LASSEN v. ARIZONA HIGHWAY DEPT.
Legal provision: 36 Stat. 557
Argument of John P. Frank
Chief Justice Earl Warren: Number 80, number 84, Obed M. Lassen, Commissioner, State Land Department, petitioner versus Arizona in the relation of Arizona Highway Department.
Mr. John P. Frank: Mr.Chief Justice, may it please the Court.
This matter comes here on a petition for certiorari to the Supreme Court of Arizona and the issue is the validity of a regulation of the State Land Commissioner of Arizona, Mr.Obed Lassen, my client here which requires that certain lands granted in trust to the State of Arizona by the federal government should be paid for if they are to be taken for the uses which I am going to discuss.
The background of the matter is that we are interpreting an Act of Congress passed in the year 1910.
At that time, there was pending the proposal to admit the 47th and 48th states, New Mexico and Arizona and an Enabling Act was about to be passed.
The legislation was to contain as in the typical acts for the admission of new states provisions to provide public lands essentially and primarily for schools.
In this case, it was contemplated that there would be ten and a half million acres of land given to the State of Arizona and a similar amount to the State of New Mexico to be held in trust for this purpose.
But there had been a background in what was then the territory of New Mexico which disturbed the Congress very much.
There had been what were known as the Tall Timber cases in which the practice had a reason of despoiling public lands in New Mexico by the devise of purporting to sell lands, having them stripped off their mineral or timber to assets and then giving them back to the state again and so as against this background in this Act, the Congress wished to be particularly careful and so it was and it provided not only as had been the tradition in other acts that the proceeds of public lands should be held in trust.
The Congress also provided in this joint act for the two states that the very lands themselves should be held in trust and it provided further that those lands could never be disposed of except by the devise of public auction and that they never could they be disposed of except after an appraisal which would determine the true value thereof.
There was a minimum offset price of so and so many dollars in paper but beyond that it was provided that the land should not be sold or leased I quote the statute in a whole or in part except to the highest and best bidder.
And if was further provided in this section and I think is of special importance that all lands, leaseholds, timber and other products should be appraised of their true value and no sale or no other disposal thereof should be made for a consideration less than the value so ascertained.
Under that statute then the lands were given to the two states and the practical experience has been that they have been frugally handled to the great benefit of education in both of these states.
In New Mexico, which has a keen interest here because as Your Honor understands, the identical statute in the same provisions and hence we are joined here by Mr.Jordan, Assistant Attorney General from New Mexico.
In New Mexico something in the amount of 40% of the educational funds of the state have been developed from these lands and some $200 million has been held in trust.
In our own state we have taken a more conservative approach to the use of the lands of the lands and we still have nine and a half million of the ten and a half million acres in the trust and the proceeds of the remainder are held in a permanent school fund and are used for the purposes of developing education in Arizona.
These lands as enormous ten million acre track I must make clear is scattered throughout the state.
We're not talking about a sector or part of a reservation.
It's rather a checker boarding of the whole state to establish the public lands.
Justice Potter Stewart: The ones that are still -- the land share which is still on up held by the state, are they rented?
Mr. John P. Frank: No, these are (Voice Overlap).
For the most part except as they may be subject to grazing or very short term leases are simply held that's part of our vast acreage, Your Honor, is perhaps aware that in our state there were 80% of the total land of the state as public land of one sort or another.
This is a relatively small patch of it.
Justice Potter Stewart: And it does not produce very much income.
Mr. John P. Frank: No, these are non-income producing lands being held for use, a million acres has been disposed of in a fashion which I have described.
Justice Hugo L. Black: Mr.Frank, does this trust fund differ and essentially from the school lands in other western states?
Mr. John P. Frank: No, Your Honor.
I have said that these lands were put in trust and I have emphasized that because it dramatizes the extraordinary care Congress took in this case but functionally it's all the same.
And that's why eight states have joined us in our position here today and why we are generally supported by all of the states because what has happened in Arizona is a peculiar localism unique to that one area but one which creates a precedent which at this period will prejudice all the public stands of the western states.
To be precise, as to what has happened.
A question when lands are to be used for highways.
And lands are to be used for highways and for transportation or for some such purpose and I will explain in a moment why I used that broad term.
They must be paid for and when the lands are taken for example to put in a road or a utility line or something of this sort, do the provisions of the trust law which provided all of the lands without exception shall be paid for in the minimum value do they apply or is there some reason for making an exception and not making a charge for those purposes.
What has happened in our own state is I think a product of the peculiar road building background there.
We are in a state which is one has developed relatively recently and in the earlier periods, local and county roads consisted as some of you has seen there a little more than running out of a drag device across the desert than sending a car long after.
There were decisions in our state and only in our state with an exception I shall mention in the 40s holding that those did not need to be paid for under the Enabling Act.
The situation has no radically changed because the roads become gigantic boulevard in interstate highways and we're talking about enormous quantities of land.
And in these circumstances, the land commissioner of Arizona who is the trustee, Mr.Lassen, issued a regulation and this regulation provided that lands to be taken for highway purposes should be appraised and could be made available for this purpose but only at their true value after appraisal.
Now, at that point, the highway department of the state instituted this action.
And this action is a suit in the nature under our practice of a written provision brought by the highway department against the land department to prohibit it from enforcing that regulation.
The matter was presented to our Supreme Court below, and the problem that was presented there is also a problem here that the attorney general is in the sense in both sides because he represents both state agencies.
This is perfectly appropriate under our practice.
It is I'm surely highly undesirable under yours.
So that what happened there was is a practical matter that the representation of the highway department was placed on the hands of the firm which represents a major utility.
A reclamation utility which wishes I am sure to follow along and put its lines in without thing for them to.
The utility appeared in support of the highway department amicus in the trial court.
Meanwhile the teachers of the state have the deepest possible interest in the future of the education and of educational lands and I was retained especially by the teachers for the purpose of filing an amicus brief there and have been denominated a wholly nominal assistant -- special assistant attorney general but in fact representative of the educational interest in the state to bring the matter here.
Now, I pause with those details to make clear that I think we meet the standard of genuine adversary proceedings and it is adversary indeed but I felt that you should know what the background circumstances of the representation ought.
The matter as they say came before our state Supreme Court and the state court in a lengthy opinion held that regardless of the trust language the lands need not need to be paid for and thus prohibited the use of the land department's regulation we brought them out of here.
Now, what is it that is the decision or the essence of the decision of the court below?
What it comes to is this.
Well, it's a lengthy opinion it can boil down to only a couple of sentences and those are set forth and I'll simply mention them because you'll then have in the nutshell exactly what the decision was in the controversy is.
The court below said that these lands need not be paid for and that the Enabling Act and that these provisions which I have read here need not be observed.
First, because and I quote "the respective right of way for these highways takes less than a fee estate".
In other words, they said, this is only taking an easement and when you take an easement you don't have to pay for it.
Second, the court below said the trust and its beneficiaries the school lands are not deprived of anything of value.
It is well known that good highways throughout the state increase the value of the lands.
In other words, the court below reached its results under two grounds, (a) that this is a taking of an easement and that therefore that's free and you don't have to pay for it.
And on the ground (b) that the school --
Justice Potter Stewart: Is that true that as a general matter under your state law?
Mr. John P. Frank: No, far from it Your Honor.
It is not only natural but let me direct myself to that because nobody seriously supports that position of our Supreme Court here.
The Government has not said a word in behalf of us and neither has the other side.
Now, in the first place Your Honor, while it may be true or not that taking an easement is that the taking of roads for our purposes is a matter of taking an easement.
This is immaterial and frankly non-rational for two reasons.
First, clearly from every practical standpoint only in interstate highway across the land of the State of Arizona with tons of concrete on the ground is in every functional sense identical to taking a fee that makes any difference.
But secondly and the reason why this becomes immaterial and I shall not mention it again and I am sure you'll hear no more of it from the other side, is that the statute clearly is the -- I am speaking of the Enabling Act.
The Enabling Act isn't restricted to the taking of fee interest.
The Enabling Act says that there must be payment in full at the appraised value for the -- for any, it uses that broad term for any disposition of the lands and on top of that it nails it down Your Honor by saying that there must be taking in full for the use of the lands so that regarding the easement as regarding this as an easement if it is and it clearly from the functional standpoint would be almost absurd the use of property concepts but regarding at as such it doesn't make any difference because the statute says that whether you take this position any disposition what you take the use of is immaterial.
So the matter comes to the remaining elements of the case and that remaining element of the case what the court below has said here in essence that it had -- I mean to judge you by it but it is similar to the -- what's good for General Motors is good for the country approach.
What the court below is saying is roads are good for the state, what's good for the state is good for the school lands.
This will increase the value of the school lands; therefore you don't need to pay for it.
What's for the general good is sufficient and there need not be dollars in hand paid, that's the essence of the decision below and it's the essence of what has been the peculiar Arizona position on this subject.
Now, in the first place Your Honor, allow to devote myself to that subject for the balance of my argument.
We begin number one with the language of the statute itself.
We begin with the fact that the statute expressly in the clearest possible way says that lands are to be paid for.
It does not permit of the so-called doctrine of enhancement.
It doesn't say that the land shall be valued and that there should be credited against the value whatever plus that there may be thought become as a result of the taking but nothing like that is in this law at all.
Instead it does in the most expressed possible way put certain statutory minimum and then in the most exact possible way says that there should be an appraisal and there should be no sale of any lands or disposition of any lands, any taking for any use of any land except of that level of value.
Now, I have begun by saying that this was a statute which have had very close congressional attention particularly because of the background of land scandals against which it was passed.
And this is so Your Honors, they -- we have set forth a good deal of the legislative histories in our briefs and I won't give you more than the flavor of it here.
But I wish to note that these particular restrictions were added in their final forum by the Senate Committee after full hearings and that the report show great emphasis on what the statute says so that the Senate Report says that these lands shall be held in trust to be disposed of only as therein provided and the question was expressly considered before one of the congressional committees are these restrictions too heavy?
Are they severe, can you live with these?
It is alright?
