CAMPBELL PAINTING CORP. v. REID
Legal provision: Self-Incrimination
Argument of Albert A. Blinder
Chief Justice Earl Warren: Number 673, Albert A. Blinder -- no.
It's George Campbell Painting Corporation, appellant versus William Reid et al.
Mr. Blinder, you may proceed with your argument.
Mr. Albert A. Blinder: Mr. Chief Justice and may it please the Court.
This case like the one just argued before it is on appeal from the New York State Court of Appeals from a decision rendered the very same day as Gardner against Broderick.
In its opinion, the New York State Court of Appeals declined that the statute in this case which is Section 2701 of the New York Public Authorities law was constitutional and based its finding upon the decision in Gardner against Broderick.
Now, the statute in question which is also identical with several other statutes in New York such 103 of the municipal law and a section of the finance law, provides similarly that if a person is called before a grand jury concerning a transaction or contracts with -- that states any political subdivision thereof, a public authority or with any public department, agency or official of the state or if any political subdivision thereof or of a public authority and refuses to sign a waiver of immunity or refuses to answer any relevant question then such person or any firm, partnership or corporation of which he is a member, partner, director or officer shall be disqualified for a period of five years from biding on contract or from doing business with the state and also any existing contracts at the time may be cancelled or terminated.
In this situation, we are presented with the question as to whether the Fourteenth Amendment is offended by the public authority's law because of the requirement that a corporation be disqualified when one of its officers or directors asserts or refuses the way the privilege against self-incrimination and as a corollary of that, whether the resignation and surrender of control by such an officer or a director prior to being called before a grand jury, makes automatic application of the statute repugnant to the Due Process Clause.
We also have the question as to whether a direction by statute that all public contracts contain an agreement to waive the privilege against self-incrimination is an unconstitutional condition of doing business with the state.
Now, the facts in this situation are somewhat different than the Gardner against Broderick case previously.
In fact, the appellants which is a corporation was disqualified from doing business with the state for a five year period and its contracts were terminated because one of its former officers have refused to sign a waiver of immunity when subpoenaed before a grand jury.
In fact, the individual in question was the president and a director of the corporation until about three weeks before he was subpoenaed before the grand jury.
While the corporation bears the same name as the individual in question, he is the son of the founder, he was 24 years of age at the time that he was subpoenaed and was not in actual control of the corporation.
He was the (Inaudible) I had because he was the heir of power to his deceased father.
About three weeks after resigning his officers and giving up his stock which was 10% of the outstanding stock of the corporation, he was subpoenaed before a grand jury.
The following day, he appeared, refused to sign a waiver of immunity and the corporation a week later was notified by the New York City housing authority that its contracts were terminated and that the appellants was disqualified.
I might add that before the subpoena was served upon him, the corporation notified the appellees that in fact he had relinquished his officers and was no longer the president and director of the corporation.
When he appeared before this grand jury pursuant to subpoena, he was never asked the question and never refused to make any answers.
In fact, all of the other officers and directors who were subpoenaed before this grand jury, signed waivers of immunity, some were called in to testify and did testify, some were not called in to testify.
Two days after the letter of disqualification was sent out by the City Housing Authority, the appellant corporation requested a hearing as to its disqualification.
That letter was ignored.
Four days later, a telegram was sent by the appellant's corporation also to the City Housing Authority, requesting a hearing.
Two weeks thereafter, a letter was sent by the City Housing Authority to the appellant corporation, advising the corporation that it could not have a hearing and that it need not bother communicating with the housing authority again about this subject.
I'm unable to advice the Court as to the content of the waiver of immunity which was offered to the individual in question.
The grand jury being a secret proceeding, we were not acquainted with its contents.
We assume it was a general waiver of immunity and we have not seen any transcript of testimony concerning the questioning by the assistant district attorney of the individual, asking him to sign the waiver of immunity.
The letter which advised the appellant corporation that it was disqualified said and this is the only way we know it that the grand jury in addition to investigating alleged bid rigging was only investigating bribery of the labor official, extortion, coercion, assault and conspiracy of each of these other things.
Now, our argument of course is based on much of what was discussed in the Gardner argument.
Justice Hugo L. Black: Who is the order here against?
Mr. Albert A. Blinder: The order of disqualification is against the appellant corporation.
Justice Hugo L. Black: Anybody else?
Mr. Albert A. Blinder: There's an automatic disqualification of the individual, pursuant to the statute and he also was disqualified but this proceeding was commenced only by the corporation.
Justice Abe Fortas: Well, don't you have -- I beg your pardon.
Justice Hugo L. Black: And the order against them is on the account of the fact that that president, who has now resigned, has he?
Mr. Albert A. Blinder: Yes, he resigned before he was subpoenaed.
Justice Hugo L. Black: But that president had refused to sign the waiver of immunity.
Mr. Albert A. Blinder: That's precisely what the letter said that because of his refusal -- because of the former president's refusal to sign the waiver of immunity, the corporation was disqualified.
There was no administrative hearing despite the fact that one was requested and there were no questions put to the former president when he appeared at the grand jury room.
Justice Hugo L. Black: There's no doubt on what the state law authorizes that --
Mr. Albert A. Blinder: I think that's considerable.
Well, may I say that the New York Court of Appeals held that the state law will approve it, yes! I believe, however, that this is repugnant to the decisions of this Court and to the privileges of the federal constitution.
Justice John M. Harlan: The corporation has no bit amount of purpose (Inaudible).
Mr. Albert A. Blinder: I agree as to that sir.
We're not --
Justice John M. Harlan: I still hear as you say, the purpose (Inaudible)
Mr. Albert A. Blinder: No.
Actually sir, what we're complaining about is that a penalty was imposed upon the corporation in a manner which is repugnant to the Due Process Clause because of a statute which imposed the penalty upon an individual contrary to Spevack against Klein.
Justice John M. Harlan: (Inaudible)
Mr. Albert A. Blinder: Well actually, we're making both this lock out point and the point in Spevack.
We state that vicarious disqualification is based upon an unconstitutional section of law.
And it's rendered unconstitutional not only by Spevack but also by virtue of Slochower because we were afforded no rights at all to make explanation.
Justice Hugo L. Black: What kind of explanation could you have made if that is the law?
Mr. Albert A. Blinder: Well, if we have the administrative hearing Mr. Justice Black, I believe that we could have found out whether the waiver of immunity that was offered to the former officer was a legal one and we would have been able to determine at least what the colloquy had been between the assistant district attorney and the officer in question concerning whether this grand jury was operating within the scope of the statute.
We don't even know that so that under the circumstances, we not only state that the statute is unconstitutional but certainly its application as the New York Court of Appeals said it was valid.It's repugnant to due process and the Slochower.
Justice Byron R. White: Well, I take it then you'll be making the same argument if the president hadn't resigned.
Mr. Albert A. Blinder: We would be making the same argument, yes, certainly in connection with the constitutionality of the statute.
Justice Byron R. White: So you say that the corporation may not be disqualified from contacting with the city even though none of its officers through -- only through whom the corporation can speak even though all of them refused to testify.
Mr. Albert A. Blinder: Yes, our position on that is simply that even under Spevack and Mr. Justice Fortas' concurring opinion that this, a grand jury inquiry is not the proper administrative inquiry to determine the fitness and qualification of this contract.
The grand jury in New York --
Justice Byron R. White: That's a little different point I suppose but you would -- do you mean if there had been an administrative hearing and the same people have refused to talk about the corporation's performance of its contracts that you wouldn't be here.
Mr. Albert A. Blinder: Well, I say this.
