UNITED BUILDING & CONSTR. TRADES v. MAYOR
Legal provision: Article 4, Section 2, Paragraph 1: Privileges and Immunities Clause
ORAL ARGUMENT OF STEVEN K. KUDATZKY, ESQ. ON BEHALF OF THE APPELLANT
Chief Justice Warren E. Burger: We'll hear arguments next in United Building and Construction Trades Council against Mayor and Council of Camden.
Mr. Kudatzky, I think you may proceed when you are ready.
Steven K. Kudatzky: Thank you, Mr. Chief Justice, and may it please the Court:
We are here today to ask this Court of nip in the bud a trend which we believe is pernicious to our national unity, that trend being an attempt by the City of Camden, among other cities, to solve in a blunderbuss fashion the problem of its resident unemployment at the expense of non-residents who seek the opportunity to ply their trade, pursue their common calling, whatever the Court cares to describe it as, in the City of Camden without being discriminated against simply because they are non-residents in the State of New Jersey and the City of Camden.
It is our view that the Privileges and Immunities Clause of the United States Constitution applies to protect non-residents against this sort of discrimination and that under the applicable tests set forth by this Court for privileges and immunities issues, set forth specifically in the Hicklin v. Orbeck case, that the invalidation of the Camden ordinance should follow.
This case is before the Court on direct appeal from the ruling of the Supreme Court of New Jersey upholding the action of the administrative agency, the Department of the Treasury for the State of New Jersey, which approved and thereby gave life to the Camden Resident Preference Ordinance.
The Supreme Court of New Jersey held essentially that the Privileges and Immunities Clause did not vie in this case either because the enactment was a municipal enactment or, more accurately in my view, because the discrimination on the basis of municipal residence is not a right protected by the Privileges and Immunities Clause.
We believe the fact that this was enacted by the City of Camden as opposed to be being enacted by the State of New Jersey to be insignificant and that the real question is does discrimination on the basis of municipal residence call into play the protection of the Privileges and Immunities Clause?
Supreme Court of New Jersey, in our view, erred factually and legally in reaching that conclusion.
The Court felt that the impact of this ordinance would be greater with respect to New Jersians who are non-residents of Camden than with respect to non-residents of the State of New Jersey.
We have sought to demonstrate through census data that we have included in our reply brief that within the standard metropolitan statistical area of Philadelphia, which includes the City of Camden, certain other counties in the State of New Jersey, and certain counties outside of the City of Philadelphia in the State of Pennsylvania, that there would be more non-residents who are likely to be affected by this ordinance than New Jersey residents who are non-residents of Camden.
We do not believe that the fact that other New Jersians are adversely impacted by this ordinance either renders the privileges and immunities protection inapplicable or somehow serves to cure the harm done to the non-residents by putting them on an equal footing somehow with the New Jersians.
We believe that in assessing whether non-residents of New Jersey are treated the same as resident of New Jersey, that all residents of New Jersey must be factored into the equation including the favored class here, residents of the City of Camden.
Some New Jersey residents are clearly treated better than residents of Pennsylvania and for that reason we believe the fact that the discrimination is on the basis of municipal residence does not render the privileges and immunities protection inapplicable.
Unidentified Justice: But the discrimination is not limited to non-residents, is it?
Steven K. Kudatzky: No, Justice.
Clearly persons who are not residents of the City of Camden are victimized to the same extent.
Unidentified Justice: Wherever they live?
Steven K. Kudatzky: Wherever they live, yes.
Slightly more than a year ago this Court heard argument in the case of White versus Mayor and Council of the City of Boston, the case whose facts are replicated to some extent in this case.
However, we believe that the ruling in White does not foreordain the rejection of our arguments here, basically for the reason that we are dealing in this case with an issue reserved for decision in White; namely the extent to which the Privileges and Immunities Clause might afford greater protection than the Commerce Clause which was at issue in White.
We believe that the Privileges and Immunities Clause, being as it is a constitutional guarantee of equality of treatment to non-residents that it is personal to the individuals involved, is not something that Congress can waive or authorize a violation of by state.
We do have UDAG money involved in this case.
One of the two projects to which the ordinance is presently being applied has in part UDAG money funding it as was the case in the Boston situation.
We also have here, however, money from the Department of Transportation funding the other large project presently being subjected to the ordinance, a transportation center for--
Unidentified Justice: Mr. Kudatzky, suppose the city was, with its own employees, doing a lot of its own construction work, but required that anybody who worked on those jobs be residents of the city.
Would you still be here or would you think the Philadelphia case covered that?
Steven K. Kudatzky: --The City of Philadelphia versus the State of New Jersey?
Unidentified Justice: Yes.
Steven K. Kudatzky: Justice, that is certainly not our case.
We do not--
Unidentified Justice: I know it isn't.
But, I just wondered if you had a view about it.
Steven K. Kudatzky: --There is much to commend the view basically set forth in the Court's cases on tuition preference and right to public education.
