ASSOCIATED ENTERPRISES, INC. v. TOLTEC DISTRICT

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Argument of Henry A. Burgess

Chief Justice Warren E. Burger: We will hear arguments next in number 71-1069 Associated Enterprises against Toltec Watershed District.

Mr, Burgess you may proceed whenever you are ready.

Mr. Henry A. Burgess: Mr. Chief Justice, may it please the Court.

This case is before this Court on appeal from the mandate of the Supreme Court of Wyoming affirming a judgment which was entered by the State District Court for Albany County, Wyoming.

The mandate and the judgment of the State Court found that certain Wyoming statutes providing for the creation of a Watershed improvement district do not violate the Equal Protection clause, the Fourteenth Amendment United States Constitution.

This action was commenced by the Toltec Watershed Improvement District which is organized under the provision of the Watershed Improvement District Law of Wyoming seeking the entry upon the lands belonging to the associated enterprises for the purpose of surveying and drilling a dam site. Preliminary to the construction of a dam.

The lands involved are owned by Associated Enterprises that are under lease to the Johnston Fuel Liners.

Johnston Fuel Liners as lessee was not allowed to vote in the election which created the district.

Justice William H. Rehnquist: Mr. Burgess where in the record is there a finding by either the Trial Court or Supreme Court of Wyoming that Johnston Fuel Liners was a lessee from Associated Enterprise.

Mr. Henry A. Burgess: It is in the appendix Your Honor.

Justice William H. Rehnquist: Where about.

The reason I asked is that I did not find in your stipulation of facts.

I found it in questions and answers submitted in interrogatory form but I did not find any finding at least in my study either by the Trial Court of the Supreme Court of Wyoming that assumed it as a fact.

Mr. Henry A. Burgess: On page 19 of the appendix, there is a stipulation of the facts, and Paragraph 3 says that Johnston Fuel Liners is not a land owner.

As defined by WS 1957 so forth, and although given notice at the time and place to the referendum had no legal right to vote and did not vote.

That was in the stipulation of the facts.

This case was not actually tried.

It was submitted.

Justice William H. Rehnquist: (Inaudible) At least the Johnston Fuel Liners almost having this based on the land.

Mr. Henry A. Burgess: That is correct.

They alleged that they are in possession of the land and then there was an order and judgment from which the appeal was taken and on page 24, in the interrogatory, and interrogatory number 3, has thus used, starting from bottom of the page 23 and we go down through the interrogatories, the second interrogatory says that they commenced using lands in 1959.

The use was continuous since 1959 to the date of the answer of the interrogatories.

Interrogatory number 4 says, Associated Enterprises had purchase some cattle in 1969, around the cattle and lands in Toltec District, then in entry or interrogatory number 5, it talks about the lease agreement between these two companies and the exchange of use of various lands.

Justice William H. Rehnquist: Okay this is Johnston Fuel Liners position I realize, but how are we to know that either the Trial Court or the Supreme Court of Wyoming accepted this position?

Mr. Henry A. Burgess: Well, I believe then the Supreme Court -- the order of intervention of course, Johnston Fuel Liners is not rich as your party defendant and they were allowed to intervene and in the motion it says, that -- this is again on pages 14 and 15 of the motion, that they were a lessee and the entry of the lands upon Toltec, up the entry by Toltec upon the lands of Johnston Fuel Liners and their interference to move and strikes to its use and possession of the lands.

That's on pages 14 in the appendix.

Justice William H. Rehnquist: Bunch of it I get, as to -- I was just concerned.

Chief Justice Warren E. Burger: I noticed though, before you leave it on the top of page on 25, there is the request in the interrogatory, please attach all copies of leases between the Johnston and Associated Enterprises, and then the answer is that the agreement is reflected on the Journals of the company and that there is no single written lease document.

Mr. Henry A. Burgess: Correct.

Chief Justice Warren E. Burger: This is just an occupancy at sufferance.

Mr. Henry A. Burgess: I would resume that you could term it that.

Say two cooperations own lands which are intermingled and one of them uses lands in one area and one uses the other, there is a monthly payment, I would take it that it is a tenancywhich could be revoked at the end of any annual period of time.

Chief Justice Warren E. Burger: Do you think that might bear if it's a tenancyof sufferance and occupancy at sufferance, and might be relevant consideration and with their interest in going on the matter.

Mr. Henry A. Burgess: Yes I would think that the interest of any user of this land who occupies it, that his interest is as great as the interest of any person who owns a title to that land.

Secondly, of course anything which affects the rent which would be charged upon that land would also affect a person who uses that land.

Chief Justice Warren E. Burger: Would you think the right to vote might be different if it is a 99 year or occupancy at sufferance, terminable at will?

Mr. Henry A. Burgess: No Your Honor I think that the right to vote is something that is granted by this particular case by this particular act.

The act says that a land owner may vote, and all other parties were excluded.