And the representative of Arizona appearing before the committee, appearing in behalf of the territory in asking for statehood said that when asked about these careful restrictions based on the lands and I am quoting from the question he said I believe the restrictions on such public lands cannot be made too broad.
In other words, the territory in asking for statehood was welcoming the very kind of provisions which in fact were put into this law and the report of the interior department shows that in -- as a result of the very investigation that have been made of land frauds, these provisions saying you can only take it this way, you can only price it this way had been put in.
The final report of the Senate Committee began and I give you this as indication of the tremendous earnestness of which the committee approach the problem began your committee cannot too earnestly call attention to the extreme care that should be taken with every provision of a bill like this and I go on to tell that but they were particularly meticulous in a matter of this kind and this matter of legislation.
Now, what has happened since?
We have had not merely a legislative history of great care.
We have had a subsequent congressional development of great care in dealing with this Act.
Because this Act is of course subject to amendment and the point is that whenever it has been proposed that there be any deviation from these careful pricing terms or from the careful disposition terms the interested parties have gone back to Congress and presented the matter and they have gotten an amendment if Congress wanted to give it and because this trust was accepted by the State of Arizona and is part of our Constitution, this may require an amendment to our state constitution as well.
But to give one illustration just a single illustration which will dramatize it I think.
We have a little village in our state called the town of Benson and the town of Benson is so small that it was unable when it wanted a section of land just that small amount for a public park to pay the $3.50 an acre amount which would be needed even for that 600 acres.
They simply couldn't afford it.
We are talking about a very small town.
And therefore, an amendment was passed through the Congress which expressly authorized the giving of a section of land, a single section to the town of Benson without compensation and the legislative history expressly shows that this was done because there was no way of dedicating that one section for a public use except by paying for it other than by this amendment of the Act.
Now, Your Honors, I have no doubt and I am sure no one did then when the sincere truly sincere people who passed that act passed it but they felt that the giving of this section to Benson would improve the value of the town of Benson and improve values of the land around it and doubtlessly the giving of that section would do something for the general values of all of the rest of the school line of the region or the state or whatever but the point is that it was not supposed that the piddling amount of $2000.00 worth of land could be disposed of without compensation except by an Act of Congress and yet under the Arizona decision and practice from which we appeal, $9 million worth of land have been taken from this school trust funds already and are irretrievably gone --
Justice Abe Fortas: Mr.Frank (Voice Overlap).
Suppose we reversed on your theory.
What happens with respect to the land that's been transferred in violation of the trust?
I notice your Consultation says that transfers in violation of the press have been null and void.
Mr. John P. Frank: Yes, Your Honor and that only says that the -- not only that the Constitution says so but the Enabling Act says so that any transfer is null and void and whether in those circumstances Mr.Lassen will be able to bring some appropriate action to try to recover as to those things whether it's a matter of policy will do so I must say I think we don't know whether there will be any retrieval because this practice of dribbling away our trust funds has been going on for 20 years.
Justice Abe Fortas: What is a matter of theory or principle in your opinion does that mean that title to those lands transferred in violation of the Enabling Act in the Constitution in regards forthwith to the trust fund or does it mean that it's voidable in the sense that state action has to be brought.
Mr. John P. Frank: Your Honor, I must say in candid that I am in doubt because the state is simply not considered how to deal with this problem or at least has not advice.
Justice Abe Fortas: Nothing like this is the reason --
Mr. John P. Frank: This is not the reason.
We have had such an action.
It is clear that it ought to arise and it is clear that the trust had been invaded to this amount but I cannot with a responsibility with which I would like to answer your question state what would happen because thoroughly -- because we're dealing really with the public land law of all of the states, we would have at that point to make a research as to how this has been treated elsewhere and I am sure there would be residents on the point with some of the jurisdictions but we simply don't know.
Justice Potter Stewart: Aren't these lands subject to eminent domain?
Mr. John P. Frank: Well, I want to turn to that Your Honor and with some care, as to the eminent domain face of the matter, there is a division of authority on that and with your permission since that that becomes a major part of my discussion I like to -- may I reserve that one question for just a moment Mr.Justice?
Have I met your point at the best of my ability Mr.Justice Fortas?
The argument which is made here then by the other side is that enhancement of value is to be presumed and that this is to be presumed to be an offset so that you don't have to pay for the lands when you take them, whether you take them for highway purposes or for utility or other purposes for which they might be taken.
Now, there is this difference of position amongst our adversaries and I identified only so that I may sharply and fairly state our own position.
The position of our adversaries divides in this.
The highway department as you will shortly hear from takes the position as the court below did that one must always presume that there is enough value created by a road so you never have to pay.
You should be thankful that a piece of your land is taken under the road is put upon.
The position of the federal government is difficult.
The land division takes the position that we are right in principle and that the Supreme Court of Arizona should be reversed but that in some instances, it will turn out as a matter of fact that there is an enhancement of value as a result of the road and that therefore there need be no compensation.
Our position on that point and our position on the total matter is this, we say when Congress established this trust it could have provided for an enhancement theory of valuation if it wanted to.
It could have been put in to the statute a provision that there shall be credited back any value which is assumed to exist as a result of the disposition of the land.
After all the land was Congress says to give away, it could have made its own conditions but the point is that it vary clearly didn't.
It simply didn't see fit to do so.
Justice Abe Fortas: Well, that's not before us anyway, is it?
That's the only question for that aspect.
I noticed the statement in the brief of the United States that I would think that the only question before us is whether there is merit to the absolute position that is to say that because of a fugitive substitute value that's created that the trust fund is not entitled in any compensation whatever whether you take into account or don't take into account, the (Inaudible) values not before us now.
Is that right?
Mr. John P. Frank: No I think not Mr.Justice.
I'm afraid I got into the double negative here.
I think that the matter needs to be before you in this that if you reject the position of the Supreme Court of Arizona and if you adopt our position, should that appeal to you then it would necessarily follow and there must in candor now just as the government position falls to because it is our position and the request we make to this Court in this appeal is that the statute is to be enforced.
That the statute provides for a system of valuation, this regulation provides for a system of valuation.
This regulation which we are asking be upheld says that no lands may be disposed of except that they appraise value.
It's taken from verbatim from the statute and if therefore the Supreme Court of Arizona is reversed and the regulation is thereby upheld so that be the result then I would think that the Government position could fall with it so that I am compelled to say that that question is so interlock here that I don't believe it could be separated out perhaps by ingenious drafting one might come up with an opinion that did not reach that matter and of course that's all is possible.
But I believe in all candor it's here, Mr.Lassen's regulation says that there shall be an appraisal and no disposition of the lands except that the appraised value in every and does not provide for a credit in case of some incremental value as this assumes.
Now, the matter which is before us is not one of first impression on this Court.
Virtually the identical question has been before you previously in the case of Ervien to which I would like to address myself.
I should make clear that the various states have also dealt with this subject as one of you asked me earlier is this, I think you did is as typical of the other land states, the answer is yes.
This question crops up in substantially all of them.
There is one case and one only in the country which is against our present position.
There was an early Wyoming case, the decision of Ross which takes essentially the view of the Arizona Supreme Court.
What you have before you a brief from the attorney general of which the attorney general of Wyoming has joined showing that that is not in fact followed in that jurisdiction.
And the whole weight of the state cases has been as I am arguing here a leading example is the case of Walker which comes from the State of New Mexico and there was thus a flat conflict just directly on this very statute, New Mexico and Walker having decided this question the opposite way of way in which Arizona has decided but apart from those state cases which are adequately discussed in the brief, apart from those cases, there is the decision of this Court in Ervien which is a matter which arose from New Mexico.
What happened there was this.
The State of New Mexico with a foreshadowing of this exact point of view had said, A good advertising program for our state is just what we need and it will increase the value of all of the lands.
Everybody will be better off as a result and therefore trust funds may be used for this general promotional purpose and we will assume that there will be a sufficient value caused by those -- that advertising program, so that the lands will gain more than they lose by this disposition of the funds.
Now, that matter was put into issue and in coming into issue it came here following an extensive consideration of the matter in the Eighth Circuit Court of Appeals and in the Eighth Circuit the almost precise point was considered that is the exact highway question just what we're talking about, what the Eighth Circuit said is it would be but a step further to argue the advantage that would approve to the trust from the physical construction of and so on and then it says specifically such as systems of public highways.
In other words, in Ervien the Eighth Circuit expressly held out the use of the funds for public highway purposes as precisely the kind of thing which was not to be allowed.
This Court adopted the Eighth Circuit opinion.
You had a short opinion of your own but the Eighth Circuit opinion is expressly incorporated by reference here and this Court said and I'd like to emphasize these words to preclude any license of construction or liberties of inference.
It was declared that the disposition of any of the land for any purpose other than that provided therein would be deemed to breach of trust and this Court said the dedication we repeat was "special and exact".
Justice William J. Brennan: What is this case?
Mr. John P. Frank: That is the case of Ervien, Your Honor, which is discussed in our brief at pages 16 and 17 the citation here is 251 U.S.41.
Now, Your Honors what then is the argument that is made for the other side?
What is the contention which is before us?
Here we have a statute that in so many words, really is as fairly as it's possible to speak English.
We have a statute which in so many words says, that lands must be paid for and that this is how you do it and they have to appraise.
The argument that has been made for the other side is essentially that an Enabling Act simply doesn't have to obeyed that strictly but the states are entitled to take a latitudinarian view of their enabling acts.
The argument is made essentially and it is based almost entirely on the case of Coyle against Smith.
Now, that was the case involving the Oklahoma Enabling Act and it was the one under which it was held that as an equal footing matter.
Oklahoma could move its capital from one place to another regardless of the provision of the Enabling Act.
This was on the grounds of equal footing.
Your Honors, that case Coyle against Smith far from being authority for the proposition for which are decided happens to be expressed authority going the other way because the movement of the capital was held to be a matter of equal footing rights but this Court in that case expressly said that this would not apply to regulations, I am quoting, "touching the sole care and disposition of the public lands or reservations therein."