A city or a state might have the right to prefer its own residents in direct distributions of state resources to those residents.
Unidentified Justice: Such as--
Steven K. Kudatzky: Such as--
Unidentified Justice: --Such as limiting its employees to residents of the state or the city?
Steven K. Kudatzky: --Correct.
The Court has--
Unidentified Justice: And that would survive the privileges and immunities challenge as well as the commerce challenge?
Steven K. Kudatzky: --Well, I am not prepared to concede that today, Your Honor.
That is the Court need not--
Unidentified Justice: What if we were?
Steven K. Kudatzky: --The Court need not go that far.
Unidentified Justice: Well, I know, but, what if we were?
What if we thought that Camden could easily have withstood any kind of a constitutional attack if it simply provided that its own employees had to be city residents and they did all their construction work with city employees?
Steven K. Kudatzky: Even assuming that the could do so in-house, as you are positing, I don't believe that would answer the question in this case because these people are clearly private employees.
It cannot be seriously argued in my view that these employees would enjoy or not enjoy rather the protections of the Fair Labor Standards Act as would be the case with in-house employees of the city if they were doing the construction.
They are different.
Whatever may be the case with respect to doing the work in-house and the application of the Privileges and Immunities Clause in the first instance were whether that would survive privileges and immunities scrutiny if the clause applies doesn't apply here.
It is not this case.
The city is seeking to go far beyond influencing direct distributions of its own resources by trying to regulate private employment.
And, we believe that is a distinction of constitutional dimension that we believe sets this case apart from Boston and really undercuts the analogy in the White case of these employees being city employees in an informal sense as Justice Rehnquist stated.
We believe that the right being asserted here is a right which has traditionally been held to be within the protection of the Privileges and Immunities Clause as interpreted by this Court and that in light of that fact it is the burden of the city to come forward with a showing that the non-residents here are a peculiar source of the evil that the city is trying to deal with in its ordinance.
That evil, we think, is a broader one than the city's characterization of it in its brief.
It is simply a problem of high unemployment among the residents of Camden.
It is not necessarily low employment of Camden residents on Camden public works projects.
I think for the same reasons that Hicklin v. Orbeck invalidated that rationale as a savings rationale, it should be invalidated here.
There is just simply no showing that whatever the causes of the unemployment problems in Camden are that they are fairly traceable to the activities of non-residents.
Unidentified Justice: Mr. Kudatzky, the Alaska statute in Hicklin had a good deal broader sweep than the Camden ordinance here, didn't it?
I don't just mean geographically, but didn't they try to regulate virtually all private employment in the state?
Steven K. Kudatzky: Yes, Justice.
It was unfortunate that the Hicklin court did not really address the propriety of the... if I can call it the first-tier regulation... the regulation of the employees who were working directly on the pipeline as opposed to those further down the line.
Clearly the Alaska higher statute had what was termed the ripple effect all the way down the line.
The City of Camden here is limiting its ordinance in a very precise way to persons who are going to be employed by contractors with whom the city deals or subcontractors of those contractors on projects, either funded directly by the city or through grants administered by the city, which need not and are not, to my understanding, limited to public works projects.
In fact, to our understanding, with the nursing home project presently half way done, I would say, if I can tell by looking at it yesterday, is a privately-owned project or at least not a city-owned project.
We further believe that the city has attempted really to use a shotgun approach to a problem that requires a surgically precise remedy.
There has been no attempt to limit the benefits of the ordinance to unemployed persons, to persons of a certain economic level, or to persons who are qualified to work in the construction trades.
We also do not believe that the city has asserted justification that this also promotes minority hiring is enough to say the ordinance--
Unidentified Justice: Would the Camden ordinance require a contractor to employ someone that he regarded as unqualified to be, say, a bricklayer or some other part of the trade, in order to make up the 40 percent rather than pick someone who he did regard as qualified who is not a resident of the City of Camden?
Steven K. Kudatzky: --The ordinance does not affirmatively say qualifications are irrelevant.
I would assume that that would come in when the city was trying to determine the extent to which good faith compliance was attempted by the contractor.
The contractor would come in and say that I didn't hire this resident because he was unqualified, therefore, I took a non-residents who happened to be more qualified.
That may or may not constitute sufficient good faith effort.
Unidentified Justice: We really can't say at this point the Camden ordinance would forbid choice of a non-resident on the basis of qualification even though the 40 percent goal weren't met?
Steven K. Kudatzky: We can't say that at this point.
We do not believe that the invalidation of the Camden ordinance would necessarily call into question the continued validity of McCarthy versus the City of Philadelphia that public employment itself may be limited to residents.
The Court need not go that far as I have indicated and in our view the implications of this ruling are only with respect to attempts by governmental bodies to influence the decisions of private employers and further down the line employers... I am sorry... subcontractors of private employers.
We do not think that this case will sound the death knell of various attempts by states to limit access to state resources whether directly or indirectly to their own residents.
