of the investigating officer, of “peas and carrots in a soup form” three times daily. Brooks’ more detailed description of this concoction— “they fed us four ounces of soup three times a day and eight ounces of water” — was not controverted, nor was his testimony that he was stripped naked before being thrown into the cell. On the 15th day of confinement under these conditions, Brooks was taken from the punishment cell and again brought directly to the investigating officer. This time, shortly after questioning began, Brooks confessed and dictated his statement into a tape recorder. The recording was introduced at trial. Brooks says that he was brutally beaten by one officer while the other was taking his statement. However, we do not consider this claim because the officer denied it and the judge disbelieved Brooks’ testimony. The judge also concluded that the confession was voluntary. We disagree.
Putting to one side quibbles over the dimensions of the windowless sweatbox into which Brooks was thrown naked with two other men, we cannot accept his statement as the voluntary expression of an uncoerced will. For two weeks this man’s home was a barren cage fitted only with a hole in one corner into which he and his cell mates could defecate. For two weeks he subsisted on a daily fare of 12 ounces of thin soup and eight ounces of water. For two full weeks he saw not one friendly face from outside the prison, but was completely under the control and domination of his jailers. These stark facts belie any contention that the confession extracted from him within minutes after he was brought from the cell was not tainted by the 14 days he spent in such an oppressive hole. In a long line of cases beginning with Brown v. Mississippi, 297 U. S. 278 (1936), and reaffirmed last Term in Clewis v. Texas, 386 U. S. 707 (1967), we have held that the Constitution does not permit prosecu-torial use of an involuntary confession. We have also asserted repeatedly that, in adjudicating the question of voluntariness, “we cannot escape the responsibility of making our own examination of the record.” Spano v. New York, 360 U. S. 315, 316 (1959). See Haynes v. Washington, 373 U. S. 503, 515 (1963); Chambers v. Florida, 309 U. S. 227, 228-229 (1940). The record in this case documents a shocking display of barbarism which should not escape the remedial action of this Court. Accordingly, we reverse the judgment below.
The motion for leave to proceed in forma pauperis and the petition for writ of certiorari are granted. The judgment of the Florida District Court of Appeal, First District, must be and hereby is
Reversed.
Mr. Justice Black concurs in the result.
Because we hold that the use at trial of the involuntary confession requires reversal of petitioner’s conviction, we find it unnecessary to reach other issues raised by him. Thus, we express no views on petitioner’s contentions that (1) he was denied a fair trial because the residents of the rural county where venue was set were hostile toward inmates of the prison and (2) he was denied the effective assistance of counsel because his appointed attorney was forced to trial without an opportunity to prepare to represent petitioner and the 12 codefendants tried with him.
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.
In this appeal we review the decision of the three-judge District Court holding a Massachusetts loyalty oath unconstitutional.
The appellee, Richardson, was hired as a research sociologist by the Boston State Hospital. Appellant Cole is superintendent of the hospital. Soon after she entered on duty Mrs. Richardson was asked to subscribe to the oath required of all public employees in Massachusetts. The oath is as follows:
“I do solemnly swear (or affirm) that I will uphold and defend the Constitution of the United States of America and the Constitution of the Commonwealth of Massachusetts and that I will oppose the overthrow of the government of the United States of America or of this Commonwealth by force, violence or by any illegal or unconstitutional method.”
Mrs. Richardson informed the hospital’s personnel department that she could not take the oath as ordered because of her belief that it was in violation of the United States Constitution. Approximately 10 days later appellant Cole personally informed Mrs. Richardson that under state law she could not continue as an employee of the Boston State Hospital unless she subscribed to the oath. • Again she refused. On November 25, 1968, Mrs. Richardson’s employment was terminated and she was paid through that date.
In March 1969 Mrs. Richardson filed a complaint in the United States District Court for the District of Massachusetts. The complaint alleged the unconstitutionality of the statute, sought damages and an injunction against its continued enforcement, and prayed for the convocation of a three-judge court pursuant to 28 U. S. C. §§2281 and 2284.
A three-judge District Court held the oath statute unconstitutional and enjoined the appellants from applying the statute to prohibit Mrs. Richardson from working for Boston State Hospital. The District Court found the attack on the “uphold and defend” clause, the first part of the oath, foreclosed by Knight v. Board of Regents, 269 F. Supp. 339 (SDNY 1967), aff’d, 390 U. S. 36 (1968). But it found that the “oppose the overthrow” clause was “fatally vague and unspecific,” and therefore a violation of First Amendment rights. The court granted the requested injunction but denied the claim for damages.
Appeals were then brought to this Court under 28 U. S. C. § 1253. We remanded for consideration of whether the case was moot in light of a suggestion that Mrs. Richardson’s job had been filled in the interim. 397 U. S. 238 (1970). On remand, the District Court concluded that Mrs. Richardson’s position had not been filled and that the hospital stood ready to hire her for the continuing research project except for the problem of the oath. In an unreported opinion dated July 1, 1970, it concluded that the case was not moot and reinstated its earlier judgment. Appellants again appealed, and we noted probable jurisdiction. 403 U. S. 917 (1971).
We conclude that the Massachusetts oath is constitutionally permissible, and in light of the prolonged litigation of this case we set forth our reasoning at greater length than previously.
A review of the oath cases in this Court will put the instant oath into context. We have made clear that neither federal nor state government may condition employment on taking oaths that impinge on rights guaranteed by the First and Fourteenth Amendments respectively, as for example those relating to political beliefs. Law Students Research Council v. Wadmond, 401 U. S. 154 (1971); Baird v. State Bar of Arizona, 401 U. S. 1 (1971); Connell v. Higginbotham, 403 U. S. 207, 209 (1971) (Marshall, J., concurring in result). Nor may employment' be conditioned on an oath that one has not engaged, or will not engage, in protected speech activities such as the following: criticizing institutions of government; discussing political doctrine that approves the overthrow of certain forms of government; and supporting candidates for political office. Keyishian v. Board of Regents, 385 U. S. 589 (1967); Baggett v. Bullitt, 377 U. S. 360 (1964); Cramp v. Board of Public Instruction, 368 U. S. 278 (1961). Employment may not be conditioned on an oath denying past, or abjuring future, associational activities within constitutional protection; such protected activities include membership in organizations having illegal purposes unless one knows of the purpose and shares a specific intent to promote the illegal purpose. Whitehill v. Elkins, 389 U. S. 54 (1967); Keyishian v. Board of Regents, supra; Elfbrandt v. Russell, 384 U. S. 11 (1966); Wieman v. Updegraff, 344 U. S. 183 (1952). Thus, last Term in Wadmond the Court sustained inquiry into a bar applicant’s associational activities only because it was narrowly confined to organizations that the individual had known to have the purpose of violent overthrow of the government and whose purpose the individual shared. And, finally, an oath may not be so vague that “ ‘men of common intelligence must necessarily guess at its meaning and differ as to its application, [because such an oath] violates the first essential of due process of law.’ ” Cramp v. Board of Public Instruction, 368 U. S., at 287. Concern for vagueness in the oath cases has been especially great because uncertainty as to an oath’s meaning may deter individuals from engaging in constitutionally protected activity conceivably within the scope of the oath.
An underlying, seldom articulated concern running throughout these cases is that the oaths under consideration often required individuals to reach back into their past to recall minor, sometimes innocent, activities. They put the government into “the censorial business of investigating, scrutinizing, interpreting, and then penalizing or approving the political viewpoints” and past activities of individuals. Law Students Research Council v. Wadmond, 401 U. S., at 192 (Marshall, J., dissenting).
Several cases recently decided by the Court stand out among our oath cases because they have upheld the constitutionality of oaths, addressed to the future, promising constitutional support in broad terms. These cases have begun with a recognition that the Constitution itself prescribes comparable oaths in two articles. Article II, § 1, cl. 8, provides that the President shall swear that he will “faithfully execute the Office . . . and will to the best of [his] Ability, preserve, protect and defend the Constitution of the United States.” Article VI, cl. 3, provides that all state and federal officers shall be bound by an oath “to support this Constitution.” The oath taken by attorneys as a condition of admission to the Bar of this Court identically provides in part “that I will support the Constitution of the United States”; it also requires the attorney to state that he will “conduct [himself] uprightly, and according to law.”
Bond v. Floyd, 385 U. S. 116 (1966), involved Georgia’s statutory requirement that state legislators swear to “support the Constitution of this State and of the United States,” a paraphrase of the constitutionally required oath. The Court there implicitly concluded that the First Amendment did not undercut the validity of the constitutional oath provisions. Although in theory the First Amendment might have invalidated those provisions, approval of the amendment by the same individuals who had included the oaths in the Constitution suggested strongly that they were consistent. The Court’s recognition of this consistency did not involve a departure from its many decisions striking down oaths that infringed First and Fourteenth Amendment rights. The Court read the Georgia oath as calling simply for an acknowledgment of a willingness to abide by “constitutional processes of government.” 385 U. S., at 135. Accord, Knight v. Board of Regents, 390 U. S. 36 (1968) (without opinion). Although disagreeing on other points, in Wadmond, supra, all members of the Court agreed on this point. Mr. Justice Marshall noted there, while dissenting as to other points,
“The oath of constitutional support requires an individual assuming public responsibilities to affirm . . . that he will endeavor to perform his public duties lawfully.” 401 U. S., at 192.
The Court has further made clear that an oath need not parrot the exact language of the constitutional oaths to be constitutionally proper. Thus in Ohlson v. Phillips, 397 U. S. 317 (1970), we sustained the constitutionality of a state requirement that teachers swear to “uphold” the Constitution. The District Court had concluded that the oath was simply a “ 'recognition that ours is a government of laws and not of men,’ ” and that the oath involved an affirmation of “organic law” and rejection of “the use of force to overthrow the government.” Ohlson v. Phillips, 304 F. Supp. 1152 (Colo. 1969).
The District Court in the instant case properly recognized that the first clause of the Massachusetts oath, in which the individual swears to “uphold and defend” the Constitutions of the United States and the Commonwealth, is indistinguishable from the oaths this Court has recently approved. Yet the District Court applied a highly literalistic approach to the second clause to strike it down. We view the second clause of the oath as essentially the same as the first.
The second clause of the oath contains a promise to “oppose the overthrow of the government of the United States of America or of this Commonwealth by force, violence or by any illegal or unconstitutional method.” The District Court sought to give a dictionary meaning to this language and found “oppose” to raise the specter of vague, undefinable responsibilities actively to combat a potential overthrow of the government. That reading of the oath understandably troubled the court because of what it saw as vagueness in terms of what threats would constitute sufficient danger of overthrow to require the oath giver to actively oppose overthrow, and exactly what actions he would have to take in that respect. Cf. Ohlson v. Phillips, 304 F. Supp., at 1154 and n. 4.
But such a literal approach to the second clause is inconsistent with the Court’s approach to the “support” oaths. One could make a literal argument that “support” involves nebulous, undefined responsibilities for action in some hypothetical situations. As Mr. Justice Harlan noted in his opinion concurring in the result on our earlier consideration of this case,
“[A]lmost any word or phrase may be rendered vague and ambiguous by dissection with a semantic scalpel. . . . [But such an approach] amounts to little more than verbal calisthenics. Cf. S. Chase, The Tyranny of Words (1959); W. Empson, Seven Types of Ambiguity (1955).” Cole v. Richardson, 397 U. S. 238, 240 (1970).
We have rejected such rigidly literal notions and recognized that the purpose leading legislatures to enact such oaths, just as the purpose leading the Framers of our Constitution to include the two explicit constitutional oaths, was not to create specific responsibilities but to assure that those in positions of public trust were willing to commit themselves to live by the constitutional processes of our system, as Mr. Justice Marshall suggested in Wadmond, 401 U. S., at 192. Here the second clause does not require specific action in some hypothetical or actual situation. Plainly “force, violence or . . . any illegal or unconstitutional method” modifies “overthrow” and does not commit the oath taker to meet force with force. Just as the connotatively active word “support” has been interpreted to mean simply a commitment to abide by our constitutional system, the second clause of this oath is merely oriented to the negative implication of this notion; it is a commitment not to use illegal and constitutionally unprotected force to change the constitutional system. The second clause does not expand the obligation of the first; it simply makes clear the application of the first clause to a particular issue. Such repetition, whether for emphasis or cadence, seems to be the wont of authors of oaths. That the second clause may be redundant is no ground to strike it down ; we are not charged with correcting grammar but with enforcing a constitution.
The purpose of the oath is clear on its face. We cannot presume that the Massachusetts Legislature intended by its use of such general terms as “uphold,” “defend,” and “oppose” to impose obligations of specific, positive action on oath takers. Any such construction would raise serious questions whether the oath was so vague as to amount to a denial of due process. Connolly v. General Construction Co., 269 U. S. 385 (1926); Cramp v. Board of Public Instruction, 368 U. S., at 287.
Nor is the oath as interpreted void for vagueness. As Mr. Justice Harlan pointed out in his opinion on our earlier consideration of this case, the oath is “no more than an amenity.” 397 U. S., at 240. It is punishable only by a prosecution for perjury and, since perjury is a knowing and willful falsehood, the constitutional vice of punishment without .fair warning cannot occur here. See American Communications Assn. v. Douds, 339 U. S. 382, 413 (1950). Nor here is there any problem of the punishment inflicted by mere prosecution. See Cramp v. Board of Public Instruction, 368 U. S., at 284. There has been no prosecution under this statute since its 1948 enactment, and there is no indication that prosecutions have been planned or begun. The oath “triggered no serious possibility of prosecution” by the Commonwealth. Cole v. Richardson, 397 U. S., at 241. Were we confronted with a record of actual prosecutions or harassment through threatened prosecutions, we might be faced with a different question. Those who view the Massachusetts oath in terms of an endless “parade of horribles” would do well to bear in mind that many of the hazards of human existence that can be imagined are circumscribed by the classic observation of Mr. Justice Holmes, when confronted with the prophecy of dire consequences of certain judicial action, that it would not occur “while this Court sits.” Panhandle Oil Co. v. Knox, 277 U. S. 218, 223 (dissenting).
Appellee mounts an additional attack on the Massachusetts oath program in that it does not provide for a hearing prior to the determination not to hire the individual based on the refusal to subscribe to the oath. All of the cases in this Court that require a hearing before discharge for failure to take an oath involved impermissible oaths. In Slochower v. Board of Education, 350 U. S. 551 (1956) (not an oath case), the State sought to dismiss a professor for claiming the Fifth Amendment privilege in a United States Senate committee hearing; the Court held the State’s action invalid because the exercise of the privilege was a constitutional right from which the State could not draw any rational inference of disloyalty. Appellee relies on Nostrand v. Little, 362 U. S. 474 (1960), and Connell v. Higginbotham, 403 U. S. 207 (1971), but in those cases the Court held, only that the mere refusal to take the particular oath was not a constitutionally permissible basis for termination. In the circumstances of those cases, only by holding a hearing, showing evidence of disloyalty, and allowing the employee an opportunity to respond might the State develop a permissible basis for concluding that the employee was to be discharged.
Since there is no constitutionally protected right to overthrow a government by force, violence, or illegal or unconstitutional means, no constitutional right is infringed by an oath to abide by the constitutional system in the future. Therefore, there is no requirement that one who refuses to take the Massachusetts oath be granted a hearing for the determination of some other fact before being discharged.
The judgment of the District Court is reversed and the case is remanded for further proceedings consistent with this opinion.
Mr. Justice Powell and Mr. Justice Rehnquist took no part in the consideration or decision of this case.
The full text of the two relevant statutes is as follows:
Mass. Gen. Laws, c. 264, § 14. Oath or affirmation; form; filing; exemptions
“Every person entering the employ of the commonwealth or any political subdivision thereof, before entering upon the discharge of his duties, shall'take and subscribe to, under the pains and penalty of perjury, the following oath or affirmation:—
“ T do solemnly swear (or affirm) that I will uphold and defend the Constitution of the United States of America and the Constitution of the Commonwealth of Massachusetts and that I will oppose the overthrow of the government of the United States of America or of this Commonwealth by force, violence or by any illegal or unconstitutional method.’
"Such oath or affirmation shall be filed by the subscriber, if he shall be employed by the state, with the secretary of the commonwealth, if an employee of a county, with the county commissioners, and if an employe of a city or town, with the city clerk or the town clerk, as the case may be.
“The oath or affirmation prescribed by this section shall not be required of any person who is employed by the commonwealth or a political subdivision thereof as a physician or nurse in a hospital or other health care institution and is a citizen of a foreign country.”
C. 264, § 15. Violation of section 14; penalty
“Violation of section fourteen shall be punished by a fine of not more than ten thousand dollars or by imprisonment for not more than one year, or both.”
Richardson v. Cole, 300 F. Supp. 1321 (Mass. 1969).
The District Court interpreted Mass. Gen. Laws, c. 264, § 15, which punishes a "[violation of section fourteen,” see n. 1, supra, as “presumably” punishing “a failure to ‘live up’ to the oath.” We see no basis for this interpretation. The clear purpose of § 15 is to punish the failure to comply with the directive aspects of § 14, which requires that every person entering the employ of the Commonwealth subscribe to the oath and file it with a certain state employee. Section 14, which includes the oath, says that it is taken upon the penalty of perjury but mentions nothing about a continuing criminal responsibility to “live up” to it.
The time may come when the value of oaths in routine public employment will be thought not “worth the candle” for all the division of opinion they engender. However, while oaths are required by legislative acts it is not our function to evaluate their wisdom or utility but only to decide whether they offend the Constitution.
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.
Justice Kennedy
delivered the opinion of the Court.
If the parties consent, federal magistrate judges may preside over the voir dire and selection of prospective jurors in a felony criminal trial. Peretz v. United States, 501 U. S. 923, 933 (1991). This case presents the question whether it suffices for counsel alone to consent to the magistrate judge’s role in presiding over voir dire and jury selection or whether the defendant must give his or her own consent.
Homero Gonzalez was charged in the United States District Court for the Southern District of Texas on five felony-drug offense counts. He is the petitioner here. At the outset of jury selection, the parties appeared before a Magistrate Judge. The Magistrate Judge asked the attorneys to approach the bench. After they complied, the Magistrate Judge said: “I need to ask the parties at this time if they are going to consent to having the United States Magistrate Judge proceed in assisting in the jury selection of this case.” App. 16. Petitioner’s counsel responded: “Yes, your Honor, we are.” Ibid. The Magistrate Judge asked if petitioner was present and if he needed an interpreter. Petitioner’s counsel answered yes to both questions. Petitioner was not asked if he consented to the Magistrate Judge’s presiding. The record does not permit us to infer this or even to infer that petitioner knew there was a right to be waived. The Magistrate Judge then supervised voir dire and jury selection. Petitioner made no objections to the Magistrate Judge’s rulings or her conduct of the proceedings. A District Judge presided at the ensuing jury trial, and the jury returned a verdict of guilty on all counts.
Petitioner appealed, contending, for the first time, that it was error not to obtain his own consent to the Magistrate Judge’s presiding at voir dire. The United States Court of Appeals for the Fifth Circuit affirmed the convictions. The court concluded petitioner could not show the error was plain and, furthermore, there was no error at all. It held the right to have an Article III judge preside over voir dire could be waived by petitioner’s counsel. 483 F. 3d 390, 394 (2007). The Courts of Appeals differ on this issue. Compare ibid, with United States v. Maragh, 174 F. 3d 1202,1206 (CA11 1999) (requiring personal and explicit consent from the defendant); see also United States v. Desir, 273 F. 3d 39, 44 (CA1 2001) (magistrate judge may conduct jury selection unless the defendant or his attorney registers an objection). We granted certiorari. 551 U. S. 1192 (2007). We agree that there was no error and hold that petitioner’s counsel had foil authority to consent to the Magistrate Judge’s role.
The Federal Magistrates Act, 28 U. S. C. § 631 et seq. (2000 ed. and Supp. V), permits district courts to assign designated functions to magistrate judges. For example, magistrate judges are authorized to: issue orders concerning release or detention of persons pending trial; take acknowledgments, affidavits, and depositions; and enter sentences for petty offenses. § 636(a) (2000 ed. and Supp. V). They also may hear and determine, when designated to do so, any pretrial matter pending before the district court, with the exception of certain specified motions. Magistrate judges may also conduct hearings and propose recommendations for those motions, applications for post-trial criminal relief, and conditions of confinement petitions. § 636(b)(1) (2000 ed.). If the parties consent, they may conduct misdemeanor criminal trials and civil trials. §§ 636(a)(3) and (c)(1).
The statutory provision of direct applicability in the present case is § 636(b)(3). It states: “A magistrate judge may be assigned such additional duties as are not inconsistent with the Constitution and laws of the United States.” The general, nonspecific terms of this paragraph, preceded by text that sets out permissible duties in more precise terms, constitute a residual or general category that must not be interpreted in terms so expansive that the paragraph overshadows all that goes before.
In two earlier cases the Court considered the question of magistrate judges presiding over the jury selection process in felony trials. In Gomez v. United States, 490 U. S. 858 (1989), the District Judge delegated the task of selecting a jury to a Federal Magistrate Judge. Defense counsel objected, but the objection was overruled. The Court noted that “[a] critical limitation on [the magistrate judge’s] expanded jurisdiction is consent,” id., at 870, and held that presiding, over an objection, at the preliminary selection phase of a jury trial in felony eases is not among the additional duties that a magistrate judge may assume, id., at 875-876.
In Peretz v. United States, 501 U. S. 923, the Court again considered whether a magistrate judge could preside over voir dire in a felony case. In that instance, however, defendant’s counsel, upon being asked by the District Court at a pretrial conference (with the defendant present) if there was any objection to having jury selection before a magistrate judge, responded, “T would love the opportunity.’” Id., at 925. Defense counsel later advised the Magistrate Judge that the defendant consented to the process. The Court clarified that in a felony trial neither the Act nor Article III forbids supervision of voir dire by a magistrate judge if both parties consent. Id., at 935-936.
Taken together, Gomez and Peretz mean that “the additional duties” the statute permits the magistrate judge to undertake include presiding at voir dire and jury selection provided there is consent but not if there is an objection. We now consider whether the consent can be given by counsel acting on behalf of the client but without the client’s own express consent.
At first reading it might seem that our holding here is dictated by the holding in Peretz. In Peretz, it would appear the accused was aware of the colloquy between the District Judge and defense counsel and the formal waiver before the Magistrate Judge. On this premise Peretz might be read narrowly to hold that a defendant may signal consent by failing to object; and indeed, petitioner here seeks to distinguish Peretz on this ground. Brief for Petitioner 41-42. We decide this case, however, on the assumption that the defendant did not hear, or did not understand, the waiver discussions. This addresses what, at least in petitioner’s view, Peretz did not. It should be noted that we do not have before us an instance where a defendant instructs the lawyer or advises the court in an explicit, timely way that he or she demands that a district judge preside in this preliminary phase.
There are instances in federal criminal proceedings where the procedural requisites for consent are specified and a right cannot be waived except with a defendant’s own informed consent. Under Federal Rule of Criminal Procedure 11(b), for example, the district court is required, as a precondition to acceptance of a guilty plea, to inform the defendant in person of the specified rights he or she may claim in a full criminal trial and then verify that the plea is voluntary by addressing the defendant. The requirement is satisfied by a colloquy between judge and defendant, reviewing all of the rights listed in Rule 11.
Statutes may also address this subject. Under 18 U. S. C. § 3401(b), for example, a magistrate judge may preside over the whole trial and sentencing in a misdemeanor case but only with the express, personal consent of the defendant. The provision requires that the magistrate judge
“carefully explain to the defendant that he has a right to trial, judgment, and sentencing by a district judge and that he may have a right to trial by jury before a district judge or magistrate judge. The magistrate judge may not proceed to try the case unless the defendant, after such explanation, expressly consents to be tried before the magistrate judge and expressly and specifically waives trial, judgment, and sentencing by a district judge. Any such consent and waiver shall be made in writing or orally on the record.”
The controlling statute in this case has a different design, however. Title 28 U. S. C. § 636(b)(3) does not state that consent to preside over felony voir dire must be granted by following a procedure of similar clarity. As a general matter, where there is a full trial there are various points in the pretrial and trial process when rights either can be asserted or waived; and there is support in our cases for concluding that some of these rights cannot be waived absent the defendant’s own consent. Whether the personal consent must be explicit and on the record or can be determined from a course of conduct may be another matter, but for now it suffices to note that we have acknowledged that some rights cannot be waived by the attorney alone. See New York v. Hill, 528 U. S. 110, 114-115 (2000).
Citing some of our precedents on point, the Court in Hill gave this capsule discussion:
“What suffices for waiver depends on the nature of the right at issue. ‘[Wjhether the defendant must participate personally in the waiver; whether certain procedures are required for waiver; and whether the defendant’s choice must be particularly informed or voluntary, all depend on the right at stake.’ United States v. Olano, 507 U. S. 725, 733 (1993). For certain fundamental rights, the defendant must personally make an informed waiver. See, e. g., Johnson v. Zerbst,. 304 U. S. 458, 464-465 (1938) (right to counsel); Brookhart v. Janis, 384 U. S. 1, 7-8 (1966) (right to plead not guilty). For other rights, however, waiver may be effected by action of counsel. ‘Although there are basic rights that the attorney cannot waive without the fully informed and publicly acknowledged consent of the client, the lawyer has — and must have — full authority to manage the conduct of the trial.’ Taylor v. Illinois, 484 U. S. 400, 417-418 (1988). As to many decisions pertaining to the conduct of the trial, the defendant is ‘deemed bound by the acts of his lawyer-agent and is considered to have “notice of all facts, notice of which can be charged upon the attorney.” ’ Link v. Wabash R. Co., 370 U. S. 626, 634 (1962) (quoting Smith v. Ayer, 101 U. S. 320, 326 (1880)). Thus, decisions by counsel are generally given effect as to what arguments to pursue, see Jones v. Barnes, 463 U. S. 745, 751 (1983), what evidentiary objections to raise, see Henry v. Mississippi, 379 U. S. 443, 451 (1965), and what agreements to conclude regarding the admission of evidence, see United States v. McGill, 11 F. 3d 223, 226-227 (CA1 1993). Absent a demonstration of ineffectiveness, counsel’s word on such matters is the last.” Ibid.
The issue in Hill was whether the attorney, acting without indication of particular consent from his client, could waive his client’s statutory right to a speedy trial pursuant to the Interstate Agreement on Detainers. The Court held that the attorney’s statement, without any showing of the client’s explicit consent, could waive the speedy trial right: “Scheduling matters are plainly among those for which agreement by counsel generally controls.” Id., at 115.
Giving the attorney control of trial management matters is a practical necessity. “The adversary process could not function effectively if every tactical decision required client approval.” Taylor v. Illinois, 484 U. S. 400, 418 (1988). The presentation of a criminal defense can be a mystifying process even for well-informed laypersons. This is one of the reasons for the right to counsel. See Powell v. Alabama, 287 U. S. 45, 68-69 (1932); ABA Standards for Criminal Justice, Defense Function 4-5.2, Commentary, p. 202 (3d ed. 1993) (“Many of the rights of an accused, including constitutional rights, are such that only trained experts can comprehend their full significance, and an explanation to any but the most sophisticated client would be futile”). Numerous choices affecting conduct of the trial, including the objections to make, the witnesses to call, and the arguments to advance, depend not only upon what is permissible under the rules of evidence and procedure but also upon tactical considerations of the moment and the larger strategic plan for the trial. These matters can be difficult to explain to a layperson; and to require in all instances that they be approved by the client could risk compromising the efficiencies and fairness that the trial process is designed to promote. In exercising professional judgment, moreover, the attorney draws upon the expertise and experience that members of the bar should bring to the trial process. In most instances the attorney will have a better understanding of the procedural choices than the client; or at least the law should so assume. See Jones v. Barnes, 463 U. S. 745, 751 (1983); see also Tollett v. Henderson, 411 U. S. 258, 267-268 (1973); cf. ABA Standards, supra, at 202 (“Every experienced advocate can recall the disconcerting experience of trying to conduct the examination of a witness or follow opposing arguments or the judge’s charge while the client ‘plucks at the attorney’s sleeve’ offering gratuitous suggestions”). To hold that every instance of waiver requires the personal consent of the client himself or herself would be impractical.
Similar to the scheduling matter in Hill, acceptance of a magistrate judge at the jury selection phase is a tactical decision that is well suited for the attorney’s own decision. Under Rule 24 of the Federal Rules of Criminal Procedure, the presiding judge has significant discretion over the structure of voir dire. The judge may ask questions of the jury pool or, as in this case, allow the attorneys for the parties to do so. Fed. Rule Crim. Proc. 24(a); App. 20. A magistrate judge’s or a district judge’s particular approach to voir dire both in substance — the questions asked — and in tone — formal or informal — may be relevant in light of the attorney’s own approach. The attorney may decide whether to accept the magistrate judge based in part on these factors. As with other tactical decisions, requiring personal, on-the-record approval from the client could necessitate a lengthy explanation the client might not understand at the moment and that might distract from more pressing matters as the attorney seeks to prepare the best defense. For these reasons we conclude that express consent by counsel suffices to permit a magistrate judge to preside over jury selection in a felony trial, pursuant to the authorization in § 636(b)(3).
Our holding is not inconsistent with reading other precedents to hold that some basic trial choices are so important that an attorney must seek the client’s consent in order to waive the right. See, e. g., Florida v. Nixon, 543 U. S. 175, 187 (2004) (identifying the choices “ ‘to plead guilty, waive a jury, testify in his or her own behalf, or take an appeal’ ” as examples (quoting Jones, supra, at 751)). Petitioner argues that the decision to have a magistrate judge rather than an Article III judge preside at jury selection is a fundamental choice, cf. Hill, 528 U. S., at 114, or, at least, raises a question of constitutional significance so that we should interpret the Act to require an explicit personal statement of consent before the magistrate judge can proceed with jury selection.
We conclude otherwise. Under the avoidance canon, “when ‘a statute is susceptible of two constructions, by one of which grave and doubtful constitutional questions arise and by the other of which such questions are avoided, our duty is to adopt the latter.’” Harris v. United States, 536 U. S. 545, 555 (2002) (quoting United States ex rel. Attorney General v. Delaware & Hudson Co., 213 U. S. 366, 408 (1909)). The canon, however, does not apply unless there are “serious concerns about the statute’s constitutionality.” Harris, supra, at 555; see also Reno v. Flores, 507 U. S. 292, 314, n. 9 (1993).
Those concerns are not present here. Petitioner concedes that a magistrate judge is capable of competent and impartial performance of the judicial tasks involved in jury examination and selection. Reply Brief for Petitioner 12-13; see also Peretz, 501 U. S., at 935 (“The Act evinces a congressional belief that magistrates are well qualified to handle matters of similar importance to jury selection”). The Act contains some features to ensure impartiality. See, e. g., 28 U. S. C. §§ 631(i) (establishing requirements for removal), 632 (limiting concurrent employment), 634(b) (providing salary protection during the term). And “ ‘the district judge — insulated by life tenure and irreducible salary — is waiting in the wings, fully able to correct errors.’” Peretz, supra, at 938 (quoting United States v. Raddatz, 447 U. S. 667, 686 (1980) (Blackmun, J., concurring)). Here petitioner made no objections to the rulings by the Magistrate Judge. Had objections been made, nothing in the record or the rules indicates that the District Judge could not have ruled on the issues, all with no delay or prejudice to any trial that had commenced. See Peretz, supra, at 935, n. 12, 939. These factors support our determination that consent of counsel suffices to allow a magistrate judge to supervise voir dire. This is not a case where the magistrate judge is asked to preside or make determinations after the trial has commenced and it is arguably difficult or disruptive for a district judge to review any objections that might have been made to the magistrate judge’s rulings.
Petitioner notes that Peretz considered supervision over entire civil and misdemeanor trials comparable to presiding over voir dire at a felony trial. 501 U. S., at 933. It follows, he argues, that § 636(b)(3) must require, as does 18 U. S. C. § 3401(b), express personal consent by the defendant before a magistrate judge may preside over voir dire. But it is not obvious that Congress would have thought these matters required the same form of consent. Aside from the fact that the statutory text is different, there are relevant differences between presiding over a full trial and presiding over voir dire. Were petitioner correct, one would think the Act would require at least the same form of consent to authorize a magistrate judge to preside over either a civil or a misdemeanor trial (which Peretz also deemed to be of comparable importance). Our interpretation of the Act indicates otherwise. Compare § 3401(b) with Roell v. Withrow, 538 U. S. 580, 590 (2003) (concluding that parties may authorize a full-time magistrate judge to preside over a civil trial via implied consent).
Petitioner argues that our view of the issue should be informed by Gomez’s conclusion that having a magistrate judge during jury selection without consent is structural error, not subject to harmless-error review. See 490 U. S., at 876. The exemption of certain errors from harmless-error review “recognizes that some errors necessarily render a trial fundamentally unfair.” Rose v. Clark, 478 U. S. 570, 577 (1986); see also id., at 577-578. In petitioner’s view, Gomez establishes that the issue in this case is of sufficient gravity or concern that personal consent must be required.
The Court held in Gomez that imposition of a magistrate judge over objection was structural error, violating the basic right to a trial conducted at all critical stages by a judicial officer with appropriate jurisdiction. 490 U. S., at 876. It does not follow, however, that this structural aspect requires an insistence on personal consent. Here, jurisdiction turns on consent; and for the reasons discussed above an attorney, acting on the client’s behalf, can make an informed decision to allow the magistrate judge to exercise the jurisdiction Congress permits.
Although a criminal defendant may demand that an Article III judge preside over the selection of a jury, the choice to do so reflects considerations more significant to the realm of the attorney than to the accused. Requiring the defendant to consent to a magistrate judge only by way of an on-the-record personal statement is not dictated by precedent and would burden the trial process, with little added protection for the defendant.
Pursuant to 28 U. S. C. § 636(b)(3) a magistrate judge may preside over jury examination and jury selection only if the parties, or the attorneys for the parties, consent. Consent from an attorney will suffice. We do not have before us, and we do not address, an instance where the attorney states consent but the party by express and timely objection seeks to override his or her counsel. We need not decide, moreover, if consent may be inferred from a failure by a party and his or her attorney to object to the presiding by a magistrate judge. These issues are not presented here.
The judgment of the Court of Appeals is affirmed.
R 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.
Justice Thomas
delivered the opinion of the Court.
The Bankruptcy Code provides a stamp-tax exemption for any asset transfer “under a plan confirmed under [Chapter 11]” of the Code. 11 U. S. C. § 1146(a) (2000 ed., Supp. V). Respondent Piccadilly Cafeterias, Inc., was granted an exemption for assets transferred after it had filed for bankruptcy but before its Chapter 11 plan was submitted to, and confirmed by, the Bankruptcy Court. Petitioner, the Florida Department of Revenue, seeks reversal of the decision of the Court of Appeals upholding the exemption for Piccadilly’s asset transfer. Because we hold that § 1146(a)’s stamp-tax exemption does not apply to transfers made before a plan is confirmed under Chapter 11, we reverse the judgment below.
I
Piccadilly was founded in 1944 and was one of the Nation’s most successful cafeteria chains until it began experiencing financial difficulties in the last decade. On October 29, 2003, Piccadilly declared bankruptcy under Chapter 11 of the Bankruptcy Code, § 1101 et seq. (2000 ed. and Supp. V), and requested court authorization to sell substantially all its assets outside the ordinary course of business pursuant to § 363(b)(1) (2000 ed., Supp. V). Piccadilly prepared to sell its assets as a going concern and sought an exemption from any stamp taxes on the eventual transfer under § 1146(a) of the Code. The Bankruptcy Court conducted an auction in which the winning bidder agreed to purchase Piccadilly’s assets for $80 million.
On January 26, 2004, as a precondition to the sale, Piccadilly entered into a global settlement agreement with committees of senior secured noteholders and unsecured creditors. The settlement agreement dictated the priority of distribution of the sale proceeds among Piccadilly’s creditors. On February 13, 2004, the Bankruptcy Court approved the proposed sale and settlement agreement. The court also ruled that the transfer of assets was exempt from stamp taxes under § 1146(a). The sale closed on March 16, 2004.
Piccadilly filed its initial Chapter 11 plan in the Bankruptcy Court on March 26, 2004, and filed an amended plan on July 31, 2004. The plan provided for distribution of the sale proceeds in a manner consistent with the settlement agreement. Before the Bankruptcy Court confirmed the plan, Florida filed an objection, seeking a declaration that the $39,200 in stamp taxes it had assessed on certain of Piccadilly’s transferred assets fell outside § 1146(a)’s exemption because the transfer had not been “under a plan confirmed” under Chapter 11. On October 21, 2004, the bankruptcy court confirmed the plan. On cross-motions for summary judgment on the stamp-tax issue, the Bankruptcy Court granted summary judgment in favor of Piccadilly, reasoning that the sale of substantially all Piccadilly’s assets was a transfer “ ‘under’ ” its confirmed plan because the sale was necessary to consummate the plan. App. D to Pet. for Cert. 40a-41a. The District Court upheld the decision on the ground that § 1146(a), in certain circumstances, affords a stamp-tax exemption even when a transfer occurs prior to confirmation. In re Piccadilly Cafeterias, Inc., 379 B. R. 215, 226 (SD Fla. 2006).
The Court of Appeals for the Eleventh Circuit affirmed, holding that “§ 1146[(a)]’s tax exemption may apply to those pre-confirmation transfers that are necessary to the consummation of a confirmed plan of reorganization, which, at the very least, requires that there be some nexus between the pre-confirmation transfer and the confirmed plan.” In re Piccadilly Cafeterias, Inc., 484 F. 3d 1299, 1304 (2007) (per curiam). Finding the statutory text ambiguous, the Court of Appeals concluded that § 1146(a) should be interpreted consistent with “the principle that a remedial statute such as the Bankruptcy Code should be liberally construed.” Ibid. The court further noted that its interpretation of § 1146(a) better accounted for “the practical realities of Chapter 11 reorganization cases” because a debtor may need to transfer assets to induce relevant parties to endorse the proposed confirmation of a plan. Ibid. The Court of Appeals acknowledged that its holding conflicted with the approach taken by the Courts of Appeals for the Third and Fourth Circuits, id., at 1302, which have held that § 1146(a) “does not apply to... transactions that occur prior to the confirmation of a plan under Chapter 11 of the Bankruptcy Code,” In re Hechinger Inv. Co. of Del., 335 F. 3d 243, 246 (CA3 2003); see also In re NVR, LP, 189 F. 3d 442, 458 (CA4 1999) (holding that § 1146(a) “applies] only to transfers under the Plan occurring after the date of confirmation”).
We granted certiorari, 552 U. S. 1074 (2007), to resolve the conflict among the Courts of Appeals as to whether § 1146(a) applies to preconfirmation transfers.
II
Section 1146(a), entitled “Special tax provisions,” provides: “The issuance, transfer, or exchange of a security, or the making or delivery of an instrument of transfer under a plan confirmed under section 1129 of this title, may not be taxed under any law imposing a stamp tax or similar tax.” (Emphasis added.) Florida asserts that § 1146(a) applies only to postconfirmation sales; Piccadilly contends that it extends to preconfirmation transfers as long as they are made in accordance with a plan that is eventually confirmed. Florida and Piccadilly base their competing readings of § 1146(a) on the provision’s text, on inferences drawn from other Code provisions, and on substantive canons of statutory construction. We consider each of their arguments in turn.
A
Florida contends that § 1146(a)’s text unambiguously limits stamp-tax exemptions to postconfirmation transfers made under the authority of a confirmed plan. It observes that the word “confirmed” modifies the word “plan” and is a past participle, i. e., “[a] verb form indicating past or completed action or time that is used as a verbal adjective in phrases such as baked beans and finished work.” American Heritage Dictionary 1287 (4th ed. 2000). Florida maintains that a past participle indicates past or completed action even when it is placed after the noun it modifies, as in “beans baked in the oven,” or “work finished after midnight.” Thus, it argues, the phrase “plan confirmed” denotes a “confirmed plan” — meaning one that has been confirmed in the past.
Florida further contends that the word “under” in “under a plan confirmed” should be read to mean “with the authorization of”, or “inferior or subordinate” to its referent, here the confirmed plan. See Ardestani v. INS, 502 U. S. 129, 135 (1991) (noting that a thing that is “ ‘under’ ” a statute is most naturally read as being “ ‘subject to’ ” or “ ‘governed by’ ” the statute). Florida points out that, in the other two appearances of “under” in § 1146(a), it clearly means “subject to.”' Invoking the textual canon that “‘identical words used in different parts of the same act are intended to have the same meaning,’” Commissioner v. Keystone Consol. Industries, Inc., 508 U. S. 152, 159 (1993), Florida asserts the term must also have its core meaning of “subject to” in the phrase “under a plan confirmed.” Florida thus reasons that to be eligible for § 1146(a)’s exemption, a transfer must be subject to a plan that has been confirmed subject to § 1129 (2000 ed. and Supp. V). Echoing the Fourth Circuit’s reasoning in NVR, supra, at 457, Florida concludes that a transfer made prior to the date of plan confirmation cannot be subject to, or under the authority of, something that did not exist at the time of the transfer — a confirmed plan.
Piccadilly counters that the statutory language does not unambiguously impose a temporal requirement. It contends that “plan confirmed” is not necessarily the equivalent of “confirmed plan,” and that had Congress intended the latter, it would have used that language, as it did in a related Code provision. See § 1142(b) (referring to “any instrument required to effect a transfer of property dealt with by a confirmed plan”). Piccadilly also argues that “under” is just as easily read to mean “in accordance with.” It observes that the variability of the term “under” is well documented, noting that the American Heritage Dictionary 1395 (1976) provides 15 definitions, including “[i]n view of,” “because of,” “by virtue of,” as well as “[s]ubject to the restraint... of.” See also Ardestani, supra, at 135 (recognizing that “[t]he word ‘under’ has many dictionary definitions and must draw its meaning from its context”). Although “under” appears several times in § 1146(a), Piccadilly maintains there is no reason why a term of such common usage and variable meaning must have the same meaning each time it is used, even in the same sentence. As an illustration, it points to § 302(a) of the Bankruptcy Code, which states, “The commencement of a joint case under a chapter of this title constitutes an order for relief under such chapter.” Piccadilly contends that this provision is best read as: “The commencement of a joint case subject to the provisions of a chapter of this title constitutes an order for relief in such chapter.” Piccadilly thus concludes that the statutory text — standing alone — is susceptible of more than one interpretation. See Hechinger, supra, at 253 (“[W]e cannot say that the language of [§ 1146(a)] rules out the possibility that ‘under a plan confirmed’ means ‘in agreement with a plan confirmed’ ”).
While both sides present credible interpretations of § 1146(a), Florida has the better one. To be sure, Congress could have used more precise language — i. e., “under a plan that has been confirmed” — and thus removed all ambiguity. But the two readings of the language that Congress chose are not equally plausible: Of the two, Florida’s is clearly the more natural. The interpretation advanced by Piccadilly and adopted by the Eleventh Circuit — that there must be “some nexus between the pre-confirmation transfer and the confirmed plan” for § 1146(a) to apply, 484 F. 3d, at 1304— places greater strain on the statutory text than the simpler construction advanced by Florida and adopted by the Third and Fourth Circuits.
Furthermore, Piccadilly’s emphasis on the distinction between “plan confirmed” and “confirmed plan” is unavailing because § 1146(a) specifies not only that a tax-exempt transfer be “under a plan,” but also that the plan in question be confirmed pursuant to § 1129. Congress’ placement of “plan confirmed” before “under section 1129” avoids the ambiguity that would have arisen had it used the term “confirmed plan,” which could easily be read to mean that the transfer must be “under section 1129” rather than under a plan that was itself confirmed under §1129.
Although we agree with Florida that the more natural reading of § 1146(a) is that the exemption applies only to postconfirmation transfers, ultimately we need not decide whether the statute is unambiguous on its face. Even assuming, arguendo, that the language of § 1146(a) is facially ambiguous, the ambiguity must be resolved in Florida’s favor. We reach this conclusion after considering the parties’ other arguments, to which we now turn.
B
Piccadilly insists that, whatever the degree of ambiguity on its face, § 1146(a) becomes even more ambiguous when read in context with other Bankruptcy Code provisions. Piccadilly asserts that if Congress had intended § 1146(a) to apply exclusively to transfers occurring after confirmation, it would have made its intent plain with an express temporal limitation similar to those appearing elsewhere in the Code. For example, §1127 governs modifications to a Chapter 11 plan, providing that the proponent of a plan may modify the plan “at any time before confirmation,” or, subject to certain restrictions, “at any time after confirmation of such plan.” §§ 1127(a)-(b). Similar examples abound. See, e. g., § 1104(a) (“[a]t any time after the commencement of the case but before confirmation of a plan... ”); § 1104(c) (“at any time before the confirmation of a plan... ”). Piccadilly emphasizes that, “where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” Russello v. United States, 464 U. S. 16, 23 (1983) (internal quotation marks omitted). Because Congress did not impose a clear and commonly used temporal limitation in § 1146(a), Piccadilly concludes that Congress did not intend one to exist. Piccadilly buttresses its conclusion by pointing out that § 1146(b)—the subsection immediately following § 1146(a)—includes an express temporal limitation. See § 1146(b) (2000 ed., Supp. V) (providing that a bankruptcy court may declare certain tax consequences after the date a government unit responds to a plan proponent’s request or “270 days after such request,” whichever is earlier). But Congress included no such limitation in subsection (a).
Piccadilly also relies on other Code provisions to bolster its argument that the term “under” preceding “a plan confirmed” in § 1146(a) should be read broadly — to mean “in accordance with” rather than the narrower “authorized by.” Apart from § 302, discussed above, Piccadilly adverts to §111, which states that an agency providing credit counseling to debtors is required to meet “the standards set forth under this section.” § 111(b)(4)(A) (2000 ed., Supp. V). Piccadilly argues that this language requires the agency to meet “the standards set forth in this section,” because reading the quoted language to mean “the standards set forth authorized by this section” would render the words “set forth” nonsensical. Piccadilly additionally refers to § 303(a), which provides that “[a]n involuntary case may be commenced only under chapter 7 or 11 of this title.” Again, Piccadilly asserts that this language means “an involuntary case may be commenced only in chapter 7 or 11 of this title.” It reasons that “under” in § 303(a) cannot mean “authorized by” because § 303(a) itself authorizes involuntary cases, and the provisions of Chapters 7 and 11 do not. Piccadilly makes a similar argument with respect to § 343, which provides that “[t]he debtor shall appear and submit to examination under oath at the meeting of creditors.” Reading “under” to mean “authorized by” would make little sense here. On the basis of these examples, Piccadilly concludes that the term “under” is ambiguous.
Finally, Piccadilly maintains that “under” in § 1146(a) should be construed broadly in light of § 365(g)(1) of the Bankruptcy Code, which provides that rejection of an executory contract or unexpired lease constitutes the equivalent of a prebankruptcy breach “if such contract or lease has not been assumed under this section or under a plan confirmed under chapter... 11.” In Hechinger, the Third Circuit concluded that substituting “authorized by” for “under” in § 1146(a) would be consistent with the use of the parallel language in § 365(g)(1). 335 F. 3d, at 254. Piccadilly attempts to refute Hechinger’s reading of § 365(g)(1), asserting that, because authorization for the assumption of a lease under a plan is described in § 1123(b)(2), which “circles back to section 365,” such authorization cannot be “subject to” or “authorized by” Chapter 11. Brief for Respondent 39 (emphasis deleted); see 11 U. S. C. § 1123(b)(2) (providing that “a plan may... subject to section 365 of this title, provide for the assumption, rejection, or assignment of any executory contract or unexpired lease of the debtor not previously rejected under such section”). The phrase “under a plan confirmed” in § 365(g)(1), contends Piccadilly, is thus best read to mean “in accordance with a plan confirmed” because a plan may provide for the assumption of an executory contract or unexpired lease but not — unlike § 365 — be the ultimate authority for that assumption. As a result, Piccadilly concludes that the identical language of § 1146(a) should have the same meaning.
Piccadilly supports this point with its assertion that, unlike sales, postconfirmation assumptions or rejections are not permitted under the Bankruptcy Code. See NLRB v. Bildisco & Bildisco, 465 U. S. 513, 529 (1984) (stating that in “a Chapter 11 reorganization, a debtor-in-possession has until a reorganization plan is confirmed to decide whether to accept or reject an executory contract”). Because, as Piccadilly contends, the phrase “under a plan confirmed under chapter... 11” in § 365(g)(1) cannot refer to assumptions or rejections occurring after confirmation, it would be anomalous to read the identical phrase in § 1146(a) to cover only postconfirmation transfers.
For its part, Florida argues that the statutory context of § 1146(a) supports its position that the stamp-tax exemption applies exclusively to postconfirmation transfers. It observes that the subchapter in which § 1146(a) appears is entitled, “POSTCONFIRMATION MATTERS.” Florida contends that, while not dispositive, the placement of a provision in a particular subchapter suggests that its terms should be interpreted consistent with that subchapter. See Davis v. Michigan Dept. of Treasury, 489 U. S. 803, 809 (1989) (“It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme”). In addition, Florida dismisses Piccadilly’s references to the temporal limitations in other Code provisions on the ground that it would have been superfluous for Congress to add any further limitations to §1146(a)’s already unambiguous temporal element.
Even on the assumption that the text of § 1146(a) is ambiguous, we are not persuaded by Piccadilly’s contextual arguments. As noted above, Congress could have used language that made § 1146(a)’s temporal element clear beyond question. Unlike § 1146(a), however, the temporal language examples quoted by Piccadilly are indispensable to the operative meaning of the provisions in which they appear. Piccadilly’s reliance on § 1127, for example, is misplaced because that section explicitly differentiates between preconfirmation modifications, see § 1127(a), and postconfirmation modifications, which are permissible “only if circumstances warrant” them, § 1127(b). It was unnecessary for Congress to include in § 1146(a) a phrase such as “at any time after confirmation of such plan” because the phrase “under a plan confirmed” is most naturally read to require that there be a confirmed plan at the time of the transfer.
Even if we were to adopt Piccadilly’s broad definition of “under,” its interpretation of the statute faces other obstacles. The asset transfer here can hardly be said to have been consummated “in accordance with” any confirmed plan because, as of the closing date, Piccadilly had not even submitted its plan to the Bankruptcy Court for confirmation. Piccadilly’s asset sale was thus not conducted “in accordance with” any plan confirmed under Chapter 11. Rather, it was conducted “in accordance with” the procedures set forth in Chapter 3 — specifically, § 363(b)(1). To read the statute as Piccadilly proposes would make § 1146(a)’s exemption turn on whether a debtor-in-possession’s actions are consistent with a legal instrument that does not exist — and indeed may not even be conceived of — at the time of the sale. Reading § 1146(a) in context with other relevant Code provisions, we find nothing justifying such a curious interpretation of what is a straightforward exemption.
Nor does anything in § 365(g)(1) recommend Piccadilly’s reading of § 1146(a). Section 365(g) generally allows a trustee to reject “an executory contract or unexpired lease of the debtor,” i. e., to reject a contract that is unfavorable to the estate, subject to court approval. As the text makes clear, such approval may occur either under “this section,” § 365(g)—i. e., “at any time before the confirmation of a plan,” § 365(d)(2)—or “under a plan confirmed under chapter 9,11,12, or 13,” § 365(g)(1). Piccadilly relies heavily on Bildisco, supra, in which this Court held that §365 permits a debtor-in-possession to reject a collective-bargaining agreement like any other executory contract, and that doing so is not an unfair labor practice under the National Labor Relations Act. In reaching this conclusion, the Court observed that “a debtor-in-possession has until a reorganization plan is confirmed to decide whether to accept or reject an executory contract.” 465 U. S., at 529 (emphasis added).
We agree with Bildisco’s commonsense observation that the decision whether to reject a contract or lease must be made before confirmation. But that in no way undermines the fact that the rejection takes effect upon or after confirmation of the Chapter 11 plan (or before confirmation if pursuant to § 365(d)(2)). In the context of § 1146(a), the decision whether to transfer a given asset “under a plan confirmed” must be made prior to submitting the Chapter 11 plan to the bankruptcy court, but the transfer itself cannot be “under a plan confirmed” until the court confirms the plan in question. Only at that point does the transfer become eligible for the stamp-tax exemption.
If the statutory context suggests anything, it is that § 1146(a) is inapplicable to preconfirmation transfers. We find it informative that Congress placed § 1146(a) in a sub-chapter entitled, “POSTCONFIRMATION MATTERS.” To be sure, a subchapter heading cannot substitute for the operative text of the statute. See, e. g., Pennsylvania Dept of Corrections v. Yeskey, 524 U. S. 206, 212 (1998) (“'[T]he title of a statute... cannot limit the plain meaning of the text’”). Nonetheless, statutory titles and section headings “ 'are tools available for the resolution of a doubt about the meaning of a statute.’ ” Porter v. Nussle, 534 U. S. 516, 528 (2002). The placement of § 1146(a) within a subchapter expressly limited to postconfirmation matters undermines Piccadilly’s view that § 1146(a) covers preconfirmation transfers.
But even if we were fully to accept Piccadilly’s textual and contextual arguments, they would establish at most that the statutory language is ambiguous. They do not — and largely are not intended to — demonstrate that § 1146(a)’s purported ambiguity should be resolved in Piccadilly’s favor. Florida argues that various nontextual canons of construction require us to resolve any ambiguity in its favor. Piccadilly responds with substantive canons of its own. It is to these dueling canons of construction that we now turn.
C
Florida contends that even if the statutory text is deemed ambiguous, applicable substantive canons compel its interpretation of § 1146(a). Florida first invokes the canon that “Congress is presumed to be aware of an administrative or judicial interpretation of a statute and to adopt that interpretation when it re-enacts a statute without change.” Lorillard v. Pons, 434 U. S. 575, 580-581 (1978). Florida observes that the relevant language of § 1146(a) relating to “under a plan confirmed” has remained unchanged since 1978 despite several revisions of the Bankruptcy Code. The most recent revision in 2005 occurred after the Fourth Circuit’s decision in NVR and the Third Circuit’s decision in Hecln inger but before the Eleventh Circuit’s decision below. Florida asserts that Congress ratified this longstanding interpretation when, in its most recent amendments to the Code, it “readopted” the stamp-tax provision verbatim as § 1146(a). Brief for Petitioner 26.
Florida also invokes the substantive canon — on which the Third Circuit relied in Hechinger — that courts should “ ‘proceed carefully when asked to recognize an exemption from state taxation that Congress has not clearly expressed.’” 335 F. 3d, at 254 (quoting California State Bd. of Equalization v. Sierra Summit, Inc., 490 U. S. 844, 851-852 (1989)). In light of this directive, Florida contends that § 1146(a)’s language must be construed strictly in favor of the States to prevent unwarranted displacement of their tax laws. See National Private Truck Council, Inc. v. Oklahoma Tax Comm’n, 515 U. S. 582, 590 (1995) (discussing principles of comity in taxation and the “federal reluctance to interfere with state taxation” given the “strong background presumption against interference”).
Furthermore, Florida notes that the canon also discourages federal interference with the administration of a State’s taxation scheme. See id., at 586, 590. Florida contends that the Court of Appeals’ extension of § 1146(a) to preconfirmation transfers directly interferes with the administration of the State’s stamp tax, which is imposed “prior to recordation” of the instrument of transfer. Fla. Stat. §§ 201.01, 201.02(1) (2006). Extending the exemption to transfers that occurred months or years before a confirmable plan even existed, Florida explains, may require the States to “ ‘unravel’ ” stamp taxes already collected. Brief for Petitioner 31. Alternatively, should a court grant an exemption under § 1146(a) before confirmation, States would be saddled with the task of monitoring whether the plan is ever eventually confirmed.
In response, Piccadilly contends that the federalism principle articulated in Sierra Summit, supra, at 852, does not apply where there is a “clear expression of an exemption from state taxation” overriding a State’s authority to tax. In Piccadilly’s view, that is precisely the case with regard to § 1146(a), which proscribes the imposition of stamp taxes and demonstrates Congress’ intent to exempt a category of state taxation.
Piccadilly further maintains that Florida’s stamp tax is nothing more than a postpetition claim, specifically an administrative expense, which is paid as a priority claim ahead of the prepetition claims of most creditors. Equating Florida’s receipt of tax revenue with a preference in favor of a particular claimant, Piccadilly argues that § 1146(a)’s ambiguous exemption should not be construed to diminish other claimants’ recoveries. See Howard Delivery Service, Inc. v. Zurich American Ins. Co., 547 U. S. 651, 667 (2006) (emphasizing that “provisions allowing preferences must be tightly construed”). Reading the stamp-tax exemption too narrowly, Piccadilly maintains, “ ‘is not only inconsistent with the policy of equality of distribution’ ” but also “ ‘dilutes the value of the priority for those creditors Congress intended to prefer’ ” — those with prepetition claims. Brief for Respondent 54 (quoting Howard Delivery Serv., supra, at 667).
Above all, Piccadilly urges us to adopt the Court of Appeals’ maxim that “a remedial statute such as the Bankruptcy Code should be liberally construed.” 484 F. 3d, at 1304; cf. Isbrandtsen Co. v. Johnson, 343 U. S. 779, 782 (1952). In Piccadilly’s view, any ambiguity in the statutory text is overshadowed by § 1146(a)’s obvious purpose: to facilitate the Chapter 11 process “through giving tax relief.” In re Jacoby-Bender, Inc., 758 F. 2d 840, 841 (CA2 1985). Piccadilly characterizes the tax on asset transfers at issue here as tantamount to a levy on the bankruptcy process itself. A stamp tax like Florida’s makes the sale of a debtor’s property more expensive and reduces the total proceeds available to satisfy the creditors’ claims, contrary to Congress’ clear intent in enacting § 1146(a).
What is unclear, Piccadilly argues, is why “Congress would have intended the anomaly that a transfer essential to a plan that occurs two minutes before confirmation may be taxed, but the same transfer occurring two seconds after may not.” Brief for Respondent 43. After all, interpreting § 1146(a) in the manner Florida proposes would lead precisely to that result. And that, Piccadilly asserts, is “absurd” in light of § 1146(a)’s policy aim — evidenced by the provision’s text and legislative history — of reducing the cost of asset transfers. In that vein, Piccadilly contends that interpreting § 1146(a) to apply solely to postconfirmation transfers would undermine Chapter ll’s twin objectives of “preserving going concerns and maximizing property available to satisfy creditors.” Bank of America Nat. Trust and Sav. Assn. v. 203 North LaSalle Street Partnership, 526 U. S. 434, 453 (1999). In order to obtain the maximum value for its assets — especially assets rapidly declining in value — Piccadilly claims that a debtor often must close the sale before formal confirmation of the Chapter 11 plan.
We agree with Florida that the federalism canon articulated in Sierra Summit and elsewhere obliges us to construe §1146(a)’s exemption narrowly. Piccadilly’s effort to evade the canon falls well short of the mark because reading § 1146(a) in the manner Piccadilly proposes would require us to do exactly what the canon counsels against. If we recognized an exemption for preconfirmation transfers, we would in effect be “ ‘recognizing] an exemption from state taxation that Congress has not clearly expressed’” — namely, an exemption for preconfirmation transfers. Sierra Summit, supra, at 851-852 (emphasis added); see also Swarts v. Hammer, 194 U. S. 441, 444 (1904) (reasoning that if Congress endeavored to exempt a debtor from state and local taxation, “the intention would be clearly expressed, not left to be collected or inferred from disputable considerations of convenience in administering the estate of the bankrupt”). Indeed, Piccadilly proves precisely this point by resting its entire case on the premise that Congress has expressed its stamp-tax exemption in ambiguous language. Therefore, far from being inapposite, the canon is decisive in this case.
The canons on which Piccadilly relies are inapposite. While we agree with Piccadilly that “provisions allowing preferences must be tightly construed,” Howard Delivery Serv., supra, at 667, § 1146(a) is not a preference-granting provision. The statutory text makes no mention of preferences.
Nor are we persuaded that in this case we should construe § 1146(a) “liberally” to serve its ostensibly “remedial” purpose. Based on the Eleventh Circuit’s declaration that the Bankruptcy Code is a “remedial statute,” Piccadilly would stretch the disallowance well beyond what the statutory text can naturally bear. Apart from the opinion below, however, the only authority Piccadilly offers is a 1952 decision of this Court interpreting the Shipping Commissioners Act of 1872. See Brief for Respondent 54 (citing Isbrandtsen, supra, at 782). But unlike the statutory scheme in Isbrandtsen, which was “‘designed to secure the comfort and health of seamen aboard ship, hospitalization at home and care abroad,’ ” 343 U. S., at 784 (quoting Aguilar v. Standard Oil Co. of N. J., 318 U. S. 724, 728-729 (1943)), the Bankruptcy Code — and Chapter 11 in particular — is not a remedial statute in that sense. To the contrary, this Court has rejected the notion that “Congress had a single purpose in enacting Chapter 11.” Toibb v. Radloff 501 U. S. 157, 163 (1991). Rather, Chapter 11 strikes a balance between a debtor’s interest in reorganizing and restructuring its debts and the creditors’ interest in maximizing the value of the bankruptcy estate. Ibid. The Code also accommodates the interests of the States in regulating property transfers by “‘generally [leaving] the determination of property rights in the assets of a bankrupt’s estate to state law.’ ” Travelers Casualty & Surety Co. of America v. Pacific Gas & Elec. Co., 549 U. S. 443, 450-451 (2007). Such interests often do not coincide, and in this case, they clearly do not. We therefore decline to construe the exemption granted by § 1146(a) to the detriment of the State.
As for Piccadilly’s assertion that reading § 1146(a) to allow preconfirmation transfers to be taxed while exempting others moments later would amount to an “absurd” policy, we reiterate that “ ‘it is not for us to substitute our view of... policy for the legislation which has been passed by Congress.’” Hechinger, 335 F. 3d, at 256. That said, we see no absurdity in reading § 1146(a) as setting forth a simple, bright-line rule instead of the complex, after-the-fact inquiry Piccadilly envisions. At bottom, we agree with the Fourth Circuit’s summation of § 1146(a):
“Congress struck a most reasonable balance. If a debtor is able to develop a Chapter 11 reorganization and obtain confirmation, then the debtor is to be afforded relief from certain taxation to facilitate the implementation of the reorganization plan. Before a debtor reaches this point, however, the state and local tax systems may not be subjected to federal interference.” NVR, 189 F. 3d, at 458.
Lastly, to the extent the “practical realities” of Chapter 11 reorganizations are increasingly rendering postconfirmation transfers a thing of the past, see 484 F. 3d, at 1304, it is incumbent upon the Legislature, and not the Judiciary, to determine whether § 1146(a) is in need of revision. See, e. g., All v. Federal Bureau of Prisons, 552 U. S. 214, 228 (2008) (“We are not at liberty to rewrite the statute to reflect a meaning we deem more desirable”).
Ill
The most natural reading of § 1146(a)’s text
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:
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H
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sc_issuearea
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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.
Mr. Chief Justice Warren
delivered the opinion of the Court.
The basic question before us is whether it is a deceptive trade practice, prohibited by § 5 of the Federal Trade Commission Act, to represent falsely that a televised test, experiment, or demonstration provides a viewer with visual proof of a product claim, regardless of whether the product claim is itself true.
The case arises out of an attempt by respondent Colgate-Palmolive Company to prove to the television public that its shaving cream, “Rapid Shave,” outshaves them all. Respondent Ted Bates & Company, Inc., an advertising agency, prepared for Colgate three one-minute commercials designed to show that Rapid Shave could soften even the toughness of sandpaper. Each of the commercials contained the same “sandpaper test.” The announcer informed the audience that, “To prove rapid shave’s super-moisturizing power, we put it right from the can onto this tough, dry sandpaper. It was apply... soak... and off in a stroke.” While the announcer was speaking, Rapid Shave was applied to a substance that appeared to be sandpaper, and immediately thereafter a razor was shown shaving the substance clean.
The Federal Trade Commission issued a complaint against respondents Colgate and Bates charging that the commercials were false and deceptive. The evidence before the hearing examiner disclosed that sandpaper of the type depicted in the commercials could not be shaved immediately following the application of Rapid Shave, but required a substantial soaking period of approximately 80 minutes. The evidence also showed that the substance resembling sandpaper was in fact a simulated prop, or “mock-up,” made of plexiglass to which sand had been applied. However, the examiner found that Rapid Shave could shave sandpaper, even though not in the short time represented by the commercials, and that if real sandpaper had been used in the commercials the inadequacies of television transmission would have made it appear to viewers to be nothing more than plain, colored paper. The examiner dismissed the complaint because neither misrepresentation — concerning the actual moistening time or the identity of the shaved substance— was in his opinion a material one that would mislead the public.
The Commission, in an opinion dated December 29, 1961, reversed the hearing examiner. It found that since Rapid Shave could not shave sandpaper within the time depicted in the commercials, respondents had misrepresented the product’s moisturizing power. Moreover, the Commission found that the undisclosed use of a plexiglass substitute for sandpaper was an additional material misrepresentation that was a deceptive act separate and distinct from the misrepresentation concerning Rapid Shave’s underlying qualities. Even if the sandpaper could be shaved just as depicted in the commercials, the Commission found that viewers had been misled into believing they had seen it done with their own eyes. As a result of these findings the Commission entered a cease- and-desist order against the respondents.
An appeal was taken to the Court of Appeals for the First Circuit which rendered an opinion on November 20, 1962. That court sustained the Commission’s conclusion that respondents had misrepresented the qualities of Rapid Shave, but it would not accept the Commission’s order forbidding the future use of undisclosed simulations in television commercials. It set aside the Commission’s order and directed that a new order be entered. On May 7, 1963, the Commission, over the protest of respondents, issued a new order narrowing and clarifying its original order to comply with the court’s mandate. The Court of Appeals again found unsatisfactory that portion of the order dealing with simulated props and refused to enforce it. We granted certiorari, 377 U. S. 942, to consider this aspect of the case and do not have before us any question concerning the misrepresentation that Rapid Shave could shave sandpaper immediately after application, that being conceded.
I.
A threshold question presented is whether the petition for certiorari was filed within 90 days after the entry of the judgment below as required by 28 U. S. C. § 2101 (c) (1958 ed.). Respondents claim that the failure of the Commission to seek certiorari from the judgment of the Court of Appeals rendered on November 20, 1962, barred a subsequent order prohibiting the use of simulated props in commercials that offer visual proof of a product claim.
After a court of appeals has set aside an order of the Commission on a point of law, the Commission may seek certiorari if it disagrees with the court’s legal conclusion. Section 5 (i) of the Federal Trade Commission Act contemplates that when the time for filing a petition for cer-tiorari has passed without a petition being filed, the Commission will enter an order in accordance with the mandate of the court of appeals. The Commission may not merely restate its former position in a new order and then apply for certiorari when the court of appeals reiterates its previous objection. As was said in Federal Power Comm’n v. Idaho Power Co., 344 U. S. 17, 20, “If the court did no more by the second judgment than to restate what it had decided by the first one... the 90 days would start to run from the first judgment.” To the same effect see Federal Trade Comm’n v. Minneapolis-Honeywell Regulator Co., 344 U. S. 206, 211. However, it has also been held that when a reviewing court finds a legal error in an administrative order, the agency is not foreclosed upon the remand of the case from enforcing the legislative policy of the act it administers, provided the new order does not conflict with the reviewing court’s mandate.
Obviously, the court which drafted the mandate is normally in the best position to determine whether the Commission’s subsequent order is consistent with the mandate, but this Court is never foreclosed from determining the issue for itself. The resolution of this issue in the present case requires a detailed analysis of the various opinions, mandates and orders issued by the Commission and the Court of Appeals.
In its initial opinion, dated December 29,1961, the Commission commented that the heart of the commercials was the visual “sandpaper test” which was designed to leave the viewer with the impression that he had actually seen such an experiment being performed. The Commission expressed the view that without this visible proof of Rapid Shave’s moisturizing ability some viewers might not have been persuaded to buy the product. The Commission then entered into a far-reaching discussion on the use of mock-ups in television and the relationship between “truth” and “television salesmanship,” and finally concluded that the use of the plexiglass prop was a deceptive practice. The Commission’s order was as inclusive as its discussion. It ordered both repondents to cease and desist from:
“Representing, directly or by implication, in describing, explaining, or purporting to prove the quality or merits of any product, that pictures, depictions, or demonstrations... are genuine or accurate representations... of, or prove the quality or merits of, any product, when such pictures, depictions, or demonstrations are not in fact genuine or accurate representations... of, or do not prove the quality or merits of, any such product.” (Emphasis added.)
The Court of Appeals understandably was concerned with the broad language in the Commission’s opinion and order, especially' since the Commission was not dealing with an established deceptive practice but was applying the flexible standards of § 5 to a hitherto unexplored area. The breadth of the Commission’s order was potentially limitless, apparently establishing a per se rule prohibiting the use of simulated props in all television commercials, since commercials by definition describe “the qualities or merits” of products. The court’s impression that the order was “quite ambiguous” was not alleviated when in oral argument counsel for the Commission stated that if a prominent person appeared on television saying “I love Lipsom’s iced tea,” while drinking something that appeared to be tea but in fact was not, the commercial would be a deceptive practice.
In light of the Commission’s order and its oral argument, the court concluded that it was the Commission’s intention to prohibit all simulated props in television commercials. The court could not agree with this position since it believed that “where the only untruth is that the substance [the viewer] sees on the screen is artificial, and the visual appearance is otherwise a correct and accurate representation of the product itself, he is not injured.” But, in setting aside the Commission’s order, the court gave little specific guidance for the drafting of a new one. It merely criticized the Commission for holding that mock-ups are “illegal per se,” and indicated that the Commission’s order “may” have been too broad in other respects as well.
Following the decision by the Court of Appeals, the Commission entered a new “proposed final order” on February 18, 1963. This order was accompanied by an explanatory opinion that admitted error in the original disposition of the case and expressed an intention to eliminate the errors found by the Court of Appeals. The Commission explained that its new order was not directed toward the broad prohibition of all undisclosed simulated props in commercials, but merely toward prohibiting respondents from misrepresenting to the public that it was seeing for itself a test, experiment or demonstration which purportedly proved a product claim. According to the Commission, the television commercial in question did not merely tell viewers that the experiment had been or could be performed, but instead told them that they were seeing it for themselves and did not have to take the seller’s word for it. This, and not the mere use of a prop, was the misrepresentation found to be a deceptive practice. Over the vigorous objection of respondents, the Commission issued its final order on May 7, 1963. Both respondents were ordered to cease and desist from:
“Unfairly or deceptively advertising 'any... product by presenting a test, experiment or demonstration that (1) is represented to the public as actual proof of a claim made for the product which is material to inducing its sale, and (2) is not in fact a genuine test, experiment or demonstration being conducted as represented and does not in fact constitute actual proof of the claim, because of the undisclosed use and substitution of a mock-up or prop instead of the product, article, or substance represented to be used therein.”
Respondents again appealed to the Court of Appeals. Despite the urgings of respondents that it limit its review to a determination whether the Commission’s order was consistent with the previous mandate, the court re-examined the Commission’s new order on the merits. The court recognized that the new order no longer prohibited the use of all simulated props in commercials, but found that it would be impossible under it to distinguish between commercials which depicted a test, experiment or demonstration, and those which did not. The court held that so long as there is an accurate portrayal of a product’s attributes or performance there is no deceit and instructed the Commission, “as we thought we had directed it before,” to enter an order merely prohibiting respondents from using mock-ups to demonstrate something which in fact could not be accomplished.
We hold that the Commission’s order of May 7, 1963, was not in disregard of the Court of Appeals’ first mandate and was a good-faith attempt to incorporate the legal principles contained therein. An examination of the Commission’s first order and accompanying opinion shows an overriding emphasis on mock-ups as such and a failure to articulate with precision the actual deceptive practice found. As a result, it is not surprising that the court criticized the order as “ambiguous,” interpreted it as prohibiting the substitution of a mock-up for a product in any commercial, and found that it rested on a premise that mock-ups were “illegal per se.” It is true that the court also said that viewers are interested in what they see and not in the means by which they see it, but this statement occurred immediately after the court discussed the contention in oral argument that it would be a deceptive practice to represent that a person was drinking “Lip-som’s iced tea” when in fact he was not. The only clear directive in the court’s mandate was for the Commission to remove the “fundamental error [which] so permeates the order” — i. e., the error that every use of mock-ups is a deceptive practice.
We find it inconceivable that the Commission could have successfully sought certiorari from this judgment. Had it done so, it would have been forced to argue either that every use of mock-ups in commercials is a deceptive practice, an apparently unintended theory, or that this Court should reinstate the Commission’s decision on a theory of its own, something the Court said it would not do in Securities & Exchange Comm’n v. Chenery Corp., 332 U. S. 194, 196.
Support is given our conclusion by the refusal of the Court of Appeals to declare that the Commission’s subsequent order was inconsistent with the previous mandate. However, even if the first opinion of the Court of Appeals could somehow be construed to hold as a matter of law that it is never a deceptive practice to use undisclosed props in a commercial designed to convince a viewer that he is seeing for himself proof of a seller’s claims, we find that the Commission acted reasonably in construing the mandate more narrowly. The Commission’s vague first order had spawned a correspondingly vague opinion by the Court of Appeals. If the court meant its first opinion to say more than we have attributed to it, it was not until the second opinion that the court clearly articulated its reasoning. Therefore, at the least the court’s second opinion resolved a genuine ambiguity in the first, and the time within which certiorari had to be requested dates from the second judgment. See Federal Trade Comm’n v. Minneapolis-Honeywell Regulator Co., 344 U. S. 206, 211.
II.
In reviewing the substantive issues in the case, it is well to remember the respective roles of the Commission and the courts in the administration of the Federal Trade Commission Act. When the Commission was created by Congress in 1914, it was directed by § 5 to prevent “ [u] nfair methods of competition in commerce.” Congress amended the Act in 1938 to extend the Commission’s jurisdiction to include “unfair or deceptive acts or practices in commerce” — a significant amendment showing Congress’ concern for consumers as well as for competitors. It is important to note the generality of these standards of illegality; the proscriptions in § -5 are flexible, “to be defined with particularity by the myriad of cases from the field of business.” Federal Trade Comm’n v. Motion Picture Advertising Service Co., 344 U. S. 392, 394.