So it would seem to me that if you are not a land owner, it does not make any difference while your tenancyis wanted sufferance for a year or for 99 years, in any event you are excluded from voting.

Justice William H. Rehnquist: But in order to as maintain -- you have standard to maintain your constitutional issue, you got to show that if the constitution were applied in the way you say it be then your client would end up having right to vote.

Mr. Henry A. Burgess: Correct I understand that and that is why in the interrogatories and the order of the Court, the Court did allow Johnston Fuel Liners to intervene finding perhaps not expressly but certainly by implication and as a general orders that all of the facts and legal conclusions necessary enter the order or embodies in that order.

As I say, the case arises under the statutes of relating to the Watershed Improvement District and the purposes of that district of course, or to provide for the prevention and control of erosion, flood water, sediment damage is to provide for storage, conservation, development, utilization and disposal of water, there by to preserve and protect land and water resources.

It is also designed as statutory purpose states, from all the health, safety and general welfare, the people they state.

Now, this district is formed by the written petition being filed by land owners with the Board of Directors, what is called Water and Soil Conservation District which board then determines whether or not in their opinion the district would be feasible.

Thereafter, if it is determined that it would be feasible a referendum has had.

Our statute provides no qualifications for the boarders except that you have to be a land owner.

The land owner is defined by the statute that as being one who holds the legal title or is acquiring title by a contract.

There is no qualification as to residence, a non-resident land owner, one outside of the state may vote, a minor may vote by a guardian and deceased to state by an executive and there is no registration requirement.

Now prior to the actual casting of the ballot, the land owner must make an affidavit in which he states the number of acres he owned.

He then votes and as the ballots are counted and in order to pass the referendum must have voting in favor of it, a majority of the land owners who also represent a majority of the acres.

So in effect the vote is weighted.

Now, after the creation of the district, a Board of Directors is elected to operate a district, there are five of them and in order to be nominated you have to be nominated by ten land owners.

Upon the creation of the district, the statute states it constitutes a governmental subdivision of the state and a public body corporate and politic, they have the authority to levy taxes, make assessments, build structures, accept grants, apportion benefits against irrigated lands.

They also have the authority to submit to the land owners, a proposition for the issuance of the bonds.

Now, once again, only the land owners vote on the bonds, the vote must carry by two-thirds of the land owners voting.

And those two-thirds must own a majority of the acreage.

So once again you have a waiting of the vote in comparison to number of acre zone.

Now, in this particular case, it was argued of course, in the lower courts that the limiting of voter franchise to the land owners in the creation and maintenance of Watershed Improvement District violates the Fourteenth Amendment, Equal Protection clause and that it creates an unreasonable arbitrary and capricious voting classification.

The second argument was that the weighting of these votes by requiring a majority of the acreage is at the basement of the votes and the people resident in the district and the owners of small acreages.

Our Supreme Court held that while Wyoming is always recognized the distinction between governmental and proprietary functions of a legal subdivision and that this was a legal subdivision, that a Watershed Improvement District functions are primarily proprietary, and then they stated that the appellants in that case would fail to show that the statute was unconstitutional and that the classification of the burden showing this classification of orders was upon the appellant.

Our court also made the observation that there is an overreaction to the decisions of this court, both by judges and lawyers, that the one man one vote rule has been extended to a local specialized unit of government, and Wyoming Supreme Court rejected the idea or extend the rules include such water a improvement district.

Justice William H. Rehnquist: What if under Wyoming law, that Watershed Improvement District must be or formed on the vote of all the registered voters within that proposed district?

Mr. Henry A. Burgess: What if it were to be?

It couldn't be under our statute.

Justice William H. Rehnquist: I know, but if the statute just provided that?

Mr. Henry A. Burgess: Well, I think that would be constitutional.

Justice William H. Rehnquist: What if -- I don't know why your corporate lessee shouldn't demand on the same argument demand the right to vote?

Mr. Henry A. Burgess: The corporate lessee in this case would not have a right to vote, if as the Justice says, it were upon the basis of an individual person voting.

Justice William H. Rehnquist: I know they wouldn't, I said that they wouldn't have the right according to the statute but would the statute be constitutional if, it like the present one excluded your corporate lessee from voting.

Mr. Henry A. Burgess: My understanding, that is the law that it would be constitutional.

Now, the corporate --

Justice William H. Rehnquist: Well, why can't the state then exclude it under this statute?

Mr. Henry A. Burgess: Sir.

I didn't --.

Justice William H. Rehnquist: Why can't the state exclude your corporate lessee --

Mr. Henry A. Burgess: Because we contend that is a unreasonable and capricious exclusion.

Justice William H. Rehnquist: Well I don't know why it wouldn't under the other one, if you would have exactly the same interest.

Mr. Henry A. Burgess: What we are talking about here as I understand it, in a sense is the purpose of an election and running counter and at the same time going along with that is a question of the qualification of a voter.