If I may return to my discussion of why this case is not the same as White, I mentioned this transportation center that is involved in this case as being funded by Department of Transportation money under the Urban Mass Transit Act.
We have cited in our brief the interpretation of the Secretary of Transportation that resident preferences in the projects funded by such monies are impermissible.
So, we do not have the harmony of... the harmony with the congressional goals that--
Unidentified Justice: Was that point made to the Supreme Court of New Jersey?
Steven K. Kudatzky: --No, Your Honor, it was not.
The Court never quite frankly addressed the issue at that level.
They stopped once they determined the Privileges and Immunities Clause was--
Unidentified Justice: I didn't mean was it made by the Supreme Court of New Jersey.
Was it made to the Supreme Court of New Jersey by you?
Steven K. Kudatzky: --No, Your Honor, we have only recently been able to determine who is funding what projects.
At the time this case was argued before the Supreme Court of New Jersey, the transportation center was, I think, very much at a conceptual stage or at least on the drawing board.
The absence of that harmony, I think, undercuts some of the White reasoning for upholding the resident preference there.
Here we have a situation where Congress has at best spoken with a mixed voice as to resident preferences.
The constitutional guarantee involved here applies more specifically to the individual employees.
White did not really deal with the rights of individual employees.
It seemed to deal more with the rights of the contractors under the Commerce Clause, although certain union groups were parties plaintiff in that case.
Unidentified Justice: I suppose Congress might take this thing out of the Commerce Clause challenge, but I am not sure it can forgive a privileges and immunities violation.
Steven K. Kudatzky: Yes, that is precisely my point, Justice.
With respect to those projects which are funded in part by federal monies, any inference that Congress has approved resident preference, I think, is unavailable in this case for the simple reason that Congress is not authorized to waive privileges and immunities protections.
We do not wish to be construed to be attacking the laudable goals of the Camden ordinance.
Camden clearly is a city with a lot of problems.
We just believe that their goals could be accomplished with less violence to the Privileges and Immunities Clause in other ways such as by preferring its residents for job training programs, by doing some of the work in-house if they really felt that that was necessary.
The city, to my knowledge, has not traditionally, as most governmental entities have not, to my understanding, built their own public works with their own work force, but it is a method that might be available to them and would present certainly different issues than are presented in this challenge.
Unidentified Justice: Did you say, Mr. Kudatzky, at the outset of your argument that your reliance is primarily on Hicklin?
Steven K. Kudatzky: Yes, Justice.
We find little to distinguish this case from Hicklin, although it is clearly--
Unidentified Justice: Well, I notice that the New Jersey Supreme Court... I gather this is the bottom line, isn't it, because the Camden ordinance does not affect
"the states' treatment of each other's residents. "
It does not violate any privilege.
That you think is error.
Steven K. Kudatzky: --Yes.
We believe the Court read Hicklin and the Privileges and Immunities Clause in general in a very miserly fashion in that respect.
Pennsylvanians do not have access to New Jersey political processes that other persons in New Jersey would have access to.
Justice Marshall, in the Austin case, noted the importance of the political accountability rationale in dealing with privileges and immunities questions.
The fact that New Jersians might, if this Court agrees with me, be in a worse position than Pennsylvanians is not something that I really stop this Court from taking that step.
New Jersians have the right to petition the New Jersey legislature to revoke Camden's power to have such an ordinance.
And, specifically we believe that more non-residents, given the location of Camden, two miles from the center of Philadelphia, the fourth largest city in the country, are going to be adversely impacted.
The New Jersey Court seemed to take into account the entire population of New Jersey which, I suppose, would fall within pretty much a 100-mile radius of Camden.
Even within the 100-miles radius, you would pick up New York City, Baltimore, all those areas.
There would still be, in my view, more non-residents, although I don't have the statistics to demonstrate that with respect to who is actually within a 100-mile radius of Camden.
Unless the Court has any other questions, I will reserve the remainder of my time for rebuttal.
Chief Justice Warren E. Burger: Mr. Foster?
ORAL ARGUMENT OF N. THOMAS FOSTER, ESQ. ON BEHALF OF THE APPELLEES
N. Thomas Foster: Mr. Chief Justice, and may it please the Court:
The City of Camden here, of course, takes quite a different position than Appellants in this matter and asks that this Court, if it would, to dismiss the appeal and, in the alternative, to affirm the decision of the New Jersey Supreme Court based on what we think are three very critical and important premises.
First, that this case before the Court is not ripe for decision because Appellants have established no case of controversy.
Secondly, because the Camden ordinance provides a basis for good or best-faith effort to provide hiring preference for 40 percent of those persons employed on construction projects for Camden residents does not violate the Privileges and Immunities Clause and, of course, the equal protection question raised by the Duration Residency Clause has been mooted by amendment and revision of our ordinance.
We noted, Your Honors, with a great deal of interest, that the Appellants here have not established any injury either to themselves or any member of their unions.
There is no record of any injury, there is no record of any person being denied a job, there is no record of any individual outside the State of New Jersey being denied employment because of the ordinance here that the City of Camden has established.