This statutory scheme necessarily gives the Commission an influential role in interpreting § 5 and in applying it to the facts of particular cases arising out of unprecedented situations. Moreover, as an administrative agency which deals continually with cases in the area, the Commission is often in a better position than are courts to determine when a practice is “deceptive” within the meaning of the Act. This Court has frequently stated that the Commission’s judgment is to be given great weight by reviewing courts. This admonition is especially true with respect to allegedly deceptive advertising since the finding of a § 5 violation in this field rests so heavily on inference and pragmatic judgment. Nevertheless, while informed judicial determination is dependent upon enlightenment gained from administrative experience, in the last analysis the words “deceptive practices” set forth a legal standard and they must get their final meaning from judicial construction. Cf. Federal Trade Comm’n v. R. F. Keppel & Bro., Inc., 291 U. S. 304, 314.
We are not concerned in this case with the clear misrepresentation in the commercials concerning the speed with which Rapid Shave could shave sandpaper, since the Court of Appeals upheld the Commission’s finding on that matter and the respondents have not challenged the finding here. We granted certiorari to consider the Commission’s conclusion that even if an advertiser has himself conducted a test, experiment or demonstration which he honestly believes will prove a certain, product claim, he may not convey to television viewers the false impression that they are seeing the test, experiment or demonstration for themselves, when they are not because of the undisclosed use of mock-ups.
We accept the Commission’s determination that the commercials involved in this case contained three representations to the public: (1) that sandpaper could be shaved by Rapid Shave; (2) that an experiment had been conducted which verified this claim; and (3) that the viewer was seeing this experiment for himself. Respondents admit that the first two representations were made, but deny that the third was. The Commission, however, found to the contrary, and, since this is a matter of fact resting on an inference that could reasonably be drawn from the commercials themselves, the Commission’s finding should be sustained. For the purposes of our review, we can assume that the first two representations were true; the focus of our consideration is on the third, which was clearly false. The parties agree that § 5 prohibits the intentional misrepresentation of any fact which would constitute a material factor in a purchaser’s decision whether to buy. They differ, however, in their conception of what “facts” constitute a “material factor” in a purchaser’s decision to buy. Respondents submit, in effect, that the only material facts are those which deal with the substantive qualities of a product. The Commission, on the other hand, submits that the misrepresentation of any fact so long as it materially induces a purchaser’s decision to buy is a deception prohibited by §5.
The Commission’s interpretation of what is a deceptive practice seems more in line with the decided cases than that of respondents. This Court said in Federal Trade Comm’n v. Algoma Lumber Co., 291 U. S. 67, 78: “[T]he public is entitled to get what it chooses, though the choice may be dictated by caprice or by fashion or perhaps by ignorance.” It has long been considered a deceptive practice to state falsely that a product ordinarily sells for an inflated price but that it is being offered at a special reduced price, even if the offered price represents the actual value of the product and the purchaser is receiving his money’s worth. Applying respondents’ arguments to these cases, it would appear that so long as buyers paid no more than the product was actually worth and the product contained the qualities advertised, the misstatement of an inflated original price was immaterial.
It has also been held a violation of § 5 for a seller to misrepresent to the public that he is in a certain line of business, even though the misstatement in no way affects the qualities of the product. As was said in Federal Trade Comm’n v. Royal Milling Co., 288 U. S. 212, 216:
“If consumers or dealers prefer to purchase a given article because it was made by a particular manufacturer or class of manufacturers, they have a right to do so, and this right cannot be satisfied by imposing upon them an exactly similar article, or one equally as good, but having a different origin.”
The courts of appeals have applied this reasoning to the merchandising of reprocessed products that are as good as new, without a disclosure that they are in fact reprocessed. And it has also been held that it is a deceptive practice to misappropriate the trade name of another.
Respondents claim that all these cases are irrelevant to our decision because they involve misrepresentations related to the product itself and not merely to the manner in which an advertising message is communicated. This distinction misses the mark for two reasons. In the first place, the present case is not concerned with a mode of communication, but with a misrepresentation that viewers have objective proof of a seller’s product claim over and above the seller’s word. Secondly, all of the above cases, like the present case, deal with methods designed to get a consumer to purchase a product, not with whether the product, when purchased, will perform up to expectations. We find an especially strong similarity between the present case and those cases in which a seller induces the public to purchase an arguably good product by misrepresenting his line of business, by concealing the fact that the product is reprocessed, or by misappropriating another’s trademark. In each the seller has used a misrepresentation to break down what he regards to be an annoying or irrational habit of the buying public — the preference for particular manufacturers or known brands regardless of a product’s actual qualities, the prejudice against reprocessed goods, and the desire for verification of a product claim. In each case the seller reasons that when the habit is broken the buyer will be satisfied with the performance of the product he receives. Yet, a misrepresentation has been used to break the habit and, as was stated in' Algoma Lumber, a misrepresentation for such an end is not permitted.
We need not limit ourselves to the cases already mentioned because there are other situations which also illustrate the correctness of the Commission’s finding in the present case. It is generally accepted that it is a deceptive practice to state falsely that a product has received a testimonial from a respected source. In addition, the Commission has consistently acted to prevent sellers from falsely stating that their product claims have been “certified.” We find these situations to be indistinguishable from the present case. We can assume that in each the underlying product claim is true and in each the seller actually conducted an experiment sufficient to prove to himself the truth of the claim. But in each the seller has told the public that it could rely on something other than his word concerning both the truth of the claim and the validity of his experiment. We find it an immaterial difference that in one case the viewer is told to rely on the word of a celebrity or authority he respects, in another on the word of a testing agency, and in the present case on his own perception of an undisclosed simulation.
Respondents again insist that the present case is not like any of the above, but is more like a case in which a celebrity or independent testing agency has in fact submitted a written verification of an experiment actually observed, but, because of the inability of the camera to transmit accurately an impression of the paper on which the testimonial is written, the seller reproduces it on another substance so that it can be seen by the viewing-audience. This analogy ignores the finding of the Commission that in the present case the seller misrepresented to the public that it was being given objective proof of a product claim. In respondents’ hypothetical the objective proof of the product claim that is offered, the word of the celebrity or agency that the experiment was actually conducted, does exist; while in the case before us the objective proof offered, the viewer’s own perception of an actual experiment, does not exist. Thus, in respondents’ hypothetical, unlike the present case, the use of the undisclosed mock-up does not conflict with the seller’s claim that there is objective proof.
We agree with the Commission, therefore, that the undisclosed use of plexiglass in the present commercials was a material deceptive practice, independent and separate from the other misrepresentation found. We find unpersuasive respondents’ other objections to this conclusion. Respondents claim that it will be impractical to inform the viewing public that it is not seeing an actual test, experiment or demonstration, but we think it inconceivable that the ingenious advertising world will be unable, if it so desires, to conform to the Commission’s insistence that the public be not misinformed. If, however, it becomes impossible or impractical to show simulated demonstrations on television in a truthful manner, this indicates that television is not a medium that lends itself to this type of commercial, not that the commercial must survive at all costs. Similarly unpersuasive is respondents’ objection that the Commission’s decision discriminates against sellers whose product claims cannot be “verified” on television without the use of simulations. All methods of advertising do not equally favor every seller. If the inherent limitations of a method do not permit its use in the way a seller desires, the seller cannot by material misrepresentation compensate for those limitations.
Respondents also claim that the Commission reached out to decide a question not properly before it and has presented this Court with an abstract question. They argue that since the commercials in the present case misrepresented the time element involved in shaving sandpaper, this Court should not consider the additional misrepresentation that the public had objective proof of the seller’s claim. As we have already said, these misrepresentations are separate and distinct, and we fail to see why respondents should be sheltered from a cease-and-desist order with respect to one deceptive practice merely because they also engaged in another.
Respondents finally object to what they consider to be the absence of an adequate record to sustain the Commission’s finding. It is true that in its initial stages the case was concerned more with the misrepresentation about the product’s underlying qualities than with the misrepresentation that objective proof was being given. Nevertheless, both misrepresentations were in the case from the beginning, and respondents were never prejudicially misled into believing that the second question was not being considered. Nor was it necessary for the Commission to conduct a survey of the viewing public before it could determine that the commercials had a tendency to mislead, for when the Commission finds deception it is also authorized, within- the bounds of reason, to infer that the deception will constitute a material factor in a purchaser’s decision to buy. See Federal Trade Comm’n v. Raladam Co., 316 U. S. 149, 152. We find the record in this case sufficient to support the Commission’s findings.
III.
We turn our attention now to the order issued by the Commission. It has been repeatedly held that the Commission has wide discretion in determining the type of order that is necessary to cope with the unfair practices found, e. g., Jacob Siegel Co. v. Federal Trade Comm’n, 327 U. S. 608, 611, and that Congress has placed the primary responsibility for fashioning orders upon the Commission, Federal Trade Comm’n v. National Lead Co., 352 U. S. 419, 429. For these reasons the courts should not “lightly modify” the Commission’s orders. Federal Trade Comm’n v. Cement Institute, 333 U. S. 683, 726. However, this Court has also warned that an order’s prohibitions “should be clear and precise in order that they may bé understood by those against whom they are directed,” Federal Trade Comm’n v. Cement Institute, supra, at 726, and that “[t]he severity of possible penalties prescribed... for violations of orders which have become final underlines the necessity for fashioning orders which are, at the outset, sufficiently clear and precise to avoid raising serious questions as to their meaning and application.” Federal Trade Comm’n v. Henry Broch & Co., 368 U. S. 360, 367-368.
The Court of Appeals has criticized the reference in the Commission’s order to “test, experiment or demonstration” as not capable of practical interpretation. It could find no difference between the Rapid Shave commercial and a commercial which extolled the goodness of ice cream while giving viewers a picture of a scoop of mashed potatoes appearing to be ice cream. We do not understand this difficulty. In the ice cream case the mashed potato prop is not being used for additional proof of the product claim, while the purpose of the Rapid Shave commercial is to give the viewer objective proof of the claims made. If in the ice cream hypothetical the focus of the commercial becomes the undisclosed potato prop and the viewer is invited, explicitly or by implication, to see for himself the truth of the claims about the ice cream’s rich texture and full color, and perhaps compare it to a “rival product,” then the commercial has become similar to the one now before us. Clearly, however, a commercial which depicts happy actors delightedly eating ice cream that is in fact mashed potatoes or drinking a product appearing to be coffee but which is in fact some other substance is not covered by the present order.
The crucial terms of the present order — “test, experiment or demonstration... represented... as actual proof of a claim” — are as specific as the circumstances will permit. If respondents in their subsequent commercials attempt.to come as close to the line of misrepresentation as the Commission’s order permits, they may without specifically intending to do so cross into the area proscribed by this order. However, it does not seem “unfair to require that one who deliberately goes perilously close to an area of proscribed conduct shall take the risk that he may cross the line.” Boyce Motor Lines, Inc. v. United States, 342 U. S. 337, 340... In commercials where the emphasis is on the seller’s word, and not on the viewer’s own perception, the respondents need not fear that an undisclosed use of props is prohibited by the present order. On the other hand, when the commercial not only makes a claim, but also invites the viewer to rely on his own perception for demonstrative proof of the claim, the respondents will be aware that the use of undisclosed props in strategic places might be a material deception. We believe that respondents will have no difficulty applying the Commission’s order to the vast majority'of their contemplated future commercials. If, however, a situation arises in which respondents are sincerely unable to determine whether a proposed course of action would violate the present order, they can, by complying with the Commission’s rules, oblige the Commission to give them definitive advice as to whether their proposed action, if pursued, would constitute compliance with the order.
Finally, we find no defect in the provision of the order which prohibits respondents from engaging in similar practices with respect to “any product” they advertise. The propriety of a broad order depends upon the specific circumstances of the case, but the courts will not interfere except where the remedy selected has no reasonable relation to the unlawful practices found to exist. In this case the respondents produced three different commercials which employed the same deceptive practice. This we believe gave the Commission a sufficient basis for believing that the respondents would be inclined to use similar commercials with respect to the other products they advertise. We think it reasonable for the Commission to frame its order broadly enough to prevent respondents from engaging in similarly illegal practices in future advertisements. As was said in Federal Trade Comm’n v. Ruberoid Co., 343 U. S. 470, 473: “[T]he Commission is not limited to prohibiting the illegal practice in the precise form in which it is found to have existed in the past.” Having been caught violating the Act, respondents “must expect some fencing in.” Federal Trade Comm’n v. National Lead Co., 352 U. S. 419, 431.
“(b) Any respondent subject to a Commission order may request advice from the Commission as to whether a proposed course of action, if pursued by it, will constitute compliance with such order. The request for advice should be submitted in writing to the Secretary of the Commission and should include full and complete information regarding the proposed course of action. On the basis of the facts submitted, as well as other information available to the Commission, the Commission will inform the respondent whether or not the proposed course of action, if pursued, would constitute compliance with its order.
“(c) The Commission may at any time reconsider its approval of any report of compliance or any advice given under this section and, where the public interest requires, rescind or revoke its prior approval or advice. In such event the respondent will be given notice of the Commission’s intent to revoke or rescind and will be given an opportunity to submit its views to the Commission. The Commission will not proceed against a respondent for violation of an order with respect to any action which was taken in good faith reliance upon the Commission’s approval or advice under this section, where all relevant facts were fully, completely and accurately presented to the Commission and where such action was promptly discontinued upon notification of rescission or revocation of the Commission’s approval.”
The judgment of the Court of Appeals is reversed and the case remanded for the entry of a judgment enforcing the Commission’s order.
Reversed and remanded.
38 Stat. 717, as amended, 52 Stat. 111, 15 U. S. C. §45 (a)(1) (1958 ed.):
“Unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are declared unlawful.”
52 Stat. 114, as amended, 15 U. S. C. § 45 (i) (1958 ed.):
“If the order of the Commission is modified or set aside by the court of appeals, and if (1) the time allowed for filing a petition for certiorari has expired and no such petition has been duly filed, or (2) the petition for certiorari has been denied, or (3) the decision of the court has been affirmed by the Supreme Court, then the order of the Commission rendered in accordance with the mandate of the court of appeals shall become final on the expiration of thirty'' days from the time such order of the Commission was rendered, unless within such thirty days either party has instituted proceedings to have such order corrected so that it will accord with the mandate, in which event the order of the Commission shall become final when so corrected.”
Securities & Exchange Comm’n v. Chenery Corp., 332 U. S. 194, 200; Federal Communications Comm’n v. Pottsville Broadcasting Co., 309 U. S. 134, 145.
See Labor Board v. Donnelly Garment Co., 330 U. S. 219, 227; Federal Communications Comm’n v. Pottsville Broadcasting Co., supra, note 3, at 141.
59 F. T. C. 1452, 1477-1478.
310 F. 2d 89, 94.
Ibid.
Colgate-Palmolive Co., No. 7736, FTC, May 7, 1963. An additional clause was added to the order for the benefit of respondent Bates in recognition of the different positions of clients and advertising agencies, which often do not have all the information about a product that the client has. The clause reads: “provided, however, that it shall be a defense hereunder that respondent neither knew nor had reason to know that the product, article or substance used in the test, experiment or demonstration was a mock-up or prop.”
326 F. 2d 517, 523.
310 F. 2d 89, 94.
38 Stat. 719 (1914), as amended, 15 U. S. C. §45 (a)(1) (1958 ed.).
52 Stat. 111 (1938), 15 U. S. C. §45 (a)(1) (1958 ed.).
See, e. g., Federal Trade Comm’n v. Motion Picture Advertising Service Co., 344 U. S. 392, 396; Federal Trade Comm’n v. Raladam Co., 316 U. S. 149, 152.
See Universal Camera Corp. v. Labor Board, 340 U. S. 474, 488; Federal Trade Comm’n v. Pacific States Paper Trade Assn., 273 U. S. 52, 63.
Brief for Petitioner, p. 13; Brief for Respondent Colgate, p. 22; Brief for Respondent Bates, p. 14.
Brief for Respondent Colgate, p. 16: “What [the buyer] is interested in is whether the actual product he buys will look and perform the way it appeared on his television set.” Id., at 17: “[A] buyer’s real concern is with the truth of the substantive claims or promises made to him, not with the means used to make them.” Id,., at 20: “[T]he Commission’s error was to confuse the substantive claim made for a product with the means by which such claim was conveyed.”
Brief for Respondent Bates, pp. 2-3: “If the viewer or reader of the advertisement buys the product, and it will do exactly what the portrayal in the advertisement asserts it will do, can there be any unlawful misrepresentation?” Id., at 13-14: “What induces the buyer to purchase is the claim that the product will perform as represented in the portrayed test. That is the material claim.” Id., at 25: “It is not a representation in any way relating to the product or to its purchase, so that even if the strained suggestion that there is such an implied representation were realistic, the representation plainly would be immaterial.”
Federal Trade Comm’n v. Standard Education Society, 302 U. S. 112, 115-117; Kalwajtys v. Federal Trade Comm’n, 237 F. 2d 654, 656 (C. A. 7th Cir. 1956), cert. denied, 352 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:
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H
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sc_issuearea
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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.
Opinion of the Court by
Mr. Justice Douglas,
announced by Mr. Justice Burton.
The orders of the Interstate Commerce Commission, which appellants seek to have set aside, resulted from two separate investigations instituted by the Commission on its own motion in 1939 to inquire into the lawfulness or unlawfulness of most of the then existing rate-making standards for interstate railroad class freight rates in the United States. One investigation related to classifications under which commodities move by rail freight.' The other related to class rates. The two investigations were consolidated and were covered by one report, as the problems of classification and of class rates are closely interrelated. The findings of the Commission as to classifications are not directly involved here. For the orders of the Commission under attack are interim orders which affect only class rates, increasing them in some areas and decreasing them in others. But a review and summary of the Commission’s findings both on classifications and on class rates are essential for an understanding of the problem.
While there are three major classification territories, there are five major rate territories. Official Territory, roughly speaking, lies east of the Mississippi and north of the Ohio and Potomac Rivers; it also includes most of Virginia. Southern Territory lies south of Official Territory and east of the Mississippi. Western Trunk-Line Territory is located approximately between Official Territory and the Rocky Mountains. Southwestern Territory lies south of Western Trunk-Line Territory and west of the Mississippi and includes Arkansas, Texas, Oklahoma, and part of Louisiana. Mountain-Pacific Territory includes Montana and New Mexico and all territory west of the Rockies. Only Mountain-Pacific Territory is not involved in these cases.
The three major classifications are Official, Southern and Western. But there is great lack of uniformity in the classifications. The problem is one with which the Commission has long wrestled. But prior to the present investigation its chief accomplishment in this field had been to establish classification uniformity within the separate territories. National classification uniformity was still in the main lacking. Many differences between classifications on a particular rating are matters of substance'; others are matters of nomenclature. Moreover, there has been a tendency among carriers to work against the evolution of uniform classifications by making exceptions which remove commodities from the classifications for rate-making purposes.
Section 1 (4) of the Interstate Commerce Act as amended, 24 Stat. 379, 54 Stat. 899,900,49 U. S. C. § 1 (4) provides that it shall be the duty of common carriers to establish just and reasonable classifications applicable to through freight rates and charges. Section 1(6) prohibits every unjust and unreasonable classification. Section 3 (1) prohibits discrimination. And § 15 (1) empowers the Commission to prescribe just, fair, and reasonable classifications, after a finding that existing classifications are unlawful. The Commission found that the existing classifications are unlawful and will continue to be unlawful until there is national uniformity of classification. It found that differences in the applicable classifications affect the levels of the class rates as much as or more, in some instances, than the differences in the levels of the class rate scales themselves. It found that shippers in one territory pay more than shippers in another territory on the same article because of classification differences; that territorial boundaries separating classification territories are artificial and cause serious complications; that where geographic conditions produce divergent costs, revenue requirements, or other conditions requiring rate adjustments, the adjustments should be made not in the basic classification itself but in the rate levels or by the creation of legitimate exceptions to the classification; that amongst the classifications there was no real uniformity of classification ratings although the same classification principles are applicable throughout the nation. It concluded that without such uniformity it is impossible to maintain just and reasonable relationships between class rates for competing commodities; that it is feasible for the carriers to establish a uniform classification. The Commission gave the railroads the opportunity to take the initiative in preparing the new uniform classification— an invitation which, we are advised, has been accepted.
Prior to this proceeding the Commission made four major class rate investigations — one for each of the rate territories except Mountain-Pacific. These established class rate structures on a regional basis, i. e. they established some degree of uniformity in class rates within each territory or subdivision of a territory. But they did not deal with interterritorial class rates by harmonizing regional rate adjustments one with the other. As a result there are separate interterritorial rate structures applicable to freight traffic moving from one territory into another.
These territorial class rate structures are exceedingly complicated. There is no basic uniformity amongst them and they are computed by varying formulae.
The Commission found that class rates within Southern, Southwestern and Western Trunk-Line territories, and from those territories to Official Territory, were generally much higher, article for article, than the rates within Official Territory. It found that higher class rates have impeded the development and movement of class rate freight within Southern, Southwestern and Western Trunk-Line territories and from those territories to Official Territory. It concluded that neither the comparative costs of transportation service nor variations in the consists and volume of traffic within the territories justified those differences in the class rates. The Commission also determined that equalization of class rates is not dependent on equalization of non-class rates and that interterri-torial rate problems can be solved only by establishing substantial uniformity in class ratings and rates.
Section 1 (4) and (5) (a) of the Act require rates and charges to be just and reasonable. The Commission found that the intraterritorial class rates applicable to the territories in question and the interterritorial class rates between the territories violate those provisions.
Section 3 (1) of the Act outlaws undue or unreasonable preferences or advantages to any region, district, or territory. The Commission found that the relation between the interterritorial class rates to Official Territory from the other territories in question and the intraterritorial class rates within Official Territory results in an unreasonable preference to Official Territory as a whole, and to shippers and receivers of freight located there, in violation of § 3 (1). The Commission, acting pursuant to its authority under § 15 (1) of the Act, prescribed reasonable and nondiscriminatory class rates to cure the preference found to exist, the new rates to become applicable simultaneously with the new revised classification which, as we have noted, the Commission ordered to be established.
But time will be required to formulate a uniform classification. And the Commission concluded that pending completion of that undertaking certain interim readjustments in the existing basis of class rates, based on existing classifications, could be made — readjustments which would be just and reasonable, and which would reduce to a minimum the preferences and prejudices which the Commission found to be unlawful in the existing system. It determined that the several intraterritorial freight-rate structures should be brought closer to the same level and be constructed on the same pattern or scheme. It concluded that as many differences as possible between the interterritorial rates and the intraterritorial rates should be eliminated. It accordingly ordered that existing interstate class rates applicable to freight traffic moving at the classification ratings within Southern, Southwestern, and Western Trunk-Line territories, interterritorially between those territories, and interterritorially between each of those territories and Official Territory, be reduced 10 per cent subject to qualifications not important here. It also ordered that interstate class rates for freight traffic moving at classification ratings within Official Territory be increased 10 per cent, subject to qualifications not relevant to our problem. It found the new interim class rates just and reasonable. 262 I. C. C. 447, supplemental report, 2641. C. C. 41.
The new interim rates were ordered to become effective January 1, 1946. Prior to that date, New York and other northern States, appellants in No. 343, filed their petition in the District Court to set aside the orders of the Commission. A statutory three judge court was convened and a temporary injunction was issued preventing the orders from going into effect. 38 Stat. 208, 220, 28 U. S. C. § 47. The Governors of the six New England States (three of whose successors in office have been substituted as appellants in No. 344) intervened on the side of the plaintiffs, as did most of the appellants in No. 345. The Commission and others intervened on the side of the United States. Appellants in No. 345, including most of the western railroads, also filed their petition in the District Court seeking substantially the same relief as appellants in No. 343. The cases were consolidated and tried together, the District Court receiving additional evidence offered by the western railroads. The court sustained the orders of the Commission in all respects, 65 F. Supp. 856, but continued the injunction pending appeal to this Court. Judicial Code § 210, 28 U. S. C. § 47a.
First. The principal evil at which the Interstate Commerce Act was aimed was discrimination in its various manifestations. Louisville & N. R. Co. v. United States, 282 U. S. 740, 749-750. Until 1935, § 3 (1) of the Act prohibited discrimination only against a “person, company, firm, corporation, or locality, or any particular description of traffic... 24 Stat. 379, 380. The question arose whether “locality” included a port insofar as the port was not a point of origin or destination but a gateway through which shipments were made. The Court held by a closely divided vote, and contrary to the ruling of the Commission, that it did not. Texas & Pacific R. Co. v. United States, 289 U. S. 627. Thereafter Congress amended § 3 (1) so as to extend the prohibition against discrimination to include a “port, port district, gateway, transit point.” 49 Stat. 607. And see Albany Port Dis trict Commission v. Ahnapee & W. R. Co., 219 I. C. C. 151. That was in 1935. In 1940 Congress went further. By § 5 (b) of the Transportation Act of 1940, 54 Stat. 899, 902, known as the Ramspeck Resolution, it authorized and directed the Commission to institute an investigation into rates on commodities between points in one classification territory and points in another territory and into like rates within territories for the purpose of determining whether those rates were “unjust and unreasonable or unlawful in any other respect in and of themselves or in their relation to each other, and to enter such orders as may be appropriate for the removal of any unlawfulness which may be found to exist....” Congress also extended the prohibition against discriminations by adding to § 3 (1) the words “region, district, territory.”
It is now asserted that the Commission has misunderstood its duties under these 1940 amendments. It is said that the Commission has construed this mandate of Congress to mean that identical rates, mile for mile, should be established everywhere in the country, in face of a longstanding practice of rate-making (which the legislative history of the 1940 amendments shows was not intended to be changed) that allowed differences in rates which were based on differences in the length of haul, character of the terrain, density of traffic, and other elements of the cost of service. Thus it is argued that the Commission runs afoul of Ann Arbor R. Co. v. United States, 281 U. S. 658, which involved the construction of a joint resolution of Congress directing the Commission to make an investigation to determine whether existing rates and charges were unjust, unreasonable, or unjustly discriminatory so as to give undue advantage “as between the various localities and parts of the country....” 43 Stat. 801, 802. The Commission, relying on that mandate, condemned certain existing rates between California and eastern points. The Court set aside the order of the Commission, holding that the joint resolution did not purport to change the existing law but left the validity of rates to be determined by that law.
But the Commission in the present cases did not proceed on the assumption that the Ramspeck Resolution changed the substantive law. As we read its report, the Commission took the resolution only as a directive to investigate and correct violations of substantive law as it deemed that law broadened by the amendment to § 3 (1). It said:
“By the amendment to the substantive antidiscrimi-nation provisions of section 3 (1) all discriminations in the form of undue or unreasonable preference or advantage, or undue or unreasonable prejudice or disadvantage, as between regions, districts, or territories, viewed as separate entities, were brought directly within the purview of the act along with all the other inhibitions previously included. We were then authorized and directed by the other provisions mentioned to remove any such discriminations found to exist in a proper proceeding. This means that such discriminations as those mentioned which result from differences in the methods of distributing the general rate burden in the several rate-making territories, or from any other cause, if not justified upon proper consideration of recognized elements of rate making applied in the light of the amended law are unlawful and should be corrected.” 262 I. C. C. p. 692.
From this statement it is apparent that the Commission concluded that the 1940 amendment to § 3 (1) enlarged the scope of the section. The Commission, indeed, stated that “it is clear that the main purpose which Congress had in mind was to bring about a greater degree of equalization, harmony, and uniformity in the different regional or territorial rate structures of the country.” Id. p. 692. And see id. pp. 688-691. But it is suggested that discriminations based on geographic factors were outlawed prior to the 1940 amendment to § 3 (1), as evidenced by its long-standing condemnation of “undue or unreasonable prejudice or disadvantage” to any “locality” and, since 1935, to any “port, port district, gateway, transit point.” It is, moreover, suggested that even the prohibition of discriminations against shippers was broad enough all along to ban discriminations based on the geographic location of the shippers. The contention is that without a change in the law the present orders were unwarranted; it is pointed out that the class rates now condemned had been found by the Commission itself to be just and reasonable in recent years. And it is asserted that the Commission did not take its present action on a showing of changed circumstances since those times. The conclusion, therefore, is that the present orders are not warranted by § 3 (1).
. We need not determine whether, prior to the 1940 amendment, § 3 (1), by its ban on unlawful discrim-inations against a “locality,” would have permitted the Commission to eradicate regional discriminations in class rates. For whatever doubt may have existed in the law was removed by the 1940 amendment which made abundantly clear that Congress thought that the problem of regional discriminations had been neglected and that, if any such discriminations were found to. be present, they should be eradicated. But, as the Commission concedes, the addition of “region, district, territory” to § 3 (1) did not change the law respecting discrimination by authorizing uniform freight rates, mile for mile, without regard to differing costs of the service. Congress, by adding those words, made plain the duty of the Commission, in determining whether discriminatory practices exist, to consider the interests of regions, districts, and territories, and to eliminate territorial rate differences which are not justified by differences in territorial conditions. In other words Congress did not introduce a new standard of discrimination by its amendment to §3(1); it merely made clear its purpose that regions, districts, and territories should be the beneficiaries of the law against discrimination.
Second. It is argued, however, that the findings of the Commission concerning regional discriminations in class rates are not supported by substantial evidence.
The great differences betwen territorial class rate levels are shown by the following table. It gives a comparison (in cents per 100 pounds) between the first-class rate scale within Official Territory and that within each of the other territories:
These first-class intraterritorial rates are used as bases in formulating rates on other classes of freight in the respective territories.
The following tables compiled by Government counsel show the first-class rates for interterritorial movements to Official Territory from each of the other territories as compared with intraterritorial movements for approximately equal distances within Official Territory:
The disadvantage to the Southern or Western shipper who attempts to market his product in Official Territory is obvious. Thus the first of these tables shows that a Nashville shipper pays 39 cents more on each 100 pounds of freight moving to Indianapolis, Indiana than one who ships from Indianapolis to a point of substantially equal distance away (Kent, Ohio) in Official Territory. Similar disadvantages suffered by Southern and Western shippers are revealed in the other comparable interterritorial freight movements set forth in the tables.
That disadvantage is emphasized if the effects of classification differences on rates for identical commodities are considered. A comparison of rates in cents per 100 pounds for 200 miles shows that, even though shippers in the South and West have the same or lower classification ratings for identical commodities, they nevertheless on the whole pay higher charges than the shippers in Official Territory for equivalent service. Thus there are in class 100 (first class) for less-than-carload lots 2092 items common to the three classifications. In Official Classification all of these move at a rate of 80 cents per 100 pounds for a haul of 200 miles. In Southern, 2075 of these items are classified 100 and move at a rate of $1.12. Of the remaining 17 items 5 are classified in Southern in class 85 with a rate of 95, 2 in class 70 with a rate of 78, 7 in class 55 with a rate of 62,2 in class 45, with a rate of 50, 1 in class 40 with a rate of 45. In Western Trunk-Line Zone I, 2076 of the 2092 items are classified 100 with a rate of 97, 4 in 85 with a rate of 82, 10 in 70 with a rate of 68,2 in 55 with a rate of 53.
In class 100 for carload lots there are 213 common items. In Official Classification all of these move at a rate of 80 cents for a haul of 200 miles. In Southern, 199 of these items are classified 100 and move at a rate of $1.12 for 200 miles. Of the remaining 14, 7 are classified in Southern in class 85 with a rate of 95, 2 in 75 with a rate of 84, 5 in 70 with a rate of 78. In Western Trunk-Line Zone I, 202 of the 213 items are classified 100 with a rate of 97, 7 in 85 with a rate of 82, 3 in 70 with a rate of 68, 1 in 55 with a rate of 53. Additional illustrations are too numerous and detailed to include in this opinion. But the ones given are representative of the rest and show how disparities in the rate levels are aggravated when the effects of classification differences on rates are considered.
There is rather voluminous evidence in the record tendered to show the effect in concrete competitive situations of these class rate inequalities. The instances were in the main reviewed by the Commission. They are attacked here on various grounds — that some of them involved rates other than class rates, that others were testified to by shippers who made no complaint of class rates, that' others showed shippers paying higher rates yet maintaining their competitive positions and prospering. We do not stop to analyze them or discuss them beyond saying th,at some of the specific instances support what is plainly to be inferred from the figures we have summarized — that class rates within Southern, Southwestern and Western territories, and from those territories to Official Territory, are generally much higher, article for article, than the rates within Official Territory. That was the basic finding of the Commission; and it is abundantly supported by the evidence.
Thus discrimination in class rates in favor of Official Territory and against the Southern, Southwestern and Western Trunk Line territories is established. But that is not the end of the matter. For “mere discrimination does not render a rate illegal under § 3.” United States v. Illinois Central R. Co., 263 U. S. 515, 521. Section 3 condemns “any undue or unreasonable preference or advantage” and “any undue or unreasonable prejudice or disadvantage” to any territory. And, as we have said, the 1940 amendment to § 3, by its addition of “region, district, territory,” did not change the prevailing rules respecting unlawful discrimination; it merely enlarged the reach of § 3. Hence we must determine from the preexisting law whether a discrimination against a territory is obnoxious to § 3. The rule is stated in United States v. Illinois Central R. Co., supra, p. 524, as follows:
“To bring a difference in rates within the prohibition of § 3, it must be shown that the discrimination practiced is unjust when measured by the transportation standard. In other words, the difference in rates cannot be held illegal, unless it is shown that it is not justified by the cost of the respective services, by their values, or by other transportation conditions.”
It is on this principle that the' findings of the Commission under § 3 are both defended and attacked.
Third. The Commission’s findings under § 3 (1) are first challenged on the ground that there is no finding that the corresponding class rates are actually charged to or demanded of competing shippers in the several territories. That is to say, no unlawful discrimination in favor of a shipper in Official Territory and against a shipper in Southern Territory can be said to exist unless it is shown that the southern competitor is actually required to pay the higher interterritorial class rates. It is contended that the record negatives the existence of facts which could support such a finding and that no such finding was made. Reliance is placed on two circumstances. In the first place, reference is made to the effect of classification ratings on class rates which we briefly summarized above. It is noted, for example, that the southern shipper in some instances actually pays less for the shipment of the same commodity than the shipper in Official Territory, e. g., where the Southern Classification carries the commodity in a lower class, which in turn exacts a rate less than that required of the higher classification granted by Official. It is apparent from the illustrations we have given that such is true in some cases. But that is not the dominant pattern. In the vast majority of the instances the classification ratings, like the class rate structure, work to the benefit of Official Territory and against the others. But the greater reliance is placed on the second circumstance— that only a minor portion of freight moves by class rates and of that a greater percentage moves in Official Territory than in the others. This point requires a more extended answer.
The Commission, indeed, found that by reason of non-use the class rates have become obsolete and no longer serve the purposes for which they were designed. They move a relatively small amount of freight. The following table indicates the percentages of carload traffic carried at class rates within and between territories in 1942:
In September, 1940, for example, less-than-carload ratings on about 3,000 commodities were removed from the Southern Classification by classification exceptions. The great bulk of the freight moves on exception rates and commodity rates. This trend, according to the Commission, has been the result of competitive forces. The creation of the exceptions has “shorn the ratings in the classifications of much of their usefulness and proper function.” 262 I. C. C. p. 504. The record is replete with evidence supporting this finding of the Commission. And appellants seize on it as supporting their claim that since class rates have largely become paper rates, they are not the source of injury to shippers from the South and the West; that if the latter are prejudiced by the rate structure, the injury must flow from the exception rates and commodity rates not involved in this proceeding; and that in any event the case of unlawful discriminations in favor of Official Territory and against the other territories has not been founded on the actual use of disadvantageous class rates by shippers in the Southern, Southwestern, and Western Trunk-Line territories.
But that takes too narrow a view of the problem confronting the Commission. We start of course with some showing of actual discrimination against shippers by reason of their use of class rates. But the main case of discrimination made out by the record is one against regions and territories. We assume that a case of unlawful discrimination against shippers by reason of their geographic location would be an unlawful discrimination against the regions where the shipments originate. But an unlawful discrimination against regions or territories is not dependent on such a showing. As we stated in Georgia v. Pennsylvania R. Co., 324 U. S. 439, 450, “Discriminatory rates are but one form of trade barriers.” Their effect is not only to impede established industries but to prevent the establishment of new ones, to arrest the development of a State or region, to make it difficult for an agricultural economy to evolve into an industrial one. Non-discriminatory class rates remove that barrier by offering that equality which the law was designed to afford. They insure prospective shippers not only that the rates are just and reasonable per se but that they are properly related to those of their competitors. Shippers are then not dependent on their ability to get exception rates or commodity rates after their industries are established and their shipments are ready to move. They have a basis for planning ahead by relying on a coherent rate structure reflecting competitive factors.
If a showing of discrimination against a territory or region were dependent on a showing of actual discrimination against shippers located in these sections, the case could never be made out where discriminatory rates had proved to be such effective trade barriers as to prevent the establishment of industries in those outlying regions. If that were the test, then the 1940 amendment to § 3 (1) would not have achieved its purpose. We cannot attribute such futility' to the effort made by Congress to make regions, districts and territories, as well as shippers, the beneficiaries of its anti-discrimination policy expressed in § 3 (1).
So far as the remedy is concerned, the present cases might' of course, be different if the Commission had ño power to prescribe classifications. But § 15 (1) of the Act grants it full power, on finding that a classification is “unjust or unreasonable or unjustly discriminatory or unduly preferential or prejudicial,” to determine and prescribe what classification will be “just, fair, and reasonable.” The Commission’s over-all conclusion was that the classifications in force and the class rates computed from them harbor inequities which result in unlawful discriminations in favor of Official Territory and against the other territories. The fact that relatively small amounts of freight move by class rates proves not that the regional and territorial discrimination is slight, but that the rate structure as constituted holds no promise of affording the various regions or territories that parity of treatment which territorial conditions warrant. The Commission in substance concluded that that result could not be achieved unless traffic was, in the main, moved on class rates. We will discuss later the appropriateness of the relief granted by the interim orders here challenged. It is sufficient here to note that the case of unlawful discrimination against these territories was chiefly founded on the absence of non-discriminatory class rates and uniform classifications which would remove the features of existing rate structures prejudicial to Southern, Southwestern, and Western Trunk-Line territories.
We are thus not primarily concerned with the adequa-cies of the Commission’s findings showing discrimination against actual shippers located in a territory (cf. Florida v. United States, 282 U. S. 194; North Carolina v. United States, 325 U. S. 507; Interstate Commerce Commission v. Mechling, 330 U. S. 567), but with prejudice to a territory as a whole.
Fourth. The inquiry of the Commission into the effect of class rates on the economic development of Southern, Southwestern, and Western Trunk-Line territories took a wide range. It concluded that prejudice to the territories in question had been established. We think that finding is supported by substantial evidence.
It is, of course, obvious that the causal connection between rate discrimination and territorial injury is not always susceptible of conclusive proof. The extent of that causal relation cannot in any case be shown with mathematical exactness. It is a matter of inference from relevant data. The Commission recognized, for example, that the fact that the South has fewer industries than the East results from a complex of causes — that the “industrial development of the East is due to many factors other than transportation services and costs, such as climate, soil, natural resources, available water power, supplies of natural gas and coal, and early settlements of population which antedated the building of railroads.” 262 I. C. C. p. 619. It noted that in 1939 freight revenues on commodities in the manufactures and miscellaneous group were but 5.3 per cent of the destination value of manufactured goods and that differences in freight charges resulting from differences in class rate levels were only a small fraction of that figure. But it nevertheless concluded that “Nearness to markets and ability to ship to markets, on a basis fairly and reasonably related to the rates of competitors, are nevertheless potent factors in the location of a manufacturing plant. In fact, rate relations are more important to the manufacturer and shipper than the levels of the rates.” 262 I. C. C. 619-620.
The great advance in industrialization of Official Territory over the other territories need not be labored, for it is obvious. Some manifestations of that development may be illustrated by the following tables:
The value added by manufacture in all industries from 1849 to 1939 is shown for all the territories by the chart on the following page.
From this chart it is apparent that Official Territory has maintained its commanding lead in spite of recent marked increases elsewhere, especially in the South. Similarly, for the period 1929 to 1939 the number of wage earners in manufacturing industries in the entire country decreased 11 per cent; in Official Territory, 12 per cent; while in the South there was an increase of 5 per cent. For the same period, values of manufactured products increased 1 per cent in the South, while they decreased 21 per cent for the entire country and 25 per cent in Official Territory. From 1930 to 1940, the number of gain-
fully occupied workers in manufacturing in Official Territory decreased from 70.5 per cent to 69.4 per cent of the nation’s total, while in the South there was an increase from 10 per cent to 11.9 per cent. A number of manufacturing activities have increased more rapidly in the South than in Official Territory, though the reverse has been true in other industries. But in spite of the growth in industrial activities in the South and West (which appellants stress heavily), the percentage comparisons are not particularly revealing because of the great disparity between the bases on which they are computed.
The fact remains that economic development in the South and West has lagged and still lags behind Official Territory. In 1940 the average annual dollar income per person employed in Official Territory was $1,988; in Southern, $940; in Southwestern, $1,177; in Western Trunk-Line, $1,411. Official has 69 per cent of all workers engaged in manufacturing in the United States and 29 per cent of all workers in extractive industries. It has, for example, a high concentration in the manufacture of steel and copper products, though less than 4 per cent of the iron ore reserves, and no reserves of metallic copper. The South and West furnish raw materials to Official and buy finished products back. They are also dependent to a great extent on the markets for their products in Official, which has over 48 per cent of the population of the country, 76 per cent of the national market for industrial machinery and raw materials, 64 per cent for all goods and sources, 62 per cent for consumer luxuries, and 53 per cent for consumer necessities. Yet the South and West suffer rate handicaps when they seek to reach those markets. One of the many illustrations will suffice. Cottonseed oil is a basic agricultural commodity. Class rates on it are 7 per cent higher from Southern to Official Territory than they are within Official Territory. If the cottonseed oil is manufactured into oleomargarine, the rates from Southern to Official Territory are 35 per cent higher than the rates within Official Territory.
It is said in reply, however, that the disparities which we have mentioned reflect only natural advantages which justify differences in rates. The great concentration of population in the East is said to show that its more favorable rates are justified by the fact that it has many more people to support the roads. The unfavorable income comparisons with the East are thought to establish one of the handicaps under which the roads in the South and West operate. It is pointed out that the heavy preponderance of the nation’s total natural resource of energy supply is located in Official Territory — 40 to 45 per cent of the total bituminous and semi-bituminous coal supply, practically all of the anthracite resources; 60 per cent of all electric energy originates there. It is said that Official Territory is the logical location for industries which use metals from other territories, since it has the natural supplies of coal. It is also pointed out that the gross income from crops and livestock in Official Territory is the highest in the country, amounting to 31 per cent of the total. From these and comparable data it is argued that the lower rates in Official Territory reflect only inherent advantages which the other territories do not enjoy. It is, therefore, argued that what the Commission has sought to do is to equalize economic advantages, to enter the field of economic planning, and to arrange a rate structure designed to relocate industries, cause a redistribution of population, and in other ways to offset the natural advantages which one territory has over another. It is asserted that such a program is unlawful under Interstate Commerce Commission v. Diffenbaugh, 222 U. S. 42, 46, where the Court held that the Act, in its condemnation of discrimination, “does not attempt to equalize fortune, opportunities or abilities.” And see United States v. Illinois Central R. Co., supra, p. 524; Texas & Pacific R. Co. v. United States, supra, pp. 637-638.
We will revert to this matter when we come to consider whether territorial conditions justify the differences in rates. It is sufficient at this point to say that the record makes out a strong case for the inference that natural disadvantages alone are not responsible for the retarded development of the South and the West, that the discriminatory rate structure has also played a part. How much a part cannot be determined, for every effect is the result of many factors. But the inference of prejudice from the discriminatory rate structure is irresistible. If this discriminatory rate structure is not justified by territorial conditions, then its continued maintenance preserves not the natural advantages of one region but man-made trade barriers which have been imposed upon the country. Such a result cannot be reconciled with the great purposes of § 3 (1) as amended in 1940.
Fifth. The Commission found that conditions peculiar to the respective territories did not justify the differences in the territorial class-rate structures. In reaching that conclusion it first inquired whether the differences in the costs of furnishing the railroad service in the several rate territories justified the existing differences in the levels and patterns of the class rate scales. The basis of its inquiry was a cost study submitted by its staff. For cost analysis purposes the United States is divided into areas roughly but not exactly approximating the classification territories. Thus there are three districts: Eastern, Southern and Western. Southern district is further divided into Pocahontas region and Southern region. Eastern district plus Pocahontas region is substantially the equivalent of Official territory. In the cost study, railroads were assigned to geographical areas; expenses for individual roads were divided into groups, each group being associated with appropriate service units which included revenue car-miles, revenue gross ton-miles, and cars originated and terminated; unit costs were then obtained by dividing the aggregate of the territorial expenses in each group by the applicable territorial
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:
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H
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sc_issuearea
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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 White
delivered the opinion of the Court.
Petitioner State of Ohio obtained an injunction ordering respondent William Kovacs to clean up a hazardous waste site. A receiver was subsequently appointed. Still later, Kovacs filed a petition for bankruptcy. The question before us is whether, in the circumstances present here, Kovacs’ obligation under the injunction is a “debt” or “liability on a claim” subject to discharge under the Bankruptcy Code.
I
Kovacs was the chief executive officer and stockholder of Chem-Dyne Corp., which with other business entities operated an industrial and hazardous waste disposal site in Hamilton, Ohio. In 1976, the State sued Kovacs and the business entities in state court for polluting public waters, maintaining a nuisance, and causing fish kills, all in violation of state environmental laws. In 1979, both in his individual capacity and on behalf of Chem-Dyne, Kovacs signed a stipulation and judgment entry settling the lawsuit. Among other things, the stipulation enjoined the defendants from causing further pollution of the air or public waters, forbade bringing additional industrial wastes onto the site, required the defendants to remove specified wastes from the property, and ordered the payment of $75,000 to compensate the State for injury to wildlife.
Kovacs and the other defendants failed to comply with their obligations under the injunction. The State then obtained the appointment in state court of a receiver, who was directed to take possession of all property and other assets of Kovacs and the corporate defendants and to implement the judgment entry by cleaning up the Chem-Dyne site. The receiver took possession of the site but had not completed his tasks when Kovacs filed a personal bankruptcy petition.
Seeking to develop a basis for requiring part of Kovacs’ postbankruptcy income to be applied to the unfinished task of the receivership, the State then filed a motion in state court to discover Kovacs’ current income and assets. Kovacs requested that the Bankruptcy Court stay those proceedings, which it did. The State also filed a complaint in the Bankruptcy Court seeking a declaration that Kovacs’ obligation under the stipulation and judgment order to clean up the Chem-Dyne site was not dischargeable in bankruptcy because it was not a “debt,” a liability on a “claim,” within the meaning of the Bankruptcy Code. In addition, the complaint sought an injunction against the bankruptcy trustee to restrain him from pursuing any action to recover assets of Kovacs in the hands of the receiver. The Bankruptcy Court ruled against Ohio, In re Kovacs, 29 B. R. 816 (SD Ohio 1982), as did the District Court. The Court of Appeals for the Sixth Circuit affirmed, holding that Ohio essentially sought from Kovacs only a monetary payment and that such a required payment was a liability on a claim that was dis-chargeable under the bankruptcy statute. In re Kovacs, 717 F. 2d 984 (1983). We granted certiorari to determine the dischargeability of Kovacs’ obligation under the affirmative injunction entered against him. 465 U. S. 1078 (1984).
II
Kovacs alleges that the Army Corps of Engineers, using funds recovered from those concerns that generated the wastes, has removed all industrial wastes from the site and that if he has an obligation to pay those expenses, the obligation is owed to the United States, not the State. Kovacs urges that the case is therefore moot. The State argues that the case is not moot because the removal of the barrels and wastes from the surface did not satisfy all of Kovacs’ obligations to clean up the site; it is said that the ground itself remains permeated with toxic materials that must be removed if further pollution of the public waters is to be avoided. We perceive nothing feigned or frivolous about the State’s submission. Sibron v. New York, 392 U. S. 40, 57 (1968). The State surely has a stake in the outcome of this case, United States Parole Comm’n v. Geraghty, 445 U. S. 388, 397 (1980), which in our view is not moot. We proceed to the merits.
Ill
Except for the nine kinds of debts saved from discharge by 11 U. S. C. § 523(a), a discharge in bankruptcy discharges the debtor from all debts that arose before bankruptcy. § 727(b). It is not claimed here that Kovacs’ obligation under the injunction fell within any of the categories of debts excepted from discharge by §523. Rather, the State submits that the obligation to clean up the Chem-Dyne site is not a debt at all within the meaning of the bankruptcy law.
For bankruptcy purposes, a debt is a liability on a claim. § 101(11). A claim is defined by § 101(4) as follows:
“(4) ‘claim’ means—
“(A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or “(B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unma-tured, disputed, undisputed, secured, or unsecured.”
The provision at issue here is § 101(4)(B). For the purposes of that section, there is little doubt that the State had the right to an equitable remedy under state law and that the right has been reduced to judgment in the form of an injunction ordering the cleanup. The State argues, however, that the injunction it has secured is not a claim against Kovacs for bankruptcy purposes because (1) Kovacs’ default was a breach of the statute, not a breach of an ordinary commercial contract which concededly would give rise to a claim; and (2) Kovacs’ breach of his obligation under the injunction did not give rise to a right to payment within the meaning of § 101(4)(B). We are not persuaded by either submission.
There is no indication in the language of the statute that the right to performance cannot be a claim unless it arises from a contractual arrangement. The State resorted to the courts to enforce its environmental laws against Kovacs and secured a negative order to cease polluting, an affirmative order to clean up the site, and an order to pay a sum of money to recompense the State for damage done to the fish population. Each order was one to remedy an alleged breach of Ohio law; and if Kovacs’ obligation to pay $75,000 to the State is a debt dischargeable in bankruptcy, which the State freely concedes, it makes little sense to assert that because the cleanup order was entered to remedy a statutory violation, it cannot likewise constitute a claim for bankruptcy purposes. Furthermore, it is apparent that Congress desired a broad definition of a “claim” and knew how to limit the application of a provision to contracts when it desired to do so. Other provisions cited by Ohio refute, rather than support, its strained interpretation.
The courts below also found little substance in the submission that the cleanup obligation did not give rise to a right to payment that renders the order dischargeable under §727. The definition of “claim” in H. R. 8200 as originally drafted would have deemed a right to an equitable remedy for breach of performance a claim even if it did not give rise to a right to payment. The initial Senate definition of claim was narrower, and a compromise version, §101(4), was finally adopted. In that version, the key phrases “equitable remedy,” “breach of performance,” and “right to payment” are not defined. See 11 U. S. C. § 101. Nor are the differences between the successive versions explained. The legislative history offers only a statement by the sponsors of the Bankruptcy Reform Act with respect to the scope of the provision:
“Section 101(4)(B) ... is intended to cause the liquidation or estimation of contingent rights of payment for which there may be an alternative equitable remedy with the result that the equitable remedy will be susceptible to being discharged in bankruptcy. For example, in some States, a judgment for specific performance may be satisfied by an alternative right to payment in the event performance is refused; in that event, the creditor entitled to specific performance would have a ‘claim’ for purposes of a proceeding under title 11.”
We think the rulings of the courts below were wholly consistent with the statute and its legislative history, sparse as it is. The Bankruptcy Court ruled as follows, In re Kovacs, 29 B. R., at 818:
“There is no suggestion by plaintiff that defendant can render performance under the affirmative obligation other than by the payment of money. We therefore conclude that plaintiff has a claim against defendant within the meaning of 11 U. S. C. § 101(4), and that defendant owes plaintiff a debt within the meaning of 11 U. S. C. §101(11). Furthermore, we have concluded that that debt is dischargeable.”
The District Court affirmed, primarily because it was bound by and saw no error in the Court of Appeals’ prior opinion holding that the State was seeking no more than a money judgment as an alternative to requiring Kovacs personally to perform the obligations imposed by the injunction. To hold otherwise, the District Court explained, “would subvert Congress’ clear intention to give debtors a fresh start.” App. JA-16. The Court of Appeals also affirmed, rejecting the State’s insistence that it had no right to, and was not attempting to enforce, an alternative right to payment:
“Ohio does not suggest that Kovacs is capable of personally cleaning up the environmental damage he may have caused. Ohio claims there is no alternative right to payment, but when Kovacs failed to perform, state law gave a state receiver total control over all Kovacs’ assets. Ohio later used state law to try and discover Kovacs’ post-petition income and employment status in an apparent attempt to levy on his future earnings. In reality, the only type of performance in which Ohio is now interested is a money payment to effectuate the Chem-Dyne cleanup.
“The impact of its attempt to realize upon Kovacs’ income or property cannot be concealed by legerdemain or linguistic gymnastics. Kovacs cannot personally clean up the waste he wrongfully released into Ohio waters. He cannot perform the affirmative obligations properly imposed upon him by the State court except by paying money or transferring over his own financial resources. The State of Ohio has acknowledged this by its steadfast pursuit of payment as an alternative to personal performance.” 717 P. 2d, at 987-988.
As we understand it, the Court of Appeals held that, in the circumstances, the cleanup duty had been reduced to a monetary obligation.
We do not disturb this judgment. The injunction surely obliged Kovacs to clean up the site. But when he failed to do so, rather than prosecute Kovacs under the environmental laws or bring civil or criminal contempt proceedings, the State secured the appointment of a receiver, who was ordered to take possession of all of Kovacs’ nonexempt assets as well as the assets of the corporate defendants and to comply with the injunction entered against Kovacs. As wise as this course may have been, it dispossessed Kovacs, removed his authority over the site, and divested him of assets that might have been used by him to clean up the property. Furthermore, when the bankruptcy trustee sought to recover Kovacs’ assets from the receiver, the latter sought an injunction against such action. Although Kovacs had been ordered to “cooperate” with the receiver, he was disabled by the receivership from personally taking charge of and carrying out the removal of wastes from the property. What the receiver wanted from Kovacs after bankruptcy was the money to defray cleanup costs. At oral argument in this Court, the State’s counsel conceded that after the receiver was appointed, the only performance sought from Kovacs was the payment of money. Tr. of Oral Arg. 19-20. Had Kovacs furnished the necessary funds, either before or after bankruptcy, there seems little doubt that the receiver and the State would have been satisfied. On the facts before it, and with the receiver in control of the site, we cannot fault the Court of Appeals for concluding that the cleanup order had been converted into an obligation to pay money, an obligation that was dischargeable in bankruptcy.
IV
It is well to emphasize what we have not decided. First, we do not suggest that Kovacs’ discharge will shield him from prosecution for having violated the environmental laws of Ohio or for criminal contempt for not performing his obligations under the injunction prior to bankruptcy. Second, had a fine or monetary penalty for violation of state law been imposed on Kovacs prior to bankruptcy, § 523(a)(7) forecloses any suggestion that his obligation to pay the fine or penalty would be discharged in bankruptcy. Third, we do not address what the legal consequences would have been had Kovacs taken bankruptcy before a receiver had been appointed and a trustee had been designated with the usual duties of a bankruptcy trustee. Fourth, we do not hold that the injunction against bringing further toxic wastes on the premises or against any conduct that will contribute to the pollution of the site or the State’s waters is dischargeable in bankruptcy; we here address, as did the Court of Appeals, only the affirmative duty to clean up the site and the duty to pay money to that end. Finally, we do not question that anyone in possession of the site — whether it is Kovacs or another in the event the receivership is liquidated and the trustee abandons the property, or a vendee from the receiver or the bankruptcy trustee — must comply with the environmental laws of the State of Ohio. Plainly, that person or firm may not maintain a nuisance, pollute the waters of the State, or refuse to remove the source of such conditions. As the case comes to us, however, Kovacs has been dispossessed and the State seeks to enforce his cleanup obligation by a money judgment.
The judgment of the Court of Appeals is
Affirmed.
Kovacs originally filed a reorganization petition under Chapter 11 of the Bankruptcy Code, 11U. S. C. § 1101 et seq., but converted the petition to a liquidation bankruptcy under Chapter 7. See 11 U. S. C. § 1112.
The Bankruptcy Court held that the requested hearing was an effort to collect money from Kovacs in violation of the automatic stay provision. See 11 U. S. C. § 362. It entered a specific stay as well. The District Court affirmed, ruling that Ohio was trying to enforce a judgment obtained before filing of the bankruptcy petition. The Court of Appeals for the Sixth Circuit also found the hearing barred. In re Kovacs, 681 F. 2d 454 (1982). In that court’s view, while § 362(b) allowed governmental units to continue to enforce police powers through mandatory injunctions, it denied them the power to collect money in their enforcement efforts. Because of the later filing by Ohio of a complaint to declare that Kovacs’ obligations were not claims under bankruptcy, we granted certiorari, vacated the judgment of the Court of Appeals, and remanded to that court to consider whether the dispute over the stay was moot. 459 U. S. 1167 (1983). As far as we are advised, the Court of Appeals has taken no action on the remand.
H. R. Rep. No. 95-595, p. 309 (1977); S. Rep. No. 95-989, p. 21 (1978). See 2 R. Levin & K. Klee, Collier on Bankruptcy ¶ 101-.04, p. 101-16.4 (15th ed. 1984).
See 11 U. S. C. § 365 (assumption or rejection of executory contracts and leases).
Congress created exemptions from discharge for claims involving penalties and forfeitures owed to a governmental unit, 11 U. S. C. § 523(a)(7), and for claims involving embezzlement and larceny. § 523(a)(4). If a bankruptcy debtor has committed larceny or embezzlement, giving rise to a remedy of either damages or equitable restitution under state law, the resulting liability for breach of an obligation created by law is clearly a claim which is nondisehargeable in bankruptcy.
H. R. 8200, 95th Cong., 1st Sess., 309-310 (House Committee print 1977), as reported September 8, 1977.
See S. 2266, 95th Cong., 1st Sess., 299 (1977), as introduced October 31, 1977.
124 Cong. Rec. 32393 (1978) (remarks of Rep. Edwards); see also id., at 33992 (remarks of Sen. DeConcini).
More fully stated, the Bankruptcy Court’s observations were:
“What is at stake in the present motion is whether defendant’s bankruptcy will discharge the affirmative obligation imposed upon him by the Judgment Entry, that he remove and dispose of all industrial and/or other wastes at the subject premises. If plaintiff is successful here, it would be able to levy on defendant’s wages, the action prevented by our Prior Decision, after defendant’s bankruptcy case is closed and/or the stay of 11 U. S. C. § 362 as interpreted by our Prior Decision is no longer in force. The parties have crystallized the issue here in simple fashion, plaintiff stoutly insisting that the just identified affirmative obligation is not a monetary obligation, while defendant says that it is. The problem arises, of course, because it is not stated as a monetary obligation. Essentially for this reason plaintiff argues that it is not a monetary obligation. Yet plaintiff in discussing the background for the Judgment Entry says that it expected that defendant would generate sufficient funds in his ongoing business to pay for the clean-up. Moreover, we take judicial notice that plaintiff sought discovery with respect to defendant’s earnings, the matter dealt with in our Prior Decision, for the purpose of levying upon his wages, a technique which has no application other than in the enforcement of a money judgment. There is no suggestion by plaintiff that defendant can render performance under the affirmative obligation other than by the payment of money. We therefore conclude that plaintiff has a claim against defendant within the meaning of 11 U. S. C. § 101(4), and that defendant owes plaintiff a debt within the meaning of 11 U. S. C. § 101(11). Furthermore, we have concluded that that debt is dischargeable.” 29 B. R., at 818.
We were advised at oral argument that the receiver at that time was still in possession of the site, although he was contemplating terminating the receivership. Tr. of Oral Arg. 4, 56-57. We were also advised that it was difficult to tell exactly who owned the property at 500 Ford Boulevard and that although the trustee did not formally abandon the property, he did not seek to take possession of it. Id., at 55, 58.
The State relies on Penn Terra, Ltd. v. Department of Environmental Resources, 733 F. 2d 267 (CA3 1984). There, the Court of Appeals for the Third Circuit held that the automatic stay provision of 11U. S. C. § 362 did not apply to the State’s seeking an injunction against a bankrupt to require compliance with the environmental laws. This was held to be an effort to enforce the police power statutes of the State, not a suit to enforce a money judgment. But in that case, there had been no appointment of a receiver who had the duty to comply with the state law and who was seeking money from the bankrupt. The automatic- stay provision does not apply to suits to enforce the regulatory statutes of the State, but the enforcement of such a judgment by seeking money from the bankrupt — what the Court of Appeals for the Sixth Circuit concluded was involved in this case — is another matter.
The commencement of a case under the Bankruptcy Code creates an estate which, with limited exceptions, consists of all of the debtor’s property wherever located. 11U. S. C. § 541. The trustee, who is to be appointed promptly in Chapter 7 cases, is charged with the duty of collecting and reducing the property of the estate and is to be accountable for all of such property. 11 U. S. C. § 704. A custodian of the debtor’s property appointed before commencement of the case is required to deliver the debt- or’s property in his custody to the trustee, unless the bankruptcy court concludes that the interest of creditors would be better served by permitting the custodian to continue in possession and control of the property. 11 U. S. C. § 543. After notice and hearing, the trustee may abandon any property of the estate that is burdensome to the estate or that is of inconsequential value to the estate. 11 U. S. C. § 554. Such abandonment is to the person having the possessory interest in the property. S. Rep. No. 95-989, p. 92 (1978). Property that is scheduled but not administered is deemed abandoned. 11 U. S. C. § 554(e). Had no receiver been appointed prior to Kovacs’ bankruptcy, the trustee would have been charged with the duty of collecting Kovacs’ nonexempt property and administering it. If the site at issue were Kovacs’ property, the trustee would shortly determine whether it was of value to the estate. If the property was worth more than the costs of bringing it into compliance with state law, the trustee would undoubtedly sell it for its net value, and the buyer would clean up the property, in which event whatever obligation Kovacs might have had to clean up the property would have been satisfied. If the property were worth less than the cost of cleanup, the trustee would likely abandon it to its prior owner, who would have to comply with the state environmental law to the extent of his or its ability.
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:
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H
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sc_issuearea
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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 Kennedy
delivered the opinion of the Court.
Among the limitations the Constitution sets on the power of a single State to tax the multistate income of a nondomicil-iary corporation are these: There must be “a ‘minimal connection’ between the interstate activities and the taxing State,” Mobil Oil Corp. v. Commissioner of Taxes of Vt., 445 U. S. 425, 436-437 (1980) (quoting Moorman Mfg. Co. v. Bair, 437 U. S. 267, 273 (1978)), and there must be a rational relation between the income attributed to the taxing State and the intrastate value of the corporate business. 445 U. S., at 437. Under our precedents, a State need not attempt to isolate the intrastate income-producing activities from the rest of the business; it may tax an apportioned sum of the corporation’s multistate business if the business is unitary. E. g., ASARCO Inc. v. Idaho Tax Comm’n, 458 U. S. 307, 317 (1982). A State may not tax a nondomiciliary corporation’s income, however, if it is “derive[d] from ‘unrelated business activity’ which constitutes a ‘discrete business enterprise.’” Exxon Corp. v. Department of Revenue of Wis., 447 U. S. 207, 224 (1980) (quoting Mobil Oil, supra, at 442, 439). This case presents the questions: (1) whether the unitary business principle remains an appropriate device for ascertaining whether a State has transgressed its constitutional limitations; and if so, (2) whether, under the unitary business principle, the State of New Jersey has the constitutional power to include in petitioner’s apportionable tax base certain income that, petitioner maintains, was not generated in the course of its unitary business.
I
Petitioner Allied-Signal, Inc., is the successor-in-interest to the Bendix Corporation (Bendix). The present dispute concerns Bendix’s corporate business tax liability to the State of New Jersey for the fiscal year ending September 30, 1981. Although three items of income were contested earlier, the controversy in this Court involves only one item: the gain of $211.5 million realized by Bendix on the sale of its 20.6% stock interest in ASARCO Inc. (ASARCO). The case was submitted below on stipulated facts, and we begin with a summary.
During the times in question, Bendix was a Delaware corporation with its commercial domicile and corporate headquarters in Michigan. Bendix conducted business in all 50 States and 22 foreign countries. App. 154. Having started business in 1929 as a manufacturer of aviation and automotive parts, from 1970 through 1981, Bendix was organized in four major operating groups: automotive; aerospace/ electronics; industrial/energy; and forest products. Id., at 154-155. Each operating group was under separate management, but the chief executive of each group reported to the chairman and chief executive officer of Bendix. Id., at 155. In this period Bendix’s primary operations in New Jersey were the development and manufacture of aerospace products. App. 161.
ASARCO is a New Jersey corporation with its principal offices in New York. It is one of the world’s leading producers of nonferrous metals, treating ore taken from its own mines and ore it obtains from others. Id., at 163-164. From December 1977 through November 1978, Bendix acquired 20.6% of ASARCO’s stock by purchases on the open market. Id., at 165. In the first half of 1981, Bendix sold its stock back to ASARCO, generating a gain of $211.5 million. Id., at 172. The issue before us is whether New Jersey can tax an apportionable part of this income.
Our determination of the question whether the business can be called “unitary,” see infra, at 788-789, is all but controlled by the terms of a stipulation between the taxpayer and the State. They stipulated: “During the period that Bendix held its investment in ASARCO, Bendix and ASARCO were unrelated business enterprises each of whose activities had nothing to do with the other.” App. 169. Furthermore,
“[p]rior to and after its investment in Asarco, no business or activity of Bendix (in New Jersey or otherwise), either directly or indirectly (other than the investment itself), was involved in the nonferrous metal production business or any other business or activity (in New Jersey or otherwise) in which Asarco was involved. On its part, Asarco had no business or activity (in New Jersey or otherwise) which, directly or indirectly, was involved in any of the businesses or activities (in New Jersey or otherwise) in which Bendix was involved. None of Asarco’s activities, businesses or income (in New Jersey or otherwise) were related to or connected with Bendix’s activities, business or income (in New Jersey or otherwise).” Id., at 164-165.
The stipulation gives the following examples of the independence of the businesses:
“There were no common management, officers, or employees of Bendix and Asarco. There was no use by Bendix of Asarco’s corporate plant, offices or facilities and no use by Asarco of Bendix’s corporate plant, offices or facilities. There was no rent or lease of any property by Bendix from Asarco and no rent or lease of any property by Asarco from Bendix. Bendix and Asarco were each responsible for providing their own legal services, contracting services, tax services, finance services and insurance. Bendix and Asarco had separate personnel and hiring policies... and separate pension and employee benefit plans. Bendix did not lend monies to Asarco and Asarco did not lend monies to Bendix. There were no joint borrowings by Bendix and Asarco. Bendix did not guaranty any of Asarco’s debt and Asarco did not guaranty any of Bendix’s debt. Asarco had no representative on Bendix’s Board of Directors. Bendix did not pledge its Asarco stock. As far as can be determined there were no sales of product by Asarco itself to Bendix or by Bendix to Asarco. There were certain sales of product in the ordinary course of business by Asarco subsidiaries to Bendix but these sales were minute compared to Asarco’s total sales.... These open market sales were at arms length prices and did not come about due to the Bendix investment in Asarco. There were no transfers of employees between Bendix and Asarco.” Id., at 169-171.
While Bendix held its ASARCO stock, ASARCO agreed to recommend that two seats on the 14-member ASARCO Board of Directors be filled by Bendix representatives. The seats were filled by Bendix chief executive officer W. M. Agee and a Bendix outside director. Id., at 168. Nonetheless, “Bendix did not exert any control over Asarco.” Ibid.
After respondent assessed Bendix for taxes on an apportioned amount which included in the base the gain realized upon Bendix’s disposition of its ASARCO stock, Bendix sued for a refund in New Jersey Tax Court. The case was decided based upon the stipulated record we have described, and the Tax Court held that the assessment was proper. Bendix Corp. v. Taxation Div. Director, 10 N. J. Tax 46 (1988). The Appellate Division affirmed, Bendix Corp. v. Director, Div. of Taxation, 237 N. J. Super. 328, 568 A. 2d 59 (1989), and so, in turn, did the New Jersey Supreme Court, Bendix Corp. v. Director, Div. of Taxation, 125 N. J. 20, 592 A. 2d 536 (1991).
The New Jersey Supreme Court held it was constitutional to consider the gain realized from the sale of the ASARCO stock as earned in Bendix’s unitary business, drawing from our decision in Container Corp. of America v. Franchise Tax Bd., 463 U. S. 159, 166 (1983), the principle that “the context for determining whether a unitary business exists has, as an overriding consideration, the exchange or transfer of value, which may be evidenced by functional integration, centralization of management, and economies of scale.” 125 N. J., at 34, 592 A. 2d, at 543-544. The New Jersey Supreme Court went on to state: “The tests for determining a unitary business are not controlled, however, by the relationship between the taxpayer recipient and the affiliate generator of the income that becomes the subject of State tax.” Id., at 35, 592 A. 2d, at 544. Based upon Bendix documents setting out corporate strategy, the court found that the acquisition and sale of ASARCO “went well beyond... passive investments in business enterprises,” id., at 36, 592 A. 2d, at 544, and Bendix “essentially had a business function of corporate acquisitions and divestitures that was an integral operational activity.” Ibid. As support for its conclusion that the proceeds from the sale of the ASARCO stock were attributable to a unitary business, the New Jersey Supreme Court relied in part on the fact that Bendix intended to use those proceeds in what later proved to be an unsuccessful bid to acquire Martin Marietta, a company whose aerospace business, it was hoped, would complement Bendix’s aerospace/ electronics business. Id., at 36, 592 A. 2d, at 545.
We granted certiorari. 502 U. S. 977 (1991). At the initial oral argument in this case New Jersey advanced the proposition that all income earned by a nondomiciliary corporation could be apportioned by any State in which the corporation does business. To understand better the consequences of this theory we requested rebriefing and reargument. Our order asked the parties to address three questions:
“1. Should the Court overrule ASARCO Inc. v. Idaho State Tax Comm’n, 458 U. S. 307 (1982), and F. W. Woolworth Co. v. Taxation and Revenue Dept. of New Mexico, 458 U. S. 354 (1982)?
“2. If ASARCO and Woolworth were overruled, should the decision apply retroactively?
“3. If ASARCO and Woolworth were overruled, what constitutional principles should govern state taxation of corporations doing business in several states?” 503 U. S. 928 (1992).
Because we give a negative answer to the first question, see infra, at 783-786, we need not address the second and third.
I — I
The principle that a State may not tax value earned outside its borders rests on the fundamental requirement of both the Due Process and Commerce Clauses that there be “some definite link, some minimum connection, between a state and the person, property or transaction it seeks to tax.” Miller Brothers Co. v. Maryland, 347 U. S. 340, 344-345 (1954). The reason the Commerce Clause includes this limit is self-evident: In a Union of 50 States, to permit each State to tax activities outside its borders would have drastic consequences for the national economy, as businesses could be subjected to severe multiple taxation. But the Due Process Clause also underlies our decisions in this area. Although our modern due process jurisprudence rejects a rigid, formalistic definition of minimum connection, we have not abandoned the requirement that, in the case of a tax on an activity, there must be a connection to the activity itself, rather than a connection only to the actor the State seeks to tax, see Quill Corp. v. North Dakota, ante, at 306-308. The constitutional question in a case such as Quill Corp. is whether the State has the authority to tax the corporation at all. The present inquiry, by contrast, focuses on the guidelines necessary to circumscribe the reach of the State’s legitimate power to tax; We are guided by the basic principle that the State’s power to tax an individual’s or corporation’s activities is justified by the “protection, opportunities and benefits” the State confers on those activities. Wisconsin v. J. C. Penney Co., 311 U. S. 435, 444 (1940).
Because of the complications and uncertainties in allocating the income of multistate businesses to the several States, we permit States to tax a corporation on an apportionable share of the multistate business carried on in part in the taxing State. That is the unitary business principle. It is not a novel construct, but one that we approved within a short time after the passage of the Fourteenth Amendment’s Due Process Clause. We now give a brief summary of its development.
When States attempted to value railroad or telegraph companies for property tax purposes, they encountered the difficulty that what makes such a business valuable is the enterprise as a whole, rather than the track or wires that happen to be located within a State’s borders. The Court held that, consistent with the Due Process Clause, a State could base its tax assessments upon “the proportionate part of the value resulting from the combination of the means by which the business was carried on, a value existing to an appreciable extent throughout the entire domain of operation.” Adams Express Co. v. Ohio State Auditor, 165 U. S. 194, 220-221 (1897) (citing Western Union Telegraph Co. v. Attorney General of Massachusetts, 125 U. S. 530 (1888)); Massachusetts v. Western Union Telegraph Co., 141 U. S. 40 (1891); Maine v. Grand Trunk R. Co., 142 U. S. 217 (1891); Pittsburgh, C., C. & St. L. R. Co. v. Backus, 154 U. S. 421 (1894); Cleveland, C., C. & St. L. R. Co. v. Backus, 154 U. S. 439 (1894); Western Union Telegraph Co. v. Taggart, 163 U. S. 1 (1896); Pullman’s Palace Car Co. v. Pennsylvania, 141 U. S. 18 (1891).
Adams Express recognized that the principles that permit a State to levy a tax on the capital stock of a railroad, telegraph, or sleeping car company by reference to its unitary business also allow proportional valuation of a unitary business in enterprises of other sorts. As the Court explained: “The physical unity existing in the former is lacking in the latter; but there is the same unity in the use of the entire property for the specific purpose, and there are the same elements of value arising from such use.” 165 U. S., at 221.
The unitary business principle was later permitted for state taxation of corporate income as well as property and capital. Thus, in Underwood Typewriter Co. v. Chamberlain, 254 U. S. 113, 120-121 (1920), we explained:
“The profits of the corporation were largely earned by a series of transactions beginning with manufacture in Connecticut and ending with sale in other States. In this it was typical of a large part of the manufacturing business conducted in the State. The legislature in attempting to put upon this business its fair share, of the burden of taxation was faced with the impossibility of allocating specifically the profits earned by the processes conducted within its borders. It, therefore, adopted a method of apportionment which, for all that appears in this record, reached, and was meant to reach, only the profits earned within the State.”
As these cases make clear, the unitary business rule is a recognition of two imperatives: the States’ wide authority to devise formulae for an accurate assessment of a corporation’s intrastate value or income; and the necessary limit on the States’ authority to tax value or income that cannot in fairness be attributed to the taxpayer’s activities within the State. It is this second component, the necessity for a limiting principle, that underlies this case.