So that in other words, Coyle against Smith was an expressed example of the sort of thing which was not to be allowed.
I will turn if I may to Justice White's question after lunch.
Chief Justice Earl Warren: You may continue your argument.
Mr. John P. Frank: Thank you.
Mr.Justice Stewart, I am advised by my associates that I may have misled an answer to you.
You asked about leasing and I meant to say and I think I did that the revenues were not substantial.
This does not mean that the lands are leased.
Justice Potter Stewart: Except there is mind a grazing in short term leases.
Mr. John P. Frank: There are leases but they don't graze it.
Justice Potter Stewart: Yes.
Mr. John P. Frank: Now, I would like to take the bulk of my few remaining minutes if I can save a tiny bit I shall but I may be unable to answer Justice White's question which raises the one I think really have a problem in the case.
Mr.Justice White, the question arises are these trust lands subject to eminent domain at all?
The answer at least in the cases is this, under virtually vertical language in 1903 Idaho decision which we've discussed fully says yes, that they can be, that they are subject to eminent domain.
In 1910, Montana decision is the opposite.
It rejected the Idaho decision and said no.
Our act was passed just before the Montana decision.
In 1921, Congress passed the statute dealing with the argument raised by the Montana decision and in that Act which dealt only with the states under that particular Enabling Act, it didn't amend the law generally, Congress declined to take a position.
It said we don't have to decide its language was a strict and perhaps accurate interpretation of the acts with bar eminent domain therefore, in order to remedy this situation, we expressly allow it and in that Act they did.
Now, how does that bear in that situation?
What our land commissioner has done is to provide that all land must go by appraisal but on the other hand under this regulation he does not require that it be sold at public auction.
The statute says it must be sold at public auction.
This regulation does not do that.
It does not because the appraisal procedure is part of our state eminent domain procedure.
And he has consciously imported the imminent domain devise following the Idaho decision and sought to use it on the theory that the eminent domain procedures can be applied and therefore he takes the appraisal device from our eminent domain law but does not require the option.
If this is permitted Mr.Justice White it is implied exception under the theory of West River Bridge and Dix that all acts are subject to the eminent domain power.
I would like to make clear that we think this is the sound review when we've advanced it in our brief.
We think this is acceptable.
I also wish to make clear that this is not of the essence of our position.
In other words, we could perfectly well go through to the form of appearing to auction off a 50-mile strip of a thousand feet wide.
Obviously, there's only going to be one bidder and it would be a pure ceremony.
But that can be done and while it's not in the regulation, we haven't the faintest objection of putting it there if this Court feels that we can impart eminent domain theory into this case.
So, so far as we are concerned, it's essentially a matter of indifference but I do report that the problem does exist, Mr.Justice White.
It is here and we have in our actual conduct attempted to apply that procedure.
Now, I may simply say this in conclusion and I hope I am saving a moment.
The Congress has given 10 million acres to the State of Arizona.
It did pass an act with what the congressional committee report shows was extreme care with painstaking care.
This Court has said that it was a painstakingly careful act about your own language.
Now, let me simply put this question to my friends who are next to me.
If you have the task of drafting a statute, if you were a member of Congress, if you wanted to draft an Act which would provide that all lands that were taken had to be paid for in appraised value.
How would you possibly do it any more precisely than to say that all lands, leaseholds, timbers and other products before bringing offer for any sale or other disposal shall be appraised as a true value and no sale shall be made for less than that amount.
I submit Your Honors that it is beyond the capacity of the English language to be more exact, more precise, more specific than this and I leave my adversaries with a question suppose the Congress of the United States didn't want to do exactly what we're saying it did here.
How could it conceivably have done a better job than it has been done in this case in this very case?
Our state stands alone in this country and taking the view, the trust lands can be taken and not be paid for.
Nine million dollars worth of land are here irretrievably gone unless we can treat them as void and somehow recover for that loss.
We respectfully submit in behalf of the educational institutions of our state that this is an invasion of a public trust which must stop.
Chief Justice Earl Warren: Mr.Weisl.
Argument of Edwin L. Weisl, Jr.
Mr. Edwin L. Weisl, Jr.: Mr.Chief Justice, Justices of this Court.
The position of the United States in this case as an amicus curiae arises because of the federal government's interest in these trust lands as grantor of the trust lands because of the duty imposed upon the attorney general by Section 28 of the Arizona, New Mexico's enabling acts and because of course of the federal government's growing interest in the field of education and its financing.
Before I embark upon the details of its position, I would like to address myself to a question as of the counsel for the state land department by Mr.Justice Fortas.
That is, what is the real question before this Court?
Is it simply in the absolute sense, must compensation be paid by the state when it takes school lands for public purposes?
If that were the naked question before this Court, I think all parties would say that perhaps it has already been answered by agreement for even the state highway department now refers in its brief that value must be paid for these school trust lands.
However, they say that the value is paid by the inherent enhancement that arises when a highway is built.
Of course, in a real sense that position is that value need not be paid because if you can conclusively and irrebuttably presume compensation as the highway enhancement rather as the highway department urges you will foreclose any inquiry as to what really happens to the value of the trust when the lands are taken.
United States decision in this case is that you must look at the trust lands as a whole in a given state.
They are there to produce income to support and maintain the public schools of that state.
The question is when a trust land is taken for a public purpose such as a highway, is the earning power of that trust impaired?
Is it no longer as valuable after the taking as it was before?
If that is so, and the trust is breached and what the state has done is wrong.
Can you consider the question of enhancement of other lands when you take a parcel, a school section to build a highway and I think you can.
Let us say for example that the entire value of the lands -- school lands in the state is $10 million and you take one section you build one road on it.
Clearly, that section no longer has a value in itself because the road is so large that no one would lease it, no income can be earned from that school section.
But if this highway, his access to a whole new portion of the state so that the lands there can now leased at high rental, can be sold for high prices then of course it is fair to state that the trust is preserved even though compensation is not paid by the state for the particular parcel.
On the other hand, it is equally reasonable to state that in certain cases, a taking for a highway will result in no enhancement of the remainder of the trust and the total value the trust enhance its earning power will be diminished.
A simple example, an access road is needed to make it easier to get to the state prison.
I could not see that this would increase the pecuniary value of other school lands within a state so that you can say enhancement can be presumed.
Justice Abe Fortas: Would you apply that principle to private taking of a private property?
Mr. Edwin L. Weisl, Jr.: The doctrine of benefits Mr.Justice Fortas is applied in many instances in eminent domain proceedings.
The requirement as I understand it is that the benefits must be special and palpable and capable of ascertainment not merely speculative.
That is you can say it is more than you can say to be able to say that it is nice to have a road here.
You have to say that there is a road here now and the remainder of this man's property is benefited because he has now access to the biggest city in the state, he now can develop it for a residential purposes.
Justice Abe Fortas: Well, would you agree that whatever the principles are in the field of eminent domain with respect to private property that those are the principles that have to be applied here?
Justice Abe Fortas: Well, why do you do that?
Why do you go further up here?
Mr. Edwin L. Weisl, Jr.: Because the purpose Mr.Justice is to preserve a trust of a certain value so that it can earn a certain amount of income to provide for public school.
Justice Abe Fortas: I am not certain.
I am uncertain and -- but that is --- is that your conception of what this trust is?
Or isn't it a trust of a construed on the basis of ordinary principles of law which parcels of property were place and those parcels are taken out and parcel by parcel that has to be taken out, they've got to be subjected the value of judgments?
Mr. Edwin L. Weisl, Jr.: I think we agree on the latter part of your statement that value judgments have to be made.
The reason that I feel you can go a little further than the eminent domain proceeding is that the state highway department for example is taking a road for a public purpose to require to pay an amount of money that will make the trust greater afterwards than before is placing an undue burden on the state.
Justice Abe Fortas: Suppose a utility company condemns a track of land in an enormous ranch for a utility or right of way for its supposed (Inaudible) and I suppose that almost every time that brings a good deal of benefit to -- on the land and the offset is are you telling me that you offset the benefits to a land that is not taken?
Mr. Edwin L. Weisl, Jr.: Yes Your Honor, that is the rule in condemnation and I -- it was first enunciated by this Court as early as 1897, in the case called, not cited in our briefs Bowman against Ross.
The requirement is that the benefits have to be readily capable of ascertainment than measurable so that an expert witness and remember that these are tested in adversary forum with expert testimony on it.
An expert witness can say in fact your property, your remaining property is more valuable, you can sell it for more.
Justice Abe Fortas: Well, I was hopefully could make that into -- find it unnecessary to pass on these questions and I am not sure that I am not still inclined to believe that we can because it seems to me that for the highway department's position to prevail when we have to indulge in assumption that there's a complete offset because if there is any discrepancy to the value of the land taken in the incremental value as a result of building a highway then their case falls, it seems to me, we don't have to go any further.
Mr. Edwin L. Weisl, Jr.: I agree completely.
We simply say that a factual determination must be made as to the actual effect of the taking.
Whether which is one that is capable of being made because expert testimony would be available to inform the body making the decision, be it the Court or an administrative agency as to whether the remainder of the trust is enhanced in value or whether it is not enhanced in value.
The minute that is not enhanced in value of course, the compensation in the form of cash must be paid by the state authority.
Chief Justice Earl Warren: Mr.Weisl, I was wondering about another situation now that question temporary when the railroads came through they were given land grants of every order of the section for 20 miles on each side of the right of way.
How was that plan treated in Arizona western states when it comes to condemning for a highway?
Are they subject to the limitation on eminent domain that you put on in this case or are they treated differently?
Mr. Edwin L. Weisl, Jr.: They are treated I believe Mr.Chief Justice although I can't say this with great confidence.
I believe they are treated with greater strictness that is our rule that we urge here is somewhat more liberal to the taking authority than the rule in respect to these railroad land grants.
They are treated like private persons we say this trust may be treated a little more -- little less liberally.
Chief Justice Earl Warren: Less liberal.
Mr. Edwin L. Weisl, Jr.: I say a more liberal rule of benefits can be applied in these trust lands when a state, another state agency is taking them that is if you look through the benefits of the trust as a whole rather than to immediately adjacent parcel of property.
