Cases by Issue - Original Jurisdiction

Mississippi v. Louisiana - Oral Argument

Fri, 09 Jan 2009 14:49:24 +0000

Case:

Mississippi v. Louisiana

Media File:

91-1158_19921109-argument.mp3

Related Transcript:

1992_91_1158_argument.xml

Transcript:

Argument of James W. McCartney

Chief Justice Rehnquist: We'll hear argument next in Number 91-1158, Mississippi v. Louisiana.

Mr. McCartney, you may proceed whenever you're ready.

Mr. McCartney: Mr. Chief Justice, and may it please the Court:

This action involves the boundary between the states of Mississippi, Louisiana, and the private ownership of a body of land known as Stack Island or Island No. 94, patented by the United States as Mississippi land in 1881.

The identity and physical location of this island, which is the only island at issue in this case, can be traced from ancient maps beginning in 1826 through aerial photographs beginning in 1932 through hydrographic, U.S. hydrographic maps up to the present time.

So the island, according to the evidence before the trial court and as the trial court found, has been in existence at least since 1881 and can be identified today.

Now there is no substantial dispute with respect to the applicable boundary law.

This Court has many times said, even in controversies between Louisiana and Mississippi, that the thalweg, that's corrupted in Louisiana and Mississippi to thalweg, of the Mississippi River forms the boundary between the states, and that boundary shifts with gradual shifts in the location.

Unknown Speaker: If that's so, why is it that 1881 became the relevant date for the district court's inquiry?

Why shouldn't it have been where the thalweg was at the time when the state was admitted to the Union?

Mr. McCartney: 1881 became the focal point of the controversy, Your Honor.

There was no controverting evidence with respect to the documentary evidence showing the island as early as 1826.

Unknown Speaker: Well, was it--

Mr. McCartney: So that's why it became the center of the trial court's fact findings.

Unknown Speaker: --Was it... and you contend that that's the correct date to focus upon?

Mr. McCartney: No, the correct date according to the rules of this Court would be the date the existence of the island if it were present at the date the state was admitted to the Union or at the date it was formed.

Unknown Speaker: Is that what you argued in the trial court?

Mr. McCartney: Yes.

Your Honor, in the trial court we offered all of this evidence and suggested--

Unknown Speaker: I know you offered it all, but was your theory in the trial court that the date of admission to the Union was the critical date, and that you tried to find out from the best evidence available what the situation was at that point?

Mr. McCartney: --The theory in the trial court focused on the 1881 because of the controversy, but the evidence in the trial court and the finding of the trial court, the ultimate finding is susceptible of the interpretation that the applicable state entry date can be under the evidence of this case the controlling date.

But no, the principal focus of the argument in the trial court was the controversy in 1881 forward.

Now, the second point relating to the boundary issue is the doctrine of acquiescence, also a fact-intensive doctrine.

The trial court found after a review of the conflicting evidence of the experts that the thalweg lay on the west side of the island, and thus under the thalweg rule the island was Mississippi property.

The trial court also found based on extensive evidence that if the trial court were wrong in that finding that nevertheless the land were Mississippi land because of the doctrine of acquiescence.

That is of course long assertion of dominion, control, and jurisdiction.

So we had two basic ultimate fact findings.

We had innumerable subsidiary fact findings.

We then come to one of the two central points in this case, and that is the Fifth Circuit's exceeding the constraints of Rule 52 and according deference to the trial court's findings of fact.

Unknown Speaker: Mr. McCartney, would you clarify a couple of things for me with respect to what the Fifth Circuit did?

I guess there were two basic questions.

One, who owned the particular land, was it the Houston Group or the State of Louisiana?

Mr. McCartney: Correct.

Unknown Speaker: The second question is was the land at issue located in Mississippi or Louisiana, right?

Mr. McCartney: Right.

Unknown Speaker: Now, did the Fifth Circuit, do you think, did its judgment have any effect on the ownership dispute as opposed to the state boundary question?

Mr. McCartney: Yes, it did, Your Honor.

Unknown Speaker: You think it did?

Mr. McCartney: Yes.

The land was patented as Mississippi land and the Fifth Circuit, the finding of the trial court was that it was, the private ownership was in the Houston Group.

That finding was reversed and renderee by the Fifth Circuit.

Unknown Speaker: Now, are you here representing the Houston Group or Mississippi?

Mr. McCartney: Both, Your Honor.

Unknown Speaker: Both.

Mr. McCartney: Yes.

My counsel advises under Louisiana law if it's Louisiana land it's owned by the state.

But the focus of the first of these issues is then the clearly erroneous rule or standard under Rule 52 which this Court has given more precision in Anderson v. Bessemer City and in Amadeo v. Zant, and has very clearly let it be known that if there are two permissible views of the evidence that there can virtually never be a clearly erroneous finding by the trial court, and that--

Unknown Speaker: Mr. McCartney, do you think that rule necessarily applies in the case in which at least some people might have thought belonged in this Court in the first place?

You know, we have original jurisdiction of controversies between two states.

Mr. McCartney: --Yes.

Unknown Speaker: Do you suppose we might have a little broader authority to review the fact finding that underlies the decision of such a controversy?

Mr. McCartney: Unquestionably, Your Honor.

It would be a different standard.

Unknown Speaker: So that we may not be bound by the clearly erroneous standard.

Mr. McCartney: I would not agree with that.

Unknown Speaker: You think we are bound by it?