As we indicated in Mobil Oil Corp. v. Commissioner of Taxes of Vt., 445 U. S., at 442: “Where the business activities of the dividend payor have nothing to do with the activities of the recipient in the taxing State, due process considerations might well preclude apportionability, because there would be no underlying unitary business.” The constitutional question becomes whether the income “derive[s] from ‘unrelated business activity’ which constitutes a ‘discrete business enterprise.’ ” Exxon Corp. v. Department of Revenue of Wis., 447 U. S., at 224 (quoting Mobil Oil, supra, at 442, 439).
Although Mobil Oil and Exxon made clear that the unitary business principle limits the States’ taxing power, it was not until our decisions in ASARCO Inc. v. Idaho Tax Common, 458 U. S. 307 (1982), and F. W. Woolworth Co. v. Taxation and Revenue Dept. of N. M., 458 U. S. 354 (1982), that we struck down a state attempt to include in the appor-tionable tax base income not derived from the unitary business. In those cases the States sought to tax unrelated business activity.
The principal question in ASARCO concerned Idaho’s attempt to include in the apportionable tax base of ASARCO certain dividends received from, among other companies, the Southern Peru Copper Corp. 458 U. S., at 309, 320. The analysis is of direct relevance for us because we have held that for constitutional purposes capital gains should be treated as no different from dividends. Id., at 330. The ASARCO in the 1982 case was the same company as the ASARCO here. It was one of four of Southern Peru’s shareholders, owning 51.5% of its stock. Under an agreement with the other shareholders, ASARCO was prevented from dominating Southern Peru’s board of directors. ASARCO had the right to appoint 6 of Southern Peru’s 13 directors, while 8 votes were required for the passage of any resolution. Southern Peru was in the business of producing unrefined copper (a nonferrous ore), some of which it sold to its shareholders. ASARCO purchased approximately 35% of Southern Peru’s output, at average representative trade prices quoted in a trade publication and over which neither Southern Peru nor ASARCO had any control. Id., at 320-322. We concluded that “ASARCO’s Idaho silver mining and Southern Peru’s autonomous business [were] insufficiently connected to permit the two companies to be classified as a unitary business.” Id., at 322.
On the same day we decided ASARCO, we decided Woolworth. In that case, the taxpayer company was domiciled in New York and operated a chain of retail variety stores in the United States. In the company’s apportionable state tax base, New Mexico sought to include earnings from four subsidiaries operating in foreign countries. The subsidiaries also engaged in chainstore retailing. 458 U. S., at 356-357. We observed that although the parent company had the potential to operate the subsidiaries as integrated divisions of a single unitary business, that potential was not significant if the subsidiaries in fact comprise discrete business operations. Id., at 362. Following the indicia of a unitary business defined in Mobil Oil, we inquired whether any of the three objective factors were present. The factors were: (1) functional integration; (2) centralization of management; and (3) economies of scale. 458 U. S., at 364. We found that “[ejxcept for the type of occasional oversight — with respect to capital structure, major debt, and dividends — that any parent gives to an investment in a subsidiary,” id., at 369, none of these factors was present. The subsidiaries were found not to be part of a unitary business. Ibid.
Our most recent case applying the unitary business principle was Container Corp. of America v. Franchise Tax Bd., 463 U. S. 159 (1983). The taxpayer there was a vertically integrated corporation which manufactured custom-ordered paperboard packaging. Id., at 171. California sought to tax income it received from its wholly owned and mostly owned foreign subsidiaries, each of which was in the same business as the parent. Id., at 171-172. The foreign subsidiaries were given a fair degree of autonomy: They purchased only 1% of their materials from the parent, and personnel transfers from the parent to the subsidiaries were rare. Id., at 172. We recognized, however:
“[I]n certain respects, the relationship between appellant and its subsidiaries was decidedly close. For example, approximately half of the subsidiaries’ long-term debt was either held directly, or guaranteed, by appellant. Appellant also provided advice and consultation regarding manufacturing techniques, engineering, design, architecture, insurance, and cost accounting to a number of its subsidiaries, either by entering into technical service agreements with them or by informal arrangement. Finally, appellant occasionally assisted its subsidiaries in their procurement of equipment, either by selling them used equipment of its own or by employing its own purchasing department to act as an agent for the subsidiaries.” Id., at 173.
Based on these facts, we found that the taxpayer had not met its burden of showing by “‘“clear and cogent evidence” ’ ” that the State sought to tax extraterritorial values. Id., at 175, 164 (quoting Exxon Corp., supra, at 221, in turn quoting Butler Brothers v. McColgan, 315 U. S. 501, 507 (1942), in turn quoting Norfolk & Western R. Co. v. North Carolina ex rel. Maxwell, 297 U. S. 682, 688 (1936)).
In the course of our decision in Container Corp., we reaffirmed that the constitutional test focuses on functional integration, centralization of management, and economies of scale. 463 U. S., at 179 (citing Woolworth, supra, at 364; Mobil Oil, supra, at 438). We also reiterated that a unitary-business may exist without a flow of goods between the parent and subsidiary, if instead there is a flow of value between the entities. 463 U. S., at 178. The principal virtue of the unitary business principle of taxation is that it does a better job of accounting for “the many subtle and largely unquantifiable transfers of value that take place among the components of a single enterprise” than, for example, geographical or transactional accounting. Id., at 164-165 (citing Mobil Oil, 445 U. S., at 438-439).
Notwithstanding the Court’s long experience in applying the unitary business principle, New Jersey and several amici curiae argue that it is not an appropriate means for distinguishing between income generated within a State and income generated without. New Jersey has not persuaded us to depart from the doctrine of stare decisis by overruling our cases that announce and follow the unitary business standard. In deciding whether to depart from a prior decision, one relevant consideration is whether the decision is “unsound in principle.” Garcia v. San Antonio Metropolitan Transit Authority, 469 U. S. 528, 546 (1985). Another is whether it is “unworkable in practice.” Ibid. And, of course, reliance interests are of particular relevance because “[ajdherence to precedent promotes stability, predictability, and respect for judicial authority.” Hilton v. South Carolina Public Railways Comm’n, 502 U. S. 197, 202 (1991) (citing Vasquez v. Hillery, 474 U. S. 254, 265-266 (1986)). See also Quill Corp. v. North Dakota, ante, at 316 (industry’s reliance justifies adherence to precedent); ante, at 320 (Scalia, J., concurring in part and concurring in judgment) (same). Against this background we address the arguments of New Jersey and its amici.
New Jersey contends that the unitary business principle must be abandoned in its entirety, arguing that a nondomicil-iary State should be permitted “to apportion all the income of a separate multistate corporate taxpayer.” Brief for Respondent on Reargument 27. According to New Jersey, the unitary business principle does not reflect economic reality, while its proposed theory does. We are not convinced.
New Jersey does not appear to dispute the basic proposition that a State may not tax value earned outside its borders. It contends instead that all income of a corporation doing any business in a State is, by virtue of common ownership, part of the corporation’s unitary business and appor-tionable. See Tr. of Oral Arg. 25-26 (Apr. 22, 1992). New Jersey’s sweeping theory cannot be reconciled with the concept that the Constitution places limits on a State’s power to tax value earned outside of its borders. To be sure, our cases give States wide latitude to fashion formulae designed to approximate the in-state portion of value produced by a corporation’s truly multistate activity. But that is far removed from New Jersey’s theory that any business in the State, no matter how small or unprofitable, subjects all of a corporation’s out-of-state income, no matter how discrete, to apportionment.
According to New Jersey, Brief for Respondent on Reargument 11, there is no logical distinction between short-term investment of working capital, which all concede is appor-tionable, see Reply Brief for Petitioner on Reargument 4-5, and n. 3; Tr. of Oral Arg. 7-8 (Apr. 22, 1992); Container Corp., supra, at 180, n. 19, and all other investments. The same point was advanced by the dissent in ASARCO, 458 U. S., at 337 (opinion of O’Connor, J.). New Jersey’s basic theory is that multistate corporations like Bendix regard all of their holdings as pools of assets, used for maximum long-term profitability, and that any distinction between operational and investment assets is artificial. We may assume, argu-endo, that the managers of Bendix cared most about the profits entry on a financial statement, but that state of mind sheds little light on the question whether in pursuing maximum profits they treated particular intangible assets as serving, on the one hand, an investment function, or, on the other, an operational function. See Container Corp,, supra, at 180, n. 19. That is the relevant unitary business inquiry, one which focuses on the objective characteristics of the asset’s use and its relation to the taxpayer and its activities within the taxing State. It is an inquiry to which our cases give content, and which is necessary if the limits of the Due Process and Commerce Clauses are to have substance in a modern economy. In short, New Jersey’s suggestion is not in accord with the well-established and substantial case law interpreting the Due Process and Commerce Clauses.
Our precedents are workable in practice; indeed, New Jersey conceded as much. See Tr. of Oral Arg. 37-38 (Apr. 22, 1992). If lower courts have reached divergent results in applying the unitary business principle to different factual circumstances, that is because, as we have said, any number of variations on the unitary business theme “are logically consistent with the underlying principles motivating the approach,” Container Corp., supra, at 167, and also because the constitutional test is quite fact sensitive.
Indeed, if anything would be unworkable in practice, it would be for us now to abandon our settled jurisprudence defining the limits of state power to tax under the unitary business principle. State legislatures have relied upon our precedents by enacting tax codes which allocate intangible nonbusiness income to the domiciliary State, see App. to Brief for Petitioner on Reargument 1a-7a (collecting statutes). Were we to adopt New Jersey’s theory, we would be required either to invalidate those statutes or authorize what would be certain double taxation. And, of course, we would defeat the reliance interest of those corporations that have structured their activities and paid their taxes based upon the well-established rules we here confirm. Difficult questions respecting the retroactive effect of our decision would also be presented. See James B. Beam Distilling Co. v. Georgia, 501 U. S. 529 (1991). New Jersey’s proposal would disrupt settled expectations in an area of the law in which the demands of the national economy require stability.
Not willing to go quite so far as New Jersey, some amici curiae urge us to modify, rather than abandon, the unitary business principle. See, e. g., Brief for Multistate Tax Commission as Amicus Curiae; Brief for Multistate Tax Commission as Amicus Curiae on Reargument; Brief for Chevron Corporation as Amicus Curiae. They urge us to hold that the Constitution does not require a unitary business relation between the payor and the payee in order for a State to apportion the income the payee corporation receives from an investment in the payor. Rather, they urge us to adopt as the constitutional test the standard set forth in the business income definition in § 1(a) of the Uniform Division of Income for Tax Purposes Act (UDITPA), 7A U. L. A. 331, 336 (1985). Under UDITPA, “business income,” which is apportioned, is defined as: “income arising from transactions and activity in the regular course of the taxpayer’s trade or business and includes income from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer’s regular trade or business operations.” UDITPA §1(a). “Non-business income,” which is allocated, is defined as “all income other than business income.” § 1(e).
In the abstract, these definitions may be quite compatible with the unitary business principle. See Container Corp., supra, at 167 (noting that most of the relevant provisions of the California statute under which we sustained the challenged tax there were derived from UDITPA). Furthermore, the unitary business principle is not so inflexible that as new methods of finance and new forms of business evolve it cannot be modified or supplemented where appropriate. It does not follow, though, that apportionment-of all income is permitted by the mere fact of corporate presence within the State; and New Jersey offers little more in support of the decision of the State Supreme Court.
We agree that the payee and the payor need not be engaged in the same unitary business as a prerequisite to apportionment in all cases. Container Corp. says as much. What is required instead is that the capital transaction serve an operational rather than an investment function. 463 U. S., at 180, n. 19. Hence, in ASARCO, although we rejected the dissent’s factual contention that the stock investments there constituted “interim uses of idle funds ‘accumulated for the future operation of [the taxpayer’s]... business [operation],’ ” we did not dispute the suggestion that had that been so the income would have been apportionable. 458 U. S., at 325, n. 21.
To be sure, the existence of a unitary relation between the payor and the payee is one means of meeting the constitutional requirement. Thus, in ASARCO and Woolworth we focused on the question whether there was such a relation. We did not purport, however, to establish a general requirement that there be a unitary relation between the payor and the payee to justify apportionment, nor do we do so today.
It remains the case that “[i]n order to exclude certain income from the apportionment formula, the company must prove that ‘the income was earned in the course of activities unrelated to [those carried out in the taxing] State.’” Exxon Corp. v. Department of Revenue of Wis., 447 U. S., at 223 (quoting Mobil Oil Corp. v. Commissioner of Taxes of Vt., 445 U. S., at 439). The existence of a unitary relation between payee and payor is one justification for apportionment, but not the only one. Hence, for example, a State may include within the apportionable income of a nondomiciliary corporation the interest earned on short-term deposits in a bank located in another State if that income forms part of the working capital of the corporation’s unitary business, notwithstanding the absence of a unitary relationship between the corporation and the bank. That circumstance, of course, is not at all presented here. See infra this page and 789.
Ill
Application of the foregoing principles to the present case yields a clear result: The stipulated factual record now before us presents an even weaker basis for inferring a unitary business than existed in either ASARCO or Woolworth, making this an a fortiori case. There is no serious contention that any of the three factors upon which we focused in Woolworth were present. Functional integration and economies of scale could not exist because, as the parties have stipulated, “Bendix and Asarco were unrelated business enterprises each of whose activities had nothing to do with the other.” App. 169. Moreover, because Bendix owned only 20.6% of ASARCO’s stock, it did not have the potential to operate ASARCO as an integrated division of a single unitary business, and of course, even potential control is not sufficient. Woolworth, 458 U. S., at 362. There was no centralization of management.
Furthermore, contrary to the view expressed below by the New Jersey Supreme Court, see 125 N. J., at 36-37, 592 A. 2d, at 544-545, the mere fact that an intangible asset was acquired pursuant to a long-term corporate strategy of acquisitions and dispositions does not convert an otherwise passive investment into an integral operational one. Indeed, in Container Corp. we noted the important distinction between a capital transaction that serves an investment function and one that serves an operational function. 463 U. S., at 180, n. 19 (citing Corn Products Refining Co. v. Commissioner, 350 U. S. 46, 50-53 (1955)). If that distinction is to retain its vitality, then, as we held in ASARCO, the fact that a transaction was undertaken for a business purpose does not change its character. 458 U. S., at 326. Idaho had argued that intangible income could be treated as earned in the course of a unitary business if the intangible property which produced that income is “ 'acquired, managed or disposed of for purposes relating or contributing to the taxpayer’s business.’ ” Ibid, (quoting Brief for Appellee 4). In rejecting the argument we observed:
“This definition of unitary business would destroy the concept. The business of a corporation requires that it earn money to continue operations and to provide a return on its invested capital. Consequently all of its operations, including any investment made, in some sense can be said to be 'for purposes related to or contributing to the [corporation’s] business.’ When pressed to its logical limit, this conception of the ‘unitary business’ limitation becomes no limitation at all.” 458 U. S., at 326.
Apart from semantics, we see no distinction between the “purpose” test we rejected in ASARCO and the “ingrained acquisition-divestiture policy” approach adopted by the New Jersey Supreme Court. 125 N. J., at 36, 592 A. 2d, at 544. The hallmarks of an acquisition that is part of the taxpayer’s unitary business continue to be
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:
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H
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sc_issuearea
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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 Scalia
delivered the opinion of the Court.
This case presents the question whether there is an exception to criminal liability under 18 U. S. C. § 1001 for a false statement that consists of the mere denial of wrongdoing, the so-called "exculpatory no.”
I
While acting as a union officer during 1987 and 1988, petitioner James Brogan accepted cash payments from JRD Management Corporation, a real estate company whose employees were represented by the union. On October 4,1993, federal agents from the Department of Labor and the Internal Revenue Service visited petitioner at his home. The agents identified themselves and explained that they were seeking petitioner’s cooperation in an investigation of JRD and various individuals. They told petitioner that if he wished to cooperate, he should have an attorney contact the United States Attorney’s Office, and that if he could not afford an attorney, one could be appointed for him.
The agents then asked petitioner if he would answer some questions, and he agreed. One question was whether he had received any cash or gifts from JRD when he was a union officer. Petitioner’s response was “no.” At that point, the agents disclosed that a search of JED headquarters had produced company records showing the contraiy. They also told petitioner that lying to federal agents in the course of an investigation was a crime. Petitioner did not modify his answers, and the interview ended shortly thereafter.
Petitioner was indicted for accepting unlawful cash payments from an employer in violation of 29 U. S. C. §§ 186(b)(1), (a)(2), and (d)(2), and making a false statement within the jurisdiction of a federal agency in violation of 18 U. S. C. § 1001. He was tried, along with several co-defendants, before a jury in the United States District Court for the Southern District of New York, and was found guilty. The United States Court of Appeals for the Second Circuit affirmed the convictions, 96 F. 3d 85 (1996). We granted cer-tiorari on the issue of the “exculpatory no.” 520 U. S. 1263 (1997).
II
At the time petitioner falsely replied “no” to the Government investigators’ question, 18 U. S. C. § 1001 (1988 ed.) provided:
“Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years, or both.”
By its terms, 18 U. S. C. § 1001 covers “any” false statement — that is, a false statement “of whatever kind,” United States v. Gonzales, 520 U. S. 1, 5 (1997) (internal quotation marks and citation omitted). The word “no” in response to a question assuredly makes a “statement,” see, e. g., Webster’s New International Dictionary 2461 (2d ed. 1950) (def. 2: “That which is stated; an embodiment in words of facts or opinions”), and petitioner does not contest that his utterance was false or that it was made “knowingly and willfully.” In fact, petitioner concedes that under a “literal reading” of the statute he loses. Brief for Petitioner 5.
Petitioner asks us, however, to depart from the literal text that Congress has enacted, and to approve the doctrine adopted by many Circuits which excludes from the scope of § 1001 the “exculpatory no.” The central feature of this doctrine is that a simple denial of guilt does not come within the statute. See, e. g., Moser v. United States, 18 F. 3d 469, 473-474 (CA7 1994); United States v. Taylor, 907 F. 2d 801, 805 (CA8 1990); United States v. Equihua-Juarez, 851 F. 2d 1222, 1224 (CA9 1988); United States v. Cogdell, 844 F. 2d 179, 183 (CA4 1988); United States v. Tabor, 788 F. 2d 714, 717-719 (CA11 1986); United States v. Fitzgibbon, 619 F. 2d 874, 880-881 (CA10 1980); United States v. Chevoor, 526 F. 2d 178, 183-184 (CA1 1975), cert. denied, 425 U. S. 935 (1976). There is considerable variation among the Circuits concerning, among other things, what degree of elaborated tale-telling carries a statement beyond simple denial. See generally Annot., 102 A. L. R. Fed. 742 (1991). In the present case, however, the Second Circuit agreed with petitioner that his statement would constitute a “true ‘exculpatory n[o]’ as recognized in other circuits,” 96 F. 3d, at 37, but aligned itself with the Fifth Circuit (one of whose panels had been the very first to embrace the “exculpatory no,” see Paternostro v. United States, 311 F. 2d 298 (CA5 1962)) in categorically rejecting the doctrine, see United States v. Rodriguez-Rios, 14 F. 3d 1040 (CA5 1994) (en banc).
Petitioner’s argument in support of the “exculpatory no” doctrine proceeds from the major premise that § 1001 criminalizes only those statements to Government investigators that “pervert governmental functions”; to the minor premise that simple denials of guilt to Government investigators do not pervert governmental functions; to the conclusion that § 1001 does not criminalize simple denials of guilt to Government investigators. Both premises seem to us mistaken. As to the minor: We cannot imagine how it could be true that falsely denying guilt in a Government investigation does not pervert a governmental function. Certainly the investigation of wrongdoing is a proper governmental function; and since it is the very purpose of an investigation to uncover the truth, any falsehood relating to the subject of the investigation perverts that function. It could be argued, perhaps, that a disbelieved falsehood does not pervert an investigation. But making the existence of this crime turn upon the credulousness of the federal investigator (or the persuasiveness of the liar) would be exceedingly strange; such a defense to the analogous crime of perjury is certainly unheard of. Moreover, as we shall see, the only support for the “perversion of governmental functions” limitation is a statement of this Court referring to the possibility (as opposed to the certainty) of perversion of function — a possibility that exists whenever investigators are told a falsehood relevant to their task.
In any event, we find no basis for the major premise that only those falsehoods that pervert governmental functions are covered by § 1001. Petitioner derives this premise from a comment we made in United States v. Gilliland, 312 U. S. 86 (1941), a ease involving the predecessor to § 1001. That earlier version of the statute subjected to criminal liability “ ‘whoever shall knowingly and willfully . . . make or cause to be made any false or fraudulent statements or representations, or make or use or cause to be made or used any false bill, receipt, voucher, roll, account, claim, certificate, affidavit, or deposition, knowing the same to contain any fraudulent or-fictitious statement or entry, in any matter within the jurisdiction of any department or agency of the United States....'" Id., at 92-93. The defendant in Gilliland, relying on the' interpretive canon ejusdem, generis, argued that the statute should be read to apply only to matters in which the Government has a financial or proprietary interest. In rejecting that argument, we noted that Congress had specifically amended the statute to cover “ ‘any matter within the jurisdiction of any department or agency of the United States,’ ” thereby indicating “the congressional intent to protect the authorized functions of governmental departments and agencies from the perversion which might result from the deceptive practices described.” Id., at 93. Petitioner would elevate this statement to a holding that § 1001 does not apply where a perversion of governmental functions does not exist. But it is not, and cannot be, our practice to restrict the unqualified language of a statute to the particular evil that Congress was trying to remedy — even assuming that it is possible to identify that evil from something other than the text of the statute itself.. The holding of Gilliland certainly does not exemplify such a practice, since it rejected the defendant’s argument for a limitation that the text of the statute would not bear. And even the relied-upon dictum from Gilliland does not support restricting text to supposed purpose, but to the contrary acknowledges the reality that the reach of a statute often exceeds the precise evil to be eliminated. There is no inconsistency whatever between the proposition that Congress intended “to protect the authorized functions of governmental departments and agencies from the perversion which might result” and the proposition that the statute forbids all “the deceptive practices described.” Ibid.
The second line of defense that petitioner invokes for the “exculpatory no” doctrine is inspired by the Fifth Amendment. He argues that a literal reading of § 1001 violates the “spirit” of the Fifth Amendment because it places a “cornered suspect” in the “cruel trilemma” of admitting guilt, remaining silent, or .falsely denying guilt. Brief for Petitioner 11. This “trilemma” is wholly of the guilty suspect’s own making, of course. An innocent person will not find himself in a similar quandary (as one commentator has put it, the innocent person lacks even a “lemma,” Allen, The Simpson Affair, Reform of the Criminal Justice Process, and Magic Bullets, 67 U. Colo. L. Rev. 989, 1016 (1996)). And even the honest and contrite guilty person will not regard the third prong of the “trilemma” (the blatant lie) as an available option. The bon mot “cruel trilemma” first appeared in Justice Goldberg’s opinion for the Court in Murphy v. Waterfront Comm’n of N. Y. Harbor, 878 U. S. 52 (1964), where it was used to explain the importance of a suspect’s Fifth Amendment right to remain silent when subpoenaed to testify in an official inquiry. Without that right, the opinion said, he would be exposed “to the cruel trilemma of self-accusation, perjury or contempt.” Id., at 55. In order to validate the “exculpatory no,” the elements of this “cruel trilemma” have now been altered — ratcheted up, as it were, so that the right to remain silent, which was the liberation from the original trilemma, is now itself a cruelty. We are not disposed to write into our law this species of compassion inflation.
Whether or not the predicament of the wrongdoer run to ground tugs at the heartstrings, neither the text nor the spirit of the Fifth Amendment confers a privilege to lie. “[Pjroper invocation of the Fifth Amendment privilege against compulsory self-incrimination allows a witness to remain silent, but not to swear falsely.” United States v. Ap felbaum, 445 U. S. 115, 117 (1980). See also United States v. Wong, 431 U. S. 174, 180 (1977); Bryson v. United States, 396 U. S. 64, 72 (1969). Petitioner contends that silence is an “illusory” option because a suspect may fear that his silence will be used against him later, or may not even know that silence is an available option. Brief for Petitioner 12-13. As to the former: It is well established that the faet that a person’s silence can be used against him — either as substantive evidence of guilt or to impeach him if he takes the stand — does not exert a form of pressure that exonerates an otherwise unlawful lie. See United States v. Knox, 396 U. S. 77, 81-82 (1969). And as for the possibility that the person under investigation may be unaware of his right to remain silent: In the modern age of frequently dramatized “Miranda” warnings, that is implausible. Indeed, we found it implausible (or irrelevant) 30 years ago, unless the suspect was “in custody or otherwise deprived of his freedom of action in any significant way,” Miranda v. Arizona, 384 U. S. 436, 445 (1966).
Petitioner repeats the argument made by many supporters of the “exculpatory no,” that the doctrine is necessary to eliminate the grave risk that § 1001 will become an instrument of prosecutorial abuse. The supposed danger is that overzealous prosecutors will use this provision as a means of “piling on” offenses — sometimes punishing the denial of wrongdoing more severely than the wrongdoing itself. The objectors’ principal grievance on this score, however, lies not with the hypothetical prosecutors but with Congress itself, which has decreed the obstruction of a legitimate investigation to be a separate offense, and a serious one. It is not for us to revise that judgment. Petitioner has been unable to demonstrate, moreover, any history of prosecutorial excess, either before or after widespread judicial acceptance of the “exculpatory no.” And finally, if there is a problem of supposed “overreaching” it is hard to see how the doctrine of the “exculpatory no” could solve it. It is easy enough for an interrogator to press the liar from the initial simple denial to a more detailed fabrication that would not qualify for the exemption.
Ill
A brief word in response to the dissent’s assertion that the Court may interpret a criminal statute more narrowly than it is written: Some of the eases it cites for that proposition represent instances in which the Court did not purport to be departing from a reasonable reading of the text, United States v. X-Citement Video, Inc., 513 U. S. 64, 77-78 (1994); Williams v. United States, 458 U. S. 279, 286-287 (1982). In the others, the Court applied what it thought to be a background interpretive principle of general application. Staples v. United States, 511 U. S. 600, 619 (1994) (construing statute to contain common-law requirement of mens rea); Sorrells v. United States, 287 U. S. 435, 446 (1932) (construing statute not to cover violations produced by entrapment); United States v. Palmer, 3 Wheat. 610, 631 (1818) (construing statute not to apply extraterritorially to noncitizens). Also into this last category falls the dissent’s correct assertion that the present statute does not “mak[e] it a crime for an undercover narcotics agent to make a false statement to a drug peddler.” Post, at 419 (opinion of Stevens, J.). Criminal prohibitions do not generally apply to reasonable enforcement actions by officers of the law. See, e.g., 2 P. Robinson, Criminal Law Defenses § 142(a), p. 121 (1984) (“Every American jurisdiction recognizes some form of law enforcement authority justification”).
It is one thing to acknowledge and accept such well defined (or even newly enunciated), generally applicable, background principles of assumed legislative intent. It is quite another to espouse the broad proposition that criminal statutes do not have to .be read as broadly as they are written, but are subject to ease-by-ease exceptions. The problem with adopting such an expansive, user-friendly judicial rule is that there is no way of knowing when, or how, the rule is to be invoked. As to the when: The only reason Justice Stevens adduces for invoking it here is that a felony conviction for this offense seems to him harsh. Which it may well be. But the instances in which courts may ignore harsh penalties are set forth in the Constitution, see Art. I, § 9; Art. III, § 3; Amdt. 8; Amdt. 14, § 1; and to go beyond them will surely leave us at sea. And as to the how: There is no reason in principle why the dissent chooses to mitigate the harshness by saying that § 1001 does not embrace the “exculpatory no,” rather than by saying that § 1001 has no application unless the defendant has been warned of the consequences of lying, or indeed unless the defendant has been put under oath. We are again at sea.
To be sure, some of this uncertainty would be eliminated, at our stage of judging, if we wrenched out of its context the principle quoted by the dissent from Sir Edward Coke, that “communis opinio is of good authoritie in law,” and if we applied that principle consistently to a consensus in the judgments of the courts of appeals. (Of course the courts of appeals themselves, and the district courts, would still be entirely at sea, until such time as a consensus would have developed.) But the dissent does not propose, and its author has not practiced, consistent application of the principle, see, e.g., Hubbard v. United States, 514 U. S. 695, 713 (1995) (opinion of Stevens, J.) (“We think the text of § 1001 forecloses any argument that we should simply ratify the body of eases adopting the judicial function exception”); Chapman v. United States, 500 U. S. 453, 468 (1991) (Stevens, J., dissenting) (disagreeing with the unanimous conclusions of the Courts of Appeals that interpreted the criminal statute at issue); thus it becomes yet another user-friendly judicial rule to be invoked ad libitum.
In sum, we find nothing to support the “exculpatory no” doctrine except the many Court of Appeals decisions that have embraced it. While communis error facit jus may be a sadly accurate description of reality, it is not the normative basis of this Court’s jurisprudence. Courts may not create their own limitations on legislation, no matter how alluring the policy arguments for doing so, and no matter how widely the blame may be spread. Because the plain language of § 1001 admits of no exception for an “exculpatory no,” we affirm the judgment of the Court of Appeals.
It is so ordered.
“The government need not show that because of the perjured testimony, the grand jury threw in the towel.... Grand jurors ... are free to disbelieve a witness and persevere in an investigation without immunizing a perjurer.” United States v. Abrams, 568 F. 2d 411, 421 (CA5), cert. denied, 437 U.S 903 (1978). See generally 70 C. J. S. Perjury § 13, pp. 260-261 (1987).
“Under the principle of ejusdem generis, when a general term follows a specific one, the general term should be understood as a reference to subjects aldn to the one with specific enumeration.” Norfolk & Western R. Co. v. Train Dispatchers, 499 U. S. 117, 129 (1991).
Coke said this in reference not to statutory law but to the lex commu-nis, which most of his illustrious treatise dealt with. 1 E. Coke, Institutes 186a (15th ed. 1794). As applied to that, of course, the statement is not only true but almost an iteration; it amounts to saying that the common law is the common 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.
Mr. Chief Justice Burger
delivered the opinion of the Court.
This appeal raises issues similar to those decided in Parham v. J. R., ante, p. 584, as to what process is due when the parents or guardian of a child seek state institutional mental health care.
I
This is the second time we have reviewed a District Court’s judgment that Pennsylvania’s procedures for the voluntary admission of mentally ill and mentally retarded children to a state hospital are unconstitutional. In the earlier suit, five children who were between the ages of 15 and 18 challenged the 1966 statute pursuant to which they had been admitted to Haverford State Hospital. Pa. Stat. Ann., Tit. 50, §§ 4402, 4403 (Purdon 1969). After a three-judge District Court, with one judge dissenting, declared the statute unconstitutional, Bartley v. Kremens, 402 F. Supp. 1039 (ED Pa. 1975), the Pennsylvania Legislature amended its mental health code with regard to the mentally ill. The amendments placed adolescents over the age of 14 in essentially the same position as adults for purposes of a voluntary admission. Mental Health Procedures Act of 1976, § 201, Pa. Stat. Ann., Tit. 50, § 7201 (Purdon Supp. 1978). Under the new statute, the named plaintiffs could obtain their requested releases from the state hospitals independently of the constitutionality of the 1966 statute, and we therefore held that the claims of the named plaintiffs were moot. Kremens v. Bartley, 431 U. S. 119, 129 (1977). We then remanded the case to the District Court for “reconsideration of the class definition, exclusion of those whose claims are moot, and substitution of class representatives with live claims.” Id., at 135.
On remand, 12 new plaintiffs, appellees here, were named to represent classes of mentally ill and mentally retarded children. Nine of the children were younger than 14 and constituted all of those who had been admitted to the State’s hospitals for the mentally ill in accordance with the 1976 Act at the time the suit was brought; three other children represented a class of patients who were 18 and younger and who had been or would be admitted to a state hospital for the mentally retarded under the 1966 Act and 1973 regulations implementing that Act. All 12 children had been admitted on the application of parents or someone standing in loco parentis with state approval after an independent medical examination.
The suit was filed against several named defendants, the Pennsylvania Secretary of Public Welfare and the directors of three state owned and operated facilities. The District Court, however, certified a defendant class that consisted of “ 'directors of all mental health and mental retardation facilities in Pennsylvania which are subject to regulation by the defendant Secretary of Public Welfare.’ ” 459 F. Supp. 30, 40 n. 37 (ED Pa. 1978).
Representatives of the nine mentally ill children sought a declaration that the admission procedures embodied in § 201 of the Pennsylvania Mental Health Procedures Act of 1976, Pa. Stat. Ann., Tit. 50, § 7201 (Purdon Supp. 1978), which subsequently have been expanded by regulations promulgated by the Secretary of Public Welfare, 8 Pa. Bull. 2432 et seq. (1978), violated their procedural due process rights and requested the court to issue an injunction against the statute’s future enforcement. The three mentally retarded children presented the same claims as to §§ 402 and 403 of the Mental Health and Mental Retardation Act of 1966, Pa. Stat. Ann., Tit. 50, §§ 4402 and 4403 (Purdon 1969), and the regulations promulgated thereunder.
The District Court certified two subclasses of plaintiffs under Fed. Rule Civ. Proc. 23 and held that the statutes challenged by each subclass were unconstitutional. It held that the State’s procedures were insufficient to satisfy the Due Process Clause of the Fourteenth Amendment.
The District Court’s analysis in this case was similar to that used by the District Court in J. L. v. Parham, 412 F. Supp. 112 (MD Ga. 1976), reversed and remanded sub nom. Parham v. J. R., ante, p. 584. The court in this case concluded that these children had a constitutionally protected liberty interest that could not be “waived” by their parents. This conclusion, coupled with the perceived fallibility of psychiatric diagnosis, led the court to hold that only a formal adversary hearing could suffice to protect the children in appellees’ class from being needlessly confined in mental hospitals.
To further protect the children’s interests, the court concluded that the following procedures were required before any child could be admitted voluntarily to a mental hospital:
1) 48-hour notice prior to any hearing;
2) legal counsel “during all significant stages of the commitment process”;
3) the child’s presence at all commitment hearings;
4) a finding by an impartial tribunal based on clear and convincing evidence that the child required institutional treatment;
5) a probable-cause determination within 72 hours after admission to a hospital;
6) a full hearing, including the right to confront and cross-examine witnesses, within two weeks from the date of the initial admission. App. 1097a-1098a.
Appellants, all of the defendants before the District Court, appealed the judgment. We noted probable jurisdiction, and consolidated the case with Parham v. J. R., ante, p. 584. 437 U. S. 902.
II
(a) Much of what we .said in Parham v. J. R. applies with equal force to this case. The liberty rights and interests of the appellee children, the prerogatives, responsibilities, and interests of the parents, and the obligations and interests of the State are the same. Our holding as to what process is due in Parham controls here, particularly:
“We conclude .that the risk of error inherent in the parental decision to have a child institutionalized for mental health care is sufficiently great that some kind of inquiry should be made by a ‘neutral factfinder’ to determine whether the statutory requirements for admission are satisfied. . . . That inquiry must carefully probe the child’s background using all available sources, including, but not limited to, parents, schools, and other social agencies. Of course, the review must also include an interview with the child. It is necessary that the decision-maker have the authority to refuse to admit any child who does not satisfy the medical standards for admission. Finally, it is necessary that the child’s continuing need for commitment be reviewed periodically by a similarly independent procedure.” Parham v. J. R., ante, at 606-607.
The only issue is whether Pennsylvania’s procedures for the voluntary commitment of children comply with these requirements.
(b) Unlike in Parham v. J. R., where the statute being challenged was general and thus the procedures for admission were evaluated hospital by hospital, the statute and regulations in Pennsylvania are specific. Our focus here is on the codified procedures declared unconstitutional by the District Court.
The Mental Health Procedures Act of 1976 and regulations promulgated by the Secretary describe the procedures for the voluntary admission for inpatient treatment of mentally ill children. Section 201 of the Act provides that “a parent, guardian, or person standing in loco parentis to a child less than 14 years of age” may apply for a voluntary examination and treatment for the child. After the child receives an examination and is provided with temporary treatment, the hospital must formulate “an individualized treatment plan ... by a treatment team.” Within 72 hours the treatment team is required to determine whether inpatient treatment is “necessary” and why. Pa. Stat. Ann., Tit. 50, § 7205 (Purdon Supp. 1978). The hospital must inform the child and his parents both of the necessity for institutional treatment and of the nature of the proposed treatment. Ibid.
Regulations promulgated under the 1976 Act provide that each child shall be' re-examined and his or her treatment plan reviewed not less than once every 30 days. See § 7100.108 (a), 8 Pa. Bull. 2436 (1978). The regulations also permit a child to object to the treatment plan and thereby obtain a review by a mental health professional independent of the treatment team. The findings of this person are reported directly to the director of the hospital who has the power and the obligation to release any child who no longer needs institutional treatment.
The statute indeed provides three methods for release of a child under the age of 14 from a mental hospital. First, the child’s parents or guardian may effect his release at will. Pa. Stat. Ann., Tit. 50, § 7206 (b) (Purdon Supp. 1978). Second, “any responsible party” may petition the juvenile court if the person believes that treatment in a less restrictive setting would be in the best interests of the child. Ibid. If such a petition is filed, an attorney is appointed to represent the child’s interests and a hearing is held within 10 days to determine “what inpatient treatment, if any, is in the minor’s best interest.” Ibid. Finally, the director of the hospital may release any child whenever institutional treatment is no longer medically indicated. § 7206 (c).
The Mental Health and Mental Retardation Act of 1966 regulates the voluntary admission for inpatient hospital habilitation of the mentally retarded. The admission process has been expanded significantly by regulations promulgated in 1973 by Pennsylvania’s Secretary of Public Welfare. 3 Pa. Bull. 1840 (1973). Unlike the procedure for the mentally ill, a hospital is not permitted to admit a mentally retarded child based solely on the application of a parent or guardian. All children must be referred by a physician and each referral must be accompanied by a medical or psychological evalution. In addition, the director of the institution must make an independent examination of each child, and if he disagrees with the recommendation of the referring physician as to whether hospital care is “required,” the child must be discharged. Mentally retarded children or anyone acting on their behalf may petition for a writ of habeas corpus to challenge the sufficiency or legality of the “proceedings leading to commitment.” Pa. Stat. Ann., Tit. 50, § 4426 (Purdon 1969).
Any child older than 13 who is admitted to a hospital must have his rights explained to him and must be informed that a status report on his condition will be provided periodically. The older child is also permitted to object, either orally or in writing, to his hospitalization. After such objection, the director of the facility, if he feels that hospitalization is still necessary, must institute an involuntary commitment proceeding under § 406 of the Act, Pa. Stat. Ann., Tit. 50, §4406 (Purdon 1969).
What the statute and regulations do not make clear is how the hospital staff decides that inpatient care is required for a child. The director of Haverford State Hospital for the mentally ill was the sole witness called by either side to testify about the decisionmaking process at a state hospital. She described the process as follows:
“[T]here is an initial examination made by the psychiatrist, and is so designated as an admission note on the hospital record. Subsequently, for all adolescents on the Adolescent Service at Haverford State Hospital, there are routine studies done, such as an electroencephalogram, a neurological examination, a medical examination, and a complete battery of psychological tests and school evaluation, as well as a psychiatric evaluation. When all their data has been compiled, an entire staff conference is held, which is called a new case conference, at which point the complete case is re-examined and it is decided whether or not the child needs hospitalization, and at that same time, as well, an adequate treatment course is planned.” App. 112a.
In addition to the physical and mental examinations that are conducted for each child within the institutions, the staff compiles a substantial “pre-admission background information” file on each child. After the child is admitted, there is a periodic review of the child’s condition by the staff. His status is reviewed by a different social worker at least every 30 days. Since the State .places a great deal of emphasis on family therapy, the parents or guardians are met with weekly to discuss the child’s case. Id., at 113a.
We are satisfied that these procedures comport with the due process requirements set out earlier. No child is admitted without at least one and often more psychiatric examinations by an independent team of mental health professionals whose sole concern under the statute is whether the child needs and can benefit from institutional care. The treatment team not only interviews the child and parents but also compiles a full background history from all available sources. If the treatment team concludes that institutional care is not in the child’s best interest, it must refuse the child’s admission. Finally, every child’s condition is reviewed at least every 30 days. This program meets the criteria of our holding in Parham. Accordingly, the judgment of the District Court that Pennsylvania’s statutes and regulations are unconstitutional is reversed, and the case is remanded for further proceedings consistent with this opinion.
Reversed and remanded.
For the reasons stated in his opinion concurring in the judgment in Parham v. J. R., ante, p. 621, Mr. Justice Stewart concurs in the judgment.
Appellants argue that the State’s regulation of admission to private hospitals is insufficient to constitute state action for purposes of the Due Process Clause of the Fourteenth Amendment. They, however, did not contest the District Court’s definition of the defendant class, which included directors of both public and private facilities. In light of our holding that Pennsylvania’s procedures comport with due process, we do not decide whether the District Court correctly found state action.
Section 201 provides in part: “A parent, guardian, or person standing in loco parentis to a child less than 14 years of age may subject such child to examination and treatment under this act, and in so doing shall be deemed to be acting for the child.”
Section 402 provides:
“(a) Application for voluntary admission to a facility for examination, treatment and care may be made by:
“(2) A parent, guardian or individual standing in loco parentis to the person to be admitted, if such person is eighteen years of age or younger.
“ (b) When an application is made, the director of the facility shall cause an examination to be made. If it is determined that the person named in the application is in need of care or observation, he may be admitted.”
Section 403 provides:
“(a) Application for voluntary commitment to a facility for examination, treatment and care may be made by:
“(2) A parent, guardian or individual standing in loco parentis to the person to be admitted, if such person is eighteen years of age or younger.
“(b) The application shall be in writing, signed by the applicant in the presence of at least one witness. When an application is made, the director of the facility shall causé an examination to be made. If it is determined that the person named in the application is in need of care or observation, he shall be committed for a period not to exceed thirty days.”
The 1973 regulations provide in part:
“1. . . . [M]entally retarded juveniles may be referred by either a pediatrician, or general physician or psychologist;
“2. This referral must be accomplished by a psychiatric evaluation and that report must indicate with specificity the reasons that the person requires institutional care; however, a medical or psychological evaluation may accompany the referral of a mentally retarded juvenile;
“3. The Director of the Institution . . . shall have conducted an independent examination of the proposed juvenile, and if his results disagree with the professional’s opinion, the Director . . . shall discharge the juvenile;
“5. Within 24 hours after the juvenile’s admission, every youth who is at least 13 years of age must receive written notification (which he signs) explaining his rights indicating that he will be given a status report periodically of his condition; that he can contact by telephone or by mail his parents or the person who requested his admission; and that he will be furnished with the number of counsel . . . that he can call for representation . . . ;
“6. In the event that a juvenile whose chronological age is 13 or older objects (either orally or in writing) to remaining in the Institution, the Director . . . if he feels it is necessary for the youth to remain, may continue the institutionalization for two business days during which time he shall notify the applicant and the referral unit so that either party may institute a 460 [involuntary commitment] proceeding. ...” 3 Pa. Bull. 1840 (1973).
One subclass consisted of “all juveniles under the age of fourteen who are subject to inpatient treatment under Article II of the 1976 Act.” 459 F. Supp., at 41. The other subclass was “mentally retarded juveniles age eighteen or younger.” Id., at 42. Appellants argue that the District Court failed to heed our admonition in remanding this case previously that it should “ ‘stop, look, and listen’ before certifying a class in order to adjudicate constitutional claims.” Kremens v. Bartley, 431 U. S. 119, 135 (1977). Given our disposition of the merits of this appeal, we need not decide whether these subclasses satisfy the requirements of Fed. Rule Civ. Proc. 23.
Judge Broderick dissented from the judgment of the majority. In his view, the majority “has prescribed ‘an overdose’ of due process.” 459 F. Supp., at 53.
Appellees argue that not much weight should be accorded to these files because the record does not make clear whether they were used in making the admission decision. The District Court, however, found that “virtually all of the information was received by the admitting facilities prior to admission.” 459 F. Supp., at 36 n. 15. The court did acknowledge that it was not -clear to what extent the information was used, but nonetheless admitted all of the records into evidence. Since it was available, we, like the District Court, assume the information served as a factual basis for some portions of the diagnoses of the children at the time of their admission to the hospitals.
Although the District Court briefly described the situation of each of the children in appellees' class, it did not indicate the process for each of their admissions. We cannot determine on the record before us whether each child’s admission conformed to our due process standards. Just as in Parham, individual members of appellees’ class are free to argue on remand that their particular commitments violated those standards.
Also, we note that as in Parham we are faced only with the issue of what process is due at the initial admission, and thus we are not deciding what postadmission procedures are constitutionally adequate to continue a voluntary commitment. The District Court had no reason to consider that issue, and indeed from our reading of appellees’ complaint there does not appear to be any specific challenge to the State’s review procedures. However, we leave it to the District Court on remand to determine what further proceedings are necessary.
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 O’Connor
delivered the opinion of the Court.
In this case we consider whether an action to enjoin the infringement of an incontestable trade or service mark may be defended on the grounds that the mark is merely descriptive. We conclude that neither the language of the relevant statutes nor the legislative history supports such a defense.
I
Petitioner operates long-term parking lots near airports. After starting business in St. Louis in 1967, petitioner subsequently opened facilities in Cleveland, Houston, Boston, Memphis, and San Francisco. Petitioner applied in 1969 to the United States Patent and Trademark Office (Patent Office) to register a service mark consisting of the logo of an airplane and the words “Park ’N Fly.” The registration issued in August 1971. Nearly six years later, petitioner filed an affidavit with the Patent Office to establish the incontestable status of the mark. As required by § 15 of the Trademark Act of 1946 (Lanham Act), 60 Stat. 433, as amended, 15 U. S. C. § 1065, the affidavit stated that the mark had been registered and in continuous use for five consecutive years, that there had been no final adverse decision to petitioner’s claim of ownership or right to registration, and that no proceedings involving such rights were pending. Incontestable status provides, subject to the provisions of § 15 and § 33(b) of the Lanham Act, “conclusive evidence of the registrant’s exclusive right to use the registered mark____” § 33(b), 15 U. S. C. § 1115(b).
Respondent also provides long-term airport parking services, but only has operations in Portland, Oregon. Respondent calls its business “Dollar Park and Ply.” Petitioner filed this infringement action in 1978 in the United States District Court for the District of Oregon and requested the court permanently to enjoin respondent from using the words “Park and Ply” in connection with its business. Respondent counterclaimed and sought cancellation of petitioner’s mark on the grounds that it is a generic term. See § 14(c), 15 U. S. C. § 1064(c). Respondent also argued that petitioner’s mark is unenforceable because it is merely descriptive. See § 2(e), 15 U. S. C. § 1052(e). As two additional defenses, respondent maintained that it is in privity with a Seattle corporation that has used the expression “Park and Ply” since a date prior to the registration of petitioner’s mark, see § 33(b)(5), 15 U. S. C. § 1115(b)(5), and that it has not infringed because there is no likelihood of confusion. See § 32(1), 15 U. S. C. § 1114(1).
After a bench trial, the District Court found that petitioner’s mark is not generic and observed that an incontestable mark cannot be challenged on the grounds that it is merely descriptive. App. 75. The District Court also concluded that there was no evidence of privity between respondent and the Seattle corporation. App. 76. Finally, the District Court found sufficient evidence of likelihood of confusion. App. 76. The District Court permanently enjoined respondent from using the words “Park and Ply” and any other mark confusingly similar to “Park ’N Ply.” App. 77.
The Court of Appeals for the Ninth Circuit reversed. 718 F. 2d 327 (1983). The District Court did not err, the Court of Appeals held, in refusing to invalidate petitioner’s mark. Id., at 331. The Court of Appeals noted, however, that it previously had held that incontestability provides a defense against the cancellation of a mark, but it may not be used offensively to enjoin another’s use. Ibid. Petitioner, under this analysis, could obtain an injunction only if its mark would be entitled to continued registration without regard to its incontestable status. Thus, respondent could defend the infringement action by showing that the mark was merely descriptive. Based on its own examination of the record, the Court of Appeals then determined that petitioner’s mark is in fact merely descriptive, and therefore respondent should not be enjoined from using the name “Park and Fly.” Ibid.
The decision below is in direct conflict with the decision of the Court of Appeals for the Seventh Circuit in Union Carbide Corp. v. Ever-Ready, Inc., 531 F. 2d 366, cert. denied, 429 U. S. 830 (1976). We granted certiorari to resolve this conflict, 465 U. S. 1078 (1984), and we now reverse.
II
Congress enacted the Lanham Act in 1946 in order to provide national protection for trademarks used in interstate and foreign commerce. S. Rep. No. 1333, 79th Cong., 2d Sess., 5 (1946). Previous federal legislation, such as the Federal Trademark Act of 1905, 33 Stat. 724, reflected the view that protection of trademarks was a matter of state concern and that the right to a mark depended solely on the common law. S. Rep. No. 1333, at 5. Consequently, rights to trademarks were uncertain and subject to variation in different parts of the country. Because trademarks desirably promote competition and the maintenance of product quality, Congress determined that “a sound public policy requires that trademarks should receive nationally the greatest protection that can be given them.” Id., at 6. Among the new protections created by the Lanham Act were the statutory provisions that allow a federally registered mark to become incontestable. §§ 15, 33(b), 15 U. S. C. §§ 1065, 1115(b).
The provisions of the Lanham Act concerning registration and incontestability distinguish a mark that is “the common descriptive name of an article or substance” from a mark that is “merely descriptive.” §§2(e), 14(c), 15 U. S. C. §§ 1052(e), 1064(c). Marks that constitute a common descriptive name are referred to as generic. A generic term is one that refers to the genus of which the particular product is a species. Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F. 2d 4, 9 (CA2 1976). Generic terms are not registrable, and a registered mark may be canceled at any time on the grounds that it has become generic. See §§ 2, 14(c), 15 U. S. C. §§ 1052, 1064(c). A “merely descriptive” mark, in contrast, describes the qualities or characteristics of a good or service, and this type of mark may be registered only if the registrant shows that it has acquired secondary meaning, i. e., it “has become distinctive of the applicant’s goods in commerce.” §§ 2(e), (f), 15 U. S. C. §§ 1052(e), (f).
This case requires us to consider the effect of the incontestability provisions of the Lanham Act in the context of an infringement action defended on the grounds that the mark is merely descriptive. Statutory construction must begin with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purpose. See American Tobacco Co. v. Patterson, 456 U. S. 63, 68 (1982). With respect to incontestable trade or service marks, § 33(b) of the Lanham Act states that “registration shall be conclusive evidence of the registrant’s exclusive right to use the registered mark” subject to the conditions of § 15 and certain enumerated defenses. Section 15 incorporates by reference subsections (c) and (e) of § 14, 15 U. S. C. § 1064. An incontestable mark that becomes generic may be canceled at any time pursuant to § 14(c). That section also allows cancellation of an incontestable mark at any time if it has been abandoned, if it is being used to misrepresent the source of the goods or services in connection with which it is used, or if it was obtained fraudulently or contrary to the provisions of § 4, 15 U. S. C. § 1054, or §§ 2(a)-(c), 15 U. S. C. §§ 1052(a)-(c).
One searches the language of the Lanham Act in vain to find any support for the offensive/defensive distinction applied by the Court of Appeals. The statute nowhere distinguishes between a registrant’s offensive and defensive use of an incontestable mark. On the contrary, §33(b)’s declaration that the registrant has an “exclusive right” to use the mark indicates that incontestable status may be used to enjoin infringement by others. A conclusion that such infringement cannot be enjoined renders meaningless the “exclusive right” recognized by the statute. Moreover, the language in three of the defenses enumerated in § 33(b) clearly contemplates the use of incontestability in infringement actions by plaintiffs. See §§ 33(b)(4) — (6), 15 U. S. C. §§ 1115(b) (4) — (6).
The language of the Lanham Act also refutes any conclusion that an incontestable mark may be challenged as merely descriptive. A mark that is merely descriptive of an applicant’s goods or services is not registrable unless the mark has secondary meaning. Before a mark achieves incontestable status, registration provides prima facie evidence of the registrant’s exclusive right to use the mark in commerce. § 33(a), 15 U. S. C. § 1115(a). The Lanham Act expressly provides that before a mark becomes incontestable an opposing party may prove any legal or equitable defense which might have been asserted if the mark had not been registered. Ibid. Thus, § 33(a) would have allowed respondent to challenge petitioner’s mark as merely descriptive if the mark had not become incontestable. With respect to incontestable marks, however, § 33(b) provides that registration is conclusive evidence of the registrant’s exclusive right to use the mark, subject to the conditions of § 15 and the seven defenses enumerated in § 33(b) itself. Mere descriptiveness is not recognized by either § 15 or § 33(b) as a basis for challenging an incontestable mark.
The statutory provisions that prohibit registration of a merely descriptive mark but do not allow an incontestable mark to be challenged on this ground cannot be attributed to inadvertence by Congress. The Conference Committee rejected an amendment that would have denied registration to any descriptive mark, and instead retained the provisions allowing registration of a merely descriptive mark that has acquired secondary meaning. See H. R. Conf. Rep. No. 2322, 79th Cong., 2d Sess., 4 (1946) (explanatory statement of House managers). The Conference Committee agreed to an amendment providing that no incontestable right can be acquired in a mark that is a common descriptive, i. e., generic, term. Id., at 5. Congress could easily have denied incontestability to merely descriptive marks as well as to generic marks had that been its intention.
The Court of Appeals in discussing the offensive/defensive distinction observed that incontestability protects a registrant against cancellation of his mark. 718 P. 2d, at 331. This observation is incorrect with respect to marks that become generic or which otherwise may be canceled at any time pursuant to §§ 14(c) and (e). Moreover, as applied to marks that are merely descriptive, the approach of the Court of Appeals makes incontestable status superfluous. Without regard to its incontestable status, a mark that has been registered five years is protected from cancellation except on the grounds stated in §§ 14(c) and (e). Pursuant to § 14, a mark may be canceled on the grounds that it is merely descriptive only if the petition to cancel is filed within five years of the date of registration. § 14(a), 15 U. S. C. § 1064(a). The approach adopted by the Court of Appeals implies that incontestability adds nothing to the protections against cancellation already provided in § 14. The decision below not only lacks support in the words of the statute; it effectively emasculates § 33(b) under the circumstances of this case.
Ill
Nothing in the legislative history of the Lanham Act supports a departure from the plain language of the statutory provisions concerning incontestability. Indeed, a conclusion that incontestable status can provide the basis for enforcement of the registrant’s exclusive right to use a trade or service mark promotes the goals of the statute. The Lanham Act provides national protection of trademarks in order to secure to the owner of the mark the goodwill of his business and to protect the ability of consumers to distinguish among competing producers. See S. Rep. No. 1333, at 3, 5. National protection of trademarks is desirable, Congress concluded, because trademarks foster competition and the maintenance of quality by securing to the producer the benefits of good reputation. Id., at 4. The incontestability provisions, as the proponents of the Lanham Act emphasized, provide a means for the registrant to quiet title in the ownership of his mark. See Hearings on H. R. 82 before the Subcommittee of the Senate Committee on Patents, 78th Cong., 2d Sess., 21 (1944) (remarks of Rep. Lanham); id., at 21, 113 (testimony of Daphne Robert, ABA Committee on Trade Mark Legislation); Hearings on H. R. 102 et al. before the Subcommittee on Trade-Marks of the House Committee on Patents, 77th Cong., 1st Sess., 73 (1941) (remarks of Rep. Lanham). The opportunity to obtain incontestable status by satisfying the requirements of § 15 thus encourages producers to cultivate the goodwill associated with a particular mark. This function of the incontestability provisions would be utterly frustrated if the holder of an incontestable mark could not enjoin infringement by others so long as they established that the mark would not be registrable but for its incontestable status.
Respondent argues, however, that enforcing petitioner’s mark would conflict with the goals of the Lanham Act because the mark is merely descriptive and should never have been registered in the first place. Representative Lanham, respondent notes, explained that the defenses enumerated in § 33(b) were “not intended to enlarge, restrict, amend, or modify the substantive law of trademarks either as set out in other sections of the act or as heretofore applied by the courts under prior laws.” 92 Cong. Rec. 7524 (1946). Respondent reasons that because the Lanham Act did not alter the substantive law of trademarks, the incontestability provisions cannot protect petitioner’s use of the mark if it were not originally registrable. Moreover, inasmuch as petitioner’s mark is merely descriptive, respondent contends that enjoining others from using the mark will not encourage competition by assisting consumers in their ability to distinguish among competing producers.
These arguments are unpersuasive. Representative Lan-ham’s remarks, if read in context, clearly refer to the effect of the defenses enumerated in § 33(b). There is no question that the Lanham Act altered existing law concerning trademark rights in several respects. For example, §22, 15 U. S. C. §1072, provides for constructive notice of registration and modifies the common-law rule that allowed acquisition of concurrent rights by users in distinct geographic areas if the subsequent user adopted the mark without knowledge of prior use. See Hanover Star Milling Co. v. Metcalf, 240 U. S. 403, 415-416 (1916) (describing pre-Lanham Act law). Similarly, § 14 cuts off certain grounds for cancellation five years after registration and thereby modifies the previous rule that the validity of a trademark could be attacked at any time. See White House Milk Products Co. v. Dwinell-Wright Co., 27 C. C. P. A. (Pat.) 1194, 111 F. 2d 490 (1940). Most significantly, Representative Lanham himself observed that incontestability was one of “the valuable new rights created by the act.” 92 Cong. Rec. 7524 (1946).
Respondent’s argument that enforcing petitioner’s mark will not promote the goals of the Lanham Act is misdirected. Arguments similar to those now urged by respondent were in fact considered by Congress in hearings on the Lanham Act. For example, the United States Department of Justice opposed the incontestability provisions and expressly noted that a merely descriptive mark might become incontestable. Hearings on H. R. 82, at 59-60 (statement of the U. S. Dept, of Justice). This result, the Department of Justice observed, would “go beyond existing law in conferring unprecedented rights on trade-mark owners,” and would undesirably create an exclusive right to use language that is descriptive of a product. Id., at 60; see also Hearings on H. R. 102, at 106-107, 109-110 (testimony of Prof. Milton Handler); id., at 107, 175 (testimony of attorney Louis Robertson). These concerns were answered by proponents of the Lanham Act, who noted that a merely descriptive mark cannot be registered unless the Commissioner finds that it has secondary meaning. Id., at 108, 113 (testimony of Karl Pohl, U. S. Trade Mark Assn.). Moreover, a mark can be challenged for five years prior to its attaining incontestable status. Id., at 114 (remarks of Rep. Lanham). The supporters of the incontestability provisions further observed that a generic mark cannot become incontestable and that § 33(b)(4) allows the nontrademark use of descriptive terms used in an incontestable mark. Id., at 110-111 (testimony of Wallace Martin, chairman, ABA Committee on Trade Mark Legislation).
The alternative of refusing to provide incontestable status for descriptive marks with secondary meaning was expressly noted in the hearings on the Lanham Act. Id., at 64, 69 (testimony of Robert Byerley, New York Patent Law Assn.); Hearings on S. 895 before the Subcommittee of the Senate Committee on Patents, 77th Cong., 2d Sess., 42 (1942) (testimony of Elliot Moyer, Special Assistant to the Attorney General). Also mentioned was the possibility of including as a defense to infringement of an incontestable mark the “fact that a mark is a descriptive, generic, or geographical term or device.” Id., at 45, 47. Congress, however, did not adopt either of these alternatives. Instead, Congress expressly provided in §§ 33(b) and 15 that an incontestable mark could be challenged on specified grounds, and the grounds identified by Congress do not include mere descriptiveness.
The dissent echoes arguments made by opponents of the Lanham Act that the incontestable status of a descriptive mark might take from the public domain language that is merely descriptive. Post, at 214-216. As we have explained, Congress has already addressed concerns to prevent the “commercial monopolization,” post, at 214, of descriptive language. The Lanham Act allows a mark to be challenged at any time if it becomes generic, and, under certain circumstances, permits the nontrademark use of descriptive terms contained in an incontestable mark. Finally, if “monopolization” of an incontestable mark threatens economic competition, § 33(b)(7), 15 U. S. C. § 1115(b)(7), provides a defense on the grounds that the mark is being used to violate federal antitrust laws. At bottom, the dissent simply disagrees with the balance struck by Congress in determining the protection to be given to incontestable marks.
IV
Respondent argues that the decision by the Court of Appeals should be upheld because trademark registrations are issued by the Patent Office after an ex parte proceeding and generally without inquiry into the merits of an application. This argument also unravels upon close examination. The facts of this case belie the suggestion that registration is virtually automatic. The Patent Office initially denied petitioner’s application because the examiner considered the mark to be merely descriptive. Petitioner sought reconsideration and successfully persuaded the Patent Office that its mark was registrable.
More generally, respondent is simply wrong to suggest that third parties do not have an opportunity to challenge applications for trademark registration. If the Patent Office examiner determines that an applicant appears to be entitled to registration, the mark is published in the Official Gazette. § 12(a), 15 U. S. C. § 1062(a). Within 30 days of publication, any person who believes that he would be damaged by registration of the mark may file an opposition. § 13, 15 U. S. C. § 1063. Registration of a mark provides constructive notice throughout the United States of the registrant’s claim to ownership. §22, 15 U. S. C. §1072. Within five years of registration, any person who believes that he is or will be damaged by registration may seek to cancel a mark. § 14(a), 15 U. S. C. § 1064(a). A mark may be canceled at any time for certain specified grounds, including that it was obtained fraudulently or has become generic. § 14(c), 15 U. S. C. § 1064(c).
The Lanham Act, as the dissent notes, post, at 217, authorizes courts to grant injunctions “according to principles of equity.” §34, 15 U. S. C. §1116. Neither respondent nor the opinion of the Court of Appeals relies on this provision to support the holding below. Whatever the precise boundaries of the courts’ equitable power, we do not believe that it encompasses a substantive challenge to the validity of an incontestable mark on the grounds that it lacks secondary meaning. To conclude otherwise would expand the meaning of “equity” to the point of vitiating the more specific provisions of the Lanham Act. Similarly, the power of the courts to cancel registrations and “to otherwise rectify the register,” §37, 15 U. S. C. §1119, must be subject to the specific provisions concerning incontestability. In effect, both respondent and the dissent argue that these provisions offer insufficient protection against improper registration of a merely descriptive mark, and therefore the validity of petitioner’s mark may be challenged notwithstanding its incontestable status. Our responsibility, however, is not to evaluate the wisdom of the legislative determinations reflected in the statute, but instead to construe and apply the provisions that Congress enacted.
V
The Court of Appeals did not attempt to justify its decision by reference to the language or legislative history of the Lanham Act. Instead, the court relied on its previous decision in Tillamook County Creamery v. Tillamook Cheese & Dairy Assn., 345 F. 2d 158, 163 (CA9), cert. denied, 382 U. S. 903 (1965), for the proposition that a registrant may not rely on incontestability to enjoin the use of the mark by others. Examination of Tillamook, however, reveals that there is no persuasive justification for the judicially created distinction between offensive and defensive use of an incontestable mark.
Tillamook discussed in dicta the offensive/defensive distinction and observed that incontestability protects a registrant against cancellation but cannot be used to obtain relief from an infringing use. Tillamook’s authority for this proposition was John Morrell & Co. v. Reliable Packing Co., 295 F. 2d 314, 316 (CA7 1961), which did reverse a finding of infringement on the grounds that incontestable status confers only defensive rights. The Court of Appeals for the Seventh Circuit based its holding in John Morrell on Rand McNally & Co. v. Christmas Club, 105 U. S. P. Q. 499 (1955), aff’d, 44 C. C. P. A. 861 (Pat.), 242 F. 2d 776 (1957), but the latter case did not in fact involve the use of an incontestable mark in an enforcement action.
The Patent Office in Rand McNally denied a petition to cancel a mark challenged as merely descriptive. The petitioner feared that if the mark became incontestable, use of the same mark in connection with a service different from the one specified in the registration could be enjoined. 105 U. S. P. Q., at 500. The Assistant Commissioner of Patents answered this concern by observing that an incontestable mark does not provide the registrant “with an ‘offensive weapon’ of any greater magnitude than that which it has had since the registration issued. . . .” Id., at 501. These comments do not suggest that incontestability may never provide the basis for injunctive relief, but instead indicate that a mark may not be expanded beyond the good or service for which it was originally designated.
John Morrell, the judicial authority providing the most direct support for the decision below, was subsequently overruled in Union Carbide Corp. v. Ever-Ready, Inc., 531 F. 2d 366 (CA7), cert. denied, 429 U. S. 830 (1976). In Union Carbide the Court of Appeals for the Seventh Circuit acknowledged that its earlier decision in John Morrell was unsupported by the language or legislative history of the Lanham Act and had been based on a misreading of Rand McNally. 531 F. 2d, at 373, 377. A registrant may rely on the incontestable status of the mark in an infringement action, Union Carbide concluded, and a “‘[defendant faced with an incontestable registered mark cannot defend by claiming that the mark is invalid because it is descriptive.’” Id., at 377 (quoting 1 J. McCarthy, Trademarks and Unfair Competition §11.16, p. 377 (1st ed. 1973)).
Other courts have subsequently followed Union Carbide and concluded that a plaintiff may rely on the incontestable status of a trade or service mark in an infringement action. See, e. g., United States Jaycees v. Philadelphia Jaycees, 639 F. 2d 134, 137 (CA3 1981); Soweco, Inc. v. Shell Oil Co., 617 F. 2d 1178, 1184-1185 (CA5 1980), cert. denied, 450 U. S. 981 (1981). The Patent Office has also rejected any offensive/defensive distinction with respect to the use of an incontestable mark. See Ansul Co. v. Matter International Corp., 199 U. S. P. Q. 596, 599-600 (TTAB 1978). Thus, the doctrine relied on by the Court of Appeals in this case is best described as flawed in its origin and subsequently discredited by its progenitors.
VI
We conclude that the holder of a registered mark may rely on incontestability to enjoin infringement and that such an action may not be defended on the grounds that the mark is merely descriptive. Respondent urges that we nevertheless affirm the decision below based on the “prior use” defense recognized by § 33(b)(5) of the Lanham Act. Alternatively, respondent argues that there is no likelihood of confusion and therefore no infringement justifying injunctive relief. The District Court rejected each of these arguments, but they were not addressed by the Court of Appeals. 718 F. 2d, at 331-332, n. 4. That court may consider them on remand. 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.
The Trademark Act of 1946 (Lanham Act), 60 Stat. 427, as amended, 15 U. S. C. § 1051 et seq., generally applies the same principles concerning registration and protection to both trade and service marks. See § 3, 15 U. S. C. § 1053. The Lanham Act defines a trademark to include “any word, name, symbol, or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others.” § 45, 15 U. S. C. § 1127. A service mark is “a mark used in the sale or advertising of services to identify the services of one person and distinguish them from the services of others.” Ibid.
Petitioner also applied in 1977 to register a mark consisting only of the words “Park ’N Fly.” That mark issued in 1979, but has not become incontestable. The existence of this mark does not affect our resolution of the issues in this case.
Section 33(b) of the Lanham Act, as set forth in 15 U. S. C. § 1115(b), provides:
“If the right to use the registered mark has become incontestable under section 1065 of this title, the registration shall be conclusive evidence of the registrant’s exclusive right to use the registered mark in commerce or in connection with the goods or services specified in the affidavit filed under the provisions of said section 1065 subject to any conditions or limitations stated therein except when one of the following defenses or defects is established:
“(1) That the registration or the incontestable right to use the mark was obtained fraudulently; or
“(2) That the mark has been abandoned by the registrant; or
“(3) That the registered mark is being used, by or with the permission of the registrant or a person in privity with the registrant, so as to misrepresent the source of the goods or services in connection with which the mark is used; or
“(4) That the use of the name, term, or device charged to be an infringement is a use, otherwise than as a trade or service mark, of the party’s individual name in his own business, or of the individual name of anyone in privity with such party, or of a term or device which is descriptive of and used fairly and in good faith only to describe to users the goods or services of such party, or their geographic origin; or
“(5) That the mark whose use by a party is charged as an infringement was adopted without knowledge of the registrant’s prior use and has been continuously used by such party or those in privity with him from a date prior to registration of the mark under this chapter or publication of the registered mark under subsection (c) of section 1062 of this title: Provided, however, That this defense or defect shall apply only for the area in which such continuous prior use is proved; or
“(6) That the mark whose use is charged as an infringement was registered and used prior to the registration under this chapter or publication under subsection (c) of section 1062 of this title of the registered mark of the registrant, and not abandoned: Provided, however, That this defense or defect shall apply only for the area in which the mark was used prior to such registration or such publication of the registrant’s mark; or
“(7) That the mark has been or is being used to violate the antitrust laws of the United States.”
Sections 2(a) — (e) prohibit registration of marks containing specified subject matter, e. g., the flag of the United States. Sections 4 and 14(e) concern certification marks and are inapplicable to this case.
The dissent similarly takes the position that the mark was improperly issued because it was descriptive and petitioner failed to prove that it had secondary meaning. Post, at 206-207. Neither the District Court nor the Court of Appeals made any finding whether the mark was properly issued in 1971. After the Patent Office denied the initial application for registration in 1970, petitioner filed a request for reconsideration arguing that the mark was not descriptive. App. 54-56. The Patent Office subsequently granted registration without specifying whether the mark had secondary meaning or instead was not descriptive. Id., at 57-59. Unlike the dissent, we decline to determine in the first instance whether the mark improperly issued. Our holding is not affected by the possibility that the mark was or has become merely descriptive.
Representative Lanham made his remarks to clarify that the seven defenses enumerated in § 33(b) are not substantive rules of law which go to the validity or enforceability of an incontestable mark. 92 Cong. Rec. 7524 (1946). Instead, the defenses affect the evidentiary status of registration where the owner claims the benefit of a mark’s incontestable status. If one of the defenses is established, registration constitutes only prima facie and not conclusive evidence of the owner’s right to exclusive use of the mark. Ibid. See also H. R. Conf. Rep. No. 2322, 79th Cong., 2d Sess., 6 (1946) (explanatory statement of House managers).
We note, however, that we need not address in this case whether traditional equitable defenses such as estoppel or laches are available in an action to enforce an incontestable mark. See generally Comment, Incontestable Trademark Rights and Equitable Defenses in Infringement Litigation, 66 Minn. L. Rev. 1067 (1982).
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.
After a jury trial in the Superior Court of DeKalb County, Georgia, petitioner Eric Presley was convicted of a cocaine trafficking offense. The conviction was affirmed by the Supreme Court of Georgia. 285 Ga. 270, 674 S. E. 2d 909 (2009). Presley seeks certiorari, claiming his Sixth and Fourteenth Amendment right to a public trial was violated when the trial court excluded the public from the voir dire of prospective jurors. The Supreme Court of Georgia’s affirmance contravened this Court's clear precedents. Certiorari and petitioner’s motion for leave to proceed in forma pawperis are now granted, and the judgment is reversed.
Before selecting a jury in Presley’s trial, the trial court noticed a lone courtroom observer. Id., at 270-271, 674 S. E. 2d, at 910. The court explained that prospective jurors were about to enter and instructed the man that he was not allowed in the courtroom and had to leave that floor of the courthouse entirely. Id., at 271, 674 S. E. 2d, at 910. The court then questioned the man and learned he was Presley’s uncle. Ibid. The court reiterated its instruction:
“Well, you still can’t sit out in the audience with the jurors. You know, most of the afternoon actually we’re going to be picking a jury. And we may have a couple of pre-trial matters, so you’re welcome to come in after we ... complete selecting the jury this afternoon. But, otherwise, you would have to leave the sixth floor, because jurors will be all out in the hallway in a few moments. That applies to everybody who’s got a ease.’” Ibid.
Presley’s counsel objected to “‘the exclusion of the public from the courtroom,’ ” but the court explained, “ ‘[tjhere just isn’t space for them to sit in the audience.’” Ibid. When Presley’s counsel requested “‘some accommodation,’” the court explained its ruling further:
“Well, the uncle can certainly come back in once the trial starts. There’s no, really no need for the uncle to be present during jury selection.... [W]e have 42 jurors coming up. Each of those rows will be occupied by jurors. And his uncle cannot sit and intermingle with members of the jury panel. But, when the trial starts, the opening statements and other matters, he can certainly come back into the courtroom.' ” Ibid.
After Presley was convicted, he moved for a new trial based on the exclusion of the public from the juror voir dire. At a hearing on the motion, Presley presented evidence showing that 14 prospective jurors could have fit in the jury box and the remaining 28 could have fit entirely on one side of the courtroom, leaving adequate room for the public. App. to Pet. for Cert. E-37, E-41. The trial court denied the motion, commenting that it preferred to seat jurors throughout the entirety of the courtroom, and “it’s up to the individual judge to decide . . . what’s comfortable.” Id., at E-38. The court continued: “It’s totally up to my discretion whether or not I want family members in the courtroom to intermingle with the jurors and sit directly behind the jurors where they might overhear some inadvertent comment or conversation.” Id., at E-42 to E-43. On appeal, the Court of Appeals of Georgia agreed, finding “[t]here was no abuse of discretion here, when the trial court explained the need to exclude spectators at the voir dire stage of the proceedings and when members of the public were invited to return afterward.” 290 Ga. App. 99, 100-101, 658 S. E. 2d 773, 775 (2008).
The Supreme Court of Georgia granted certiorari and affirmed, with two justices dissenting. After finding “the trial court certainly had an overriding interest in ensuring that potential jurors heard no inherently prejudicial remarks from observers during voir dire,” the Supreme Court of Georgia rejected Presley’s argument that the trial court was required to consider alternatives to closing the courtroom. 285 Ga., at 272, 273, 674 S. E. 2d, at 911. It noted that “the United States Supreme Court [has] not provide[d] clear guidance regarding whether a court must, sua sponte, advance its own alternatives to [closure],” and the court ruled that “Presley was obliged to present the court with any alternatives that he wished the court to consider.” Id., at 273, 674 S. E. 2d, at 911, 912. When no alternatives are offered, it concluded, “there is no abuse of discretion in the court’s failure to sua sponte advance its own alternatives.” Id., at 274, 674 S. E. 2d, at 912.
This Court’s rulings with respect to the public trial right rest upon two different provisions of the Bill of Rights, both applicable to the States via the Due Process Clause of the Fourteenth Amendment. The Sixth Amendment directs, in relevant part, that “[i]n all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial....” The Court in In re Oliver, 333 U. S. 257, 273 (1948), made it clear that this right extends to the States. The Sixth Amendment right, as the quoted language makes explicit, is the right of the accused.