Chief Justice Earl Warren: Well what rule would be applied to those land grants that were granted for the sole purpose of developing the country?
What rule do they apply if it's stricter rule?
Mr. Edwin L. Weisl, Jr.: I think they apply these exact same rules I believe to other lands that are in normal, private ownerships.
That is to say you can offset benefits against compensation due provided that it is adjacently in the same use and what have you but you can't say that that the benefit to a section, thousand miles away would be recognized into the offset.
It has to be much more closed.
I want to say however that our position does not foreclose a state paying compensation measured by the rule asserted by the state land commissioner petitioner here.
We are saying that as a minimum, we think the requirements maintained by the trust would be met by the recognition of benefits on some cases when they are actually capable of ascertainment and measurement.
As to the contentions made by petitioner that the recognitions of these benefits are foreclosed by the enabling act, I think what Congress was speaking of was in terms of actual disposition to private parties which is a quite different matter than changes of ownerships through eminent domain proceeding the latter having inherent safeguards of judicial review of an initial determination at least in Arizona by an administrative agency whereas a provision relating to an absolute outright sale by a state through a private party is an area where review is not inherent and not necessary.
In fact the very thing complained of in the Tall Timber cases, eminent domain where both parties are presumably interested in the public good and the public benefit is quite different.
I think the enabling act permits the interpretation that we quite submit of that is benefits to the remaining land can be recognized and compensation in some cases need not be paid in form of cash because it has actually resulted in terms of enhanced value to the remainder.
Justice Byron R. White: Well, can the same -- by the same token I suppose then the state could give 100 acres of land to IBM to build a plant because once the IBM plant is there, the surrounding property will be three times as valuable and there will be a great -- sort of a nucleus where an industrial development in the (Inaudible) expert real estate testimony that supported those values I suppose it would take the same approach?
Mr. Edwin L. Weisl, Jr.: Well I wouldn't really because the enabling act speaks as to actual voluntary I think dispositions by the state.
That is to say, these are truly prohibited by the enabling act whereas eminent domain is not specifically dealt with in these enabling acts and I think it was probably overlooked by the Congress.
Justice Byron R. White: So you would go to line between -- between increments attached to a disposition?
Mr. Edwin L. Weisl, Jr.: Yes.
Justice Byron R. White: An increment that arises from the state's own use?
Mr. Edwin L. Weisl, Jr.: Yes, some of the Acts for example --
Justice Byron R. White: Do you say that the state could take the property, 500 acres of it for a golf course because the surrounding property would be contend as valuable?
Mr. Edwin L. Weisl, Jr.: I think if it is for a recognized public purpose for which the state has the condemnation power, I would say that that would be correct whereas the enabling act specifically require a minimum most of them do anyway, require minimum payments for disposition to private persons.
Justice Abe Fortas: If that is so why (Inaudible) anything for -- when it takes for a highway?
Mr. Edwin L. Weisl, Jr.: Because of the I think clear congressional purpose to create a trust for schools to preserve the value of that trust so that the intent of Congress which was to have a trust for schools be continued.
Justice Abe Fortas: Are you saying that all the procedures and standards of the Act don't apply to that kind of a taking?
Mr. Edwin L. Weisl, Jr.: Yes, sir.
Justice Abe Fortas: And apply only to a private taking?
Mr. Edwin L. Weisl, Jr.: Well, I think that the requirement for preservation of a trust through some form of compensation remains in eminent domain the compensation on occasion can be in the form of benefits to the remainder which are so great as to outweigh the amount of cash loss to the particular track of land.
Justice Abe Fortas: Well, is your position that if you can -- is your position the same as Mr.Frank's in this respect or is it different?
Mr. Edwin L. Weisl, Jr.: We agree that the compensation must be paid.
We are in slight disagreement in that he says that you cannot offset general benefits to the remainder of the trust.
You have to actually pay cash to --
Justice Abe Fortas: Well, does he agree of the procedure of the standards of the Act do not apply to a taking for a governmental purpose?
Is that what you're telling us now as I understand it?
Mr. Edwin L. Weisl, Jr.: You would then -- you would take a far harsher view, we would say that virtually every safeguard in the act applies to the sale of the private people, persons apply.
However, the eminent domain proceeding are not specifically provided for substitutes for some of these requirements such as the public auction to the appraisal procedure arrived at through expert testimony which is the equivalent of the public auction.
The experts determine the market rather than bidders which I think is the same thing.
I thank the Court it yield back --
Justice Hugo L. Black: Suppose you were (Inaudible)?
Mr. Edwin L. Weisl, Jr.: Federal government would, yes Your Honor and I believe that this doctrine obtained in Arizona, yes.
Justice William J. Brennan: Your theory is that since you do have the power of eminent domain, you play that?
Mr. Edwin L. Weisl, Jr.: Yes.
Justice Tom C. Clark: Despite the enabling act, the eminent domain (Inaudible) rather than a sale.
Mr. Edwin L. Weisl, Jr.: Well, despite the eminent domain is different than a sale.
It's partly also that the purpose of the enabling act is preserved and is maintained when the theory of valuation and compensation that we advanced is followed, i.e., that the trust is not impaired because it is as valuable after the taking as it was before.
And I submit that this is capable of measurement through expert testimony and through analysis of the effect of the proposed improvement the highway on the remaining trust lands.
It would be rather unfair if the state builds a highway that opens up a whole new section of the state which is replete with undispose of school lands and has to take cash for the taking of the school land in the other -- on the one hand, on the other hand, the school land is a tremendously more valuable than the state, the schools directly benefit in increase income.
Justice Byron R. White: By the way Mr.Weisl, in terms of paying cash, when does the federal highway interstate highway for example, who has to pay for the exhibition of these --
Mr. Edwin L. Weisl, Jr.: The federal government pays that.
Justice William J. Brennan: That's the reason for the government (Inaudible)?
Mr. Edwin L. Weisl, Jr.: Mr.Justice Brennan, I represented this Court but that was never in our mind at least my --
Justice William J. Brennan: I just wonder Mr.Weisl, I take it it's not because the highway went through anything else but these school lands which perhaps are worth -- Arizona got them at 25 cents an acre and now worth $5 an acre, you wouldn't say the state can give away $100,000.00 worth because of what's left is still worth a lot more than (Inaudible)?
Mr. Edwin L. Weisl, Jr.: No, sir I would not.
I would really -- what really weighs heavily on me is the fact that the state highway department is taking for a public purpose that is an act which is of value to the taxpayer or the citizen of the state as a whole.
It's a little bit different than a private acquisition.
Justice Hugo L. Black: Can you say the State of Arizona would have powers to build highways to these schools on land and assess the school lands for their benefit confirmed?
Mr. Edwin L. Weisl, Jr.: No, sir I do not.
Justice Hugo L. Black: Well, if not why can they do it the other way?
Mr. Edwin L. Weisl, Jr.: Well, because I believe that the value of the trust is preserved if actual benefits accrue the remainder and therefore --
Justice Hugo L. Black: But then that, the way to test that out is to test it out under the general laws of the state.
Mr. Edwin L. Weisl, Jr.: Well, I think that in essence --
Justice Hugo L. Black: Like they build that highway?
Mr. Edwin L. Weisl, Jr.: I think, in essence that is what would happen.
That is an adversary proceeding which would take place which the condemning agency of the highway department would have the burden of establishing these benefits as offsets against what they would ordinarily owe for the land taking and I would say that the normal state adversary eminent domain proceeding would --
Justice Hugo L. Black: I may find it a little bit difficult to say that the state can't directly assess the school lands, the value of the highways built through them or next to them be a little difficult to leave over there and say they could do it indirectly by the method you suggest.
Mr. Edwin L. Weisl, Jr.: Well, all I can say is that to assess them would be to actually deprive them of money which is not authorized by the enabling act where as to offset benefits to them would be to preserve the value of the trust intact so that it would still have the capacity to earn the same amount of money for the state school system or perhaps even more than it did before the taking.
Justice Hugo L. Black: So that will leave it up to the state to fix school lands that given to the state for school purposes only intact but nothing else will work and that's the state decide when it build roads there and then make them pay for it.
Mr. Edwin L. Weisl, Jr.: Well, I think if a requirement is maintained that the burden is on the state to establish these benefits and that the --
Justice Hugo L. Black: But I am talking about special benefits.
That way, against land which is set apart for other purpose.
It wasn't intended whether to leave that land over for assessment by the state to build roads through the lands.
Mr. Edwin L. Weisl, Jr.: That, I think that's correct.
However, we have not brief and I do not dispute that the state has authority to take these lands as an eminent domain proceedings for public purposes.
Justice Hugo L. Black: If it pays.
Mr. Edwin L. Weisl, Jr.: If it pays for which and I just -- I simply said that manner.
Justice Hugo L. Black: That maintain money?
Mr. Edwin L. Weisl, Jr.: I still simply say that the manner of payment sometimes can be and in the context of the state ought to be a recognition that the lands are compensated by the benefits resulting from the improvement.
Justice Hugo L. Black: Those raise him there problematic method of computation in order to protect the state's interest and the school's interest?
Mr. Edwin L. Weisl, Jr.: Well, the benefit -- the burden should be on the authority which is taking the land.
Justice Hugo L. Black: Well, whether you have the burden (Voice Overlap) you still just prevent the complications of this.
Mr. Edwin L. Weisl, Jr.: It does indeed and these are difficult problems.
All these appraisals are --
Justice Hugo L. Black: All these are difficult to protect the states interest or school's interest to possess -- to pay money, isn't it?
Mr. Edwin L. Weisl, Jr.: I would say that it certainly is simpler and I would not --
Justice Hugo L. Black: And most certainly they have it isn't it?
Mr. Edwin L. Weisl, Jr.: It is certainly safer and far more certain.
I do not think in the 20th century though that you require that rigid safeguard when it is possible in an impartial forum such as the court which would review these matters I presume to establish what has really happen.