I believe that that is an opening question in Spevack.
And under the circumstances, this Court might very well find that our people before our proper administrative tribunal have to demonstrate their fitness and qualification but we say that the grand jury was absolutely the wrong tribunal that it never had the functions of determining fitness and qualifications of a public contract.
In fact and I believe this is set forth by our brief with -- in some detail.
The grand jury by statute may only look into criminal misconduct of public officials and when the counsel for the appellee in the proceeding argument said that the grand jury may present on other than criminal matters, he was not quite stating accurately the Law of New York State.
The lore of New York State as it is clearly set out in the Code of Criminal Procedure.
It says that in the cause of examining into whether there was criminal misconduct, if it finds that there was non-criminal misconduct of public officials that at the discretion of the Court, it may make a recommendation concerning this non-criminal misconduct of public officials but there again, if it does make such a recommendation, the public official who was so charged has the right within 31 days to file an asset to the presentment of the grand jury before that presentment can be made public.
Justice Byron R. White: In any event, we consider this case as though it would be the same issue if this gentleman have not resigned and that this was a -- that one of the officers have refused to testify before the grand jury.
Mr. Albert A. Blinder: Well, I believe that's certainly one of the points.
The other points has to do with the Slochower question as to his resignation whether in fact any administrative hearing was given and I can't say that it's strictly that because we have also made the other point.
Justice Hugo L. Black: Does the New York statute provide for an effective reinstatement proceeding that some sort of a proceeding be brought here by this corporation to remove its disqualification?
Mr. Albert A. Blinder: Yes, under the Public Authorities Law at a later time, Section 2303 was added -- 2603, I beg your pardon.
And under that section, a corporation after its disqualification may commence a proceeding, establishing one that there was cooperation by the corporation afterwards, and two, that the person who was the recalcitrant witness so to speak, had not actually been a control person than the Court might in a discretionary fashion remove the disqualification if it was in the public interest to so remove.
Justice John M. Harlan: Does the record show how the stock of this corporation is known?
Mr. Albert A. Blinder: Yes, it does.
Justice John M. Harlan: Where is the stock?
Mr. Albert A. Blinder: The stock is held as follows.
The resigned officer had 10% of the stock.
His brothers and sisters had an additional 40% of the stock.
50% of the stock was owned by the estate of his late father of which his mother was one of the principal beneficiaries.
Justice John M. Harlan: And there is no publicly held stock.
Mr. Albert A. Blinder: There is no publicly held stock.
This is a closely held private corporation.
Justice Abe Fortas: Suppose the state obtains information from a president of the company in violation of his Fifth Amendment rights and then uses that -- the information in a proceeding against the company itself.
Can the company assert the individual's Fifth Amendment privilege for the purpose of excluding that evidence?
Mr. Albert A. Blinder: Well, I believe this Court has held in United States against White that the privilege cannot be used by a corporation.
And I would assume that in following it through to the state of facts you've mentioned that the corporation could not object providing that it met that competency and relevancy and materiality test of evidence.
Justice Abe Fortas: Yes, if it cannot object in that case, how does -- what's the basis for your assertion that in this case, the corporation can in effect assert the privilege on the behalf of one of its officers.
Mr. Albert A. Blinder: Well, Mr. Justice --
Justice Abe Fortas: Your argument here is that the statute is unconstitutional because it penalizes the exercise of Fifth Amendment rights.
That's still in there?
Mr. Albert A. Blinder: Yes.
Justice Abe Fortas: And you're saying that the penalty imposed by the statute operates upon the corporation.
Mr. Albert A. Blinder: As well as the individual.
Justice Abe Fortas: And here, the corporation is asserting -- it was asserting what in effect you urge as a constitutional right of the individual to be able to exercise his Fifth Amendment privilege without being subjected to any kind of penalty.
Mr. Albert A. Blinder: Well, I think Mr. Justice --
Justice Abe Fortas: And I think it's a problem in this case, don't you?
Mr. Albert A. Blinder: It is a problem and in our reply brief, we explained it as follows.
I'm not certain that the explanation is sufficient to convince you sir but we have said that the corporation is not in effect, asserting the Fifth Amendment.
The corporation is asserting the Fourteenth Amendment in that as a result of an illegal penalty that's based upon an individual -- is having asserted the Fifth Amendment, the corporation by virtue of the Fourteenth Amendment as being deprived of its property without due process.
Justice Abe Fortas: But that would also -- if that were true the you would assume that the corporation wouldn't be able successfully to oppose a tender of evidence obtained in violation of its president's Fifth Amendment rights.
Mr. Albert A. Blinder: Well --
Justice Abe Fortas: The corporation has a right under the Fourteenth Amendment of fair trial and it would be -- it would then be able to assert as part of that right as to have excluded from use against if evidence unlawfully obtained from its president, it seems to me that one would follow from the other?
Mr. Albert A. Blinder: Well, I must say that I think what you say is correct and I believe that it is basically unfair for the corporation not to be able under the same set of circumstances as I've argued to assert that privilege.
However, I do understand that this Court has ruled with in contrary and what I'm saying is that basically since we're talking about a civil penalty which was vicariously imposed without even the right of the corporation to have a rudimentary hearing, I say that that is repugnant to due process.
Justice Byron R. White: Did the corporation ever make -- refer to the city that it was willing to furnish any kind of information through its other officers?
Mr. Albert A. Blinder: Oh yes.
We've -- the corporation turned over all its records and the other officers and directors all appeared before the grand jury and waived immunity.
In addition to which --
Justice Byron R. White: At the same time, is this gentleman --?
Mr. Albert A. Blinder: A week later.
Justice Byron R. White: That this was after the bids has been --
Mr. Albert A. Blinder: No, before it was disqualified.
Chief Justice Earl Warren: You offer to make this man available, the one who refuse to test -- refused to waive immunity?
Mr. Albert A. Blinder: Excuse me your --
Chief Justice Earl Warren: Did you -- did you offer to have him testify in the proceeding of that kind?
Mr. Albert A. Blinder: Well, we merely ask for a hearing.
The hearing did not specify who would be called I think could determine on the nature of the hearing which the appellees would have called.
Chief Justice Earl Warren: Would they have had a right to call him and ask him to waive immunity and if he didn't, to go ahead and declare the corporation ineligible for the contracts?
Mr. Albert A. Blinder: Well, I believe Mr. Chief Justice that that question was left open in the Spevack decision and I -- I maintain sir that even if that right -- well, may I put it this way.
Even if these were the case that he could have been called before a disciplinary hearing appropriately set up by the City Housing Authority and had refused to testify, it is entirely possible that he -- that the corporation and he could have been fired without changing this case which we're arguing at the moment.
I -- my point is that the grand jury is not a disciplinary proceeding and in fact, there was no hearing given and they -- the matter of the fitness and qualification of the individual officer as well as the corporation was never put in issue.
If in fact, that had been put in issue before an administrative tribunal then I do not know what the answer would be because it would depend very much on whether this Court decides that the Fifth Amendment under Malloy and Hogan and Spevack covers disciplinary hearings of public officials as well as public contractors.
I say that it is not necessary for this Court to go that far in seeing the basic unfairness of the situation which resulted in this particular case.
Justice Byron R. White: Was the corporation -- I suppose the corporation was powerless to secure the testimony of this gentleman who resigned.
Mr. Albert A. Blinder: Well, the record reveals that when counsel first hear that this investigation was being conducted by the District Attorney's office and that there was a possibility that subpoenas might be served upon officers of the corporation.