The Court has further held that the public trial right extends beyond the accused and can be invoked under the First Amendment. Press-Enterprise Co. v. Superior Court of Cal., Riverside Cty., 464 U. S. 501 (1984) (Press-Enterprise I). This requirement, too, is binding on the States. Ibid.
The case now before the Court is brought under the Sixth Amendment, for it is the accused who invoked his right to a public trial. An initial question is whether the right to a public trial in criminal cases extends to the jury selection phase of trial, and in particular the voir dire of prospective jurors. In the First Amendment context that question was answered in Press-Enterprise I. Id., at 510. The Court there held that the voir dire of prospective jurors must be open to the public under the First Amendment. Later in the same Term as Press-Enterprise I, the Court considered a Sixth Amendment case concerning whether the public trial right extends to a pretrial hearing on a motion to suppress certain evidence. Waller v. Georgia, 467 U. S. 39 (1984). The Waller Court relied heavily upon Press-Enterprise I in finding that the Sixth Amendment right to a public trial extends beyond the actual proof at trial. It ruled that the pretrial suppression hearing must be open to the public because “there can be little doubt that the explicit Sixth Amendment right of the accused is no less protective of a public trial than the implicit First Amendment right of the press and public.” 467 U. S., at 46.
While Press-Enterprise I was heavily relied upon in Waller, the jury selection issue in the former case was resolved under the First, not the Sixth, Amendment. 464 U. S., at 516 (Stevens, J., concurring) (“The constitutional protection for the right of access that the Court upholds today is found in the First Amendment, rather than the public trial provision of the Sixth” (footnote omitted)). In the instant case, the question then arises whether it is so well settled that the Sixth Amendment right extends to jury voir dire that this Court may proceed by summary disposition.
The point is well settled under Press-Enterprise I and Waller. The extent to which the First and Sixth Amendment public trial rights are coextensive is an open question, and it is not necessary here to speculate whether or in what circumstances the reach or protections of one might be greater than the other. Still, there is no legitimate reason, at least in the context of juror selection proceedings, to give one who asserts a First Amendment privilege greater rights to insist on public proceedings than the accused has. “Our cases have uniformly recognized the public-trial guarantee as one created for the benefit of the defendant.” Gannett Co. v. DePasquale, 443 U. S. 368, 380 (1979). There could be no explanation for barring the accused from raising a constitutional right that is unmistakably for his or her benefit. That rationale suffices to resolve the instant matter. The Supreme Court of Georgia was correct in assuming that the Sixth Amendment right to a public trial extends to the voir dire of prospective jurors.
While the accused does have a right to insist that the voir dire of the jurors be public, there are exceptions to this general rule. “[T]he right to an open trial may give way in certain cases to other rights or interests, such as the defendant’s right to a fair trial or the government’s interest in inhibiting disclosure of sensitive information.” Waller, 467 U. S., at 45. “Such circumstances will be rare, however, and the balance of interests must be struck with special care.” Ibid. Waller provided standards for courts to apply before excluding the public from any stage of a criminal trial:
“[T]he party seeking to close the hearing must advance an overriding interest that is likely to be prejudiced, the closure must be no broader than necessary to protect that interest, the trial court must consider reasonable alternatives to closing the proceeding, and it must make findings adequate to support the closure.” Id., at 48.
In upholding exclusion of the public at juror voir dire in the instant case, the Supreme Court of Georgia concluded, despite our explicit statements to the contrary, that trial courts need not consider alternatives to closure absent an opposing party’s proffer of some alternatives. While the Supreme Court of Georgia concluded this was an open question under this Court’s precedents, the statement in Waller that “the trial court must consider reasonable alternatives to closing the proceeding” settles the point. Ibid. If that statement leaves any room for doubt, the Court was more explicit in Press-Enterprise I:
“Even with findings adequate to support closure, the trial court’s orders denying access to voir dire testimony failed to consider whether alternatives were available to protect the interests of the prospective jurors that the trial court’s orders sought to guard. Absent consideration of alternatives to closure, the trial court could not constitutionally close the voir dire.” 464 U. S., at 511.
The conclusion that trial courts are required to consider alternatives to closure even when they are not offered by the parties is clear not only from this Court’s precedents but also from the premise that “[t]he process of juror selection is itself a matter of importance, not simply to the adversaries but to the criminal justice system.” Id., at 505. The public has a right to be present whether or not any party has asserted the right. In Press-Enterprise I, for instance, neither the defendant nor the prosecution requested an open courtroom during juror voir dire proceedings; in fact, both specifically argued in favor of keeping the transcript of the proceedings confidential. Id., at 503-504. The Court, nonetheless, found it was error to close the courtroom. Id., at 513.
Trial courts are obligated to take every reasonable measure to accommodate public attendance at criminal trials. Nothing in the record shows that the trial court could not have accommodated the public at Presley’s trial. Without knowing the precise circumstances, some possibilities include reserving one or more rows for the public; dividing the jury venire panel to reduce courtroom congestion; or instructing prospective jurors not to engage or interact with audience members.
Petitioner also argues that, apart from failing to consider alternatives to closure, the trial court erred because it did not even identify any overriding interest likely to be prejudiced absent the closure of voir dire. There is some merit to this complaint. The generic risk of jurors overhearing prejudicial remarks, unsubstantiated by any specific threat or incident, is inherent whenever members of the public are present during the selection of jurors. If broad concerns of this sort were sufficient to override a defendant’s constitutional right to a public trial, a court could exclude the public from jury selection almost as a matter of course. As noted in the dissent below, “the majority’s reasoning permits the closure of voir dire in every criminal case conducted in this courtroom whenever the trial judge decides, for whatever reason, that he or she would prefer to fill the courtroom with potential jurors rather than spectators.” 285 Ga., at 276, 674 S. E. 2d, at 913 (opinion of Sears, C. J.).
There are no doubt circumstances where a judge could conclude that threats of improper communications with jurors or safety concerns are concrete enough to warrant closing voir dire. But in those cases, the particular interest, and threat to that interest, must “be articulated along with findings specific enough that a reviewing court can determine whether the closure order was properly entered.” Press-Enterprise I, supra, at 510; see also Press-Enterprise Co. v. Superior Court of Cal., County of Riverside, 478 U. S. 1, 15 (1986) (“The First Amendment right of access cannot be overcome by the conelusory assertion that publicity might deprive the defendant of [the right to a fair trial]”).
We need not rule on this second claim of error, because even assuming, arguendo, that the trial court had an overriding interest in closing voir dire, it was still incumbent upon it to consider all reasonable alternatives to closure. It did not, and that is all this Court needs to decide.
The Supreme Court of Georgia’s judgment is reversed, and the case is remanded for further proceedings not inconsistent 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
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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.
According to the verified complaint filed in a United States District Court in Illinois by the respondent, Chicago & North Western Railway Company, against the petitioners, the Order of Railroad Telegraphers and its officials, “This is an action for injunction to restrain and enjoin the calling and carrying out of a wrongful and unlawful strike or work stoppage on plaintiff’s railroad.” Section 4 of the Norris-LaGuardia Act provides, however, that “No court of the United States shall have jurisdiction to issue any restraining order or temporary or permanent injunction in any case involving or growing out of any ■ labor dispute to prohibit any person or persons . . . from ... (a) Ceasing or refusing to perform any work or to remain in any relation of employment; ...” The main question in this case then was, and still is, whether this prohibition of the Norris-LaGuardia Act bars an injunction in the circumstances of this case.
Respondent railroad, owning and operating a rail system of over 9,000 miles in the States of Illinois, Wisconsin, Iowa, Minnesota, Michigan, Nebraska, South Dakota, North Dakota, and Wyoming, is an integral part of the nationwide railway system important to the transportation of passengers and freight in interstate commerce. When the railroad began operations, about 100 years ago, traffic was such that railroad stations were established about 7 to 10 miles apart. Trucks, automobiles, airplanes, barges, pipelines and modern roads have reduced the amount of railroad traffic so that the work now performed at many of these stations by agents is less than one hour during a normal eight-hour day. Maintenance of so many agencies where company employees do so little work, the complaint alleges, is wasteful and consequently in 1957 the railroad filed petitions with the public utility commissions in four of the nine States in which it operated asking permission to institute a “Central Agency Plan whereby certain stations would be made central agencies . . .” and others abolished. The plan would necessarily result in loss of jobs for some of the station agents and telegraphers, members of the petitioner union. A few weeks after the state proceedings were filed and before any decision had been made, the petitioner union, the duly recognized, certified and acting collective bargaining agent for the railroad’s employees, notified the railroad under § 6 of the Railway Labor Act, 45 U. S. C. § 156, that it wanted to negotiate with the railroad to amend the current bargaining agreement by adding the following rule:
“No position in existence on December 3, 1957, will be abolished or discontinued except by agreement between the carrier and the organization.”
The railroad took the position, according to its complaint, that this request did not constitute a “labor dispute under the Railway Labor Act,” that it did not raise a bargain-able issue, and that the union had no right to protest or to seek relief except by appearing before the state public utility commissions which had power to determine whether station agencies could be discontinued, a power which private parties could not thwart by entering into a bargaining agreement. The respondent added that maintenance of the unnecessary agencies was offensive to the national transportation policy Congress adopted in the Interstate Commerce Act, 49 U. S. C. §§ 1-27, and that the duties that Act imposed on railroads could not be contracted away.
The union contended that the District Court was without jurisdiction to grant injunctive relief under the provisions of the Norris-LaGuardia Act because this case involved a labor dispute, and that the railroad had refused to negotiate in good faith on the proposed change in the agreement in violation of § 2, First, of the Railway Labor Act, 45 U. S. C. § 152, First, which requires the railroad to exert every reasonable effort to make and maintain agreements concerning rates of pay, rules and working conditions. Therefore, the union argued, an injunction in federal court is barred if for no other reason because of § 8 of the Norris-LaGuardia Act which provides:
“No restraining order or injunctive relief shall be granted to any complainant who has failed to comply with any obligation imposed by law which is involved in the labor dispute in question, or who has failed to make every reasonable effort to settle such dispute either by negotiation or with the aid of any available governmental machinery of mediation or voluntary arbitration.” 29 U. S. C. § 108.
See Brotherhood of Railroad Trainmen v. Toledo, P. & W. R. Co., 321 U. S. 50.
After hearings, the District Court found, so far as is relevant here, that the railroad “refused to negotiate, confer, mediate or otherwise treat with defendant Telegraphers on the proposed change in agreement set forth in the Section 6 notice,” although the railroad “did show willingness to negotiate upon the central agency plan, including a possibility concerning severance pay”; that the proposed contract change referred to in the § 6 notice “relates to the length or term of employment as well as stabilization of employment” and that collective bargaining as to the length or term of employment is commonplace ; that “The dispute giving rise to the proposed strike is a major dispute and not a minor grievance under the Railway Labor Act, and no issue involved therein is properly referable to the National Railroad Adjustment Board”; and that the contract change proposed in the § 6 notice related to “rates of pay, rules and working conditions,” and was therefore a bargainable issue under the Railway Labor Act. On its findings and conclusions of law, the District Court granted temporary relief but declined to grant a permanent injunction on the ground that it was without jurisdiction to do so.
On appeal the Court of Appeals did grant a permanent injunction upon its decision that “The District Court’s finding that the proposed contract change related to ‘rates of pay, rules, or working conditions,’ and was thus a bar-gainable issue under the Railway Labor Act, is clearly erroneous.” It held that the Norris-LaGuardia Act did not apply to bar an injunction against this strike and we granted certiorari, 361 U. S. 809, to consider this important question.
We hold, with the District Court, that this case involves or grows out of a labor dispute within the meaning of the Norris-LaGuardia Act and that the District Court was without jurisdiction permanently to enjoin the strike.
Section 4 of the Norris-LaGuardia Act specifically withdraws jurisdiction from a District Court to prohibit any person or persons from “[c] easing or refusing to perform any work or to remain in any relation of employment” “in any case involving or growing out of any labor dispute” as “herein defined.” Section 13 (c) of the Act defines a labor dispute as including,
“any controversy concerning terms or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employer and employee.”
Unless the literal language of this definition is to be ignored, it squarely covers this controversy. Congress made the definition broad because it wanted it to be broad. There are few pieces of legislation where the congressional hearings, committee reports, and the language in the legislation itself more clearly point to the necessity for giving an Act a construction that will protect the congressional policy the Act adopted. Section 2 of this Act specifies the public policy to be taken into consideration in interpreting the Act’s language and in determining the jurisdiction and authority of federal courts; it is one of freedom of association, organization, representation and negotiation on the part of workers. The hearings and committee reports reveal that Congress attempted to write its bill in unmistakable language because it believed previous measures looking toward the same policy against non judicial intervention in labor disputes had been given unduly limited constructions by the courts.
Plainly the controversy here relates to an effort on the part of the union to change the “terms” of an existing collective bargaining agreement. The change desired just as plainly referred to “conditions of employment” of the railroad’s employees who are represented by the union. The employment of many of these station agents inescapably hangs on the number of railroad stations that will be either completely abandoned or consolidated with other stations. And, in the collective bargaining world today, there is nothing strange about agreements that affect the permanency of employment. The District Court’s finding that “[c]ollective bargaining as to the length or term of employment is commonplace,” is not challenged.
We cannot agree with the Court of Appeals that the union’s effort to negotiate about the job security of its members “represents an attempt to usurp legitimate managerial prerogative in the exercise of business judgment with respect to the most economical and efficient conduct of its operations.” The Railway Labor Act and the Interstate Commerce Act recognize that stable and fair terms and conditions of railroad employment are essential to a well-functioning national transportation system. The Railway Labor Act safeguards an opportunity for employees to obtain contracts through collective rather than individualistic bargaining. Where combinations and consolidations of railroads might adversely affect the interests of employees, Congress in the Interstate Commerce Act has expressly required that before approving such consolidations the Interstate Commerce Commission “shall require a fair and equitable arrangement to protect the interests of the railroad employees affected.” It requires the Commission to do this by including “terms and conditions” which provide that for a term of years after a consolidation employees shall not be “in a worse position with respect to their employment” than they would otherwise have been. (Emphasis supplied.)
In 1942 this Court held that when a railroad abandons a portion of its lines, the Interstate Commerce Commission has power to include conditions for the protection of displaced workers in deciding what “the public convenience and necessity may require.” We so construed the Interstate Commerce Act specifically on the basis that imposition of such conditions “might strengthen the national system through their effect, on the morale and stability of railway workers generally.” Interstate Commerce Comm’n v. Railway L. Exec. Assn., 315 U. S. 373, 378, citing United States v. Lowden, 308 U. S. 225. The brief for the railroad associations there called our attention to testimony previously given to Congress that as early as 1936 railroads representing 85% of the mileage of the country had made collective bargaining agreements with their employees to provide a schedule of benefits for workers who might be displaced or adversely affected by coordinations or mergers. In ah effort to prevent a disruption and stoppage of interstate commerce, the trend of legislation affecting railroads and railroad employees has been to broaden, not narrow, the scope of subjects about which workers and railroads may or must negotiate and bargain collectively. Furthermore, the whole idea of what is bargainable has been greatly affected by the practices and customs of the railroads and their employees themselves. It is too late now to argue that employees can have no collective voice to influence railroads to act in a way that will preserve the interests of the employees as well as the interests of the railroad and the public at large.
The railroad has argued throughout the proceedings that the union’s strike here may be enjoined, regardless of Norris-LaGuardia, because its effort to bargain about the consolidation and abandonment of railroad stations is unlawful. It is true that in a series of cases where collective bargaining agents stepped outside their legal duties and violated the Act which called them into being, we held that they could be enjoined. None of these cases, however, enjoined conduct which the Norris-LaGuardia Act withdrew from the injunctive power of the federal courts except the Chicago River case which held that a strike could be enjoined to prevent a plain violation of a basic command of the Railway Labor Act “adopted as a part of a pattern of labor legislation.” 353 U. S. 30, 42. The Court there regarded as inapposite those cases in which it was held that the Norris-LaGuardia Act’s ban on federal injunctions is not lifted because the conduct of the union is unlawful under some other, nonlabor statute. Here, far from violating the Railway Labor Act, the union’s effort to negotiate its controversy with the railroad was in obedience to the Act’s command that employees as well as railroads exert every reasonable effort to settle all disputes “concerning rates of pay, rules, and working conditions.” 45 U. S. C. § 152, First. Moreover, neither the respondent nor anyone else points to any other specific legal command that the union violated here by attempting to bring about a change in its collective bargaining agreement. It would stretch credulity too far to say that the Railway Labor Act, designed to protect railroad workers, was somehow violated by the union acting precisely in accordance with that Act’s purpose to obtain stability and permanence in employment for workers. There is no express provision of law, and certainly we can infer none from the Interstate Commerce Act, making it unlawful for unions to want to discuss with railroads actions that may vitally and adversely affect the security, seniority and stability of railroad jobs. And for a number of reasons the state public utility proceedings, invoked by the railroad to obtain approval of consolidation or abandonment of stations, could not stamp illegality on the union’s effort to negotiate this whole question with the railroad. The union merely asked for a contractual right to bargain with the railroad about any voluntary steps it might take to abandon stations or to seek permission to abandon stations and thus abolish jobs. Nothing the union requested would require the railroad to violate any valid law or the valid order of any public agency. There is no testimony and there are no findings that this union has set itself up in defiance of any state mandatory order. In fact, there was no state order of any kind at the time the union first asked to negotiate about the proposed contractual change. Even if a Norris-LaGuardia “labor dispute” could not arise out of an unlawful bargaining demand, but see Afran Transp. Co. v. National Maritime Union, 169 F. Supp. 416, 1959 Am. Mar. Cas. 326, the union’s proposal here was not unlawful.
The union contends that, whether the state rulings were mandatory or permissive, the States are without authority to order an abandonment of stations that would conflict with collective bargaining agreements made or to be made between the railroad and the union. Whether this contention is valid or not we need not decide since there is no such conflict before us. And the District Court expressly refused to find that the union’s proposal was prompted by the railroad’s action in seeking state authority to put its Central Agency Plan into effect. Instead, the District Court specifically found that the dispute grew out of the failure of the parties to reach an agreement on the contract change proposed by the union.
Only a word need be said about the railroad’s contention that' the dispute here with the union was a minor one relating to an interpretation of its contract and therefore one that the Railway Labor Act requires to be heard by the National Railroad Adjustment Board. We have held that a strike over a “minor dispute” may be enjoined in order to enforce compliance with the Railway Labor Act’s requirement that minor disputes be heard by the Adjustment Board. Brotherhood of Railroad Trainmen v. Chicago River & I. R. Co., 353 U. S. 30. But it is impossible to classify as a minor dispute this dispute relating to a major change, affecting jobs, in an existing collective bargaining agreement, rather than to mere infractions or interpretations of the provisions of that agreement. Particularly since the collective bargaining agreement which the union sought to change was a result of mediation under the Railway Labor Act, this is the type of major dispute that is not governed by the Adjustment Board.
In concluding that the injunction ordered by the Court of Appeals is forbidden by the Norris-LaGuardia Act, we have taken due account of the railroad’s argument that the operation of unnecessary stations, services and lines is wasteful and thus runs counter to the congressional policy, expressed in the Interstate Commerce Act, to foster an efficient national railroad system. In other legislation, however, like the Railway Labor and Norris-LaGuardia Acts, Congress has acted on the assumption that collective bargaining by employees will also foster an efficient national railroad service. It passed such Acts with knowledge that collective bargaining might sometimes increase the expense of railroad operations because of increased wages and better working conditions. It goes without saying,, therefore, that added railroad expenditures for employees cannot always be classified as “wasteful.” It may be, as some people think, that Congress was unwise in curtailing the jurisdiction of federal courts in railroad disputes as it did in the Norris-LaGuardia Act. Arguments have even been presented here pointing to the financial debilitation of the respondent Chicago & North Western Railroad and to the absolute necessity for the abandonment of railroad stations. These arguments, however, are addressed to the wrong forum. If the scope of the Norris-LaGuardia Act is to be cut down in order to prevent “waste” by the railroads, Congress should be the body to do so. Such action is beyond the judicial province and we decline to take it.
There are other subsidiary questions raised with reference to the validity of a second 30-day restraining order issued by the district judge and an injunction pending appeal under Rule 62 (c) of the Federal Rules of Civil Procedure. But since we have determined the main controversy between the parties, we think it inadvisable to decide either of these questions now. We intimate no opinion concerning either at this time.
The judgment of the Court of Appeals is reversed and that of the District Court is affirmed insofar as it held that the court was without jurisdiction under the Norris-LaGuardia Act to enter the injunction.
It is so ordered.
47 Stat. 70, 29 U. S. C. § 104. (Emphasis supplied.)
See Brotherhood of Railroad Trainmen v. Chicago River & I. R. Co., 353 U. S. 30.
Chicago & N.W. R. Co. v. Order of Railroad Telegraphers, 264 F. 2d 254, at 260.
Ibid. See Brotherhood of Railroad Trainmen v. New York Central R. Co., 246 F. 2d 114. But see Bull Steamship Co. v. Seafarers’ International Union, 250 F. 2d 326.
At the time of the District Court’s decision, two States (South Dakota and Iowa) of the four in which the railroad had sought permission to institute its Central Agency Plan (the other two were Minnesota and Wisconsin) had granted permission and the plan was promptly placed in effect. Since then, we are given to understand, the commissions in the remaining two States have issued orders approving the plan.
Compare Marine Cooks & Stewards v. Panama Steamship Co., post, p. 365, decided this day.
29 U. S. C. § 104.
29 U. S. C. § 113 (c).
29 U. S. C. § 102.
See Allen Bradley Co. v. Local Union No. 3, 325 U. S. 797, 805; United States v. Hutcheson, 312 U. S. 219, 230-236; Milk Wagon Drivers’ Union v. Lake Valley Farm Products, Inc., 311 U. S. 91, 102-103.
264 F. 2d, at 259.
49 U. S. C. § 5 (2)(f). And see § 5 (2)(c).
49 U.S.C. § 5 (2) (f)
Hearings before the House Committee on Interstate and Foreign Commerce on H. R. 2531, 76th Cong., 1st Sess. 216-217.
Brotherhood of Railroad Trainmen v. Chicago River & I. R. Co., 353 U. S. 30; Brotherhood of Railroad Trainmen v. Howard, 343 U. S. 768; Graham v. Brotherhood of Locomotive Firemen & Enginemen, 338 U. S. 232; Tunstall v. Brotherhood of Locomotive Firemen & Enginemen, 323 U. S. 210; Virginian R. Co. v. System Federation No. 40, 300 U. S. 515. See also Textile Workers Union v. Lincoln Mills, 353 U. S. 448, 457-459. And see Steele v. Louisville & N. R. Co., 323 U. S. 192.
The Court cited the following cases to show that unlawfulness under nonlabor legislation did not remove the restrictions of the Norris-LaGuardia Act upon the jurisdiction of federal courts: Milk Wagon Drivers’ Union v. Lake Valley Farm Products, Inc., 311 U. S. 91, 103 (alleged violations of Sherman Act); East Texas Motor Freight Lines v. International Brotherhood of Teamsters, 163 F. 2d 10, 12 (violation of Interstate Commerce Act and Motor Carrier Act).
Of course, a holding here that mere unlawfulness under any law is enough to remove the strictures of the Norris-LaGuardia Act would require a modification or abandonment of our statement that “For us to hold, in the face of this legislation [the Clayton and Norris-LaGuardia Acts], that the federal courts have jurisdiction to grant injunctions in cases growing out of labor disputes, merely because alleged violations of the Sherman Act are involved, would run counter to the plain mandate of the [Norris-LaGuardia] Act and would reverse the declared purpose of Congress.” Milk Wagon Drivers’ Union v. Lake Valley Farm Products, Inc., 311 U. S. 91, 103. See also Lee Way Motor Freight v. Keystone Freight Lines, 126 F. 2d 931, 934.
Moreover, this railroad operates in nine States; it has instituted proceedings in the state regulatory commissions of four only and at the time of the District Court’s decision, only two of these had rendered decisions. Yet the union’s proposal was to negotiate for a clause which would apply to respondent’s entire system. The railroad’s refusal to bargain was not limited, however, to operations in the four States in which proceedings had begun. And even assuming that the order of one State, South Dakota, was mandatory and that this fact is of importance, it would not relieve the railroad from any duty it had to bargain on the proposed contract change in the eight other States involved.
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.
On August 6, 1977, respondent Barry Joe Roberts lost control of his car and collided with a pickup truck, killing a passenger in the truck. Shortly after the accident, Roberts received citations for reckless driving, driving while his license was revoked, driving on the wrong side of the road, and driving while intoxicated. He was convicted of these four misdemeanors in a Justice of the Peace Court in Talla-hatchie County, Miss. Roberts gave notice of appeal and the case was transferred to the Circuit Court for trial de novo.
While the appeal was pending, in December 1977, a grand jury indicted Roberts for manslaughter based on the August 6 accident. App. 90-91. Roberts was arraigned on the appeal and the felony indictment simultaneously, and the five charges were set for trial together. Id., at 92-93. During the trial, the State elected not to press the misdemeanor charges and remanded them to the file. The jury convicted Roberts of manslaughter, and the judge sentenced him to 20 years in prison. The Mississippi Supreme Court affirmed. Roberts v. State, 379 So. 2d 514 (1979). It also refused Roberts leave to pursue state postconviction remedies.
Roberts then brought the present habeas corpus action in the United States District Court for the Northern District of Mississippi. The petition was referred to a Magistrate, who recommended that the writ issue for two reasons. First, the manslaughter prosecution violated the Double Jeopardy Clause because proof of manslaughter required proof of all the elements of reckless driving, of which Roberts had already been convicted. See Illinois v. Vitale, 447 U. S. 410 (1980). Second, substitution of a felony charge covering the conduct for which Roberts had already been convicted of four misdemeanors violated the Due Process Clause. See Blackledge v. Perry, 417 U. S. 21 (1974). The District Court adopted the Magistrate’s report. The Court of Appeals for the Fifth Circuit affirmed, relying solely on the double jeopardy argument, judgment order reported at 693 F. 2d 132 (1982).
We granted certiorari, 461 U. S. 956 (1983), and we now affirm. Although the court below and the petition for certio-rari addressed only the double jeopardy issue, we may affirm on any ground that the law and the record permit and that will not expand the relief granted below. United States v. New York Telephone Co., 434 U. S. 159, 166, n. 8 (1977). Because this case is plainly controlled by Blackledge v. Perry, supra, we affirm on the basis of that decision without reaching the double jeopardy issue.
Perry was convicted of assault in a court of limited jurisdiction under a scheme essentially identical to Mississippi’s. He exercised his statutory right to a trial de novo, and the prosecutor then obtained a felony indictment charging him with assault with a deadly weapon. We concluded that this sequence of events suggested “a realistic likelihood of ‘vindictiveness.’” 417 U. S., at 27. Fearing that the prosecutor, who “has a considerable stake in discouraging convicted misdemeanants from appealing and thus obtaining a trial de novo,” would make retaliatory use of his power to “up the ante,” we considered the situation analogous to the imposition of a stiffer sentence after reversal and reconvietion. See North Carolina v. Pearce, 395 U. S. 711 (1969). We therefore established a presumption of unconstitutional vindictiveness in these circumstances. Blackledge, supra, at 27-28.
Blackledge clearly controls this case. The relevant facts are identical. Like Perry, Roberts was convicted of a misdemeanor and exercised his right to a trial de novo, only to be confronted with a felony charge. That charge covered the same conduct as the misdemeanors he sought to appeal. As the Magistrate concluded, “[t]he facts of this case fall squarely within Blackledge.” App. to Pet. for Cert. A4.
The only possible distinction between the two cases is that in Blackledge the same attorney was apparently responsible for the entire prosecution. Here the proceedings before the Justice of the Peace were the responsibility of the county prosecutor, whereas the felony indictment was obtained by the District Attorney, who was then involved in the manslaughter trial. It might be argued that if two different prosecutors are involved, a presumption of vindictiveness, which arises in part from assumptions about the individual’s personal stake in the proceedings, is inappropriate. Cf. Colten v. Kentucky, 407 U. S. 104 (1972) (refusing to apply prophylactic rule of Pearce where enhanced sentence is imposed by a different court after trial de novo). On the other hand, to the extent the presumption reflects “institutional pressure that . . . might . . . subconsciously motivate a vindictive prosecutorial. . . response to a defendant’s exercise of his right to obtain a retrial of a decided question,” United States v. Goodwin, 457 U. S. 368, 377 (1982), it does not hinge on the continued involvement of a particular individual. A district attorney burdened with the retrial of an already-convicted defendant might be no less vindictive because he did not bring the initial prosecution. Indeed, Blackledge referred frequently to actions by “the State,” rather than “the prosecutor.” E. g., 417 U. S., at 28-29.
We need not determine the correct rule when two independent prosecutors are involved, however. Here the county prosecutor participated fully after the conclusion of proceedings in the Justice of the Peace Court. He was the State’s sole representative at the arraignment in Circuit Court, App. 92, assisted at the trial, id., at 94; Tr. of Oral Arg. 9, and presented the initial closing argument to the jury, App. 96. In fact, such participation was a statutory duty. Under the state law then in effect, the county prosecutor was to “assist the district attorney in all criminal cases in the circuit court” in which his county had an interest and “to represent the state in all matters coming before the grand jury of his county.” Miss. Code Ann. § 19-23-11 (1972). In these circumstances, the addition of the District Attorney to the prosecutorial team changes little.
Petitioners suggest that we should remand the Blackledge issue to the Court of Appeals rather than reach it ourselves. Tr. of Oral Arg. 24. It is true that “[w]hen attention has been focused on other issues, or when the court from which a case comes has expressed no views on a controlling question, it may be appropriate to remand the case rather than deal with the merits of that question in this Court.” Dandridge v. Williams, 397 U. S. 471, 476, n. 6 (1970). Nonetheless, we have little hesitation in deciding the case in its current posture. The due process issue was argued before both the District Court and the Court of Appeals. The State’s opposition to the Magistrate’s report and its brief to the Court of Appeals are before us. The factual record is adequate, and would not be improved by a remand to the Court of Appeals. And the case is decided by a straightforward application of controlling precedent.
The prosecution of Roberts for manslaughter, following his invocation of his statutory right to appeal his misdemeanor convictions, was unconstitutional. The resulting conviction cannot stand. The judgment of the Court of Appeals is therefore
Affirmed.
Roberts was fined $100 for reckless driving, fined $100 and sentenced to 6 months in jail for driving while his license was revoked, fined $100 and sentenced to 10 days in jail for driving on the wrong side of the road, and fined $1,000 and sentenced to 11 months in jail for driving under the influence.
Under the Mississippi scheme then in effect, Justice of the Peace Courts had concurrent jurisdiction with the County Courts over misdemeanors. Miss. Code Ann. §§9-9-21, 99-33-1 (1972). In practice, misdemeanors were always brought in one or the other of these courts by county prosecutors. Brief for Petitioners 5, n. 1; Tr. of Oral Arg. 7-10. Such proceedings were initiated by affidavit, the traffic citations serving that function in the present case. If convicted in the Justice of the Peace Court, the defendant had an absolute right to appeal to the Circuit Court for a trial de novo. § 99-35-1.
Under Mississippi practice, a remand to the file “is the functional equivalent of a nolle pros.’’ Tr. of Oral Arg. 15.
At oral argument, the State suggested that Blackledge had been overruled, or at least modified, by United States v. Goodwin, 457 U. S. 368 (1982). Tr. of Oral Arg. 24. Goodwin held that the Blackledge presumption does not apply when charges are enhanced following a pretrial demand for a jury trial. We distinguished Blackledge on the basis of the critical differences in the timing of the heightened charge and in the amount of extra effort to which the defendant has put the State. There is no hint in Goodwin that Blackledge does not apply with full force in the circumstances of that case, circumstances that are repeated here.
In both courts below, the State attempted to distinguish Blackledge on the ground that the misdemeanor and felony at issue in that ease shared specific elements in a way that traffic violations and manslaughter do not. This argument closely resembled their double jeopardy argument, both focusing on the rule set out in Blockburger v. United States, 284 U. S. 299 (1932). Even if the State is correct that the offenses charged in Blackledge had more in common than those charged here, this parsing of the statutes misses the point. Blackledge engaged in no such analysis. It noted merely that the “indictment covered the same conduct for which Perry had been tried and convicted.” 417 U. S., at 23. That is equally true here. Whatever the congruence, or lack thereof, of the offenses charged, the postappeal felony indictment poses “the danger that the State might be retaliating against the accused for lawfully attacking his conviction.” Bordenkircher v. Hayes, 434 U. S. 357, 363 (1978).
In this regard, we note that the Blackledge presumption is rebuttable. See United States v. Goodwin, supra, at 376, n. 8; Blackledge, 417 U. S., at 29, n. 7. The State had ample opportunity below to attempt to rebut it but did not do so. Its only argument has been that Blackledge should not apply.
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:
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A
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sc_issuearea
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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 Blackmun
delivered the opinion of the Court.
In this case we must decide the narrow statutory issue whether § 506(b) of the Bankruptcy Code of 1978, 11 U. S. C. § 506(b) (1982 ed., Supp. IV), entitles a creditor to receive postpetition interest on a nonconsensual oversecured claim allowed in a bankruptcy proceeding. We conclude that it does, and we therefore reverse the judgment of the Court of Appeals.
I
Respondent Ron Pair Enterprises, Inc., filed a petition for reorganization under Chapter 11 of the Bankruptcy Code on May 1, 1984, in the United States Bankruptcy Court for the Eastern District of Michigan. The Government filed timely proof of a prepetition claim of $52,277.93, comprised of assessments for unpaid withholding and Social Security taxes, penalties, and prepetition interest. The claim was perfected through a tax lien on property owned by respondent. Respondent’s First Amended Plan of Reorganization, filed October 1, 1985, provided for full payment of the prepetition claim, but did not provide for postpetition interest on that claim. The Government filed a timely objection, claiming that § 506(b) allowed recovery of postpetition interest, since the property securing the claim had a value greater than the amount of the principal debt. At the Bankruptcy Court hearing, the parties stipulated that the claim was over-secured, but the court subsequently overruled the Government’s objection. The Government appealed to the United States District Court for the Eastern District of Michigan. That court reversed the Bankruptcy Court’s judgment, concluding that the plain language of § 506(b) entitled the Government to postpetition interest.
The United States Court of Appeals for the Sixth Circuit, in its turn, reversed the District Court. 828 F. 2d 367 (1987). While not directly ruling that the language of § 506(b) was ambiguous, the court reasoned that reference to pre-Code law was appropriate “in order to better understand the context in which the provision was drafted and therefore the language itself.” Id., at 370. The court went on to note that under pre-Code law the general rule was that post-petition interest on an oversecured prepetition claim was allowable only where the lien was consensual in nature. In light of this practice, and of the lack of any legislative history evincing an intent to change the standard, the court held that § 506(b) codified the pre-existing standard, and that post-petition interest was allowable only on consensual claims. Because this result was in direct conflict with the view of the Court of Appeals for the Fourth Circuit, see Best Repair Co. v. United States, 789 F. 2d 1080 (1986), and with the views of other courts, we granted certiorari, 485 U. S. 958 (1988), to resolve the conflict.
► — I HH
Section 506, enacted as part of the extensive 1978 revision of the bankruptcy laws, governs the definition and treatment of secured claims, i. <?., claims by creditors against the estate that are secured by a lien on property in which the estate has an interest. Subsection (a) of § 506 provides that a claim is secured only to the extent of the value of the property on which the lien is fixed; the remainder of that claim is considered unsecured. Subsection (b) is concerned specifically with oversecured claims, that is, any claim that is for an amount less than the value of the property securing it. Thus, if a $50,000 claim were secured by a lien on property having a value of $75,000, the claim would be oversecured, provided the trustee’s costs of preserving or disposing of the property were less than $25,000. Section 506(b) allows a holder of an oversecured claim to recover, in addition to the prepetition amount of the claim, “interest on such claim, and any reasonable fees, costs, or charges provided for under the agreement under which such claim arose.”
The question before us today arises because there are two types of secured claims: (1) voluntary (or consensual) secured claims, each created by agreement between the debtor and the creditor and called a “security interest” by the Code, 11 U. S. C. §101(45) (1982 ed., Supp. IV), and (2) involuntary secured claims, such as a judicial or statutory lien, see 11 U. S. C. §§101(32) and (47) (1982 ed., Supp. IV), which are fixed by operation of law and do not require the consent of the debtor. The claim against respondent’s estate was of this latter kind. Prior to the passage of the 1978 Code, some Courts of Appeals drew a distinction between the two types for purposes of determining postpetition interest. The question we must answer is whether the 1978 Code recognizes and enforces this distinction, or whether Congress intended that all oversecured claims be treated the same way for purposes of postpetition interest.
HH ) — I t-H
Initially, it is worth recalling that Congress worked on the formulation of the Code for nearly a decade. It was intended to modernize the bankruptcy laws, see H. R. Rep. No. 95-595, p. 3 (1977) (Report), and as a result made significant changes in both the substantive and procedural laws of bankruptcy. See Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U. S. 50, 52-53 (1982) (plurality opinion). In particular, Congress intended “significant changes from current law in . . . the treatment of secured creditors and secured claims.” Report, at 180. In such a substantial overhaul of the system, it is not appropriate or realistic to expect Congress to have explained with particularity each step it took. Rather, as long as the statutory scheme is coherent and consistent, there generally is no need for a court to inquire beyond the plain language of the statute.
A
The task of resolving the dispute over the meaning of § 506(b) begins where all such inquiries must begin: with the language of the statute itself. Landreth Timber Co. v. Landreth, 471 U. S. 681, 685 (1985). In this case it is also where the inquiry should end, for where, as here, the statute’s language is plain, “the sole function of the courts is to enforce it according to its terms.” Caminetti v. United States, 242 U. S. 470, 485 (1917). The language before us expresses Congress’ intent — that postpetition interest be available — with sufficient precision so that reference to legislative history and to pre-Code practice is hardly necessary.
The relevant phrase in § 506(b) is: “[T]here shall be allowed to the holder of such claim, interest on such claim, and any reasonable fees, costs, or charges provided for under the agreement under which such claim arose.” “Such claim” refers to an oversecured claim. The natural reading of the phrase entitles the holder of an oversecured claim to post-petition interest and, in addition, gives one having a secured claim created pursuant to an agreement the right to reasonable fees, costs, and charges provided for in that agreement. Recovery of postpetition interest is unqualified. Recovery of fees, costs, and charges, however, is allowed only if they are reasonable and provided for in the agreement under which the claim arose. Therefore, in the absence of an agreement, postpetition interest is the only added recovery available.
This reading is also mandated by the grammatical structure of the statute. The phrase “interest on such claim” is set aside by commas, and separated from the reference to fees, costs, and charges by the conjunctive words “and any.” As a result, the phrase “interest on such claim” stands independent of the language that follows. “[IJnterest on such claim” is not part of the list made up of “fees, costs, or charges,” nor is it joined to the following clause so that the final “provided for under the agreement” modifies it as well. See Best Repair Co. v. United States, 789 F. 2d, at 1082. The language and punctuation Congress used eannot be read in any other way. By the plain language of the statute, the two types of recovery are distinct.
B
The plain meaning of legislation should be conclusive, except in the “rare cases [in which] the literal application of a statute will produce a result demonstrably at odds with the intentions of its drafters.” Griffin v. Oceanic Contractors, Inc., 458 U. S. 564, 571 (1982). In such cases, the intention of the drafters, rather than the strict language, controls. Ibid. It is clear that allowing postpetition interest on nonconsensual oversecured liens does not contravene the intent of the framers of the Code. Allowing such interest does ,not conflict with any other section of the Code, or with any important state or federal interest; nor is a contrary view suggested by the legislative history. Respondent has not articulated, nor can we discern, any significant reason why Congress would have intended, or any policy reason would compel, that the two types of secured claims be treated differently in allowing postpetition interest.
C
Respondent urges that pre-Code practice drew a distinction between consensual and nonconsensual liens for the purpose of determining entitlement to postpetition interest, and that Congress’ failure to repudiate that distinction requires us to enforce it. It is respondent’s view, as it was the view of the Court of Appeals, that Midlantic National Bank v. New Jersey Dept. of Environmental Protection, 474 U. S. 494 (1986), and Kelly v. Robinson, 479 U. S. 36 (1986), so require. We disagree.
In Midlantic we held that § 554(a) of the Code, 11 U. S. C. § 554(a), which provides that “the trustee may abandon any property of the estate that is burdensome to the estate,” does not give a trustee the authority to violate state health and safety laws by abandoning property containing hazardous wastes. 474 U. S., at 507. In reaching that conclusion, we noted that according to pre-Code doctrine the trustee’s authority to dispose of property could be limited in order “to protect legitimate state or federal interests.” Id., at 500. But we did not rest solely, or even primarily, on a presumption of continuity with pre-Code practice. Rather, we concluded that a contrary result would render abandonment doctrine inconsistent with other provisions of the Code itself, which embody the principle that “the trustee is not to have carte blanche to ignore nonbankruptcy law.” Id., at 502. We also recognized that the outcome sought would be not only a departure from pre-Code practice, but also “an extraordinary exemption from nonbankruptcy law,” id., at 501, requiring some clearer expression of congressional intent. We relied as well on Congress’ repeated emphasis in environmental legislation “on its ‘goal of protecting the environment against toxic pollution.’” Id., at 505, quoting Chemical Manufacturers Assn. v. Natural Resources Defense Council, Inc., 470 U. S. 116, 143 (1985). To put it simply, we looked to pre-Code practice for interpretive assistance, because it appeared that a literal application of the statute would be “demonstrably at odds with the intentions of its drafters.” Griffin v. Oceanic Contractors, Inc., 458 U. S., at 571.
A similar issue presented itself in Kelly v. Robinson, supra, where we held that a restitution obligation, imposed as part of a state criminal sentence, was not dischargeable in bankruptcy. We reached this conclusion by interpreting § 523(a)(7) of the Code, 11 U. S. C. § 523(a)(7), as “preserving] from discharge any condition a state criminal court imposes as part of a criminal sentence.” 479 U. S., at 50. We noted that the Code provision was “subject to interpretation,” ibid., and considered both legislative history and pre-Code practice in aid of that interpretation. But in determining that Congress had not intended to depart from pre-Code practice in this regard, we did not rely on a pale presumption to that effect. We concluded that the pre-Code practice had been animated by “a deep conviction that federal bankruptcy courts should not invalidate the results of state criminal proceedings,” id., at 47, which has its source in the basic principle of our federalism that “the States’ interest in administering their criminal justice systems free from federal interference is one of the most powerful of the considerations that should influence a court considering equitable types of relief.” Id., at 49. In Kelly, as in Midlantic, pre-Code practice was significant because it reflected policy considerations of great longevity and importance.
Kelly and Midlantic make clear that, in an appropriate case, a court must determine whether Congress has expressed an intent to change the interpretation of a judicially created concept in enacting the Code. But Midlantic and Kelly suggest that there are limits to what may constitute an appropriate case. Both decisions concerned statutory language which, at least to some degree, was open to interpretation. Each involved a situation where bankruptcy law, under the proposed interpretation, was in clear conflict with state or federal laws of great importance. In the present case, in contrast, the language in question is clearer than the language at issue in Midlantic and Kelly: as written it directs that postpetition interest be paid on all oversecured claims. In addition, this natural interpretation of the statutory language does not conflict with any significant state or federal interest, nor with any other aspect of the Code. Although the payment of postpetition interest is arguably somewhat in tension with the desirability of paying all creditors as uniformly as practicable, Congress expressly chose to create that alleged tension. There is no reason to suspect that Congress did not mean what the language of the statute says.
D
But even if we saw the need to turn to pre-Code practice in this case, it would be of little assistance. The practice of denying postpetition interest to the holders of nonconsensual liens, while allowing it to holders of consensual liens, was an exception to an exception, recognized by only a few courts and often dependent on particular circumstances. It was certainly not the type of “rule” that we assume Congress was aware of when enacting the Code; nor was it of such significance that Congress would have taken steps other than enacting statutory language to the contrary.
There was, indeed, a pre-Code rule that the running of interest ceased when a bankruptcy petition was filed. See Sexton v. Dreyfus, 219 U. S. 339, 344 (1911). Two exceptions to this rule had been recognized under pre-Code practice. The first allowed postpetition interest when the debtor ultimately proved to be solvent; the second allowed dividends and interest earned by securities held by the creditor as collateral to be applied to postpetition interest. See City of New York v. Saper, 336 U. S. 328, 330, n. 7 (1949). Neither of these exceptions would be relevant to this case. A third exception was of more doubtful provenance: an exception for oversecured claims. At least one Court of Appeals refused to apply this exception, United States v. Harrington, 269 F. 2d 719, 722 (CA4 1959), and there was some uncertainty among courts which did recognize it as to whether this Court ever had done so. United States v. Bass, 271 F. 2d 129, 131, n. 3 (CA9 1959); but see Vanston Bondholders Protective Committee v. Green, 329 U. S. 156, 159 (1946).
What is at issue in this case is not the oversecured claim exception per se, but an exception to that exception. Several Courts of Appeals refused to apply the oversecured claim exception to an oversecured federal tax claim. See United States v. Harrington, 269 F. 2d, at 722-723 (holding that even if there were a general exception for oversecured claims, it would not apply to tax liens); United States v. Bass, 271 F. 2d, at 132; In re Kerber Packing Co., 276 F. 2d 245, 247-248 (CA7 1960); see also In re Boston & Maine Corp., 719 F. 2d 493, 496 (CA1 1983) (municipal property tax claim), cert, denied sub nom. City of Cambridge v. Meserve, 466 U. S. 938 (1984). But see In re Parchem, 166 F. Supp. 724, 730 (Minn.) (allowing postpetition interest on tax claim), appeal dism’d upon stipulation, 261 F. 2d 839 (CA8 1958); In re Ross Nursing Home, 2 B. R. 496, 499-500 (Bkrtcy., EDNY 1980) (same). It is this refusal to apply the exception that the Court of Appeals thought constituted a well-established judicially created rule.
The fact that this Court never clearly has acknowledged or relied upon this limitation on the oversecured-claim exception counsels against concluding that the limitation was well recognized. Also arguing against considering this limitation a clear rule is the fact that all the cases that limited the third exception were tax-lien cases. Each gave weight to City of New York v. Saper, supra, where this Court had ruled that postpetition interest was not available on unsecured tax claims, and reasoned that the broad language of that case denied it for all tax claims. See United States v. Harrington, 269 F. 2d, at 721-722; United States v. Bass, 271 F. 2d, at 132; In re Kerber Packing Co., 276 F. 2d, at 247. The rule articulated in these cases never was extended to other forms of nonconsensual liens. Obviously, there is no way to read § 506(b) as allowing postpetition interest on all oversecured claims except claims based on unpaid taxes. For this reason, the statute Congress wrote is simply not subject to a reading that would harmonize it with the supposed pre-Code rule.
More importantly, this “rule,” in the few cases where it was recognized, was only a guide to the trustee’s exercise of his powers in the particular circumstances of the case. We have noted that “the touchstone of each decision on allowance of interest in bankruptcy . . . has been a balance of equities between creditor and creditor or between creditors and the debtor.” Vanston Bondholders Protective Committee v. Green, 329 U. S., at 165. All the exceptions to the denial of postpetition interest “are not rigid doctrinal categories. Rather, they are flexible guidelines which have been developed by the courts in the exercise of their equitable powers in insolvency proceedings.” In re Boston & Maine Corp., 719 F. 2d, at 496. None of the cases cited by the Court of Appeals states that the doctrine does anything more than provide a bankruptcy court with guidance in the exercise of its equitable powers. As such, there is no reason to think that Congress, in enacting a contrary standard, would have felt the need expressly to repudiate it. The contrary view, which is the view we adopt today, is more consistent with Congress’ stated intent, in enacting the Code, to “codif[y] creditors’ rights more clearly than the case law . . . [by] defining] the protections to which a secured creditor is entitled, and the means through which the court may grant that protection.” Report, at 4-5 (emphasis added). Whether or not Congress took notice of the pre-Code standard, it acted with sufficient clarity in enacting the statute.
The judgment of the Court of Appeals is reversed.
It is so ordered.
Most bankruptcy courts interpreting § 506(b) have permitted the holder of an oversecured claim to recover postpetition interest. These courts have considered both state and federal tax liens, see, e. g., In re Brandenburg, 71 B. R. 719 (SD 1987); In re Busone, 71 B. R. 201 (EDNY 1987); In re Gilliland, 67 B. R. 410 (ND Tex. 1986); In re Hoffman, 28 B. R. 503 (Md. 1983), and private nonconsensual liens, such as judicial and mechanic’s liens, see, e. g., In re Charter Co., 63 B. R. 568 (MD Fla. 1986); In re Romano, 51 B. R. 813 (MD Fla. 1985); In re Morrissey, 37 B. R. 571 (ED Va. 1984). One other Court of Appeals and a leading commentator have taken the position that § 506(b) codiñes pre-Code law and distinguishes between consensual and nonconsensual liens in determining the allowance of postpetition interest. See In re Newbury Cafe, Inc., 841 F. 2d 20 (CA1 1988), cert. pending, No. 87-1784; 3 Collier on Bankruptcy ¶ 506.05, p. 506-41, and n. 5b (15th ed. 1988).
Section 506, as amended, reads:
“(a) An allowed claim of a creditor secured by a lien on property in which the estate has an interest, or that is subject to setoff under section 553 of this title, is a secured claim to the extent of the value of such creditor’s interest in the estate’s interest in such property, or to the extent of the amount subject to setoff, as the case may be, and is an unsecured claim to the extent that the value of such creditor’s interest or the amount so sub-jeet to setoff is less than the amount of such allowed claim. Such value should be determined in light of the purpose of the valuation and of the proposed disposition or use of such property, and in conjunction with any hearing on such disposition or use or on a plan affecting such creditor’s interest.
“(b) To the extent that an allowed secured claim is secured by property the value of which, after any recovery under subsection (c) of this section, is greater than the amount of such claim, there shall be allowed to the holder of such claim, interest on such claim, and any reasonable fees, costs, or charges provided for under the agreement under which such claim arose.
“(c) 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.
“(d) To the extent that a lien secures a claim against the debtor that is not an allowed secured claim, such lien is void, unless —
“(1) such claim was disallowed only under section 502(b)(5) or 502(e) of this title; or
“(2) such claim is not an allowed secured claim due only to the failure of any entity to file a proof of such claim under section 501 of this title.” 11 U. S. C. § 506 (1982 ed. and Supp. IV).
Thus, a $100,000 claim, secured by a lien on property of a value of $60,000, is considered to be a secured claim to the extent of $60,000, and to be an unsecured claim for $40,000. See 3 Collier on Bankruptcy *1506.04, p. 506-15 (15th ed. 1988) (“[SJection 506(a) requires a bifurcation of a ‘partially secured’ or ‘undersecured’ claim into separate and independent secured claim and unsecured claim components”).
The United States Court of Appeals for the Fourth Circuit pointed out in Best Repair Co. that, had Congress intended to limit postpetition interest to consensual liens, § 506(b) could have said: “there shall be allowed to the holder of such claim, as provided for under the agreement under which such claim arose, interest on such claim and any reasonable fees, costs or charges.” 789 F. 2d, at 1082, n. 2. A less clear way of stating this, closer to the actual language, would be: “there shall be allowed to the holder of such claim, interest on such claim and reasonable fees, costs, and charges provided for under the agreement under which such claim arose.” Ibid.
It seems to us that the interpretation adopted by the Court of Appeals in this case not only requires that the statutory language be read in an unnatural way, but that it is inconsistent with the remainder of § 506 and with terminology used throughout the Code. Adopting the Court of Appeals’ view would mean that § 506(b) is operative only in regard to consensual liens, i. e., that only a holder of an oversecured claim arising from an agreement is entitled to any added recovery. But the other portions of § 506 make no distinction between consensual and nonconsensual liens. Moreover, had Congress intended § 506(b) to apply only to consensual liens, it would have clarified its intent by using the specific phrase, “security interest,” which the Code employs to refer to liens created by agreement. 11 U. S. C. §101(45) (1982 ed., Supp. IV). When Congress wanted to restrict the application of a particular provision of the Code to such liens, it used the term “security interest.” See, e. g., 11 U. S. C. §§ 362(b)(12) and (13), 363(a), 547(c)(3)-(5), 552, 752(c), 1110(a), 1168(a), 1322(b)(2) (1982 ed. and Supp. IV).
See H. R. 6, 95th Cong., 1st Sess. (1977); H. R. 8200, 95th Cong., 1st Sess. (1977); S. 2266, 95th Cong., 1st Sess. (1977). Because the final version of the statute contained the same language as that initially introduced, there was no change during the legislative process that could shed light on the meaning of the allowance of interest. See generally 3 Collier on Bankruptcy ¶ 506.03, pp. 506-7 to 506-12. Neither the Committee Reports nor the statements by the managers of the legislation discuss the question of postpetition interest at all. See Report, at 356; S. Rep. No. 95-989, p. 68 (1978); 124 Cong. Rec. 32398 (1978) (statement of Rep. Edwards); id., at 33997 (statement of Sen. DeConcini).
Section 523(a)(7) provides that a discharge in bankruptcy does not affect any debt that “is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss . . . .”
The rule preventing discharge of criminal fines was articulated promptly after the Bankruptcy Act of 1898 was passed, see In re Moore, 111 F. 145, 148-149 (WD Ky. 1901), and was uniformly accepted at the time Congress was considering the Code. See Kelly v. Robinson, 479 U. S., at 45-46.
Some pre-Code courts also distinguished between the two types of liens because noneonsensual liens were often fixed to the entirety of a debtor’s property, while consensual liens usually were fixed to a particular item of property. Whatever the merit of the distinction, modern commercial lending practices have changed, and it is not unusual for commercial lenders to obtain a lien on almost all of the debtor’s property. Congress, in enacting the Code, was aware of this, see Report, at 127, and in fact took specific steps to deal with such blanket liens on household- goods, see 11 U. S. C. § 522(f)(2). On the other hand, not all noneonsensual liens attach broadly to a debtor’s property. A typical mechanic’s or construction lien is limited to the property on which the improvement is made. See T. Crandall, R. Hagedorn, & F. Smith, Debtor-Creditor Law Manual ¶ 9.02[2] (1985).
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
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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 hold that the proofs justified with reason the jury’s conclusion that employer negligence played a part in producing the petitioner’s injury. Rogers v. Missouri Pacific R. Co., 352 U. S. 500; Webb v. Illinois Central R. Co., 352 U. S. 512; Ferguson v. Moore-McCormack Lines, 352 U. S. 521. The judgment of the Court of Appeals is reversed and the case is remanded. Mr. Justice Frankfurter would dismiss the writ as improvidently granted. See his dissent in Rogers v. Missouri Pacific R. Co., 352 U. S. 500, 524. Mr. Justice Harlan and Mr. Justice Whit-taker dissent for the reasons given in Mr. Justice Harlan’s opinion in Rogers v. Missouri Pacific R. Co., 352 U. S. 500, 559.
Beverly Tarpley argued the cause for petitioner. With her on the brief were Dallas Scarborough and Davis Scarborough. J. B. Look argued the cause for respondent. With him on the brief was John B. Pope.
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
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sc_issuearea
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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.
Opinion of the Court by
Mr. Justice Stewart,
announced by Mr. Justice White.
The appellant union is the certified representative of a majority of the employees of Kansas City Transit, Inc., a Missouri corporation which operates a public transit business in Kansas and Missouri. A collective bargaining agreement between the appellant and the‘company was due to expire on October 31, 1961, and in August of that year, after appropriate notices, the parties commenced the negotiation of an amended agreement. An impasse in these negotiations was reached, and in early November the appellant’s members voted to strike. The strike was called on. November 13.
The same day the Governor of Missouri, acting under the authority of a state law known as the King-Thompson Act, issued a proclamation that the public interest, health and welfare were jeopardized by the threatened interruption ojb the company’s operations, and by an executive order purported to take possession “of the plants, equipment, and all facilities of the Kansas City Transit, Inc., located in the State of Missouri, for the use and operation by the State of Missouri in the public interest.” A second executive order provided in part that “All rules and regulations . . . governing the internal management and' organization of the company, and its duties and responsibilities, shall remain in force and effect.throughout the term of operation by the State of Missouri.”
Pursuant to a provision of the Act which makes unlawful any strike or concerted refusal to work as a means of enforcing demands against the utility or the State after possession has been taken by the State, the State petitioned the Circuit Court of Jackson County for an injunction on November 15,1961. A temporary restraining order was issued on that day, and the strike and picketing were discontinued that evening. After a two-day trial, the order was continued, in effect, and the Circuit Court later entered a permanent injunction barring the continuation of the strike “against the State of Missouri.”
On appeal to the Supreme Court of Missouri, the appellants argued that the King-Thompson Act is in conflict with and is pre-empted by federal labor legislation, and that it abridges rights guaranteed by the First, Thirteenth, and Fourteenth Amendments. Reaffirming its earlier decisions in cases arising under the Act, the Supreme Court of Missouri rejected these arguments and affirmed the issuance of the injunction. 361 S. W. 2d 33. We noted probable jurisdiction. 371 U. S. 961.
We are met at the threshold with the claim that this controversy has become moot, and that we are accordingly foreclosed from considering the merits of the appeal. The basis for this contention is the fact that, after the appellants’ j urisdietioiyal 'statement was filed in this Court, theTJovernorof Missouri issued an executive order which, although reciting that the labor dispute between Kansas City Transit, Inc., and the appellant union “remains unresolved,” nevertheless terminated the outstanding seizure order, upon the finding that “continued exercise, by me of such authority is not justified in the circumstances of the ,aforesaid labor dispute.” Reliance for the claim of mootness is placed upon this Court’s decisions in Harris v. Battle, 348 U. S. 803, and Oil Workers Unions v. Missouri, 361 U. S. 363. In the Oil Workers case the Court declined to consider constitutional challenges to the King-Thompson Act, and in the Harris case declined to rule on the constitutionality of a similar Virginia statute, on the ground that the controversies had become moot. In both of those cases, however, the underlying labor dispute had been settled and' pek. collective bargaining agreements concluded by the time- the litigation reached this Court. Here, by contrast, the labor dispute remains unresolved. There thus exists in the present case not merely the speculative possibility of invocation of the King-Thompson Act in some future labor dispute, but the presence of an existing unresolved dispute which continues subject to all the provisions of the Act. Cf. Southern Pac. Terminal Co. v. Interstate Commerce Comm’n, 219 U. S. 498, 51A-516; United States v. W. T. Grant Co., 345 U. S. 629, 632. The situation here is thus quite different from that presented in the Harris and Oil Workers Unions cases, and we hold that the merits of this controversy are before us and must be decided.
The King-Thómpson Act defines certain public utilities as “life essentials of the people” and declares it to be the policy of the State that “the possibility of labor strife in utilities operating under governmental franchise or permit or under governmental ownership and control is a threat to the welfare and health of the people.” The Act imposes requirements in connection with the duration and renewal of collective bargaining agreements,. and creates a State Board of Mediation and public hearing panels whose services are to be invoked whenever the parties cannot themselves agree upon the terms to be included in a new agreement. And where, as here, the recommendations of these agencies are not accepted, and the continued operation of the utility is threatened as a result, the Governor is empowered to “take immediate possession off’ the utility “for the use and operation by the state of Missouri in the public interest.”
In Bus Employees v. Wisconsin Board, 340 U. S. 383, this Court held that the Wisconsin Public Utility Anti-Strike Law, which made it a misdemeanor for public utility employees to engage in a strike which would cause an interruption of an essential public utility service, conflicted with the National Labor Relations Act and was therefore invalid Tinder the Supremacy Clause of the Constitution. The Supreme Court of Missouri in the present case rejected the appellants’ argument that the Wisconsin Board, decision was determinative of the unconstitutionality of the Missouri statute here in issue. The court held that the provisions of the King-Thompson Act dealing with-the mediation board and public hearing panels were severable from the remainder of the statute, and refused to pass on any but those provisions which authorize the seizure and the issuance of injunctions against strikes taking place after seizure has been imposed. These provisions, the court ruled, do not — as in the Wisconsin Board casé — provide a comprehensive labor code conflicting with federal legislation, but rather represent “strictly emergency legislation” designed solely to authorize use of the State’s police power to protect the public from threatened breakdowns in vital community services. Emphasizing that the company was not a party to the injunction suit, the court concluded that, although the State did not actively participate in the management of the utility’s operations, the Governor’s executive order had been sufficient to convert the strike into one against the State, and that an injunction barring such a strike is therefore not barred by the provisions of. federal labor legislation^. 361 S. W. 2d, at 44, 46, 48-52.
We disagree. None of the distinctions drawn by the Missouri court between the King-Thompson Act and the legislation involved in Wisconsin Board seem to us to be apposite. First, whatever the status of the title to the properties of Kansas City Transit, Inc., acquired by the State as a result of the Governor’s executive order, the record shows that the State’s involvement fell far short of creating a state-owned and operated utility whose labor relations are by definition excluded from the coverage of the National Labor Relations Act. The employees of the company did not become employees of Missouri. Missouri did not pay their wages, and did not direct or supervise their duties. -No property of the company was actually conveyed, transferred, or otherwise turned over to the State. Missouri did not participate in any way in the actual management of the company, and there was no change of any kind" in the conduct of the company’s business. As summed up by the Chairman of the State Mediation Board: “So far as I know the company is operating now just as it was two weéks ago before the strike.”
Secondly, the Wisconsin Board case decisively rejected the proposition that a state enactment affecting a public utility operating in interstate commerce could be saved from a challenge based upon a demonstrated conflict with the standards embodied in federal law simply by designating it as “emergency legislation.” There the Court said that where “the state seeks to deny entirely a federally guaranteed right which Congress itself restricted only to a limited extent in case of national emergencies, however serious, it is manifest that the state legislation is in conflict with federal law.” 340 U. S., at 394.
The short of the matter is that Missouri, through the fiction of “seizure” by the State, has made a peaceful strike against a public utility unlawful, in direct conflict with federal legislation which guarantees the right to strike against a public utility, as against any employer éngaged in interstate commerce. In forbidding a strike against an employer covered by the National Labor Relations Act, Missouri has forbidden the exercise of rights explicitly protected by § 7 of that Act. Collective bargaining, with the right to strike at its core, is the essence of the federal scheme. As in Wisconsin Board, a state law which denies that right cannot stand under the Supremacy Clause of the Constitution.
It is hardly necessary to add that nothing we have said even remotely affects the right of a State to own or operate a public utility or any other business, nor the right or duty of the chief executive or legislature of a State to deal with emergency conditions of public danger, violence, or disaster under appropriate provisions of the State’s organic or statutory law.
Reversed.
The King-Thompson Act is Chapter 295 of the Revised Statutes of Missouri, 1959. The section of the statute authorizing seizure is Mo. Rev. Stat., 1959, § 295.180.
Missouri Rev. Stat., 1959, § 295.200, par. 1, provides:
“It shall be unlawful for any person, employee, or representative as defined in this chapter to call, incite, support or participate in any strike or concerted refusal to work for any utility or for the state after any plant, equipment or facility has been taken over by the state under this chapter, as means of enforcing any demands against the utility or against the state.”
Section 295.200, par. 6, provides:
“The courts of this state shall have power to enforce by injunction or other legal or equitable remedies any provision of this chapter or any rule or regulation prescribed by the governor hereunder.”
See State ex rel. State Board of Mediation v. Pigg, 362 Mo. 798, 244 S. W. 2d 75; Rider v. Julian 65 Mo. 313, 282 S. W. 2d 484; State v. Local No. 8-6, Oil, Chemical M Atomic Workers International Union, AFL-CIO, 317 S. W. 2d 309, vacated as moot, 361 U. S. 363.
§ 295.010. “It is hereby .declared to' be the policy of the state that heat, light, power, sanitation, transportation, communication, and water are life essentials of the people; that the possibility of labor strife in utilities operating under governmental franchise or permit or under governmental ownership and control is' a threat to the welfare and health of the people; that utilities so operating are clothed with public interest, and the state’s regulation of the labor relations affecting such public utilities is necessary in the public interest.”
§ 295.090. “All collective bargaining labor agreements hereafter entered into between the management of a utility and its employees or any craft or class of employees shall be reduced to writing and continue for a period of not less than one year from the date of the expiration of the previous agreement entered into between the management of the utility and its employees or if there has been no such previous agreement then for a period of not less than one year from the date of the actual execution of the agreement. Such agreement shall be presumed to continue in force and effect from year to year after the date fixed for its original termination unless either or both parties, thereto inform the other, in writing, of the specific changes desired to be made .therein and shall also file a copy of such demands with the state board of mediation, at least sixty days before the original termination date or sixty- days before the end of any yearly renewal period, or sixty days before any termination date desired thereafter.”
Mo. Rev. Stat., 1959, §§295.030, 295.070, 295.080, 295.120, 295.140, 295.160, 295.170.
§295.180. "1. Should either the utility or its employees refuse to accept and abide by the recommendations made pursuant to the provisions of this chapter and as a result thereof the effective operation of a public utility be threatened or interrupted, or should either party in a labor dispute between a utility and its employees, after having given sixty days’ notice thereof, or failing to' give such notice, engage in any strike, work stoppage or lockout which, in the opinion of the governor, will result in the failure to continue the operation of the public utility, and threatens the public interest, health and welfare, or in the event that neither side has given notice to the other of an intention to seek a change in working conditions, and there occurs a lockout, strike or work stoppage which, in the opinion of the governor, threatens to impair the operation of the utility so as to interfere with the public interest, health and welfare, then and in that case he is authorized to take immediate possession of the plant, equipment or facility for the use and operation by the state of Missouri in the public interest.
“2. Such power and authority may be exercised by the governor through such department or agency of the government as he may designate and may be exercised after his investigation and. proclamation that there is a threatened or actual interruption of -the operation of such public utility as the result of a labor dispute, a .threatened or actual strike, a lockout or other labor disturbance, and that the public interest, health and welfare are jeopardized, and that the exercise of such authority is necessary to insure the operation of such public utility; provided, .that whenever such public utility, its plant, equipment or facility has been or is hereafter so taken by reason of a strike, lockout, threatened strike, threatened lockout, work stoppage or slowdown, or other cause, such utility, plant, equipment or facility shall be returned to. the owners thereof as soon as practicable after the settlement of said labor dispute, and it shall thereupon be the duty of such utility to continue the operation of the plant facility, of equipment in accordance with its franchise and certificate of public convenience and necessity.”
29 U. S. C, § 152 (2), (3), 49 Stat. 450; 61 Stat. 137-138. Compare United States v. United Mine Workers, 330 U. S. 258.
In enacting the Taft-Hartley Act, Congress expressly rejected the suggestion that public utilities be treated differently from other employers. As explained by Senator Taft, “If we begin with public utilities, it will be said that coal and steel are just as important as public utilities. I do not know where we could draw the line. So far as the bill' is concerned, we have proceeded on the theory that there is a right to strike and that labor peace must be based on free collective bargaining.” 93 Cong. Rec. 3835.
“Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 158 (a)(3).” 29 U. S. C. § 157, 49 Stat. 452 ; 61 Stat. 140.
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 United States has sought review of a decision of the Supreme Court of Arkansas subordinating the federal tax lien (26 U. S. C. § 6321) to a lien for attorney’s fees included in an antecedent mortgage contract. 235 Ark. 267, 357 S. W. 2d 653: Because of conflict between the Arkansas decision and United States v. Bond, 279 F. 2d 837 (C. A. 4th Cir.); In re New Haven Clock & Watch Co., 253 F. 2d 577 (C. A. 2d Cir.), we granted certiorari. 371 U. S. 909.
When the taxpayers in 1958 acquired their -interest in the parcel of real estate involved hete, they assumed liability on a note and the deed of trust (first mortgage) securing it, which were held by respondent Pioneer American Insurance Company. The note obligated taxpayers “in the event of default herein and of the placing of this note in the hands of an attorney for collection, or this note is collected through any court proceedings, to pay a reasonable attorney’s fee.” The taxpayers at the same time executed a note and second mortgage to their vendor, respondent The Development Company, and subsequently, in April 1960, the real estáte became burdened again with a mechanic’s' lien in favor of Alfred J. Anderson.
In October of 1960, taxpayers defaulted on the first mortgage monthly installment and failed thereafter to meet payments as they fell due. On March 24, 1961, Pioneer American filed a suit to foreclose its mortgage and sought, in addition to the principal and interest, a reasonable attorney’s fee. The United States was named a party defendant because of two outstanding federal tax liens against the taxpayers which were filed on November 29, 1960, and January 30, 1961. The United States admitted its liens were subordinate to the principal and interest on the first and second mortgages but claimed that the liens were superior to the claim for the- attorney’s fee. Three additional federal tax liens subsequently were filed on April 14, July 17, and October 3, 1961.
On November 15,1961, the Chancery Court entered its decree of foreclosure which fixed the attorney’s fee at $1,250 and determined the priority of the various claimants. After satisfaction of court and foreclosure sale costs, Pioneer American was -accorded first priority for principal, interest and the attorney’s fee; The Development Company took next on principal and interest under the second mortgage; Alfred J. Anderson shared thereafter on his mechanic’s lien and the United States took last. The property was sold and proceeds were received which satisfied all claims except $3,615.28 of the federal tax liens. The United States appealed to the Supreme Court of Arkansas asserting that it was entitled to priority over the attorney’s fees, and that $1,250 more should have been applied to reduce the unpaid federal taxes. With one judge dissenting, the Arkansas court rejected that contention and sustained the superiority of the claim for the attorney’s fee.
It goes unchallenged that the claim for the attorney’s fee, arising out of the obligations assumed by the taxpayer in 1958, became enforceable under Arkanas law as a contract of indemnity at the time of default in October 1960 before the filing of the first federal tax liens. Furthermore, it is evident that the suit in which this attorney’s fee was earned was commenced on March 24, 1961, prior to the filing of the unpaid federal tax liens crucial to this suit, i. e., the liens of April 14, July 17, and October 3, 1961. Nevertheless, because this fee had not been incurred and paid and could not be finally fixed in amount until November 15, 1961, after all the federal liens had been filed, we hold that the claim for attorney’s fees remained inchoate at least until that date and that the federal tax liens are entitled to priority.
The priority of the federal tax lien provided by 26 U. S. C. § 6321 as against liens created under state law is governed by the common-law rule — “the first in time is the first in right.” United States v. New Britain, 347 U. S. 81, 85-86. It is critical, therefore, to determine when competing liens, whether federal or state-created, come into existence or become valid for the purpose of the rule.
The tax lien arises, according to § 6322, when the tax is assessed, but as against the specific interests mentioned in § 6323 (a) — mortgagees, pledgees, purchasers and judgment creditors — it is not valid until placed of public record, and insofar as the federal lien attaches to securities, mortgagees, pledgees and purchasers must have actual notice of the lien. § 6323 (c).
As for. a lien created by state law, its priority depends “on the time it attached to the property in question and became choate.” United States v. New Britain, supra, at 86; United States v. Security Tr. & Sav. Bank, 340 U. S. 47. Choate state-created liens take priority over later federal tax liens, United States v. New Britain, supra; Crest Finance Co. v. United States, 368 U. S. 347, while inchoate liens do not. See United States v. Liverpool & London Ins. Co., 348 U. S. 215; United States v. Scovil, 348 U. S. 218; United States v. Colotta, 350 U. S. 808. And it is a matter of federal law when such a lien has acquired sufficient substance and has become so perfected as to defeat a later-arising or later-filed federal tax lien. “Otherwise, a State could affect the standing of federal liens, contrary to the established.doctrine, simply by causing an inchoate lien to attach at some arbitrary time even before the amount of the tax, assessment, etc., is determined.” United States v. New Britain, supra, at 86. The federal rule is that liens are “perfected in the sense that there is nothing more to be done to have a choate lien — when the identity of the lienor, the property subject to the lien, and the amount of the lien are established.” Id., at 84.
We reject respondents’ contention that the choateness rule has no place when a mortgage under § 6323 (a) involved. The predecessor to § 6323 was first enacted by Congress in 1912 in order to protect' mortgagees, purchasers and judgment creditors against a secret lien for assessed taxes and to postpone the effectiveness of the tax, lien as against these interests until the tax lien was filed. H. R. Rep. No. 1018, 62d Cong., 2d Sess. The section dealt with the federal lien only and it did not purport to affect the time at which- local liens were deemed to arisé or to become choate or to subordinate the tax lien to tentative, conditional or imperfect state" liens. Rather, we believe Congress intended that if out of the whole spectrum of state^created liens,, certain liens áre tó enjoy the preferred status granted by § 6323, they should at least have attained the degree of perfection required of other liens and be choate for the purposes of the federal rule.
The Court has never held that mortgagees face a less demanding test of perfection than other interests when competing with the federal lien. Indeed United States v. Ball Constr. Co., 355 U. S. 587, stands for just the contrary. There the state law creditor, assérting that the assignment under which he claimed was a mortgage within the predecessor to § 6323, insisted upon priority over the federal lien by virtue of the previously executed assignment. A majority of the Court, although not expressly declaring the assignment to be a mortgage, held that § 6323 (a) afforded the creditor no protection since his interest was “inchoate and unperfected.” The four dissenters thought the assignment was a mortgage and that it was “completely perfected” and “in all respects choate.” While disagreeing on the choateness of the particular assignment involved there, the Court was unanimous in applying the choateness test to those seeking the protection of § 6323 (a). We follow that lead here and therefore proceed to measure against the rule the choateness of the mortgagee’s lien for reasonable attorney’s fees before us.
Clearly the identity of the lienholder and the property subject to the lien are definite here, but it is equally "apparent that the amount of the lien for attorney’s fees was undetermined and indefinite when the federal tax liens in question were filed. The mortgage held by respondents secured a promissory note which obligated the mortgagor maker to pay a “reasonable attorney’s fee” “in the event of default” and “of the placing of this note in the hands of an attorney for collection.” By the time the federal liens subordinated by the Arkansas courts were placed of public record, default had occurred, the mortgagee had elected to declare the note due and payable, an attorney' had been engaged and a suit to foreclose the mortgage had been filed. But the “reasonable attorney’s fee” — reasonable in relation to the service to be performed by the attorney — had not been reduced to a liquidated amount. The final amount was to be established by court decree and the Chancery Court set the fee considerably below the sum requested. Moreover, there is no showing in this record that the mortgagee had become obligated to pay and had paid any sum of money for services performed prior to the filing of the federal tax lien.