Expert testimony is available to say that a development is now possible in this far of the state.
Justice Hugo L. Black: (Voice Overlap) is not usually good as much?
Mr. Edwin L. Weisl, Jr.: Well, that is true.
That is true but it is very expensive Mr.Justice Black as we know in the lands division.
Chief Justice Earl Warren: Mr.Weisl, may I ask you one other question.
If we adopt your theory of the case must that be the rule in all the western states or would the parties be left to the condemnation procedures in the various states.
Mr. Edwin L. Weisl, Jr.: I think the states would be left to their normal procedure.
We're suggesting a rule that I think would be a minimum rule that would probably satisfy the purpose of the Enabling Act if the state feels that it should be more for example adopt the rule that's proposed by Mr.Frank today, I think that would be perfectly permissible.
Chief Justice Earl Warren: But in other words, would they have to treat this trust fund the same as they would any other property that they take from the states?
Mr. Edwin L. Weisl, Jr.: No sir, I don't think so.
I think they'd be required to make a recognized of minimum standards such as the one the government advocates here but they will be free to treat for their trust as much accord the trust to a much greater degree of protection in private lands or the same degree of protection as private lands [Audio Cut]
What we are merely proposing I reiterate what we think is a minimum standard would preserve this.
Justice Abe Fortas: Well, you will have -- you rely on anything in the act, well the act does say that for purposes of the U.S.irrigation projects some of these lands can be turned on to the United States, isn't that right?
Mr. Edwin L. Weisl, Jr.: Yes.
Justice Abe Fortas: But the Congress didn't say anything about the state thing that would have taken without paying money.
Is there anything in this Enabling Act that supports your argument?
Mr. Edwin L. Weisl, Jr.: The state -- yes I think the mere fact that the state never even -- the Enabling Act never given came to grips with eminent domain providing that the lands can only be disposed of through public auction is not really an indication that the Congress intended to foreclose the eminent domain.
I think they were concerned with the problem of the state making dispositions to private parties for inadequate considerations as it had in these Tall Timber cases.
Justice Abe Fortas: Are you relying on something that's not in the act instead and you're saying that if Congress intended to cover it they would cover it.
Mr. Edwin L. Weisl, Jr.: I think that if the eminent domain power is so inherent the power of the sovereign such as the state that we ought to require a great deal of Congress before we rule that the state has been deprived of them.
Justice Byron R. White: Mr.Weisl, what do you do about Ervien?
It seems to me that presented the enhancement argument of the court there?
Mr. Edwin L. Weisl, Jr.: Yes.
Justice Byron R. White: And it seems to me that Court almost squarely rejected it.
Mr. Edwin L. Weisl, Jr.: Well, I think that Ervien is different from this reason.
One it required the school trust to actually to part with cash income that it received from these lands to 2 or 3%.
Secondly, the benefit --
Justice Byron R. White: They were saying -- as they were saying they will back -- they will get back a little more than that.
Mr. Edwin L. Weisl, Jr.: Precisely the point I made about the benefits or I tried to make, perhaps I have no doubt to do that inadequately.
These are the kind of benefits that are highly speculative in nature.
You advertise in a New York newspaper that one ought to come in New Mexico and establish a business, an immediate return is certainly speculative.
We all may feel that this would work but we cannot say that it would.
However, a direct benefit such as a road that opens up a new area of the state previously had no access to markets or agricultural products for example I think can be said to have enhanced directly in market value by virtue of the construction of that road and I think expert testimony would withstand cross-examination could be produced that would satisfy a Court that the benefit had accrued.
Justice Byron R. White: What are we talking about out there in Arizona, about 40,000 acres?
Mr. Edwin L. Weisl, Jr.: 9,100,000 acres.
Justice Byron R. White: No I mean the number of acres that have been taken for roads up to date?
Mr. Edwin L. Weisl, Jr.: I don't believe I have that figure.
The Highway Department perhaps can supply that Justice White.
Chief Justice Earl Warren: Mr.Lee.
Argument of Rex E. Lee
Mr. Rex E. Lee: Mr.Chief Justice, may it please the Court.
In our view, there are two basic issues in this case which we feel subsume all of the other issues and I feel that my argument could be most helpful if developed in the context of these two issues.
The first one is whether net value enhancement is relevant at all.
That is in developing a principle of compensation to the trust is it permissible for the state to the trust, is it permissible for the state to take into consideration the total impact upon the value of the trust of highway construction to all lands are most must focus narrowly only on the particular parcel that is taken.
On this issue, the United States and the respondent are in agreement.
The second issue is that assuming that net value enhancement is that the net value enhancement is a permissible consideration for the state taking the consideration.
How do you go about showing whether in fact the net benefit of the mere fact of highway construction across the trust lands has been to benefit or to derogate from the value of these lands is on this issue that the respondents and the United States are in disagreement.
Justice Abe Fortas: Well you are starting off with the agreement that the state highway department has applied?
Mr. Rex E. Lee: That is correct Mr.Justice Fortas.
We have never contended at any point in this litigation that the total value of the trust after the construction of highways can be lesser than it was before the construction of highways.
That is the net benefits attributable and directly attributable to the highway construction which is only to remaining surrounding trust lands must be at least increase in value to the value to the value of the land --
Justice Abe Fortas: Where does the standard come from?
I thought the standard of eminent domain was one of value.
The value doesn't mean just equating everything that you have a whole pot work the same that it was before.
The question is have paid value for what you have expected from that, isn't that right, isn't that conventional?
Mr. Rex E. Lee: Well, I would like to make two observations.
In the first place, the statute says nothing about eminent domain.
Justice Abe Fortas: I am aware of that.
Mr. Rex E. Lee: In the second place, what we are talking about, we may borrow on the principles to a certain extent and in eminent domain there are as I understand it two different rules.
One is that you can offset value to remaining lands belonging to the condemnee against the value of the interest taken.
The rule in Arizona happens to be different and I would like to clarify this, the rule in Arizona, A.R.S.Section 12-1122 is that you can't offset benefit to remaining trust lands only against the severance damages that is the amount that you damage those remaining trust lands and not against the value.
Justice Abe Fortas: Well, would that rule apply here, would the Arizona eminent domain apply here?
Mr. Rex E. Lee: We contend not simply because we contend that it is not eminent domain that is the applicable rule.
I'll develop this more completely in the course of my argument.
But we contend that the State of Arizona could have had it solely elected adopted this principle of eminent domain but what we are dealing here with is three essential provisions in our view, provisions that appear in Section 28 of the Enabling Act.
Mr.Frank has referred to two of these and I will advert to them in a moment briefly for that reason but first is the public auction provisions.
Mr.Frank has stated there is a blanket provision that permits of no exception which states that these lands must be disposed of by public auction which you have to give notice of that public auction for ten weeks once each week for a period of 10 weeks in two different newspapers.
The second provision that is relevant and this of course Mr.Justice Fortas is particularly going to bear down that all of the interest shall be appraised and that no sale or other disposal thereof shall be made for a consideration less than the value so ascertained and finally the provision that has not been yet mentioned this day but a provision which is of extreme importance is the catch all provision that comes at the end of Section 28 the one dealing with these trust land provisions and says this.
I am reading from the appendix, the petitioner's brief at the bottom of page 39, "Every sale, lease, conveyance or contract of or concerning any of the lands hereby granted or confirmed or the use thereof or the national products thereof not made in substantial conformity with the provisions of this Act shall be null and void."
And I'd like to consider first as a background to the value provision because I think it sheds light on it the applicability of these public auction provisions.
The great significance of this pubic auction provision is that they don't apply to use this for highway purposes.
Every governmental agency that had addressed itself to this problem has agreed on this point that you don't have to submit highways which are -- lands which are going to be used for highway purposes to these public auction provisions notice for over a period of 10 weeks and so forth.
From a practical standpoint, the reason is obvious, we're dealing here with strips of land that are 100 feet wide, a mile long, and bounded on each end by a proposed highway.
As a matter of fact, they know that it is going to be interested in bidding on those -- on the strips, on the long narrow strips of land except the highway department and --
Justice Byron R. White: Is that your only way of saying they are not --
Mr. Rex E. Lee: Not at all.
Not at all and I'll come to that in just a moment.
I have a practical reason and a legal reason Mr.Justice White and this is the practical reason.
And the legal reason is this that the obvious inappropriateness of these public auction provisions to uses for highway purposes points out the central fact that when Congress enacted this particular provision of the Enabling Act, it did not have in mind public uses in general and particularly uses for highway practices.
As Mr.Frank has pointed out this morning, the dominant consideration underlying Congress' enactment of this Enabling Act was to prevent the sale of these lands to private proprietors.
Justice Byron R. White: Well, Mr.Lee how about if the state takes 1000 acres of the land and because we're going to use this as a park and the wide built camp ground and things like that, it's not available for anything else.
But I'll guarantee if that were put up for auction and they got some bidders.
Mr. Rex E. Lee: Alright.
Justice Byron R. White: Now, would you say that that -- is that subject to the sale or an auction.
Mr. Rex E. Lee: Here is my answer, here is my answer, -- let me answer it in two steps.
I first of all say its obvious inappropriateness to the highway context is saved by the interaction of two facts.
Number one, the fact of Congress obviously did not consider this particular problem.
And number two, the fact that Congress did not deal with this specific face of the problem it did deal with it as a generic type by this substantial conformity clause.
Justice Byron R. White: But why is this even a sale or disposition.
Why don't you talk just stop there and say this is -- the Act has no application to non-dispositional use?
Mr. Rex E. Lee: Because
Justice Byron R. White: No sale, no lease, no nothing?
Mr. Rex E. Lee: Because in all fairness, Mr.Justice White, I think that the overall purpose of this value provision is this that this is the basic concept underlying a value provision.
The state has given a basic package of lands.
Two things, any proceeds that come from the sale of those lands has to be used for school purposes.
There is no other permissible ---
Justice Byron R. White: You don't need to rely.
You wouldn't need to rely on the sale provision to protect the value of the trust.
You just rely on general trust principle.