Now I think that when you vote --

Justice Potter Stewart: You mean you have a case here, you think you have case here only because they proceeded on the basis of land owners being voters?

Mr. Henry A. Burgess: And voting the acreage.

You wait the vote.

What you are doing is you are voting the number of acres you own.

Justice Potter Stewart: So, you say therefore, it is just they proceed on the basis of the land owners, it's invidious to exclude lessee?

Mr. Henry A. Burgess: Right.

What we are talking about as I understand, in these previous decisions of this court, is people and certainly not acres, the corporations.

In the Cipriano case, you are talking about striking down a statute that was provided for the passage of sewer bonds.

Now there is really no difference between this case and that case, and one case of sewage is what you are talking about on a bond issue, in this case we are trying to get the water.

Justice Hugo L. Black: Mr. Burgess, who pays the bond that are issued by your district?

Mr. Henry A. Burgess: The bonds are paid by the owner of the land who benefits from the improvements made in form of the dam, and canals and ditches.

Now in the instance that is assessed against the land owner.

He is the one who has the obligation to pay the tax that are collected by the county treasure, for failure to pay the tax as the land is sold under the regular laws relating to delinquency taxes.

We contend that that payment and the case below, the lessee is passed over to the lessee, in increased breadths.

Justice Hugo L. Black: Is the assessment based on the number of acres--

Mr. Henry A. Burgess: It is based upon the value of benefits on certain acres, for instance, if a total project had cost $100,000 and there is 10,000 acres, it must be $10 per acres, would be the assessment.

Justice Hugo L. Black: If the general public has no obligation directly or indirectly to pay the bonds that are issued by the district.

Mr. Henry A. Burgess: Correct.

Justice Hugo L. Black: You refer to a case involving the issuance of sewer bonds, who paid for interest and principal on those bonds?

Mr. Henry A. Burgess: Property owners.

Justice Hugo L. Black: Only property owners?

Mr. Henry A. Burgess: Only property owners.

It is my understanding that's Cipriano v. City of Houma.

In that case they are talking about paying for the bonds, for the sewage, in this case we are talking about paying for the bonds for the purpose of getting the water.

Justice Hugo L. Black: Is your position that one must have an interest in land by a lease or otherwise to be entitled to vote or would you suggest that anyone who lived in the district regardless of whether he had an interest in land also should be entitled to vote?

Mr. Henry A. Burgess: I would respectfully suggest that anybody in the district has a right to vote.

I think that in this day and age, with government being as complex as it is --

Justice Potter Stewart: But you don't have to go that far.

Mr. Henry A. Burgess: No, I don't have to go that far, but I think that the people have the right to vote.

Now we are talking about an arid state and there are only three things that value in Wyoming, those years they had no water and the water is an illusory transitory thing and if you don't get the water when it's there and if you don't use it, is forever gone, or you have it and you have wealth, you have homes, you have an irrigated farms, you have towns, you have communities.

It is our contention that everybody in the community whether it is an irrigated has a vital interest.

Justice Potter Stewart: What the priority of the used water in Wyoming to--

Mr. Henry A. Burgess: Doctrine of prior appropriations.

Justice Potter Stewart: And what got in to the conflict between the domestic consumption and irrigation?

Mr. Henry A. Burgess: Well, we go on a doctrine of priority, if you have, we have four prime preferred uses, if you have a preferred use which is subsequent in time to an irrigation right, the irrigation right prevails, however the preferred right can Wyoming domain take the prior use or on the scale--

Justice Potter Stewart: The water conserved by this district might be available or higher usage of --

Mr. Henry A. Burgess: Well, the contemplated use is used for agricultural purposes.

Now Wyoming is growing, I suppose and in a sense it could be used, it would be kept in Wyoming--

Justice Potter Stewart: It would have to be bought.

Mr. Henry A. Burgess: It would have to be purchased by someone else.

Justice William H. Rehnquist: The improvement district doesn't acquire any water rights of its own as a result of constructing this facility.

Mr. Henry A. Burgess: That's correct you have to file to the state engineer, make a beneficial use of the water and then you get a water right.

But this is the facility and the structure.

Now, pardon me, but under this the water district could file an application to construct a dam and get what they call a primary permit which would authorize them to then impound and store within the dam for the benefit of the members of the districts of water.

Justice William H. Rehnquist: So, but the water it does store is not for its own benefit as such but simply for the benefit of its members?

Mr. Henry A. Burgess: Of the members and also be used for recreational purposes, fishing.

We also submit that this is a case which probably was raised by the dissent of Justice Harlan, which he said that on this day, I pleaded the Hadley case, this principle which was handed down at a case applies to an irrigation district and for all of the reasons enunciated by this court in previous cases, we feel it's only logical that this press-school be applied to the watershed improvement district tax of the State of Wyoming.

Chief Justice Warren E. Burger: Thank you Mr. Burgess, Mr. Phifer.

Argument of Fred W. Phifer

Mr. Fred W. Phifer: Mr. Chief Justice and may it please the court.