Ball once again provides a parallel. Sums due the contractor-taxpayer under a particular construction contract were assigned to the surety as security for any future indebtedness of the contractor to the surety arising under that contract or any other. After the filing of the federal tax lien against the contractor, the surety made advances to complete another contract of the taxpayer, as the surety was obligated to do under its bond issued on that contract, and the taxpayer thereby became indebted to the surety. The majority held the surety’s interest “inchoate and unperfected” at the time of the filing of the federal tax liens. Ball therefore rejects as inchoate an assignee’s or mortgagee’s lien to secure future indebtedness of the taxpayer-debtor. The creditor holds merely “a caveat of a more perfect lien to come.” New York v. Maclay, 288 U. S. 290, 294. Likewise, when a mortgagee has a lien for an attorney’s fee which is uncertain in amount and yet to be incurred and paid, such a lien is inchoate and is subordinate to the intervening federal tax-lien filed before the mortgagee’s lien for the attorney’s fee matures.
But, it is said, the principal and interest of the mortgage were definite in amount, the attorney’s fee later became certain by court order and if the tax lien were to prevail the preference of .the mortgagee given by § 6323 will be frustrated since payment of the attorney’s fee will reduce the net amount realized from the mortgage. Aside from the fact that the mortgagee here will experience no such reduction, this argument would subordinate federal tax liens to inchoate liens and in both United States v. New Britain, supra, and United States v. Buffalo Savings Bank, 371 U. S. 228, the Court denied priority to local tax liens which were imperfect when the federal tax lien was filed even though the former had priority over the mortgage and would reduce the recovery of the mortgagee.
The court below was in error and its judgment is reversed and the cause remanded for further proceedings not inconsistent with this opinion.
Reversed and remanded.
Mr. Justice Douglas dissents.
The deed of trust provided, in addition:
“That if either the party of the sécond part [trustee] or the party of the first part [mortgagor] shall become a party to any suit or proceeding at law or in equity in reference to its interest in the premises herein conveyed, the reasonable costs, charges and attorney’s fees in such suit or proceeding shall be added to 4he principal sum then owing by the party of the first part and shall be secured by this instrument, and the note secured hereby shall, at the option of the holder, become due and collectible.
. . . . .
“The proceeds of any sale under this deed of trust shall be applied ... as follows:
“First: To-pay the costs and expenses of executing this trust, and any and all sums expended on account of costs of litigation, attorney’s.fees, ground rents, taxes, insurance premiums, or any advances made or expenses incurred on account of the property sold, with interest thereon.
“Second: To retain as compensation, a commission as set forth by the laws of the State of Arkansas.
“Third: To pay off the debt secured hereby, including accrued interest thereon, as well as any other sums owing . . . pursuant to this instrument.”
The federal tax liens, as of the date of the order of distribution, November 15, 1961, were as follows:
Lien of November 29, 1960.........;............ $659.67
Lien of January 30,1961........................ 1,661.03
Lien of April 14,1961.......................... 1,344.69
Lien of July 17, 1961.......................... 1,653.23
Lien of October 3, 1961........................ 1,164.04
The first two liens, November 29, 1960, and January 30, 1961, were satisfied in full. $546.68 was available for partial payment of the April 14, 1961, lien. The balance of the April lien and the full amounts of the July 17 and October 3, 1961, liens remained unsatisfied.
The United States did not challenge the priority of the mechanic’s, lien or of any other distribution fixed by the decree.
Once the attorney’s fee is subordinated to the federal tax liens, the $1,250 would be borne by the other claimants in order of seniority among themselves under state law. On the basis of the present decree, the share of the mechanic’s lienor Anderson would be eliminated and that of the second mortgagee, The Development Company, reduced by half.
“While it is true that the filing of the notice of the tax lien may constitute notice in the case of real property, it is inequitable for the statute to provide that it constitutes notice as regards securities.' For example, when a broker purchases a security for his customer on the exchange, it is obviously impossible for him to check all the offices in which a notice of the tax lien may be duly filed to determine whether the security is subject to such lien.' A like situation exists with respect to over-the-counter and' direct transactions in securities. An attempt to enforce such liens' on recorded notice would in many cases impair the negotiability of securities and seriously interfere with business transactions. The adoption of the amendment will remove an existing hardship without causing any undue loss of revenue.” H. R. Rep. No. 855, 76th Cong., 1st Sess. 26 (1939).
“The effect of a lien in relation to a provision of federal law for the collection of debts owing the United States is always a federal question. Hence, although a state court’s classification of a lien as specific and perfected is entitled to weight, it is subject to reexamination by this Court.” United States v. Security Tr. & Sav. Bank, 340 U. S. 47, 49-50; see also, United States v. Acri, 348 U. S. 211; United States v. Vorreiter, 355 U. S. 15. Thus the fact that, under Arkansas law, the claim for attorney’s fees becomes enforceable upon default as a contract of .indemnity does not foreclose inquiry by this Court into the degree the claim is choate at that time.
There is nothing in Security Mortgage Co. v. Powers, 278 U. S. 149, which compels us to hold the lien choate, since the issue there was the status of an attorney’s' fee clause, fixed in amount, in bankruptcy proceedings where the rigorous federal lien choateness test was not necessarily applicable.
Contrast Crest Finance Co. v. United States, 368 U. S. 347, where the assignment and the'loans were consummated prior to.the accrual and filing of the federal tax liens.
See in accord, with respect to attorney’s fees, United States v. Bond, 279 F. 2d 837 (C. A. 4th Cir.); In re New Haven Clock & Watch Co., 253 F. 2d 577 (C. A. 2d Cir.); Bank of America v. Embry, 188 Cal. App. 2d 425,10 Cal. Rptr. 602; with respect to payments of subsequently attaching local taxes, United States v. Bond, supra; United States v. Christensen, 269 F. 2d 624 (C. A. 9th Cir.); and with respect to future advance clause transactions, American Surety Co. v. Sundberg, 58 Wash. 2d 337, 363 P. 2d 99; Rev. Rule 56-41, 1956-1 Cum. Bull. 562; cf. United States v. Peoples Bank, 197 P. 2d 898 (C. A. 5th Cir.); Hoare v. United States, 294 F. 2d 823 (C. A. 9th Cir.).
This argument would require us to revitalize the long since rejected relation-back doctrine. See United States v. Security Tr. & Sav. Bank, 340 U. S. 47, 50.
See note 5, supra.
By the same token respondents’ contention that the rules against “unjust enrichment” are violated by preferring the tax lien to the claim for attorney’s fees is without merit. Both New Britain and Buffalo Savings Bank prefer the federal lien even though the mortgagee’s interest in the proceeds will be reduced by later-arising local taxes having priority under state law over the mortgagee. The attorney’s services, moreover, were rendered for the benefit of the mortgagee to protect his interest in .the property, and the United States, holding an adverse interest, received no such benefit from them that its interest is to be charged-therefor.
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.
The joint motion for entry of a supplemental decree is granted.
SUPPLEMENTAL DECREE
The Court having, by its decision of February 25, 1986, adopted the recommendation of its Special Master that Vineyard Sound constitutes historic inland waters and overruled the exception of Massachusetts to the Report of its Special Master herein insofar as it challenged the Master’s determination that the whole of Nantucket Sound does not constitute historic or ancient inland waters, and having, to this extent, adopted the Master’s recommendations and confirmed his Report:
IT IS ORDERED, ADJUDGED, AND DECREED as follows:
1. For the purposes of the Court’s Decree herein dated October 6, 1975, 423 U. S. 1 (affirming the title of the United States to the seabed more than three geographic miles seaward of the coastline, and of the States to the seabed within the three geographic mile zone), the coastline of the Commonwealth of Massachusetts shall be determined on the basis that the whole of Vineyard Sound constitutes state inland waters and Nantucket Sound (with the exception of interior indentations which are described in paragraphs 2(c), (d) and (e) below) is made up of territorial seas and high seas.
2. For purposes of said Decree of October 6, 1975, the coastline of Massachusetts includes the following straight lines:
(a) A line from a point on Gay Head on Martha’s Vineyard (approximately 41°21’10"N, 70°50'07"W) to the southwestern point of Cuttyhunk Island (approximately 41°24’39"N, 70°56'34"W);
(b) A line from a point on East Chop (approximately 41°28'15"N, 70°34’05"W) to a point on Cape Cod (approximately 41°33'10"N, 70°29'30"W);
(c) A line from a point southeast of East Chop (approximately 41°27'30"N, 70°33'18"W) to a point west of Cape Pogue (approximately 41°25'06"N, 70°27'56"W) on the island of Martha’s Vineyard;
(d) A line from a point on Point Gammon on Cape Cod (approximately 41°36'36"N, 70°15'40"W) to the southwestern-most point of Monomoy Island (approximately 41°33'02"N, 70°00'59"W); and
(e) A line from a point on the west coast of Great Island (approximately 41°37'08"N, 70°16'15"W) to a point on Hyannis Point on Cape Cod (approximately 41°37'27"N, 70°17'34"W).
3. The Court retains jurisdiction to entertain such further proceedings, enter such orders, and issue such writs as from time to time may be deemed necessary or advisable to effectuate and supplement the decree and the rights of the respective parties.
Justice Souter took no part in the consideration or decision of this motion and supplemental 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:
|
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 Burton
delivered the opinion of the Court.
The issue in these cases is whether, for the years 1940 through 1945, abatements of federal excess profits taxes, through application of I. R. C., § 722, are retroactive. For the reasons hereafter stated, we hold that they are not and that they relieve taxpayers from the payment of interest on deficiencies in such taxes from the time of the abatements, rather than from the original due dates of the taxes abated.
In No. 29, United States v. Koppers Co., the taxpayer, respondent therein, reported and paid excess profits taxes of $6,512.76 for 1940, and $1,781,288.14 for 1941. In computing these taxes, it used excess profits credits based upon invested capital. In 1943 and 1945, it applied under § 722 for relief from all or part of these taxes, claiming that they were “excessive and discriminatory.” In accordance with the usual administrative practice, the Commissioner determined the amount of the excess profits taxes due without regard to the application for relief under § 722. In doing so, he found it necessary to proceed under I. R. C., § 713, using excess profits credits based upon the taxpayer’s income, rather than upon its invested capital. As a result he found that the above taxes, as returned and paid by the taxpayer without reference to § 722, had been understated and that the following deficiencies existed as of their original due dates, March 15, 1941, and 1942:
Excess profits tax under §§ 710 (a) and 19Jfi 1941 713 . $466,921.67 $2,208,019.09
Payments. 6,512.76 1,781,288.14
Deficiencies . 460,408.91 426,730.95
The Commissioner computed interest, at 6%, on the above deficiencies, amounting to $217,376.07 for 1940, and $230,504.86 for 1941.
After extended investigations and negotiations conducted under authority of § 722, the Commissioner and the taxpayer agreed upon a “constructive average base period net income” which fixed the excess profits credits for the years in question and, as a result, the relief available under § 722. After this agreement was approved by the Excess Profits Tax Council of the Bureau of Internal Revenue, the Commissioner determined that the above-stated deficiencies, with the benefit of § 722, should be reduced to $260,554.39 for 1940, and to $95,749.33 for 1941. The taxpayer consented to the assessment of these deficiencies, with interest as provided by law. Whereupon, the Commissioner issued a formal determination of them and assessed them against the taxpayer. He also assessed the above-stated interest charges, based upon the full amount of the original deficiencies.
The taxpayer paid the deficiencies and interest so assessed but claimed refunds of $94,358.71 for 1940, and $178,784.48 for 1941. Those sums represented the interest on the abatements in its excess profits taxes made under § 722. When the Commissioner disallowed the claims, the taxpayer sued in the Court of Claims to recover their amounts. With one judge dissenting, that court deducted a setoff and rendered judgment in favor of the taxpayer for $270,216.34. 126 Ct. Cl. 847, 117 F. Supp. 181. To resolve the resulting conflict with United States v. Premier Oil Co., 209 F. 2d 692, we granted certiorari, 347 U. S. 965.
In No. 41, Premier Oil Co. v. United States, the taxpayer, petitioner therein, paid the excess profits taxes shown on its original returns in the following amounts: for 1943, $564,167.70 (adjusted to $560,484.84); for 1944, $353,292.15 (adjusted to $313,639.13); and for 1945, $45,679.67. Thereafter, several deductions which the taxpayer had made from its income were disallowed, resulting, in 1948, in the following deficiencies in its payment of its excess profits and income taxes as of their original due dates:
Deficiencies Without the Application of § 722. •
Deficiencies in excess profits 1943 1944 1945 tax, under §§ 710 (a) and
713. $78,359.80 $55,529.92 $190,785.32 Deficiencies in income tax... 9,060.07 9,178.01 (90.00)
Total deficiencies. 87,419.87 64,707.93 190,695.32
The Commissioner computed interest, at 6%, on the above excess profits tax deficiencies as follows:
For 1943 — on $78,359.80, March 15, 1944, to June 23, 1948 . $20,084.79
For 1944 — on $55,529.92, March 15, 1945, to June 23, 1948 . 10,901.36
For 1945 — on $190,785.32, March 15, 1946, to June 19, 1948 . 25,869.26
Total . 56,855.41
In the meantime, the taxpayer had applied for relief under § 722, seeking acceptance of a “constructive average base period net income” of $357,000 for each of the years at issue. The Excess Profits Tax Council approved that figure as a credit in lieu of $93,150.36 for each of the years 1943 and 1944, and of $116,437.95 for 1945. This credit so far reduced the taxpayer’s taxable excess profits as to abate its excess profits tax deficiencies for 1943 and 1944 entirely, and that for 1945 to $366.52. Accordingly, the Commissioner’s assessment of the remainder of the taxpayer’s deficiencies in excess profits taxes was for only $366.52. However, as in the Koppers case, supra, he assessed against the taxpayer the full amount of the interest charges based upon the original deficiencies.
The taxpayer paid the deficiency and interest so assessed but claimed refunds totaling $56,855.41. That sum represented the interest on the abatements in its excess profits taxes made under § 722. When the Commissioner disallowed those claims, the taxpayer brought the instant action to recover their amounts, in the United States District Court for the Northern District of Texas, under 28 U. S. C. § 1346 (a)(1). That court rendered judgment for the taxpayer. 107 F. Supp. 837. The Court of Appeals reversed. 209 F. 2d 692. We granted certiorari to resolve the conflict with United States v. Koppers Co., supra. 347 U. S. 987.
As the underlying issue is the same in each case and for each year, we shall discuss it in relation to the 1940 taxes in the Koppers case. There, the taxpayer, under the usual procedure, computed and paid the excess profits tax of $6,512.76 shown on its return for 1940. In due course the Commissioner, without the application of § 722, determined that the payment should have been $466,921.67, and, therefore, that a deficiency of $460,408.91 was due the United States, with interest from March 15, 1941. I. R. C., §§53 (a), 56 (a). If the taxpayer had made no application for relief under § 722, there is no doubt that such interest would have remained due the United States until paid and that, when paid, it would not have been refundable. The same would have been true if the taxpayer’s application for relief under § 722 had been finally denied. The taxpayer contends, however, that, because the Commissioner has abated the taxpayer’s deficiency from $460,408.91 to $260,554.39 under § 722, such reduction is necessarily retroactive to March 15, 1941, and that the taxpayer, accordingly, is entitled to a refund of the interest on the sum abated. The Commissioner, on the other hand, contends that the determination under § 722 is not retroactive but is a current abatement effective when made.
Congress could have prescribed either treatment but did not expressly specify either. Our answer is determined from our consideration of the statutory scheme as a whole, the related provisions of the statute, the legislative history of § 722 and the administrative interpretation that has been given the statute.
1. The statutory scheme as a whole.
The excess profits tax was a device initiated by Congress, late in 1940, in great part for the quick collection of large sums needed by the Government in a national emergency. Congress sought to obtain those funds from abnormally high corporate profits while such profits were available. To that end, it prescribed computations of unusual profits and required prompt payment of the taxes on them.
From the beginning, the statute also provided, in § 722, a means of subsequent adjustment of the tax in special instances where the normal computation of the tax was found to result in inequity. The adjustment could be made only after administrative action and, pending its consideration, it did not eliminate the tax return or the tax payment otherwise required. Until 1942, it did not permit even the postponement of the payment of any part of the standard tax. Indeed, the full payment of that tax soon was made an express condition of the application for adjustment. I. R. C., § 722 (d). In 1943, Congress stated that if overpayments for either of the taxable years 1940 or 1941 were found to be attributable to § 722, no interest on such overpayments was to be paid the taxpayer. At least to that extent, Congress expressly recognized that the funds paid as excess profits taxes, when due and without the benefit of § 722, were funds owed to and usable by the Government.
The significance of this statutory scheme further appears when it is applied to the instant case. If the instant taxpayer had paid its required tax in 1941, the Government would have received an additional $460,408.91 at that time. Accordingly, it would have had the use of that money, without charge, during the crucial war years. Correspondingly, the taxpayer would have been without that money during the same period. Instead, the taxpayer, in fact, retained the funds for its own use and now contends that it need not compensate the Government for such use of a substantial part of it.
While in the instant case the taxpayer did not underpay any amount actually shown on its return, as contemplated by I. R. C., § 294 (a), it understated its tax and thus withheld the amount in question. The detriment to the Government and benefit to the taxpayer was the same — the use of $460,408.91 for eight years. The above distinction, emphasized by the taxpayer, may have helped it in initiating its application for relief under § 722 (d) because it could establish that, at least, it had paid “the tax shown on its return.” The distinction, however, supplies no ground for different results once the deficiencies have been determined. We find no implication that a self-serving error in the understatement of its tax on its tax return entitles the taxpayer to a greater ultimate tax advantage than does a self-serving error of the same size in the underpayment of the same tax. A fortiori we find nothing to justify a greater tax advantage to any taxpayer that underpays its correct tax, over one that pays such tax in full when due.
2. The interest here in controversy is attributable to I. R. C., § m (a).
The interest here in controversy was due under § 292 (a) from March 15, 1941, until paid. Accordingly, to obtain a refund of it, the taxpayer must sustain the proposition that the tax relief granted under § 722 is necessarily retroactive, extinguishing the deficiency as of the original due date of the tax and thus eliminating the interest charges for the corresponding period. To that end, the taxpayer emphasizes the statement in § 722 (a) that, as a condition of securing the application of § 722, a taxpayer must establish that the usual procedure “re-suits in an excessive and discriminatory tax” and also must establish “what would be a fair and just amount representing normal earnings to be used as a constructive average base period net income.” Once the taxpayer has done that, “the tax shall be determined by using such constructive average base period net income in lieu of the average base period net income otherwise determined under this subchapter.” Standing alone, this directive language is elastic. It can be read consistently either with the interpretation that the new computation replaces and abates the old one currently, when the new one is determined and assessed, or that it retroactively replaces the old tax from its original due date. It leaves the issue open for disposition by the effect of other clauses relating more specifically to the issue. For the reasons hereafter stated, we read it as looking forward, rather than backward.
3. I. R. C., §710 (a)(5), ■permits a taxpayer, seeking relief under § 782, to defer a part of its existing excess profits taxes where its adjusted excess profits net income exceeds 50% of its normal tax net income.
In 1942, Congress added §710 (a)(5), conditionally authorizing partial deferment of the tax in cases where a taxpayer claimed benefits under § 722. The condition was that the taxpayer’s “adjusted excess profits net income (computed without reference to section 722)” must exceed 50% of the taxpayer’s normal tax net income for the year. Even then, deferment was limited to 33% of the benefit claimed under § 722. If a taxpayer, without this amendment, could have successfully deferred payment and avoided interest charges by following the course taken in the instant cases, it could, by understatement of its tax, have deferred, without incurring interest charges, the payment of a corresponding part of its tax pending relief. If so, there would have been little need for § 710 (a)(5). The 1942 amendment, by its restrictions, fairly meant that, under all other circumstances, the existing taxes were to be paid when due, or be subjected to interest during their delinquency under § 292 (a).
4. The denial of interest on refunds is prescribed by I.R. C., § 3771 (g).
Although § 3771 (g) was not enacted until 1943, it was then made applicable to taxable years before, as well as after, January 1, 1942. It denied all interest on refunds attributable to § 722 where the refunds related to the taxable years 1940 or 1941. It also denied interest on refunds relating to taxable years beginning after January 1, 1942, but limited such denials to the first year after the filing of an application for relief under § 722, or to periods prior to September 16, 1945 (two years after the effective date of the amendment), whichever was the later.
In cases where the Government has authorized refunds of excess profits taxes overpaid to it by reason of the abatement of taxes attributable to § 722, § 3771 (g) expressly precludes the payment of interest by the Government upon the amounts abated. This treats the Government as entitled to the use of the abated amounts between the time of their overpayment and that of their abatement. Equity demands a comparable result in the case of underpayments. Where unpaid taxes are abated by reason of § 722, the taxpayer then receives a release from its existing obligation to pay the amount abated. However, the Government having been entitled, up to that time, to collect and use the sum abated, the Government should receive interest, on the abated sum, for the period during which the Government was entitled to have its use. This is the natural counterpart of the Government’s freedom from paying interest on refunded overpayments.
5. The legislative history of § 722.
The excess profits tax was initiated in 1940. 54 Stat. 975 et seg. It provided for prompt payment of large taxes computed on income reflecting unusual profits. Computation of the tax on the basis of the taxpayer’s prior income or invested capital was prescribed in §§713 and 714. A standardized treatment of abnormalities was provided in § 721. In addition, § 722 authorized the Commissioner “to make such adjustments as may be necessary to adjust abnormalities affecting income or capital.” 54 Stat. 986. The procedure under § 722 was formalized by the Excess Profits Tax Amendments of 1941, 55 Stat. 23-25, and put in its final form by the Revenue Act of 1942, 56 Stat. 914-917, as amended, 57 Stat. 601-602. The technical and discretionary nature of the adjustment was emphasized by the provision that the determination of most computations under § 722 was reviewable only by a special division of the Tax Court constituted for the occasion and by no other court or agency. 55 Stat. 26, as amended, 56 Stat. 917, 59 Stat. 295, 673, 26 U. S. C. § 732. A taxpayer never was permitted to file a return of its own under § 722. S. Rep. No. 75, 77th Cong., 1st Sess. 13; H. R. Rep. No. 146, 77th Cong., 1st Sess. 13.
The statute has been interpreted as authorizing a procedure that is in the nature of a claim for a refund preceded by long investigations of complicated special circumstances, and followed by extended negotiations between the Commissioner and taxpayer to develop a mutually satisfactory “constructive average base period net income.” This interpretation leaves the usual procedure under § 710 et seq. complete in itself but subject, upon application, to ultimate adjustment in instances accepted by the Commissioner under § 722. We find no statement of a purpose that § 722 shall relieve taxpayers from penalties or interest charges due either to their defaults in paying, or their errors in computing, their taxes. On the contrary, it has been suggested that Congress considered relief under § 722 to be in the nature of a favor and as not relieving the taxpayer of its duty to pay the original tax when due.
The regulations do not deal specifically with the issue before us but, from their beginning, in Treasury Regulations 109, they have been consistent with the interpretation given the Act by the Government. See § 30.722-5, as added by T. D. 5264, 1943 Cum. Bull. 761, as amended, T. D. 5393, 1944 Cum. Bull. 415. In addition to the practice of the Commissioner in the instant cases, there is in the record of the Premier Oil Co. case an .undisputed affidavit by a Treasury Department reviewer to the effect that the policy followed was the administrative policy of the Bureau:
“It is the policy of the Bureau of Internal Revenue in those cases where all or any part of a tax deficiency has been extinguished by application of the relief provisions of Section 722 of the Internal Revenue Code not to assess the extinguished portion of such deficiency. However, interest has been computed and assessed on the extinguished portion of the deficiency from the due date of the return to the thirtieth day after the agreement, Form 874, is filed or date of assessment, whichever is the earlier.” (Emphasis supplied.)
While Manning v. Seeley Tube & Box Co., 338 U. S. 561, relates to the carry-back provisions of the Internal Revenue Code, it is thoroughly consistent in principle with the above discussion. There the Court upheld the collection of interest on a deficiency which later was extinguished by carrying back a loss which occurred in a subsequent year. It treated the carry-back as a current adjustment of the tax previously determined, characterizing it as an “abatement” at 565. It recognized I. R. C., § 3771 (e), as a help to the interpretation of the statute, much as we recognize I. R. C., § 3771 (g), as a help here. See 567-568. The Court also there announced that “In the absence of a clear legislative expression to the contrary, the question of who properly should possess the right of use of the money owed the Government for the period it is owed must be answered in favor of the Government.” Id., at 566.
While the deficiency for 1940 in the amount of $460,408.91 was properly determined without reference to § 722 and treated as a deficiency for that year by the Commissioner, it was not separately assessed as such. This was not necessary because, at the time of its determination and before its assessment, it was abated to $260,-554.39. The latter sum, with interest in the amount of $217,376.07 computed on the whole deficiency of $460,-408.91, was correctly and adequately assessed and paid.
For the foregoing reasons, we conclude that the Government, in each case, is entitled to retain the interest now in controversy. Therefore, in No. 29, the judgment of the Court of Claims is reversed and, in No. 41, the judgment of the Court of Appeals is affirmed.
No. 29 — Reversed.
No. ¿¡.1 — Affirmed.
Mr. Justice Reed and Mr. Justice Douglas dissent.
“SEC. 722. GENERAL RELIEF — CONSTRUCTIVE AVERAGE BASE PERIOD NET INCOME.
“(a) GENERAL Rule. — In any case in which the taxpayer establishes that the tax computed under this subchapter [as to excess profits tax, § 710 et seg.] (without the benefit of this section) results in an excessive and discriminatory tax and establishes what would be a fair and just amount representing normal earnings to be used as a constructive average base period net income for the purposes of an excess profits tax based upon a comparison of normal earnings and earnings during an excess profits tax period, the tax shall be determined by using such constructive average base period net income in lieu of the average base period net income otherwise determined under this subchapter. . . .
“(d) ApplicatioN for Relief Under This Section. — The taxpayer shall compute its tax, file its return, and pay the tax shown on its return under this subchapter without the application of this section, except as provided in section 710 [a) (6). The benefits of this section shall not be allowed unless the taxpayer within the period of time prescribed by section 322 and subject to the limitation as to amount of credit or refund prescribed in such section makes application therefor in accordance with regulations prescribed by the Commissioner with the approval of the Secretary. If a constructive average base period net income has been determined under the provisions of this section for any taxable year, the Commissioner may, by regulations approved by the Secretary, prescribe the extent to which the limitations prescribed by this subsection may be waived for the purpose of determining the tax under this subchapter for a subsequent taxable year.1’ (Emphasis supplied.) 56 Stat. 914-915, as amended, 57 Stat. 601-602, 26 U. S. C. § 722 (a) (d).
The above provisions of § 722 (d) apply to taxable years beginning after December 31, 1939. 57 Stat. 602.
Koppers Company, Inc., is, in fact, the successor to Koppers United Company and its subsidiaries, which filed consolidated excess profits tax returns for the years in question. For convenience, all of such corporations are referred to as the taxpayer.
This tax was computed and paid pursuant to the Excess Profits Tax Act of 1940, 54 Stat. 975, as amended. See I. R. C., § 710 et seq. On November 8, 1945, these provisions became inapplicable to any calendar- year beginning after 1945. 59 Stat. 568.
Two methods of computation of the excess profits credit were authorized: the invested capital method under L R. C., § 714, or the base period income method under I, R. C., § 713.
By timely consents, the Commissioner and the taxpayer agreed that the amount of any income, excess profits, or war profits tax due for 1940 and 1941 could be assessed at any time on or before June 30, 1951.
The interest on the 1940 tax ran from March 15,1941, to January 28, 1949, which was treated as the date of its payment'; that on the 1941 tax ran from March 15, 1942, to March 16, 1951, which was 30 days after the filing of a waiver consenting to the assessment and collection of the deficiencies finally determined. See I. R. C., §292 (a), infra, note 12.
ABATEMENT OF EXCESS PROFITS TAX DEFICIENCIES UNDER § 722.
Deficiencies without ap- 1943 1944 1945 plication of § 722. $78,359.80 $55,529.92 $190,785.32
(Decreases) under § 722. (175,307.78) (175,174.49) (190,418.80)
Resulting (credits) and deficiency . (96,947.98) (119,644.57) 366.52
By reducing that part of the taxpayer’s income that was subject to excess profits taxes, this application of § 722 automatically left more of the taxpayer’s income subject to the normal tax and surtax. Those increases in the taxpayer’s income taxes and their consequences are not before us.
The original judgment for $56,855.41 was modified to $52,292.40 to reflect several adjustments, including the deduction of $49.72, representing interest on the unabated deficiency of $366.52 upon which the taxpayer conceded that interest was chargeable.
The grant was limited to the following question stated in the petition:
“Where a deficiency in excess profits tax, based on the income and credits as shown in the taxpayer’s return, would have existed except for the subsequent application of Section 722 of the Internal Revenue Code, is the taxpayer liable for interest on the amount of such deficiency (hereinafter called the 'potential deficiency’) which would have existed had it not been extinguished by the application of Section 722?” 347 U. S., at 988.
I. R. C., § 713 — on the basis of income, or I. R. C., § 714 — on the basis of invested capital. I. R. C., § 721, authorized standard allowances for specified abnormalities. No return by the taxpayer under I. R. C., § 722, was permissible.
I. R. C., §3771 (g), infra, note 15, discussed at 266-267, infra.
“SEC. 292. INTEREST ON DEFICIENCIES.
“(a) General Rule. — Interest upon the amount determined as a deficiency shall be assessed at the same time as the deficiency, shall be paid upon notice and demand from the collector, and shall be collected as a part of the tax, at the rate of 6 per centum per annum from the date prescribed for the payment of the tax (or, if the tax is paid in installments, from the date prescribed for the payment of the first installment) to the date the deficiency is assessed, or, in the case of a waiver under section 272 (d), to the thirtieth day after the filing of such waiver or to the date the deficiency is assessed .whichever is the earlier.” 53 Stat. 88, as amended, 57 Stat. 602, 26 U. S. C. § 292 (a).
Section 722 (d) looks forward when it provides that if a constructive base period net income has been determined under § 722 for any taxable year, the Commissioner may, by regulations approved by the Secretary, permit waivers of the section’s limitations for the purpose of determining excess profits taxes for a subsequent taxable year. Even this effect is not automatic, whereas it might have been expected to be so if the adjustment were a retroactive correction of the standard excess profits credit.
“SEC. 710. IMPOSITION OF TAX.
“(a) . . .
“(5) DEFERMENT OF PAYMENT IN CASE OF ABNORMALITY. — If the adjusted excess profits net income (computed without reference to section 722) for the taxable year of a taxpayer which claims on its return, in accordance with regulations prescribed by the Commissioner with the approval of the Secretary, the benefits of section 722, is in excess of 50 per centum of its normal tax net income for such year, computed without the credit provided in section 26 (e) (relating to adjusted excess profits net income), the amount of tax payable at the time prescribed for payment may be reduced by an amount equal to 33 per centum of the amount of the reduction in the tax so claimed. For the purposes of section 271, if the tax payable is the tax so reduced, the tax so reduced shall be considered the amount shown on the return.” 54 Stat. 975, as amended, 56 Stat. 917, but see also, later amendment indicated by 26 U. S. C. §710 (a)(5).
The Senate Committee on Finance Report accompanying the Revenue Act of 1942, 56 Stat. 798, stated:
“Although it is believed advisable to require a taxpayer seeking relief under section 722 to compute and pay its tax without the benefit of such section, there are some eases in which it would be inequitable to compel the taxpayer to pay the entire amount of such tax. Section 710 (a) is therefore amended to provide . . . [as above quoted].” S. Rep. No. 1631, 77th Cong., 2d Sess. 205.
“SEC. 3771. INTEREST ON OVERPAYMENTS.
“(g) Claims Based Upon Relief Under Section 722'. — If any part of an overpayment for a taxable year beginning prior to January 1, 1942, is determined by the Commissioner to be attributable to the final determination of an application for relief or benefit under section 722 for any taxable year, no interest shall be allowed or paid with respect to such part of the overpayment. If any part of an overpayment for a taxable year beginning after December 31, 1941, is determined by the Commissioner to be attributable to the final determination of an application for relief or benefit under section 722 for any taxable year, no interest shall be allowed or paid with respect to such part of the overpayment for any period prior to one year after the filing of such application, or September 16, 1945, whichever is the later.” 53 Stat. 465, as amended, 57 Stat. 602, 26 U. S. C. § 3771 (g).
The same Act added I. R. C., § 292 (b), containing comparable provisions prohibiting the assessment of interest upon deficiencies attributable to the final determination of an application for relief under § 722. 53 Stat. 88, as amended, 57 Stat. 602, 26 U. S. C. § 292 (b). This applied, for example, to deficiencies in the payment of ordinary income taxes resulting from an abatement under § 722 of excess profits taxes. Such an abatement automatically would leave a larger portion of a corporation’s taxable income subject to the normal income tax and surtax. This increase, however, was not made retroactive any more than the decrease in the excess profits tax which caused it was made retroactive. Congress thus appropriately charged no interest on the resulting deficiency just as it had allowed none on the related overpayment.
When Congress, in a later Act, authorized deferment of payments of comparable taxes pending determinations of applications for relief, it did so unequivocally. The relief provisions in the Excess Profits Tax Act of 1950, 64 Stat. 1137, adding I. R. C., §§ 430-472, prescribed formulas for determining a substitute average base period net income, §§ 442-446, and permitted the taxpayer to adjust its base period net income at the time the return was filed, § 447 (e). See S. Rep. No. 2679, 81st Cong., 2d Sess. 17-21, discussing the general relationship between these provisions and the experience gained under § 722 now before us.
See legislative history outlined in American Coast Line v. Commissioner, 159 F. 2d 665, and Pohatcong Hosiery Mills v. Commissioner, 162 F. 2d 146.
“. . . there is no doubt a difference between a tax, conceded to be due in the corporation’s own return, and a tax assessed against it in invitum. This argument might perhaps be persuasive, if the denial of 'benefits’ under § 722 were regarded as a constituent factor of the tax itself, as for example are the conditions detailed in § 721. We do not so regard § 722; on the contrary it was a favor; it presupposed that, even after taking into account the ameliatory conditions of §721, the tax was due unless ex gratia the blow was softened; it was a tempering of the wind to the shorn lamb.” Circuit Judge Learned Hand, for the court, 159 F. 2d, at 668. See also, Ideal Packing Co. v. Commissioner, 9 T. C. 346, 349; Uni-Term Stevedoring Co. v. Commissioner, 3 T. C. 917, 918.
“In each instance the section [722] provided that a hypothetical base period earnings credit be ‘tailor made’ for the particular taxpayer and that certain assumptions be made in connection with the case. Each case was a problem in research, and the legal or tax result generally was intertwined with complicated accounting and economic problems. Almost every factor which had any influence on the particular business was pertinent to the case and the time and expense involved in reconstructing the average base period earnings credit were tremendous.” S. Rep. No. 2679, 81st Cong., 2d Sess. 17.
See also, Standard Roofing & Material Co. v. United States, 199 F. 2d 607; Rodgers v. United States, 123 Ct. Cl. 779, 108 F. Supp. 727; Cumberland Portland Cement Co. v. United States, 101 F. Supp. 677. aff’d. 202 F. 2d 152.
See Rodgers v. United States, supra; Cumberland Portland Cement Co. v. United States, 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:
|
L
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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 United States brought this condemnation action to acquire a permanent easement in land owned by the respondent. The jury determined that just compensation for the easement was $146,206, a sum about halfway between the Government’s offer and the respondent’s claim. The District Court granted the respondent’s motion to increase the award by $20,512.60 to compensate it for the expenses of securing appraisals of the land and for the fees of expert witnesses. A divided panel of the Court of Appeals for the Fifth Circuit affirmed the award in part, holding that the appraisal fees in this case were an appropriate part of the compensation required by the Fifth Amendment:
“Under the facts of this case, we cannot conclude that the Bodcaw Company has been made whole for the Government’s taking of its land if the large amount expended by it for appraisals in order to demonstrate the unfairness of the price offered by the United States is not considered an element of just compensation.” United States v. 1,380.09 Acres of Land, 574 F. 2d 238, 241 (1978).
The Fifth Amendment forbids the taking of “private property ... for public use, without just compensation.” This Court has often faced the problem of defining just compensation. One principle from which it has not deviated is that just compensation “is for the property, and not to the owner.” Monongahela Navigation Co. v. United States, 148 U. S. 312, 326 (1893). As a result, indirect costs to the property owner caused by the taking of his land are generally not part of the just compensation to which he is constitutionally entitled. See, e. g., Dohany v. Rogers, 281 U. S. 362 (1930); Mitchell v. United States, 267 U. S. 341 (1925); Joslin Mfg. Co. v. Providence, 262 U. S. 668 (1923). See generally 4A J. Sackman, Nichols’ Law of Eminent Domain, ch. 14 (rev. 3d ed. 1977). Thus, “[attorneys’ fees and expenses are not embraced within just compensation . . . .” Dohany v. Rogers, supra, at 368.
There may be exceptions to this general rule. This ease, however, does not qualify as such an exception. As the dissenting judge in the Court of Appeals described this litigation, it no more than reflects “the rather typical, oft-recurring situation where the landowner is dissatisfied with the Government’s valuation.” 574 F. 2d, at 242. The court, therefore, was in error in holding that the respondent was entitled to compensation for the costs of the appraisals it had had made.
Perhaps it would be fair or efficient to compensate a landowner for all the costs he incurs as a result of a condemnation action. See Ayer, Allocating the Costs of Determining “Just Compensation,” 21 Stan. L. Rev. 693 (1969). Congress moved in that direction with Pub. L. 91-646, 84 Stat. 1894, codified at 42 U. S. C. §§ 4601-4655. Among other costs which the Act placed on the Government were the property owner’s reasonable litigation expenses (including attorney’s fees) when a condemnation action is dismissed as being unauthorized, when the Government abandons a condemnation, or when the property owner has recovered through an inverse condemnation action under the Tucker Act. 42 U, S. C. § 4654. Rut such compensation is a matter of legislative grace rather than constitutional command. The respondent’s appraisal expenses were not part of the “just compensation” required by the Fifth Amendment.
The petition for certiorari is granted, the judgment is reversed, and the case is remanded to the Court of Appeals for the Fifth Circuit for proceedings consistent with this opinion.
It is so ordered.
The Court of Appeals reduced the award by the amount of compensation allowed by the trial court for expert witness fees.
The Court of Appeals relied on its previous decision in United States v. Lee, 360 F. 2d 449 (1966). In that case.the court allowed as part of a compensation award the owner’s expenses in having a survey made of the land to be taken. But the Lee ease involved misrepresentation on the part of the Government as to the amount of land to be taken. Even if correctly decided, therefore, that case presented a situation quite different from the present case, where no such misrepresentation was alleged.
The Court of Appeals necessarily rested its decision on constitutional grounds. It is settled that litigation costs cannot be assessed against the United States in the absence of statutory authorization. United States v. Worley, 281 U. S. 339, 344 (1930). Although Congress has provided that court costs may sometimes be assessed against the Government when the opposing party prevails, 28 U. S. C. § 2412, that authorization does not apply to condemnation cases. Fed. Rule Civ. Proc. 71A (l); United States v. 2,186.63 Acres of Land, 464 F. 2d 676 (CA10 1972); United States ex rel. TVA v. An Easement, 452 F. 2d 729 (CA6 1971). Thus, even if the appraisal expenses in this case were to be considered “costs,” they could not be taxed to the United States. Congress has provided that appraisal fees will be paid by the Government in some condemnation cases, but this case does not fall within the scope of that provision. 42 U. S. C. § 4654.
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.
Per Curiam.
The petition for rehearing is granted. The order entered March 20, 1961, 365 U. S. 844, denying the petition for writ of certiorari is vacated and the petition for writ of certiorari to the United States Court of Appeals for the Tenth Circuit is granted. The judgment is vacated and the case is remanded to the Court of Appeals for reconsideration in the light of Southard v. MacDonald, 360 P. 2d 940.
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 GINSBURG delivered the opinion of the Court.
This case concerns a gender-based differential in the law governing acquisition of U.S. citizenship by a child born abroad, when one parent is a U.S. citizen, the other, a citizen of another nation. The main rule appears in 8 U.S.C. § 1401(a)(7) (1958 ed.), now § 1401(g) (2012 ed.). Applicable to married couples, § 1401(a)(7) requires a period of physical presence in the United States for the U.S.-citizen parent. The requirement, as initially prescribed, was ten years' physical presence prior to the child's birth, § 601(g) (1940 ed.); currently, the requirement is five years prebirth, § 1401(g) (2012 ed.). That main rule is rendered applicable to unwed U.S.-citizen fathers by § 1409(a). Congress ordered an exception, however, for unwed U.S.-citizen mothers. Contained in § 1409(c), the exception allows an unwed mother to transmit her citizenship to a child born abroad if she has lived in the United States for just one year prior to the child's birth.
The respondent in this case, Luis Ramón Morales-Santana, was born in the Dominican Republic when his father was just 20 days short of meeting § 1401(a)(7)'s physical-presence requirement. Opposing removal to the Dominican Republic, Morales-Santana asserts that the equal protection principle implicit in the Fifth Amendment entitles him to citizenship stature. We hold that the gender line Congress drew is incompatible with the requirement that the Government accord to all persons "the equal protection of the laws." Nevertheless, we cannot convert § 1409(c)'s exception for unwed mothers into the main rule displacing § 1401(a)(7) (covering married couples) and § 1409(a) (covering unwed fathers). We must therefore leave it to Congress to select, going forward, a physical-presence requirement (ten years, one year, or some other period) uniformly applicable to all children born abroad with one U.S.-citizen and one alien parent, wed or unwed. In the interim, the Government must ensure that the laws in question are administered in a manner free from gender-based discrimination.
I
A
We first describe in greater detail the regime Congress constructed. The general rules for acquiring U.S. citizenship are found in 8 U.S.C. § 1401, the first section in Chapter 1 of Title III of the Immigration and Nationality Act (1952 Act or INA), § 301, 66 Stat. 235-236. Section 1401 sets forth the INA's rules for determining who "shall be nationals and citizens of the United States at birth" by establishing a range of residency and physical-presence requirements calibrated primarily to the parents' nationality and the child's place of birth. § 1401(a) (1958 ed.) ; § 1401 (2012 ed.). The primacy of § 1401 in the statutory scheme is evident. Comprehensive in coverage, § 1401 provides the general framework for the acquisition of citizenship at birth. In particular, at the time relevant here, § 1401(a)(7) provided for the U.S. citizenship of
"a person born outside the geographical limits of the United States and its outlying possessions of parents one of whom is an alien, and the other a citizen of the United States who, prior to the birth of such person, was physically present in the United States or its outlying possessions for a period or periods totaling not less than ten years, at least five of which were after attaining the age of fourteen years: Provided, That any periods of honorable service in the Armed Forces of the United States by such citizen parent may be included in computing the physical presence requirements of this paragraph."
Congress has since reduced the duration requirement to five years, two after age 14. § 1401(g) (2012 ed.).
Section 1409 pertains specifically to children with unmarried parents. Its first subsection, § 1409(a), incorporates by reference the physical-presence requirements of § 1401, thereby allowing an acknowledged unwed citizen parent to transmit U.S. citizenship to a foreign-born child under the same terms as a married citizen parent. Section 1409(c) -a provision applicable only to unwed U.S.-citizen mothers-states an exception to the physical-presence requirements of §§ 1401 and 1409(a). Under § 1409(c)'s exception, only one year of continuous physical presence is required before unwed mothers may pass citizenship to their children born abroad.
B
Respondent Luis Ramón Morales-Santana moved to the United States at age 13, and has resided in this country most of his life. Now facing deportation, he asserts U.S. citizenship at birth based on the citizenship of his biological father, José Morales, who accepted parental responsibility and included Morales-Santana in his household.
José Morales was born in Guánica, Puerto Rico, on March 19, 1900. Record 55-56. Puerto Rico was then, as it is now, part of the United States, see Puerto Rico v. Sanchez Valle, 579 U.S. ----, ---- - ----, 136 S.Ct. 1863, 1868-1869, 195 L.Ed.2d 179 (2016) ; 8 U.S.C. § 1101(a)(38) (1958 ed.) ("The term United States... means the continental United States, Alaska, Hawaii, Puerto Rico, Guam, and the [U.S.] Virgin Islands." (internal quotation marks omitted)); § 1101(a)(38) (2012 ed.) (similar), and José became a U.S. citizen under the Organic Act of Puerto Rico, ch. 145, § 5, 39 Stat. 953 (a predecessor to 8 U.S.C. § 1402 ). After living in Puerto Rico for nearly two decades, José left his childhood home on February 27, 1919, 20 days short of his 19th birthday, therefore failing to satisfy § 1401(a)(7)'s requirement of five years' physical presence after age 14. Record 57, 66. He did so to take up employment as a builder-mechanic for a U.S. company in the then-U.S.-occupied Dominican Republic. Ibid.
By 1959, José attested in a June 21, 1971 affidavit presented to the U.S. Embassy in the Dominican Republic, he was living with Yrma Santana Montilla, a Dominican woman he would eventually marry. Id., at 57. In 1962, Yrma gave birth to their child, respondent Luis Morales-Santana. Id., at 166-167. While the record before us reveals little about Morales-Santana's childhood, the Dominican archives disclose that Yrma and José married in 1970, and that José was then added to Morales-Santana's birth certificate as his father. Id., at 163-164, 167. José also related in the same affidavit that he was then saving money "for the susten[ance] of [his] family" in anticipation of undergoing surgery in Puerto Rico, where members of his family still resided. Id., at 57. In 1975, when Morales-Santana was 13, he moved to Puerto Rico, id., at 368, and by 1976, the year his father died, he was attending public school in the Bronx, a New York City borough, id., at 140, 369.
C
In 2000, the Government placed Morales-Santana in removal proceedings based on several convictions for offenses under New York State Penal Law, all of them rendered on May 17, 1995. Id., at 426. Morales-Santana ranked as an alien despite the many years he lived in the United States, because, at the time of his birth, his father did not satisfy the requirement of five years' physical presence after age 14. See supra, at 1686 - 1687, and n. 3. An immigration judge rejected Morales-Santana's claim to citizenship derived from the U.S. citizenship of his father, and ordered Morales-Santana's removal to the Dominican Republic. Record 253, 366; App. to Pet. for Cert. 45a-49a. In 2010, Morales-Santana moved to reopen the proceedings, asserting that the Government's refusal to recognize that he derived citizenship from his U.S.-citizen father violated the Constitution's equal protection guarantee. See Record 27, 45. The Board of Immigration Appeals (BIA) denied the motion. App. to Pet. for Cert. 8a, 42a-44a.
The United States Court of Appeals for the Second Circuit reversed the BIA's decision. 804 F.3d 520, 524 (2015). Relying on this Court's post-1970 construction of the equal protection principle as it bears on gender-based classifications, the court held unconstitutional the differential treatment of unwed mothers and fathers. Id., at 527-535. To cure the constitutional flaw, the court further held that Morales-Santana derived citizenship through his father, just as he would were his mother the U.S. citizen. Id., at 535-538. In so ruling, the Second Circuit declined to follow the conflicting decision of the Ninth Circuit in United States v. Flores-Villar, 536 F.3d 990 (2008), see 804 F.3d, at 530, 535, n. 17. We granted certiorari in Flores-Villar, but ultimately affirmed by an equally divided Court. Flores-Villar v. United States, 564 U.S. 210, 131 S.Ct. 2312, 180 L.Ed.2d 222 (2011) (per curiam ). Taking up Morales-Santana's request for review, 579 U.S. ---- (2016), we consider the matter anew.
II
Because § 1409 treats sons and daughters alike, Morales-Santana does not suffer discrimination on the basis of his gender. He complains, instead, of gender-based discrimination against his father, who was unwed at the time of Morales-Santana's birth and was not accorded the right an unwed U.S.-citizen mother would have to transmit citizenship to her child. Although the Government does not contend otherwise, we briefly explain why Morales-Santana may seek to vindicate his father's right to the equal protection of the laws.
Ordinarily, a party "must assert his own legal rights" and "cannot rest his claim to relief on the legal rights... of third parties." Warth v. Seldin, 422 U.S. 490, 499, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). But we recognize an exception where, as here, "the party asserting the right has a close relationship with the person who possesses the right [and] there is a hindrance to the possessor's ability to protect his own interests." Kowalski v. Tesmer, 543 U.S. 125, 130, 125 S.Ct. 564, 160 L.Ed.2d 519 (2004) (quoting Powers v. Ohio, 499 U.S. 400, 411, 111 S.Ct. 1364, 113 L.Ed.2d 411 (1991) ). José Morales' ability to pass citizenship to his son, respondent Morales-Santana, easily satisfies the "close relationship" requirement. So, too, is the "hindrance" requirement well met. José Morales' failure to assert a claim in his own right "stems from disability," not "disinterest," Miller v. Albright, 523 U.S. 420, 450, 118 S.Ct. 1428, 140 L.Ed.2d 575 (1998) (O'Connor, J., concurring in judgment), for José died in 1976, Record 140, many years before the current controversy arose. See Hodel v. Irving, 481 U.S. 704, 711-712, 723, n. 7, 107 S.Ct. 2076, 95 L.Ed.2d 668 (1987) (children and their guardians may assert Fifth Amendment rights of deceased relatives). Morales-Santana is thus the "obvious claimant," see Craig v. Boren, 429 U.S. 190, 197, 97 S.Ct. 451, 50 L.Ed.2d 397 (1976), the "best available proponent," Singleton v. Wulff, 428 U.S. 106, 116, 96 S.Ct. 2868, 49 L.Ed.2d 826 (1976), of his father's right to equal protection.
III
Sections 1401 and 1409, we note, date from an era when the lawbooks of our Nation were rife with overbroad generalizations about the way men and women are. See, e.g., Hoyt v. Florida, 368 U.S. 57, 62, 82 S.Ct. 159, 7 L.Ed.2d 118 (1961) (women are the "center of home and family life," therefore they can be "relieved from the civic duty of jury service"); Goesaert v. Cleary, 335 U.S. 464, 466, 69 S.Ct. 198, 93 L.Ed. 163 (1948) (States may draw "a sharp line between the sexes"). Today, laws of this kind are subject to review under the heightened scrutiny that now attends "all gender-based classifications." J.E.B. v. Alabama ex rel. T. B., 511 U.S. 127, 136, 114 S.Ct. 1419, 128 L.Ed.2d 89 (1994) ; see, e.g., United States v. Virginia, 518 U.S. 515, 555-556, 116 S.Ct. 2264, 135 L.Ed.2d 735 (1996) (state-maintained military academy may not deny admission to qualified women).
Laws granting or denying benefits "on the basis of the sex of the qualifying parent," our post-1970 decisions affirm, differentiate on the basis of gender, and therefore attract heightened review under the Constitution's equal protection guarantee. Califano v. Westcott, 443 U.S. 76, 84, 99 S.Ct. 2655, 61 L.Ed.2d 382 (1979) ; see id., at 88-89, 99 S.Ct. 2655 (holding unconstitutional provision of unemployed-parent benefits exclusively to fathers). Accord Califano v. Goldfarb, 430 U.S. 199, 206-207, 97 S.Ct. 1021, 51 L.Ed.2d 270 (1977)
(plurality opinion) (holding unconstitutional a Social Security classification that denied widowers survivors' benefits available to widows); Weinberger v. Wiesenfeld, 420 U.S. 636, 648-653, 95 S.Ct. 1225, 43 L.Ed.2d 514 (1975) (holding unconstitutional a Social Security classification that excluded fathers from receipt of child-in-care benefits available to mothers); Frontiero v. Richardson, 411 U.S. 677, 688-691, 93 S.Ct. 1764, 36 L.Ed.2d 583 (1973) (plurality opinion) (holding unconstitutional exclusion of married female officers in the military from benefits automatically accorded married male officers); cf. Reed v. Reed, 404 U.S. 71, 74, 76-77, 92 S.Ct. 251, 30 L.Ed.2d 225 (1971) (holding unconstitutional a probate-code preference for a father over a mother as administrator of a deceased child's estate).
Prescribing one rule for mothers, another for fathers, § 1409 is of the same genre as the classifications we declared unconstitutional in Reed,Frontiero,Wiesenfeld,Goldfarb, and Westcott. As in those cases, heightened scrutiny is in order. Successful defense of legislation that differentiates on the basis of gender, we have reiterated, requires an "exceedingly persuasive justification." Virginia, 518 U.S., at 531, 116 S.Ct. 2264 (internal quotation marks omitted); Kirchberg v. Feenstra, 450 U.S. 455, 461, 101 S.Ct. 1195, 67 L.Ed.2d 428 (1981) (internal quotation marks omitted).
A
The defender of legislation that differentiates on the basis of gender must show "at least that the [challenged] classification serves important governmental objectives and that the discriminatory means employed are substantially related to the achievement of those objectives." Virginia, 518 U.S., at 533, 116 S.Ct. 2264 (quoting Mississippi Univ. for Women v. Hogan, 458 U.S. 718, 724, 102 S.Ct. 3331, 73 L.Ed.2d 1090 (1982) ; alteration in original); see Tuan Anh Nguyen v. INS, 533 U.S. 53, 60, 70, 121 S.Ct. 2053, 150 L.Ed.2d 115 (2001). Moreover, the classification must substantially serve an important governmental interest today, for "in interpreting the [e]qual [p]rotection [guarantee], [we have] recognized that new insights and societal understandings can reveal unjustified inequality... that once passed unnoticed and unchallenged." Obergefell v. Hodges, 576 U.S. ----, ----, 135 S.Ct. 2584, 2603, 192 L.Ed.2d 609 (2015). Here, the Government has supplied no "exceedingly persuasive justification," Virginia, 518 U.S., at 531, 116 S.Ct. 2264 (internal quotation marks omitted), for § 1409(a) and (c)'s "gender-based" and "gender-biased" disparity, Westcott, 443 U.S., at 84, 99 S.Ct. 2655 (internal quotation marks omitted).
1
History reveals what lurks behind § 1409. Enacted in the Nationality Act of 1940 (1940 Act), see 54 Stat. 1139-1140, § 1409 ended a century and a half of congressional silence on the citizenship of children born abroad to unwed parents. During this era, two once habitual, but now untenable, assumptions pervaded our Nation's citizenship laws and underpinned judicial and administrative rulings: In marriage, husband is dominant, wife subordinate; unwed mother is the natural and sole guardian of a nonmarital child.
Under the once entrenched principle of male dominance in marriage, the husband controlled both wife and child. "[D]ominance [of] the husband," this Court observed in 1915, "is an ancient principle of our jurisprudence." Mackenzie v. Hare, 239 U.S. 299, 311, 36 S.Ct. 106, 60 L.Ed. 297 (1915). See generally Brief for Professors of History et al. as Amici Curiae 4-15. Through the early 20th century, a male citizen automatically conferred U.S. citizenship on his alien wife. Act of Feb. 10, 1855, ch. 71, § 2, 10 Stat. 604; see Kelly v. Owen, 7 Wall. 496, 498, 19 L.Ed. 283 (1869) (the 1855 Act "confers the privileges of citizenship upon women married to citizens of the United States"); C. Bredbenner, A Nationality of Her Own: Women, Marriage, and the Law of Citizenship 15-16, 20-21 (1998). A female citizen, however, was incapable of conferring citizenship on her husband; indeed, she was subject to expatriation if she married an alien. The family of a citizen or a lawfully admitted permanent resident enjoyed statutory exemptions from entry requirements, but only if the citizen or resident was male. See, e.g., Act of Mar. 3, 1903, ch. 1012, § 37, 32 Stat. 1221 (wives and children entering the country to join permanent-resident aliens and found to have contracted contagious diseases during transit shall not be deported if the diseases were easily curable or did not present a danger to others); S.Rep. No. 1515, 81st Cong., 2d Sess., 415-417 (1950) (wives exempt from literacy and quota requirements). And from 1790 until 1934, the foreign-born child of a married couple gained U.S. citizenship only through the father.
For unwed parents, the father-controls tradition never held sway. Instead, the mother was regarded as the child's natural and sole guardian. At common law, the mother, and only the mother, was "bound to maintain [a nonmarital child] as its natural guardian." 2 J. Kent, Commentaries on American Law *215-*216 (8th ed. 1854); see Nguyen, 533 U.S., at 91-92, 121 S.Ct. 2053 (O'Connor, J., dissenting). In line with that understanding, in the early 20th century, the State Department sometimes permitted unwed mothers to pass citizenship to their children, despite the absence of any statutory authority for the practice. See Hearings on H.R. 6127 before the House Committee on Immigration and Naturalization, 76th Cong., 1st Sess., 43, 431 (1940) (hereinafter 1940 Hearings); 39 Op. Atty. Gen. 397, 397-398 (1939); 39 Op. Atty. Gen. 290, 291 (1939). See also Collins, Illegitimate Borders: Jus Sanguinis Citizenship and the Legal Construction of Family, Race, and Nation, 123 Yale L.J. 2134, 2199-2205 (2014) (hereinafter Collins).
In the 1940 Act, Congress discarded the father-controls assumption concerning married parents, but codified the mother-as-sole-guardian perception regarding unmarried parents. The Roosevelt administration, which proposed § 1409, explained: "[T]he mother [of a nonmarital child] stands in the place of the father... [,] has a right to the custody and control of such a child as against the putative father, and is bound to maintain it as its natural guardian." 1940 Hearings 431 (internal quotation marks omitted).
This unwed-mother-as-natural-guardian notion renders § 1409's gender-based residency rules understandable. Fearing that a foreign-born child could turn out "more alien than American in character," the administration believed that a citizen parent with lengthy ties to the United States would counteract the influence of the alien parent. Id., at 426-427. Concern about the attachment of foreign-born children to the United States explains the treatment of unwed citizen fathers, who, according to the familiar stereotype, would care little about, and have scant contact with, their nonmarital children. For unwed citizen mothers, however, there was no need for a prolonged residency prophylactic: The alien father, who might transmit foreign ways, was presumptively out of the picture. See id., at 431; Collins 2203 (in "nearly uniform view" of U.S. officials, "almost invariably," the mother alone "concern[ed] herself with [a nonmarital] child" (internal quotation marks omitted)).
2
For close to a half century, as earlier observed, see supra, at 1689 - 1690, this Court has viewed with suspicion laws that rely on "overbroad generalizations about the different talents, capacities, or preferences of males and females." Virginia, 518 U.S., at 533, 116 S.Ct. 2264 ; see Wiesenfeld, 420 U.S., at 643, 648, 95 S.Ct. 1225. In particular, we have recognized that if a "statutory objective is to exclude or 'protect' members of one gender" in reliance on "fixed notions concerning [that gender's] roles and abilities," the "objective itself is illegitimate." Mississippi Univ. for Women, 458 U.S., at 725, 102 S.Ct. 3331.
In accord with this eventual understanding, the Court has held that no "important [governmental] interest" is served by laws grounded, as § 1409(a) and (c) are, in the obsolescing view that "unwed fathers [are] invariably less qualified and entitled than mothers" to take responsibility for nonmarital children. Caban v. Mohammed, 441 U.S. 380, 382, 394, 99 S.Ct. 1760, 60 L.Ed.2d 297 (1979). Overbroad generalizations of that order, the Court has come to comprehend, have a constraining impact, descriptive though they may be of the way many people still order their lives. Laws according or denying benefits in reliance on "[s]tereotypes about women's domestic roles," the Court has observed, may "creat[e] a self-fulfilling cycle of discrimination that force[s] women to continue to assume the role of primary family caregiver." Nevada Dept. of Human Resources v. Hibbs, 538 U.S. 721, 736, 123 S.Ct. 1972, 155 L.Ed.2d 953 (2003). Correspondingly, such laws may disserve men who exercise responsibility for raising their children. See ibid. In light of the equal protection jurisprudence this Court has developed since 1971, see Virginia, 518 U.S., at 531-534, 116 S.Ct. 2264, § 1409(a) and (c)'s discrete duration-of-residence requirements for unwed mothers and fathers who have accepted parental responsibility is stunningly anachronistic.
B
In urging this Court nevertheless to reject Morales-Santana's equal protection plea, the Government cites three decisions of this Court: Fiallo v. Bell, 430 U.S. 787, 97 S.Ct. 1473, 52 L.Ed.2d 50 (1977) ; Miller v. Albright, 523 U.S. 420, 118 S.Ct. 1428, 140 L.Ed.2d 575 ; and Nguyen v. INS, 533 U.S. 53, 121 S.Ct. 2053, 150 L.Ed.2d 115. None controls this case.
The 1952 Act provision at issue in Fiallo gave special immigration preferences to alien children of citizen (or lawful-permanent-resident) mothers, and to alien unwed mothers of citizen (or lawful-permanent-resident) children. 430 U.S., at 788-789, and n. 1, 97 S.Ct. 1473. Unwed fathers and their children, asserting their right to equal protection, sought the same preferences. Id., at 791, 97 S.Ct. 1473. Applying minimal scrutiny (rational-basis review), the Court upheld the provision, relying on Congress' "exceptionally broad power" to admit or exclude aliens. Id., at 792, 794, 97 S.Ct. 1473. This case, however, involves no entry preference for aliens. Morales-Santana claims he is, and since birth has been, a U.S. citizen. Examining a claim of that order, the Court has not disclaimed, as it did in Fiallo, the application of an exacting standard of review. See Nguyen, 533 U.S., at 60-61, 70, 121 S.Ct. 2053 ; Miller, 523 U.S., at 434-435, n. 11, 118 S.Ct. 1428 (opinion of Stevens, J.).
The provision challenged in Miller and Nguyen as violative of equal protection requires unwed U.S.-citizen fathers, but not mothers, to formally acknowledge parenthood of their foreign-born children in order to transmit their U.S. citizenship to those children. See § 1409(a)(4) (2012 ed.). After Miller produced no opinion for the Court, see 523 U.S., at 423, 118 S.Ct. 1428 we took up the issue anew in Nguyen. There, the Court held that imposing a paternal-acknowledgment requirement on fathers was a justifiable, easily met means of ensuring the existence of a biological parent-child relationship, which the mother establishes by giving birth. See 533 U.S., at 62-63, 121 S.Ct. 2053. Morales-Santana's challenge does not renew the contest over § 1409's paternal-acknowledgment requirement (whether the current version or that in effect in 1970), and the Government does not dispute that Morales-Santana's father, by marrying Morales-Santana's mother, satisfied that requirement.
Unlike the paternal-acknowledgment requirement at issue in Nguyen and Miller, the physical-presence requirements now before us relate solely to the duration of the parent's prebirth residency in the United States, not to the parent's filial tie to the child. As the Court of Appeals observed in this case, a man needs no more time in the United States than a woman "in order to have assimilated citizenship-related values to transmit to [his] child." 804 F.3d, at 531. And unlike Nguyen's parental-acknowledgment requirement, § 1409(a)'s age-calibrated physical-presence requirements cannot fairly be described as "minimal." 533 U.S., at 70, 121 S.Ct. 2053.
C
Notwithstanding § 1409(a) and (c)'s provenance in traditional notions of the way women and men are, the Government maintains that the statute serves two important objectives: (1) ensuring a connection between the child to become a citizen and the United States and (2) preventing "statelessness," i.e., a child's possession of no citizenship at all. Even indulging the assumption that Congress intended § 1409 to serve these interests, but see supra, at 1683 - 1693, neither rationale survives heightened scrutiny.
1
We take up first the Government's assertion that § 1409(a) and (c)'s gender-based differential ensures that a child born abroad has a connection to the United States of sufficient strength to warrant conferral of citizenship at birth. The Government does not contend, nor could it, that unmarried men take more time to absorb U.S. values than unmarried women do. See supra, at 1694. Instead, it presents a novel argument, one it did not advance in Flores-Villar.
An unwed mother, the Government urges, is the child's only "legally recognized" parent at the time of childbirth. Brief for Petitioner 9-10, 28-32. An unwed citizen father enters the scene later, as a second parent. A longer physical connection to the United States is warranted for the unwed father, the Government maintains, because of the "competing national influence" of the alien mother. Id., at 9-10. Congress, the Government suggests, designed the statute to bracket an unwed U.S.-citizen mother with a married couple in which both parents are U.S. citizens, and to align an unwed U.S.-citizen father with a married couple, one spouse a citizen, the other, an alien.
Underlying this apparent design is the assumption that the alien father of a nonmarital child born abroad to a U.S.-citizen mother will not accept parental responsibility. For an actual affiliation between alien father and nonmarital child would create the "competing national influence" that, according to the Government, justifies imposing on unwed U.S.-citizen fathers, but not unwed U.S.-citizen mothers, lengthy physical-presence requirements. Hardly gender neutral, see id., at 9, that assumption conforms to the long-held view that unwed fathers care little about, indeed are strangers to, their children. See supra, at 1690 - 1693. Lump characterization of that kind, however, no longer passes equal protection inspection. See supra, at 1692 - 1693, and n. 13.
Accepting, arguendo, that Congress intended the diverse physical-presence prescriptions to serve an interest in ensuring a connection between the foreign-born nonmarital child and the United States, the gender-based means scarcely serve the posited end. The scheme permits the transmission of citizenship to children who have no tie to the United States so long as their mother was a U.S. citizen continuously present in the United States for one year at any point in her life prior to the child's birth. The transmission holds even if the mother marries the child's alien father immediately after the child's birth and never returns with the child to the United States. At the same time, the legislation precludes citizenship transmission by a U.S.-citizen father who falls a few days short of meeting § 1401(a)(7)'s longer physical-presence requirements, even if the father acknowledges paternity on the day of the child's birth and raises the child in the United States. One cannot see in this driven-by-gender scheme the close means-end fit required to survive heightened scrutiny. See, e.g., Wengler v. Druggists Mut. Ins. Co., 446 U.S. 142, 151-152, 100 S.Ct. 1540, 64 L.Ed.2d 107 (1980) (holding unconstitutional state workers' compensation death-benefits statute presuming widows' but not widowers' dependence on their spouse's earnings); Westcott, 443 U.S., at 88-89, 99 S.Ct. 2655.
2
The Government maintains that Congress established the gender-based residency differential in § 1409(a) and (c) to reduce the risk that a foreign-born child of a U.S. citizen would be born stateless. Brief for Petitioner 33. This risk, according to the Government, was substantially greater for the foreign-born child of an unwed U.S.-citizen mother than it was for the foreign-born child of an unwed U.S.-citizen father. Ibid. But there is little reason to believe that a statelessness concern prompted the diverse physical-presence requirements. Nor has the Government shown that the risk of statelessness disproportionately endangered the children of unwed mothers.
As the Court of Appeals pointed out, with one exception, nothing in the congressional hearings and reports on the 1940 and 1952 Acts "refer[s] to the problem of statelessness for children born abroad." 804 F.3d, at 532-533. See Collins 2205, n. 283 (author examined "many hundreds of pre-1940 administrative memos... defend[ing] or explain[ing] recognition of the nonmarital foreign-born children of American mothers as citizens"; of the hundreds, "exactly one memo by a U.S. official... mentions the risk of statelessness for the foreign-born nonmarital children of American mothers as a concern"). Reducing the incidence of statelessness was the express goal of other sections of 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:
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B
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sc_issuearea
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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 White
delivered the opinion of the Court.
The State of Washington requires that a minor-party candidate for partisan office receive at least 1% of all votes cast for that office in the State’s primary election before the candidate’s name will be placed on the general election ballot. The question for decision is whether this statutory requirement, as applied to candidates for statewide offices, violates the First and Fourteenth Amendments to the United States Constitution. The Court of Appeals for the Ninth Circuit declared the provision unconstitutional. 765 F. 2d 1417 (1985). We reverse.
In 1977, the State of Washington enacted amendments to its election laws, changing the manner in which candidates from minor political parties qualify for placement on the general election ballot. Before the amendments, a minor-party candidate did not participate in the State’s primary elections, but rather sought his or her party’s nomination at a party convention held on the same day as the primary election for “major” parties. The convention-nominated, minor-party candidate secured a position on the general election ballot upon the filing of a certificate signed by at least 100 registered voters who had participated in the convention and who had not voted in the primary election. The 1977 amendments retained the requirement that a minor-party candidate be nominated by convention, but imposed the additional requirement that, as a precondition to general ballot access, the nominee for an office appear on the primary election ballot and receive at least 1% of all votes cast for that particular of-flee at the primary election. Wash. Rev. Code §29.18.110 (1985).
Washington conducts a “blanket primary” at which registered voters may vote for any candidate of their choice, irrespective of the candidates’ political party affiliation. A candidate seeking placement on the primary election ballot must declare his candidacy no earlier than the last Monday in July, and no later than the following Friday. Minor-party nominating conventions are to be held on the Saturday preceding this filing period. The primary election is held on the third Tuesday in September.
The events giving rise to this action occurred in 1983, after the state legislature authorized a special primary election to be held on October 11, 1983, to fill a vacancy in the office of United States Senator. Appellee Dean Peoples qualified to be placed on the primary election ballot as the nominee of appellee Socialist Workers Party (Party). Also appearing on that ballot were 32 other candidates. At the primary, Mr, Peoples received approximately nine one-hundredths of one percent of the total votes cast for the office, and, accordingly, the State did not place his name on the general election ballot.
Appellees (Peoples, the Party, and two registered voters) commenced this action in United States District Court, alleging that § 29.18.110 abridged their rights secured by the First and Fourteenth Amendments. The District Court entered judgment denying appellees relief, but the Court of Appeals for the Ninth Circuit reversed, holding that §29.18.110, as applied to candidates for statewide offices, was unconstitutional. The State filed a timely appeal with this Court, and we noted probable jurisdiction. 474 U. S. 1049 (1986).
Restrictions upon the access of political parties to the ballot impinge upon the rights of individuals to associate for political purposes, as well as the rights of qualified voters to cast their votes effectively, Williams v. Rhodes, 393 U. S. 23, 30 (1968), and may not survive scrutiny under the First and Fourteenth Amendments. In Williams v. Rhodes, for example, we held unconstitutional the election laws of Ohio insofar as in combination they made it virtually impossible for a new political party to be placed on the ballot, even if the party had hundreds of thousands of adherents. These associational rights, however, are not absolute and are necessarily subject to qualification if elections are to be run fairly and effectively. Storer v. Brown, 415 U. S. 724, 730 (1974).
While there is no “litmus-paper test” for deciding a case like this, ibid., it is now clear that States may condition access to the general election ballot by a minor-party or independent candidate upon a showing of a modicum of support among the potential voters for the office. In Jenness v. Fortson, 403 U. S. 431 (1971), the Court unanimously rejected a challenge to Georgia’s election statutes that required independent candidates and minor-party candidates, in order to be listed on the general election ballot, to submit petitions signed by at least 5% of the voters eligible to vote in the last election for the office in question. Primary elections were held only for those political organizations whose candidate received 20% or more of the vote at the last gubernatorial or Presidential election. The Court’s opinion observed that “[tjhere is surely an important state interest in requiring some preliminary showing of a significant modicum of support before printing the name of a political organization’s candidate on the ballot — the interest, if no other, in avoiding confusion, deception, and even frustration of the democratic process at the general election.” Id., at 442. And, in American Party of Texas v. White, 415 U. S. 767 (1974), candidates of minor political parties in Texas were required to demonstrate support by persons numbering at least 1% of the total vote cast for Governor at the last preceding general election. Candidates could secure the requisite number of petition signatures at precinct nominating conventions and by supplemental petitions following the conventions. Voters signing these supplemental petitions had to swear under oath that they had not participated in another party’s primary election or nominating process. In rejecting a First Amendment challenge to the 1% requirement, we asserted that the State’s interest in preserving the integrity of the electoral process and in regulating the number of candidates on the ballot was compelling and reiterated the holding in Jenness that a State may require a preliminary showing of significant support before placing a candidate on the general election ballot. American Party of Texas v. White, supra, at 782, n. 14.
Jenness and American Party establish with unmistakable clarity that States have an “undoubted right to require candidates to make a preliminary showing of substantial support in order to qualify for a place on the ballot. . . .” Anderson v. Celebrezze, 460 U. S. 780, 788-789, n. 9 (1983). We reaffirm that principle today.
The Court of Appeals determined that Washington’s interest in insuring that candidates had sufficient community support did not justify the enactment of §29.18.110 because “Washington’s political history evidences no voter confusion from ballot overcrowding.” 765 F. 2d, at 1420. We accept this historical fact, but it does not require invalidation of §29.18.110.
We have never required a State to make a particularized showing of the existence of voter confusion, ballot overcrowding, or the presence of frivolous candidacies prior to the imposition of reasonable restrictions on ballot access. In Jenness v. Fortson, supra, we conducted no inquiry into the sufficiency and quantum of the data supporting the reasons for Georgia’s 5% petition-signature requirement. In American Party of Texas v. White, supra, we upheld the 1% petition-signature requirement, asserting that the “State’s admittedly vital interests are sufficiently implicated to insist that political parties appearing on the general ballot demonstrate a significant, measurable quantum of community support.” Id., at 782. And, in Storer v. Brown, supra, we upheld California’s statutory provisions that denied ballot access to an independent candidate if the candidate had been affiliated with any political party within one year prior to the immediately preceding primary election. We recognized that California had a “compelling” interest in maintaining the integrity of its political processes, and that the disaffiliation requirement furthered this interest and was therefore valid, even though it was an absolute bar to attaining a ballot position. We asserted that “[i]t appears obvious to us that the one-year disaffiliation provision furthers the State’s interest in the stability of its political system. ” Id., at 736. There is no indication that we held California to the burden of demonstrating empirically the objective effects on political stability that were produced by the 1-year disaffiliation requirement.
To require States to prove actual voter confusion, ballot overcrowding, or the presence of frivolous candidacies as a predicate to the imposition of reasonable ballot access restrictions would invariably lead to endless court battles over the sufficiency of the “evidence” marshaled by a State to prove the predicate. Such a requirement would necessitate that a State’s political system sustain some level of damage before the legislature could take corrective action. Legislatures, we think, should be permitted to respond to potential deficiencies in the electoral process with foresight rather than re-actively, provided that the response is reasonable and does not significantly impinge on constitutionally protected rights.