There are no concrete facts for this Court to determine whether, in fact, if not an actual privileges and immunities issues has been raised by the Appellant.
We have no factual backdrop to determine how many persons, if any persons, have been injured by this ordinance passed by the City of Camden.
We think that one of the reasons why there has been no factual backdrop or no clear definition of a concise injury or concrete establishment of a fact of injury is because Appellants here clearly misapply and misunderstand, in our opinion, the Privileges and Immunities Clause.
The Privileges and Immunities Clause itself is a clause historically which is established to develop national unity, a national republic, out of a number of independent sovereign states at the beginning of this country's history.
The purpose of it was to form a comity of interests among the states, among the citizens of those states, assuring to the citizens of each state the same fundamental rights and privileges of citizens of other states.
Nowhere in the case law, nowhere in the Constitution does the Privileges and Immunities Clause itself deny states their own sovereignty, the sovereignty to solve their own problems, the sovereignty to solve their own local social ills.
Nowhere does the Constitution--
Unidentified Justice: Would you suggest that Camden could pass an ordinance that said that every contractor performing any construction work in the city, whether for the city or privately, must employ 40 percent Camden residents?
N. Thomas Foster: --No, we don't say that.
Unidentified Justice: Why not?
Why wouldn't you?
Why shouldn't the city have the authority to solve its own problems?
N. Thomas Foster: All right.
We could say that, Your Honor.
We don't say that, however, is what I mean.
Unidentified Justice: Because of Hicklin?
N. Thomas Foster: Well, yes, because of Hicklin, but because of the far reaching impact of the ripple effect, of course, that Hicklin has established.
We feel that the Privileges and Immunities Clause does not deny a state or local government from solving its own problems.
We don't feel as though it says that at all.
It does not say that in fact.
In fact, as we look at a number of cases... this Court has stated in Federal Energy Regulatory Commission v. Mississippi that the idea of states solving their own local ills is no judicial myth.
States, in fact, promote the idea of states as laboratories to solve their own local problems.
Here the City of Camden, a city with severe labor, economic, and social problems is attempting to do that very... to achieve that very goal, solving its own local problems.
The city, which, by the way, has an unemployment rate of over 20 percent, over twice that of the national record, and, of course, as counsel stated something to the effect that it would be a blunderbuss fashion to solve a social ill.
This is no blunderbuss fashion to solve a social ill.
It is the attempt by the City of Camden to ameliorate serious social problems facing its unemployed persons.
We feel in no way this ordinance would simply ask that a contractor who comes into Camden to work on public works projects in the cost range of over $50,000 make a good faith effort to provide employment for... in terms of its hiring practice hire 40 percent citizens of the City of Camden.
I think it is important also for us to stress at this point that there are no penalties for a contractor who fails to reach the 40 percent.
In fact, there is a very good possibility the 40 percent could be all members of this union here or--
Unidentified Justice: Mr. Foster?
N. Thomas Foster: --Yes, sir.
Unidentified Justice: You said a moment ago that you thought there was no concrete case of controversy here.
I was just looking over the opinion of the Supreme Court of New Jersey, on page A2 of the jurisdictional statement, and the only sense I could find in there was Appellant United Building and Construction Trades Council, an association of labor organizations, challenges state approval of the Camden program as both unauthorized under New Jersey law and unconstitutional.
How did this case work its way into the New Jersey court system?
N. Thomas Foster: Your Honor, it was... It worked its way into the New Jersey court system in a very interesting fashion.
According to New Jersey statute in terms of anti-discrimination law, the State Department of the Treasury, its affirmative action ordinance, has the right to endorse any local plan.
We call this, in effect, the Camden plan.
The Camden City Council adopted this ordinance and it became effective once it was approved by the state affirmative action officer.
Unidentified Justice: It could not have become effective without that?
N. Thomas Foster: That is correct, Your Honor.
At that point in time, once this case was approved by the Department of the Treasury or the state affirmative action officer, the Appellants here then took the case directly, following an administrative decision... it was an administrative decision... into the New Jersey Appellate Division, Superior Court Appellant Division.
That is under Rule 256 of New Jersey Court Rules which says that a party may at any time, if it opposes or feels aggrieved by an administrative ruling, the state may go directly into the Appellate Division.
And, this is what the Appellants here elected to do.
That is why there was no concrete record below.
Unidentified Justice: This was really at the formative stage of the Camden ordinance.
It was just getting off the ground.
N. Thomas Foster: That is correct, Your Honor.
That is exactly... The ordinance had just been approved by the State Treasurer.
Immediately they appealed to the Appellate Division of the New Jersey Superior Court.
We feel, Your Honors, that this case in no way threatens any person who is not a resident of the State of New Jersey because it places persons within the State of New Jersey in the same precise predicament and posture as persons outside the State of New Jersey.
Unidentified Justice: Excuse me, Mr. Foster.