Possibly to give a little bit more background on this case, the question that was raised about tenancyat sufferance was raised in the Wyoming Supreme Court and was specifically not passed on.

There is no written lease in this case as the interrogatory shows.

This was a working arrangement between two corporations to use the land.

Now what isn't shown in the record but I am sure Mr. Burgess would concede is that one man is the primary stockholder in these two corporations.

They both belong to a man by the name of Elvin Johnston.

He has several ranches, as indicated by the record, Johnston Fuel Liners is a trucking company.

Justice Potter Stewart: But the boards were the same.

Mr. Fred W. Phifer: The boards are the same, yes, there is some differentiation in some of the minority stockholders but --

Justice Potter Stewart: The stockholders are not the same.

Mr. Fred W. Phifer: The stockholdings are not quite the same but almost the same Mr. Justice.

Secondly, in Wyoming there is a statute which specifically provides that you are a tenant at sufferance unless you have a specific written lease.

So in this case, there are a candidate sufferance although the Wyoming Supreme court passed over that question when I raised it in my brief.

Secondly, with regard to the question on paying for this, the district is originally formed as an (Inaudible) would indicate on a watershed area, the drainage is all the same.

Then after the district is formed and after they have decided that it is feasible to build a dam in a certain location, then only the lands that are benefited below that dam are assessed.

In other words, not all of the lands that is in the watershed district, much of it is in the mountainous area, this area in particular is an outlying area, the lowest elevation I suppose in the district would be 6900 feet running from there to about 7200 feet.

It's quite an arid area.

The dam in on the North Wyoming River which is a very small river but normally in the middle of the summer, you could step across it in places.

There is a large spring run off and it is the purpose of this type of law in Wyoming to catch this spring run off, so that it can be used later for irrigation.

The meadows that are irrigated here will only grow in hay because of the altitude and the shortness of the growing season.

There probably is 2000 acres involved belonging to about 12 different families.

The production on these wells is very limited again because of the fragility of the soil, it's a very thin outlying soil mostly gravel.

It will produce a half-a-ton to a ton of hay, with very good cultivation and some fertilizer.

It might produce a ton-and-a half a hay, but here again it's not Alfalfa, as Mr. Justice quite would be familiar with from his background in Northern Colorado but primarily wild hay.

It has no market this area is located about 60 miles from the nearest town.

The hay is used primarily by the ranchers for cattle.

Justice Potter Stewart: Present in the vicinity of--

Mr. Fred W. Phifer: Well, the Wyoming Peak is right on the edge of this, so it's in the vicinity of Laramie, Wyoming it would be about 60 to 70 miles in north of Laramie Wyoming.

Justice William H. Rehnquist: Really it is just irrigated pasture there.

Mr. Fred W. Phifer: Well, no it's irrigated meadows.

Justice Potter Stewart: Irrigated meadows.

Justice William H. Rehnquist: Because you harvest the hay.

Mr. Fred W. Phifer: You harvested hay, you have to have it for winter.

Justice Potter Stewart: Do you bale it?

Mr. Fred W. Phifer: All that most part they don't bale it here, primarily because the meadows are too rough.

Justice Potter Stewart: But do you keep the cattle there?

Mr. Fred W. Phifer: Keep the cattle there and feed them there --

Justice Potter Stewart: In the winter time.

Mr. Fred W. Phifer: In the winter time.

This would provide only supplemental water incidentally to existing water rights.

It would not bring any new land under irrigation.

Here again to go back to the question of who pays for this, once this question here is decided, if we are still constitutional, then appraisers are ordered by the court to go out and appraise the land that will be benefited, only the land that will be under ditch.

Now the land will be classified, by these appraisers so that some of it will probably pay a little bit more than others.

But where the total area of the Watershed district itself might be 15,000 or 20,000 acres.

The area that will pay for it is only the area that's benefited that would come under, I would say under 2000 acres meadow.

Now, in regard to the question on priority of water rights in Wyoming, domestic consumption does come first, and it can at any time condemn any other industrial or agricultural water, if it's necessary.

In this case it's very unlikely, it's located in a remote area.

There is under the provisions for setting up the Watershed law in the first place, Congress enacted specific legislation making grants in aid to Watershed districts to build these sort of things.

In the interest of conservation and particularly in the interest of flood control, and we have a flood control problem here.

Nothing that menaces life but that does cause damage, quite extensive damage down the river each year.

They grant about 50% of the cost of these projects as an outright rent.

Then the other half of it is loaned to the projects by the Farmers Home Administration.

Justice Potter Stewart: Well, how does this case get started?

Mr. Fred W. Phifer: The case got started primarily right after the district was formed, we asked permission to go on to Johnston's land to make a survey to see if the foundation studies would be proper to build a dam in a particular location.

Justice Potter Stewart: I think Johnston must have gone against the formation?

Mr. Fred W. Phifer: He allowed us to go on first.