In any event, the record here suggests that revision of §29.18.110 was, in fact, linked to the state legislature’s perception that the general election ballot was becoming cluttered with candidates from minor parties who did not command significant voter support. In 1976, one year prior to revision of §29.18.110, the largest number of minor political parties in Washington’s history — 12—appeared on the general election ballot. The record demonstrates that at least part of the legislative impetus for revision of § 29.18.110 was concern about minor parties having such easy access to Washington’s general election ballot.
The primary election in Washington, like its counterpart in California, is “an integral part of the entire election process . . . [that] functions to winnow out and finally reject all but the chosen candidates.” Stover v. Brown, 415 U. S., at 735. We think that the State can properly reserve the general election ballot “for major struggles,” ibid., by conditioning access to that ballot on a showing of a modicum of voter support. In this respect, the fact that the State is willing to have a long and complicated ballot at the primary provides no measure of what it may require for access to the general election ballot. The State of Washington was clearly entitled to raise the ante for ballot access, to simplify the general election ballot, and to avoid the possibility of unrestrained factionalism at the general election. See id., at 786.
Neither do we agree with the Court of Appeals and appel-lees that the burdens imposed on appellees’ First Amendment rights by the 1977 amendments are far too severe to be justified by the State’s interest in restricting access to the general ballot. Much is made of the fact that prior to 1977, virtually every minor-party candidate who sought general election ballot position so qualified, while since 1977 only 1 out of 12 minor-party candidates has appeared on that ballot. Such historical facts are relevant, but they prove very little in this case, other than the fact that §29.18.110 does not provide an insuperable barrier to minor-party ballot access. It is hardly a surprise that minor parties appeared on the general election ballot before §29.18.110 was revised; for, until then, there were virtually no restrictions on access. Under our cases, however, Washington was not required to afford such automatic access and would have been entitled to insist on a more substantial showing of voter support. Comparing the actual experience before and after 1977 tells us nothing about how minor parties would have fared in those earlier years had Washington conditioned ballot access to the maximum extent permitted by the Constitution.
Appellees urge that this case differs substantially from our previous cases because requiring primary votes to qualify for a position on the general election ballot is qualitatively more restrictive than requiring signatures on a nominating petition. In effect, their submission would foreclose any use of the primary election to determine a minor party’s qualification for the general ballot. We are unpersuaded, however, that the differences between the two mechanisms are of constitutional dimension. Because Washington provides a “blanket primary,” minor-party candidates can campaign among the entire pool of registered voters. Effort and resources that would otherwise be directed at securing petition signatures can instead be channeled into campaigns to “get the vote out,” foster candidate name recognition, and educate the electorate. To be sure, candidates must demonstrate, through their ability to secure votes at the primary election, that they enjoy a modicum of community support in order to advance to the general election. But requiring candidates to demonstrate such support is precisely what we have held States are permitted to do.
Appellees argue that voter turnout at primary elections is generally lower than the turnout at general elections, and therefore enactment of § 29.18.110 has reduced the pool of potential supporters from which Party candidates can secure 1% of the vote. We perceive no more force to this argument than we would with an argument by a losing candidate that his supporters’ constitutional rights were infringed by their failure to participate in the election. Washington has created no impediment to voting at the primary elections; every supporter of the Party in the State is free to cast his or her ballot for the Party’s candidates. As was the case in Jenness v. Fortson, 403 U. S. 431 (1971), “candidates and members of small or newly formed political organizations are wholly free to associate, to proselytize, to speak, to write, and to organize campaigns for any school of thought they wish. . . .” Id., at 438. States are not burdened with a constitutional imperative to reduce voter apathy or to “handicap” an unpopular candidate to increase the likelihood that the candidate will gain access to the general election ballot. As we see it, Washington has done no more than to visit on a candidate a requirement to show a “significant modicum” of voter support, and it was entitled to require that showing in its primary elections.
We also observe that §29.18.110 is more accommodating of First Amendment rights and values than were the statutes we upheld in Jenness, American Party, and Storer. Under each scheme analyzed in those cases, if a candidate failed to satisfy the qualifying criteria, the State’s voters had no opportunity to cast a ballot for that candidate and the candidate had no ballot-connected campaign platform from which to espouse his or her views; the unsatisfied qualifying criteria served as an absolute bar to ballot access. Undeniably, such restrictions raise concerns of constitutional dimension, for the “exclusion of candidates . . . burdens voters’ freedom of association, because an election campaign is an effective platform for the expression of views on the issues of the day . . . Anderson v. Celebrezze, 460 U. S., at 787-788. Here, however, Washington virtually guarantees what the parties challenging the Georgia, Texas, and California election laws so vigorously sought — candidate access to a statewide ballot. This is a significant difference. Washington has chosen a vehicle by which minor-party candidates must demonstrate voter support that serves to promote the very First Amendment values that are threatened by overly burdensome ballot access restrictions. It can hardly be said that Washington’s voters are denied freedom of association because they must channel their expressive activity into a campaign at the primary as opposed to the general election. It is true that voters must make choices as they vote at the primary, but there are no state-imposed obstacles impairing voters in the exercise of their choices. Washington simply has not substantially burdened the “availability of political opportunity.” Lubin v. Panish, 415 U. S. 709, 716 (1974).
Jenness and American Party rejected challenges to ballot access restrictions that were based on a candidate’s showing of voter support, notwithstanding the fact that the systems operated to foreclose a candidate’s access to any statewide ballot. Here, because Washington affords a minor-party candidate easy access to the primary election ballot and the opportunity for the candidate to wage a ballot-connected campaign, we conclude that the magnitude of §29.18.110’s effect on constitutional rights is slight when compared to the restrictions we upheld in Jenness and American Party. Accordingly, Washington did not violate the Constitution by denying appellee Peoples a position on the general election ballot on November 8, 1983.
The judgment of the Court of Appeals for the Ninth Circuit is therefore reversed.
It is so ordered.
Wash. Rev. Code §29.24.020 (1976). A “major” political party was defined as “a political party of which at least one nominee received at least ten percent of the total vote east at the last preceding state-wide general election . . . .” §29.01.090(1). This section’s 10% requirement was amended in 1977 to 5%. § 29.01.090. A “minor” political party is “a political organization other than a major political party.” § 29.01.100.
§29.24.040.
§ 29.24.020. Section 29.24.030(1) provides:
“To be valid, a convention must:
“(1) Be attended by at least a number of individuals who are registered to vote in the election jurisdiction for which nominations are to be made, which number is equal to one for each ten thousand voters or portion thereof who voted in the last preceding presidential election held in the election jurisdiction or twenty-five such registered voters, whichever number is greater . . . .”
Appellees did not challenge this requirement in the courts below.
Section 29.18.110 provides:
“No name of a candidate for a partisan office shall appear on the general election ballot unless he receives a number of votes equal to at least one percent of the total number east for all candidates for the position sought: Provided, That only the name of the candidate who receives a plurality of the votes cast for the candidates of his party for any office shall appear on the general election ballot.”
§29.18.200.
§29.18.025.
§29.24.020.
§29.13.070.
Mr. Peoples received 596 of the 681,690 votes cast in the primary.
Memorandum from the Office of the Secretary of State to the legislature’s Conference Committee, App. A to Reply Brief for Appellant.
Section 29.18.110 apparently poses an insubstantial obstacle to minor-party candidates for nonstatewide offices and independent candidates for statewide offices. Since 1977, 36 out of 40 such minor-party candidates have qualified for the general election ballot and 4 out of 5 independent candidates for statewide office have so qualified.
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 Black
delivered the opinion of the Court.
• The United States asks this Court to strike down as unconstitutional a tax statute of the State of Michigan as applied to a lessee of government property. In general terms this statute, Public Act 189 of 1953, provides that when tax-exempt real property is used by a private party in a business conducted for profit the private party is subject to taxation to the same extent as though he owned the property.
Here the United States was the owner of an industrial plant in Detroit, Michigan. It leased a portion of that plant to the Borg-Warner Corporation at a stipulated annual rental for use in the latter’s private manufacturing business. The lease provided that Borg-Warner could deduct from the agreed rental any taxes paid by it under Public Act 189 or similar state statutes enacted during the term of the lease, but the Government reserved the right to contest the validity of such taxes.
On January 1, 1954, a tax was assessed against Borg-Warner under Public Act 189. The tax was based on the value of the property leased and computed at the rate used for calculating real property taxes. Under protest Borg-Warner paid part of the assessment. Subsequently the United States and Borg-Warner filed this suit in a state court for refund of the amount paid. They charged that the tax was repugnant to the Constitution of the United States because it imposed a levy upon government property and discriminated against those using such property. The lower court however upheld the tax and the Michigan Supreme Court affirmed. 345 Mich. 601, 77 N. W. 2d 79. It ruled that the tax was neither discriminatory nor on the property of the United States but instead was a tax on the lessee’s privilege of using the property in a private business conducted for profit. We noted probable jurisdiction of an appeal by the United States and Borg-Warner from this decision. 352 U. S. 962.
This Court has held that a State cannot constitutionally levy a tax directly against the Government of the United States or its property without the consent of Congress. M’Culloch v. Maryland, 4 Wheat. 316; Van Brocklin v. Tennessee, 117 U. S. 151. At the same time it is well settled that the Government’s constitutional immunity does not shield private parties with whom it does business from state taxes imposed on them merely because part or all of the financial burden of the tax eventually falls on the Government. See, e. g., James v. Dravo Contracting Co., 302 U. S. 134; Graves v. New York ex rel. O’Keefe, 306 U. S. 466; Alabama v. King & Boozer, 314 U. S. 1. Of course in determining whether a tax is actually laid on the United States or its property this Court goes beyond the bare face of the taxing statute to consider all relevant circumstances.
The Michigan statute challenged here imposes a tax on private lessees and users of tax-exempt property who use such property in a business conducted for profit. Any taxes due under the statute are the personal obligation of the private lessee or user. The owner is not liable for their payment nor is the property itself subject to any lien if they remain unpaid. So far as the United States is concerned as the owner of the exempt property used in this case it seems clear that there was no attempt to levy against its property or treasury.
Nevertheless the Government argues that since the tax is measured by the value of the property used it should be treated as nothing but a contrivance to lay a tax on that property. We do not find this argument persuasive. A tax for the beneficial use of property, as distinguished from a tax on the property itself, has long been a commonplace in this country. See Henneford, v. Silas Mason Co., 300 U. S. 577, 582-583. In measuring such a use tax it seems neither irregular nor extravagant to resort to the value of the property used; indeed no more so than measuring a sales tax by the value of the property sold. Public Act 189 was apparently designed to equalize the annual tax burden carried by private businesses using exempt property with that of similar businesses using nonexempt property. Other things being the same, it seems obvious enough that use of exempt property is worth as much as use of comparable taxed property during the same interval. In our judgment it was not an impermissible subterfuge but a permissible exercise of its taxing power for Michigan to compute its tax by the value of the property used.
A number of decisions by this Court support this conclusion. For example in Curry v. United States, 314 U. S. 14, we upheld unanimously a state use tax on a contractor who was using government-owned materials although the tax was based on the full value of those materials. Similarly in Esso Standard Oil Co. v. Evans, 345 U. S. 495, the Court held valid a state tax on the privilege of storing gasoline even though that part of the tax which was challenged was measured by the number of gallons of government-owned gasoline stored with the taxpayer. While it is true that the tax here is measured by the value of government property instead of by its quantity as in Esso such technical difference has no meaningful significance in determining whether the Constitution prohibits this tax. Still other cases further confirm the proposition that it may be permissible for a State to measure a tax imposed on a valid subject of state taxation by taking into account government property which is itself tax-exempt. See, e. g., Home Insurance Co. v. New York, 134 U. S. 594; Plummer v. Coler, 178 U. S. 115; Educational Films Corp. v. Ward, 282 U. S. 379; Pacific Co. v. Johnson, 285 U. S. 480, 489-490.
In urging that the tax assessed here be struck down the appellants rely primarily on United States v. Allegheny County, 322 U. S. 174, but we do not think that case is at all controlling. In Allegheny the Court ruled invalid a tax which the State did not contend was “anything other than the old and widely used ad valorem general property tax” to the extent it was laid on government property in the hands of a private bailee. Reviewing all the circumstances the Court concluded that the tax was simply and forthrightly imposed on the property itself, not on the privilege of using or possessing it. In carefully reserving the question whether the bailee could be taxed for exercising such privileges, the Court stated:
“Whether such a right of possession and use in view of all the circumstances could be taxed by appropriate proceedings we do not decide.
“Actual possession and custody of Government property nearly always are in someone who is not himself the Government but acts in its behalf and for its purposes. He may be an officer, an agent, or a contractor. His personal advantages from the relationship by way of salary, profit, or beneficial personal use of the property may be taxed as we have held.” 322 U. S.. at 184. 186, 187.
Here we have a tax which is imposed on a party using tax-exempt property for its own “beneficial personal use” and “advantage.”
It is undoubtedly true, as the Government points out, that it will not be able to secure as high rentals if lessees are taxed for using its property. But as this Court has ruled in James v. Dravo Contracting Co., 302 U. S. 134, Alabama v. King & Boozer, 314 U. S. 1, and numerous other cases, the imposition of an increased financial burden on the Government does not, by itself, vitiate a state tax. King cfc Boozer offers a striking example. There a private party, acting under contract with the United States, purchased materials which the contract required him to transfer to the Government. At the same time the Government agreed to pay his costs plus a fixed fee so a state excise levied on his purchase was passed directly and completely to the Govérnment. Yet despite the immediate financial burden imposed on the United States, this Court, without dissent, upheld the tax.
We are aware of course that the general principles laid down in Dravo, King & Boozer and subsequent cases do not resolve all the difficulties in the area of intergovernmental tax immunity, but they were adopted by this Court, with the full support of the Government, as the least complicated, the most workable and the proper standards for decision in this much litigated and often confused field and we adhere to them.
It still remains true, as it has from the beginning, that a tax may be invalid even though it does not fall directly on the United States if it operates so as to discriminate against the Government or those with whom it deals. Cf. M’Culloch v. Maryland, 4 Wheat. 316. But here the tax applies to every private party who uses exempt property in Michigan in connection with a business conducted for private gain. Under Michigan law this means persons who use property owned by the Federal Government, the State, its political subdivisions, churches, charitable organizations and a great host of other entities. The class defined is not an arbitrary or invidiously discriminatory one. As suggested before the legislature apparently was trying to equate the tax burden imposed on private enterprise using exempt property with that carried by similar businesses using taxed property. Those using exempt property are required to pay no greater tax than that placed on private owners or passed on by them to their business lessees. In the absence of such equalization the lessees of tax-exempt property might well be given a distinct economic preference over their neighboring competitors, as well as escaping their fair share of local tax responsibility. Cf. Henneford v. Silas Mason Co., 300 U. S. 577, 583-585. Nor is there any showing that the tax is in fact administered to discriminate against those using federal property. To the contrary undisputed evidence introduced by appellees demonstrates that lessees of other exempt property have also been taxed.
Today the United States does business with a vast number of private parties. In this Court the trend has been to reject immunizing these private parties from nondiscriminatory state taxes as a matter of constitutional law. Cf. Penn Dairies v. Milk Control Comm’n, 318 U. S. 261, 270. Of course this is not to say that Congress, acting within the proper scope of its power, cannot confer immunity by statute where it does not exist constitutionally. Wise and flexible adjustment of intergovernmental tax immunity calls for political and economic considerations of the greatest difficulty and delicacy. Such complex problems are ones which Congress is best qualified to resolve. As the Government points out Congress has already extensively legislated in this area by permitting States to tax what would have otherwise been immune. To hold that the tax imposed here on a private business violates the Government’s constitutional tax immunity would improperly impair the taxing power of the State.
Affirmed.
[For opinion of Mr. Justice Frankfurter, see post, p. 495.]
[For opinion of Mr. Justice Harlan, see post, p. 505.]
Now compiled in 6 Mich. Stat. Ann., 1950 (1957 Cum. Supp.), §§7.7 (5) and (6). In full the Act reads:
“AN ACT to provide for the taxation of lessees and users of tax-exempt property.
“Sec. 1. When any real property which for any reason is exempt from taxation is leased, loaned or otherwise made available to and used by a private individual, association or corporation in connection with a business conducted for profit, except where the use is by way of a concession in or relative to the use of a public airport, park, market, fair ground or similar property which is available to the use of the general public [sic], shall be subject to taxation in the same amount and to the same extent as though the lessee or user were the owner of such property: Provided, however, That the foregoing shall not apply to federal property for which payments are made in lieu of taxes in amounts equivalent to taxes which might otherwise be lawfully assessed or property of any state-supported educational institution.
“Sec. 2. Taxes shall be assessed to such lessees or users of real property and collected in the same manner as taxes assessed to owners of real property, except that such taxes shall not become a lien against the property. When due, such taxes shall constitute a debt due from the lessee or user to the township, city, village, county and school district for which the taxes were assessed and shall be recoverable by direct action of assumpsit.”
The Government also places reliance on Macollen Co. v. Massachusetts, 279 U. S. 620. The weight of that case as a precedent was substantially impaired by its narrow distinction in Educational Films Corp. v. Ward, 282 U. S. 379, 392, and the reasoning of the Court in Pacific Co. v. Johnson, 285 U. S. 480, 495. Later in New York ex rel. Northern Finance Corp. v. Lynch, 290 U. S. 601, a case which seems indistinguishable from Macollen on its facts, the Court in a per curiam opinion upheld the same kind of state tax which it had struck down in Macollen.
See, e. g., Graves v. New York ex rel. O’Keefe, 306 U. S. 466, 485-486; Helvering v. Gerhardt, 304 U. S. 405, 420-422; Helvering v. Mountain Producers Corp., 303 U. S. 376; Metcalf & Eddy v. Mitchell, 269 U. S. 514.
In its brief in King & Boozer the Government strongly urged the Court to abandon whatever remained of the “economic burden” test, which at one time was used to range far afield in striking down state taxes, because that test was “illusory and incapable of consistent application.”
In somewhat greater detail, Michigan statutes exempt from real property taxes all property belonging to the Federal Government, the State, political subdivisions of the State, charitable organizations, educational or scientific institutions, fraternal or secret societies (if used for charitable purposes), churches, libraries, religious societies, cemeteries, state or county agricultural societies, certain corporations making payments to the State in lieu of taxes, nonprofit trusts (if used for hospital or public health purposes), boy or girl scout organizations (up to 160 acres), certain veterans’ homes and land dedicated to public use. See 6 Mich. Stat. Ann., 1950, § 7.7.
The Government points to the fact that Public Act 189 creates an exception to the tax on users where payments are made by the United States “in lieu of taxes in amounts equivalent to taxes which might otherwise be lawfully assessed” as manifesting a purpose to tax government property. But this exemption, which if anything operates in the Government’s favor, avoids the possibility of a double contribution to the revenues of the State where private parties use federal property for their own. commercial purposes. Moreover, it is not at all inconceivable that the Govérnment might, in one way or another, pass the economic burden of such in-lieu payments to the taxpayer using its property even though he was also compelled to pay the tax imposed by Public Act 189.
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 Stevens
delivered the opinion of the Court.
The question presented is whether defendants in an action brought under Rev. Stat. § 1979, 42 U. S. C. § 1983, in state court have a federal right to an interlocutory appeal from a denial of qualified immunity. We hold that they do not.
I
Petitioners are officials of the Idaho Liquor Dispensary. Respondent, a former liquor store clerk, brought this action for damages under §1983 in the District Court for the County of Bonner, Idaho. She alleged that petitioners deprived her of property without due process of law in violation of the Fourteenth Amendment to the Federal Constitution when they terminated her employment. Petitioners moved to dismiss the complaint on the ground that they were entitled to qualified immunity. They contended that, at the time of respondent’s dismissal, they reasonably believed that she was a probationary employee who had no property interest in her job. Accordingly, petitioners argued, her termination did not violate clearly established law. The trial court denied the motion, and petitioners filed a timely notice of appeal to the Supreme Court of the State of Idaho.
The State Supreme Court entered an order dismissing the appeal. The court explained that an order denying a motion for summary judgment is not appealable under Idaho Appellate Rule 11(a)(1) “for the reason it is not from a final order or Judgment.” App. 67. It also rejected petitioners’ arguments that the order was appealable under 42 U. S. C. § 1983 and Behrens v. Pelletier, 516 U. S. 299 (1996). Petitioners sought rehearing, again arguing that the order was final within the meaning of the Idaho Appellate Rule, and, in the alternative, that they had a right to appeal as a matter of federal law. The court denied rehearing and dismissed the appeal.
Petitioners then filed a petition in this Court seeking either a writ of certiorari or a writ of mandamus. They pointed out that some state courts, unlike the Idaho Supreme Court, allow interlocutory appeals of orders denying qualified immunity on the theory that such review is necessary to protect a substantial federal right, see McLin v. Trimble, 795 P. 2d 1035, 1037-1038 (Okla. 1990); Lakewood v. Brace, 919 P. 2d 231, 238-240 (Colo. 1996). We granted certiorari to resolve the conflict, 519 U. S. 947 (1996), and now affirm.
II
We have recognized a qualified immunity defense for both federal officials sued under the implied cause of action asserted in Bivens v. Six Unknown Fed. Narcotics Agents, 403 U. S. 388 (1971), and state officials sued under 42 U. S. C. § 1983. In both situations, “officials performing discretionary function[s] generally are shielded from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.” Harlow v. Fitzgerald, 457 U. S. 800, 818 (1982).
This “qualified immunity” defense is valuable to officials asserting it for two reasons. First, if it is found applicable at any stage of the proceedings, it determines the outcome of the litigation by shielding the official from damages liability. Second, when the complaint fails to allege a violation of clearly established law or when discovery fails to uncover evidence sufficient to create a genuine issue whether the defendant committed such a violation, it provides the defendant with an immunity from the burdens of trial as well as a defense to liability. Indeed, one reason for adopting the objective test announced in Harlow was to “permit the resolution of many insubstantial claims on summary judgment.” Ibid.
Consistent with that purpose, we held in Mitchell v. Forsyth, 472 U. S. 511, 524-530 (1985), that a Federal District Court order rejecting a qualified immunity defense on the ground that the defendant’s actions — if proved — would have violated clearly established law may be appealed immediately as a “final decision” within the meaning of the general federal appellate jurisdiction statute, 28 U. S. C. § 1291. If this action had been brought in a federal court, therefore, petitioners would have had a right to take an appeal from the trial court’s order denying their motion for summary judgment.
Relying on the facts (a) that respondent has asserted a federal claim under a federal statute, and (b) that they are asserting a defense provided by federal law, petitioners submit that the Idaho courts must protect their right to avoid the burdens of trial by allowing the same interlocutory appeal that would be available in a federal court. They support this submission with two different arguments: First, that when the Idaho courts construe their own rules allowing appeals from final judgments, they must accept the federal definition of finality in cases brought under §1983; and second, that if those rules do not authorize the appeal, they are pre-empted by federal law. We find neither argument persuasive.
III
We can easily dispense with petitioners’ first contention that Idaho must follow the federal construction of a “final decision.” Even if the Idaho and federal statutes contained identical language — and they do not — the interpretation of the Idaho statute by the Idaho Supreme Court would be binding on federal courts. Neither this Court nor any other federal tribunal has any authority to place a construction on a state statute different from the one rendered by the highest court of the State. See, e. g., New York v. Ferber, 458 U. S. 747, 767 (1982); Exxon Corp. v. Department of Revenue of Wis., 447 U. S. 207, 226, n. 9 (1980); Commissioner v. Estate of Bosch, 387 U. S. 456, 465 (1967). This proposition, fundamental to our system of federalism, is applicable to procedural as well as substantive rules. See Wardius v. Oregon, 412 U. S. 470, 477 (1973).
The definition of the term “final decision” that we adopted in Mitchell was an application of the “collateral order” doctrine first recognized in Cohen v. Beneficial Industrial Loan Corp., 337 U. S. 541 (1949). In that case, as in all of our cases following it, we were construing the federal statutory-language of 28 U. S. C. § 1291. While some States have adopted a similar “collateral order” exception when construing their jurisdictional statutes, we have never suggested that federal law compelled them to do so. Indeed, a number of States employ collateral order doctrines that reject the limitations this Court has placed on § 1291. Idaho could, of course, place the same construction on its Appellate Rule 11(a)(1) as we have placed on §1291. But that is clearly a choice for that court to make, not one that we have any authority to command.
IV
Petitioners also contend that, to the extent that Idaho Appellate Rule 11(a)(1) does not allow an interlocutory appeal, it is pre-empted by §1983. Relying heavily on Felder v. Casey, 487 U. S. 131 (1988), petitioners first assert that preemption is necessary to avoid “different outcomes in § 1983 litigation based solely on whether the claim is asserted in state or federal court,” id., at 138. Second, they argue that the state procedure “impermissibly burden[s]” the federal immunity from suit because it does not adequately protect their right to prevail on the immunity question in advance of trial.
For two reasons, petitioners have a heavy burden of persuasion in making this argument. First, our normal presumption against pre-emption' is buttressed by the fact that the Idaho Supreme Court’s dismissal of the appeal rested squarely on a neutral state Rule regarding the administration of the state courts. As we explained in Howlett v. Rose, 496 U. S. 356, 372 (1990):
“When a state court refuses jurisdiction because of a neutral state rule regarding the administration of the courts, we must act with utmost caution before deciding that it is obligated to entertain the claim. See Missouri ex rel. Southern R. Co. v. Mayfield, 340 U. S. 1 (1950); Georgia Rail Road & Banking Co. v. Musgrove, 335 U. S. 900 (1949) (per curiam); Herb v. Pitcairn, 324 U. S. 117 (1945); Douglas v. New York, N. H. & H. R. Co., 279 U. S. 377 (1929). The requirement that a state court of competent jurisdiction treat federal law as the law of the land does not necessarily include within it a requirement that the State create a court competent to hear the case in which the federal claim is presented. The general rule, 'bottomed deeply in belief in the importance of state control of state judicial procedure, is that federal law takes the state courts as it finds them.’ Hart, [The Relations Between State and Federal Law], 54 Colum. L. Rev. [489, 508 (1954)]; see also Southland Corp. v. Keating, 465 U. S. 1, 33 (1984) (O’Connor, J., dissenting); FERC v. Mississippi, 456 U. S. [742, 774 (1982)] (opinion of Powell, J.). The States thus have great latitude to establish the structure and jurisdiction of their own courts.”
A second barrier to petitioners’ argument arises from the nature of the interest protected by the defense of qualified immunity. Petitioners’ argument for pre-emption is bottomed on their claims that the Idaho rules are interfering with their federal rights. While it is true that the defense has its source in a federal statute (§ 1983), the ultimate purpose of qualified immunity is to protect the State and its officials from overenforcement of federal rights. The Idaho Supreme Court’s application of the State’s procedural rules in this context is thus less an interference with federal interests than a judgment about how best to balance the competing state interests of limiting interlocutory appeals and providing state officials with immediate review of the merits of their defense.
Petitioners’ arguments for pre-emption are not strong enough to overcome these considerable hurdles. Contrary to petitioners’ assertions, Idaho’s decision not to provide appellate review for the vast majority of interlocutory orders— including denials of qualified immunity in § 1983 cases — is not “outcome determinative” in the sense that we used that term when we held that Wisconsin’s notice-of-claim statute could not be applied to defeat a federal civil rights action brought in state courts under § 1983. Felder, 487 U. S., at 153. The failure to comply with the Wisconsin statute in Felder resulted in a judgment dismissing a complaint that would not have been dismissed — at least not without a judicial determination of the merits of the claim — if the case had been filed in a federal court. One of the primary grounds for our decision was that, because the notice-of-claim requirement would “frequently and predictably produce different outcomes” depending on whether § 1983 claims were brought in state or federal court, it was inconsistent with the federal interest in uniformity. Id., at 138.
Petitioners’ reliance on Felder is misplaced because “outcome,” as we used the term there, referred to the ultimate disposition of the case. If petitioners’ claim to qualified immunity is meritorious, there is no suggestion that the application of the Idaho rules of procedure will produce a final result different from what a federal ruling would produce. Petitioners were able to argue their immunity from suit claim to the trial court, just as they would to a federal court. And the claim will be reviewable by the Idaho Supreme Court after the trial court enters a final judgment, thus providing petitioners with a further chance to urge their immunity. Consequently, the postponement of the appeal until after final judgment will not affect the ultimate outcome of the case.
Petitioners’ second argument for pre-emption of the state procedural Rule is that the Rule does not adequately protect their right to prevail in advance of trial. In evaluating this contention, it is important to focus on the precise source and scope of the federal right at issue. The right to have the trial court rule on the merits of the qualified immunity defense presumably has its source in § 1983, but the right to immediate appellate review of that ruling in a federal case has its source in § 1291. The former right is fully protected by Idaho. The latter right, however, is a federal procedural right that simply does not apply in a nonfederal forum.
The locus of the right to interlocutory appeal in §1291, rather than in § 1983 itself, is demonstrated by our holding in Johnson v. Jones, 515 U. S. 304 (1995). In that case, government officials asserting qualified immunity claimed entitlement to an interlocutory appeal of a District Court order denying their motion for summary judgment on the ground that the record showed a genuine issue of material fact whether the officials actually engaged in the conduct that constituted a clear violation of constitutional law. Id., at 307-308. We concluded that this circumstance was different from that presented in Mitchell, 472 U. S., at 528, in which the subject of the interlocutory appeal was whether a given set of facts showed a violation of clearly established law, and held that although § 1291 did allow an interlocutory appeal in the latter circumstance, such an appeal was not allowed in the former.
In so holding, we acknowledged that “whether a district court’s denial of summary judgment amounts to (a) a determination about pre-existing ‘clearly established’ law, or (b) a determination about ‘genuine’ issues of fact for trial, it still forces public officials to trial.” 515 U. S., at 317. But we concluded that the strong “countervailing considerations” surrounding appropriate interpretation of § 1291 were of sufficient importance to outweigh the officials’ interest in avoiding the burdens of litigation.
The “countervailing considerations” at issue here are even stronger than those presented in Johnson. When preemption of state law is at issue, we must respect the “principles [that] are fundamental to a system of federalism in which the state courts share responsibility for the application and enforcement of federal law.” Howlett, 496 U. S., at 372-373. This respect is at its apex when we confront a claim that federal law requires a State to undertake something as fundamental as restructuring the operation of its courts. We therefore cannot agree with petitioners that § 1983’s recognition of the defense of qualified immunity preempts a State’s consistent application of its neutral procedural rules, even when those rules deny an interlocutory appeal in this context.
The judgment of the Supreme Court of the State of Idaho dismissing petitioners’ appeal is therefore affirmed.
It is so ordered.
Because affidavits had been filed in support of the motion, the court treated it as a motion for summary judgment.
Of course, when a ease can be dismissed on the pleadings or in an early pretrial stage, qualified immunity also provides officials with the valuable protection from “the burdens of broad-reaching discovery,” Harlow v. Fitzgerald, 457 U. S. 800, 818 (1982).
While Mitchell v. Forsyth, 472 U. S. 511 (1985), involved a Bivens v. Six Unknown Fed. Narcotics Agents, 403 U. S. 388 (1971), action against a federal official, we have also construed § 1291 to authorize similar appeals in actions brought against state officials under § 1983. See, e. g., Johnson v. Jones, 515 U. S. 304 (1995).
“Final decision” is the operative term of § 1291, whereas “[j]udgments, orders and decrees which are final” is the language of Idaho Appellate Rule 11(a)(1).
Thus, in Mitchell we explained: “In holding these and Similar issues of absolute immunity to be appealable under the collateral order doctrine, see Abney v. United States, [431 U. S. 651 (1977)]; Helstoski v. Meanor, 442 U. S. 500 (1979); Nixon v. Fitzgerald, 457 U. S. 731 (1982), the Court has recognized that a question of immunity is separate from the merits of the underlying action for purposes of the Cohen test even though a reviewing court must consider the plaintiff’s factual allegations in resolving the immunity issue. Accordingly, we hold that a district court’s denial of a claim of qualified immunity, to the extent that it turns on an issue of law, is an appealable ‘final decision’ within the meaning of 28 U. S. C. § 1291 notwithstanding the absence of a final judgment.” 472 U. S., at 528-530 (footnote omitted).
See, e. g., Richardson v. Chevrefils, 131 N. H. 227, 231, 552 A. 2d 89, 92 (1988) (“Although all of the court’s rulings . .. would normally be treated as interlocutory, . . . [w]e have followed Mitchell in accepting the State defendants’ appeal from the order denying their motion for summary judgment”); Murray v. White, 155 Vt. 621, 626, 587 A. 2d 975, 977-978 (1991) (“In [Mitchell], the Supreme Court held that a trial court’s denial of a claim of qualified immunity met these [collateral order] requirements, and we agree with this determination”); Park County v. Cooney, 845 P. 2d 346, 349 (Wyo. 1992) (“We believe the state decisions which allow appeal, for the reasons detailed in Mitchell..., are better reasoned; and -we therefore hold that an order denying dismissal of a claim based on qualified immunity is an order appealable to this court”).
See, e. g., Goldston v. American Motors Corp., 326 N. C. 723, 727, 392 S. E. 2d 735, 737 (1990) (disqualification of counsel is appealable under state collateral order doctrine notwithstanding Richardson-Merrell Inc. v. Koller, 472 U. S. 424 (1985)); Hanson v. Federal Signal Corp., 451 Pa. Super. 260, 264-265, 679 A. 2d 785, 787-788 (1996) (same for class certification denial notwithstanding Coopers & Lybrand v. Livesay, 437 U. S. 463 (1978)).
See Brief for Petitioners 22.
Unlike the notiee-of-elaim rule at issue in Felder v. Casey, 487 U. S., at 140-145, Idaho Appellate Rule 11(a)(1) does not target civil rights claims against the State. See also Howlett v. Rose, 496 U. S. 356, 380-381 (1990). Instead, it generally permits appeals only of “[jludgments, orders and decrees which are final,” without regard to the identity of the party seeking the appeal or the subject matter of the suit. Petitioners claim that the rule is not neutral because it permits interlocutory appeals in certain limited circumstances but denies an appeal here. But we have never held that a rule must be monolithic to be neutral. Absent evidence that Appellate Rule 11(a)(1) discriminates against interlocutory appeals of §1983 qualified immunity determinations by defendants — as compared with other types of appeals — we must deem the state procedure neutral.
It does warrant observation that Rule 12(a) of the Idaho Appellate Rules provides that the State Supreme Court may grant permission “to appeal from an interlocutory order or decree . . . which is not otherwise appealable under these rules, but which involves a controlling question of law as to which there is substantial grounds for difference of opinion and in which an immediate appeal . . . may materially advance the orderly resolution of the litigation.” Presumably, petitioners could have sought review under this permissive provision, and the Idaho Supreme Court might have granted review if, in the view of that court, the officials’ claim to immunity was so substantial that the suit should not proceed.
See also Brown v. Western R. Co. of Ala., 338 U. S. 294, 296-299 (1949) (Federal Employers’ Liability Act (FELA) pre-empted different state pleading requirements when effect was to defeat plaintiff’s cause of action); Garrett v. Moore-McCormack Co., 317 U. S. 239, 243-244 (1942) (federal Jones Act pre-empted different state burden of proof regarding releases when effect was to defeat plaintiff’s cause of action).
Petitioners’ reliance on Dice v. Akron, C. & Y. R. Co., 342 U. S. 359 (1952), is therefore misplaced. In Dice we held that the FELA preempted a state rule denying a right to a jury trial. In that case, however, we made clear that Congress had provided in FELA that the jury trial procedure was to be part of claims brought under the Act. Id,., at 363 (citing Bailey v. Central Vermont R. Co., 319 U. S. 350, 354 (1943)). In this case, by contrast, Congress has mentioned nothing about interlocutory appeals in § 1983; rather, the right to an immediate appeal in the federal court system is found in §1291, which obviously has no application to state courts.
We have made it quite clear that it is a matter for each State to decide how to structure its judicial system. See, e. g., M. L. B. v. S. L. J., 519 U. S. 102, 111 (1996) (States under no obligation to provide appellate review) (citing eases); Kohl v. Lehlback, 160 U. S. 293, 299 (1895) (“[T]he right of review in an appellate court is purely a matter of state concern”); McKane v. Durston, 153 U. S. 684, 688 (1894) (“[W]hether an appeal should be allowed, and if so, under what circumstances or on what conditions, are matters for each State to determine for itself”).
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:
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J
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sc_issuearea
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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.
Mr. Justice White
announced the judgment of the Court and filed an opinion in which Mr. Justice Stevens joined; Parts I, II, and III of which are joined by Mr. Justice Brennan and Mr. Justice Blackmun; and Parts I and IV of which joined by Mr. Justice Rehnquist.
Section 5 of the Voting Rights Act of 1965 prohibits a State or political subdivision subject to § 4 of the Act from implementing a legislative reapportionment unless it has obtained a declaratory judgment from the District Court for the District of Columbia, or a ruling from the Attorney General of the United States, that the reapportionment “does not have the purpose and will not have the effect of denying or abridging the right to vote on account of race or color....” The question presented is whether, in the circumstances of this case, the use of racial criteria by the State of New York in its attempt to comply with § 5 of the Voting Rights Act and to secure the approval of the Attorney General violated the Fourteenth or Fifteenth Amendment.
I
Kings County, N. Y., together with New York (Manhattan) and Bronx Counties, became subject to §§ 4 and 5 of the Act, by virtue of a determination by the Attorney General that a literacy test was used in these three counties as of November 1, 1968, and a determination by the Director of the Census that fewer than 50% of the voting-age residents of these three counties voted in the Presidential election of 1968. Litigation to secure exemption from the Act was unsuccessful, and it became necessary for New York to secure the approval of the Attorney General or of the United States District Court for the District of Columbia for its 1972 reapportionment statute insofar as that statute concerned Kings, New York, and Bronx Counties. On January 31, 1974, the provisions of the statute districting these counties for congressional, state senate, and state assembly seats were submitted to the Attorney General. In accordance with the regulations governing his § 5 review, the Attorney General considered submissions from interested parties criticizing and defending the plan. Those submissions included assertions that voting in these counties was racially polarized and that the district lines had been created with the purpose or effect of diluting the voting strength of nonwhites (blacks and Puerto Ricans). On April 1, 1974, the Attorney General concluded that, as to certain districts in Kings County covering the Bedford-Stuyvesant area of Brooklyn, the State had not met the burden placed on it by § 5 and the regulations thereunder to demonstrate that the redistricting had neither the purpose nor the effect of abridging the right to vote by reason of race on color.
Under § 5, the State could have challenged the Attorney General’s objections to the redistricting plan by filing a declaratory judgment action in a three-judge court in the District of Columbia. Instead, the State sought to meet what it understood to be the Attorney General’s objections and to secure his approval in order that the 1974 primary and general elections could go forward under the 1972 statute. A revised plan, submitted to the Attorney General on May 31, 1974, in its essentials did not change the number of districts with nonwhite majorities, but did change the size of the non white majorities in most of those districts. Under the 1972 plan, Kings County had three state senate districts with nonwhite majorities of approximately 91%, 61%, and 53%; under the revised 1974 plan, there were again three districts with nonwhite majorities, but now all three were between 70% and 75% nonwhite. As for state assembly districts, both the 1972 and the 1974 plans provided for seven districts with nonwhite majorities. However, under the 1972 plan, there were four between 85% and 95% nonwhite, and three were approximately 76%, 61%, and 52%, respectively; under the 1974 plan, the two smallest nonwhite majorities were increased to 65% and 67.5%, and the two largest non white majorities were decreased from greater than 90% to between 80% and 90%. The report of the legislative committee on reapportionment stated that these changes were made “to overcome Justice Department objections” by creating more “substantial nonwhite majorities” in two assembly districts and two senate districts.
One of the communities affected by these revisions in the Kings County reapportionment plan was the Williamsburgh area, where about 30,000 Hasidic Jews live. Under the 1972 plan, the Hasidic community was located entirely in one assembly district (61% nonwhite) and one senate district (37% nonwhite); in order to create substantial nonwhite majorities in these districts, the 1974 revisions split the Hasidic community between two senate and two assembly districts. A staff member of the legislative reapportionment committee testified that in the course of meetings and telephone conversations with Justice Department officials, he “got the feeling... that 65 percent would be probably an approved figure” for the nonwhite population in the assembly district in which the Hasidic community was located, a district approximately 61% nonwhite under the 1972 plan. To attain the 65% figure, a portion of the white population, including part of the Hasidic community, was reassigned to an adjoining district.
Shortly after the State submitted this revised redistricting plan for Kings County to the Attorney General, petitioners sued on behalf of the Hasidic Jewish community of Williamsburgh, alleging that the 1974 plan “would dilute the value of each plaintiff’s franchise by halving its effectiveness,” solely for the purpose of achieving a racial quota and therefore in violation of the Fourteenth Amendment. Petitioners also alleged that they were assigned to electoral districts solely on the basis of race, and that this racial assignment diluted their voting power in violation of the Fifteenth Amendment. Petitioners sought an injunction restraining New York officials from enforcing the new redistricting plan and a declaratory judgment that the Attorney General of the United States had used unconstitutional and improper standards in objecting to the 1972 plan.
On June 20, 1974, the District Court held a hearing on petitioners’ motion for a preliminary injunction. On July 1, 1974, the Attorney General informed the State of New York that he did not object to the implementation of the revised plan. The Attorney General moved to be dismissed as a party on the ground that the relief sought against him could be obtained only in the District Court for the District of Columbia and only by a State or political subdivision subject to the Voting Rights Act; the State and the intervenor NAACP moved to dismiss the complaint on the ground that it failed to state a claim upon which relief could be granted. The District Court granted the motions to dismiss the complaint, reasoning that petitioners enjoyed no constitutional right in reapportionment to separate community recognition as Hasidic Jews, that the redistricting did not disenfranchise petitioners, and that racial considerations were permissible to correct past discrimination. United Jewish Organizations v. Wilson, 377 F. Supp. 1164, 1165-1166 (EDNY 1974).
A divided Court of Appeals affirmed. 510 F. 2d 512 (CA2 1975). The majority first held that the Attorney General had to be dismissed as a party because the court had no jurisdiction to review his objection to the 1972 plan. After agreeing with the District Court that petitioners had no constitutional right to separate community recognition in reapportionment—a holding not challenged by petitioners here—the Court of Appeals went on to address petitioners’ claims as white voters that the 1974 plan denied them equal protection of the laws and abridged their right to vote on the basis of race. The court noted that the 1974 plan left approximately 70% of the senate and assembly districts in Kings County with white majorities; given that only 65% of the population of the county was white, the 1974 plan would not underrepresent the white population, assuming that voting followed racial lines. Id., at 523, and n. 21. Petitioners thus could not claim that the plan canceled out the voting strength of whites as a racial group, under this Court’s decisions in White v. Regester, 412 U. S. 755 (1973), and Whitcomb v. Chavis, 403 U. S. 124 (1971). The court then observed that the case did not present the question whether a legislature, “starting afresh,” could draw lines on a racial basis so as to bolster nonwhite voting strength, but rather the “narrower” question whether a State could use racial considerations in drawing lines in an effort to secure the Attorney General’s approval under the Voting Rights Act. 510 F. 2d, at 524. The court thought this question answered by this Court’s decision in Allen v. State Board of Elections, 393 U. S. 544, 569 (1969), where a change from district to at-large voting for county supervisors was held to be covered by § 5 of the Act. The court below reasoned that the Act contemplated that the Attorney General and the state legislature would have “to think in racial terms”; because the Act “necessarily deals with race or color, corrective action under it must do the same.” 510 F. 2d, at 525. (Emphasis in original; footnote omitted.) The court held that
“so long as a districting, even though based on racial considerations, is in conformity with the unchallenged directive of and has the approval of the Attorney General of the United States under the Act, at least absent a clear showing that the resultant legislative reapportionment is unfairly prejudicial to white or nonwhite, that districting is not subject to challenge.” Ibid.
We granted certiorari, 423 U. S. 945 (1975). We affirm.
II
Petitioners argue that the New York Legislature, although seeking to comply with the Voting Rights Act as construed by the Attorney General, has violated the Fourteenth and Fifteenth Amendments by deliberately revising its reapportionment plan along racial lines. In rejecting petitioners’ claims, we address four propositions: First, that whatever might be true in other contexts, the use of racial criteria in districting and apportionment is never permissible; second, that even if racial considerations may be used to redraw district lines in order to remedy the residual effects of past unconstitutional reapportionments, there are no findings here of prior discriminations that would require or justify as a remedy that white voters be reassigned in order to increase the size of black majorities in certain districts; third, that the use of a “racial quota” in redistricting is never acceptable; and fourth, that even if the foregoing general propositions are infirm, what New York actually did in this case was unconstitutional, particularly its use of a 65% nonwhite racial quota for certain districts. The first three arguments, as we now explain, are foreclosed by our cases construing and sustaining the constitutionality of the Voting Rights Act; the fourth we address in Parts III and IV.
It is apparent from the face of the Act, from its legislative history, and from our cases that the Act itself was broadly remedial in the sense that it was “designed by Congress to banish the blight of racial discrimination in voting....” South Carolina v. Katzenbach, 383 U. S. 301, 308 (1966). It is also plain, however, that after “repeatedly try[ing] to cope with the problem by facilitating case-by-case litigation against voting discrimination,” id., at 313, Congress became dissatisfied with this approach, which required judicial findings of unconstitutional discrimination in specific situations and judicially approved remedies to cure that discrimination. Instead, Congress devised more stringent measures, one of which, § 5, required the covered States to seek the approval of either the Attorney General or of a three-judge court in the District of Columbia whenever they sought to implement new voting procedures. Under § 4, a State became subject to § 5 whenever it was administratively determined that certain conditions which experience had proved were indicative of racial discrimination in voting had existed in the area—in the case of New York, as already indicated, supra, at 148, that a literacy test was in use in certain counties in 1968 and that fewer than 50% of the voting-age residents in these counties voted in the Presidential election that year. At that point, New York could have escaped coverage by demonstrating to the appropriate court that the test had not been used to discriminate within the past 10 years, which New York was unable to do. See n. 3, supra.
Given this coverage of the counties involved, it is evident that the Act’s prohibition against instituting new voting procedures without the approval of the Attorney General or the three-judge District Court is not dependent upon proving past unconstitutional apportionments and that in operation the Act is aimed at preventing the use of new procedures until their capacity for discrimination has been examined by the Attorney General or by a court. Although recognizing that the “stringent new remedies,” including § 5, were “an uncommon exercise of congressional power,” we nevertheless sustained the Act as a “permissibly decisive” response to “the extraordinary stratagem of contriving new rules of various kinds for the sole purpose of perpetrating voting discrimination in the face of adverse federal court decrees.” South Carolina v. Katzenbach, supra, at 334-335 (footnote omitted).
It is also clear that under § 5, new or revised reapportionment plans are among those voting procedures, standards, or practices that may not be adopted by a covered State without the Attorney General’s or a three-judge court’s ruling that the plan “does not have the purpose and will not have the effect of denying or abridging the right to vote on account of race or color.” In Allen v. State Board of Elections, on which the Court of Appeals relied below, we held that a change from district to at-large voting for county supervisors had to be submitted for federal approval under § 5, because of the potential for a “dilution” of minority voting power which could “nullify [its] ability to elect the candidate of [its] choice....” 393 U. S., at 569. When it renewed the Voting Rights Act in 1970 and again in 1975, Congress was well aware of the application of § 5 to redistricting. In its 1970 extension, Congress relied on findings by the United States Commission on Civil Rights that the newly gained voting strength of minorities was in danger of being diluted by redistricting plans that divided minority communities among predominantly white districts. In 1975, Congress was unmistakably cognizant of this new phase in the effort to eliminate voting discrimination. Former Attorney General Katzenbach testified that § 5 “has had its broadest impact... in the areas of redistricting and reapportionment,” and the Senate and House reports recommending the extension of the Act referred specifically to the Attorney General’s role in screening redistricting plans to protect the opportunities for nonwhites to be elected to public office.
As the Court of Appeals understood the Act and our decision in Allen, compliance with the Act in reapportionment cases would often necessitate the use of racial considerations in drawing district lines. That the Court of Appeals correctly read the Act has become clearer from later cases.
In Beer v. United States, 425 U. S. 130 (1976), the Court considered the question of what criteria a legislative reapportionment must satisfy under § 5 of the Voting Rights Act to demonstrate that it does not have the “effect” of denying or abridging the right to vote on account of race. Beer established that the Voting Rights Act does not permit the implementation of a reapportionment that “would lead to a retrogression in the position of racial minorities with respect to their effective exercise of the electoral franchise.” 425 U. S., at 141. This test was satisfied where the reapportionment increased the percentage of districts where members of racial minorities protected by the Act were in the majority. See ibid. But if this test were not met, clearance by the Attorney General or the District Court for the District of Columbia could not be given, and the reapportionment could not be implemented.
The reapportionment at issue in Beer was approved by this Court, because New Orleans had created one councilmanic district with a majority of black voters where none existed before. But had there been districts with black majorities under the previous law and had New Orleans in fact decreased the number of majority black districts, it would have had to modify its plan in order to implement its reapportionment by carving out a large enough black majority in however many additional districts would be necessary to satisfy the Beer test. There was division on the Court as to what a State must show to satisfy §5; but all eight Justices who participated in the decision implicitly accepted the proposition that a State may revise its reapportionment plan to comply with § 5 by increasing the percentage of black voters in a particular district until it has produced a clear majority. See 425 U. S., at 141-142; id., at 144 (White, J., dissenting) ; id., at 158-161 (Marshall, J., dissenting). Indeed, the plan eventually approved by this Court in Beer was drawn with the purpose of avoiding dilution of the black vote by attaining at least a 54% majority of black voters in one district while preventing a 90% concentration. See App. in Beer v. United States, O. T. 1975, No. 73-1869, pp. 341-342.
The Court has taken a similar approach in applying § 5 to the extension of city boundaries through annexation. Where the annexation has the effect of reducing the percentage of blacks in the city, the proscribed “effect” on voting rights can be avoided by a post-annexation districting plan which “fairly reflects the strength of the Negro community as it exists after the annexation” and which “would afford [it] representation reasonably equivalent to [its] political strength in the enlarged community.” City of Richmond v. United States, 422 U. S. 358, 370-371 (1975). Accord, City of Petersburg v. United States, 354 F. Supp. 1021 (DC 1972), summarily aff’d, 410 U. S. 962 (1973). In City of Richmond, the Court approved an annexation which reduced the proportion of blacks in the city from 52% to 42%, because the post-annexation ward system created four out of nine wards with substantial black majorities of 64%. Had the redistricting failed to “fairly [reflect] the strength of the Negro community,” however, it would follow from the Court’s decision that the Constitution would permit the city to modify its plan by deliberately creating black majorities in a sufficient number of wards to satisfy statutory requirements.
Implicit in Beer and City of Richmond, then, is the proposition that the Constitution does not prevent a State subject to the Voting Rights Act from deliberately creating or preserving black majorities in particular districts in order to ensure that its reapportionment plan complies with § 5. That proposition must be rejected and § 5 held unconstitutional to that extent if we are to accept petitioners’ view that racial criteria may never be used in redistricting or that they may be used, if at all, only as a specific remedy for past unconstitutional apportionments. We are unwilling to overturn our prior cases, however. Section 5 and its authorization for racial redistricting where appropriate to avoid abridging the right to vote on account of race or color are constitutional. Contrary to petitioners’ first argument, neither the Fourteenth nor the Fifteenth Amendment mandates any per se rule against using racial factors in districting and apportionment. Nor is petitioners’ second argument valid. The permissible use of racial criteria is not confined to eliminating the effects of past discriminatory districting or apportionment.
Moreover, in the process of drawing black majority districts in order to comply with § 5, the State must decide how substantial those majorities must be in order to satisfy the Voting Rights Act. The figure used in drawing the Beer plan, for example, was 54% of registered voters. At a minimum and by definition, a “black majority district” must be more than 50% black. But whatever the specific percentage, the State will inevitably arrive at it as a necessary means to ensure the opportunity for the election of a black representative and to obtain approval of its reapportionment plan. Unless we adopted an unconstitutional construction of § 5 in Beer and City of Richmond, a reapportionment cannot violate the Fourteenth or Fifteenth Amendment merely because a State uses specific numerical quotas in establishing a certain number of black majority districts. Our cases under § 5 stand for at least this much.
III
Having rejected these three broad objections to the use of racial criteria in redistricting under the Voting Rights Act, we turn to the fourth question, which is whether the racial criteria New York used in this case—the revision of the 1972 plan to create 65% nonwhite majorities in two additional senate and two additional assembly districts—were constitutionally infirm. We hold they are not, on two separate grounds. The first is addressed in this Part III, the second in Part IV.
The first ground is that petitioners have not shown, or offered to prove, that New York did more than the Attorney General was authorized to require it to do under the non-retrogression principle of Beer, a principle that, as we have already indicated, this Court has accepted as constitutionally valid. Under Beer, the acceptability of New York’s 1972 reapportionment for purposes of § 5 depends on the change in nonwhite voting strength in comparison with the previous apportionment, which occurred in 1966. Yet there is no evidence in the record to show whether the 1972 plan increased, or decreased the number of senate or assembly districts with substantial non white majorities of 65%. For all that petitioners have alleged or proved, the 1974 revisions may have accomplished nothing more than the restoration of nonwhite voting strength to 1966 levels. To be successful in their constitutional challenge to the racial criteria used in New York’s revised plan, petitioners must show at a minimum that minority voting strength was increased under the 1974 plan in comparison with the 1966 apportionment; otherwise the challenge amounts to a constitutional attack on compliance with the statutory rule of nonretrogression.
In the absence of any evidence regarding nonwhite voting strength under the 1966 apportionment, the creation of substantial nonwhite majorities in approximately 30% of the senate and assembly districts in Kings County was reasonably related to the constitutionally valid statutory mandate of maintaining nonwhite voting strength. The percentage of districts with nonwhite majorities was less than the percentage of nonwhites in the county as a whole (35%). The size of the nonwhite majorities in those districts reflected the need to take account of the substantial difference between the nonwhite percentage of the total population in a district and the nonwhite percentage of the voting-age population. Because, as the Court said in Beer, the inquiry under § 5 focuses ultimately on “the position of racial minorities with respect to their effective exercise of the electoral franchise,” 425 U. S., at 141, the percentage of eligible voters by district is of great importance to that inquiry. In the redistricting plan approved in Beer, for example, only one of the two districts with a black population majority also had a black majority of registered voters. Id., at 142. We think it was reasonable for the Attorney General to conclude in this case that a substantial nonwhite population majority—in the vicinity of 65%— would be required to achieve a non white majority of eligible voters.
Petitioners have not shown that New York did more than accede to a position taken by the Attorney General that was authorized by our constitutionally permissible construction of § 5. New York adopted the 1974 plan because it sought to comply with the Voting Rights Act. This has been its primary defense of the plan, which was sustained on that basis by the Court of Appeals. Because the Court of Appeals was essentially correct, its judgment may be affirmed without addressing the additional argument by New York and by the United States that, wholly aside from New York's obligation under the Voting Rights Act to preserve minority voting strength in Kings County, the Constitution permits it to draw district lines deliberately in such a way that the percentage of districts with a non white majority roughly approximates the percentage of nonwhites in the county.
IV
This additional argument, however, affords a second, and independent, ground for sustaining the particulars of the 1974 plan for Kings County. Whether or not the plan was authorized by or was in compliance with § 5 of the Voting Rights Act, New York was free to do what it did as long as it did not violate the Constitution, particularly the Fourteenth and Fifteenth Amendments; and we are convinced that neither Amendment was infringed.
There is no doubt that in preparing the 1974 legislation, the State deliberately used race in a purposeful manner. But its plan represented no racial slur or stigma with respect to whites or any other race, and we discern no discrimination violative of the Fourteenth Amendment nor any abridgment of the right to vote on account of race within the meaning of the Fifteenth Amendment.
It is true that New York deliberately increased the nonwhite majorities in certain districts in order to enhance the opportunity for election of nonwhite representatives from those districts. Nevertheless, there was no fencing out of the white population from participation in the political processes of the county, and the plan did not minimize or unfairly cancel out white voting strength. Compare White v. Regester, 412 U. S., at 765-767, and Gomillion v. Lightfoot, 364 U. S. 339 (1960), with Gaffney v. Cummings, 412 U. S. 735, 751-754 (1973). Petitioners have not objected to the impact of the 1974 plan on the representation of white voters in the county or in the State as a whole. As the Court of Appeals observed, the plan left white majorities in approximately 70% of the assembly and senate districts in Kings County, which had a countywide population that was 65% white. Thus, even if voting in the county occurred strictly according to race, whites would not be underrepresented relative to their share of the population.
In individual districts where nonwhite majorities were increased to approximately 65%, it became more likely, given racial bloc voting, that black candidates would be elected instead of their white opponents, and it became less likely that white voters would be represented by a member of their own race; but as long as whites in Kings County, as a group, were provided with fair representation, we cannot conclude that there was a cognizable discrimination against whites or an abridgment of their right to vote on the grounds of race. Furthermore, the individual voter in the district with a non white majority has no constitutional complaint merely because his candidate has lost out at the polls and his district is represented by a person for whom he did not vote. Some candidate, along with his supporters, always loses. See Whitcomb v. Chavis, 403 U. S., at 153-160.
Where it occurs, voting for or against a candidate because of his race is an unfortunate practice. But it is not rare; and in any district where it regularly happens, it is unlikely that any candidate will be elected who is a member of the race that is in the minority in that district. However disagreeable this result may be, there is no authority for the proposition that the candidates who are found racially unacceptable by the majority, and the minority voters supporting those candidates, have had their Fourteenth or Fifteenth Amendment rights infringed by this process. Their position is similar to that of the Democratic or Republican minority that is submerged year after year by the adherents to the majority party who tend to vote a straight party line.
It does not follow, however, that the State is powerless to minimize the consequences of racial discrimination by voters when it is regularly practiced at the polls. In Gaffney v. Cummings, the Court upheld a districting plan “drawn with the conscious intent to... achieve a rough approximation of the statewide political strengths of the Democratic and Republican Parties.” 412 U. S., at 752. We there recognized that districting plans would be vulnerable under our cases if “racial or political groups have been fenced out of the political process and their voting strength invidiously minimized,” id., at 754 (emphasis added); but that was not the case there, and no such purpose or effect may be ascribed to New York’s 1974 plan. Rather, that plan can be viewed as seeking to alleviate the consequences of racial voting at the polls and to achieve a fair allocation of political power between white and nonwhite voters in Kings County.
In this respect New York’s revision of certain district lines is little different in kind from the decision by a State in which a racial minority is unable to elect representatives from multimember districts to change to single-member districting for the purpose of increasing minority representation. This change might substantially increase minority representation at the expense of white voters, who previously elected all of the legislators but who with single-member districts could elect no more than their proportional share. If this intentional reduction of white voting power would be constitutionally permissible, as we think it would be, we think it also permissible for a State, employing sound districting principles such as compactness and population equality, to attempt to prevent racial minorities from being repeatedly outvoted by creating districts that will afford fair representation to the members of those racial groups who are sufficiently numerous and whose residential patterns afford the opportunity of creating districts in which they will be in the majority.
As the Court said in Gaffney:
“[C]ourts have [no] constitutional warrant to invalidate a state plan, otherwise within tolerable population limits, because it undertakes, not to minimize or eliminate the political strength of any group or party, but to recognize it and, through districting, provide a rough sort of proportional representation in the legislative halls of the State.” Ibid.
New York was well within this rule when, under the circumstances present in Kings County, it amended its 1972 plan.
The judgment is
Affirmed.
Mr. Justice Marshall took no part in the consideration or decision of this case.
Section 5 of the Voting Rights Act of 1965, 79 Stat. 439, as amended, 42 U. S. C. § 1973c, at the time in question here, provided in pertinent part:
“[W]henever a State or political subdivision with respect to which the prohibitions set forth in section 1973b (a) of this title based upon determinations made under the second sentence of section 1973b (b) of this title are in effect shall enact or seek to administer any voting qualification or prerequisite to voting, or standard, practice, or procedure with respect to voting different from that in force or effect on November 1, 1968, such State or subdivision may institute an action in the United States District Court for the District of Columbia for a declaratory judgment that such qualification, prerequisite, standard, practice, or procedure does not have the purpose and will not have the effect of denying or abridging the right to vote on account of race or color, and unless and until the court enters such judgment no person shall be denied the right to vote for failure to comply with such qualification, prerequisite, standard, practice, or procedure: Provided, That such qualification, prerequisite, standard, practice, or procedure may be enforced without such proceeding if the qualification, prerequisite, standard, practice, or procedure has been submitted by the chief legal officer or other appropriate official of such State or subdivision to the Attorney General and the Attorney General has not interposed an objection within sixty days after such submission, except that neither the Attorney General’s failure to object nor a declaratory judgment entered under this section shall bar a subsequent action to enjoin enforcement of such qualification, prerequisite, standard, practice, or procedure. Any action under this section shall be heard and determined by a court of three judges in accordance with the provisions of section 2284 of Title 28 and any appeal shall lie to the Supreme Court.”
A legislative reapportionment is a “standard, practice, or procedure with respect to voting different from that in force or effect on November 1, 1968,” within the meaning of § 5. See infra, at 157-159.
See 42 U. S. C. § 1973b (b).
The State of New York brought an action to obtain a statutory exemption for the three counties under § 4 (a) of the Act, seeking a declaratory judgment that its literacy test had not been used within the 10 years preceding the filing of the suit “for the purpose or with the effect of denying or abridging the right to vote on account of race or color.” 42 U. S. C. § 1973b (a). After several years of litigation, the District Court for the District of Columbia denied the exemption and ordered the State to comply with the filing requirements of § 5. This Court summarily affirmed. New York ex rel. New York County v. United States, 419 U. S. 888 (1974). See 510 F. 2d 512, 516 (CA2 1975).
Title 28 CFR § 51.19 (1976) provides:
“Section 5, in providing for submission to the Attorney General as an alternative to seeking a declaratory judgment from the U. S. District Court for the District of Columbia, imposes on the Attorney General what is essentially a judicial function. Therefore, the burden of proof on the submitting authority is the same in submitting changes to the Attorney General as it would be in submitting changes to the District Court for the District of Columbia. The Attorney General shall base his decision on a review of material presented by the submitting authority, relevant information provided by individuals or groups, and the results of any investigation conducted by the Department of Justice. If the Attorney General is satisfied that the submitted change does not have a racially discriminatory purpose or effect, he will not object to the change and will so notify the submitting authority. If the Attorney General determines that the submitted change has a racially discriminatory purpose or effect, he will enter an objection and will so notify the submitting authority. If the evidence as to the purpose or effect of the change is conflicting, and the Attorney General is unable to resolve the conflict within the 60-day period, he shall, consistent with the above-described burden of proof applicable in the District Court, enter an objection and so notify the submitting authority.”
The record, in this Court contains only part of the materials submitted to and considered by the Attorney General in his review of the 1972 plan. Included in the present record, are a memorandum submitted on behalf of the National Association for the Advancement of Colored People and letters from several prominent black and Puerto Rican elected officials, all opposing the plan. Not included in the record are materials defending the plan submitted by the reapportionment committee of the New York Legislature, the State Attorney General, and several state legislators. Brief for United States 8, and n. 9.
The NAACP, the Attorney General, and the court below classified Puerto Ricans in New York together with blacks as a minority group entitled to the protections of the Voting Rights Act. Hereinafter we use the term “nonwhite” to refer to blacks and Puerto Ricans, although small numbers of other nonwhite groups (such as Orientals) are also included in the nonwhite population statistics.
The basis for the Attorney General’s conclusion that “the proscribed effect may exist” as to certain state assembly and senate districts in Kings County was explained in a letter to the New York State authorities as follows:
“Senate district 18 appears to have an abnormally high minority concentration while adjoining minority neighborhoods are significantly diffused into surrounding districts. In the less populous proposed assembly districts, the minority population appears to be concentrated into districts 53, 54, 55 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:
|
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 Brennan
delivered the opinion of the Court.
This is another appeal claiming that the application of a state taxing scheme violates the Due Process and Commerce Clauses of the Federal Constitution. California imposes a corporate franchise tax geared to income. In common with a large number of other States, it employs the “unitary business” principle and formula apportionment in applying that tax to corporations doing business both inside and outside the State. Appellant is a Delaware corporation headquartered in Illinois and doing business in California and elsewhere. It also has a number of overseas subsidiaries incorporated in the countries in which they operate. Appellee is the California authority charged with administering the State’s franchise tax. This appeal presents three questions for review: (1) Was it improper for appellee and the state courts to find that appellant and its overseas subsidiaries constituted a “unitary business” for purposes of the state tax? (2) Even if the unitary business finding was proper, do certain salient differences among national economies render the standard three-factor apportionment formula used by California so inaccurate as applied to the multinational enterprise consisting of appellant and its subsidiaries as to violate the constitutional requirement of “fair apportionment”? (3) In any event, did California have an obligation under the Foreign Commerce Clause, U. S. Const., Art. I, §8, cl. 3, to employ the “arm’s-length” analysis used by the Federal Government and most foreign nations in evaluating the tax consequences of intercorporate relationships?
i — i
A
Various aspects of state tax systems based on the “unitary business” principle and formula apportionment have provoked repeated constitutional litigation in this Court. See, e. g., ASARCO Inc. v. Idaho State Tax Comm’n, 458 U. S. 307 (1982); F. W. Woolworth Co. v. Taxation & Revenue Dept., 458 U. S. 354 (1982); Exxon Corp. v. Wisconsin Dept. of Revenue, 447 U. S. 207 (1980); Mobil Oil Corp. v. Commissioner of Taxes, 445 U. S. 425 (1980); Moorman Mfg. Co. v. Bair, 437 U. S. 267 (1978); General Motors Corp. v. Washington, 377 U. S. 436 (1964); Butler Bros. v. McColgan, 315 U. S. 501 (1942); Bass, Ratcliff & Gretton, Ltd. v. State Tax Comm’n, 266 U. S. 271 (1924); Underwood Typewriter Co. v. Chamberlain, 254 U. S. 113 (1920).
Under both the Due Process and the Commerce Clauses of the Constitution, a State may not, when imposing an income-based tax, “tax value earned outside its borders.” ASARCO, supra, at 315. In the case of a more-or-Iess integrated business enterprise operating in more than one State, however, arriving at precise territorial allocations of “value” is often an elusive goal, both in theory and in practice. See Mobil Oil Corp. v. Commissioner of Taxes, supra, at 438; Butler Bros. v. McColgan, supra, at 507-509; Underwood Typewriter Co. v. Chamberlain, supra, at 121. For this reason and others, we have long held that the Constitution imposes no single formula on the States, Wisconsin v. J. C. Penney Co., 311 U. S. 435, 445 (1940), and that the taxpayer has the “‘distinct burden of showing by “clear and cogent evidence” that [the state tax] results in extraterritorial values being taxed....’” Exxon Corp., supra, at 221, quoting Butler Bros. v. McColgan, supra, at 507, in turn quoting Norfolk & Western R. Co. v. North Carolina ex rel. Maxwell, 297 U. S. 682, 688 (1936).
One way of deriving locally taxable income is on the basis of formal geographical or transactional accounting. The problem with this method is that formal accounting is subject to manipulation and imprecision, and often ignores or captures inadequately the many subtle and largely unquantifiable transfers of value that take place among the components of a single enterprise. See generally Mobil Oil Corp., supra, at 438-439, and sources cited. The unitary business/ formula apportionment method is a very different approach to the problem of taxing businesses operating in more than one jurisdiction. It rejects geographical or transactional accounting, and instead 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. This Court long ago upheld the constitutionality of the unitary business/formula apportionment method, although subject to certain constraints. See, e. g., Hans Rees’ Sons, Inc. v. North Carolina ex rel. Maxwell, 283 U. S. 123 (1931); Bass, Ratcliff & Gretton, Ltd. v. State Tax Comm’n, supra; Underwood Typewriter Co. v. Chamberlain, supra. The method has now gained wide acceptance, and is in one of its forms the basis for the the Uniform Division of Income for Tax Purposes Act (Uniform Act), which has at last count been substantially adopted by 23 States, including California.
B
Two aspects of the unitary business/formula apportionment method have traditionally attracted judicial attention. These are, as one might easily guess, the notions of “unitary business” and “formula apportionment,” respectively.
(1)
The Due Process and Commerce Clauses of the Constitution do not allow a State to tax income arising out of interstate activities — even on a proportional basis — unless there is a “ ‘minimal connection’ or ‘nexus’ between the interstate activities and the taxing State, and ‘a rational relationship between the income attributed to the State and the intrastate values of the enterprise.’ ” Exxon Corp. v. Wisconsin Dept. of Revenue, supra, at 219-220, quoting Mobil Oil Corp. v. Commissioner of Taxes, supra, at 436, 437. At the very-least, this set of principles imposes the obvious and largely self-executing limitation that a State not tax a purported “unitary business” unless at least some part of it is conducted in the State. See Exxon Corp., supra, at 220; Wisconsin v. J. C. Penney Co., supra, at 444. It also requires that there be some bond of ownership or control uniting the purported “unitary business.” See ASARCO, supra, at 316-317.
In addition, the principles we have quoted require that the out-of-state activities of the purported “unitary business” be related in some concrete way to the in-state activities. The functional meaning of this requirement is that there be some sharing or exchange of value not capable of precise identification or measurement — beyond the mere flow of funds arising out of a passive investment or a distinct business operation— which renders formula apportionment a reasonable method of taxation. See generally ASARCO, supra, at 317; Mobil Oil Corp., supra, at 438-442. In Underwood Typewriter Co. v. Chamberlain, supra, we held that a State could tax on an apportioned basis the combined income of a vertically integrated business whose various components (manufacturing, sales, etc.) operated in different States. In Bass, Ratcliff & Gretton, supra, we applied the same principle to a vertically integrated business operating across national boundaries. In Butler Bros. v. McColgan, supra, we recognized that the unitary business principle could apply, not only to vertically integrated enterprises, but also to a series of similar enterprises operating separately in various jurisdictions but linked by common managerial or operational resources that produced economies of scale and transfers of value. More recently, we have further refined the “unitary business” concept in Exxon Corp. v. Wisconsin Dept. of Rev enue, 447 U. S. 207 (1980), and Mobil Oil Corp. v. Commissioner of Taxes, 445 U. S. 425 (1980), where we upheld the States’ unitary business findings, and in ASARCO Inc. v. Idaho State Tax Comm’n, 458 U. S. 307 (1982), and F. W. Woolworth Co. v. Taxation & Revenue Dept., 458 U. S. 354 (1982), in which we found such findings to have been improper.
The California statute at issue in this case, and the Uniform Act from which most of its relevant provisions are derived, track in large part the principles we have just discussed. In particular, the statute distinguishes between the “business income” of a multijurisdictional enterprise, which is apportioned by formula, Cal. Rev. & Tax. Code Ann. §§25128-25136 (West 1979), and its “nonbusiness” income, which is not. Although the statute does not explicitly require that income from distinct business enterprises be apportioned separately, this requirement antedated adoption of the Uniform Act, and has not been abandoned.
A final point that needs to be made about the unitary business concept is that it is not, so to speak, unitary: there are variations on the theme, and any number of them are logically consistent with the underlying principles motivating the approach. For example, a State might decide to respect formal corporate lines and treat the ownership of a corporate subsidiary as per se a passive investment. In Mobil Oil Corp., 445 U. S., at 440-441, however, we made clear that, as a general matter, such a per se rule is not constitutionally required:
“Superficially, intercorporate division might appear to be a[n]... attractive basis for limiting apportionability. But the form of business organization may have nothing to do with the underlying unity or diversity of business enterprise.” Id., at 440.
Thus, for example, California law provides: Even among States that take this approach, however, only-some apply it in taxing American corporations with subsidiaries located in foreign countries. The difficult question we address in Part V of this opinion is whether, for reasons not implicated in Mobil, that particular variation on the theme is constitutionally barred.
“In the case of a corporation... owning or controlling, either directly or indirectly, another corporation, or other corporations, and in the case of a corporation... owned or controlled, either directly or indirectly, by another corporation, the Franchise Tax Board may require a consolidated report showing the combined net income or such other facts as it deems necessary.” Cal. Rev. & Tax. Code Ann. §25104 (West 1979).
(2)
Having determined that a certain set of activities constitute a “unitary business,” a State must then apply a formula apportioning the income of that business within and without the State. Such an apportionment formula must, under both the Due Process and Commerce Clauses, be fair. See Exxon Corp., supra, at 219, 227-228; Moorman Mfg. Co., 437 U. S., at 272-273; Hans Rees’ Sons, Inc., 283 U. S., at 134. The first, and again obvious, component of fairness in an apportionment formula is what might be called internal consistency — that is, the formula must be such that, if applied by every jurisdiction, it would result in no more than all of the unitary business’ income being taxed. The second and more difficult requirement is what might be called external consistency — the factor or factors used in the apportionment formula must actually reflect a reasonable sense of how income is generated. The Constitution does not “invalidat[e] an apportionment formula whenever it may result in taxation of some income that did not have its source in the taxing State... Moorman Mfg. Co., supra, at 272 (emphasis added). See Underwood Typewriter Co., 254 U. S., at 120-121. Nevertheless, we will strike down the application of an apportionment formula if the taxpayer can prove “by ‘clear and cogent evidence’ that the income attributed to the State is in fact ‘out of all appropriate proportions to the business transacted... in that State,’ [Hans Rees’ Sons, Inc.,] 283 U. S., at 135, or has ‘led to a grossly distorted result,’ [Norfolk & Western R. Co. v. State Tax Comm’n, 390 U. S. 317, 326 (1968)].” Moorman Mfg. Co., supra, at 274.
California and the other States that have adopted the Uniform Act use a formula — commonly called the “three-factor” formula — which is based, in equal parts, on the proportion of a unitary business’ total payroll, property, and sales which are located in the taxing State. See Cal. Tax & Rev. Code Ann. §§25128-25136 (West 1979). We approved the three-factor formula in Butler Bros. v. McColgan, 315 U. S. 501 (1942). Indeed, not only has the three-factor formula met our approval, but it has become, for reasons we discuss in more detail infra, at 183, something of a benchmark against which other apportionment formulas are judged. See Moorman Mfg. Co., supra, at 282 (Blackmun, J., dissenting); cf. General Motors Corp. v. District of Columbia, 380 U. S. 553, 561 (1965).