N. Thomas Foster: Yes, sir.
Unidentified Justice: I gather the Appellate Division did not... There was no decision there.
N. Thomas Foster: Yes.
Unidentified Justice: --Court certified--
N. Thomas Foster: Certified directly.
In other words, it was never heard by the Appellate Division, Your Honor.
It went directly to the New Jersey Supreme Court.
One of the points we try to make on this case is that no one is... No state citizens of New Jersey is advantaged or given an advantage because of state citizenship and no out-of-state citizen is denied an advantage because of out-of-state residency in this particular ordinance.
There is no benefit to being a New Jersey resident just as there is no disadvantage to being an out-of-state resident.
Therefore, we do not feel that this matter falls under ambit of the Privileges and Immunities Clause as traditionally has been argued.
We feel that in terms of the Hicklin case, which was argued by the Appellants, that there is a different case altogether.
There are similarities however, we feel that the Hicklin case goes much further than the Camden ordinance in terms of its ripple effect.
If we look at the Hicklin case, we can see where the advantages of the Alaskan hire law even went to suppliers of subcontractors and it was very difficult, as this Court has stated for the Court to even determine how remote or how the attenuating factors involved in this case affected or achieved the goals that were to be affected by this hire law.
Our particular ordinance is specific, it is to the point, and applies only to persons working on public works projects for the City of Camden.
Another point that I think is important in terms of privileges and immunities argument is that no person is denied any fundamental right here.
There is no fundamental right to work on a construction project for the City of Camden.
And, when we weigh that particular factor with the interest the city has or the state has in developing its urban infrastructure or the development of those citizens within our city, we feel that weighing the fundamental right alleged here and the interest of the state far outweigh the particular argument being made by counsel.
What we also want to impress upon this Court, that the City of Camden, like so many other cities in the northeastern part of our country and throughout this country, as they become older, find that one of the remaining resources available to those cities is the rehabilitation, revitalization, remodernization of the city's infrastructure.
We feel that the development of a city for those persons who continue to live there, for those new industries or services who wish to move there, redevelopment of highways, facilities such a bridges, sewers, whatever, is a new resource and new industry facing our cities, the redevelopment of our transportation systems.
And, we feel that the City of Camden, as well as the State of New Jersey, has an interest in seeing to it that its citizens benefit directly from the need to rehabilitate and revitalize the infrastructure of our cities.
The important factor here again is that the City of Camden is not here attempting to develop some sort of obstructionist goal or doctrine of trying to keep people out.
In fact, we welcome people to come into the City of Camden.
What we are attempting to do here is to pass affirmative social legislation to benefit the citizens of our city and we do not in any way violate the Privileges and Immunities Clause in doing so.
Unidentified Justice: --Of course, what you don't want to happen is to have people cross the Delaware River from Pennsylvania and come to work in Camden by day and go back to their Pennsylvania homes by night.
That you have prohibited I take it.
N. Thomas Foster: Well, we... I can't say, Your Honor, that we don't want that.
We don't want that if it is, in effect, going to take jobs away from Camden citizens certainly.
If we are talking about, and I think it is a very important factor here, where construction companies, using your example, are hiring people from Philadelphia while Camden people go unemployed, then, of course, yes, I agree exactly with what you are saying.
I think the point is very interesting here about unions' posture in this entire case.
We see several things here.
Number one, the unions obviously must have some people who belong to it who benefit from our ordinance.
Keep in mind that our ordinance says make a best-faith effort to hire 40 percent residents in terms of manpower.
Obviously, it would seem to me, that a union that would come into Camden or a construction company that would come into Camden to work would normally, ordinarily hire persons who worked in the City of Camden.
Unidentified Justice: What difference would it make whether the Union members are benefited or not to the issues in this case?
N. Thomas Foster: Well, Your Honor, it does in terms, we feel, in position of standing.
We find that the union is somewhat in conflict if it has members of its union who, for instance, are benefiting from the preference clause or... as well as those they say who don't benefit or are injured by it.
Unidentified Justice: Last year we had a case where I think the League of Women Voters in Wyoming was challenging the apportionment of one particular county.
Now, you wouldn't throw the League of Women Voters out because they had a member who lived in that county and might benefit?
N. Thomas Foster: No.
No, I would not, Your Honor.
The point is that I think in addressing the Chief Justice's question as I recall it is that the posture we are taking is that the standing issue is one that has to be addressed.
It is one that we feel has not been addressed by the posture of the unions in this case.
Unidentified Justice: May I ask, would your argument be different, instead of 40 percent it were 100 percent?
N. Thomas Foster: No, Your Honor, it would not be.
Unidentified Justice: So, you would agree, of course, then that Philadelphia could have imposed the same kind of requirement on--
N. Thomas Foster: We see no difficulty with that at all.
Unidentified Justice: --It would be better if each city preferred its own citizens rather than let anybody cross the river.
N. Thomas Foster: Your Honor, I didn't--
Unidentified Justice: I can see that this sort of ordinance cuts both ways for people in Camden it seems to me.