Well, he have already guessed the formation the district yes, then he allowed us to go in his land and check to see, then as it often happens with government projects, we had the inadequate data.

Justice Potter Stewart: So that the people of -- there were other owners who own more land that he did.

Mr. Fred W. Phifer: Yes.

Justice Potter Stewart: So they outvoted him?

Mr. Fred W. Phifer: Well, actually the vote -- there were only three land owners that voted against that there were about 12 that voted for it.

There were two large land owners in the area and both of them voted for it.

So the acreage --

Justice Potter Stewart: So he got voted.

Mr. Fred W. Phifer: He got out voted.

Justice Potter Stewart: Now if this lessee is entitled to vote, that isn't going to do any good because he would have been out voted also --

Mr. Fred W. Phifer: Well --

Justice Potter Stewart: If set what, do you have to really strike down, do you have to get to the acreage limitations as well as--

Mr. Fred W. Phifer: As to the land owners.

Justice Potter Stewart: I think it goes down rather than --

Mr. Fred W. Phifer: I think that based on the decisions in this Court, all of which are concerned with so called popular elections.

I am not exactly sure what a popular elections except that it's where we go into a voting booth and it's a secret ballot and whether we are voting on sewage bonds or anything else, it has a particular form to it.

This and the decision of this court apply to popular elections, unless there is an -- they will stand unless there is invidious discrimination.

In fact, I think there is some language in some cases of this Court, that says once the popular election process shows then you must do so and so.

Justice Potter Stewart: How would this election have come out in the first place if the rule had been (Inaudible)?

Mr. Fred W. Phifer: It would still have passed.

Both ways, but here is the thing this is not popular election.

Justice Potter Stewart: Well then let's assume this, let's assume you lose this suit?

Mr. Fred W. Phifer: If we lose this suit, the entire Wyoming Watershed law I think is unconstitutional, then probably we have plans to go back and form a private ditch company--

Justice Potter Stewart: No I was just asking just really a fair reliable law suit.

Mr. Fred W. Phifer: I beg your pardon.

Justice Potter Stewart: And what interest would the other side have, and they would would still lose this, they would still lose the election.

They still would have then lost the election?

Mr. Fred W. Phifer: Well they wouldn't, in one particular instance, if lessees are allowed to vote, then what is to prevent the landowner who is against this, from leasing, ten acres out of 10,000 acres to 50 different people in a line to vote.

Justice Potter Stewart: That would be the situation for (Inaudible) --

Mr. Fred W. Phifer: Yeah.

But I think the --

Justice Potter Stewart: Well if you lose this lawsuit --

Mr. Fred W. Phifer: These are things that open to fraud.

Justice Potter Stewart: Well if you lose this lawsuit there will be a new vote that's the point and you don't know how that's going to come out.

Mr. Fred W. Phifer: But we know how the new vote will come out because we not only have a majority in number, we have a majority in acreage both, either way we are --

Justice Potter Stewart: Except that, if there is a new vote as you say one of the land owners that might lease an acre of piece to 200 people, of all them were --

Mr. Fred W. Phifer: That's right, and they will control the election.

It leaves it open to fraud I think.

I think that this is the compelling state interest that, the state of Wyoming had in setting up this proposition of landowners only, is that it does leave it open to fraud.

If you do it on the basis of letting lessees also.

Not only that but let's take this particular instance.

Here is Johnston Fuel Liners and Associated Enterprises, are you going to say that only lessees can vote and the landowner can't if there is a lease or you are going to say both lessees and landlords can vote.

If that's the case Mr. Johnson would be allowed to vote twice in this instance.

Because he owns the land as one corporation he is a lessee as another.

Justice William H. Rehnquist: And he is lessor voted in the fist instance?

Justice Potter Stewart: He was his lessor.

Mr. Fred W. Phifer: He was his own lessor --

Justice William H. Rehnquist: He was his own --

Mr. Fred W. Phifer: Now going back to this popular election proposition, this is not a popular election, there is no secret ballot to start with.

Because they have to write down how many acres they have so that we'll know when we look at their name at the counting of the ballots how many acres are involved.

There is no age limit in this case. There is no residency requirement, in fact there isn't any citizenship requirement nor is a vote limited to persons.

A Swiss corporation if it filed to do business in Wyoming could own land and vote in this.

So it has no real comparison to a popular election, which to my mind distinguishes this from the whole line of cases on one man one vote.

Justice Potter Stewart: Well if you distinguish the cases where -- say there is really no difference between landowner and a lessee.

I mean there is a not enough difference land owner and the lessee to warrant its duty for the lessee simply because the landowner has the formal obligation to pay the bill.

Mr. Fred W. Phifer: That's the right because actually as you said in previous cases the renter or the lessee ends up paying bill and increased rent at least to next --

Justice Potter Stewart: Do you accept that?