Mr. McCartney: I would say that as the case comes up through the appellate court route that the appellate courts are bound by the erroneous standard.

If the case comes to the Supreme Court by the original jurisdiction route, then this Court has no constraints but it is likewise obligated to make the fact findings required as a matter of its original jurisdiction.

So I see a distinction between the standards of review under the clearly erroneous finding.

Unknown Speaker: Depending upon how it gets here, you say.

Mr. McCartney: Yes.

Unknown Speaker: But this one has gotten here not through original jurisdiction--

Mr. McCartney: Correct.

Unknown Speaker: --and so you say we would be bound by what the district court found?

Mr. McCartney: Correct.

If that you find from a review, of course, that the finding was, quote, plausible or was, quote, permissible.

And just, if I may briefly address the Court's attention to some of the evidence that clearly indicates that the trial court's findings were supported.

Unknown Speaker: Before you do that, would you clarify for us what if we think that only this Court can determine the boundary dispute, this Court and no other, that the district court could not decide that question, what do we do now?

Mr. McCartney: If you do that, then we think that you can do one of two things.

You can dismiss, in which there is no forum.

Of course this Court has already considered that problem and made a contrary determination.

But alternately you could consider the findings of the trial court based on the record and treat them as the findings of a master that you might have appointed.

Unknown Speaker: But there is no third alternative of vacating any decision on the boundary but then dealing separately with the question of who owns the land?

Mr. McCartney: I think not, Your Honor.

Our position is that when the case comes up through the appellate route, and that's the way this Court has mapped the route of this case, then we look at it on a standard of review based on clearly erroneous, and if the case comes up through the original jurisdiction route you consider those facts yourself as a matter of original jurisdiction.

Unknown Speaker: Mr. McCartney, may I put the question, I don't know if Justice O'Connor had this in mind but just a slightly different version of her question.

Is it conceivable that the ruling on ownership is not dependent on the ruling on where the boundary is?

Mr. McCartney: It is conceivable... in this case, Your Honor?

Unknown Speaker: Yes.

Obviously it's conceivable, but in this case do both parties feel that one cannot answer the ownership question without first answering the boundary line question?

Mr. McCartney: I believe that to be true--

Unknown Speaker: I see.

Mr. McCartney: --because of the ownership of the state unless, unless there is an adverse possession possibility, and I am not certain whether the land has been sufficiently divested from ownership by the state to permit the adverse possession of the Houston Group to mature title, even if this is Louisiana land.

Unknown Speaker: I see.

So that you would fear, I guess, the precedential or the res judicata effect if we allowed the private ownership determination to stand and vacated with respect to the sovereignty issue between the two states?

Mr. McCartney: No, Your Honor, if the private ownership were allowed to stand on the basis of the adverse possession concept, then that would be the ruling of this Court.

But--

Unknown Speaker: And what would be your position if we vacated and allowed an original action as between the two states on their controversy?

Mr. McCartney: --Your Honor, our position would be that the original action would directly affect the ownership if you were to at this point in time--

Unknown Speaker: So the original action would not, would not be subject to res judicata is what you're saying?

Why don't you answer that at 1:00, Mr. McCartney.

We'll recess until then.

Mr. McCartney: --Thank you.

Chief Justice Rehnquist: Mr. McCartney, you've had the lunch hour to think about Justice Souter's question.

Let's proceed.

Unknown Speaker: What was the question?

Would you repeat the question?

Mr. McCartney: As we understood the question it was basically whether title and boundary were intertwined, and we believe that they are, that if this Court were to decide boundary in Louisiana that that would directly affect title, although there is some--

Unknown Speaker: Why?

Mr. McCartney: --Well, because, Your Honor, I was going to say there is some uncertainty because of the Louisiana ownership of the islands as opposed to the fact that the private owners Houston have title from the United States, a patent from the United States.

But the case was tried and it appears to us that title and boundary fall together.

Unknown Speaker: Well, you still haven't told me why.

Mr. McCartney: The best answer I can give you is that if the land is in Louisiana then we have no title out of Louisiana, and we may have a possessory right if the Court were to find some facts--

Unknown Speaker: What do you mean you don't have any title out of Louisiana?

Mr. McCartney: --Precisely that, Your Honor.

The title is out of the United States covering Mississippi land.

Unknown Speaker: Well, what difference would it make if it's in Louisiana?

How would that cancel out your title from the United States?

Mr. McCartney: Well, that, Your Honor, is why I qualify to say it's not altogether clear, and that's what's not clear.

Unknown Speaker: Well, what's the argument that your title would be affected if it's in Louisiana?

Mr. McCartney: Because we could not mature a limitation title against a sovereign Louisiana by possession and occupancy, and we would not have record title.

Unknown Speaker: Oh, you mean adverse--

--Adverse possession.

Mr. McCartney: Yes, sir.

Unknown Speaker: But does Louisiana recognize the doctrine of accretion and avulsion that, you know, title may change depending upon whether a switch in a river thalweg was sudden or gradual?

Mr. McCartney: Louisiana recognizes title by accretion to private land owners and there would be a fact question about the private land ownership.

Unknown Speaker: I suppose if we said that the title issue should have been that we have exclusive jurisdiction to decide the boundary issue, then we could, couldn't we, if we decided it that way couldn't we remand to the courts below to decide whether or not the fact that we took the boundary issue here could be, can be disassociated with the title issue?