N. Thomas Foster: --No, I would disagree with Your Honor.
That was a point that the Appellants make here about what they call economic vulcanization or parochial interest.
We feel that in terms of the privileges and immunities argument that if a state... I don't think any state or any city can just simply make a rule saying that you must hire our own and keep out other people and that is the point that I am trying hard here to impress upon the Court.
I think that would be a violation of privileges and immunities.
However, the Privileges and Immunities Clause has certain principles.
One, of course, as long as the discrimination is not based upon alienage or based upon residency, that, of course--
Unidentified Justice: But here it is based on residency.
N. Thomas Foster: --Well, no, it is not based on residency, Your Honor, because this is not an ordinance that simply says that out-of-state residents or--
Unidentified Justice: Residency in the city.
You have got to be a resident of Camden to get to be one of the--
N. Thomas Foster: --Yes, but that is not, Your Honor, a privileges and immunities argument.
We don't take that position.
This is based on municipal residency, not state residency.
Unidentified Justice: --Yes, but if you are... You say you have to be a Camden resident, but if you are a Camden resident, you are a resident of the state.
N. Thomas Foster: That is correct.
Unidentified Justice: So, you are preferring certain state residents, certain residents of New Jersey to non-residents of the state.
N. Thomas Foster: We are providing a preference for certain residents, those are residents of the City of Camden.
Unidentified Justice: Mr. Foster, do you suggest this case would be some how different if the State of New Jersey had enacted a state-wide law saying that Camden shall grant 40 percent preference to its local residents?
N. Thomas Foster: Well, Your Honor, I think in fact this is our case in terms of the facts established because the State of New Jersey--
Unidentified Justice: It seems to me that way too.
I gather from one of your comments in response to one of my colleagues that where perhaps the State of New Jersey couldn't enact a statute, it would have exactly the same effect as the Camden ordinance.
Somehow the City of Camden can do it because there is an ordinance of just kind of local... by a local governing body rather than a state-wide law.
Do you take that position?
N. Thomas Foster: --Your Honor, I don't see that as being in violation of the Privileges and Immunities Clause.
No, I don't.
I do take that position, yes.
Unidentified Justice: But, you would say the case would be different.
At least you would be making a different argument if the state enacted a law saying that 40 percent of all the people who are working on contracts that the state is financing must be residents of the State of New Jersey.
That would be a different case.
I don't know how you would... At least you would say that case is not here because--
N. Thomas Foster: I would like to say this case is not here, but I am not clear, Your Honor, if the case would fail for that reason.
I think one of the things that was very important in the Hicklin case, and even in the case of Toomer against Witsell, was that those cases indicated that the Privileges and Immunities Clause is not an absolute; that there can be distinction made between citizens and non-citizens and one of the factors was whether or not a state had a possessory interest in any of the factors concerned such as its own resources, money, or whatever.
There is another factor that I would like to argue here.
There has been some discussion about the White case, White against Massachusetts Council of Construction Employers.
That case, of course, was founded on the Commerce Clause, found that that case did not violate the Commerce Clause.
I think it is important for us to point out that we feel that the Commerce Clause and the Privileges and Immunities Clause are mutually reinforcing doctrines, each attempting in its own way to establish a certain sense of national unity; one vis a vis the flow of commerce, the other through the flow of persons and privileges and fundamental rights of citizens through the states.
We feel that there are times, for instance, when a state does get involved in commerce, as long as it is acting as a market participant rather than a market regulator, that it may get involved in commerce and somehow involve itself in the flow of commerce.
As long as the state is using its own money and it may distinguish and favor citizens of that state which was certainly the case in this Court's opinion in Hughes v. Alexandria Scrap, Reeves and Stake.
I think the same thing can be said true about the Privileges and Immunities Clause, that there are times when the state... when it can in the protection of certain vital state interests find that it can and should favor or distinguish or make distinction between its own citizens and other citizens.
I don't feel that when those vital interests are... When those particular factors are prevalent that there is a violation of the privileges and immunities of any particular individual.
We also find it interesting that here a Council of Trade Unions, who probably feel that a clause in a contract that says buy American is patriotic, but on the other hand, a clause in a contract that says hire local is unconstitutional.
We do not feel that the statute here or the ordinance of the City of Camden, which attempts to ameliorate certain local evils, addresses specifically those evils, and simply requests of those contractors who do business with it to try to hire our own.
In the Appellant's brief, they speak in strong terms of our ordinance being exclusionary, denying access to out-of-state persons.
The concern that we have here is that that is not true and if one reads that ordinance carefully you can see that it excludes no one and denies no one access and impinges upon no one's constitutional right.
It is merely an effort by the City of Camden to address a very grave social issue by passing what it thinks is an affirmative, positive, social legislation to cure a local ill.
And, we feel that we should pass reference the Privileges and Immunities Clause because we do not feel as though it reaches that level.
Unless there are any further questions--
Unidentified Justice: --Mr. Foster?