Mr. Fred W. Phifer: I do accept that, except that I am afraid that the compelling state interest in this case is to exclude lessees because it would lead the elections open to fraud and that any landowner that was opposed to it could bring an enough so called lessees to entirely control the elections.

Justice William H. Rehnquist: But other than that you have no answer to give?

Mr. Fred W. Phifer: No sir.

Justice William H. Rehnquist: Mr. Phifer, Justice Powell as Mr. Burgess about the case of Cipriano, do you read Cipriano the same way Mr. Burgess does as involving a obligation that was to be ultimately paid only by property owners?

Mr. Fred W. Phifer: Well no, I read Cipriano and all the other cases once you get out of the -- once you get into the bond election sort of process.

Everything at this court had passed on before, with regard to school district, sewer bonds and so forth, the benefit in those cases were things, were such that benefited the entire community, everybody in a sewer district is interested in sewers, whether they own land and have to pay for the --

Justice Potter Stewart: Regardless of who pays the bill?

Mr. Fred W. Phifer: Regardless of who pays the bill, everybody is directly affected by sewage disposal.

It's a matter of again health of the whole community.

So that and like schools whether you have children in school or whether you own property, everyone in the community is directly affected and directly interested in the benefits of the schools.

Everyone in the community is not directly interested or directly benefited by a Watershed district.

This is only concerned with irrigation water.

Now I can't differentiate too much between lessees and landlords.

But you can certainly differentiate between people who or several residents, for instance, that would cabin side in the Watershed district or employees on ranches, another way of broodingly controlling this election would be to bring up multitude of employees in, just prior to election and allowing them to vote because they are located on the ranches.

Justice Thurgood Marshall: But don't you have that same possibility with one man one vote, (Inaudible) to bring in a thousand people?

Mr. Fred W. Phifer: Well --

Justice Thurgood Marshall: Yes, yes, yes.

Mr. Fred W. Phifer: You do Mr. Justice up to the point that they have to support them for about 30 days I believe now under your --

Justice Thurgood Marshall: Well you could put a residence, what prevents them putting a residence requirement.

Mr. Fred W. Phifer: A residency equirement in here?

Justice Thurgood Marshall: Yeah.

Mr. Fred W. Phifer: Well I think that it would be unconstitutional to make a residency requirement here because here we go back to the matter of discrimination, is the class which is excluded more directly interested in the results than the class which is included.

And in this case if you put a residency requirement in, all the corporations at a glance would be non-residents.

Justice Thurgood Marshall: All he says is let to lessee vote, he doesn't say that the lessee that comes in today, vote sort of thing?

Mr. Fred W. Phifer: No but the only alternative I think to the present system where it limits the landowners, is a system that what put it back on the old residency requirement.

Justice Thurgood Marshall: Do you know of any lessor who pays taxes himself?

Mr. Fred W. Phifer: lessor?

Justice Thurgood Marshall: Yeah.

Mr. Fred W. Phifer: In our areas yes sir they all pay the taxes directly themselves generally speaking at least --

Justice Thurgood Marshall: If you have got a lessor and a lessee, who pays the taxes?

Mr. Fred W. Phifer: Well.

Justice Thurgood Marshall: I know who signs the check but who will pays --

Mr. Fred W. Phifer: Well, of course ultimately then it goes back to who is paying the bill.

Justice Thurgood Marshall: How many people are in this district?

Mr. Fred W. Phifer: Probably 12 families.

Justice Thurgood Marshall: What's wrong if they let the 12 people vote?

Mr. Fred W. Phifer: Not a thing except that they are not the people who are directly interested in the elections.

The landowners are -- there are quite a few landowners that live in this area.

For instances neither one of the corporations here actually headquarter here.

They wouldn't be classed as residents.

Justice Thurgood Marshall: But you said, definitely this and other cases is for the benefit of all the people in the district.

Mr. Fred W. Phifer: The other cases are at the benefit, I think sewer or bonds or --

Justice Thurgood Marshall: Is this advantageous to all of the people in the district?

Mr. Fred W. Phifer: No sir, No sir, it's only of interest to the people who own or lease irrigated land.

It's not of any interest to summer people, except for the low possibility --

Justice Thurgood Marshall: A sewer for 12 families, would that make difference?

Mr. Fred W. Phifer: I beg your pardon.

Justice Thurgood Marshall: A sewer for 12 --

Mr. Fred W. Phifer: That would make a great deal of interest, because even if you are --

Justice Thurgood Marshall: I notice a great trouble with letting twelve people full.

Mr. Fred W. Phifer: Well, I think that if you limited it again, as I said to residence, then you will be excluding a great number of land owners who are directly interested in this.

And I think then it would be unconstitutional.

Justice Thurgood Marshall: I am only saying that you want to protect it against fraud.

You are here bringing thousand people in here with lease -- I mean, that's not in this case.

Mr. Fred W. Phifer: Well, if lessees were allowed to vote and if Associated or Johnston Fuel Liners is classified as lessee which has no lease.