Mr. McCartney: Yes, you could do that.

Unknown Speaker: Because I would think that the courts below could, would know more about that than we do.

Mr. McCartney: Yes.

Unknown Speaker: Mr. McCartney, I thought it was your, frankly I'm surprised to hear what you've said.

I thought it was your position, I gathered from footnote 14 of your brief that Mississippi would remain free to litigate the boundary issue even if we decided we had no jurisdiction, if we decided that the district court had no jurisdiction over the question.

That's what it says.

It says a holding that the district court lacked jurisdiction of a third-party complaint against Mississippi would require vacation of the judgment against the state and leave Mississippi free to litigate the boundary issue anew.

Mr. McCartney: Yes.

Unknown Speaker: I thought you might concede--

Mr. McCartney: What we're saying there was that we recognize that this Court could reconsider its 1988 decision to defer--

Unknown Speaker: --Right.

And suppose we do that?

I thought that was the question you were being asked.

Suppose we do that, isn't Mississippi then free to relitigate the boundary issue?

Mr. McCartney: --Yes, Your Honor.

Unknown Speaker: Okay.

Mr. McCartney: If that's the question I was asked, then it's very clear.

Unknown Speaker: Maybe I misunderstood it.

Mr. McCartney: Yes.

If this Court were to reconsider, and we would urge after of course a very lengthy period of litigation that it not do so, but if it were to do so then we feel it would be free, and neither Louisiana nor Mississippi would be bound by the district court's decision.

But as it stands--

Unknown Speaker: Although the title decision would stand.

Mr. McCartney: --We believe that the title decision would likely follow the determination of the boundary, but I will have to say that I'm not clear on that and that is frankly the best I can do.

Unknown Speaker: Well, we wouldn't... if we granted, if we granted a motion for leave to file an original action it would just deal with the boundary, I suppose.

We wouldn't be deciding title.

Mr. McCartney: That's correct, Your Honor.

It would be left to another day to decide the title.

Unknown Speaker: And of course if Louisiana had never intervened into this case Mississippi could have remained in it and litigated the title.

Mr. McCartney: Louisiana brought Mississippi into the case.

Unknown Speaker: Oh, oh.

Mr. McCartney: Louisiana brought Mississippi--

Unknown Speaker: Mississippi wasn't a party at the outset?

Mr. McCartney: --No, Your Honor.

Louisiana... and that was the third issue on cert, was the third-party complaint by Louisiana against Mississippi within the jurisdiction of the district court.

Unknown Speaker: But do you agree that Mississippi would be equally free to litigate the boundary issue--

Mr. McCartney: Yes.

Unknown Speaker: --if we vacate the judgment with respect to the boundary issue but we, for whatever reason, do not disturb the judgment with respect to the title issue, the private title issue?

Mr. McCartney: You're referring to the Fifth Circuit's judgment of the district court's judgment?

Unknown Speaker: Yes, the Fifth Circuit judgment.

Mr. McCartney: The Fifth Circuit judgment.

I'll have to return to my original answer that I believe that the Court, if it were to vacate, would leave the title question to a later date but that it would have a distinct impact on the title issue.

Perhaps I could put it that way.

Unknown Speaker: In other words I think you're saying that we could not consistently vacate the judgment with respect to the boundary and leave the judgment with respect to the private title as it is, as the Fifth Circuit decided it.

Mr. McCartney: I believe that to be correct.

Unknown Speaker: Okay.

And I take it that if in the first instance we had decided to permit the filing of the complaint and exercised our original jurisdiction the private parties would not have been parties to that aspect of the proceeding?

Mr. McCartney: That's correct.

There was a motion to stay, Your Honor, and presumably the case would have been stayed pending this Court's determination of that issue.

This Court denied the motion to stay.

Unknown Speaker: And it seems to me it's not unusual that boundary determinations which determine where property is are conclusive of many private claims--

Mr. McCartney: Correct.

Unknown Speaker: --whether or not those private owners are represented in the boundary dispute.

Mr. McCartney: If I might just briefly address the main point of the support of the findings of the trial court, and this only by way of example.

But we have exhibit which is the original survey in 1881 which is adverted to by the trial court and by the Fifth Circuit which clearly shows the thalweg lying to the west of Stack Island.

We have exhibit 8, which is the expert testimony of Austin Smith, which locates the thalweg west of Stack Island.

We have the Louisiana expert, Mr. Easterly, agreeing, agreeing that this is an appropriate location of the thalweg.

We have the Mississippi River Commission on which the Fifth Circuit, which it finds virtually conclusive, saying that the objective was to bring the thalweg, or main channel as it's called, back to the west of the island, and if it's going to be brought back obviously it has to have been there at some time.

Those are examples that more than demonstrate the permissible finding by the trial court that this was Mississippi land.

Furthermore, the trial court buttressed that finding by the finding of acquiescence, and it made the ultimate finding very clearly, that if it was wrong with respect to the thalweg it was right with respect to acquiescence because there had been taxation by Mississippi since 1989, excuse me, 1889, no taxation by Louisiana.

There had been foreclosure, there had been sale, there had been exercise of jurisdiction, there had been enforcement of game laws, there had been enforcement of criminal laws, there had been litigation in the courts, nothing, no litigation in the courts regarding this property, there had been an uninterrupted exercise of dominion and control.

This is a pure fact question, and it is a complex fact question, and the trial court heard the evidence on it and it made the finding.