N. Thomas Foster: --Yes.
Unidentified Justice: Perhaps you have stated this, but I want to be sure.
Do you, representing the Mayor and Council, rely on the proposition that the Privileges and Immunities Clause does not apply to classifications drawn on the basis of a municipal as opposed to state residency?
N. Thomas Foster: Yes, Your Honor, we do rely on that.
Unidentified Justice: Because that is the first point in your corespondent's brief.
N. Thomas Foster: That is true.
That is our point, Your Honor.
It is not... I thought we had addressed that to one of your colleagues.
That it is not municipal... Because it is municipal residency rather than state residency--
Unidentified Justice: But suppose every municipality in the State of New Jersey did the same thing?
N. Thomas Foster: --Your Honor, we feel two ways about that.
Number one, we don't think it will happen.
If it did, we don't see anything... We don't see that violating privileges and immunities constitution, the Privileges and Immunities Clause.
Unidentified Justice: No, but I gather you would say that situation would present a problem that the city ordinance does not under the--
N. Thomas Foster: Yes.
We would concede that if that were to happen, then the State of New Jersey... and if the ill effects attained, then we think the State of New Jersey then would have an obligation to--
Unidentified Justice: --And, I gather you don't think the requirement of the state's approval of the ordinance makes this a state enactment rather than a municipal one?
N. Thomas Foster: --Well, Your Honor, that is the position the Appellants take, because the State of New Jersey has... this Department of Treasury has sanctioned or approved our ordinance, that it is state action.
Our position is that it is really a municipal ordinance created by the City of Camden to cure local evils within the--
Unidentified Justice: I thought you earlier said, and I thought it made good sense, that even if the State of New Jersey had passed a statute saying that Camden, all Camden contracts--
N. Thomas Foster: --Yes.
Unidentified Justice: --should have 40 percent Camden residents employed, that it would be the same case.
N. Thomas Foster: That is correct.
Unidentified Justice: Because it would be conditioned on municipal residency rather than state residency.
N. Thomas Foster: Yes.
Apparently I answered that question differently.
Unidentified Justice: Would it also be the same case if the New Jersey legislation said every city such as Camden and every other New Jersey city bordering on another state shall require local residency as a requirement, sort of applied to each of the cities if you can cross the river and commute to?
N. Thomas Foster: Your Honor--
Unidentified Justice: One of the other rivers.
There are different rivers I believe.
N. Thomas Foster: --I don't see any difficulty with that under the Constitution.
I think that--
Unidentified Justice: As long as some part of New Jersey is not covered by the statute.
N. Thomas Foster: --Well, I would assume that could be true, Your Honor.
I think the thing we have to look at is what are we asking or what are we trying to legislate?
Remember, that the ordinance of the City of Camden states very specifically that for any contractor who performs public works projects for the City of Camden, paid by the City of Camden, either in whole or in part or through funds administered by the City of Camden, attempt to hire 40 percent... Attempt to hire in his work force 40 percent residents of the City of Camden.
There is no fundamental right to working on a public works project in the City of Camden.
There is no fundamental right to work in a public works project in Trenton, Cherry Hill, Elizabeth, Jersey City, or Newark.
So, I would say that in terms of that there would be no fundamental rights involved.
Of course, as stated earlier, there are a number of cases, McCarthy v. Philadelphia, Detroit Association against Detroit, it has been determined that even the right to direct employment with a municipality is not a constitutional right or fundamental right.
If there are no further questions, Mr. Chief Justice--
Unidentified Justice: Counsel, just as a matter of interest--
N. Thomas Foster: --Yes.
Unidentified Justice: --has the population of Camden declined in the decade of the 70s?
N. Thomas Foster: Yes, Your Honor, tremendously.
In 1970, the population of the City of Camden, I believe, was approximately 103,000 persons.
In 1980, it had dropped to 85,000.
Unidentified Justice: Does the record show what percentage of the present population is on relief?
N. Thomas Foster: Your Honor, approximately 34 percent of the population of the City of Camden is receiving some type of social relief, welfare assistance.
It represents approximately one-third of our population.
Camden is also a community which is approximately 75 percent minority and, of course, our unemployment rate is approximately 20 percent, twice that of the nation, and some five or six percent higher than the State of New Jersey.
Unidentified Justice: Thank you.
Chief Justice Warren E. Burger: Do you have anything further, Mr. Kudatzky?
Steven K. Kudatzky: Yes, Mr. Chief Justice.
Chief Justice Warren E. Burger: You have ten minutes remaining.
ORAL ARGUMENT OF STEVEN K. KUDATZKY, ESQ. ON BEHALF OF THE APPELLANT -- REBUTTAL
Steven K. Kudatzky: Justice Powell, with respect to that very point, the City of Philadelphia has suffered many of those same problems over the last decade.
There is no evidence and no basis for assuming that Philadelphians or Pennsylvanians or Delawarians have caused any of these problems to be suffered by Camden.