Justice Thurgood Marshall: Oh, you said bona fide lessee.

Mr. Fred W. Phifer: Bona fide lessees again, you can make out 50 leases in an afternoon.

I think that the lessee's interest is not different than the land owners.

I think they both have a commonality of purpose in irrigation districts.

So that they are not going to be voting at odds.

I think also, that it's not fair for a lessee, who may be tenant at sufferance or at least for a term of years to be allowed to come in and push through a large expensive project -- the payoff on this is estimated as 50 years.

And he may be there a year of two and pull out and leave the landlord with $3 ½ or $4 a year assessment to pay on this project.

I agree that it doesn't seem on itself on the surface to be fair, except that you have to draw the line somewhere.

And I think it is more fair to draw the line against the lessees that it would be to set up a residency requirement and draw the line against -- but non-resident landowners who have a very direct interest in both the benefits and the cost of this project.

Secondly, I really believe that this isn't again a matter of government --

Justice Thurgood Marshall: Do you think anybody could persuade to go up in the back woods of Wyoming and just stay there for the purpose of vote?

Mr. Fred W. Phifer: They wouldn't, no, I don't think so.

I am differentiating here again, Mr. Justice, between -- if the lessee is --

Justice Potter Stewart: It so happened --

Mr. Fred W. Phifer: Here again the lessees would not have to come up here.

If lessees were allowed to vote without a residency requirement.

If there is a residency requirement, I am not worried about fraud, because I don't think they are going to move lessees into the area and make them stay there almost till they fill up the lessee, let's say a fractional residency requirement.

It's a pretty remote and cold area.

But I do think that then, you are probably excluding a great many people who are directly interested in the thing, and there are non-residents, or even non-citizens, non-persons as these corporations, who should be allowed to vote at.

I don't think you could device a fair system.

I don't believe there is any injustice here.

No large landowner can force through a vote, on his small neighbors because it has to be pass by a majority of the people.

Conversely, no group of small landowners could come in and force a project against one large landowner who would have the burden of pain for it.

Because it must pass by a majority of the acreage.

And limiting it to landowners here again is the only logical way that it can be done, I think.

Here again, I think it should be differentiated from a governmental unit.

It is a governmental entity, but it exercises no sovereign power over the people.

None of the --- it's more in the nature of a quasi-private corporation or quasi-public.

It has a power to levy and collect assessments, which almost any mutual company would have.

It has the power to buy and sell real estate and personal property and the power to borrow money and sell bonds which any private corporation can do.

It does have the power to receive government grants and loans, that I think, the (Inaudible) corporation has that power also.

And it has the power of eminent domain.

Now there seems to be in counsel's brief, a great distinction made because of this branding of the power of eminent domain.

Every private or public utility has the power to eminent domain.

So I think this thing has much more in common with private corporations than it does with any public governmental entity.

Justice Potter Stewart: Mr. Phifer, some little time ago, you were contrasting the situation here with what you called a popular election, and as you rightly said, in a popular election generally there is a vote in polling place by a secret ballot by individual voters.

Since so many of these voters are corporation, how is the vote taken, is it public, is it just done by a letter or--

Mr. Fred W. Phifer: No, we have a meeting, and they come in and vote.

Justice Potter Stewart: Individual representatives of the corporation?

Mr. Fred W. Phifer: Individual representatives of the corporation.

Justice Potter Stewart: Who in question show their authority to represent the corporation.

Mr. Fred W. Phifer: Yes, in this instance, this is a small community and there is no question about who is the owner of the corporation and also the land.

In the course only one man would be allowed.

Here again --

Justice Potter Stewart: Is it a public meeting?

Mr. Fred W. Phifer: Yes, it is an open meeting and there is quite an involved due notice requirement here.

Every time anything is done by this thing, by the Watershed district, due notice must be given in and it must be posted at four or five places prominent in the district which is kind of hard to do, when there ranches are ten miles are apart, they post them on the bridge post and it has to be advertised in the newspaper in the area for three weeks I think, prior to that time.

So there is good notice given, not only that but because we anticipated that there will be problems in the first place, we always send certified letters to everyone of the voters, giving them due notice of any elections.

Justice Potter Stewart: Actual notice by them.

Mr. Fred W. Phifer: Yes, sir.

Justice Hugo L. Black: Mr. Phifer, where are these bonds marketed?

Mr. Fred W. Phifer: They only have one market and that's United States government, the bonds as such are merely security for the obligation under the FHA Rules.

It'd be interesting to see how they were foreclosed on those bonds, if they had to since almost all of the land involved was privately mortgaged to insurance companies or to the state of Wyoming, prior to this time.

So the bonds are an overriding obligation on the Watershed district, and they had quite a time collecting on them if they were to pay.

Justice Hugo L. Black: Are they subordinate to the private debt?