Now, the Fifth Circuit disregarded it and it said it was not adequate, but the record itself will demonstrate that the Fifth Circuit was not correctly following this Court's interpretation of the clearly erroneous rule and was ignoring substantial record evidence that supported the trial court's findings.

Now, if I may turn briefly to the jurisdiction question, essentially this Court has held, as it well knows, that it has jurisdiction to decline under Article 1251(a) both original and exclusive jurisdiction, and there are a number of cases so holding.

And the cases and the conclusion of this Court that it has jurisdiction, correctly based on the fact that its primary function should be to act as the supreme appellate court and that it is ill-equipped to make the fact findings necessary for original jurisdiction.

Now, its findings are consistent with the dictionary definition of the term exclusive, which is the power to exclude.

Its findings have been recognized by Congress, that is its discretionary interpretation of 1251, so there can't be a question about that.

Now, Louisiana agrees essentially that the district court had jurisdiction over Louisiana.

It agrees that the district court had jurisdiction over the controversy by virtue of Federal question jurisdiction.

Now, where it disagrees is that the district court of Mississippi could determine title to land in Louisiana, but in this respect Louisiana position is inconsistent because it asks this Court to reverse and render.

Certainly the Fifth Circuit could not have had jurisdiction if the district court did not have jurisdiction.

Unknown Speaker: Mr. McCartney, is your position on the jurisdictional point that you're asserting, is that the position of both the private client you represent and also of the State of Mississippi?

Mr. McCartney: It is, Your Honor.

Unknown Speaker: Mississippi acknowledges that the court had jurisdiction over it for purposes of the boundary dispute?

Mr. McCartney: It does, Your Honor.

It entered the fray in the district court and our position is that the District Court of Mississippi, having Federal court, excuse me, Federal question jurisdiction, had the power to decide the Federal question that gave it the jurisdiction, and that Mississippi's position that a hard and fast exception to the discretion rule regarding boundary is not well taken.

I would like to reserve--

Unknown Speaker: Mr. McCartney, before you reserve, what you have just told me is again contrary to what your brief says.

The footnote 14 of your brief says that Mississippi believes that what it said in 1988 as to the jurisdiction of the district court to determine the boundary dispute was correct and it adheres to that position now.

Does it adhere to that now or doesn't it adhere to that now?

Mr. McCartney: --Yes, Your Honor.

Mississippi opposed jurisdiction in this Court.

Mississippi said this Court should defer to the jurisdiction of the Mississippi district court, and it adheres to that position now.

And if I may reserve the rest of my time.

Unknown Speaker: Thank you, Mr. McCartney.

Mr. Keyser, we'll hear from you.

Argument of Gary L. Keyser

Mr. Keyser: Mr. Chief Justice, and may it please the Court:

The facts in this case and the law do not favor the petitioners.

The facts and the law are with Louisiana and the Louisiana residents.

The case is one which ironically we believe now has its origin in the erroneous acts of a map maker some 20 or 30 years ago who put a dotted line on a map somewhere with the geological survey that said indefinite boundary, and it's on the Louisiana bank.

And seeing the indefinite boundary, the petitioners got the idea that they could move across the Mississippi River and claim land which is within the radiating sections in Louisiana patented out by Louisiana to Louisiana riparians.

I have two exhibits I'd like to show you.

The first is Louisiana Exhibit 1, which is a 1970 U.S. Geological Survey map which does indeed have the dotted line showing an indefinite boundary.

Unknown Speaker: Is that a duplicate of something we have in the Appendix?

Mr. Keyser: Yes, Justice O'Connor, that's on page 136.

It's Louisiana Exhibit 1A from the trial court.

The indefinite boundary runs along inland actually of the Louisiana bank.

The island which petitioners were patented in 1888 based on an 1881 survey is a 117-acre island, shown here near the east bank of the river in black.

That island eroded downstream in a south--

Unknown Speaker: Shown in black?

Mr. Keyser: --Yes, sir, right here.

0 [Indicating.]

It's a little bitty figure.

Unknown Speaker: So, with black, with a black outline?

Mr. Keyser: With a black outline, yes, sir.

The island eroded south and southwesterly and eventually moved toward the Louisiana bank.

At the same time the Louisiana bank was being scoured westerly by the river in a slight migration of the river into the Louisiana bank.

Unknown Speaker: Did it ever wash away completely or did this sort of land mass just slowly move?

Mr. Keyser: Our expert calculated that and it's a very difficult thing to see because there are two competing notions about that.

But our expert Hatley Harrison held that in fact the remnants of what were Stack Island some mile or 2 to the east against Mississippi had completely eroded away by the time the Louisiana riparian sections starting rebuilding through the accretionary process.

Unknown Speaker: And was there contrary testimony?

In other words was there evidence on that score from which the trial judge could have gone either way?

Mr. Keyser: No.

No, there was no contrary testimony.

The trial judge simply concluded that 8 miles of accretion from above Lake Providence to below the corner in the reach of the river, thousands of acres, was really no more than the original 117-acre Stack Island, less erosion, plus accretion, but he failed to consider, although all the maps show, that the accretion which filled up the Louisiana bank simply restored the radiating sections which Louisiana patented out of its state land office over 100 years ago.

So the trial judge's theory, like the petitioners', was an island can move laterally across the river and grow and become a part of the bank in Louisiana ergo it's still an island or once was and those remnants belong to the petitioners.