They held a meeting with the officers and directors and advise them that this might happen and that if anyone of them would waive -- would refuse to waive immunity, he had best get out of the corporation as an officer and director in stockholding and the only one who said that for personal reasons he might do this was George Campbell, Jr. and that --
Justice Byron R. White: That was hardly -- for whom was that -- to whose benefit was that advice?
For whose benefit would that advice, the officers or the corporation?
Mr. Albert A. Blinder: Well, it was to the corporation's interest to have them all waive the immunity so that the corporation wouldn't be disqualified if and when they were subpoenaed.
Justice Byron R. White: So you are saying to him, you either waive immunity or get out.
Mr. Albert A. Blinder: Essentially, that is correct.
Justice Byron R. White: Which is what you're objecting to the city during the year?
Mr. Albert A. Blinder: Yes sir.
But this was a private corporation and I say that while the state has the burden of being sure that its contractual obligations do not violate the basic Bill of Rights when a person's family corporation says to the contrary, it might be an entirely different picture.
Justice John M. Harlan: Does record show what the nature of the underlying charge was that set the investigation.
Mr. Albert A. Blinder: Well, the letter -- the record does indicate that the grand jury was investigating bid rigging, bribery of the labor official, extortion, coercion and assault and a conspiracy to commit any of those substantive crimes.
And I must argue to the Court that certainly, within the realm of a transaction and a contract with the state, I can imagine how a grand jury can determine the issue as to whether an assault bears upon the contractual obligation of the contractor or upon his fitness or qualification.
Now, I respectfully --
Chief Justice Earl Warren: Will that depend upon the context in which the assault was committed?
Mr. Albert A. Blinder: I think it might very well Mr. Chief Justice but they never informed you -- the corporation or the client who was the alleged recalcitrant witness just what the circumstances of whether they were investigating.
In fact, under the statute, they do not have to confine the grand jury investigation to only the contracts in question.
Under the statute, they can look into any transaction with any political subdivision or any public official and I assume in this case they could even ask questions concerning whether his taxes were paid, whether the streets were properly paid outside of his house assuming he had an obligation to do so and they could probably ask questions which not in the least could affect his fitness and qualification as a public contractor with the New York City Housing Authority.
So all I can say on this is that without specifically being advised of the nature of the inquiry and that they were looking into the contracts which were allegedly the ones in question.
The individual would be waiving immunity as to all kinds of remote things which couldn't possibly bear upon fitness and qualification and therefore, carrying at once that further, the corporation could in turn be penalized by an inquiry that would have nothing to do with its function as a public contract.
Justice Byron R. White: Well I -- even if the -- even if the city could require a public employee to talk or lose his job, I'm not sure that that would entitle it to do anything at all to these officers and officer this -- well, he wasn't working for the city.
Mr. Albert A. Blinder: No.
Justice Byron R. White: His only recourse would be against the corporation.
Now I take it the corporation is saying that we did all we could to cooperate.
We couldn't control the officer if we would have -- could have gotten his testimony, we would have but our lives are an open book except for him and we can't do anything about him and you're saying that it's a lack of due process to be cut off for that.
Mr. Albert A. Blinder: That's correct sir.
Also, I might add that the individual himself was disqualified but of course we're obviously not raising that question.
We say that the corporation despite all of its intents to cooperate and comply in every respect possible was vicariously disqualified because of an unconstitutional --
Justice Byron R. White: Yeah, but the fact is that there maybe some things about the corporate business that the city hasn't been able to find out and it may be that the only way to find out is if your ex-officer talk but he will not talk.
Mr. Albert A. Blinder: Well, may I just state this.
They never asked the corporation about any of these things and have they done --
Justice Byron R. White: I thought they have to talk -- didn't the officers testify what the other officers testified for grand jury --
Mr. Albert A. Blinder: They were called.
Justice Byron R. White: -- and waive their immunity --
Mr. Albert A. Blinder: That's correct.
Justice Byron R. White: -- and were asked questions?
Mr. Albert A. Blinder: That's correct but nothing specific was asked by the City Housing Authority.
Justice Byron R. White: -- which they wanted to know that you didn't know and they could only get from the other appellants.
Mr. Albert A. Blinder: Well, except if it wasn't the City Housing Authority conducting the grand jury.
It was in Assistant District Attorney and I'm sure he wasn't under the -- under the laws of New York allowed to divulge what happened to the City Housing Authority and certainly, it's their duty to determine fitness and qualification and I don't believe that they were ever able to find out because there is a strict rule of secrecy in New York concerning grand juries which makes it a crime to divulge the testimony before it.
And under the circumstances, if the City Housing Authority wanted to find out something about this corporation, I say that the only way they could find out is by asking the corporation because the grand jury wasn't allowed to give it to them and always the Assistant District Attorney without a court order.
Justice Hugo L. Black: Who gave the company notice of its disqualification?
Mr. Albert A. Blinder: Well, what happened was, the Assistant District Attorney notified the City Housing Authority that George Campbell, Jr. had refused to waive.
They in turn wrote a letter to the corporation, telling the corporation that based upon the letter from the Assistant District Attorney informing them that the individual had refused to waive, they were disqualifying the corporation.
Justice Hugo L. Black: Who was disqualifying?
Mr. Albert A. Blinder: The City Housing Authority.
Justice Hugo L. Black: City Housing Authority
Mr. Albert A. Blinder: -- who are the appellees.
Justice Hugo L. Black: And then what did you do?
Mr. Albert A. Blinder: We then filed the necessary -- well, number one, we asked for a hearing which was denied.
Number two, we filed an Article 78 proceeding which is a special proceeding in New York in the nature of the review.
Justice Hugo L. Black: A judicial review.
Mr. Albert A. Blinder: A judicial review.
And we were informed by opinion that we were in the wrong remedy that we should start a plenary action.
We started a plenary action and as part of that move for a temporary injunction.
Justice Hugo L. Black: Is that this one?
Mr. Albert A. Blinder: Yes.
They're both in this case sir.
Justice Hugo L. Black: Both of them.
Mr. Albert A. Blinder: We move for a temporary injunction requesting the disqualification be held up pending the outcome of the plenary action and that was stayed because we were appealing the Article 78 proceeding and then the appellant division of the New York Supreme Court, dismissed both claiming that we were obligated to stand on our contracts and we have no right to test any further.
We then went --
Justice Hugo L. Black: I don't stand on your contract which provided what?
Mr. Albert A. Blinder: The contract provided in advance that if any officer or director of the corporation were called before a grand jury and this is the statutory language --
Justice Hugo L. Black: In the contract.
Mr. Albert A. Blinder: In the contract.
That if any -- if any officer or director were called and refused to waive that the contracts will be terminated and that the contractor would be disqualified for five years.
Justice Hugo L. Black: Did you challenge that?
Mr. Albert A. Blinder: Yes, we did sir.
Justice Hugo L. Black: Is that basically what this issue is here whether they have a right to make it at any contact?
Mr. Albert A. Blinder: Well, there are two questions because the statute contains one section which puts it into the contract and another section which operates separate from the contract and we have argued that both are unconstitutional.
The first, because the state may not impose an unconstitutional provision in its contracts and the other based upon the fact that this is interrogation of Spevack and also Slochower because of the due process.
Justice Hugo L. Black: Your contract has agreed to him but the company's contract agreed that it would -- it could be disqualified if he also refused to testify?
Mr. Albert A. Blinder: That's correct sir.
The statute mandates that every public contract don't have that provision in it and we say that the statutory direction is unconstitutional because it requires an unconstitutional provision to be put into a public contract.