Besides being fair, an apportionment formula must, under the Commerce Clause, also not result in discrimination against interstate or foreign commerce. See Mobil Oil Corp., supra, at 444; cf. Japan Line, Ltd. v. County of Los Angeles, 441 U. S. 434, 444-448 (1979) (property tax). Aside from forbidding the obvious types of discrimination against interstate or foreign commerce, this principle might have been construed to require that a state apportionment formula not differ so substantially from methods of allocation used by other jurisdictions in which the taxpayer is subject to taxation as to produce double taxation of the same income and a resultant tax burden higher than the taxpayer would incur if its business were limited to any one jurisdiction. At least in the interstate commerce context, however, the anti-discrimination principle has not in practice required much in addition to the requirement of fair apportionment. In Moorman Mfg. Co. v. Bair, supra, in particular, we explained that eliminating all overlapping taxation would require this Court to establish not only a single constitutionally mandated method of taxation, but also rules regarding the application of that method in particular cases. 437 U. S., at 278-280. Because that task was thought to be essentially legislative, we declined to undertake it, and held that a fairly apportioned tax would not be found invalid simply because it differed from the prevailing approach adopted by the States. As we discuss infra, at 185-187, however, a more searching inquiry is necessary when we are confronted with the possibility of international double taxation.
n
5»
Appellant is m the business of manufacturing custom-ordered paperboard packaging. Its operation is vertically integrated, and includes the production of paperboard from raw timber and wastepaper as well as its composition into the finished products ordered by customers. The operation is also largely domestic. During the years at issue in this case — 1963, 1964, and 1965 — appellant controlled 20 foreign subsidiaries located in four Latin American and four European countries. Its percentage ownership of the subsidiaries (either directly or through other subsidiaries) ranged between 66.7% and 100%. In those instances (about half) in which appellant did not own a 100% interest in the subsidiary, the remainder was owned by local nationals. One of the subsidiaries was a holding company that had no payroll, sales, or property, but did have book income. Another was inactive. The rest were all engaged — in their respective local markets — in essentially the same business as appellant.
Most of appellant’s subsidiaries were, like appellant itself, fully integrated, although a few bought paperboard and other intermediate products elsewhere. Sales of materials from appellant to its subsidiaries accounted for only about 1% of the subsidiaries’ total purchases. The subsidiaries were also relatively autonomous with respect to matters of personnel and day-to-day management. For example, transfers of personnel from appellant to its subsidiaries were rare, and occurred only when a subsidiary could not fill a position locally. There was no formal United States training program for the subsidiaries’ employees, although groups of foreign employees occasionally visited the United States for 2-6 week periods to familiarize themselves with appellant’s methods of operation. Appellant charged one senior vice president and four other officers with the task of overseeing the operations of the subsidiaries. These officers established general standards of professionalism, profitability, and ethical practices and dealt with major problems and long-term decisions; day-to-day management of the subsidiaries, however, was left in the hands of local executives who were always citizens of the host country. Although local decisions regarding capital expenditures were subject to review by appellant, problems were generally worked out by consensus rather than outright domination. Appellant also had a number of its directors and officers on the boards of directors of the subsidiaries, but they did not generally play an active role in management decisions.
Nevertheless, in certain respects, the relationship between appellant and its subsidiaries was decidedly close. For example, approximately half of the subsidiaries’ long-term debt was either held directly, or guaranteed, by appellant. Appellant also provided advice and consultation regarding manufacturing techniques, engineering, design, architecture, insurance, and cost accounting to a number of its subsidiaries, either by entering into technical service agreements with them or by informal arrangement. Finally, appellant occasionally assisted its subsidiaries in their procurement of equipment, either by selling them used equipment of its own or by employing its own purchasing department to act as an agent for the subsidiaries.
B
During the tax years at issue in this case, appellant filed California franchise tax returns. In 1969, after conducting an audit of appellant’s returns for the years in question, appellee issued notices of additional assessments for each of those years. The respective approaches and results reflected in appellant’s initial returns and in appellee’s notices of additional assessments capture the legal differences at issue in this case.
In calculating the total unapportioned taxable income of its unitary business, appellant included its own corporate net earnings as derived from its federal tax form (subject to certain adjustments not relevant here), but did not include any income of its subsidiaries. It also deducted — as it was authorized to do under state law, see supra, at 167, and n. 1 — all dividend income, nonbusiness interest income, and gains on sales of assets not related to the unitary business. In calculating the share of its net income which was appor-tionable to California under the three-factor formula, appellant omitted all of its subsidiaries’ payroll, property, and sales. The results of these calculations are summarized in the margin.
The gravamen of the notices issued by appellee in 1969 was that appellant should have treated its overseas subsidiaries as part of its unitary business rather than as passive investments. Including the overseas subsidiaries in appellant’s unitary business had two primary effects: it increased the income subject to apportionment by an amount equal to the total income of those subsidiaries (less intersubsidiary dividends, see n. 5, supra), and it decreased the percentage of that income which was apportionable to California. The net effect, however, was to increase appellant’s tax liability in each of the three years.
Appellant paid the additional amounts under protest, and then sued in California Superior Court for a refund, raising the issues now before this Court. The case was tried on stipulated facts, and the Superior Court upheld appellee’s assessments. On appeal, the California Court of Appeal affirmed, 117 Cal. App. 3d 988, 173 Cal. Rptr. 121 (1981), and the California Supreme Court refused to exercise discretionary review. We noted probable jurisdiction. 456 U. S. 960 (1982).
H-I I — I HH
, <T ^
We address the unitary business issue first. As previously noted, the taxpayer always has the “distinct burden of showing by ‘clear and cogent evidence’ that [the state tax] results in extraterritorial values being taxed.” Supra, at 164. One necessary corollary of that principle is that this Court will, if reasonably possible, defer to the judgment of state courts in deciding whether a particular set of activities constitutes a “unitary business.” As we said in a closely related context in Norton Co. v. Department of Revenue, 340 U. S. 534 (1951):
“The general rule, applicable here, is that a taxpayer claiming immunity from a tax has the burden of establishing his exemption.
“This burden is never met merely by showing a fair difference of opinion which as an original matter might be decided differently.... Of course, in constitutional cases, we have power to examine the whole record to arrive at an independent judgment as to whether constitutional rights have been invaded, but that does not mean that we will re-examine, as a court of first instance, findings of fact supported by substantial evidence.” Id., at 537-538 (footnotes omitted; emphasis added).
See id., at 538 (concluding that, “in light of all the evidence, the [state] judgment [on a question of whether income should be attributed to the State] was within the realm of permissible judgment”). The legal principles defining the constitutional limits on the unitary business principle are now well established. The factual records in such cases, even when the parties enter into a stipulation, tend to be long and complex, and the line between “historical fact” and “constitutional fact” is often fuzzy at best. Cf. AS ARCO, 458 U. S., at 326-328, nn. 22, 23. It will do the cause of legal certainty little good if this Court turns every colorable claim that a state court erred in a particular application of those principles into a de novo adjudication, whose unintended nuances would then spawn further litigation and an avalanche of critical comment. Rather, our task must be to determine whether the state court applied the correct standards to the case; and if it did, whether its judgment “was within the realm of permissible judgment.”
B
In this case, we are singularly unconvinced by appellant’s argument that the State Court of Appeal “in important part analyzed this case under a different legal standard,” F. W. Woolworth, 458 U. S., at 363, from the one articulated by this Court. Appellant argues that the state court here, like the state court in F. W. Woolworth, improperly relied on appellant’s mere potential to control the operations of its subsidiaries as a dispositive factor in reaching its unitary business finding. In fact, although the state court mentioned that “major policy decisions of the subsidiaries were subject to review by appellant,” 117 Cal. App. 3d, at 998, 173 Cal. Rptr., at 127, it relied principally, in discussing the management relationship between appellant and its subsidiaries, on the more concrete observation that “[h]igh officials of appellant gave directions to subsidiaries for compliance with the parent’s standard of professionalism, profitability, and ethical practices.” Id., at 998, 173 Cal. Rptr., at 127-128.
Appellant also argues that the state court erred in endorsing an administrative presumption that corporations engaged in the same line of business are unitary. This presumption affected the state court’s reasoning, but only as one element among many. Moreover, considering the limited use to which it was put, we find the “presumption” criticized by appellant to be reasonable. Investment in a business enterprise truly “distinct” from a corporation’s main line of business often serves the primary function of diversifying the corporate portfolio and reducing the risks inherent in being tied to one industry’s business cycle. When a corporation invests in a subsidiary that engages in the same line of work as itself, it becomes much more likely that one function of the investment is to make better use — either through economies of scale or through operational integration or sharing of expertise — of the parent’s existing business-related resources.
Finally, appellant urges us to adopt a bright-line rule requiring as a prerequisite to a finding that a mercantile or manufacturing enterprise is unitary that it be characterized by “a substantial flow of goods.” Brief for Appellant 47. We decline this invitation. The prerequisite to a constitutionally acceptable finding of unitary business is a flow of value, not a flow of goods. As we reiterated in F. W. Wool worth, a relevant question in the unitary business inquiry is whether ‘“contributions to income [of the subsidiaries] resulted] from functional integration, centralization of management, and economies of scale.’” 458 U. S., at 364, quoting Mobil, 445 U. S., at 438. “[Substantial mutual interdependence,” F. W. Woolworth, supra, at 371, can arise in any number of ways; a substantial flow of goods is clearly one but just as clearly not the only one.
C
The State Court of Appeal relied on a large number of factors in reaching its judgment that appellant and its foreign subsidiaries constituted a unitary business. These included appellant’s assistance to its subsidiaries in obtaining used and new equipment and in filling personnel needs that could not be met locally, the substantial role played by appellant in loaning funds to the subsidiaries and guaranteeing loans provided by others, the “considerable interplay between appellant and its foreign subsidiaries in the area of corporate expansion,” 117 Cal. App. 3d, at 997, 173 Cal. Rptr., at 127, the “substantial” technical assistance provided by appellant to the subsidiaries, id., at 998-999, 173 Cal. Rptr., at 128, and the supervisory role played by appellant’s officers in providing general guidance to the subsidiaries. In each of these respects, this case differs from ASARCO and F. W. Woolworth, and clearly comes closer than those cases did to presenting a “functionally integrated enterprise,” Mobil, supra, at 440, which the State is entitled to tax as a single entity. We need not decide whether any one of these factors would be sufficient as a constitutional matter to prove the existence of a unitary business. Taken in combination, at least, they clearly demonstrate that the state court reached a conclusion “within the realm of permissible judgment.”
> > — (
We turn now to the question of fair apportionment. Once again, appellant has the burden of proof; it must demonstrate that there is “‘no rational relationship between the income attributed to the State and the intrastate values of the enterprise, Exxon Corp., 447 U. S., at 220, quoting Mobil, supra, at 437, by proving that the income apportioned to California under the statute is “out of all appropriate proportion to the business transacted by the appellant in that State,” Hans Rees’ Sons, Inc., 283 U. S., at 135.
Appellant challenges the application of California’s three-factor formula to its business on two related grounds, both arising as a practical (although not a theoretical) matter out of the international character of the enterprise. First, appellant argues that its foreign subsidiaries are significantly more profitable than it is, and that the three-factor formula, by ignoring that fact and relying instead on indirect measures of income such as payroll, property, and sales, systematically distorts the true allocation of income between appellant and the subsidiaries. The problem with this argument is obvious: the profit figures relied on by appellant are based on precisely the sort of formal geographical accounting whose basic theoretical weaknesses justify resort to formula apportionment in the first place. Indeed, we considered and rejected a very similar argument in Mobil, pointing out that whenever a unitary business exists,
“separate [geographical] accounting, while it purports to isolate portions of income received in various States, may fail to account for contributions to income resulting from functional integration, centralization of management, and economies of scale. Because these factors of profitability arise from the operation of the business as a whole, it becomes misleading to characterize the income of the business as having a single identifiable ‘source.’ Although separate geographical accounting may be useful for internal auditing, for purposes of state taxation it is not constitutionally required.” 445 U. S., at 438 (citation omitted).
Appellant’s second argument is related, and can be answered in the same way. Appellant contends:
“The costs of production in foreign countries are generally significantly lower than in the United States, primarily as a result of the lower wage rates of workers in countries other than the United States. Because wages are one of the three factors used in formulary apportionment, the use of the formula unfairly inflates the amount of income apportioned to United States operations, where wages are higher.” Brief for Appellant 12.
Appellant supports this argument with various statistics that appear to demonstrate, not only that wage rates are generally lower in the foreign countries in which its subsidiaries operate, but also that those lower wages are not offset by lower levels of productivity. Indeed, it is able to show that at least one foreign plant had labor costs per thousand square feet of corrugated container that were approximately 40% of the same costs in appellant’s California plants.
The problem with all this evidence, however, is that it does not by itself come close to impeaching the basic rationale behind the three-factor formula. Appellant and its foreign subsidiaries have been determined to be a unitary business. It therefore may well be that in addition to the foreign payroll going into the production of any given corrugated container by a foreign subsidiary, there is also California payroll, as well as other California factors, contributing — albeit more indirectly — to the same production. The mere fact that this possibility is not reflected in appellant’s accounting does not disturb the underlying premises of the formula apportionment method.
Both geographical accounting and formula apportionment are imperfect proxies for an ideal which is not only difficult to achieve in practice, but also difficult to describe in theory. Some methods of formula apportionment are particularly problematic because they focus on only a small part of the spectrum of activities by which value is generated. Although we have generally upheld the use of such formulas, see, e. g., Moorman Mfg. Co. v. Bair, 437 U. S. 267 (1978); Underwood Typewriter Co. v. Chamberlain, 254 U. S. 113 (1920), we have on occasion found the distortive effect of focusing on only one factor so outrageous in a particular case as to require reversal. In Hans Rees’ Sons, Inc. v. North Carolina ex rel. Maxwell, supra, for example, an apportionment method based entirely on ownership of tangible property resulted in an attribution to North Carolina of between 66% and 85% of the taxpayer’s income over the course of a number of years, while a separate accounting analysis purposely skewed to resolve all doubts in favor of the State resulted in an attribution of no more than 21.7%. We struck down the application of the one-factor formula to that particular business, holding that the method, “albeit fair on its face, operates so as to reach profits which are in no just sense attributable to transactions within its jurisdiction.” Id.,at 134.
The three-factor formula used by California has gained wide approval precisely because payroll, property, and sales appear in combination to reflect a very large share of the activities by which value is generated. It is therefore able to avoid the sorts of distortions that were present in Hans Rees’ Sons, Inc.
Of course, even the three-factor formula is necessarily imperfect. But we have seen no evidence demonstrating that the margin of error (systematic or not) inherent in the three-factor formula is greater than the margin of error (systematic or not) inherent in the sort of separate accounting urged upon us by appellant. Indeed, it would be difficult to come to such a conclusion on the basis of the figures in this case: for all of appellant’s statistics showing allegedly enormous distortions caused by the three-factor formula, the tables we set out at nn. 11, 12, supra, reveal that the percentage increase in taxable income attributable to California between the methodology employed by appellant and the methodology employed by appellee comes to approximately 14%, a far cry from the more than 250% difference which led us to strike down the state tax in Hans Rees’ Sons, Inc., and a figure certainly within the substantial margin of error inherent in any method of attributing income among the components of a unitary business. See also Moorman Mfg. Co., supra, at 272-273; Ford Motor Co. v. Beauchamp, 308 U. S. 331 (1939); Underwood Typewriter Co., supra, at 120-121.
V
For the reasons we have just outlined, we conclude that California’s application of the unitary business principle to appellant and its foreign subsidiaries was proper, and that its use of the standard three-factor formula to apportion the income of that unitary business was fair. This proper and fair method of taxation happens, however, to be quite different from the method employed both by the Federal Government in taxing appellant’s business, and by each of the relevant foreign jurisdictions in taxing the business of appellant’s subsidiaries. Each of these other taxing jurisdictions has adopted a qualified separate accounting approach — often referred to as the “arm’s-length” approach — to the taxation of related corporations. Under the “arm’s-length” approach, every corporation, even if closely tied to other corporations, is treated for most — but decidedly not all — purposes as if it were an independent entity dealing at arm’s length with its affiliated corporations, and subject to taxation only by the jurisdictions in which it operates and only for the income it realizes on its own books.
If the unitary business consisting of appellant and its subsidiaries were entirely domestic, the fact that different jurisdictions applied different methods of taxation to it would probably make little constitutional difference, for the reasons we discuss supra, at 170-171. Given that it is international, however, we must subject this case to the additional scrutiny required by the Foreign Commerce Clause. See Mobil Oil Corp., 445 U. S., at 446; Japan Line, Ltd., 441 U. S., at 446; Bowman v. Chicago & N. W. R. Co., 125 U. S. 465, 482 (1888). The case most relevant to our inquiry is Japan Line.
A
Japan Line involved an attempt by California to impose an apparently fairly apportioned, nondiscriminatory, ad valorem property tax on cargo containers which were instrumental-ities of foreign commerce and which were temporarily located in various California ports. The same cargo containers, however, were subject to an unapportioned property tax in their home port of Japan. Moreover, a convention signed by the United States and Japan made clear, at least, that neither National Government could impose a tax on temporarily imported cargo containers whose home port was in the other nation. We held that “[w]hen a State seeks to tax the instru-mentalities of foreign commerce, two additional considerations, beyond those articulated in [the doctrine governing the Interstate Commerce Clause], come into play.” 441 U. S., at 446. The first is the enhanced risk of multiple taxation. Although consistent application of the fair apportionment standard can generally mitigate, if not eliminate, double taxation in the domestic context,
“neither this Court nor this Nation can ensure full apportionment when one of the taxing entities is a foreign sovereign. If an instrumentality of commerce is domiciled abroad, the country of domicile may have the right, consistently with the custom of nations, to impose a tax on its full value. If a State should seek to tax the same instrumentality on an apportioned basis, multiple taxation inevitably
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:
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H
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sc_issuearea
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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.
Mr. Justice Black
delivered the opinion of the Court.
A corporation selling its physical properties is taxed on capital gains resulting from the sale. There is no corporate tax, however, on distribution of assets in kind to shareholders as part of a genuine liquidation. The respondent corporation transferred property to its shareholders as a liquidating dividend in kind. The shareholders transferred it to a purchaser. The question is whether, despite contrary findings by the Court of Claims, this record requires a holding that the transaction was in fact a sale by the corporation subjecting the corporation to a capital gains tax.
Details of the transaction are as follows. The respondent, a closely held corporation, was long engaged in the business of generating and distributing electric power in three Kentucky counties. In 1936 a local cooperative began to distribute Tennessee Valley Authority power in the area served by respondent. It soon became obvious that respondent’s Diesel-generated power could not compete with TVA power, which respondent had been unable to obtain. Respondent’s shareholders, realizing that the corporation must get out of the power business unless it obtained TVA power, accordingly offered to sell all the corporate stock to the cooperative, which was receiving such power. The cooperative refused to buy the stock, but countered with an offer to buy from the corporation its transmission and distribution equipment. The corporation rejected the offer because it would have been compelled to pay a heavy capital gains tax. At the same time the shareholders, desiring to save payment of the corporate capital gains tax, offered to acquire the transmission and distribution equipment and then sell to the cooperative. The cooperative accepted. The corporation transferred the transmission and distribution systems to its shareholders in partial liquidation. The remaining assets were sold and the corporation dissolved. The shareholders then executed the previously contemplated sale to the cooperative.
Upon this sale by the shareholders, the Commissioner assessed and collected a $17,000 tax from the corporation on the theory that the shareholders had been used as a mere conduit for effectuating what was really a corporate sale. Respondent corporation brought this action to recover the amount of the tax. The Court of Claims found that the method by which the stockholders disposed of the properties was avowedly chosen in order to reduce taxes, but that the liquidation and dissolution genuinely ended the corporation’s activities and existence. The court also found that at no time did the corporation plan to make the sale itself. Accordingly it found as a fact that the sale was made by the shareholders rather than the corporation, and entered judgment for respondent. One judge dissented, believing that our opinion in Commissioner v. Court Holding Co., 324 U. S. 331, required a finding that the sale had been made by the corporation. Certiorari was granted, 338 U. S. 846, to clear up doubts arising out of the Court Holding Co. case.
Our Court Holding Co. decision rested on findings of fact by the Tax Court that a sale had been made and gains realized by the taxpayer corporation. There the corporation had negotiated for sale of its assets and had reached an oral agreement of sale. When the tax consequences of the corporate sale were belatedly recognized, the corporation purported to “call off” the sale at the last minute and distributed the physical properties in kind to the stockholders. They promptly conveyed these properties to the same persons who had negotiated with the corporation. The terms of purchase were substantially those of the previous oral agreement. One thousand dollars already paid to the corporation was applied as part payment of the purchase price. The Tax Court found that the corporation never really abandoned its sales negotiations, that it never did dissolve, and that the sole purpose of the so-called liquidation was to disguise a corporate sale through use of mere formalisms in order to avoid tax liability. The Circuit Court of Appeals took a different view of the evidence. In this Court the Government contended that whether a liquidation distribution was genuine or merely a sham was traditionally a question of fact. We agreed with this contention, and reinstated the Tax Court’s findings and judgment. Discussing the evidence which supported the findings of fact, we went on to say that “the incidence of taxation depends upon the substance of a transaction” regardless of “mere formalisms,” and that taxes on a corporate sale cannot be avoided by using the shareholders as a “conduit through which to pass title.”
This language does not mean that a corporation can be taxed even when the sale has been made by its stockholders following a genuine liquidation and dissolution. While the distinction between sales by a corporation as compared with distribution in kind followed by shareholder sales may be particularly shadowy and artificial when the corporation is closely held, Congress has chosen to recognize such a distinction for tax purposes. The corporate tax is thus aimed primarily at the profits of a going concern. This is true despite the fact that gains realized from corporate sales are taxed, perhaps to prevent tax evasions, even where the cash proceeds are at once distributed in liquidation. But Congress has imposed no tax on liquidating distributions in kind or on dissolution, whatever may be the motive for such liquidation. Consequently, a corporation may liquidate or dissolve without subjecting itself to the corporate gains tax, even though a primary motive is to avoid the burden of corporate taxation.
Here, on the basis of adequate subsidiary findings, the Court of Claims has found that the sale in question was made by the stockholders rather than the corporation. The Government’s argument that the shareholders acted as a mere “conduit” for a sale by respondent corporation must fall before this finding. The subsidiary finding that a major motive of the shareholders was to reduce taxes does not bar this conclusion. Whatever the motive and however relevant it may be in determining whether the transaction was real or a sham, sales of physical properties by shareholders following a genuine liquidation distribution cannot be attributed to the corporation for tax purposes.
The oddities in tax consequences that emerge from the tax provisions here controlling appear to be inherent in the present tax pattern. For a corporation is taxed if it sells all its physical properties and distributes the cash proceeds as liquidating dividends, yet is not taxed if that property is distributed in kind and is then sold by the shareholders. In both instances the interest of the shareholders in the business has been transferred to the purchaser. Again, if these stockholders had succeeded in their original effort to sell all their stock, their interest would have been transferred to the purchasers just as effectively. Yet on such a transaction the corporation would have realized no taxable gain.
Congress having determined that different tax consequences shall flow from different methods by which the shareholders of a closely held corporation may dispose of corporate property, we accept its mandate. It is for the trial court, upon consideration of an entire transaction, to determine the factual category in which a particular transaction belongs. Here as in the Court Holding Co. case we accept the ultimate findings of fact of the trial tribunal. Accordingly the judgment of the Court of Claims is
Affirmed.
Mr. Justice Douglas took no part in the consideration or decision of this case.
26 U. S. C. § 22 (a); Treas. Reg. 103, § 19.22 (a)-19.
“. . . No gain or loss is realized by a corporation from the mere distribution of its assets in kind in partial or complete liquidation, however they may have appreciated or depreciated in value since their acquisition. . . .” Treas. Reg. 103, § 19.22 (a)—21.
What we said in the Court Holding Co. case was an approval of the action of the Tax Court in looking beyond the papers executed by the corporation and shareholders in order to determine whether the sale there had actually been made by the corporation. We were but emphasizing the established principle that in resolving such questions as who made a sale, fact-finding tribunals in tax cases can consider motives, intent, and conduct in addition to what appears in written instruments used by parties to control rights as among themselves. See, e. g., Helvering v. Clifford, 309 U. S. 331, 335-337; Commissioner v. Tower, 327 U. S. 280.
It has also been held that where corporate liquidations are effected through trustees or agents, gains from sales are taxable to the corporation as though it were a going concern. See, e. g., First National Bank v. United States, 86 F. 2d 938, 941; Treas. Reg. 103, § 19.22 (a)-21.
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
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sc_issuearea
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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.
Mr. Justice Jackson
delivered the opinion of the Court.
This controversy arises under 8 U. S. C. § 47 (3), which provides civil remedies for certain conspiracies. A motion to dismiss the amended complaint raises the issue of its sufficiency and, of course, requires us to accept its well-pleaded facts as the hypothesis for decision.
Its essential allegations are that plaintiffs are citizens of the United States, residents of California, and members or officers of a voluntary association or political club organized for the purpose of participating in the election of officers of the United States, petitioning the national government for redress of grievances, and engaging in public meetings for the discussion of national public issues. It planned a public meeting for November 14, 1947, on the subject, “The Cominform and the Marshall Plan,” at which it was intended to adopt a resolution opposing said Marshall Plan, to be forwarded, by way of a petition for the redress of grievances, to appropriate federal officials.
The conspiracy charged as being within the Act is that defendants, with knowledge of the meeting and its purposes, entered into an agreement to deprive the plaintiffs, “as citizens of the United States, of privileges and immunities, as citizens of the United States, of the rights peaceably to assemble for the purpose of discussing and communicating upon national public issues . . . .” And further, “to deprive the plaintiffs as well as the members of said club, as citizens of the United States, of equal privileges and immunities under the laws of the United States . . . .” This is amplified by allegations that defendants knew of many public meetings in the locality, at which resolutions were adopted by groups with whose opinions defendants agreed, and with which defendants did not interfere or conspire to interfere. “With respect to the meeting aforesaid on November 14, 1947, however, the defendants conspired to interfere with said meeting for the reason that the defendants opposed the views of the plaintiffs . . . .”
In the effort to bring the; case within the statute, the pleader also alleged that defendants conspired “to go in disguise upon the highways” and that they did in fact go in disguise “consisting of the unlawful and unauthorized wearing of caps of the American Legion.” The District Court disposed of this part of the complaint by holding that wearing such headgear did not constitute the disguise or concealment of identity contemplated by the Act. Plaintiffs thereupon abandoned that part of the complaint and do not here rely upon it to support their claims.
The complaint then separately sets out the overt acts of injury and damage relied upon to meet the requirements of the Act. To carry out the conspiracy, it is alleged, defendants proceeded to the meeting place and, by force and threats of force, did assault and intimidate plaintiffs and those present at the meeting and thereby broke up the meeting, thus interfering with the right of the plaintiffs to petition the Government for redress of grievances. Both compensatory and punitive damages are demanded.
It is averred that the cause of action arises under the statute cited and under the Constitution of the United States. But apparently the draftsman was scrupulously cautious not to allege that it arose under the Fourteenth Amendment, or that defendants had conspired to deprive plaintiffs of rights secured by that Amendment, thus seeking to avoid the effect of earlier decisions of this Court in Fourteenth Amendment cases.
The complaint makes no claim that the conspiracy or the overt acts involved any action by state officials, or that defendants even pretended to act under color of state law. It is not shown that defendants had or claimed any protection or immunity from the law of the State, or that they in fact enjoyed such because of any act or omission by state authorities. Indeed, the trial court found that the acts alleged are punishable under the laws of California relating to disturbance of the peace, assault, and trespass, and are also civilly actionable.
The District Judge held that the statute does not and cannot constitutionally afford redress for invasions of civil rights at the hands of individuals, but can only be applied to injuries to civil rights by persons acting pursuant to or under color of state law. In reversing the District Court’s dismissal of the complaint, the Court of Appeals for the Ninth Circuit held otherwise, one judge dissenting. The Court of Appeals for the Eighth Circuit, in Love v. Chandler, 124 F. 2d 785, has ruled in accord with the District Judge and the dissenting Court of Appeals Judge here. To resolve the conflict, we granted certiorari.
This statutory provision has long been dormant. It was introduced into the federal statutes by the Act of April 20, 1871, entitled, “An Act to enforce the Provisions of the Fourteenth Amendment to the Constitution of the United States, and for other Purposes.” The Act was among the last of the reconstruction legislation to be based on the “conquered province” theory which prevailed in Congress for a period following the Civil War. This statute, without separability provisions, established the civil liability with which we are here concerned as well as other civil liabilities, together with parallel criminal liabilities. It also provided that unlawful combinations and conspiracies named in the Act might be deemed rebellions, and authorized the President to employ the militia to suppress them. The President was also authorized to suspend the privilege of the writ of habeas corpus. It prohibited any person from being a federal grand or petit juror in any case arising under the Act unless he took and subscribed an oath in open court “that he has never, directly or indirectly, counselled, advised, or voluntarily aided any such combination or conspiracy.” Heavy penalties and liabilities were laid upon any person who, with knowledge of such conspiracies, aided them or failed to do what he could to suppress them.
The Act, popularly known as the Ku Klux Act, was passed by a partisan vote in a highly inflamed atmosphere. It was preceded by spirited debate which pointed out its grave character and susceptibility to abuse, and its defects were soon realized when its execution brought about a severe reaction.
The provision establishing criminal conspiracies in language indistinguishable from that used to describe civil conspiracies came to judgment in United States v. Harris, 106 U. S. 629. It was held unconstitutional. This decision was in harmony with that of other important decisions during that period by a Court, every member of which had been appointed by President Lincoln, Grant, Hayes, Garfield or Arthur — all indoctrinated in the cause which produced the Fourteenth Amendment, but convinced that it was not to be used to centralize power so as to upset the federal system.
While we have not been in agreement as to the interpretation and application of some of the post-Civil War legislation, the Court recently unanimously declared, through the Chief Justice:
“Since the decision of this Court in the Civil Rights Cases, 109 U. S. 3 (1883), the principle has become firmly embedded in our constitutional law that the action inhibited by the first section of the Fourteenth Amendment is only such action as may fairly be said to be that of the States. That Amendment erects no shield against merely private conduct, however discriminatory or wrongful.”
And Mr. Justice Douglas, dissenting, has quoted with approval from the Cruikshank case, “ ‘The fourteenth amendment prohibits a State from denying to any person within its jurisdiction the equal protection of the laws; but this provision does not, any more than the one which precedes it . . . add anything to the rights which one citizen has under the Constitution against another.’ 92 U. S. at pp. 554-555.” And “ ‘The only obligation resting upon the United States is to see that the States do not deny the right. This the amendment guarantees, but no more. The power of the national government is limited to the enforcement of this guaranty.’ ” He summed up: “The Fourteenth Amendment protects the individual against state action, not against wrongs done by individuals. . . .”
It is apparent that, if this complaint meets the requirements of this Act, it raises constitutional problems of the first magnitude that, in the light of history, are not without difficulty. These would include issues as to congressional power under and apart from the Fourteenth Amendment, the reserved power of the States, the content of rights derived from national as distinguished from state citizenship, and the question of separability of the Act in its application to those two classes of rights. The latter question was long ago decided adversely to the plaintiffs. Baldwin v. Franks, 120 U. S. 678. Before we embark upon such a constitutional inquiry, it is necessary to satisfy ourselves that the attempt to allege a cause of action within the purview of the statute has been successful.
The section under which this action is brought falls into two divisions. The forepart defines conspiracies that may become the basis of liability, and the latter portion defines overt acts necessary to consummate the conspiracy as an actionable wrong. While a mere unlawful agreement or conspiracy may be made a federal crime, as it was at common law, this statute does not make the mere agreement or understanding for concerted action which constitutes the forbidden conspiracy an actionable wrong unless it matures into some action that inflicts injury. That, we think, is the significance of the second division of the- section.
The provision with reference to the overt act will bear repeating, with emphasis supplied: “. . . [I]n any case of conspiracy set forth in this section, if one or more persons engaged therein do, or cause to be done, any act in furtherance of the object of such conspiracy, whereby another is injured in his person or property, or deprived of having and exercising any right or privilege of a citizen of the United States, the party so injured or deprived may have an action for the recovery of damages . . . .”
In the light of the dictum in United States v. Cruikshank, 92 U. S. 542, 552, we assume, without deciding, that the facts pleaded show that defendants did deprive plaintiffs “of having and exercising” a federal right which, provided the defendants were engaged in a “conspiracy set forth in this section,” would bring the case within the Act.
The “conspiracy” required is differently stated from the required overt act and we think the difference is not accidental but significant. Its essentials, with emphasis supplied, are that two or more persons must conspire (1) for the purpose of depriving any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the law; or (2) for the purpose of preventing or hindering the constituted authorities from giving or securing to all persons the equal protection of the laws; or (3) to prevent by force, intimidation, or threat, any citizen entitled to vote from giving his support or advocacy in a legal manner toward election of an elector for President or a member of Congress; or (4) to injure any citizen in person or property on account of such support or advocacy. There is no claim that any allegation brings this case within the provisions that we have numbered (2), (3), and (4), so we may eliminate any consideration of those categories. The complaint is within the statute only if it alleges a conspiracy of the first described class. It is apparent that this part of the Act defines conspiracies of a very limited character. They must, we repeat, be “for the purpose of depriving . . . of the equal protection of the laws, or of equal privileges and immunities under the laws.” (Italics supplied.)
Passing the argument, fully developed in the Civil Rights Cases, that an individual or group of individuals not in office cannot deprive anybody of constitutional rights, though they may invade or violate, those rights, it is clear that this statute does not attempt to reach a conspiracy to deprive oné of rights, unless it is a deprivation of equality, of “equal protection of the law,” or of “equal privileges and immunities under the law.” That accords with the purpose of the Act to put the lately freed Negro on an equal footing before the law with his former master. The Act apparently deemed that adequate and went no further.
What we have here is not a conspiracy to affect in any way these plaintiffs’ equality of protection by the law, or their equality of privileges and immunities under the law. There is not the slightest allegation that defendants were conscious of or trying to influence the law, or were endeavoring to obstruct or interfere with it. The only inequality suggested is that the defendants broke up plaintiffs’ meeting and did not break up meetings of others with whose sentiments they agreed. To be sure, this is not equal injury, but it is no more a deprivation of “equal protection” or of “equal privileges and immunities” than it would be for one to assault one neighbor without assaulting them all, or to libel some persons without mention of others. Such private discrimination is not inequality before the law unless there is some manipulation of the law or its agencies to give sanction or sanctuary for doing so. Plaintiffs’ rights were certainly invaded, disregarded and lawlessly violated, but neither their rights nor their equality of rights under the law have been, or were intended to be, denied or impaired. Their rights under the laws and to protection of the laws remain untouched and equal to the rights of every other Californian, and may be vindicated in the same way and with the same effect as those of any other citizen who suffers violence at the hands of a mob.
We do not say that no conspiracy by private individuals could be of such magnitude and effect as to work a deprivation of equal protection of the laws, or of equal privileges and immunities under laws. Indeed, the post-Civil War Ku Klux Klan, against which this Act was fashioned, may have, or may reasonably have been thought to have, done so. It is estimated to have had a membership of around 550,000, and thus to have included “nearly the entire adult male white population of the South.” It may well be that a conspiracy, so far-flung and embracing such numbers, with a purpose to dominate and set at naught the “carpetbag” and “scalawag” governments of the day, was able effectively to deprive Negroes of their legal rights and to close all avenues of redress or vindication, in view of the then disparity of position, education and opportunity between them and those who made up the Ku Klux Klan. We do not know. But here nothing of that sort appears. We have a case of a lawless political brawl, precipitated by a handful of white citizens against other white citizens. California courts are open to plaintiffs and its laws offer redress for their injury and vindication for their rights.
We say nothing of the power of Congress to authorize such civil actions as respondents have commenced or otherwise to redress such grievances as they' assert. We think that Congress has not, in the narrow class of conspiracies defined by this statute, included the conspiracy charged here. We therefore reach no constitutional questions. The facts alleged fall short of a conspiracy to alter, impair or deny equality of rights under the law, though they do show a lawless invasion of rights for which there are remedies in the law of California. It is not for this Court to compete with Congress or attempt to replace it as the Nation’s law-making body.
The judgment of the Court of Appeals is
Reversed.
17Stat. 13, 8 U.S. C. § 47 (3) reads:
“If two or more persons in any State or Territory conspire or go in disguise on the highway or on the premises of another, for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws; or for the purpose of preventing or hindering the constituted authorities of any State or Territory from giving or securing to all persons within such State or Territory the equal protection of the laws; or if two or more persons conspire to prevent by force, intimidation, or threat, any citizen who is lawfully entitled to vote, from giving his support or advocacy in a legal manner, toward or in favor of the election of any lawfully qualified person as an elector for President or Vice President, or as a Member of Congress of the United States; or to injure any citizen in person or property on account of such support or advocacy; in any case of conspiracy set forth in this section, if one or more persons engaged therein do, or cause to be done, any act in furtherance of the object of such conspiracy, whereby another is injured in his person or property, or deprived of having and exercising any right or privilege of a citizen of the United States, the party so injured or deprived may have an action for the recovery of damages, occasioned by such injury or deprivation, against any one or more of the conspirators.”
This paragraph should be read in the context of other paragraphs of the same section, and note should also be taken of 8 U. S. C. § 43, which reads:
“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 of the United States or other person within the jurisdiction thereof 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.”
The opinion of District Judge Yankwich for this cites in his notes, 80 F. Supp. 501,510:
“39. Cal. Penal Code, Section 415 (disturbance of the peace of neighborhood or person); Section 403 (disturbance of public meetings)
“40. Cal. Penal Code, Section 602 (j) (illegal entry for the purpose of injuring property or property rights or interfering or obstructing lawful business of another).
“41. Cal. Penal Code, Sections 240, 241 (assault); sections 242, 243 (battery). Among the corresponding civil sections relating to civil remedies are California Civil Code, Section 43 (guarantee against personal bodily harm or restraint); Government Code, Section 241 (defining as citizens all persons born or residing within the state); California Code of Civil Procedure, Section 338 (3) [Section 338 (2)] (action for trespass to real property may be brought within three years); section 340 (3) (action for assault and battery may be brought within one year). And for the state civil rights provisions, see California Civil Code, Sections 51-54.”
80 F. Supp. 501.
183 F. 2d 308.
Other recent cases involving the statute are Viles v. Symes, 129 F. 2d 828; Robeson v. Fanelli, 94 F. Supp. 62; and Ferrer v. Fronton Exhibition Co., 188 F. 2d 954.
340 U. S. 809.
17 Stat. 13.
The background of this Act, the nature of the debates which preceded its passage, and the reaction it produced are set forth in Bowers, The Tragic Era, 340-348.
R. S. § 5519, under which the prosecution was brought, provided: “If two or more persons in any State or Territory conspire, or go in disguise on the highway or on the premises of another, for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws; or for the purpose of preventing or hindering the constituted authorities of any State or Territory from giving or securing to all persons within such State or Territory the equal protection of the laws; each of such persons shall be punished by a fine of not less than five hundred nor more than five thousand dollars, or by imprisonment, with or without hard labor, not less than six months nor more than six years, or by both such fine and imprisonment.”
Slaughter-House Cases, 16 Wall. 36; United States v. Reese, 92 U. S. 214; United States v. Cruikshank, 92 U. S. 542; Civil Rights Cases, 109 U. S. 3.
Screws v. United States, 325 U. S. 91.
Shelley v. Kraemer, 334 U. S. 1, 13.
United States v. Williams, 341 U. S. 70, 92.
Nash v. United States, 229 U. S. 373, 378; United States v. Socony-Vacuum Oil Co., 310 U. S. 150, 252.
8 Encyc. Soc. Sci. 606, 607.
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:
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B
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sc_issuearea
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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.
Mr. Justice Harlan
delivered the opinion of the Court.
After Donald J. Angelini had been convicted of failing to register as a gambler and to pay the related gambling tax required by federal law, 26 U. S. C. §§4411, 4412, 4901, the United States instituted the forfeiture proceeding to obtain $8,674 which Angelini had in his possession at the time of his arrest. The District Court for the Northern District of Illinois found that the money was being used in a bookmaking operation in violation of these internal revenue laws and ordered forfeiture under 26 U. S. C. § 7302 which provides:
“It shall be unlawful to have or possess any property intended for use in violating the provisions of the internal revenue laws . . . and no property rights shall exist in any such property. . . .”
When the Court of Appeals affirmed, we granted certiorari, sub nom. Angelini v. United States, 390 U. S. 204, and remanded the case for further consideration in the light of our decisions in Marchetti v. United States, 390 U. S. 39 (1968), and Grosso v. United States, 390 U. S. 62 (1968), which precluded the criminal conviction of gamblers who properly assert their privilege against self-incrimination as a ground for their failure to comply with these aspects of the gambling tax law. A unanimous panel of the Court of Appeals concluded that Angelini might properly assert his Fifth Amendment privilege in this forfeiture proceeding and ordered the return of the seized money. 393 F. 2d 499 (1968). Since the Court of Appeals for the Sixth Circuit subsequently came to the opposite conclusion, we granted the Government’s petition for certiorari in the present case, 393 U. S. 949 (1968), in order to resolve the conflict. The case was first argued at the 1968 Term and reargued at the current Term. We now affirm the decision below.
I
The Government’s principal argument turns upon an exceedingly narrow construction of our decisions in Marchetti and Grosso. In those cases, we took pains to make it clear that the Court in no way doubted the Government’s power to assess and collect taxes on unlawful gambling activities. It was only the method Congress had adopted in collecting the tax that raised the Fifth Amendment question. The statute commanded that gamblers submit special registration statements and tax returns that contained information which could well incriminate them in many circumstances. Because the risk of self-incrimination was substantial, we held that a Fifth Amendment privilege could be raised as a defense to a criminal prosecution charging failure to file the required forms. Since it was only this method of tax collection which was subject to constitutional objection, we indicated that the Government remained free to collect taxes due under the statute so long as it did not attempt to punish the taxpayer for his failure to file the required documents.
The Government now relies heavily on the fact that Marchetti and Grosso only held that “a claim of privilege precludes a criminal conviction premised on failure to pay the tax.” (Emphasis supplied.) It argues that just as it may collect taxes in a civil action, the Government may also initiate forfeiture proceedings — which are also formally civil in nature — without offending Marchetti and Grosso. But as Boyd v. United States, 116 U. S. 616, 634 (1886), makes clear, “proceedings instituted for the purpose of declaring the forfeiture of a man’s property by reason of offences committed by him, though they may be civil in form, are in their nature criminal” for Fifth Amendment purposes. (Emphasis supplied.) From the relevant constitutional standpoint there is no difference between a man who “forfeits” $8,674 because he has used the money in illegal gambling activities and a man who pays a “criminal fine” of $8,674 as a result of the same course of conduct. In both instances, money liability is predicated upon a finding of the owner’s wrongful conduct; in both cases, the Fifth Amendment applies with equal force. See also One 1958 Plymouth Sedan v. Pennsylvania, 380 U. S. 693, 700 (1965).
The Government does not seriously contend otherwise. Instead it places great emphasis on the peculiar nature of the proceedings authorized under § 7302. Boyd, we are told, was only concerned with forfeitures which are imposed “by reason of offences committed by” the owner. 116 U. S., at 634. In the present action, however, the Government contends that the guilt of the owner of the money is irrelevant. The forfeiture statute, it is noted, simply authorizes confiscation of “any property intended for use in violating the provisions of the internal revenue laws”; it does not require that Angelini be the one who possessed the requisite intention. If, for example, Angelini had left the money in a bookmaker’s office without having any reason to know that illegal activities would take place there, the Government reads the statute as permitting confiscation if it can be shown that the bookmaker used Angelinas money in illegal wagering activities. Since, under the Government’s view, the guilt or innocence of the actual owner of the money is irrelevant in an action under § 7302, the Government urges that the present forfeiture should not be considered the result of a “criminal” proceeding for Fifth Amendment purposes.
If we were writing on a clean slate, this claim that § 7302 operates to deprive totally innocent people of their property would hardly be compelling. Although it is true that the statute does not specifically state that the property shall be seized only if its owner significantly participated in the criminal enterprise, we would not readily infer that Congress intended a different meaning. Cf. Morissette v. United States, 342 U. S. 246 (1952). However, as our past decisions have recognized, centuries of history support the Government’s claim that forfeiture statutes similar to this one have an extraordinarily broad scope. See Goldsmith-Grant Co. v. United States, 254 U. S. 505 (1921); United States v. One Ford Coupe, 272 U. S. 321 (1926). Traditionally, forfeiture actions have proceeded upon the fiction that inanimate objects themselves can be guilty of wrongdoing. See Dobbins’s Distillery v. United States, 96 U. S. 395, 399-401 (1878); The Palmyra, 12 Wheat. 1, 14 (1827). Simply put, the theory has been that if the object is “guilty,” it should be held forfeit. In the words of a medieval English writer, “Where a man killeth another with the sword of John at Stile, the sword shall be forfeit as deodand, and yet no default is in the owner.” The modern forfeiture statutes are the direct descendants of this heritage, which is searchingly considered by Mr. Justice Holmes in a brilliant chapter in his book, The Common Law. The forfeiture action in the present case was instituted as an in rem proceeding in which the money itself is the formal respondent. More remarkable, the Government’s complaint charges the money with the commission of an actionable wrong.
It would appear then that history does support the Government’s contention regarding the operation of this forfeiture statute, as do several decisions rendered by the courts of appeals. But before the Government’s attempt to distinguish the Boyd case could even begin to convince, we would first have to be satisfied that a forfeiture statute, with such a broad sweep, did not raise serious constitutional questions under that portion of the Fifth Amendment which commands that no person shall be “deprived of . . . property, without due process of law; nor shall private property be taken for public use, without just compensation.” Even Blackstone, who is not known as a biting critic of the English legal tradition, condemned the seizure of the property of the innocent as based upon a “superstition” inherited from the “blind days” of feudalism. And this Court in the past has recognized the difficulty of reconciling the broad scope of traditional forfeiture doctrine with the requirements of the Fifth Amendment. See, e. g., Goldsmith-Grant Co. v. United States, supra. Cf. United States v. One Ford Coach, 307 U. S. 219, 236-237 (1939).
We need not pursue that inquiry once again, however, because we think that the Government’s argument fails on another -score. For the broad language of § 7302 cannot be understood without considering the terms of the other statutes which regulate forfeiture proceedings. An express statutory provision permits the innocent owner to prove to the Secretary of the Treasury that the “forfeiture was incurred without willful negligence or without any intention on the part of the petitioner . . . to violate the law . . . .” 19 U. S. C. § 1618. Upon this showing, the Secretary is authorized to return the seized property “upon such terms and conditions as he deems reasonable and just.” It is not to be presumed that the Secretary will not conscientiously fulfill this trust, and the courts have intervened when the innocent petitioner’s protests have gone unheeded. United States v. Edwards, 368 F. 2d 722 (CA4 1966); Cotonificio Bustese, S. A. v. Morgenthau, 74 App. D. C. 13, 121 F. 2d 884 (1941) (Rutledge, J.). When the forfeiture statutes are viewed in their entirety, it is manifest that they are intended to impose a penalty only upon those who are significantly involved in a criminal enterprise. It follows from Boyd, Marchetti, and Grosso that the Fifth Amendment’s privilege may properly be invoked in these proceedings.
II
The Government next contends that in any event our decisions in Marchetti and Grosso should not be retroactively applied to govern seizures of property taking place before these decisions were handed down on January 29, 1968. It is said that in reliance on the Court’s earlier decisions in Kahriger and Lewis, which upheld the validity of the gambling tax and registration require-merits, “$6,686,098.22 worth of money and property has been seized under 26 U. S. C. 7302.” Brief for the United States 32-33. The Solicitor General concedes, however, that this figure overestimates the Government's stake in the retroactivity question since “there are no reliable statistics indicating what percentage [of the property seized] was eventually returned to claimants” who proved to the Secretary of the Treasury that they were not significantly involved in criminal gambling activities. Id., at 33. Nevertheless, the Government contends that simply because some litigation may be anticipated as gamblers attempt to reclaim their property, the retroactive effect of the new rule should be limited.
We cannot agree. Unlike some of our earlier retro-activity decisions, we are not here concerned with the implementation of a procedural rule which does not undermine the basic accuracy of the factfinding process at trial. Linkletter v. Walker, 381 U. S. 618 (1965); Tehan v. Shott, 382 U. S. 406 (1966); Johnson v. New Jersey, 384 U. S. 719 (1966); Stovall v. Denno, 388 U. S. 293 (1967). Rather, Marchetti and Orosso dealt with the kind of conduct that cannot constitutionally be punished in the first instance. These cases held that gamblers in Angelini’s position had the Fifth Amendment right to remain silent in the face of the statute’s command that they submit reports which could incriminate them. In the absence of a waiver of that right, such persons could not properly be prosecuted at all.
Given the aim of the Marchetti-Grosso rule, it seems clear that the Government must be required to undergo the relatively insignificant inconvenience involved in defending any lawsuits that may be anticipated. Indeed, this conclusion follows a fortiori from those decisions mandating the retroactive application of those new rules which substantially improve the accuracy of the factfinding process at trial. In those cases, retroactivity was held required because the failure to employ such rules at trial meant there was a significant chance that innocent men had been wrongfully punished in the past. In the case before us, however, even the use of impeccable fact-finding procedures could not legitimate a verdict decreeing forfeiture, for we have held that the conduct being penalized is constitutionally immune from punishment. No circumstances call more for the invocation of a rule of complete retroactivity.
Affirmed.
Mr. Justice Black concurs in the Court’s judgment and the opinion so far as it goes. He would go further and now overrule Linkletter v. Walker, 381 U. S. 618 (1965), and its progeny.
United States v. One 1965 Buick, 392 F. 2d 672, rehearing denied, 397 F. 2d 782.
Grosso v. United States, 390 U. S., at 70 n. 7; see also Marchetti v. United States, 390 U. S., at 41-42, 61.
Quoted from O. Holmes, The Common Law 23 (M. Howe ed. 1963).
Holmes, supra, n. 3, Lecture 1.
The libel charged that: “On one or more of the aforementioned dates . . . aforesaid respondents [i. e., the money] had been used and were intended to be used in violation of the Internal Revenue Laws of the United States of America. . . . WHEREFORE, FRANK E. McDONALD, United States Attorney for the Northern District of Illinois . . . prays . . . That aforesaid respondents be adjudged and decreed forfeited to the UNITED STATES OF AMERICA.” App. 5-6.
United States v. Bride, 308 F. 2d 470 (CA9 1962); United States v. One 1958 Pontiac Coupe, 298 F. 2d 421 (CA7 1962); cf. United States v. One 1957 Oldsmobile Automobile, 256 F. 2d 931 (CA5 1958).
1 W. Blackstone, Commentaries, e. 8, *300.
Although this statute appears in Title 19, regulating forfeitures under the customs laws, 26 U. S. C. §7327 provides that: “The provisions of law applicable to the remission or mitigation by the Secretary or his delegate of forfeitures under the customs laws shall apply to forfeitures incurred or alleged to have been incurred under the internal revenue laws.”
It is noteworthy that the libel instituted by the United States made claim to the $8,674 because "a business was being operated, by Donald Angelini, in violation of [the gambling tax provisions],” App. 5 (emphasis supplied), and that the evidence introduced at trial was consistent only with this theory of liability.
In the present case, the Government has not suggested that the Fifth Amendment provides Angelini with a defense only with respect to his failure to file the required registration and tax forms, and that the gambler’s failure to pay the required tax may still be punished consistently with Marchetti and Grosso. This argument was properly abandoned by the Solicitor General on reargument in Marchetti and Grosso, see Brief for the United States on Reargument 37-41, Marchetti v. United States and Grosso v. United States, supra, and we held in Grosso that, “[although failures to pay the excise tax and to file a return are separately punishable under 26 U. S. C. § 7203, the two obligations must be considered inseparable for purposes of measuring the hazards of self-incrimination which might stem from payment of the excise tax.” 390 U. S., at 65. Similarly, Marchetti ruled that: “The statutory obligations to register and to pay the occupational tax are essentially inseparable elements of a single registration procedure.” 390 U. S., at 42-43, and see n. 3. Consequently, it appears clear that the Fifth Amendment provides gamblers in Angelini’s position with a complete defense.
United States v. Kahriger, 345 U. S. 22 (1953); Lewis v. United States, 348 U. S. 419 (1955).
See, e. g., Roberts v. Russell, 392 U. S. 293 (1968); McConnell v. Rhay, 393 U. S. 2 (1968); Arsenault v. Massachusetts, 393 U. S. 5 (1968); Berger v. California, 393 U. S. 314 (1969).
In the view of the writer of this opinion, the fact that this case had not become final by the time of this Court’s decisions in Mar-chetti and Grosso suffices, without more, to require rejection of the Government’s contention respecting nonretroactivity. See, e. g., Desist v. United States, 394 U. S. 244, 256 (Harlan, J., dissenting), and Mackey v. United States, ante, p. 675 (Harlan, J., concurring in judgments and dissenting).
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 Rehnquist
delivered the opinion of the Court.
In 1974, respondent Reader’s Digest Association, Inc., published a book entitled KGB, the Secret Work of Soviet Agents (KGB), written by respondent John Barron. The book describes the Soviet Union’s espionage organization and chronicles its activities since World War II. In a passage referring to disclosures by “royal commissions in Canada and Australia, and official investigations in Great Britain and the United States,” the book contains the following statements relating to petitioner Ilya Wolston:
“Among Soviet agents identified in the United States were Elizabeth T. Bentley, Edward Joseph Fitzgerald, William Ludwig Ullmann, William Walter Remington, Franklin Victor Reno, Judith Coplon, Harry Gold, David Greenglass, Julius and Ethel Rosenberg, Morton Sobell, William Perl, Alfred Dean Slack, Jack Soble, Ilya Wol-ston, Alfred and Martha Stern.*
“'"‘No claim is made that this list is complete. It consists of Soviet agents who were convicted of espionage or falsifying information or perjury and/or contempt charges following espionage indictments, or who fled to the Soviet bloc to avoid prosecution. . . .” App. 28 (emphasis supplied).
In addition, the index to KGB lists petitioner as follows: “Wolston, Ilya, Soviet agent in U. S.” Id., at 29.
Petitioner sued the author and publishers of KGB in the United States District Court for the District of Columbia, claiming that the passages in KGB stating that he had been indicted for espionage and had been a Soviet agent were false and defamatory. The District Court granted respondents’ motion for summary judgment. 429 F. Supp. 167 (1977). The court held that petitioner was a “public figure” and that the First Amendment therefore precluded recovery unless petitioner proved that respondents had published a defamatory falsehood with “ 'actual malice’ — that is, with knowledge that it was false or with reckless disregard of whether it was false or not,” New York Times Co. v. Sullivan, 376 U. S. 264, 280 (1964). 429 F. Supp., at 172, 176. While the District Court agreed that the above-quoted portions of KGB appeared to state falsely that petitioner had been indicted for espionage, it ruled, on the basis of affidavits and deposition testimony, that the evidence raised no genuine issue with respect to the existence of “actual malice” on the part of respondents. Id., at 180-181. The Court of Appeals for the District of Columbia Circuit affirmed. 188 U. S. App. D. C. 185, 578 F. 2d 427 (1978).
We granted certiorari, 439 U. S. 1066 (1979), and we now reverse. We hold that the District Court and the Court of Appeals were wrong in concluding that petitioner was a public figure within the meaning of this Court's defamation cases. Petitioner therefore was not required by the First Amendment to meet the “actual, malice" standard of New York Times Co. v. Sullivan, supra, in order to recover from respondents.
During 1957 and 1958, a special federal grand jury sitting in New York City conducted a major investigation into the activities of Soviet intelligence agents in the United States. As a result of this investigation, petitioner’s aunt and uncle, Myra and Jack Soble, were arrested in January 1957 on charges of spying. The Sobles later pleaded guilty to espionage charges, and in the ensuing months, the grand jury’s investigation focused on other participants in a suspected Soviet espionage ring, resulting in further arrests, convictions, and guilty pleas. On the same day the Sobles were arrested, petitioner was interviewed by agents of the Federal Bureau of Investigation at his home in the District of Columbia. Petitioner was interviewed several more times during the following months in both Washington and in New York City and traveled to New York on various occasions pursuant to grand jury subpoenas.
On July 1, 1958, however, petitioner failed to respond to a grand jury subpoena directing him to appear on that date. Petitioner previously had attempted to persuade law enforcement authorities not to require him to travel to New York for interrogation because of his state of mental depression. App. 91 (affidavit of petitioner, June 15, 1976). On July 14, a Federal District Judge issued an order to show cause why petitioner should not be held in criminal contempt- of court. These events immediately attracted the interest of the news media, and on July 15 and 16, at least seven news stories focusing on petitoner’s failure to respond to the grand jury subpoena appeared in New York and Washington newspapers.
Petitioner appeared in court on the return date of the show-cause order and offered to testify before the grand jury, but the offer was refused. A hearing then commenced on the contempt charges. Petitioner’s wife, who then was pregnant, was called to testify as to petitioner’s mental condition at the time of the return date of the subpoena, but after she became hysterical on the witness stand, petitioner agreed to plead guilty to the contempt charge. See App. 92 (affidavit of petitioner, June 15, 1976). He received a 1-year suspended sentence and was placed on probation for three years, conditioned on his cooperation with the grand jury in any further inquiries regarding Soviet espionage. Ibid. Newspapers also reported the details of the contempt proceedings and petitioner’s guilty plea and sentencing. In all, during the 6-week period between petitioner’s failure to appear before the grand jury and his sentencing, 15 stories in newspapers in Washington and New York mentioned or discussed these events. This flurry of publicity subsided following petitioner’s sentencing, however, and, thereafter, he succeeded for the most part in returning to the private life he had led prior to issuance of the grand jury subpoena. 429 F. Supp., at 174. At no time was petitioner indicted for espionage.
In New York Times Co. v. Sullivan, 376 U. S., at 279-280, the Court held that the First and Fourteenth Amendments prohibit a public official from recovering damages for a defamatory falsehood relating to his official conduct absent proof that the statement was made with “actual malice,” as that term is defined in that opinion. See also St. Amant v. Thompson, 390 U. S. 727, 731 (1968). Three years later, the Court extended the New York Times standard to “public figures.” Curtis Publishing Co. v. Butts, 388 U. S. 130, 162 (1967) (Warren, C. J., concurring in result). But in Gertz v. Robert Welch, Inc., 418 U. S. 323, 344-347 (1974), we declined to expand the protection afforded by that standard to defamation actions brought by private individuals. We explained in Gerts that the rationale for extending the New York Times rule to public figures-was twofold. First, we recognized that public figures are less vulnerable to injury from defamatory statements because of their ability to resort to effective “self-help.” They usually enjoy significantly greater access than private individuals to channels of effective communication, which enable them through discussion to counter criticism and expose the falsehood and fallacies of defamatory statements. 418 U. S., at 344; see Curtis Publishing Co. v. Butts, 388 U. S., at 155 (plurality opinion); id., at 164 (Warren, C. J., concurring in result). Second, and more importantly, was a normative consideration that public figures are less deserving of protection than private persons because public figures, like public officials, have “voluntarily exposed themselves to increased risk of injury from defamatory falsehood concerning them.” 418 U. S., at 345; see Curtis Publishing Co. v. Butts, supra, at 164 (Warren, C. J., concurring in result). We identified two ways in which a person may become a public figure for purposes of the First Amendment:
“For the most part those who attain this status have assumed roles of especial prominence in the affairs of society. Some occupy positions of such persuasive power and influence that they are deemed public figures for all purposes. More commonly, those classed as public figures have thrust themselves to the forefront of particular | public controversies in order to influence the resolution of ¡ the issues involved.” 418 U. S., at 345.
See id., at 351; Time, Inc. v. Firestone, 424 U. S. 448, 453 (1976).
Neither respondents nor the lower courts relied on any claim that petitioner occupied a position of such “persuasive power and influence” that he could be deemed one of that small group of individuals who are public figures for all purposes. Petitioner led a thoroughly private existence prior to the grand jury inquiry and returned to a position of relative obscurity after his sentencing. He achieved no general fame or notoriety and assumed no role of special prominence in the affairs of society as a result of his contempt citation or because of his involvement in the investigation of Soviet espionage in 1958. See Time, Inc. v. Firestone, supra, at 453; Gertz v. Robert Welch, Inc., supra, at 352.
Instead, respondents argue, and the lower courts held, that petitioner falls within the second category of public figures— those who have “thrust themselves to the forefront of particular public controversies in order to influence the resolution of the issues involved” — and that, therefore, petitioner is a public figure for the limited purpose of comment on his connection with, or involvement in, Soviet espionage in the 1940’s and 1950’s. 188 U. S. App. D. C., at 189, 578 F. 2d, at 431; 429 F. Supp., at 174-178. Both lower courts found petitioner’s failure to appear before the grand jury and citation for contempt determinative of the public-figure issue. The District Court concluded that by failing to appear before the grand jury and subjecting himself to a citation for contempt, petitioner “became involved in a controversy of a decidedly public nature in a way that invited attention and comment, and thereby created in the public an interest in knowing about his connection with espionage . . . .” Id., at 177 n. 33. Similarly, the Court of Appeals stated that by refusing to comply with the subpoena, petitioner “stepped center front into the spotlight focused on the investigation of Soviet espionage. In short, by his voluntary action he invited attention and comment in connection with the public questions involved in the investigation of espionage.” 188 U. S. App. D. C., at 189, 578 F. 2d, at 431.
We do not agree with respondents and the lower courts that petitioner can be classed as such a limited-purpose public figure. First, the undisputed facts do not justify the conclusion of the District Court and Court of Appeals that petitioner “voluntarily thrust” or “injected” himself into the forefront of the public controversy surrounding the investigation of Soviet espionage in the United States. See Time, Inc. v. Firestone, supra, at 453-454; Gertz v. Robert Welch, Inc., supra, at 352; Curtis Publishing Co. v. Butts, supra, at 155 (plurality opinion). It would be more accurate to say that petitioner was dragged unwillingly into the controversy. The Government pursued him in its investigation. Petitioner did fail to respond to a grand jury subpoena, and this failure, as well as his subsequent citation for contempt, did attract media attention. But the mere fact that petitioner voluntarily chose not to appear before the grand jury, knowing that his action might be attended by publicity, is not decisive on the question of public-figure status. In Gertz, we held that an attorney was not a public figure even though he voluntarily associated himself with a case that was certain to receive extensive media exposure. 418 U. S., at 352. We emphasized that a court must focus on the “nature and extent of an individual’s participation in the particular controversy giving rise to the defamation.” Ibid. In Gertz, the attorney took no part in the criminal prosecution, never discussed the litigation with the press, and limited his participation in the civil litigation solely to his representation of a private client. Ibid. Similarly, petitioner never discussed this matter with the press and limited his involvement to that necessary to defend himself against the contempt charge. It is clear that petitioner played only a minor role in whatever public controversy there may have been concerning the investigation of Soviet espionage. We decline to hold that his mere citation for contempt rendered him a public figure for purposes of comment on the investigation of Soviet espionage.
Petitioner’s failure to appear before the grand jury and citation for contempt no doubt were “newsworthy,” but the simple fact that these events attracted media attention also is not conclusive of the public-figure issue. A private individual is not automatically transformed into a public figure just by becoming involved in or associated with a matter that attracts public attention. To accept such reasoning would in effect re-establish the doctrine advanced by the plurality opinion in Rosenbloom v. Metromedia, Inc., 403 U. S. 29, 44 (1971), which concluded that the New York Times standard should extend to defamatory falsehoods relating to private persons if the statements involved matters of public or general concern. We repudiated this proposition in Gertz and in Firestone, however, and we reject it again today. A libel defendant must show more than mere newsworthiness to justify application of the demanding burden of New York Times. See Time, Inc. v. Firestone, 424 U. S., at 454.
Nor do we think that petitioner engaged the attention of the public in an attempt to influence the resolution of the issues involved. Petitioner assumed no “special prominence in the resolution of public questions.” See Gertz v. Robert Welch, Inc., 418 U. S., at 351. His failure to respond to the grand jury’s subpoena was in no way calculated to draw attention to himself in order to invite public comment or influence the public with respect to any issue. He did not in any way seek to arouse public sentiment in his favor and against the investigation. Thus, this is not a case where a defendant invites a citation for contempt in order to use the contempt citation as a fulcrum to create public discussion about the methods being used in connection with an investigation or prosecution. To the contrary, petitioner’s failure to appear before the grand jury appears simply to have been the result of his poor health. 429 F. Supp., at 177 n. 33; App. 91-92 (affidavit of petitioner, June 15, 1976). He then promptly communicated his desire to testify and, when the offer was rejected, passively accepted his punishment. There is no evidence that petitioner’s failure to appear was intended to have, or did in fact have, any effect on any issue of public concern. In short, we find no basis whatsoever for concluding that petitioner relinquished, to any degree, his interest in the protection of his own name.
This reasoning leads us to reject the further contention of respondents that any person who engages in criminal conduct automatically becomes a public figure for purposes of comment on a limited range of issues relating to his conviction. Brief for Respondents 24; Tr. of Oral Arg. 15, 17. We declined to accept a similar argument in Time, Inc. v. Firestone, supra, at 457, where we said
“[Wjhile participants in some litigation may be legitimate 'public figures,’ either generally or for the limited purpose of that litigation, the majority will more likely resemble respondent, drawn into a public forum largely against their will in order to attempt to obtain the only redress available to them or to defend themselves against actions brought by the State or by others. There appears little reason why these individuals should substantially forfeit that degree of protection which the law of defamation would otherwise afford them simply by virtue of their being drawn into a courtroom. The public interest in accurate reports of judicial proceedings is substantially protected by Cox Broadcasting Co. [v. Cohn, 420 U. S. 469 (1975)]. As to inaccurate and defamatory reports of facts, matters deserving no First Amendment protection ... , we think Gertz provides an adequate safeguard for the constitutionally protected interests of the press and affords it a tolerable margin for error by requiring some type of fault.”
We think that these observations remain sound, and that they control the disposition of this case. To hold otherwise would create an “open season” for all who sought to defame persons convicted of a crime.
Accordingly, the judgment of the Court of Appeals is
Reversed.
Respondents Bantam Books, Inc., MacMillan Book Clubs, Inc., and Book-of-the-Month Club, Inc., are subsequent publishers of KGB under contractual arrangements with Reader’s Digest.
Both the District Court and the Court of Appeals rested their decisions on the First Amendment to the United States Constitution. The District Court commented in a footnote that it “might also have decided to apply the actual-malice standard in this case on the ground that the law in the District of Columbia requires it.” 429 F. Supp., at 178-179, n. 37. The court referred to an unpublished decision of the Superior Court of the District of Columbia as support for that proposition. Hatter v. Evening Star Newspaper Co., Civ. No. 8298-75 (Mar. 15, 1975). But the Court of Appeals in a footnote to its opinion cast substantial doubt on the correctness of the District Court’s comment. See 188 U. S. App. D. C., at 193 n. 3, 578 F. 2d, at 435 n. 3. It described Hatter as “a brief unpublished order which recited several other grounds for granting summary judgment” and which cited no District of Columbia authority, and it noted that subsequent to the District Court’s decision, another judge of the District of Columbia Superior Court had “filed an elaborate opinion which concluded to the contrary that in the District a newspaper may be liable for actual damages suffered by a private person if it negligently publishes defamation, without actual malice.” 188 U. S. App. D. C., at 193 n. 3, 578 F. 2d, at 435 n. 3, citing Phillips v. Evening Star Newspaper Co., Civ. No. 9999-75 (June 30, 1977). We assume that the Court of Appeals is as familiar as we are with the general principle that dispositive issues of statutory and local law are to be treated before reaching constitutional issues. E. g., Dillard v. Virginia Industrial Comm’n, 416 U. S. 783, 785 (1974); Alma Motor Co. v. Timken-Detroit Axle Co., 329 U. S. 129, 136 (1946); Siler v. Louisville & Nashville R. Co., 213 U. S. 175, 193 (1909). We interpret the footnote to the Court of Appeals’ opinion in this-case, where jurisdiction is based upon diversity of citizenship, to indicate its view that Phillips represents a more accurate expression of District of Columbia law than the dicta from Hatter and that, therefore, the appeal could not be decided without reaching the constitutional question. See Commissioner v. Estate of Bosch, 387 U. S. 456, 465 (1967); King v. Order of Travelers, 333 U. S. 153, 162 (1948); West v. American Tel. & Tel. Co., 311 U. S. 223, 236-237 (1940); Washington Times Co. v. Bonner, 66 App. D. C. 280, 86 F. 2d 836 (1936); Johnson v. Johnson Pub. Co., 271 A. 2d 696 (D. C. App. 1970); Chaloner v. Washington Post Co., 36 App. D. C. 231 (1911).
Petitioner also challenges the propriety of summary judgment on the issue of “actual malice.” Brief for Petitioner 21-31. In view of our disposition of the public-figure issue, we need not and do not reach this question. See generally Hutchinson v. Proxmire, ante, at 120 n. 9.
“Wolston was bom in Russia in 1918. He subsequently lived in Lithuania, Germany, France, and England before coming to the United States in 1939. The army drafted him in 1942, and during his tour of duty he became a naturalized citizen; he was trained as an interpreter and served primarily in Alaska. After receiving an honorable discharge in 1946 he worked as an interpreter for the United States Military Government and the State Department in Allied-occupied Berlin. He returned to the United States in 1951 and worked as a clerk until 1953, when he enrolled in an undergraduate program at New York University. In 1955 he and his wife moved to Washington, D. C., where he worked several months for the Army Map Service and then as a free-lance translator until January 1957. Deposition of Ilya Wolston at 5-42.” 429 F. Supp., at 169 n. 1.
Since this case was decided on respondents' motion for summary judgment, we must construe the record most favorably to petitioner. E. g., Bishop v. Wood, 426 U. S. 341, 347 n. 11 (1976); United States v. Diebold, Inc., 369 U. S. 654, 655 (1962).
A short time after these events, petitioner was mentioned in two publications. In the book My Ten Years as a Counterspy, written by Boris Morros and published in 1959, Morros, a former confederate of Jack Soble who later became a double agent, states that Soble identified petitioner as a Soviet agent. App. 30-34. And in 1960, a report prepared by the Federal Bureau of Investigation, entitled Exposé of Soviet Espionage May 1960, listed petitioner’s name among people "the FBI investigation resulted in identifying as Soviet intelligence agents.” S. Doc. No. 114, 86th Cong., 2d Sess., 24, 26-27 (1960).
Both lower courts found that petitioner became a public figure at the time of his contempt citation in 1968. See 188 U. S. App. D. C., at 189, 578 F. 2d, at 431; 429 F. Supp., at 176-177. Petitioner argued below that even if he was once a public figure, the passage of time has restored him to the status of a private figure for purposes of the First Amendment. Both the District Court and the Court of Appeals rejected this argument. 188 U. S. App. D. C., at 189, 678 F. 2d, at 431; 429 F. Supp., at 178. And petitioner has abandoned the argument in this Court. Reply Brief for Petitioner 5-6, n. 8; Tr. of Oral Arg. 10. Because petitioner does not press the issue in this Court and because we conclude that petitioner was not a public figure in 1958, we need not and do not decide whether or when an individual who was once a public figure may lose that status by the passage of time.
It is difficult to determine with precision the “public controversy” into which petitioner is alleged to have thrust himself. Certainly, there was no public controversy or debate in 1958 about the desirability of permitting Soviet espionage in the United States; all responsible United States citizens understandably were and are opposed to it. Respondents urge, and the Court of Appeals apparently agreed, that the public controversy involved the propriety of the actions of law enforcement officials in investigating and prosecuting suspected Soviet agents. 188 U. S. App. D. C., at 189, 578 F. 2d, at 431; Brief for Respondents 26-27; Tr. of Oral Arg. 27-29. We may accept, arguendo, respondents’ characterization of the “public controversy” involved in this case, for it is clear that petitioner fails to meet the other criteria established in Gertz for public-figure status.
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.
Justice Breyer
delivered the opinion of the Court.
The issue before us is whether prison guards who are employees of a private prison management firm are entitled to a qualified immunity from suit by prisoners charging a violation of 42 U. S. C. § 1983. We hold that they are not.
r — I
Ronnie Lee McKnight, a prisoner at Tennessee s South Central Correctional Center (SCCC), brought this federal constitutional tort action against two prison guards, Darryl Richardson and John Walker. He says the guards injured him by placing upon him extremely tight physical restraints, thereby unlawfully “subject[ing]” him “to the deprivation of” a right “secured by the Constitution” of the United States. Rev. Stat. § 1979, 42 U. S. C. § 1983. Richardson and Walker asserted a qualified immunity from § 1983 lawsuits, see Harlow v. Fitzgerald, 457 U. S. 800, 807 (1982), and moved to dismiss the action. The District Court noted that Tennessee had “privatized” the management of a number of its correctional facilities, and that consequently a private firm, not the state government, employed the guards. See Tenn. Code Ann. § 41-24-101 et seq, (1990 and Supp. 1996); see generally Cody & Bennett, The Privatization of Correctional Institutions: The Tennessee Experience, 40 Vand. L. Rev. 829 (1987) (outlining State’s history with private correctional services). The court held that, because they worked for a private company rather than the government, the law did not grant the guards immunity from suit. It therefore denied the guards’ motion to dismiss. The guards appealed to the Sixth Circuit. See Mitchell v. Forsyth, 472 U. S. 511, 530 (1985) (permitting interlocutory appeals of qualified immunity determinations); see also Johnson v. Jones, 515 U. S. 304 (1995); Behrens v. Pelletier, 516 U. S. 299 (1996). That court also ruled against them. McKnight v. Rees, 88 F. 3d 417, 425 (CA6 1996). The Court of Appeals conceded that other courts had reached varying conclusions about whether, or the extent to which, private sector defendants are entitled to immunities of the sort the law provides governmental defendants. See, e. g., Eagon v. Elk City, 72 F. 3d 1480, 1489-1490 (CA10 1996); Williams v. O’Leary, 55 F. 3d 320, 323-324 (CA7), cert. denied, 516 U. S. 993 (1995); Frazier v. Bailey, 957 F. 2d 920, 928-929 (CA1 1992). But the court concluded, primarily for reasons of “public policy,” that the privately employed prison guards were not entitled to the immunity provided their governmental counterparts. 88 F. 3d, at 425. We granted certiorari to review this holding. We now affirm.