Unknown Speaker: Is there any clear law on the application of the thalweg island exception in an instance in which the original island disappears, as you claim this one did?

Mr. Keyser: First of all, I have never found a case quite like this.

I have never heard of one like this and I have researched diligently trying to find a similar example and never have.

It's not, it's not your usual avulsion case.

The river never left its banks or bed.

It never cut a new bed, never cut through, never left a cutoff loop.

It simply migrated a little bit to the west and then came back to center position again.

It's a unique case in that instance.

Also in this LA-1 we see a frozen thalweg to the east of Stack Island.

Unknown Speaker: Mr. Keyser, I think that word is pronounced thalweg.

I know it has been pronounced thalweg by everybody who has spoken.

I have checked it in a couple of dictionaries.

It's based on the old German word thal, which is the word for a valley, and that's pronounced thal I think, not thal.

Mr. Keyser: You're correct, Mr. Chief Justice, and my friends think I am being uppity when I say that.

[Laughter]

I was here in the number 9 case, the Louisiana tidelands case, and the number 36 case and the number 86 case, and I have seen that word before but I am reluctant to say thalweg.

This is another map exhibit which is for illustrative purposes.

It shows the colors a little bit more vividly.

The river is quite clearly blue, the outline of the 1881 location of the island is in yellow.

And we see now... now this is a 1988 Corps of Engineers map from the flood control and navigation series that they put out every year.

We see that the 1881 location of the island is now occupied by a very large, huge really, island that is midstream in the river in the same location as the 1881 island, yet petitioners continue to claim the accretion along the west bank of the river at Lake Providence.

Now, historically what has happened here, and when I began I said the facts do not favor Mississippi, that is because in 1879 Congress for the first time funded massive river construction projects, being the one here at Lake Providence, at Stack Island and at Plum Point about 100 miles north.

The upshot of that was by 1883, 1884 at the conclusion of the project, the Mississippi River Commission reported to Congress what it had done.

And what it said was, and it attached hydrological data in the form of maps which are in the Appendix attached to Louisiana Exhibit 18A and which are colored to show the Court their importance, the Mississippi River Commission reported to Congress that the east chute channel of the Mississippi River carried the main channel of the river in December of 1881.

It was scouring the Mississippi bank, it was threatening to erode the bank.

The Mississippi River Commission saw as its chief purpose here the object of training the river away from Mississippi to keep it from eroding the bank.

It did that by building a series of dikes out of the north end of Stack Island and connecting to Baleshed Towhead to the north, so that the river was suddenly diverted out of the east chute channel to midstream position.

That occurred by 1883 because of the two maps attached to Louisiana Exhibit 18A--

Unknown Speaker: How was that diversion accomplished?

Mr. Keyser: --They drove dikes into the sand and drove them in a northerly direction and connected them by willow mattresses so that the river could no longer flow directly behind the island.

Unknown Speaker: To block the east channel?

Mr. Keyser: To block the east channel.

It did remain open for a while as a low-water channel, but the main current of the river and the downstream track of navigation was then carried to the west in more of a midstream position, pretty much the way it is today.

In that report the second part of it is that by 1883 that act had been accomplished.

So in December of 1881 you have the main flow of the river on the east side of the island.

Within a few months it had been diverted to the outside, toward the right descending bank, and stayed there for about 20 years before it moved slowly back into that position.

And it stayed to the east of the island until the 1970's, at which time, as you see from the 1988 map, the Corps got more heavily involved in construction projects, built dikes all along the east side and revetments all along the west side, and has captured a substantial amount of sediment to train the river into a center flow position and to keep it from ambulatory movement back and forth between the east and west banks.

The report to Congress is explicit, it's clear, it's plain meaning is what I have just told you.

The district judge disregarded that.

The petitioners expert disregarded it.

He refused to answer questions about it on cross-examination, and he refused to answer other questions about other map exhibits that Louisiana produced.

That report and those maps are the most conclusive pieces of evidence, although we have put in dozens of other maps to show the same story.

The Fifth--

Unknown Speaker: Were you able to authenticate that report in any way other than as an official document as to just what efforts had been put in and what the qualifications of the people on the commission were?

Mr. Keyser: --We didn't get into the history of the Mississippi River Commission.

It was stipulated between counsel that it was an authentic report, that it was a Government document, that it indeed was reported to Congress, and the experts testified.

Louisiana's two experts, Mr. Harrison and Dr. Easterly, testified from it.

Petitioner's expert, Mr. Austin Smith, declined to testify from it.

Unknown Speaker: Well, did he express doubt as to its correctness?

Mr. Keyser: No, his version was that what the language really meant was that the main channel of the river was always to the right of the island and that there was no avulsion in 1882-1883 because the river was always to the right of the island, which is contrary to the plain reading of the report itself, which--

Unknown Speaker: Was... might not the district court have been free to discount the usefulness of the report?

I mean, was he obligated to take it?

You suggest, it seems to me, almost like a stipulation.

Mr. Keyser: --Well, there was no countervailing testimony that the report didn't say what it plainly says except Mr. Smith said his interpretation was that it meant the stream was, the main body of the stream was to the right.

Our experts said it said what it said, and the judge tried to get them to admit maybe it meant something different and they said no, it means what it says.

And that's as simple as it gets.

The petitioners started off their case, now both Louisiana and Mississippi had listed all of their exhibits.