And with respect to the -- to the letter, may I just call to your attention sir the dissenting opinion in Reagan against New York in which Your Honor joined in which Mr. Justice Douglas said, "So far as I know, it has never been held before that the privilege against self-incrimination or any other Bill of Rights safeguard can be bargained away far in advance of the day when needed as protection against the overreaching power of government."
We state that under the entire line of unconstitutional provisions of public contracts that the state may not put this provision into a public contract and cause the contract thereby to agree to unconstitutional provision in the contract.
Justice John M. Harlan: What was the original contract signed by this officer -- this particular officer, the president?
Mr. Albert A. Blinder: Yes, it was signed by the president.
Justice Abe Fortas: Is it signed by the same young man, this 24-year-old man who resigned after all these started?
Mr. Albert A. Blinder: Yes sir.
He signed three contracts in the short period when he was the president which was about seven months.
Justice Abe Fortas: Did the company have other contracts which were signed by somebody else?
Mr. Albert A. Blinder: I believe I did.
In fact, only about 15% of the business of this corporation was with this particular agency.
But as a result of this disqualification, this corporation was not only disqualified from doing business with the State of New York but has been unable to get some contracts with other states and with many private companies because of a general blacklisting which has occurred in the industry.
Justice Abe Fortas: It's like federal blacklist, isn't it?
This federal blacklist is --
Mr. Albert A. Blinder: Yes, I believe.
Although, the Acting Process case which this Court decided, indicated that whether there was a violation with the anti-kickback section, only the one contact in question was not enforceable, it didn't go any further not saying a general blacklisting for a specific length of time.
Now, if I have any more time, may reserve it for rebuttal.
Chief Justice Earl Warren: You may Mr. Blinder.
Argument of Paul W. Hessel
Mr. Paul W. Hessel: Mr. Chief Justice and may it please the Court.
At the outset, I should like to make the position of these appellees quite clear that whereas in view of the fact that we're here arguing this case along with the case that's relating to public employees, in view of the fact that Court of Appeals has sight of the Gardner case as a authority that have decided the same day as our case, as authority for upholding the constitutionality of Section 2601.
In view of those facts, we take it that the decision of this Court on the public employees' case, will have an impact in my opinion, a major impact upon the equation of the constitutionality of Section 2601 of the Public Authorities Law which is an issue in this case.
It is our position however that if Section 1123 and Article I, Section 6 of the New York State Constitution are held to be constitutional with respect to the public employees and certainly in our opinion a fortiori, this Section of the Public Authorities Law which imposes as somewhat similar duty upon public contractors rather than public employees should likewise be held unconstitutional and that in my opinion then should be the end of the case at that point.
However, by no means that we concede that the commerce is true because there are so many points of distinction between this case and the cases of the -- the public employees' cases that under any circumstances, the judgment of the Court of Appeals in this case should be affirmed.
And those points of distinction relate -- are based upon two grounds.
One on the general proposition as Section 2601 applies to public contractors all over the state generally and certainly upon the peculiar circumstances of this particular case, some of which had been brought out by questioning of various of the justice of this Court.
Now, with that purpose, I should like to fill in somewhat more of the facts in this case that have been thus far brought out.
The authority which is the appellee here is a state created agency.
And in fact, it is so designated as a state agency under the Public Housing Law, designed to carry out the functions of the State Constitution of some slum clearance and the creation and construction of public housing for low income families and as such, all of the statutes of the state according to public corporations or public divisions applied to the New York Housing Authority, the appellee here, the authorities given authorization by the public housing law, Section 151 to bid its public contracts for maintenance of its projects.
There are about 150 of these projects, housing equals to 600,000 low income tenants or person.
In the bidding of its periodic painting contracts, three of these contracts were bid upon by this upheld and cooperation.
And it has been brought out those three contracts which are in issue here was signed on behalf of the appellant corporation by George Campbell, Jr. its president.
In addition to the fact that these contracts contained the mandatory provision of Section 2601 of the Public Authorities Law that the corporation or its officers -- corporation of that contract of an individual or if a corporation and its officers must waive immunity and answer question in a narrowly related field and I'm referring now, particularly calling to mind Mr. Justice Fortas' statement as Spevack, that the corporation must as Section 2601 provides by its officers answer questions were then called before the grand jury concerning any transaction or contract have with the state, any political subdivision thereof a public authority or any public department or subdivision of the state.
Justice Hugo L. Black: It must do what now?
Mr. Paul W. Hessel: I beg your pardon?
Justice Hugo L. Black: It must do what?
Mr. Paul W. Hessel: The corporation or its officers by the contract as Your Honor has brought up.
In the -- written in the contract, there is a provision that the corporation or its officers when called before a grand jury must waive immunity and answer questions in this very narrow field --
Justice Hugo L. Black: Under the Fifth Amendment?
Mr. Paul W. Hessel: Only with respect to contracts or transactions had with the states or any of its subdivisions.
Justice Hugo L. Black: That is with the contracts in which their guilt of a crime is affected.
Mr. Paul W. Hessel: I beg your pardon.
Justice Hugo L. Black: That is in effect with whether their guilt of the crime is to be confessed.
Mr. Paul W. Hessel: Well --
Justice Hugo L. Black: Is that right?
Mr. Paul W. Hessel: -- the statute doesn't talk about it.
Well it may be.
Justice Hugo L. Black: But that's what it does.
Mr. Paul W. Hessel: It may be.
That's what might be required -- is that the officer testify, concerning any transaction which may involve a crime.I can't say anything.
Justice Hugo L. Black: In other words, to straight out waiver of the Fifth Amendment immunity against self incrimination.
Mr. Paul W. Hessel: That's right, by contract.
Justice William J. Brennan: You mean by contract, you can't add the contract unless you agree to it without provision and can't --
Mr. Paul W. Hessel: That's right.
Contract voluntarily subscribed to this --
Justice William J. Brennan: Voluntarily subscribed which don't get a contract unless you agree to this contract containing that provision.
Mr. Paul W. Hessel: That's right.
That is one of the conditions that they're complaining about and I'll come to that question on provisioning.
Now, I would like --
Justice John M. Harlan: Supposing this contract is signed by someone -- other gentleman or a person to this corporation (Inaudible).
Mr. Paul W. Hessel: Well, as long as it's signed --
Justice John M. Harlan: (Inaudible)
Mr. Paul W. Hessel: Well, we're not maintaining that the individual George Campbell, Jr. contracted to waive immunity at the time.
What we're maintaining is that the corporation contracted to a certain consequences as a result of the failure of the third party if you will, to accomplish any particular or to furnish particular information.
Now, what I want to point out at this point --
Justice Hugo L. Black: The point was to make a certain person lose his privilege not to be a witness against himself under the Federal Government's Fifth Amendment.
Mr. Paul W. Hessel: That's so far as the individual is concern.
Justice Hugo L. Black: Pardon?
Mr. Paul W. Hessel: Yes.
Justice Hugo L. Black: That's the basis to get around on the Fifth Amendment.
Mr. Paul W. Hessel: That's right.
But the purpose of it was just as the purpose was in the public employees' cases to furnish information.
Now, in addition to that condition in this context --
Justice Abe Fortas: Well, that isn't quite right.
It isn't quite the same thing though.
That's what -- a bothersome fact.
What is required to do here is to waive the protection of the Fifth Amendment --
Mr. Paul W. Hessel: That's right.
Justice Abe Fortas: That is perfectly possible to grant immunity to ask the questions and to get answers to the questions.