No trustee can use the land do depreciate its value or use it for a purpose not contemplated by the donor.
And I would suppose that if the state took some of this land and permitted to a use depreciated the whole value of the trust the state would be in real trouble as a trustee?
You wouldn't have to rely on the state on these purposes.
Mr. Rex E. Lee: Conceivably so but this is not the only restriction.
There is in our view an additional restriction and that is the one that is imposed by this value provision.
That the -- the state was given a basic package of lands until those lands were converted into cash.
Once they were converted into cash the cash could only be used for certain purposes.
Until they were converted into cash, the state had an additional obligation on it and that is that it was charged to an obligation of seeing to it that the total value, the total value of this package was not diminished.
Justice Byron R. White: You can't find that in the Act.
That's just general trust, was it?
Mr. Rex E. Lee: Well, I think it's also implicit in this paragraph which says that these shall not be disposed of except for value though the language has not expressly written in that regard.
This -- Congress set forth certain general restrictions and certain general principles, manifestly Congress could not in 1910 foresee all of the problems that are going to occur.
A case in point did not foresee that problem.
Now I will get into that in just a moment.
But Congress did provide, Congress did recognize that it couldn't foresee all the problems and therefore it provided that substantial conformity was to be the applicable rule within the State of Arizona.
Therefore, the obligation which is imposed upon the state is and I think it is at this point the reasoning of the government's brief is particularly helpful.
The government points out in its brief that there is no precise blueprint detailing the exact nature of the responsibilities of the state that under these circumstances, the obligation of the state is determined by the general principle of the general purposes of the Act and that so long as the overall value of the trust is maintained that the state is entitled to use these lands for public purposes.
So long as it's in substantial conformity for the purpose of the Act.
Now, is it we submit that it is for various reasons that have discussed in our brief I'd like to mention just very briefly two of them.
One is that this is not a noble decision and the only one of its kind in the country.
Mr.Frank recognized the opinion of the Wyoming Supreme Court.
Though not dealing with enabling acts there are other states for example New Jersey which in the Constitution has certain restrictions placed on certain kinds of lands.
We have cited about five or six cases in our briefs dealing with those type of constitutional provisions which dignity wise are of a simple -- similar type of dignity of this Enabling Act and various different states have held that in these lands may be used for highway construction purposes if the offsetting value increment to remaining trust land is at least equal to the value of the lands taken for these purposes but the point on which I would like to bear down particularly is the point that Arizona is entitled to interpret value as meaning value to each of the trust lands and not just value to the lands taken for the reason that is the position has been taken by the United States Attorney General over a period of 50 years.
This interpretation is significant not only because of its intrinsic persuasiveness but also by virtue of the bare fact that it is the position that has been taken by the Attorney General.
The enforcement response -- well, the act does leave it, it is true to either the states or any individual the right to enforce the provision of this act but the primary responsibility, the first line of defense is the United States Attorney General.
There's of course a familiar doctrine that interpretation placed upon the federal statute by the agency charged with the enforcement of that statute are entitled to particular weight as Mr.Chief Justice Warren pointed out for the Court in Udall versus Tallman, it need not necessarily be the only interpretation which the act might permit nor need it be the interpretation which we as an original manner might have adopted had the case originally had arisen as a judicial case or in the context of a judicial proceeding.
And the particularly significant thing about the interpretation of the justice department in this case is that it extends over a period of more than 50 years.
As the opinion of the lower court pointed out the practice that is presently under attack is of some 50 years standing in this State of Arizona.
During all of that 50-year period, United States Attorney General has never taken any action to have this practice declared invalid.
This acquiescence we submit has not been through inadvertence.
In those instances in which practices have occurred which have truly derogated from the value of the trust the United States Attorney General had been swept for act.
For example, in this Tall Timber cases which have been so prominently referred to involved were 12 suits which were brought in the territorial court for the New Mexico by the attorney general's office.
Similarly in 1915 when the State of New Mexico enacted an act, a statute providing that 3% of the proceeds from the sale of all these lands should be used to advertise the advantages and resources of the State of New Mexico generally, the attorney general's office was successful in having the statute declared invalid as repugnant to the enabling act and this was the Irving litigation which eventually terminated in this Court.
The action of the attorney general in the Irving case was swept and decisive.
The New Mexico Act was passed on March 8, 1915 and the federal district court action was instituted by the attorney general less than five months later on August 7, 1915 yet during all the time that this Ervien litigation was progressing, the very practice which is under attack here was in effect under the State of Arizona and the united states attorney general's office made no look to take any corrective action.
Justice Abe Fortas: Was it in effect in New Mexico?
Mr. Rex E. Lee: No sir, it was not.
But we have there in two states side by side that are identical enabling act provisions practiced by one was attacked, a practice by one was not.
This of course brings us to the question of whether there are determinative differences between the two practices and we submit that there are for two reason.
The first is that that which the United States suggested indicated earlier that the basic concept of these value provisions of the trust is that a certain package of trust land has conveyed to the state with a thought in mind that one day it will be converted into cash and these cash will be used for the purpose of schools, hospitals, reformatories and so forth.
Once the funds, once these lands are converted into cash, they remain invaluable.
You can't use them for any other purpose and that's the first difference.
If the State of New Mexico directly used the funds resulting from the sale of the lands themselves, that is not the problem in this case.
The problem in this case is rather whether or how the lands which one day will be disposed of and converted into cash are to be maintained or to have their integral value maintained so that at that time that they are disposed of the value will not be lesser because the use that has been made of the interim period.
The second difference is this, Mr.Frank had referred to the fact of the Eighth Circuit Court of Appeals was cited with approval by Mr.Justice McKinney's majority opinion.
If you read the opinion of the Eighth Circuit Court of Appeals you see, that the real problem that the Court there was concerned with was the fact that these trust lands comprised only 126 of the total area of the state and yet there has been 126 of the lands were being made to bear the brunt of an advertising program which presumably would benefit the entire state, the opinion --
Justice Hugo L. Black: May I say to you --
Mr. Rex E. Lee: Yes sir.
Justice Hugo L. Black: That's one of the simpler thing about that (Inaudible) you say certain part of the lands would bear the entire brunt which cause it, should all the people from the sale or all the people there.
What you have here is that a certain part of this government land which has been used for school purpose certain part of it that at the time (Inaudible) of the road building is and through its properties?
Mr. Rex E. Lee: Well, if this in fact were the case Mr.Justice Black it would bother me too.
What we submit is that of course these lands do not bear the entire --
Justice Hugo L. Black: I understand there have been 9 -- how many acres already taken with that (Inaudible)?
Mr. Rex E. Lee: Mr.Justice Black I have no idea how many acres have already been taken.
Justice Hugo L. Black: But wasn't that to be borne broad building as the job to all the people of the state.
Mr. Rex E. Lee: That is correct.
Let me make two statements with the regard to that.
In the first place of course, these parcels were mostly located in the section side parcels, the Enabling Act says Section 2, 16, 32 and 36 so that they would principally be in Section one mile square parcels.
And the road of course would come through other land come up through these school lands and would go across the lands the interstate would say some 102, 100 feet wide.
Justice Hugo L. Black: But it will benefit the people all over the state and the people -- the nation (Inaudible) highway?
Mr. Rex E. Lee: Yes.
But I think what we have to assume for the purpose of this first issue is that also benefits the surrounding trust lands.
Now whether it does in fact or whether this has been adequately proven, I will get to it in just a moment.
But I think that we also have to assume this --
Justice William J. Brennan: Are these -- the highways conceded here have a limited access highway?
Mr. Rex E. Lee: There are all kinds Mr.Justice Brennan.
Justice William J. Brennan: Well, I suppose some of them go some 50 miles before it gets to an exit?
Mr. Rex E. Lee: That is very correct.
Justice William J. Brennan: Now, I wonder how much good does that --
Mr. Rex E. Lee: Oh a limited access highway where you might go 50 miles before you get to an exit.
Justice William J. Brennan: Maybe 50 is too many?
Mr. Rex E. Lee: Well, this simply points out the problem that the posture of this case is not proper for the consideration of this particular issue.
But that is we don't have in this record any evidence as to what type of highways and roads there are --
Justice William J. Brennan: You mean the court below was wrong.
Mr. Rex E. Lee: I am going to get to that in just a moment.
I do not mean by that the court below was wrong.
I mean that by the virtue that of the way the case came to the court it had no other alternative but to do as it did.
Let me just say at this point.
Justice Byron R. White: Well, then --
Mr. Rex E. Lee: I assure you Mr.Justice White I will get to that.
Chief Justice Earl Warren: Let me ask you this question Mr.Lee.
You have a sort of a checkerboard effect over here.
One section over here and another one down a few miles and another one over two.
Mr. Rex E. Lee: That is correct.
Chief Justice Earl Warren: Now, when you are -- when you are determining what the value of this property is and what it might gain or lose by reason of a highway.
Do you asses the value that will come to that land as being the value that will come to that particular parcel through which the highway goes or do you consider it the value that is affected in all the checkerboard affair over the state.
Mr. Rex E. Lee: I will be over that in more detail in a moment.
Let me say that but because of our concept that it's the total impact of the entire trust, we would say that would be both.
That is in a particular instance when you open up entirely new lands if you run a highway across a particular section, manifestly it's going to have some effect in that section.
We think that it is always a benefit.
Also if it's an area previously undeveloped as much of Arizona certainly is and Mr.Frank himself has pointed out that much of these lands are simply non-income producing at the present time presumably because they are inaccessible and you may have also benefits to other nearby lands in other sections.
But just briefly with regards to the lack of a record, the only support for the proposition that in fact there has been 40,000 acres or $9 million or whatever it is if the fact that there have self serving conclusionary and totally extra record assertions of fact to that effect made in the proceedings, made in the proceedings before this Court.Indeed in article appearing recently in the Arizona republic the suggestion is made that these facts -- that these figures are incorrect.
Manifestly this is not the tribunal in which that particular issue should be resolved.