We started with exhibits more at the time of Louisiana's sovereignty and Mississippi's sovereignty, but Mississippi, being the plaintiff in the case, never used those exhibits.

So we responded to their case at trial, didn't put those exhibits on because their theory at trial was the river was subject to two avulsive actions which they said their expert Austin Smith would prove up, and that they occurred sometime around 1912-1913.

Well, when Mr. Smith testified he only testified about one avulsion which he claimed was due to the flooding of 1912-1913 which he concludes happened because he has some tables of river elevations of that year which he said demonstrated a flood which apparently enlarged the chute channel to the east of Stack Island, meaning that the river boundary and the downstream track of navigation or thalweg would have been frozen to the west of the island.

But even Mr. Smith only said it apparently enlarged the chute channel.

And when I showed him maps prior to the 1912-1913 claimed floods, I showed him maps of 1908, 1909, 1911 from the U.S. Geological Survey, that showed that the channel was already occupied with the main channel of the river, the chute channel, he refused to discuss it.

He said the maps were unwholly and that Louisiana must have rigged those maps up or something to that effect.

So we disproved the northerly avulsion which he really didn't even clearly testify to, and as to the southerly avulsion, which would have the boundary going a couple of miles inland 8 or 9 miles downstream, he had no testimony whatsoever.

Then in the Fifth Circuit, after the Fifth Circuit reversed and rendered, the petitioners changed their theory to the time of sovereignty.

Certainly the Fifth Circuit was in error in using the 1881-1882 avulsion caused by the Mississippi River Commission.

The Fifth Circuit should have looked to much earlier periods of time.

In our briefing we have pointed out that in all other periods of time Stack Island didn't exist at the claimed relevant time, the time of sovereignty of either state, or at any later time until right up just prior to the Mississippi River construction program, the cause being in this reach of the river, although the alignment is relatively straight, it's a reach of the river that stores sediments from upstream.

And you can see even now there is substantial amounts of sediment stored.

When these become too large I presume the Corps will allow them to go downstream by removing some dikes and revetments, but this reach of the river has always had a lot of movement of shoals and bars and islands.

So while Stack Island was in existence prior to the Louisiana sovereignty in the 1700's-1800's, it disappeared by 1812, it reappeared in the 1820's, it disappeared by the 1850's and sixties, and it came back in the late 1860's.

It was a small island near the Mississippi shore, but it was cut off from Mississippi by the main channel of the river, the east chute channel, which the Mississippi River Commission sought to move away from the Mississippi bank and thence the construction project.

So Louisiana's position has been that the east chute channel, being avulsively diverted by the Mississippi River Commission project, created a frozen thalweg to be connected at the north and at the south to the active downstream track of navigation or live thalweg, and that was a position of our experts.

They clearly testified to that.

We say that the, at all pertinent times the thalweg was east of the island.

There never was a time favorable to Mississippi.

Unknown Speaker: Well, Mr. Keyser, what is your position if this Court determines that the lower court had no jurisdiction to determine boundaries between the states?

Mr. Keyser: I must reluctantly admit that the district court did have jurisdiction.

I didn't like it.

I told the court that--

Unknown Speaker: Well, we might not agree with you.

Mr. Keyser: --That... if you hold that the district court had no jurisdiction?

Unknown Speaker: Yes.

Mr. Keyser: You must hear the case and decide it yourself.

Unknown Speaker: Well, what about the boundary?

The title dispute?

Mr. Keyser: The boundary must be decided in the first instance because petitioners are claiming riparian sections of land which have historically been in Louisiana in a different land district than the Mississippi land district.

That's the ultimate question, and that's why we intervened, because Mississippi people had sued Louisiana riparians and a state agency on the west bank claiming adverse possession.

Unknown Speaker: What is the basis upon which you conceded that the district court had jurisdiction?

On what theory?

Mr. Keyser: I have only done that recently, and I have looked through the law and find no exception to the district court having jurisdiction.

All the cases I find say that even though I don't like it and even though I say the district court had to predetermine its jurisdiction and thence the outcome of the case before it even heard the first witness, nonetheless as a matter of jurisdictional finality they did have jurisdiction.

Unknown Speaker: Is that because of the presence of third parties or because of the order of this Court, or both?

Mr. Keyser: I would say it's because of the jurisprudence in the orders of this Court declining to take jurisdiction itself, thereby giving the district court the suitable alternative forum, implicit jurisdiction to hear and determine all issues.

Unknown Speaker: I see.

You don't contest that we could have taken original jurisdiction if we had chosen to do so?

Mr. Keyser: No, sir, I moved for it twice.

Unknown Speaker: As long as we didn't take it, you say that was a judgment of ours?

Mr. Keyser: Only that the district court must then be vested with sufficient jurisdiction to hear and determine all issues.

Implicit in that ruling would be that the Court had found that to be the suitable alternative forum beside the Supreme--

Unknown Speaker: Well, I'd say implicit in the ruling is that the judges that voted that way probably thought that, but does it have the force of a judgment of this Court that there is jurisdiction?

Mr. Keyser: --As a practical matter it certainly does.

I don't know as a technical legal matter whether or not it does.

Unknown Speaker: Isn't it at least theoretically possible, maybe this isn't what the majority was actually thinking then, but that the Court might have thought that the title issue could have been resolved without resolving the boundary issue and that the district court was an adequate forum for that purpose?

Mr. Keyser: I don't know how the Court could have reached that conclusion.