So what is happening here is that the individual or the corporation is given the opportunity to contract with the state only if the individual agrees to answer questions without the benefit of the Fifth Amendment.
And that's not a question -- it's not a matter of whether the state can or cannot get answer to its questions because the state can get answer to its questions by grant of immunity consistently with the Fifth Amendment.
Isn't that so?
Mr. Paul W. Hessel: Yes, I would say that by granting the community under Section 2447, to an individual, the state can get answers to his questions.
But we have here an administrative agency which is interested solely in the qualifications of its contract.
It's up to the District Attorney or the grand jury who are concerned with punishment to grant or not to grant immunity under the statute of New York.
Now, if they're conducting a criminal investigation in which they do not find it desirable to grant immunity.
What does the administrative agency to do?
To continue to do business with a corporation which is perhaps under investigation at that time in which they know that some question should be answered and those questions would be available if the corporation carried out by its officers, its contractual duty to furnish that information.
Now it's to the statement here that that information would not be available before it's a grand jury.There's absolutely no basis for that at all.
I don't think I'll take the time of the Court because it's fully briefed in my brief.
Justice Thurgood Marshall: Mr. Hessel, suppose this man who signed the contract, the young man?
Mr. Paul W. Hessel: Yes sir.
Justice Thurgood Marshall: Suppose in the meantime, he'd been arrested and convicted of rigging bids, fraud, etcetera in regard to another corporation.
Could you cancel the contract here?
Mr. Paul W. Hessel: In regard to another corporation completely unrelated.
Justice Thurgood Marshall: Oh!
But the same president.
Mr. Paul W. Hessel: The same president but an unrelated corporation.
Justice Thurgood Marshall: Right.
Mr. Paul W. Hessel: No interlocking directorship of any of that kind.
Justice Thurgood Marshall: No.
Mr. Paul W. Hessel: I would say under New York law that possibly, we would not cancel the existing contract because a property right was involved there.
But as the future disqualification, the New York clause has so held that in fact, even if there were only an indictment and not a conviction at that time.
Justice Thurgood Marshall: We have talking about canceling this one.
Mr. Paul W. Hessel: You mean cancellation of the contract?
Justice Thurgood Marshall: Yes sir.
Mr. Paul W. Hessel: Yes.
Justice Thurgood Marshall: You couldn't do it, right?
Mr. Paul W. Hessel: There our property right would be involved and I would say --
Justice Thurgood Marshall: So you're really not interested in the people in dealing with good, clean people are you, because he had been doing business with a convicted criminal?
Mr. Paul W. Hessel: Well, Your Honor, we've called and made a distinction between cancellation of a particular contract which is a property right and disqualification for bidding on future contract.
Now, I want to make the point --
Justice Thurgood Marshall: Well, could you just qualify him for the future?
Mr. Paul W. Hessel: Yes, Your Honor.
I would say we would.
Justice Thurgood Marshall: You mean that this man had been convicted and it subsequently resigned?
I would assume he would resign that that you would disqualify in the coming five years?
Mr. Paul W. Hessel: Well, under this statute, there is relief from that by judicial intervention and that is one of the points that I wanted to get to.
Justice Thurgood Marshall: But before you get to judicial intervention at least so far as I'm concerned you have to get to a little due process hearing.
Mr. Paul W. Hessel: Well, that's exactly what is provided for in the statute and I'll come into that.
There is now a -- since a question of hearing has been raised, here is another point of distinction between this and the public authorities and the public employees cases.
While my colleague with the corporation counsel's office has taken the position that a hearing is read into Section 1123 and that may very well be so.
It does not appear on the face of that statute.
The Public Authorities Law on the other hand, expressly provides for a judicial hearing on the very issue that has been raised here.
Now the issue that has been raised -- that was raised throughout the record in the courts below was not a constitutional issue at all.
You won't find any constitutional issue in the record of this case.
It was only raised on appeal in the Court of Appeals.
The issue that was raised was solely a question of interpretation of the statute of Section 2601 and that is as to whether an officer who have resigned just before being called before the grand jury was still to be considered or deemed to be an officer for the purpose of that section.
Now, the Court of Appeals so decided and I respectfully submit that decision is binding upon this Court.
The Court of Appeals did not negate the fact that this young man had resigned just before he was called before the grand jury but the Court of Appeals did say that in view of these particular circumstances and in view of the nature of this statute, in view of the nature of the requirement that he shall be deemed to be an officer enacting in his capacity at that time he was subpoenaed before the grand jury.
Moreover, the Court of Appeals further said that there may be times when the statute will operate to penalize a corporation which have actually served at its connection with the recalcitrant officers and which has otherwise been cooperative.
This is precisely the circumstances my opponent was talking about.
The Court of Appeals went on to say the legislature has, however, recognize this problem and has specified a procedure by which the disqualification can be removed under such circumstances.
Now, here is not only an administrative hearing, it's a plenary judicial hearing which this corporation had available to him in addition to which this Section 2603 which I have just read from, provides that such in cooperation can go into the Court, the Supreme Court and get a stay against any harm to it whatsoever including a stay against cancellation of this very contract.
Now, that in my opinion is full judicial due process under the Fourteenth Amendment and it has been so held by this Court in a number of cases which we cite.
Now, some more of the distinctive provisions between -- the distinctions between this and the public employee cases are as follows and I think this is to touch upon some of the questions.
Here, we have a claim of violation of Fifth Amendment rights of somebody who is not even here in Court.
George Campbell, Jr. is not a party to this preceding only the corporation is.
If George Campbell, Jr. had been a party to this proceeding and he had come in and claimed this compulsive waiver was costly to me because, one, I myself was the contractor who is disqualified.
That is an issue that might have to be decided in line with the public employees' cases.Or even if he had said, I am the principal officer stockholder of this corporation and while not directly, indirectly.
You are making it costly to me to exercise my Fifth Amendment right and therefore it's unconstitutional for you to do so, that's another situation.
But that is not the situation before this Court and I respectfully point out to this Court that I think you will shortly have that situation before you in a case that is now pending.
And that's the case of Holland against Hogan which I sat and listened to in the three-judge court down in New York and which I believe is now before this Court the decision.
And there, I believe there is a situation of an officer and a stockholder of milk companies as I believe it is Mr. Hirshowitz, would you going to be in that case, who are claiming that very violation I am talking about.
Here, we have no such situation.
Now, it's a peculiar circumstance in this case that this contract to which they subscribe, not only contain the one condition that its officers must waive immunity and find the information as to other contracts had with state agencies.
It contained another condition that in my opinion was even more open to complaint that they complain about it but it was nevertheless valid and that is that at the time the contract was signed, the corporation by its principal officers must sign a non-collusive affidavit.
I believe that type of affidavit is required in federal contracts.
There, they must swear that they have not been entering into this contract colluded with any other person, firm or corporation to rig the bid and so on and so on.
Now, there is a condition which requires a statement of something that might have been a crime.
In fact, that statement turn out to be a crime because as the record here shows, Mr. George Campbell, Jr. and the corporation were both indicted for perjury for falsifying that non-collusive affidavit and while this case was pending and coming to the course to this Court, both the corporation and Mr. George Campbell, Jr. pleaded guilty to an indictment of bid rigging which was a separate indictment which included this perjury count in a non-collusive affidavit.
Chief Justice Earl Warren: He pleaded guilty of saying it?
Mr. Paul W. Hessel: I beg your pardon.
Chief Justice Earl Warren: You say they plead guilty?
Did you say they plead guilty?
Mr. Paul W. Hessel: Yes.
They pleaded guilty.