We simply point out and I will go into this more fully in just a moment that because of the posture of the case this is not an appropriate case in which to raise -- the issues that are in this case we really feel that probably certiorari should be dismissed as having been improvidently granted, and it should await future cases which the record is proper.
Chief Justice Earl Warren: Well that partly answers the question I asked you --
Mr. Rex E. Lee: Excuse me Mr.Chief Justice.
Chief Justice Earl Warren: -- about the checkerboard here.
Let's say you have Section 1 and Section 16 and Section 62, 32 in the school lands, you go through just a portion of Section 1.
Now when you are determining the value of the highway to the school lands and when you are considering the damage to the school lands, do you consider it with relation to only Section 1 through which the highway cost or do you consider the added value or depreciated value as to Section 16, Section 32 and all the other school lands.
Mr. Rex E. Lee: We consider the added value to all the school lands.
We think that this is consistent with viewing the impact of highway construction on the total trust on the total land which is our basic problem.
Chief Justice Earl Warren: Would you do that if it was a private utility or a private individual?
Mr. Rex E. Lee: No, Your Honor, we would not.
Chief Justice Earl Warren: What is the distinction?
Mr. Rex E. Lee: The distinction is this.
That as I read the Enabling Act, there was quite a definite purpose to place severe restrictions rather severe restrictions against the use of these lands for private purposes except under these restrictive purposes for example the public auction and so forth.
Because of what I regard to be this basic purpose of the trust land provisions of the Enabling Act we would say that the strict letter of the law must be adhered to whenever these lands are used for private purposes.
But when it comes to a matter of use by the public itself for the purpose of construction of roads then this is an apt instance for application of what Congress provided would be the governing rule that only those transactions not in substantial conformity with the provisions of the act could be proscribed.
Justice Abe Fortas: But how do you do -- what do you do with the fact that the Enabling Act does contain two specific provisions about public use.
One is use by the United States for irrigation.
The other is a provision that is a provision that says that if the state of Arizona wants to exchange any lands in trust for any other lands, they've got to go to Congress and get approval.
Mr. Rex E. Lee: I'm glad you asked that Mr.Justice Fortas.
Justice Abe Fortas: I don't know why.
Mr. Rex E. Lee: Because I have an answer for it.
And the answer is this.
When Congress passed this Enabling Act, it foresaw certain problems.
It did not foresee all of the problems and it recognized that it didn't foresee all of the problems.
One of these problems was private use.
Another was use by reclamation project.
Because Congress recognized that it didn't foresee all of the problems, it provided a catch all of raising saving funds at the end that only those transactions not in substantial conformity.
Justice Abe Fortas: This is clearly noble (Inaudible) statutory construction, isn't it that is to say would you ordinarily say that to the extent that Congress did not specifically cover state use meant for the generality of the statute to the government.
Mr. Rex E. Lee: I would agree were it not for the fact that Congress did provide that those transactions are in substantial conformity.
I refer to another canon of statutory interpretation that the language has meaning particularly when you consider where are these particular paragraph comes.
Section 28 is the basic section that deals with these trust lands provisions and right at the end of Section 28 and presumably an all embracing provision that all transactions not in substantial conformity with the provisions of the act shall be null and void.
Chief Justice Earl Warren: On what would you rely to the show that Congress could not have anticipated the need for public roads in this great western country.
Mr. Rex E. Lee: Well, --
Chief Justice Earl Warren: In 1910 after the automobile that came along and was really developed --
Mr. Rex E. Lee: This of course is not my point Mr.Chief Justice.
They didn't anticipate the need for public roads.
What they didn't anticipate was the possible conflict.
Obviously, it was not anticipated.
And the possible conflict between these particular provisions dealing with public auction and the needs which might arise in 1966 say for example as to the need for an immediate taking and the re-inimical -- the fact that it would be clearly inimical to the state's highway construction program if you had to simply wait for a 10-week period in which you went through these public auction notice provisions before you can take the lands and use them for highway construction purposes.
Chief Justice Earl Warren: Why would they anticipate reclamation projects and not be able to recognize the possibility of roads?
Mr. Rex E. Lee: Presumably because the reclamation projects had someone who had a good lobby there and anticipated the problem.
My --- I really don't know -- I really don't know.
All I know is that we do have the language of the statute that it is obvious that there are some portions of the statute as to which a too literal application would result in an unintended consequence.
Couple that with the fact that Congress did provide a safety valve as a generic type against the possibility of a too literal application resulting in unintended consequences and I can describe no other reason for this substantial conformity provision.
Now let me address myself just very briefly to the question of assuming that the net value enhancement theory is an acceptable theory upon whom does the burden lie.
The United States suggests that it should lie with the highway department and as an abstract proposition we are not out of sympathy with this.
If all we have to go on with the bare pages of the Enabling Act itself on the day following its enactment but we would disagree in this case because of the fact that the Arizona Supreme Court has on three different occasions determined that in fact the constructions of highways in Arizona does result in a net value enhancement to trust lands and this gets us back to the question of Mr.Justice White asked me earlier and I think perhaps I can anticipate a question that follows it and that is was this not an arbitrary decision?
Let me say two things about that.
In the first place, it's difficult to fault the Arizona Supreme Court for handling this case the way it did because of the posture in which the case arose.
At the time that this case came before the Arizona Supreme Court on a writ of provision, there were already outstanding two prior decisions of that Court holding that in fact the construction of highways across these trust lands resulted in a net benefit not to lands as a whole but to the trust lands themselves.
Justice Hugo L. Black: What about the land intervening between that you told the chief about?
Mr. Rex E. Lee: Well that those lands that are being in between Justice Black I was just referring to other school lands.
Justice Hugo L. Black: But I am talking about private lands.
Why shouldn't they pay as much of it as the public lands.
Mr. Rex E. Lee: Well, in our view it's not a matter of who has to pay how much.
It's a matter of after you get through building --
Justice Hugo L. Black: Not whose benefits.
And if it benefited them as much why should the trust land have to pay it all not only that those to them but all through the intervening private landowners.
Mr. Rex E. Lee: Well, because of peculiar Arizona rule and it may exist in other instances.
Justice Hugo L. Black: But that couldn't keep it, that peculiar Arizona rule couldn't keep that from putting a cost on road construction on land that others are just somewhat responsible for --
Mr. Rex E. Lee: I agree with you but on the other hand if it has been determined by a competent process and I'd like to deal just briefly with what is a competent process.
If it has been determined by a competent process that in fact after you put a road across trust lands, take a given stretch of roads --
Justice Hugo L. Black: Trust lands and other lands.
Mr. Rex E. Lee: And other lands that trust lands considered just and by themselves are worth more by virtue of the bare fact that that road has been constructed in the process.
Justice Hugo L. Black: Well, what about the intervening lands, are they worth more?
Mr. Rex E. Lee: They may be.
They may be and this may also be a consideration the State of Arizona may wish to take into consideration there.
And I think that if they did it would be perfectly proper for example if the state were to adopt a principle of compensation to -- as to private lands.
Chief Justice Earl Warren: Does it now?
Mr. Rex E. Lee: Mr.Chief Justice, it does not.
Some states do but the State of Arizona in normal eminent domain procedure only allows benefits to be offset against what we call severance damages and not against the damages from the actual taking.
Justice Abe Fortas: Mr.Lee in the federal highway program, I suppose a lot of these lands are used in that?
Mr. Rex E. Lee: I presume it would be so, yes.
Justice Abe Fortas: The value of the land I think somebody said that the value of the land is counted as part of the state contribution.
Mr. Rex E. Lee: There's nothing in this on the record.
I am not familiar with the federal highway program Mr.Justice Fortas but that is my understanding yes.
Justice Abe Fortas: You know whether the State of Arizona puts a value on these trust lands for purposes of the federal highway program?
In other words, if it uses some trust lands as part of its contribution to the federal highway program I presume that it puts a value and it places some value on them.
You know whether it does or not.
Mr. Rex E. Lee: I'm informed by my co-counsel who spends time, full time in highway department matters.
This is not done.
Justice Abe Fortas: But it's not done.
Then this goes in as free?
Goes in for free?
Mr. Rex E. Lee: Well --
Justice Abe Fortas: Well, maybe you don't know.
Mr. Rex E. Lee: Yes.I really don't know it.
Chief Justice Earl Warren: Did the federal government do it?
Mr. Rex E. Lee: There is no evidence on this record as to what the procedure is and I am really not familiar with the procedure Mr.Chief Justice.
Justice Byron R. White: But if the state has to pay for it, we'll say, who is going to pick up the tab eventually if the state have to pay for it?
Mr. Rex E. Lee: Pay for what, Mr.Justice White?
Justice Byron R. White: These rights of way.
Mr. Rex E. Lee: Well, --
Justice Byron R. White: Let's assume that you're wrong and that they can't take these for nothing, they have to pay some money, who's going to pay eventually, the state or the federal government?
Mr. Rex E. Lee: In the case of an interstate highway then pursuant to the terms of the act, part would be paid by the federal government and part would be paid by the state.
Justice William J. Brennan: By 90%?
Mr. Rex E. Lee: In accord of whatever the percentage would be.
Justice William J. Brennan: That's 90% by the federal government?
Mr. Rex E. Lee: Well, there are cases where there would be more Mr.Justice Brennan.
Chief Justice Earl Warren: But so far as the state is concerned, who gets the whole benefit if the other side prevails?
Mr. Rex E. Lee: The other side prevails then the benefit goes to the trust.
Chief Justice Earl Warren: Suppose the public schools of Arizona.
Mr. Rex E. Lee: That is correct.
That is correct.
Chief Justice Earl Warren: So wouldn't that pay more of a benefit to the state than when you prevail?
Mr. Rex E. Lee: Yes, there is no question Mr.Chief Justice that it would be more of a benefit but we submit that is not the issue in this case.
There is no question that if a value -- if actual cash has to be paid from the highway department to the land department, and in addition to that they get the value increase resulting from the highway construction that the trust will be greater in risk but we submit that that is not the issue in this case.
What is the greatest benefit that can possibly be, that can possibly be obtained for this reason the trust -- the trust provisions deal in terms of value and the standard as we see it is that value must be maintained.