I would also like to concur with, I believe, Justice Stevens' observation that this case must be analyzed as if it were 100 percent preference here, because clearly, I believe, that if the city can do 40 percent, they can require 100 percent preference and that the case should be analyzed in that fashion.
Unidentified Justice: Do you agree with the city attorney that there is nothing in this record to show that anyone has been injured?
Steven K. Kudatzky: No, Justice, I do not.
We started this case as early as we could.
We didn't want to wait and file a 1983 action after people had actually lost jobs.
The ordinance came into effect upon its approval by the state affirmative action officer.
Under New Jersey law, the exclusive method of reviewing state administrative agency action is by appeal to the Appellate Division.
At that point, once the ordinance came into play, non-residents, out-of-state residents, seeking to work on construction projects were the victims of a diminution in their job market, that diminution being 40 percent of the component of that job market represented by City of Camden public works projects, which is not an insubstantial amount.
While I cannot name an individual who has suffered the loss of a job at this point, it seems undeniable to me that some day someone is going to actually lose a job, but presently people are having a diminution.
Unidentified Justice: Why not file suit when that happens?
Steven K. Kudatzky: Pardon me?
Unidentified Justice: Why not file suit when that happens?
Steven K. Kudatzky: Well, we didn't think that it was necessary or appropriate to wait that long.
Unidentified Justice: But, you do agree that nobody... There is nothing in the record that shows anybody applied for a job and was denied employment?
Steven K. Kudatzky: I will agree that no specific individual has done that.
We do assert, nevertheless, the standing does exist because these persons are likely to suffer the detriment.
That detriment is traceable to the ordinance and, in fact, they are presently suffering a detriment in the reduction of their employability represented by the resident preference.
I would again note that we are representing or asserting rather the rights of out-of-state employees.
We are not here defending the contractors.
It is irrelevant in my view what penalties or non-penalties might exist for contractors.
In this case, even if one out-of-state resident loses a job or an employment opportunity, I think that is sufficient to confer standing and to create a privileges and immunities controversy cognizable by this Court.
With respect to the point that we are asserting a right to work on Camden public works projects, I disagree that the right being asserted is so specific.
In Hicklin v. Orbeck people could have work on non-oil and gas related jobs in Alaska, yet the fact that those jobs were denied them was deemed sufficient to trigger the applicability of the clause.
In Toomer, the shrimp people could have gone and fished for something besides shrimp or fished beyond the three-mile limit, yet that constriction of their employability was sufficient.
We see a trend already under way in New Jersey where two other jurisdictions have enacted protectionist preference ordinances perhaps as a result of the New Jersey Supreme Court's ruling here.
I think the Privileges and Immunities Clause would be gutted, literally gutted if it is not applicable to municipal residents' discrimination.
It would be no different than allowing the state to accomplish via the backdoor what it cannot accomplish directly.
In State of New Jersey versus City of Philadelphia, New Jersey could vend Philadelphia's trash on a county-by-county or municipality-by-municipality basis.
If it could do that, but couldn't do it directly, this Court's ruling would have been eviscerated.
We see a day coming when people will only be able to work where they live.
Philadelphia surely has cause now to enact a retaliatory resident preference ordinance and a number of Camden residents would be penalized by that certainly.
Other municipalities in New Jersey have reason to do that.
1984 is coming.
We would not like to see this Court encourage in any way a system which could lead ultimately to an internal passport system where people--
Unidentified Justice: Well, no one suggests that... At least under our cases there is a limit on what they can do about private employment.
Steven K. Kudatzky: --Correct.
Unidentified Justice: We are just talking about public employment here.
Steven K. Kudatzky: Well, the public--
Unidentified Justice: We are talking about the employment by contractors doing business with the city.
Steven K. Kudatzky: --Yes.
That, nevertheless, in the building and construction trades these days is virtually the entire field.
There is little... Certainly in Camden, there is little going on that is not public-works related in the broadest sense.
With respect to the divided loyalty question, clearly some members of our unions are Camden residents and are being benefited, however, they, I believe, would rather see this type of protectionism struck down because they know that they are going to be the victims when it is Philadelphia or another Camden suburb that enacts the ordinance.
There is no reason to think this is going to stop at Camden's door.
There are 521 municipalities in New Jersey.
All of them could do the same thing and certainly a vast number more throughout the country.
The goal of revitalization cited by the city simply is not well served by pitting Camden against its neighbors, particularly its out-of-state neighbors in this respect.
We believe the Privileges and Immunities Clause applies here and limits the rights of the city in preferring its own residents or trying to ensure to them the benefits of some of its expenditures when they try to do it this way.
Regulation of private employment is simply beyond any concept validated by this Court of state or municipal sovereignty.
There are differences.
They are doing it in a constitutionally impermissible fashion in this case.
It is not to say that they cannot do it in some other fashion and accomplish substantially a similar result.
I have nothing further.
Chief Justice Warren E. Burger: Thank you, gentlemen, the case is submitted.
We will hear the next case at 1:00.