Pleaded guilty and we have attached to our brief because it came up only after the matter was pending on this Court.
We have attached to the appendix in our brief a certified copy of the plea of guilty from the county clerk accountant.
Now if ever there was demonstrated in this Court, the validity, the rationality, the reasonableness of these very conditions in these public contracts that are now before this Court, I don't see how there could have been better demonstration of it.
Now, this Court has said and I have cited, I think was the Hoffman case that a public agency has as much a right to attached conditions to its contract as any private contractor and this Court has said so in very broad terms.
Now, of course to every such expression that must be attached to proviso of reasonableness.
Of course I would concede that neither on a public contract nor a private contract can you make it a condition that the contract though must go out and discriminate or shoot people or commit some crime, of course not.
But a reasonable condition such as I have described that swear to the fact that you have not colluded with anybody else in bidding upon this contract to agree that in the future you will be frank and open if called before --
Justice Abe Fortas: But that's not quite it.
Here, you have the waiver problem.
An officer -- you've got two things and they're may be very different.
One is the -- penalizing the corporation for the refusal of its officer to sign a waiver and the other is penalizing a corporation for the refusal of its officer to reply to questions within the -- which are relevant to the contract and to the obligations assumed.
Now, I notice that in your argument, you run those two things together but when you look at it from the point of view of the Federal Constitution.
Is there not a difference between forgetting your separate point about the corporation's right to claim this?
Is there not a difference between compelling a person to sign a waiver of his right -- of his Fifth Amendment rights on one hand and on the other hand, compelling a person to reply to questions as to whether he as well and faithfully discharged his obligations with respect to a public contract?
Mr. Paul W. Hessel: Alright, let me answer that.
Section 2601 talks about both.
It says that the corporation or any person who've been called before in a grand jury --
Justice William J. Brennan: Where is that 2601?
Mr. Paul W. Hessel: Here it is sir.
A clause to be cited on all contracts provided upon refusal of a person called to appear in a grand jury to testify concerning any transaction or to sign a waiver against subsequent criminal prosecution or to answer any relevant question concerning such transaction or contract.
And then in that even, the contract can be cancelled and he may -- and the corporation maybe disqualified.
Now, I think as I've said before you.
It's up to the District Attorney or the grand jury to decide whether their criminal prosecution in the public interest is more -- they are more concerned with that than they are concerned with getting administrative information.
It's up to the administrative agency which has to spend the state's funds to be concerned with the question of getting answers.
Now, if the District Attorney of the grand jury under the statute decides that they will not grant immunity.
They will not permit any person under investigation to testify without a waiver then the administrative agency is in the position where it cannot get the answers to the question that it should have.
Justice Abe Fortas: Well, that's too bad.
Maybe you don't have another statute if that runs a file of the Federal Constitution but that doesn't answer the federal constitutional question.
As I read the statute, it relates to a person who is called before a grand jury (a) to testify or (b) to sign a waiver of immunity or (c) to answer any relevant question.
And if he refuses to do anyone of those things, he -- then the consequence as follow that corporation's contract is terminated and he is blacklisted.
Now, in the present case, we have a situation which this man is called before the grand jury to testify as to sign a waiver of immunity.
In other words, as to sign a waiver of his rights under the Federal Constitution Fifth Amendment rights and he refuses to do so and therefore release the consequences attached.
Now, it is possible that that presents a different question under the Federal Constitution regardless of practical consequences.
That would be preserved if he had declined to answer a question.
Mr. Paul W. Hessel: If granted immunity.
Justice Abe Fortas: He was granted immunity --
Mr. Paul W. Hessel: All without signing a waiver.
Justice Abe Fortas: Suppose he had been granted immunity and suppose he'd been asked a question about this whether you bribed somebody in connection with obtaining this painting contract and he declined to answer that question and then the housing authority went ahead and blacklist him.
That might be quite a different question viewed in the light of the Federal Constitution.
Mr. Paul W. Hessel: Well, I just say an answer to that Your Honor that in public employee cases like Beilan, Lerner, Casey all off against Welleby that the waiver, the failure to waive immunity or to answer questions was equated either as whether as with incompetency, insubordination or various other violations of local statute.
Justice Potter Stewart: A federal employee is or at least maybe for many purposes is different as was pointed out in the case of Spevack against Klein both by in the footnote in the Court's opinion and also in a concurring opinion that when you're dealing and as you were in that case with a lawyer who is not a public employee, different consideration -- different constitutional considerations may be applicable from those that apply between an employer and an employee when the employer is the state and when the employee is an officer of the government.
You began in this case by saying that if the previous case were decided in favor of the respondent a fortiori would control your case but not conversely and that it occurred to me at the time that in so far as your case does not involve a public employee, your adversary might have more rights and I'm thinking of the language in Spevack against Klein.
Mr. Paul W. Hessel: Well, Your Honor, with respect to that, I should respectfully like to refer you to the opinion of Judge Kennedy which was confirmed -- affirmed by the Second Circuit Court of Appeals which I think was eloquent and quite exhausting and pointed out that a public contractor should by far more firmly be in a position to be subjected to the requirement of candor and practice even then a public employee because a public employee can be selected by the state on the basis of qualifications which were examined long beforehand.
They can be rejected by the state for lack of qualifications of various kinds.
A public contractor on the other hand aptly is forced upon a public agency simply through the bidding process and therefore, as the public contractor bidding for a lucrative contract in competition with others in his position who are willing to subscribe to these provisions, he certainly should have no less than obligation than a public employee.
In fact, the very words of these sections of the Public Authorities Law arose from the very type of grand jury investigations that were involved here and you'll find in my brief a reference to the birth of the statute through the governor's message who approved it and signed it and I think the Attorney General has a reference to the Attorney General's recommendation that the statute be adopted because a grand jury was frustrated in its investigation of public contracts because they were blocked by the refusal of public contractors to testify before a grand jury either to waive immunity or to testify.
And I say because this is a public purpose, a vital public purpose, important public purpose.
The condition that was created here is one that is in all respect, it should be held valid by this Court to whether or not the public employee situation is decided by this Court in accordance with the question that was left open to Spevack against Klein.
Justice Abe Fortas: Well the only -- all of these disqualification statutes relate only to appearances before the grand jury, is that right?
Mr. Paul W. Hessel: In this case?
Justice Abe Fortas: Yes.
Mr. Paul W. Hessel: Yes, Your Honor, specifically towards --
Justice Abe Fortas: And none of them for example relates to any proceeding for the sole purpose of determining the eligibility of a public contractor.
Mr. Paul W. Hessel: No.
Justice Abe Fortas: So they're all -- and your brother spoke before you said that New York -- the grand jury always -- the grand jury can exercise its powers only in connection with its investigation of alleged criminal violations, is that correct?
Mr. Paul W. Hessel: No sir, it is not.
Unfortunately, my friend is quite wrong in that.
He has cited in his brief a case of Wood against Hughes I think as the Court of Appeals decided in 1961 which upset to the dismay of the Attorney General and in fact, every law enforcement agency in the state, upset the century and a half old practice of grand jury presentments on the ground that there was no statutory authority for it.
That is the Court of Appeals held that because the statute that authorized the grand jury to make investigations only authorized criminal investigations and therefore, they could not make presentments as to civil or fraud or corruption or anything else as to which no indictments resulted.That was in 1961.
In 1960, just about three or four years thereafter, that case was overruled by a specific act of the legislature and you will find in my brief the government's message on that Act which refer to that case and said that it was unfortunate the Court of Appeals so held but we are now presenting a statute and adopting a statute which expressly authorized the very type of presentment they had theretofore without statutory authorization or something and that is the present situation today.