If it is maintained, then the state may deal with these -- may use these lands for highway construction purposes.
In the final analysis, it's true that enabling acts are federal statutes, but many of the provisions of these enabling acts deal particularly with problem areas which substantively are within the exclusive domain of the state itself.
For example, the establishment of schools, the establishment of hospitals, and the establishment of reformatories lies within the exclusive responsibility of the state itself.
Similarly, the setting of the standards according to which these institutions are to be maintained is an exclusive state responsibility.
Once the state is determined and you can set the standards, the state can set the standard for school just as high or low, or just it wants to.
If it sets up high, that means that more money is going to be required.
Once the standard has been set to whatever extent the school trust funds are insufficient to pay the bill, the difference is going to have to be made up by the state itself and regardless of which way this determination has made as to whether highway department funds have to be paid to the state department, state land department no matter on what circumstances, the eventual bite is going to be felt by the state itself through its taxing process.
All we're saying is this that in working out its overall governmental problems of providing for schools, hospitals, reformatories and highways, all of which are state responsibilities.
The state should be entitled to incorporate into its total governmental scheme that interpretation of the enabling act which best comports with its total scheme and which it fits in best with the other constituent parts of that scheme.
It follows then that if the State of New Mexico wants to interpret its Enabling Act as requiring that only -- that value means only value to the particular lands that are taken, then this is perfectly within the right of the State of New Mexico to do so but this does not mean that the State of Arizona must adopt a similarly restrictive view.
We submit simply as to the issue of the burden of proof that the decision of the Supreme Court of the State of Arizona was made by persons who are familiar with Arizona.
They are familiar with its problems, with its history and with its geography.
We don't know what considerations they took into account.
We do know that they are -- in the studies made in the State of Texas and elsewhere which indicate rather forcefully, rather dramatically that highway construction across even developed lands, the golf freeway in Houston and the Dallas expressway in the suburbs of Dallas.It illustrate rather dramatically that the effect of construction of highways across lands is to fantastically increase the value of those lands.
In the case of the Dallas study, the increase of value of the surrounding lands was even in excess of the cost of construction of the highway itself and we don't whether the members of the Arizona Supreme Court took these particular factors into consideration or not.
We do know that tourism is the fourth largest industry in the State of Arizona.
We know that historians have assigned an important role to highways in the development of the state interest presumably also therefore of its lands.
At the very least, these decisions of the Arizona Supreme Court are entitled to some weight and are entitled not to be rejected out of hand as though they never existed at all.
At the very least, we submit they are entitled to sufficient weight to shift the burden to those who would contend that the conclusions reached there are not correct.
Justice Hugo L. Black: May I ask you, considering these two or three plan you had on this line, which on in your judgment can complete the function, will most surely guarantee but not a dime of the school plan will be spent for anything except school funds.
Mr. Rex E. Lee: Mr.Justice Black, if we are correct in our theory I would think that they would be equal in achieving this purpose because of the fact that a dollar increment to a surrounding land is just as effective as a dollar actually paid for lands that are taken for that purpose.
Chief Justice Earl Warren: But you don't take them all into consideration.
That way you take this parcel over here and add the benefit it gets to all these other parcels of the fund which you don't do that with other people.
Mr. Rex E. Lee: Well, Mr.Chief Justice I would like to say that we consider the total impact on the value of all of the lands taken as a whole, all of the trust lands.
We offset only the value of the lands taken from the trust against the value increment to trust lands themselves in the trust.
The private lands, we leave out of them entirely because the private lands simply don't enter into it.
It's the trust lands that we take into consideration.
Justice Hugo L. Black: Why isn't there a question of bookkeeping?
What you have here is a system, one system which would guarantee not a dime went out of those schools, or not a particle of that land went out without going to the school funds and it's a question of bookkeeping.
Mr. Rex E. Lee: That's right.
It it's a question of --
Justice Hugo L. Black: And the question of bookkeeping I should say the burden, the likelihood will always exist that the state funds can -- that funds can be best protected following the statutory method lend and pay money.
Mr. Rex E. Lee: The extent that it is a matter of bookkeeping Mr.Justice Black in answer to your question then I would contend that since the ultimate burden is going to be born by the State of Arizona, the state should be allowed to incorporate into its total overall scheme that interpretation of the enabling act which best fits within its overall scheme so long as insubstantial conformity with the provisions of the act which we submit this is.
Chief Justice Earl Warren: Mr.Frank, you have a few moments.
Rebuttal of John P. Frank
Mr. John P. Frank: Thank you Your Honor.
I shall be brief.
I would like to relate to some of the questions which were asked I think Justice Fortas, you, Mr.Chief Justice asked expressly as to what our law is in terms of what would happen if these were private lands, or if they were railroad lands.
The answer has been forthrightly and candidly put by Mr.Lee.
If that were happening, the doctrine of enhancement would not apply so that under the position taken by the highway department under our law these lands are put, the school lands are put in a position inferior to the railroad lands or to any other lands because under our expressed statutes and categorical decisions there would be no such enhancement as they are claiming here.
We have covered that with citations.
Justice William J. Brennan: Well would those private lands would have to -- would the -- if you went through one of these sections which are privately owned I take it you have to pay for it.
Mr. John P. Frank: You'd have to pay for it Your Honor and you wouldn't get the very enhancement which they are claiming here by expressed provision, we have set forth the statute in the interpretive cases in our reply brief at page 4.
I would like to make clear that we have not Mr.Chief Justice made that the primary focus of our argument although I think it is conclusive.
We have not first in deference to the other eight states which are with us because some of those other states may not have as flat as statute as this.
And secondly, because we wish to nail our flag to and stand on the Enabling act, the question which I put when I sat down before was if Congress wanted to require that you get the appraised value for every acre, how could Congress do it anymore explicitly than it has been done?
No one has answered that question because you can't do it anymore explicitly than that's been done and we prefer to rest on that.
Justice Byron R. White: Mr.Frank, could I ask you just about one situation?
Suppose the state lets one of these sections that on the edge of the city and they think they ought to just subdivide these sections and sell it off and so it does that while it (Inaudible) county and it dedicates to roads and streets all over the section, so that roads, (Inaudible) utility, they spend a good deal of trust money -- trust money on this section.
And then the Attorney General of the United States comes in and says you can't do this because of the -- or the school people say you can't do this because there's going to be several of these acres here that are going to be street and you are going to pay for it.
You got to pay for it.
Would you, I suppose you take the same position?
Mr. John P. Frank: You bet and when it applied to this whole section.
In other words, if I understand you sir, the Chief Justice has given the problem of checker boarded sections.
Justice Byron R. White: Well, this is just one section deal.
Mr. John P. Frank: That's right.
This one section has a number.
That precise section is either in the school trust or it isn't.
Justice Byron R. White: But what we're dealing is trying to get the section in condition itself.
They are putting in the utilities and the roads and then they begin to sell it off.
Mr. John P. Frank: The answer is that we have carried this traditionally in such fashion that if we improve these lands, we do them out of the general funds.
We would not deplete the school trust for that purpose sir.
Now, do I miss you --
Justice Byron R. White: I know but I said suppose they extend the trust money in improving trust lands so they will bring in higher price.
Mr. John P. Frank: Yes.
Justice Byron R. White: Like developers do subdivide it rather than selling it.Subdivide it, got a lot of money on it, and then they sell it.
And they make a pretty good profit.
How about -- how about the trust doing it, developing its land, selling it and making enhancing profit to the school?
Mr. John P. Frank: Yes and our position on the score Your Honor would be that the trust lands if they are going to be sold after improvement but nonetheless require payment for the totality of them and there isn't any system under this Act whereby you can ship away some acres.
Justice Byron R. White: So you would say -- you would say that the moment they purported to designate some of these lands permanently for use of streets, they -- the state hold some money in the process?
Mr. John P. Frank: Not Your Honor when they designate but when they dispose of.
The statute says use or dispose of.
Now, if they are neither using nor disposing nor selling, that would be another thing but if there is a use and may I now intervene with you sir.
Justice Byron R. White: Well, that doesn't much any difference then but the fact is you would say they have to pay for those roads.
Mr. John P. Frank: That must be paid for and it is our position you gave Your Honor the example of the golf course when you say that one part of a golf course, one section to develop and improve the area they have to pay for it.
The answer is that that was exactly what happened in the town of Benson when a section was taken.
And precisely that part and people went to the Congress of the United States and they said please give us an amendment and the Senate Committee duly recommended it on the ground that that was necessary and it is necessary under this statute.
If it is to be changed it must be by amendment.
One last word and I shall --
Justice Hugo L. Black: How could Congress change it?
Mr. John P. Frank: Pardon?
Justice Hugo L. Black: How could Congress change it?
Mr. John P. Frank: It should be done, Your Honor.
Congress may amend the Enabling Act which it then accepted as an amendment in Arizona as an amendment to the Constitution would amount to a change of the trust.
Justice Hugo L. Black: In other words, Congress can withdraw its gift?
Mr. John P. Frank: The Congress -- no.
Congress cannot withdraw it unless it is mutual.
But if there were mutual agreement and this has been done Your Honor, there have been amendments.
Justice Hugo L. Black: But you do put on that addition that it has to be mutual.
Mr. John P. Frank: You bet.
We indeed, we do.
I will advert in closing only to one last matter and that is the argument which has been made by Mr.Lee that non-enforcement by the attorney general in past years is a reason why the Act evaporates now and can't be enforced anymore.
We submit, Your Honor that the Act is not so fragile that it is erased by the fact that the attorney general may not have brought an action earlier from this.
It is true that there are changing circumstances and the problem does become larger and more frightening as we see the roads taking the land and the utility standing behind it.
As it happens, the Arizona Education Association representing the teachers who are concerned not for now because this doesn't effect now but for the future of the state have seen fit to press this matter and to bring it here to protect those school lands and we respectfully submit that this has been a public service on their part and that they are not part in pressing that argument through us here and before this Court to protect these trust lands whatever the course of ignoring these values may have been on the past.