Unknown Speaker: Well, lots of times the ownership of land could be in the same party even though he thinks he's in Mississippi when in fact he turns out to be in a different jurisdiction.

I think at least analytically they are, they could be regarded as separate issues.

Maybe not on the facts of this case after you get into it.

Mr. Keyser: Because of the interstate boundary issue I made a rather concerted effort to point out that this case did deal with an interstate boundary, that it involved the Treaty of Paris, that it involved acts of Congress, that it involved statutes of the United States, and I did everything I could to draw the court's attention to that.

Unknown Speaker: I'm not sure any of that would be conclusive on the question whether the boundary issue would also necessarily determine the title issue.

That's all I'm saying.

Maybe it is, I just don't know, understand it well enough.

Mr. Keyser: Well, in our view if the boundary is drawn in its proper place all of the lands at issue remain in Louisiana as they were patented out, thereby the only claim that the Mississippi people would have would be one of adverse possession or acquiescence, and they certainly can't prove either of those.

Unknown Speaker: On the facts of this case, but I suppose it's at least theoretically possible, isn't it, that a Mississippi citizen could acquire land in Louisiana by adverse possession?

Mr. Keyser: I would agree with that.

Unknown Speaker: I suppose it doesn't make a whole lot of difference to the state who owns it, does it, so long as the state has sovereignty over it?

Mr. Keyser: I would agree with that.

Our port commission is faced with the possibility that it no longer has water frontage because of the boundary drawn by petitioner's expert, and the riparian owners from above Lake Providence to below Lake Providence no longer have river frontage and they are cut off somewhere a quarter of a mile inland from the river.

Those are all issues.

Unknown Speaker: And that, of course, and that pertains to the title, not to the boundary?

Mr. Keyser: Yes, sir.

Unknown Speaker: Are you going to address the acquiescence aspect of this case?

Mr. Keyser: I certainly could.

I hadn't intended to.

The greater preponderance of all witness evidence and all documentary evidence is with Louisiana simply because the Louisiana riparians have lived on the Louisiana side of the river and gone to the water's edge since the time of their titles.

We had the very elderly widow of the former speaker of the House of Representatives who lives in Lake Providence down in this area, in fact on LA Exhibit 1, her name is Mrs. Vail Delony and you will see two straight lines drawn out to the water's edge and the name Delony written in there.

Mrs. Delony and her daughter, Mrs. Reed, both testified that from the early part of this century their family has lived there, mined sand and gravel there, hunted there.

They never have seen any Mississippi people there.

And all of the other witnesses I called, and I have to tell you the trial judge didn't like some of my witnesses.

I called the United States Fish and Wildlife field agent who is known all over the United States although he's a relatively young man in his thirties, he has exercised jurisdiction all over the accreted area since he has been assigned to this area and said he never saw any Mississippi people.

He said he wrote all his game violations and took them to Federal court in Louisiana.

Then I called several Louisiana Wildlife and Fisheries people and they said the same thing.

They had grown up there, exercised Louisiana wildlife authority.

They never saw any Mississippi people there, wrote all their violations under Louisiana law and Federal law, and took them all to court in Monroe and Shreveport.

Every witness that we called said that they had never seen any Mississippi people here.

As a practical matter I know that there were people from Mississippi hunting deer out here at different times because there was some testimony to that effect, but it was not generally recognized that they were Mississippi people exercising adverse possession.

Now as to the acquiescence argument there is no testimony or evidence of which I am aware that as a sovereign either state dealt with this area.

Certainly Louisiana never recognized the sovereignty of Mississippi here.

There was not one single witness to say that Mississippi exercised sovereignty here.

We had such colorful witnesses as Jelly Higgins and Horsefly Higgins for the petitioners, who were their main witnesses.

Now, Jelly and Horsefly said they were acts of adverse possession out here, but I didn't think it was good, strong evidence myself and I pointed that out to the court.

And I have to say whenever you have a serious case in Federal court if those are your strongest witnesses you've got a problem.

And that's my view of acquiescence.

Are there any questions?

Thank you.

Unknown Speaker: Thank you, Mr. Keyser.

Mr. McCartney, you have 4 minutes remaining.

Rebuttal of James W. McCartney

Mr. McCartney: First, as the Court can see, this is a case that is highly fact-intensive.

There is dispute.

We dispute what Mr. Keyser has represented to the Court as the facts.

Obviously we can't get into the entire record.

The trial court did.

The nature of the case as such is to validate this Court's exercise of its writ of discretion to let the facts be heard by the trial court.

Secondly, as I pointed out to begin with, Stack Island can be traced as a separate body of land from 1826 to date by maps, aerial photographs, and surveys.

There was a controversy before the trial court regarding the disappearance of the island.

The trial court made a specific fact finding that this island, which has migrated from the Mississippi shore southwesterly to the Louisiana shore, is the same identical island that existed during the 19th century, and that fact finding is fully supported by the record.

So--

Unknown Speaker: What... was there specific testimony on your behalf that the original island had not disappeared and reappeared, but had enjoyed a continuity, a physical continuity throughout the period?

Mr. McCartney: --At the Joint Appendix page 98 and 99 our expert witness so testifies that the island has never disappeared.

It says in place in 1988 and remained in place throughout the entire period and is still there today.

So there was certainly evidence on which the district court could have rendered its fact finding.

And, with respect, we submit that this is not an accretion case at all.