In fact, the Court of Appeals decision here, now here before you in the Gardner case points out that it was before the grand jury that the information that the public had a right to know and it was not given by Gardner.
Now the Court of Appeals said that obviously must mean that the public would have a right to know whatever information Gardner would have given.
Had he testified under the waiver that it was then required.
There is no question any longer Your Honor that under New York law today, any information brought before the grand jury can upon order of the Court or other appropriate procedure be brought out.
In fact, as I said before the very birth of the statute arose from the grand jury presentment.
Justice Abe Fortas: That doesn't make to what the other counsel said.
He said that there has to be a criminal investigation focused to a grand jury investigation.
Mr. Paul W. Hessel: I don't agree with that.
Justice Abe Fortas: And cannot be called merely for an investigatory purpose.
Mr. Paul W. Hessel: In fact, the very statute --
Justice Abe Fortas: And you say that is --
Mr. Paul W. Hessel: I say that is not true.
Justice Abe Fortas: Alright, I don't want to take anymore --
Mr. Paul W. Hessel: In fact, the very statute that he set forth in his appendix as a provision that states that the grand jury can make what in effect was called presentments as to corruption, fraud and various other things and this may be made public by order of the Court.
Chief Justice Earl Warren: Mr. Blinder -- do you have another -- there is another counsel here.
Argument of Samuel A. Hirshowitz
Mr. Samuel A. Hirshowitz: Mr. Chief Justice and may it please the Court.
The points that I intend to make the duty of the public contractor to furnish information as to the securing and the execution of public contracts which is even more than but at least equal to to that of a public employee discussed in the previous case.
Secondly, the expressed waiver of the Fifth Amendment privilege and the contract executed pursuant to the statute and the lack of ability of the appellant corporation to challenge the requirement for a limited waiver of immunity of its officers which it undertook in the contract to deliver to the state before Spevack and Garrity this Court and the cases mentioned (Inaudible) and Nelson in various areas upheld the duty of candor, the obligation of public employees to respond to calls for information.
These cases followed chronologically Slochower case where the Court appears to have made the type of inquiry and important factor and applied that if the petitioner there had invoked the privilege at an inquiry relevant to the performance of his duties, the outcome would have been different.
Somebody expressions in the dissenting opinion by various justices of this Court in Lenoir and Nelson indicated to emphasis upon the type of inquiry involved in the particular case.
The Attorney General upon the phases of a study of the cases that I've referred to, recommended the legislation that is under consideration by this Court and then the governor and the memorandum, speaking of the urgent need for the legislation approved it and the governor's memorandum is quoted in our brief.
It cannot be plausibly disputed that the inquiry whose subject is collusion of public contractors and bidding practice involved in the present case just as is the inquiry as to the police officers' performance of his duties involved in the Gardner case is relevant.
The claim of privilege of the police officers in the previous case and an investigation of the official duties of such officer is incompatible with the duties and responsibilities of such officers.
Such incompatibility is antagonistic to a rational system of law enforcement and dismissal for lack of candor in such circumstances is a proper exercise that I submit of the state's police power.
As a consequence, every state case to which we have been referred has upheld a dismissal of such public officers before and after the Malloy case and the Griffin case predicated upon the paramount right of the people to protection against law violation.
As a matter of fact, the District of Columbia Court contains a provision which is similar to the statute under consideration here and has an additional paragraph which refers to former officers and says if they refuse to testify then that action rights can be abrogated.
And the uniform rules of evidence Rule 25, prepared by the uniform commissioners, is in line with this expression as to both public employees and public contractors.
The appellant in its briefs has not disputed the importance of the objectives sought to be achieved by the state's disclosure requirement.
The need for self-disclosure as a means of achieving the objective since proof of collusive bidding is normally solely within the knowledge of the participants or the responsibility of the public contractor to account to the state for his actions in obtaining and performing state contracts.
And in this case here in the --
Justice William J. Brennan: May I ask you.
Mr. Samuel A. Hirshowitz: Yes sir.
Justice William J. Brennan: If this young man had signed the waiver and had testified and had revealed the evidence upon which some criminal violation might be charged as against him personally, do you think he would have had the benefit of Garrity?
I gather in the police case --
Mr. Samuel A. Hirshowitz: Yes.
Justice William J. Brennan: -- as I understood Mr. (Inaudible).
He said that if he had signed the waiver and talk, nothing he said which was incriminating.
It could have been the basis of a criminal prosecution.
Mr. Samuel A. Hirshowitz: Nothing he said could have been --
Justice William J. Brennan: And he is -- would that be so here too?
Mr. Samuel A. Hirshowitz: Yes sir, Your Honor.
Justice William J. Brennan: Now, is this because you think Garrity requires that answer?
Mr. Samuel A. Hirshowitz: No.
It was preceded by -- yes, it would be under Garrity of which -- yes.
Justice William J. Brennan: Yes.
Mr. Samuel A. Hirshowitz: But of course --
Justice Byron R. White: Because there was some compulsion only to talk.
Mr. Samuel A. Hirshowitz: Yes.
And in the Garrity case, this Court held as I read it that there is compulsion in a public employee and that case also, police officer had consequently, couldn't be prosecuted on the basis of that evidence.
Justice William J. Brennan: And you say even though this young man is not a public employee, the same application in Garrity you think would be required.
Mr. Samuel A. Hirshowitz: Yes, Mr. Justice Brennan.
Justice William J. Brennan: Yes.
Mr. Samuel A. Hirshowitz: Of course, if he were in view on some of the questions of the Court that he were asked to sign a waiver and refuse and then what was brought and requested to answer questions and was directed to answer the questions.
If he refused, he would under New York law receive the counsel type of immunity, he couldn't be prosecuted for that crime, where as if he signed the waiver under the Garrity case, as I read it, he can be prosecuted not on the basis of the evidence that he gave or the fruits thereof but on the basis of independent evidence.
And the efficacy of such a waiver which has been discussed earlier in the course of the two cases is that in this very painting conspiracy situation involving the public housing, some of the painting contractors did waive immunity and did testify as a result of which you had convictions after trials in New York County and as you hire Mr. Campbell, the alleged paper president of the corporation and the corporation itself pleaded guilty to conspiracy in his bid rigging and that was because the efficacy of obtaining testimony as a result to the statute that sound the consideration in.
Justice William J. Brennan: Wait a minute.
You mean the word conviction is based on what some of this --
Mr. Samuel A. Hirshowitz: No.
Some of the painting contractors in line with Mr. Justice Brennan with what we just said.
Some of the painting contractors when called before the grand jury --
Justice William J. Brennan: Testify.
Mr. Samuel A. Hirshowitz: Did testify.
Justice William J. Brennan: They waive, the sign the waiver and they testified.
Mr. Samuel A. Hirshowitz: Yes.
Justice William J. Brennan: Now, were they prosecuted?
Mr. Samuel A. Hirshowitz: They were not prosecuted but that testimony was used --
Justice William J. Brennan: Used against Campbell --
Mr. Samuel A. Hirshowitz: Right.
And of course they -- and I say this.
They testify that as I understand that in the bidding practices, bids were selected by roads and it was agreed that advances though would be the low bidder.
As my associate here pointed out to the Court, every such public contractor as the appellant executes an affidavit of non-collusive practices before obtaining the contract.
Thus, apart from the statute of being -- apart from the statute that's under consideration by this Court, we maintain that its officers were under a duty to furnish the appropriate information to the state or its investigating agencies when called upon.