Mr. Fred W. Phifer: Well, they are really not a private debt, there are debt of the Watershed district itself, and the land under assessment is of course subject to leans or assessments, but -- and it might be subject to foreclosure by these, but I think the government would have step in pay off, lot of insurance company loans before they can do it.

It isn't spelled up very well.

Justice Potter Stewart: How do you know that if these assessments and the leans, the representatives -- subordinate with the private lease, does the statute say something?

Mr. Fred W. Phifer: No, the statute does not say something.

Justice Potter Stewart: This hasn't been adjudicated?

Mr. Fred W. Phifer: No, it hasn't been adjudicated.

I don't know whether they're subordinate --

Justice Potter Stewart: (Inaudible)

Mr. Fred W. Phifer: I don't -- I am sorry, I think you are right, it wouldn't be subordinate but the assessments are not subordinate.

But the assessments don't represent the bonds.

The assessments are merely -- assessments made by the districts to help pay the bills of the districts, and it could not only be bonds but improvements and everything else.

And the assessments are an obligation owing to the district from that landowner.

There is no other obligation, from the District to the federal government for the loan except the bonds, and what their priority is, I have no idea.

Justice William H. Rehnquist: But occasionally, when one recalls at lease cases where the bond owner has sought an action against the issuer to make the issuer take such action as it can by marshaling of assets to collect funds that maybe available to it but not directly to the bond owner.

I take it that, if a land owner fails to pay an assessment made by this district, the district has the power to have the property sold to pay the assessment under Wyoming bond.

Mr. Fred W. Phifer: That's right.

Here again I don't know what the priority is, that would be --

Justice Potter Stewart: (Inaudible)

Mr. Fred W. Phifer: That might be.

Thank you gentleman.

Chief Justice Warren E. Burger: Thank you Mr. Phifer, Mr. Burgess, you have got about nine minutes left.

Rebuttal of Henry A. Burgess

Mr. Henry A. Burgess: Mr. Chief Justice and the Court, several observations I make, but one of them is, and I think we got a little bit outside of the record here, discussing this district.

The fact of the matter is, there is gerrymandering went on here, Johnston Fuel Liners does have a number of employees who do reside in the district of course, they were not allowed to vote.

The site for their proposed dam, where take in and destroy much of the land of Associated Enterprises who in turn have upstream dams, and what we are talking about --

Justice Potter Stewart: Does it involve (Inaudible)

Mr. Henry A. Burgess: I will stop it Your Honor, if you don't believe, it shouldn't go on, but the point is that people did decide, it was said there was two big landowners and they voted the acreage and that's how we are here.

Now, this business of voting, I can't visualize as one of the justices said, anybody moving to the Laramie Peak country, was at least just to vote, and I am sure that every election case, which is brought before this court has thrown out to it, this bug-a-boo about fraud in elections, and that's no problem.

A small community like Wyoming, at first place we all think we are honest, secondly, the people come in and they are pretty well known to their neighbors and they are that.

When you get all through looking at this case, I think that historically these cases started on a question of voting for Congress and then it got over to voting of a school trustee, and then the county commissioner, and you keep growing down and down and down into the spectrum of local self-government, and we contend that this principle should also be extended into the lower unit of this particular water improvement district.

Justice William H. Rehnquist: Your colleague said that the question of tenancy at sufferance would resemble the Wyoming Supreme court, was not decided to pass by them, which I take it means, it wouldn't make any difference to one on the Supreme Court in terms of its right, if this were a wholly independent lessee with a lease of 10 years.

Mr. Henry A. Burgess: Correct, or you have an individual.

And I would just like to point that up, the saying that this case --

Justice Thurgood Marshall: Is this true that there were only 12 people involved?

Mr. Henry A. Burgess: I think there maybe 12 families that voted for, I am not sure the exact vote, there were three who voted against as I understand, but there are more families involved above the upper limit which are interested in this, and of course, they were brought in.

If this is a live issue in the community, it's a very live issue --

Justice Thurgood Marshall: Are those families up there lessees or landowner.

Mr. Henry A. Burgess: Both.

Justice Thurgood Marshall: Would the landowner be allowed to vote?

Mr. Henry A. Burgess: Certainly they should be allowed to vote, but they weren't, they weren't even put into the proposed boundary.

Justice Thurgood Marshall: Does that raise the interest?

Mr. Henry A. Burgess: No.

Justice Thurgood Marshall: In this case, there are 12 families involved.

Mr. Henry A. Burgess: Correct.

Justice Thurgood Marshall: Why do you call this election made by who sits around the living room and tells about something.

Mr. Henry A. Burgess: That's correct, that's probably it was.

Justice Thurgood Marshall: And that's an election?

Mr. Henry A. Burgess: Well, that's for this court --

Justice Thurgood Marshall: If it wasn't called an election, would you have any case?

Mr. Henry A. Burgess: Well I suppose not, except it is a governmental, political subdivision of the state.

Thank you.

Chief Justice Warren E. Burger: Thank you gentleman, the case is submitted.