II
A
We take the Court’s recent case, Wyatt v. Cole, 504 U. S. 158 (1992), as pertinent authority. The Court there considered whether private defendants, charged with § 1983 liability for “invoking state replevin, garnishment, and attachment statutes” later declared unconstitutional were “entitled to qualified immunity from suit.” Id., at 159. It held that they were not. Id., at 169. We find four aspects of Wyatt relevant here.
First, as Wyatt noted, § 1983 basically seeks “to deter state áctors from using the badge of their authority to deprive individuals of their federally guaranteed rights” and to provide related relief. Id., at 161 (emphasis added) (citing Carey v. Piphus, 435 U. S. 247, 254-257 (1978)); see also Owen v. Independence, 445 U. S. 622, 654 (1980). It imposes liability only where a person acts “under color” of a state “statute, ordinance, regulation, custom, or usage.” 42 U. S. C. § 1983. Nonetheless, Wyatt reaffirmed that § 1983 can sometimes impose liability upon a private individual. 504 U. S., at 162; see also Lugar v. Edmondson Oil Co., 457 U. S. 922, 924 (1982).
Second, Wyatt reiterated that after Harlow, supra, and this Court’s reformulation of the qualified immunity doctrine, see Anderson v. Creighton, 483 U. S. 635, 645 (1987), a distinction exists between an “immunity from suit” and other kinds of legal defenses. 504 U. S., at 166-167; see also Mitchell, supra, at 526. As the Wyatt concurrence pointed out, a legal defense may well involve “the essence of the wrong,” while an immunity frees one who enjoys it from a lawsuit whether or not he acted wrongly. 504 U. S., at 171—172 (Kennedy, J., concurring).
Third, Wyatt specified the legal source of § 1983 immunities. It pointed out that although § 1983 “ ‘creates a species of tort liability that on its face admits of no immunities,’ ” id., at 163 (quoting Imbler v. Pachtman, 424 U. S. 409, 417 (1976)), this Court has nonetheless accorded immunity where a
“ ‘tradition of immunity was so firmly rooted in the common law and was supported by such strong policy reasons that “Congress would have specifically so provided had it wished to abolish the doctrine.” ’ ” 504 U. S., at 164 (quoting Owen v. Independence, supra, at 637).
The Wyatt majority, in deciding whether or not the private defendants enjoyed immunity, looked both to history and to “the special policy concerns involved in suing government officials.” 504 U. S., at 167; see also Mitchell, supra, at 526; Harlow, supra, at 807; Imbler v. Pachtman, supra, at 424. And in this respect — the relevant sources of the law — both the Wyatt concurrence, and the dissent seemed to agree. Compare 504 U. S., at 169-171 (Kennedy, J., concurring) (existence of immunity depends upon “historical origins” and “public policy”), with id., at 175-176 (Rehnquist, C. J., dissenting) (“immunity” recognized where “similarly situated defendant would have enjoyed an immunity at common law” or “when important public policy concerns suggest the need for an immunity”).
Fourth, Wyatt did not consider its answer to the question before it as one applicable to all private individuals — irrespective of the nature of their relation to the government, position, or the kind of liability at issue. Rather, Wyatt explicitly limited its holding to what it called a “narrow” question about “private persons . . . who conspire with state officials,” id., at 168, and it answered that question by stating that private defendants “faced with § 1983 liability for invoking a state replevin, garnishment, or attachment statute” are not entitled to immunity, id., at 168-169.
Wyatt, then, did not answer the legal question before us, whether petitioners — two employees of a private prison management firm — enjoy a qualified immunity from suit under § 1983. It does tell us, however, to look both to history and to the purposes that underlie government employee immunity in order to find the answer. Id., at 164; see also Newport v. Fact Concerts, Inc., 453 U. S. 247, 259 (1981); Owen, supra, at 638; Imbler, supra, at 424.
B
History does not reveal a “firmly rooted” tradition of immunity applicable to privately employed prison guards. Correctional services in the United States have undergone various transformations. See D. Shiehor, Punishment for Profit 33, 36 (1995) (Shiehor). Governmentsmployed prison guards may have enjoyed a kind of immunity defense arising out of their status as public employees at common law. See Procunier v. Navarette, 434 U. S. 555, 561-562 (1978) (extending qualified immunity to state prison guards). But correctional functions have never been exclusively public. Shiehor 33, 36. Private individuals operated local jails in the 18th century, G. Bowman, S. Hakim, & P. Seidenstat, Privatizing the United States Justice System 271, n. 1 (1992), and private contractors were heavily involved in prison management during the 19th century. Shiehor 33, 36.
During that time, some States, including southern States like Tennessee, leased their entire prison systems to private individuals or companies which frequently took complete control over prison management, including inmate labor and discipline. G. Bowman, S. Hakim, & P. Seidenstat, Privatizing Correctional Institutions 42 (1993); see generally B. McKelvey, American Prisons: A Study in American Social History Prior to 1915, pp. 172-180 (1968) (describing 19th-century American prison system); see also Shiehor 34; G. de Beaumont & A. de Tocqueville, On the Penitentiary System in the United States and Its Application in France 35 (1833) (describing more limited prison contracting system in Massachusetts and Pennsylvania). Private prison lease agreements (like inmate suits) seem to have been more prevalent after § 1983’s enactment, see generally M. Mancini, One Dies, Get Another (1996), but we have found evidence that the common law provided mistreated prisoners in prison leasing States with remedies against mistreatment by those private lessors. See, e. g., Dade Coal Co. v. Haslett, 83 Ga. 549, 550-551, 10 S. E. 435, 435-436 (1889) (convict can recover from contractor for injuries sustained while on lease to private company); Boswell v. Barnhart, 96 Ga. 521, 522-523, 23 S. E. 414, 415 (1895) (wife can recover from contractor for chain-gang-related death of husband); Dahlheim v. Lemon, 45 F. 225, 228-230 (1891) (contractor liable for convict injuries); Tillar v. Reynolds, 96 Ark. 358, 360-361, 365-366, 131 S. W. 969, 970, 971-972 (1910) (work farm owner liable for inmate beating death); Weigel v. Brown, 194 F. 652 (CA8 1912) (prison contractor liable for unlawful whipping); see also Edwards v. Pocahontas, 47 F. 268 (CC Va. 1891) (inmate can recover from municipal corporation for injuries caused by poor jail conditions); Hall v. O’Neil Turpentine Co., 56 Fla. 324, 47 So. 609 (1908) (private prison contractor and subcontractor liable to municipality for escaped prisoner under lease agreement); see generally Mancini, supra (discussing abuses of 19th-century private lease system). Yet, we have found no evidence that the law gave purely private companies or their employees any special immunity from such suits. Cf. Almango v. Board of Supervisors of Albany County, 32 N. Y. Sup. Ct. 551 (1881) (no cause of action against private contractor where contractor designated state instrumentality by statute). The case on which the dissent rests its argument, Williams v. Adams, 85 Mass. 171 (1861) (which could not — without more — prove the existence of such a tradition and does not, moreover, clearly involve a private prison operator) actually supports our point. It suggests that no immunity from suit would exist for the type of intentional conduct at issue in this case. See ibid, (were “battery” at issue, the case would be of a different “character” and “the defendant might be responsible”); see id., at 176 (making clear that case only involves claim of ordinary negligence for lack of heat and other items, not “gross negligence,” “implied malice,” or “intention to do the prisoner any bodily injury”); cf. Tower v. Glover, 467 U. S. 914, 921 (1984) (concluding that state public defenders do not enjoy immunity from suit where conduct intentional and no history of immunity for intentional conduct was established).
Correctional functions in England have been more consistently public, see generally 22 Encyclopedia Brittanica, “Prison” 361-368 (11th ed. 1911); S. Webb & B. Webb, English Prisons Under Local Government (1922) (Webb), but historical sources indicate that England relied upon private jailers to manage the detention of prisoners from the Middle Ages until well into the 18th century. Shichor 21; see also Webb 4-5; 1 E. Coke, Institutes 43 (1797). The common law forbade those jailers to subject “‘their prisoners to any pain or torment,’” whether through harsh confinement in leg irons, or otherwise. See In re Birdsong, 39 F. 599, 601 (SD Ga. 1889); 1 Coke, supra, at 315, 316, 381; 2 C. Addison, A Treatise on the Law of Torts § 1016, pp. 224-225 (1876); see also 4 Geo. IV, ch. 64, § X Twelfth. And it apparently authorized prisoner lawsuits to recover damages. 2 Addison, supra, § 1016. Apparently the law did provide a kind of immunity for certain private defendants, such as doctors or lawyers who performed services at the behest of the sovereign. See Tower, supra, at 921; J. Bishop, Commentaries on Non-Contract Law §§ 704, 710 (1889). But we have found no indication of any more general immunity that might have applied to private individuals working for profit.
Our research, including the sources that the parties have cited, reveals that in the 19th century (and earlier) sometimes private contractors and sometimes government itself carried on prison management activities. And we have found no conclusive evidence of a historical tradition of immunity for private parties carrying out these functions. History therefore does not provide significant support for the immunity claim. Cf. Briscoe v. LaHue, 460 U. S. 325, 330-334 (1983) (immunity for witnesses); Pierson v. Ray, 386 U. S. 547, 554-555 (1967) (immunity for judges and police officers); Tenney v. Brandhove, 341 U. S. 367, 372-376 (1951) (immunity for legislators).
C
Whether the immunity doctrine’s purposes warrant immunity for private prison guards presents a closer question. Wyatt, consistent with earlier precedent, described the doctrine’s purposes as protecting “government’s ability to perform its traditional functions” by providing immunity where “necessary to preserve” the ability of government officials “to serve the public good or to ensure that talented candidates were not deterred by the threat of damages suits from entering public service.” 504 U. S., at 167. Earlier precedent described immunity as protecting the public from unwarranted timidity on the part of public officials by, for example, “encouraging the vigorous exercise of official authority,” Butz v. Economou, 438 U. S. 478, 506 (1978), by contributing to “‘principled and fearless decision-making,”’ Wood v. Strickland, 420 U. S. 308, 319 (1975) (quoting Pier-son, supra, at 554), and by responding to the concern that threatened liability would, in Judge Hand’s words, “ ‘dampen the ardour of all but the most resolute, or the most irresponsible,’” public officials, Harlow, 457 U. S., at 814 (quoting Gregoire v. Biddle, 177 F. 2d 579, 581 (CA2 1949) (L. Hand, J.), cert. denied, 339 U. S. 949 (1950); see also Mitchell, 472 U. S., at 526 (lawsuits may “distrac[t] officials from their governmental duties”).
The guards argue that those purposes support immunity whether their employer is private or public. Brief for Petitioners 35-36. Since private prison guards perform the same work as state prison guards, they say, they must require immunity to a similar degree. To say this, however, is to misread this Court’s precedents. The Court has sometimes applied a functional approach in immunity cases, but only to decide which type of immunity — absolute or qualified — a public officer should receive. See, e. g., Buckley v. Fitzsimmons, 509 U. S. 259 (1993); Burns v. Reed, 500 U. S. 478 (1991); Forrester v. White, 484 U. S. 219 (1988); Cleavinger v. Saxner, 474 U. S. 193 (1985); Harlow, supra. And it never has held that the mere performance of a governmental function could make the difference between unlimited § 1983 liability and qualified immunity, see, e. g., Tower, 467 U. S., at 922-923, especially for a private person who performs a job without government supervision or direction. Indeed a purely functional approach bristles with difficulty, particularly since, in many areas, government and private industry may engage in fundamentally similar activities, ranging from electricity production, to waste disposal, to even mail delivery.
Petitioners’ argument also overlook certain important differences that, from an immunity perspective, are critical. First, the most important special government immunity-producing concern — unwarranted timidity — is less likely present, or at least is not special, when a private company subject to competitive market pressures operates a prison. Competitive pressures mean not only that a firm whose guards are too aggressive will face damages that raise costs, thereby threatening its replacement, but also that a firm whose guards are too timid will face threats of replacement by other firms with records that demonstrate their ability to do both a safer and a more effective job.
These ordinary marketplace pressures are present here. The private prison guards before us work for a large, multi-state private prison management firm. C. Thomas, D. Bol-inger, & J. Badalamenti, Private Adult Correctional Facility Census 1 (10th ed. 1997) (listing the Corrections Corporation of America as the largest prison management concern in the United States). The firm is systematically organized to perform a major administrative task for profit. Cf. Tenn. Code Ann. § 41-24-104 (Supp. 1996) (requiring that firms contracting with the State demonstrate a history of successful operation of correctional facilities). It performs that task independently, with relatively less ongoing direct state supervision. Compare § 41-4-140(c)(5) (exempting private jails from certain monitoring) with § 41-4-116 (requiring inspectors to examine publicly operated county jails once a month or more) and § 41-4-140(a) (requiring Tennessee Correctional Institute to inspect public correctional facilities on an annual basis and to report findings of such inspections). It must buy insurance sufficient to compensate victims of civil rights torts. § 41-24-107. And, since the firm’s first contract expires after three years, § 41—24—105(a), its performance is disciplined, not only by state review, see §§41-24—105(c)—(f), 41-24-109, but also by pressure from potentially competing firms who can try to take its place. Cf. §41-24-104(a)(4) (permitting State, upon notice, to cancel contract at any time after first year of operation); see also §§ 41-24-105(c) and (d) (describing standards for renewal of contract).
In other words, marketplace pressures provide the private firm with strong incentives to avoid overly timid, insufficiently vigorous, unduly fearful, or “nonarduous” employee job performance. And the contract’s provisions — including those that might permit employee indemnification and avoid many civil-service restrictions — grant this private firm freedom to respond to those market pressures through rewards and penalties that operate directly upon its employees. See § 41-24-111. To this extent, the employees before us resemble those of other private firms and differ from government employees.
This is not to say that government employees, in their efforts to act within constitutional limits, will always, or often, sacrifice the otherwise effective performance of their duties. Rather, it is to say that government employees typically act within a different system. They work within a system that is responsible through elected officials to voters who, when they vote, rarely consider the performance of individual subdepartments or civil servants specifically and in detail. And that system is often characterized by multidepartment civil service rules that, while providing employee security, may limit the incentives or the ability of individual departments or supervisors flexibly to reward, or to punish, individual employees. Hence a judicial determination that “effectiveness” concerns warrant special immunity-type protection in respect to this latter (governmental) system does not prove its need in respect to the former. Consequently, we can find no special immunity-related need to encourage vigorous performance.
Second, “privatization” helps to meet the immunity-related need “to ensure that talented candidates” are “not deterred by the threat of damages suits from entering public service.” Wyatt, 504 U. S., at 167; see also Mitchell, 472 U. S., at 526 (citing Harlow, 457 U. S., at 816). It does so in part because of the comprehensive insurance-coverage requirements just mentioned. The insurance increases the likelihood of employee indemnification and to that extent reduces the employment-discouraging fear of unwarranted liability potential applicants face. Because privatization law also frees the private prison-management firm from many civil service law restraints, Tenn. Code Ann. §41-24-111 (1990), it permits the private firm, unlike a government department, to offset any increased employee liability risk with higher pay or extra benefits. In respect to this second government-immunity-related purpose then, it is difficult to find a special need for immunity, for the guards’ employer can operate like other private firms; it need not operate like a typical government department.
Third, lawsuits may well “ ‘distrac[t]’ ” these employees “‘from their . . . duties,’” Mitchell, supra, at 526 (quoting Harlow, 457 U. S., at 816), but the risk of “distraction” alone cannot be sufficient grounds for an immunity. Our qualified immunity cases do not contemplate the complete elimination of lawsuit-based distractions. Cf. id., at 818-819 (officials subject to suit for violations of clearly established rights). And it is significant that, here, Tennessee law reserves certain important discretionary tasks — those related to prison discipline, to parole, and to good time — for state officials. Term. Code Ann. § 41-24-110 (1990). Given a continual and conceded need for deterring constitutional violations and our sense that the firm’s tasks are not enormously different in respect to their importance from various other publicly important tasks carried out by private firms, we are not persuaded that the threat of distracting workers from their duties is enough virtually by itself to justify providing an immunity. Moreover, Tennessee, which has itself decided not to extend sovereign immunity to private prison operators (and arguably appreciated that this decision would increase contract prices to some degree), § 41-24-107, can be understood to have anticipated a certain amount of distraction.
D
Our examination of history and purpose thus reveals nothing special enough about the job or about its organizational structure that would warrant providing these private prison guards with a governmental immunity. The job is one that private industry might, or might not, perform; and which history shows private firms did sometimes perform without relevant immunities. The organizational structure is one subject to the ordinary competitive pressures that normally help private firms adjust their behavior in response to the incentives that tort suits provide — pressures not necessarily present in government departments. Since there are no special reasons significantly favoring an extension of governmental immunity, and since Wyatt makes clear that private actors are not automatically immune (i. e., § 1983 immunity does not automatically follow § 1983 liability), we must conclude that private prison guards, unlike those who work directly for the government, do not enjoy immunity from suit in a § 1983 case. Cf. Forrester v. White, 484 U. S., at 224 (Officers “who seek exemption from personal liability have the burden of showing that such an exemption is justified”); see also Butz, 438 U. S., at 506.
) — I H-4 H-<
We close with three caveats. First, we have focused only on questions of §1983 immunity and have not addressed whether the defendants are liable under § 1983 even though they are employed by a private firm. Because the Court of Appeals assumed, but did not decide, § 1983 liability, it is for the District Court to determine whether, under this Court’s decision in Lugar v. Edmondson Oil Co., 457 U. S. 922 (1982), defendants actually acted “under color of state law.”
Second, we have answered the immunity question narrowly, in the context in which it arose. That context is one in which a private firm, systematically organized to assume a major lengthy administrative task (managing an institution) with limited direct supervision by the government, undertakes that task for profit and potentially in competition with other firms. The case does not involve a private individual briefly associated with a government body, serving as an adjunct to government in an essential governmental activity, or acting under close official supervision.
Third, Wyatt explicitly stated that it did not decide whether or not the private defendants before it might assert, not immunity, but a special “good-faith” defense. The Court said that it
“d[id] not foreclose the possibility that private defendants faced with § 1983 liability under Lugar v. Edmondson Oil Co., 457 U. S. 922 (1982), could be entitled to an affirmative defense based on good faith and/or probable cause or that § 1983 suits against private, rather than governmental, parties could require plaintiffs to carry additional burdens.” Wyatt, 504 U. S., at 169.
But because those issues were not fairly before the Court, it left “them for another day.” Ibid. Similarly, the Court of Appeals in this case limited its holding to the question of immunity. It said specifically that it
“may be that the appropriate balance to be struck here is to permit the correctional officers to assert a good faith defense, rather than qualified immunity. . . . However, that issue is not before this Court in this interlocutory appeal.” 88 F. 3d, at 425.
Like the Court in Wyatt, and the Court of Appeals in this case, we do not express a view on this last-mentioned question.
For these reasons the judgment of the Court of Appeals is
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:
|
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.
These four cases present issues of basic importance to the federal reclamation laws. The Supreme Court of California has refused to confirm certain contracts entered into between two state irrigation districts and a water agency on the one hand and the United States on the other, finding the contracts invalid on several grounds. 47 Cal. 2d 597, 681, 695, 699, 306 P. 2d 824, 886, 894, 875. Specifically involved are parts of two statutory enactments: Section 5 of the Reclamation Act of 1902, providing generally that no right to the use of water shall be sold for lands in excess of 160 acres in single ownership, and § 9 of the Reclamation Project Act of 1939, providing, inter alia, for the repayment to the United States of funds expended on the construction of reclamation works, and authorizing the Secretary of the Interior to make contracts to furnish reclamation water at appropriate rates for irrigation. The opinion of the Supreme Court of California turned on an interpretation of a third provision, § 8 of the Reclamation Act of 1902. That section provides that the Act is not to be construed as interfering with state laws “relating to the control, appropriation, use, or distribution of water used in irrigation.” It further provides that in administering the Act the Secretary of the Interior “shall proceed in conformity with such laws... The California court held that this provision required the application of California law, and finding the provisions of the contracts contrary thereto, it refused confirmation. The water districts and agency involved, joined by the State of California, appealed, and we postponed the question of jurisdiction to the merits. 355 U. S. 803 (1957). We have concluded, for reasons hereinafter set forth, that we have no jurisdiction over the appeals. Treating the papers as petitions for certiorari, 28 U. S. C. § 2103, we grant certio-rari. On the merits, we deem the contracts controlled by federal law and valid as against the objections made.
I. The Background of the Litigation.
This litigation involves a dispute between landowners on the one hand and the combined State and Federal Governments on the other. As the Attorney General of California points out, there is no clash here between the United States and the State of California. Quite to the contrary, the United States and the various state agencies, with commendable faith and steadfastness to one another, have embarked upon and nearly completed a most complicated joint venture known as the Central Valley Project. There have at times been differences, but these are inevitable in the everyday implementation of such a giant undertaking. On the whole the parties have kept the ultimate goal firmly centered in their joint vision.
Central Valley is the largest single undertaking yet embarked upon under the federal reclamation program. It was born in the minds of far-seeing Californians in their endeavor to bring to that State’s parched acres a water supply sufficiently permanent to transform them into veritable gardens for the benefit of mankind. Failing in its efforts to finance such a giant undertaking, California almost a quarter of a century ago petitioned the United States to join in the enterprise. The Congress approved and adopted the project, pursuant to repeated requests of the State, and thus far has expended nearly half a billion dollars. The total cost is estimated to be as high as a billion dollars.
The saga of this project is fascinating. California has two somewhat parallel ranges of mountains running south from its northern border for two-thirds the length of the State. Known as the Sierra Nevada on the east and the Coast Range on the west, they converge on the north at Mount Shasta and are joined by the Tehachapi Mountains on the south, thereby forming the Central Valley Basin. The basin extends almost 500 miles between these ranges, from Shasta to Bakersfield, and has an average width of 120 miles, including more than a third of the area of California. The main valley floor, comprising about a third of the basin area, is an alluvial plain some 400 miles long and averaging 45 miles in width. The Sacramento River, with headwaters near Mount Shasta, flows south into San Francisco Bay, draining the northern portion of the basin. The San Joaquin River, which rises above Friant in the south, runs first west then north to join the Sacramento River in the Sacramento-San Joaquin Delta, both finding a common outlet to the ocean through San Francisco Bay. See United States v. Gerlach Live Stock Co., 339 U. S. 725 (1950).
Rainfall on the valley floor comes during the winter months — 85% from November to April — and summers are quite dry. At Red Bluff, just south of Mount Shasta, the average is 23 inches, while south at Bakersfield a scant 6 inches fall. The climate is ideal with a frost-free period of over seven months and a mild winter permitting production of some citrus as well as deciduous fruits and other specialized crops. The absence of rain, however, makes irrigation essential, particularly in the southern region.
In the mountain ranges precipitation is greater, and the winters more severe. The Northern Sierras average 80 inches of rainfall and the Southern 35 inches. The Coast Range experiences much less. In the higher recesses of the mountains precipitation is largely snow which, when it melts, joins the other runoff of the mountain areas to make up an annual average of 33,000,000 acre-feet of water coming from the mountain regions. Nature has not regulated the timing of the runoff water, however, and it is estimated that half of the Sierra runoff occurs during the three months of April, May, and June. Resulting floods cause great damage, and waste this phenomenal accumulation of water so vital to the valley’s rich alluvial soil. The object of the plan is to arrest this flow and regulate its seasonal and year-to-year variations, thereby creating salinity control to avoid the gradual encroachment of ocean water, providing an adequate supply of water for municipal and irrigation purposes, facilitating navigation, and generating power. The plan is now nearing completion and is actually in partial operation in some areas.
The completed project is built around these two great rivers, and includes a series of dams, three of which— Shasta, Folsom, and Trinity River — will furnish electric power. The state water plan contemplates that eventually 38 major reservoirs scattered at various points in this part of the State will store an estimated 30,000,000 acre-feet of water. The Shasta Dam and Reservoir sits at the head of the table on the north. With a capacity of 4,500,000 acre-feet of water, it, along with tributary dams and reservoirs, will control the floods from that area. The Trinity River, with headwaters west of Shasta on the western slope of the Coast Range, drains into the Pacific Ocean. A dam now under construction near Lewiston will impound some three-quarters of a million acre-feet of water which, by means of a tunnel, will be partially diverted into and supplement the waters of the Sacramento River lying to the east and across the mountains. The water supply facilities along the Sacramento River will regulate its flow, store surplus winter runoff for use in the Sacramento Valley, maintain navigation in the channel, protect the Sacramento-San Joaquin Delta from salt intrusion from the Pacific, provide a water supply for the Contra Costa and Delta-Men-dota Canals, and generate a great deal of hydroelectric energy. The Contra Costa Canal services the south shore of Suisun Bay from Antioch to Martinez with water from the Delta for domestic, industrial, and irrigation use. The Delta-Mendota Canal transports surplus Sacramento River water to Mendota Pool on the San Joaquin River, 120 miles south of the Delta. The water is pumped from the Delta to the canal along the foothills of the Coast Range and by gravity it runs to the pool at Mendota. This exchange of water replaces that diverted from the San Joaquin by the dam at Friant. This latter dam forces the entire flow of the San Joaquin into Millerton Lake which has a capacity of 520,000 acre-feet of water. It is diverted from the lake by the Madera Canal to the north and the Friant-Kern Canal to the south. The former extends about 37 miles in length and services the Madera District, while the latter supplies water to the Ivanhoe District and others to the south. It will extend south about 160 miles to a point near Bakersfield, which sits at the foot of the Central Valley’s enormous table.
The power facilities of the project will, when finally completed, have a capacity of near a million kilowatts. Transmission lines, steam plants, and other essential facilities will be constructed so as to obtain the maximum utilization. It is estimated that through the sale of this power the United States will receive reimbursement for over half of its total reimbursable expenditures.
The over-all allocation of these enormous costs has not been definitely determined. That portion of the costs ultimately allocated to power facilities will be reimbursed at 4% interest, but that allocated to irrigation facilities will be reimbursed at no interest. Moreover, the Federal Government will receive no reimbursement for that portion of the cost allocated to numerous aspects of the project, such as navigation, flood control, salinity prevention, fish and wildlife preservation, and recreation. The irrigators will, therefore, be chargeable with but a small fraction of the total cost of the project.
We hasten to correct any impression that lands in the Central Valley had not been reclaimed and irrigated at the inception of the project. On the contrary, since California entered the Union it has worked diligently to bring water to its arid lands. Working largely through state irrigation districts, private interests have been ingenious in constructing smaller reservoirs, tapping underground sources, and attempting to prevent saline encroachment which would destroy the soil for agricultural purposes. Water has been called “the life blood of the State.” Competition for this vital natural resource has provoked such controversy that it has required amendments to the Constitution and continual legislative activity. It is not at all surprising, therefore, that in putting together the mosaic of Central Valley some litigation would ensue. See United States v. Gerlach Live Stock Co., supra.
II. Scope of the Appeals and Nature of the Contracts.
These four appeals contest the right of the United States and California to complete the venture and reap the rewards therefrom as provided by their respective laws.
It should be noted that the appeal involving the Santa Barbara County Water Agency, No. 125, does not involve the Central Valley Project, as it does not lie within that area. It concerns a project to supply water for irrigation and municipal uses along the south coastal area of Santa Barbara County. It includes a dam on the Santa Ynez River impounding water in Cachuma Reservoir. This river rises on the western slopes of the Coast Range and runs into the' Pacific. The Tecolote Tunnel will deliver water across the coastal range of mountains to the Santa Barbara County Agency through the lateral distribution systems of the Goleta and Carpenteria County Water Districts. The adoption of the project by the Congress in 1948 was based on the recommendation of the State Division of Water Resources Report stating that there was “an urgent and immediate need for substantial supplemental municipal and irrigation water supplies.... The city of Santa Barbara has a critical water situation at this time.... The underground water supplies in the county water districts are being seriously overdrawn. In some localities... wells are being damaged by salt water intrusion.” H. R. Doc. No. 587, 80th Cong., 2d Sess. 10. While the contract is authorized under § 9 (c) of the 1939 Act, for our purposes it is identical to the others and will be discussed with them.
The remaining appeals involve areas in the southern portion of the Central Valley Basin. The Madera District includes the Friant Dam and Millerton Lake, the sites for which the United States has purchased outright. Water rights surrounding these areas were involved in United States v. Gerlach Live Stock Co., supra, and have been acquired by the United States. These installations are, of course, vital to the operation of the project in the south of the valley. The Madera District will be furnished water from Millerton Lake by the Madera Canal. The Ivanhoe District is south of Friant and will be supplied water through the Friant-Kern Canal. It is interesting to note that irrigators in this district receive water diverted from the San Joaquin in which they never had nor were able to obtain any water right.
The contracts to which the Supreme Court of California took exception provide, in outline, that the United States will, after construction of the water supply facilities and the lateral distribution system for the irrigation districts, furnish water to the districts and the Santa Barbara County Agency for a period of 40 years. Incorporating the requirements of § 5 of the Reclamation Act of 1902, the contract provides that project water shall not be furnished to lands in excess of 160 acres in single ownership. This limitation applies only to “project water” and previously existing water supplies are unaffected thereby. “Large landowners,” i. e., those who own excess land, who wish that excess to have the benefit of project water must agree to sell their excess to other than large landowners within 10 years at a price, fixed by three appraisers, which will exclude potential enhancement of the price by reason of project water being available. Large landowners electing not to sell their excess may use existing water supplies in underground sources. Moreover, if they designate which of their holdings shall be considered nonexcess, the district would furnish water to that land under the terms provided in the contracts.
The repayment provisions as to the “distribution systems” require liquidation of the maximum stated expenditure of the United States by installments spread over 40 years, without interest, in accordance with § 9 (d) of the Reclamation Project Act of 1939. As to the “water supply facilities,” such as the dams and reservoirs, the contracts employ the more liberal provisions of § 9 (e) of that Act. Repayment, without interest, is to be included in the charge for water sold to the districts and the agency by the United States. The contract term runs for 40 years and, using the language of § 9 (e), the water rate is calculated so as to return to the United States “revenues at least sufficient to cover an appropriate share of the annual operation and maintenance cost and an appropriate share of such fixed charges as the Secretary deems proper, due consideration being given to that part of the cost of construction of works connected with water supply and allocated to irrigation.” The Congress has now supplemented these terms of the contracts by the Act of July 2, 1956, 70 Stat. 483. It provides that the districts and the agency shall be given “credit each year” for “so much of the amount paid... as is in excess of the share of the operation and maintenance costs of the project which the Secretary finds is properly chargeable....” The provision is retroactive and runs with the contract, and when this amount is equal to the amount owing on the total water supply expenditures allocated to irrigation, “no construction component shall be included in any charges made for the furnishing of water... The Act also permits renewal of the contract on terms that will reflect any “increases or decreases in construction, operation, and maintenance costs and improvement or deterioration in the [district’s] repayment capacity.” In addition, the Act provides that the districts and the agency “shall... have a first right (to which right the rights of the holders of any other type of irrigation water contract shall be subordinate) to a stated share or quantity of the project’s available water supply for beneficial use on the irrigable lands [within the district] and a permanent right to such share or quantity upon completion of payment of the amount” that is due on expenditures for water supply allocated to irrigation.
III. Action of the California Courts.
In the confirmation suits involving the Ivanhoe District, No. 122, and of the Madera District, No. 123, the trial court found the contracts and the proceedings leading to their execution invalid. The court reasoned that § 8 of the 1902 Act required that “whenever there is a conflict between the Federal Reclamation laws and the laws of the State, the law of California must prevail.” The court also found that in the light of the origin of the Central Valley Project, the United States was trustee of an express trust of which the Ivanhoe District and others were among the beneficiaries. It concluded that all applications to appropriate water are included in such trust and the beneficiaries have “an incomplete, incipient and conditional right in the water applied for” which is vested and runs with the land. The excess land provision was declared invalid and unenforceable as conflicting with both state law and the Reclamation Act. Application of the excess land provision to an irrigator would, the court found, be unconstitutional.
The Albonico litigation, No. 124, was an application for a mandatory order excluding lands in excess of 320 acres owned by the Albonicos from the Madera District. The court held that the excess land provisions were unconstitutional and that if applied to the Albonicos the mandatory order should issue.
The trial court in the Santa Barbara confirmation case, No. 125, contrary to the action in the other cases, upheld the contract and granted confirmation. The court found that the Master Contract was ratified and confirmed by the Interior Department’s Appropriation Act for 1951. 64 Stat. 595, 679.
The Supreme Court of California, by a 4-3 vote, reversed the trial court judgment validating the contract in No. 125, the Santa Barbara case, and affirmed each of the other judgments. The principal opinion was in the I van-hoe case to which we confine our discussion. The majority agreed with the.trial court that § 8 of the 1902 Act required the application of state law. It found that the excess lands provision was inapplicable and improper under state law, and that the contract was therefore invalid. This conclusion was posited on a trust theory of California water law which placed a trust on the State and the irrigation districts fQr the benefit of water users. In administering this trust the United States, the majority held, stood in the shoes of the State. The § 9 (e) provisions of the contract were found invalid on the grounds that no provision was made for repayment of a stated amount within 40 years or for transfer of title to the distribution systems to the respective districts after payment thereof, and that no permanent right to receive water was vested in the respective districts and their members. The court appears to have reached this conclusion by finding that the contract created a “debtor-creditor” relationship and that the United States was acting as a public utility without conforming to state law.
IV. The Jurisdictional Question.
We first face the dual aspects of the jurisdictional question: has California’s Supreme Court held a federal statute unconstitutional, and does its decision rest on an adequate state ground? Flournoy v. Wiener, 321 U. S. 253, 262 (1944).
As we read the reasons, heretofore mentioned, upon which the Supreme Court of California invalidated the contracts, we conclude that they rest upon neither ground. As to the rights and duties of the United States under the contracts, these are matters of federal law on which this Court has final word. Clearfield Trust Co. v. United States, 318 U. S. 363 (1943). Our construction of the contract might dispel any features thereof found offensive. The other ground, namely, the 160-acre limitation., alone requires further consideration.
Appellants claim that California’s Supreme Court has held unconstitutional the federal statutes, § 5 of the Reclamation Act of 1902, as re-enacted in § 46 of the Omnibus Adjustment Act of 1926, relating to the 160-acre limitation. It appears to us, however, that the opinion actually turned on the court’s interpretation of § 8 of the 1902 Act. In effect, the court held that this section overrides all other sections of the Act, requiring that it be construed as not affecting state laws “relating to the control, appropriation, use, or distribution of water used in irrigation.” Turning to state law, the court by applying a “trust theory” held that the Federal Government could acquire no title to appropriative water rights free of a trust in the State of California for the benefit of the people of the State. This “limited measure of control” of the appropriative water, the court said, 47 Cal. 2d, at 620, 306 P. 2d, at 837, prevented the imposition of the 160-acre limitation because the beneficiaries of the trust, namely, the people of the State and particularly those in the districts involved, would be deprived by the acreage limitation of a right to the use of the water in the district. We think it plain that this was a construction of federal law and not a holding of unconstitutionality. This, of course, provides no basis for an appeal, but the importance of the case, as we earlier noted, requires that certiorari be granted.
We deem it equally clear that the judgments do not rest on an adequate state ground. The construction the opinion gave to § 8 of the 1902 Act nullified the specific mandate of § 5, as well as its re-enactment in the 1926 Act, and even though in the doing a state law may have been called into play, this would not immunize it from this Court’s review. Basically it is the interpretation of the Federal Act that opens the door to the application of the state law and leads to the striking down of the contracts made by the Secretary.
Nor would the suggestion that state law prevented the water districts and agencies of the State from entering into the contracts change this conclusion. We need not determine whether a State could in that manner frustrate the consummation of a federal project constructed at its own behest. The fact remains that the state law was, in fact, invoked only by the interpretation the court gave § 8.
V. Application op the Reclamation Laws to the Contracts.
At the outset we set aside as not necessary to decision here the question of title to or vested rights in unappropriated water. Cf. Nebraska v. Wyoming, 325 U. S. 589, 611-616 (1945). If the rights held by the United States are insufficient, then it must acquire those necessary to carry on the project, United States v. Gerlach Live Stock Co., supra, at 739, paying just compensation therefor, either through condemnation or, if already taken, through action of the owners in the courts. As we see it, the authority to impose the conditions of the contracts here comes from the power of the Congress to condition the use of federal funds, works, and projects on compliance with reasonable requirements. And, again, if the enforcement of those conditions impairs any compensable property rights, then recourse for just compensation is open in the courts.
As we have noted, the Supreme Court of California first concluded that the provisions of § 8 of the 1902 Act as to the application of state law were absolute, and controlled all provisions of the Act and other reclamation statutes having to do with “the control, appropriation, use, or distribution of water used in irrigation, or any vested right acquired thereunder....” We believe this erroneous insofar as the substantive provisions of § 5 of the 1902 Act are concerned. As we read § 8, it merely requires the United States to comply with state law when, in the construction and operation of a reclamation project, it becomes necessary for it to acquire water rights or vested interests therein. But the acquisition of water rights must not be confused with the operation of federal projects. As the Court said in Nebraska v. Wyoming, supra, at 615: “We do not suggest that where Congress has provided a system of regulation for federal projects it must give way before an inconsistent state system.” Section 5 is a specific and mandatory prerequisite laid down by the Congress as binding in the operation of reclamation projects, providing that “[n]o right to the use of water... shall be sold for a tract exceeding one hundred and sixty acres to any one landowner... We read nothing in § 8 that compels the United States to deliver water on conditions imposed by the State. To read § 8 to the contrary would require the Secretary to violate § 5, the provisions of which, as we shall see, have been national policy for over half a century. Without passing generally on the coverage of § 8 in the delicate area of federal-state relations in the irrigation field, we do not believe that the Congress intended § 8 to override the repeatedly reaffirmed national policy of § 5.
From the beginning of the federal reclamation program in 1902, the policy as declared by the Congress has been one requiring that the benefits therefrom be made available to the largest number of people, consistent, of course, with the public good. This policy has been accomplished by limiting the quantity of land in a single ownership to which project water might be supplied. It has been applied to public land opened up for entry under the reclamation law as well as privately owned lands, which might receive project water. See Taylor, The Excess Land Law: Execution of a Public Policy, 64 Yale L. J. 477.
Significantly, where a particular project has been exempted because of its peculiar circumstances, the Congress has always made such exemption by express enactment. See Act of September 3, 1954, 68 Stat. 1190, exempting the Santa Maria Project from the applicability of “excess land laws.” With respect to the Central Valley Project the Congress has again and again reaffirmed the specific requirements of § 5 and the action taken by the Secretary thereunder. As late as 1944 on consideration of the Omnibus Rivers and Harbors Bill the Senate refused, after vigorous debate, to concur in a conference report that would have exempted this project from the excess land requirements of § 5. 90 Cong Rec. 9493-9499. At the next Session of the Congress the disputed exemption was deleted from the bill and it was promptly passed. Likewise, the Secretary reported to the Congress from time to time the execution of contracts, similar to those involved here, wherein “the excess land limitations and other requirements of law are fully incorporated in the Central Valley contract form.” His annual report for 1950 and 1951 related the execution of the Madera, Ivanhoe, and Santa Barbara contracts involved here. In the latter report he mentions individual contracts with water users under the excess land laws, advising that these laws were “given active attention. Five recordable contracts providing for delivery of Central Valley Project water to 3,570 acres of excess land are the first to be executed on the project.” During this period the Congress reauthorized the project, additional units were added, see Act of October 14, 1949, 63 Stat. 852; H. R. Doc. No. 416, 84th Cong., 2d Sess., pp. 620-622; Act of September 26, 1950, 64 Stat. 1036, and the Act of August 12, 1955, 69 Stat. 719; H. R. Doc. No. 416, pp. 937-940, and large appropriations of funds thereto were granted annually.
In light of these congressional actions, it cannot be said that Congress intended that § 8 would, under the application of state law, make inapplicable the excess lands provisions of § 5 of the Reclamation Act of 1902 to the Central Valley Project. That possibility is foreclosed by subsequent and continuing action by the Congress ever since the inception of the project. Such a record constitutes ratification of administrative construction, and confirmation and approval of the contracts. Fleming v. Mohawk Co., 331 U. S. 111, 119 (1947); Brooks v. Dewar, 313 U. S. 354, 361 (1941); Swayne & Hoyt, Ltd., v. United States, 300 U. S. 297, 302 (1937).
VI. The Constitutional Issues.
Appellees urge, however, that the federal statutes requiring insertion of these provisions in the contracts are unconstitutional as a denial of due process and equal protection of the law under the Fifth and Fourteenth Amendments. They assert that the excess acreage provisions amount to a taking of vested property rights both in land and irrigation district water, and discriminate between the nonexcess and the excess landowner. We cannot agree.
There can be no doubt of the Federal Government’s general authority to establish and execute the Central Valley and Santa Barbara County projects. As we said in United States v. Gerlach Live Stock Co., supra, at 739, the Congress “elected to treat it [the Central Valley Project] as a reclamation project.” We upheld its power to pursue the project as “clear” and “ample,” an exercise of the general power “to promote the general welfare through large-scale projects for reclamation, irrigation, or other internal improvement.” Id., at 738. The Santa Barbara Project is supportable on the same grounds. Cf. United States v. Butler, 297 U. S. 1, 65-67 (1936). In developing these projects the United States is expending federal funds and acquiring federal property for a valid public and national purpose, the promotion of agriculture. This power flows not only from the General Welfare Clause of Art. I, § 8, of the Constitution, but also from Art. IV, § 3, relating to the management and disposal of federal property. As this Court said in United States v. San Francisco, 310 U. S. 16, 29-30 (1940), this “power over the public land thus entrusted to Congress is without limitations. 'And it is not for the courts to say how that trust shall be administered. That is for Congress to determine.’ ” See also United States v. California, 332 U. S. 19, 27 (1947), and Alabama v. Texas, 347 U. S. 272, 273-274 (1954).
Also beyond challenge is the power of the Federal Government to impose reasonable conditions on the use of federal funds, federal property, and federal privileges. See Berman v. Parker, 348 U. S. 26 (1954), and Federal Power Comm’n v. Idaho Power Co., 344 U. S. 17 (1952). The lesson of these cases is that the Federal Government may establish and impose reasonable conditions relevant to federal interest in the project and to the over-all objectives thereof. Conversely, a State cannot compel use of federal property on terms other than those prescribed or authorized by Congress. Public Utilities Comm’n of California v. United States, 355 U. S. 534 (1958). Article VI of the Constitution, of course, forbids state encroachment on the supremacy of federal legislative action.
In considering appellees’ specific constitutional contentions, it is well to recapitulate. The Central Valley Project is multi-purpose in nature. That portion of the project expense attributable to navigation, flood control, salinity prevention, recreation and fish and wildlife preservation is nonreimbursable. The remainder of the total expense, and the only part that is reimbursable, is divided between two main sources. The first is hydroelectric power which estimates indicate will be chargeable with over 50 percent of the reimbursable expense, plus interest on the part representing electric plants in service. The other is irrigation, which pays the rest without interest charge. In short, the project is a subsidy, the cost of which will never be recovered in full. Appellees argue that the same reasoning applies to power facilities, but there the Government is operating the generating facilities itself and the base rate upon which the power is sold includes an item for interest on the amount of expenditures allocated to that purpose. Hence the true relationship of debtor-creditor is maintained. In the light of these facts we believe that the language of the Court in Wickard v. Filburn, 317 U. S. 111, 131 (1942), is apposite: “It is hardly lack of due process for the Government to regulate that which it subsidizes.”
In any event, the provisions under attack are entirely ■ reasonable and do not deprive appellees of any rights to property or water. It is beyond dispute that excess land will be benefited by delivery of water to neighboring and nearby nonexcess land. This fact was recognized by the California Supreme Court in the Santa Barbara case. 47 Cal. 2d 699, 712, 306 P. 2d 875, 883. Furthermore the Chief Engineer of the Madera District so testified before the Senate Committee on Public Lands in 1944. The contracts themselves indirectly refer to the benefits that may accrue, through underground water improvement, to excess owners, by provisions which declare that such water shall not be considered as furnished by the project. In other words, any benefits to the underground water level under excess acreage will not be chargeable to the owner of such acreage, but still will be available to his excess land. We therefore find no substance in the contention that “possible severance” of the excess acreage will result in damage constituting a taking of property without just compensation. We deem it unnecessary to discuss other claims in this area, but repeat in connection therewith that if the United States takes any compensable water or property right the courts are open for redress.
As to the claim of discrimination in the 160-acre limitation, we believe that it overlooks the purpose for which the project was designed. The project was designed to benefit people, not land. It is a reasonable classification to limit the amount of project water available to each individual in order that benefits may be distributed in accordance with the greatest good to the greatest number of individuals. The limitation insures that this enormous expenditure will not go in disproportionate share to a few individuals with large land holdings. Moreover, it prevents the use of the federal reclamation service for speculative purposes. In short, the excess acreage provision acts as a ceiling, imposed equally upon all participants, on the federal subsidy that is being bestowed.
We also find the other contract provisions reasonable and necessary. As we have pointed out heretofore the Act of July 2, 1966, supra, answered most of the objections lodged against these requirements. That Act requires the Secretary, in all § 9 (d) and § 9 (e) contracts executed after its passage, (1) to include a renewal provision, (2) to provide that during the term of the contract or any renewal thereof the contracting parties shall have “first right... to a stated share or quantity of the project’s available water supply,” and (3) to determine as soon as feasible the total repayment obligation of the contracting parties, crediting against that obligation so much of the amount paid for water supply as is unnecessary for operation and maintenance costs until, and only until, that obligation has been liquidated. The Secretary is authorized to negotiate amendments to existing contracts to incorporate the foregoing amendments. In view of the declarations and privileges incorporated in these amendments we see no room for objection to the contracts on the ground that they infer that the water users are not entitled to water rights beyond the 40-year terms of the contracts, or that they do not make clear that the districts and landowners become free of indebtedness upon repayment.
That leaves two other objections, the first being the failure of the contracts to recite a definite sum as being the total amount due for the water supply facilities. It was not possible at the time of executing the contracts, nor is it today, to determine the exact amount of expenditures necessary for dams and reservoirs. The record shows that original estimates often bore little resemblance to ultimate cost. The project is only two-thirds completed, and estimates of the remaining third cannot be accurately made. Moreover, the Government was not bound to determine in advance of the project’s completion just what proportion of this total cost should be attributed to irrigation. 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:
|
D
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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.
Title VIII of the Civil Rights Act of 1968, 82 Stat. 81, as amended, 42 U. S. C. § 3601 et seq., commonly known as the Fair Housing Act of 1968 (Act), broadly prohibits discrimination in housing throughout the Nation. This case presents both statutory and constitutional questions concerning standing to sue under Title VIII.
I
Petitioners in this case are two real estate brokerage firms, Gladstone, Realtors (Gladstone), and Robert A. Hintze, Realtors (Hintze), and nine of their employees. Respondents are the village of Bellwood, a municipal corporation and suburb of Chicago, one Negro and four white residents of Bellwood, and one Negro resident of neighboring Maywood. During the fall of 1975, the individual respondents and other persons consulted petitioners, stating that they were interested in purchasing homes in the general suburban area of which Bellwood is a part. The individual respondents were not in fact seeking to purchase homes, but were acting as “testers” in an attempt to determine whether petitioners were engaging in racial “steering,” i. e., directing prospective home buyers interested in equivalent properties to different areas according to their race.
In October 1975, respondents commenced an action under § 812 of the Act, 42 U. S. C. § 3612, against Gladstone and its employees in the District Court for the Northern District of Illinois, alleging that they had violated § 804 of Title VIII, 42 U. S. C. § 3604. Simultaneously, respondents filed a virtually identical complaint against Hintze and its salespeople in the same court. The complaints, as illuminated by subsequent discovery, charged that petitioners had steered prospective Negro home buyers toward an integrated area of Bellwood approximately 12 by 13 blocks in dimension and away from other, predominately white areas. White customers, by contrast, allegedly were steered away from the integrated area of Bellwood. Four of the six individual respondents reside in this “target” area of Bellwood described in the complaint. The complaints further alleged that the “Village of Bellwood... has been injured by having [its] housing market... wrongfully and illegally manipulated to the economic and social detriment of the citizens of [the] village,” and that the individual respondents “have been denied their right to select housing without regard to race and have been deprived of the social and professional benefits of living in an integrated society.” App. 6, 99. Respondents requested monetary, injunctive, and declaratory relief.
Petitioners moved for summary judgment in both cases, arguing that respondents had “no actionable claim or standing to sue” under the statutes relied upon in the complaint, that there existed “no case or controversy between the parties within the meaning of Article III of the Constitution,” and that respondents failed to satisfy the prudential requirements for standing applicable in the federal courts. Id., at 78, 143. The District Judge presiding over the case against Gladstone and its employees decided that respondents were not within the class of persons to whom Congress had extended the right to sue under § 812. The court expressly adopted the reasoning of TOPIC v. Circle Realty, 532 F. 2d 1273 (CA9 1976), a case involving facts similar to those here. In TOPIC the Ninth Circuit decided that Congress intended to limit actions under § 812 of the Act to “direct victims” of Title VIII violations, even though under Trafficante v. Metropolitan Life Ins. Co., 409 U. S. 205 (1972), standing under § 810 of the Act, 42 U. S. C. § 3610, extends to the broadest class of plaintiffs permitted by Art. III. Since the individual respondents had been acting only as testers and thus admittedly had not been steered away from any homes they might have wished to purchase, the court concluded that they were, at most, only indirect victims of Gladstone’s alleged violations of the Act. As respondents’ action was brought under § 812, the court ruled that they lacked standing under the terms of the Act. The court did not discuss Gladstone’s contention that respondents lacked standing under Art. Ill and the prudential limitations on federal jurisdiction. The District Judge presiding over the case against Hintze adopted the opinion of the Gladstone court as his own and also granted summary judgment.
The Court of Appeals for the Seventh Circuit consolidated the cases for appellate review. It first considered the significance of the fact that the individual respondents were merely testers not genuinely interested in purchasing homes. The court noted that while this precluded respondents from arguing that they had been denied their right to select housing without regard to race, “the testers did... generate evidence suggesting the perfectly permissible inference that [petitioners] have been engaging, as the complaints allege, in the practice of racial steering with all of the buyer prospects who come through their doors.” 569 F. 2d 1013, 1016 (1978) (emphasis in original). Thus, although the individual respondents lacked standing in their capacity as testers, they were entitled to prove that the discriminatory practices documented by their testing deprived them, as residents of the adversely affected area, “of the social and professional benefits of living in an integrated society.”
The Court of Appeals then turned to the question whether the Art. Ill minima for standing had been satisfied. Observing the similarity between the allegations of injury here and those accepted as constitutionally sufficient in Traficante, it concluded that the individual respondents had presented a case or controversy within the meaning of Art. III. The court also read the complaints as alleging economic injury to the village itself as a consequence of the claimed racial segregation of a portion of Bellwood. Although this aspect of the case was not directly controlled by Traficante, the court found that the requirements of Art. Ill had been satisfied.
Having concluded that a case or controversy within the meaning of Art. Ill was before it, the Court of Appeals addressed the District Court’s ruling that § 812 of the Act, unlike § 810, affords standing only to those directly injured by the discriminatory acts challenged. After considering the legislative history and recent federal-court decisions construing these provisions, the court concluded, contrary to the decision in TOPIC v. Circle Realty, supra, that §§810 and 812 provide alternative remedies available to precisely the same class of plaintiffs. The conclusion of this Court in Traficante that standing under § 810 extends “ ‘as broadly as is permitted by Article III of the Constitution,’ ” 409 U. S., at 209, quoting Blackett v. McGuire Bros., Inc., 445 F. 2d 442, 446 (CA3 1971), was seen as applicable to these cases brought under § 812. The Court of Appeals reversed the judgments of the District Court and remanded for further proceedings.
Petitioners sought review in this Court. We granted cer-tiorari to resolve the conflict between the decision of the Court of Appeals in this case and that of the Ninth Circuit in TOPIC, and to consider the important questions of standing raised under Title VIII of the Civil Rights Act of 1968. 436 U. S. 956 (1978). With the limitation noted in n. 25, infra, we now affirm.
II
In recent decisions, we have considered in some detail the doctrine of standing in the federal courts. “In essence the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues. This inquiry involves both constitutional limitations on federal-court jurisdiction and prudential limitations on its exercise.... In both dimensions it is founded in concern about the proper — and properly limited — role of the courts in a democratic society.” Warth v. Seldin, 422 U. S. 490, 498 (1975).
The constitutional limits on standing eliminate claims in which the plaintiff has failed to make out a case or controversy between himself and the defendant. In order to satisfy Art. Ill, the plaintiff must show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant. Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U. S. 59, 72 (1978); Arlington Heights v. Metropolitan Housing Dev. Corp., 429 U. S. 252, 260-261 (1977); Simon v. Eastern Kentucky Welfare Rights Org., 426 U. S. 26, 38 (1976) ; Warth v. Seldin, supra, at 499; Linda R. S. v. Richard D., 410 U. S. 614, 617 (1973). Otherwise, the exercise of federal jurisdiction “would be gratuitous and thus inconsistent with the Art. Ill limitation.” Simon v. Eastern Kentucky Welfare Rights Org., supra, at 38.
Even when a case falls within these constitutional boundaries, a plaintiff may still lack standing under the prudential principles by which the judiciary seeks to avoid deciding questions of broad social import where no individual rights would be vindicated and to limit access to the federal courts to those litigants best suited to assert a particular claim. For example, a litigant normally must assert an injury that is peculiar to himself or to a distinct group of which he is a part, rather than one “shared in substantially equal measure by all or a large class of citizens.” Warth v. Seldin, 422 U. S., at 499. He also must assert his own legal interests, rather than those of third parties. Ibid. Accord, Arlington Heights v. Metropolitan Housing Dev. Corp., supra, at 263.
Congress may, by legislation, expand standing to the full extent permitted by Art. Ill, thus permitting litigation by one “who otherwise would be barred by prudential standing rules.” Warth v. Seldin, 422 U. S., at 501. In no event, however, may Congress abrogate the Art. Ill minima: A plaintiff must always have suffered “a distinct and palpable injury to himself,” ibid.,, that is likely to be redressed if the requested relief is granted. Simon v. Eastern Kentucky Welfare Rights Org., supra, at 38.
Ill
Petitioners have insisted throughout this litigation that respondents lack standing under the terms of the Act. Their argument, which was accepted by the District Court, is that while § 810 provides standing to the fullest extent permitted by Art. Ill, see Trafficante v. Metropolitan Life Ins. Co., 409 U. S., at 209, § 812, under which respondents proceed, affords standing only to “direct victims” of the conduct proscribed by Title VIII. Respondents, on the other hand, argue that the Court of Appeals correctly concluded that §§ 810 and 812 are alternative remedies available to precisely the same class of plaintiffs. The issue is a critical one, for if the District Court correctly understood and applied § 812, we do not reach the question whether the minimum requirements of Art. Ill have been satisfied. If the Court of Appeals is correct, however, then the constitutional question is squarely presented.
Petitioners’ argument centers on two points. First, § 810 uses the term “person aggrieved,” defined as “[a]ny person who claims to have been injured by a discriminatory housing practice,” to describe those who may seek relief under that section. By contrast, § 812 lacks this broad definition of potential plaintiffs, referring explicitly only to civil suits brought to enforce the rights granted elsewhere in the Act. Second, under § 810 a plaintiff must first seek informal conciliation of housing discrimination disputes from the Department of Housing and Urban Development (HUD) and appropriate state agencies before pursuing a judicial remedy. See n. 4, supra. But under § 812 a complainant may proceed directly to federal court.
From these facts, petitioners infer a congressional plan to create two distinct, though overlapping, remedial avenues under Title VIII. Under § 810, they argue, Congress intended to reach all victims — both direct and indirect — of housing discrimination by referring generally to those “aggrieved.” But in order to protect the courts from the volume of litigation such plaintiffs might generate, to make available the administrative expertise of state and federal agencies, and to involve state and local governments in national fair housing goals, Congress interposed administrative remedies as a prerequisite to the invocation of the federal judicial power by “indirect victims” of Title VIII violations.
Since § 812 does not specifically refer to “persons aggrieved” and allows direct access to the courts by those invoking it, petitioners argue that Congress must have intended this provision to be available only to those most in need of a quick, authoritative solution: those directly victimized by a wrongful refusal to rent or sell a dwelling place or by some other violation of the Act. The construction of § 812 accepted by the Court of Appeals, they contend, is illogical because it would permit a plaintiff simply to ignore, at his option, the scheme of administrative remedies set up in § 810. Thus, according to petitioners, “direct victims” may proceed under either § 810 or § 812, while those injured only indirectly by housing discrimination may proceed, if at all, under the former provision alone.
Finally, petitioners claim that the legislative history of the Act supports their view. That history reflects that Congress was concerned that Title VIII not be used as an instrument of harassment. Petitioners contend that permitting individuals such as respondents, who have not been harmed directly by petitioners’ alleged conduct, to invoke § 812 provides substantial opportunity for abuse of that kind.
We find this construction of Title VIII to be inconsistent with the statute’s terms and its legislative history. Nothing in the language of § 812 suggests that it contemplates a more restricted class of plaintiffs than does § 810. The operative language of § 812 is phrased in the passive voice — “[t]he rights granted by sectio[n] 804... may be enforced by civil actions in appropriate United States district courts” — simply-avoiding the need for a direct reference to the potential plaintiff. The absence of “person aggrieved” in § 812, therefore, does not indicate that standing is more limited under that provision than under § 810. To the contrary, § 812 on its face contains no particular statutory restrictions on potential plaintiffs.
Contrary to petitioners’ contention, § 810 is not structured to keep complaints brought under it from reaching the federal courts, or even to assure that the administrative process runs its full course. Section 810 (d) appears to give a complainant the right to commence an action in federal court whether or not the Secretary of HUD completes or chooses to pursue conciliation efforts. Thus, a complainant under § 810 may resort to federal court merely because he is dissatisfied with the results or delays of the conciliatory efforts of HUD. The most plausible inference to be drawn from Title VIII is that Congress intended to provide all victims of Title VIII violations two alternative mechanisms by which to seek redress: immediate suit in federal district court, or a simple, inexpensive, informal conciliation procedure, to be followed by litigation should conciliation efforts fail.
Although the legislative history gave little help in determining the proper scope of standing under § 810, see Trafficante, 409 U. S., at 210, it provides substantial and rather specific support for the view that §§810 and 812 are available to precisely the same class of plaintiffs. Early legislative proposals for fair housing legislation contained no administrative remedies. The nonjudicial avenue of relief was later added on the theory that it would provide a more expeditious and less burdensome method of resolving housing complaints. There is no evidence that Congress intended to condition access to the courts on a prior resort to the federal agency. To the contrary, the history suggests that all Title VIII complainants were to have available immediate judicial review. The alternative, administrative remedy was then offered as an option to those who desired to use it.
This apparently was the understanding of Representative Celler who, as chairman of the House Judiciary Committee, summarized the Act on the floor of the House. Similar perceptions were reflected in reports on the proposed legislation by the Department of Justice and the House Judiciary Committee. HUD, the federal agency primarily assigned to implement and administer Title VIII, consistently has treated §§ 810 and 812 as alternative remedial provisions. Under familiar principles, see Teamsters v. Daniel, 439 U. S. 551, 566 n. 20 (1979); Udall v. Tallman, 380 U. S. 1, 16 (1965), and as we stated in Trafficante, supra, at 210, the agency’s interpretation of the statute ordinarily commands considerable deference.
Petitioners have identified nothing in the legislative history contrary to this view. Their reliance on the expressed intent that Title VIII not be used for harassment is unconvincing. Nowhere does the history of the Act suggest that Congress attempted to deter possible harassment by limiting standing under § 812. Indeed, such an attempt would have been pointless, given the relatively easy access to the courts provided by § 810.
Most federal courts that have considered the issue agree that §§ 810 and 812 provide parallel remedies to precisely the same prospective plaintiffs. E. g., Wheatley Heights Neighborhood Coalition v. Jenna Resales Co., 429 F. Supp. 486, 489-492 (EDNY 1977); Village of Park Forest v. Fairfax Realty, P-H 1 EOHC ¶ 13,699, pp. 14,467-14,468 (ND Ill. 1975) ; Fair Housing Council v. Eastern Bergen County Multiple Listing Serv., Inc., 422 F. Supp. 1071, 1081-1083 (NJ 1976). See also Howard v. W. P. Bill Atkinson Enterprises, 412 F. Supp. 610, 611 (WD Okla. 1975); Miller v. Poretsky, 409 F. Supp. 837, 838 (DC 1976); Young v. AAA Realty Co., 350 F. Supp. 1382, 1384-1385 (MDNC 1972); Crim v. Glover, 338 F. Supp. 823, 825 (SD Ohio 1972); Johnson v. Decker, 333 F. Supp. 88, 90-92 (ND Cal. 1971); Brown v. Lo Duca, 307 F. Supp. 102, 103-104 (ED Wis. 1969). The notable exception is the Ninth Circuit in TOPIC v. Circle Realty, 532 F. 2d 1273 (1976), upon which petitioners rely. For the reasons stated, we believe that the Court of Appeals in this case correctly declined to follow TOPIC. Standing under § 812, like that under § 810, is “ 'as broa[d] as is permitted by Article III of the Constitution.' ” Trafficante, 409 U. S., at 209.
IV
We now consider the standing of the village of Bellwood and the individual respondents in light of Art. III. We “accept as true all material allegations of the complaint, and... construe the complaint in favor of the complaining party,” Warth v. Seldin, 422 U. S., at 501, as standing was challenged largely on the basis of the pleadings.
A
The gist of Bellwood’s complaint is that petitioners’ racial steering effectively manipulates the housing market in the described area of the village: Some whites who otherwise would purchase homes there do not do so simply because petitioners refrain from showing them what is available; conversely, some Negroes purchase homes in the affected area solely because petitioners falsely lead them to believe that no suitable homes within the desired price range are available elsewhere in the general area. Although the complaints are more conclusory and abbreviated than good pleading would suggest, construed favorably to Bellwood they allege that this conduct is affecting the village’s racial composition, replacing what is presently an integrated neighborhood with a segregated one.
The adverse consequences attendant upon a “changing” neighborhood can be profound. If petitioners’ steering practices significantly reduce the total number of buyers in the Bellwood housing market, prices may be deflected downward. This phenomenon would be exacerbated if perceptible increases in the minority population directly attributable to racial steering precipitate an exodus of white residents. Cf. Zuch v. Hussey, 394 F. Supp. 1028, 1030, 1054 (ED Mich. 1975), order aff’g and remanding, 547 F. 2d 1168 (CA6 1977) ; Barrick Realty, Inc. v. City of Gary, 354 F. Supp. 126, 135 (ND Ind. 1973), aff’d, 491 F. 2d 161 (CA7 1974); United States v. Mitchell, 335 F. Supp. 1004, 1005 (ND Ga. 1971), aff’d sub nom. United States v. Bob Lawrence Realty, Inc., 474 F. 2d 115 (CA5), cert. denied, 414 U. S. 826 (1973). A significant reduction in property values directly injures a municipality by diminishing its tax base, thus threatening its ability to bear the costs of local government and to provide services. Other harms flowing from the realities of a racially segregated community are not unlikely. As we have said before, “[t]here can be no question about the importance” to a community of “promoting stable, racially integrated housing.” Linmark Associates, Inc. v. Willingboro, 431 U. S. 85, 94 (1977). If, as alleged, petitioners’ sales practices actually have begun to rob Bellwood of its racial balance and stability, the village has standing to challenge the legality of that conduct.
B
The individual respondents appeared before the District Court in two capacities. First, they and other individuals had acted as testers of petitioners’ sales practices. In this Court, however, respondents have not pressed the claim that they have standing to sue as testers, see Brief for Respondents 14-15, and we therefore do not reach this question. Second, the individual respondents claimed to be injured as homeowners in the community against which petitioners’ alleged steering has been directed. It is in this capacity that they claim standing to pursue this litigation.
Four of the individual respondents actually reside within the target area of Bellwood. They claim that the transformation of their neighborhood from an integrated to a predominantly Negro community is depriving them of “the social and professional benefits of living in an integrated society.” This allegation is similar to that presented in Trafficante. In that case, a Negro and a white resident of a large apartment complex in San Francisco complained that the landlord's exclusion of nonwhites from the complex stigmatized them as residents of a “white ghetto” and deprived them of the social and professional advantages of living in an integrated community. Noting the importance of the “benefits from interracial associations,” 409 U. S., at 210, and in keeping with the Court’s recent statement that noneconomic injuries may suffice to provide standing, Sierra Club v. Morton, 405 U. S. 727, 734-735 (1972), we concluded that this injury was sufficient to satisfy the constitutional standing requirement of actual or threatened harm.
Petitioners argue that Trafficante is distinguishable because the complainants in that case alleged harm to the racial character of their “community,” whereas respondents refer only to their “society.” Reading the complaints as a whole, and remembering that we encounter these allegations at the pleading stage, we attach no particular significance to this difference in word choice. Although an injury to one's “society” arguably would be an exceptionally generalized harm or, more important for Art. Ill purposes, one that could not conceivably be the result of these petitioners’ conduct, we are obliged to construe the complaint favorably to respondents, against whom the motions for summary judgment were made in the District Court. So construed, and read in context, the allegations of injury to the individual respondents’ “society” refer to the harm done to the residents of the carefully described neighborhood in Bellwood in which four of the individual respondents reside. The question before us, therefore, is whether an allegation that this particular area is losing its integrated character because of petitioners’ conduct is sufficient to satisfy Art. III.
Petitioners suggest that there is a critical distinction between an apartment complex, even one as large as that in Trafficante, and a 12- by 13-block residential neighborhood. Although there are factual differences, we do not view them as controlling in this case. We note first that these differences arguably may run in favor of standing for the individual respondents, according to how one views his living environment. Apartment dwellers often are more mobile, with less attachment to a community as such, and thus are able to react more quickly to perceived social or economic changes. The homeowner in a suburban neighborhood such as Bellwood may well have deeper community attachments and be less mobile. Various inferences may be drawn from these and other differences, but for the purpose of standing analysis, we perceive no categorical distinction between injury from racial steering suffered by occupants of a large apartment complex and that imposed upon residents of a relatively compact neighborhood such as Bellwood.
The constitutional limits of respondents’ standing to protest the intentional segregation of their community do not vary simply because that community is defined in terms of city blocks rather than apartment buildings. Rather, they are determined by the presence or absence of a “distinct and palpable injury,” Warth v. Seldin, 422 U. S., at 501, to respondents resulting from petitioners’ conduct. A “neighborhood” whose racial composition allegedly is being manipulated may be so extensive in area, so heavily or even so sparsely populated, or so lacking in shared social and commercial intercourse that there would be no actual injury to a particular resident. The presence of a genuine injury should be ascertainable on the basis of discrete facts presented at trial.
In addition to claiming the loss of social and professional benefits to the individual respondents, the complaints fairly can be read as alleging economic injury to them as well. The most obvious source of such harm would be an absolute or relative diminution in value of the individual respondents’ homes. This is a fact subject to proof before the District Court, but convincing evidence that the economic valué of one’s own home has declined as a result of the conduct of another certainly is sufficient under Art. Ill to allow standing to contest the legality of that conduct. -
y
We conclude that the facts alleged in the complaints and revealed by initial discovery are sufficient to provide standing under Art. III. It remains open to petitioners, of course, to contest these facts at trial. The adequacy of proof of respondents’ standing is not before us, and we express no views on it. We hold only that the summary judgments should not have been entered on the records before the District Court, except with respect to respondents Perry and Sharp. See n. 25, supra. Subject to this exception, the judgment of the Court of Appeals is affirmed.
So ordered.
Section 812 provides in part:
“(a) The rights granted by sections 803, 804, 805, and 806 may be enforced by civil actions in appropriate United States district courts without regard to the amount in controversy and in appropriate State or local courts of general jurisdiction.”
Section 804 provides:
“As made applicable by section 803 and except as exempted by sections 803 (b) and 807, it shall be unlawful—
“(a) To refuse to sell or rent after the malting of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, or national origin.
“(b) To discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, or national origin.
“(c) To make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, or national origin, or an intention to make any such preference, limitation, or discrimination.
“(d) To represent to any person because of race, color, religion, sex, or national origin that any dwelling is not available for inspection, sale, or rental when such dwelling is in fact so available.
“(e) For profit, to induce or attempt to induce any person to sell or rent any dwelling by representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race, color, religion, sex, or national origin.” 82 Stat. 83, as amended, 88 Stat. 729.
Respondents also claimed that petitioners had violated 42 U. S. C. § 1982.
Respondent Perry is a resident of Bellwood, but lives outside the area allegedly affected by petitioners’ steering practices. Respondent Sharp lives in Maywood. These respondents are Negroes.
Section 810 provides in part:
“(a) Any person who claims to have been injured by a discriminatory housing practice or who believes that he will be irrevocably injured by a discriminatory housing practice that is about to occur (hereafter 'person aggrieved’) may file a complaint with the Secretary [of HUD].... Within thirty days after receiving a complaint, or within thirty days after the expiration of any period of reference under subsection (c), the Secretary shall investigate the complaint and give notice in writing to the person aggrieved whether he intends to resolve it. If the Secretary decides to resolve the complaint, he shall proceed to try to eliminate or correct the alleged discriminatory housing practice by informal methods of conference, conciliation, and persuasion....
“(c) Wherever a State or local fair housing law provides rights and remedies for alleged discriminatory housing practices which are substantially equivalent to the rights and'remedies provided in this title, the Secretary shall notify the appropriate State or local agency of any complaint filed under this title which appears to constitute a violation of such State or local fair housing law, and the Secretary shall take no further action with respect to such complaint if the appropriate State or local law enforcement official has, within thirty days from the date the alleged offense has been brought to his attention, commenced proceedings in the matter, or, having done so, carries forward such proceedings with reasonable promptness. In no event shall the Secretary take further action unless he certifies that in his judgment, under the circumstances of the particular case, the protection of the rights of the parties or the interests of justice require such action.
“(d) If within thirty days after a complaint is filed with the Secretary or within thirty days after expiration of any period of reference under subsection (c), the Secretary has been unable to obtain voluntary compliance with this title, the person aggrieved may, within thirty days thereafter, commence a civil action in any appropriate United States district court, against the respondent named in the complaint, to enforce the rights granted or protected by this title, insofar as such rights relate to the subject of the complaint: Provided, That no such civil action may be brought in any United States district court if the person aggrieved has a judicial remedy under a State or local fair housing law which provides rights and remedies for alleged discriminatory housing practices which are substantially equivalent to the rights and remedies provided in this title....” 82 Stat. 85.
The Court of Appeals agreed with the District Court that the Leadership Council for Metropolitan Open Communities, also a plaintiff in the two actions in the District Court, lacked standing. 569 F. 2d, at 1017. That ruling has not been challenged in this Court.
There are other nonconstitutional limitations on standing to be applied in appropriate circumstances. See, e. g., Simon v. Eastern Kentucky Welfare Rights Org., 426 U. S. 26, 39 n. 19 (1976) (“the interest of the plaintiff, regardless of its nature in the absolute, [must] at least be 'arguably within the zone of interests to be protected or regulated’ by the statutory framework within which his claim arises,” quoting Data Processing Service v. Camp, 397 U. S. 150, 153 (1969)).
It is not clear whether our opinion in Traficante was intended to construe § 812 as well as § 810. Although certain intervening plaintiffs in that case asserted standing under § 812, but not § 810, see Trafficante v. Metropolitan Life Ins. Co., 322 F. Supp. 352, 353 (ND Cal.), aff’d, 446 F. 2d 1158, 1161 n. 5 (CA9 1971), and the Court failed to disclaim a decision on the former provision, the opinion focuses exclusively on § 810. Rather than attempt to reconstruct whatever understanding of the relationship between §§ 810 and 812 might have been implicit in Traficante, we consider the merits of this important statutory question directly.
This concern was expressed clearly in connection with an amendment to § 804 proposed by Senator Allott. See 114 Cong. Rec. 5515 (1968).
Both petitioners and the dissenting opinion, post, at 124, emphasize the language of §812 that “[t]he rights granted by sectio[n] 804... may be enforced by civil actions....” See n. 1, supra. They argue that since § 804 on its face grants no right to have one’s community protected from the harms of racial segregation, respondents have no substantive rights to enforce under § 812.
That respondents themselves are not granted substantive rights by § 804, however, hardly determines whether they may sue to enforce the § 804 rights of others. See supra, at 99-100. If, as is demonstrated in the text, Congress intended standing under § 812 to extend to the full limits of Art. Ill, the normal prudential rules do not apply; as long as the plaintiff suffers actual injury as a result of the defendant’s conduct, he is permitted to prove that the rights of another were infringed. The central issue at this stage of the proceedings is not who possesses the legal rights protected by § 804, but whether respondents were genuinely injured by conduct that violates someone’s § 804 rights, and thus are entitled to seek redress of that harm under § 812.
The lower federal courts are divided over the question whether a Title VIII complainant who has enlisted the aid of HUD under § 810 must commence the civil action referred to in § 810 (d) no later than 60 days after the filing of his administrative complaint, even if HUD has not completed its conciliatory efforts by that time. Several courts believe the plain language of §810 (d), see n. 4, supra, requires this result. Green v. Ten Eyck, 572 F. 2d 1233, 1240-1243 (CA8 1978); Tatum v. Myrick, 425 F. Supp. 809, 810-812 (MD Fla. 1977); Sumlin v. Brown, 420 F. Supp. 78, 80-82 (ND Fla. 1976); Brown v. Blake & Bane, Inc., 402 F. Supp. 621, 622 (ED Va. 1975); Young v. AAA Realty Co., 350 F. Supp. 1382, 1385-1387 (MDNC 1972). Others, following HIJD’s interpretation of § 810 (d), see 24 CFR §§ 105.16 (a), 105.34 (1978), believe that the only time limitation on one who has properly complained to HUD is that a civil action be commenced within 30 days of notice of HUD’s failure to negotiate a settlement. Logan v. Richard E. Carmack & Assoc., 368 F. Supp. 121
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:
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I
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sc_issuearea
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