The statute did not create such a duty.
It provided that when the refusal to furnish the information as to the securing and performance of contracts -- public contracts as before a grand jury, the contractor would be disqualified for five years and it is this disqualification not the cancellation Justice Marshall, it's the disqualification that's under consideration in this case and not the cancellation as I understand.
The five years is the same period of disqualification which was involved in the case of a public officer under Article I Section 6 of the State Constitution, and in drafting the statute, we and the Attorney General's office used the Article I Section 6 as a prototype on what to put in to the proposed legislation.
The conference of the legislature that the grand jury would not act capriciously in calling upon public contractors or their officers to furnish such relevant information is the reason why the particular section provides for waiver of immunity before the grand jury.
The grand jury is the young, the people of the State of New York.
It has fads or fantasies and it has no leanings in any direction.
And as a protection to the public contractor, the statute provides that only in the case of refusal to waive immunity before the grand jury, may the contractor be disqualified.
Appellants rely upon Garrity and Spevack.
And they maintain that regardless of the above considerations, this Court has already determined that the objective cannot be constitutionally achieved and that state and its subdivisions must by force or continue to pay from the public treasury corporate contractors whose officers refuse to disclose facts relating to the securing and execution of the public contracts.
The New York Court of Appeals in Gardner and in the present case and the three-judge court in a case that has to follow here, the Sanitation Employees case has read Garrity and Spevack as not affecting the state's responsibilities to secure necessary and relevant information from public employees and public contractors.
Even before Spevack, some state courts Justice Fortas in Florida and Illinois simply differentiated the attorney from the public employee.
I'm referring to two cases Shiner against the State in Florida 82 Southern Second 57 and In re Harlan in Illinois, 36 Northeast and Second 545, they contrasted the general duty of an attorney to aid in investigating with the specific duty of public employees in that case such as police officers to furnish information and in the Spevack case, the disbarment of the attorney of course puts him out of business besides the reputation -- detriment to his reputation.
The public contractors involved here simply lose its part of his public business.
Here, the appellant said in its petition and repeated on in his argument that he lost 15% of his business by a reason of the disqualification.
The Garrity case too does not appear to be helpful to the appellant as the New York Court of Appeals pointed out the person executing to limited labor immunity nevertheless obtains constitutional immunity.
Thus, if the officer here had executed to waiver as I said before, he could not be prosecuted upon the evidence secured by his testimony or by any fruits.
Such immunity is coextensive with the waiver of the privilege.
Appellant recognizing in its reply brief and then an exchange for immunity for such prosecution, the witness would be under the duty to testify, contends that the state was required to offer the witness more complete the immunity for many criminal prosecution even derive from testimony unrelated to any evidence given by the witness or leads obtained thereby.
Thus, the issue oppose by the appellant is a very narrow one as opposed the witness would be required to testify despite disadvantages.
The only dispute presented by the reply brief is whether Garrity means that the witness thereby obtains complete immunity under the Counselman case or the limited immunity exemplified by the Murphy case and held by the New York Court of Appeals in (Inaudible) and in Leno.
I see nothing in the reply brief which contends that in addition to this promise of immunity of one category or another, immunity must also be given from other sanctions such as the disqualification from a contract.
The disqualification imposed here is imposed in a manner consistent with the requirements of due process, the contract and those by statute and by contract that testimony of officers maybe required.
The question of whether or not disqualification is or would be justified may be raised by the contractor as the New York Court of Appeals pointed out in the specific statutory provisions which are adversary read.
Appellant in his reply brief acknowledges this and states that it has deliberately refused to avail itself of this proceeding.
Thus, this case is distinguishable also from Spevack because the contractor here has an opportunity to be heard on the reasons for the refusal to testify and in this very case had the corporation presented to the Court in a proceeding under the Section to which I have referred the fact that this was a former officer and that he had resigned in good faith if these were the case that he had no longer had any interest in the corporation.
If this were the case that he was not in league with the other officers of the corporation of this very case, I'm sure that the court acting under that section would have eliminated the disqualification but the appellant was in no position to do that because the only office who refuse to waive immunity, signed a limited waiver of immunity was George Campbell, the president and as you heard, he was the one who's subsequently was convicted of pleaded guilty to a conspiracy for bid rigging so he knew in advance and I'm sure the corporation knew because it also pleaded guilty that this was one officer who could not testify because he had information in his possession.
Chief Justice Earl Warren: Well, I think we will have to take the rest of your argument from your brief, Mr. Hirshowitz.
Rebuttal of Albert A. Blinder
Mr. Albert A. Blinder: Mr. Chief Justice and may it please the Court.
I just have one or two rebuttal arguments which I will try to confine in just a few moments.
Number one, with respect to the irrelevancy of the corporation having pleaded guilty to one count of a misdemeanor, may I just say this.
The plea of guilty that was offered by the corporation appellant here was to one count in a multi-count indictment that was offered prior to the commencement of a mass conspiracy trial that lasted over three months.
The District Attorney recommended the acceptance of the one misdemeanor count.
In fact, this was a business decision.
It would have cost the corporation far more money to a defendant on this situation and then there's the maximum penalty on the misdemeanor that it pleaded guilty to.
It did not plead guilty to all of the other things which my learned friends over here mentioned.
I say this is an irrelevancy because under the New York State Law the fact that a corporation may have pleaded guilty does not result in automatic disqualification and certainly not for a five year period.
The only way this occurs is if someone refuses to waive immunity or refuses to -- or asserts his privilege against self incrimination and I believe that that's the very crux of the argument.
Now, as Mr. Justice Fortas inquired before, may I just refer to the learned Court to pages 25 and 26 of our appellant's brief which contains the New York State statutes and from Section 2(a) of Section 253(a), it is obvious that the grand jury's power derives only from the right to investigate criminal conduct and then if in addition to its investigation of criminal conduct, it finds non-criminal conduct.
It may make a report which is still subject to certain other conditions and the other conditions involve the preponderance of credible and legally admissible evidence and also, it gives the officer an opportunity to reply before this report can be made public.
In addition to which, the report itself is limited to reporting on public officers and public employees.
Now, while this is a contractor which may have in one or two aspects be doing certain work for a public agency, certainly, none of the officers or employees of this corporation would deem to be public officers or -- or public employees and under the New York State decision on the subject, I don't even believe under this Section that a report can be handed up except to recommend the changes in the law but it cannot bring to the attention of an administrative agency the misconduct of a public contractor.
It is wholly without the scope of the grand jury.
Now, with respect to standing, I believe that the Attorney General in his brief, attempted to say that this was a situation which was not covered by the Pierce or by the Joint Anti-Facist Refugee Committee case.
I believe, however, that in an analysis of this, it would have to be an inescapable conclusion that this corporation just as the corporation in Pierce was entitled to raise the issue as to whether its business or property were taken away without due process of law.
In addition to which and this was mentioned by learned friend, Mr. Hessel.
In Holland against Hogan case which is number 653 in the October term and which is a petition for certiorari, the Attorney General argued exactly the converse of this situation.
In that case, the individuals are applying for certiorari here and he has argued that it's the corporation that was disqualified and therefore the individuals have no standing, the corporation must bring the suit.
Now, I submit the Attorney General of the State of New York cannot have it both ways either we have standing here or in the Holland against Hogan case there is standing and under the circumstances since we're dealing with exactly the same statute, may I state that this Court should pass upon the constitutionality of the statute which I believe deprives the corporation not only of due process but its individual officers of the guarantees of the Fifth Amendment.
Chief Justice Earl Warren: We'll recess now.