This is a case of an island that has migrated from one point to another.

Migration out of its original location does not constitute disappearance.

We have the same body of land.

We have facts to support that finding.

That finding was not clearly erroneous.

Thank you.

Chief Justice Rehnquist: Thank you, Mr. McCartney.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

South Carolina v. Regan - Oral Argument

Thu, 30 Aug 2012 22:15:48 +0000

Case:

South Carolina v. Regan

Media File:

94orig_19831005-argument

Related Transcript:

94orig_19831005-argument

Transcript:

ORAL ARGUMENT OF HUGER SINKLER, ESQ. ON BEHALF OF THE PLAINTIFF

Chief Justice Warren E. Burger: We will hear arguments first this morning in South Carolina against Secretary Regan.

Mr. Sinkler, you may proceed whenever you are ready.

Huger Sinkler: Mr. Chief Justice, and may it please this Court:

South Carolina this morning responds to the leave granted by this Court to argue that this Court take original jurisdiction to dispose of the case which it seeks to bring against the Secretary of the Treasury.

Since its inception, South Carolina has been joined by perhaps some 27 states, and for that reason, we move before this Court... The Court granted permission to divide argument and I, thus, will yield ten minutes of my argument to the Assistant Attorney General from Texas.

She will stress the financial burdens that result to the states on account of this provision in the law.

The Solicitor General has suggested in his brief... I think it was in a footnote... that since this case so clearly lacks merit that the Court dismiss and grant him the relief.

I think that necessitates comment on the true issues that are involved here.

This case really has a historic background.

In 1894, Congress inacted an Income Tax Law which was broad and widesweeping.

It included a provision taxing the interest on notes and bonds of whatever nature, except those bonds of the United States which, by the terms of their issuance, were exempt from taxation.

That produced the famous litigation of Pollock against Farmers' Loan and Trust Company which was twice heard by this Court.

At all times, it was unanimous that the very nature of the federal system prevented the imposition of the tax on the interest on state bonds.

However, because of its holding with respect to the lack of power to impose an excise tax on interest and dividends and rents, the law was declared... which had been declared unconstitutional by five to four in Pollock, really resulted in the adoption of the 16th Amendment.

Now, from the time of Pollock until 1982, with the enactment of TEFRA, Congress had conceded, although it was done originally by Mr. Cordell Hull as Chairman of the Ways and Means Committee in 1913, the fact that interest on state bonds was immune from taxation, but in TEFRA we see a direct challenge.

And, meanwhile the Court, while never having precisely this question before it, repeatedly said time after time that the doctrine of reciprocal immunity, which was essential to the federal system, resulted in the freedom from taxation of interest on state bonds.

That lasted until 1982 when TEFRA challenges both the meaning of the 16th Amendment, as has been announced by this Court, although technically, I suppose, those pronouncements are dicta.

They were pronounced so many times they seemed to work themselves into the body and tradition of the law.

And, they have further challenged... Must further argue that the 16th Amendment permits this tax.

We don't think it does.

The Solicitor General has urged that this Court should not take jurisdiction of this case despite the fact that the second clause of the second section of Article III of the Constitution specifically grants to this Court original jurisdiction in actions which involve a state and a citizen of another state.

What we are doing here, of course, is to seek an injunction against the Secretary of the Treasurer in the traditional fashion of enjoining an officer of the United States for performing... acting under an unconstitutional statute, and, thus, performing an illegal act.

I think Marbury against Madison got into this Court in the same way.

Unidentified Justice: Mr. Sinkler, can I ask you one question?

Huger Sinkler: Surely.

Unidentified Justice: You have left the merits and are going to the injunction act.

In your view would Congress have the power to pass a statute that said all bonds traded in the interstate market must be in registered form, including those issued by a state, without any taxation as a penalty?

Huger Sinkler: I don't think they do.

I think that is an invasion of the state's right.

I think maybe in that case you might get yourself... Your determination might rest on a balancing of equities as has been traditional where the commerce clause is involved.

Whereas here, where the taxation clause power is involved, what you really have here is a question of reciprocal immunity, one that really goes to the very nature of the federal system.

Unidentified Justice: But, that would be a lesser burden or a greater burden on the state than the one they have now because you can avoid the tax by selling--

Huger Sinkler: I think we meet both burdens, sir.

Unidentified Justice: --You do?

Huger Sinkler: I think we can meet both burdens and show you.

For instance, South Carolina sold $65 million of bonds on September 13 which we will deliver in New York next week.

We normally pay for paying agent services on an issue of $65 million... I think we have had some before and we figure it to be about $85,000.

The cost of paying registered... of issuing registered bonds.

Now, they are not so terribly expensive.

The cost of arranging for their transfers and arranging for checks to go out, we have an estimate from the Morgan Bank, which is our fiscal agent and bond registrar, that the cost of this issue, which has an average life to 11 years and extends to 00, will be $385,000.

South Carolina... which is an additional cost of, oh, I think it is $310,000.

It happens that South Carolina has approximately a debt of about $600 million and the state treasurer has structured that debt on a short-term basis so he will able to come back to the trough more frequently.

Well, if you just... assuming it was $650 million, you really have added costs in the neighborhood of over $3 million.

That is a good deal of money.

Unidentified Justice: Are you saying the federal government may not impose any regulation on the issuance of bonds that imposes any cost on the state?

You say they require to be printed in English and have certain disclosures and the like?

Huger Sinkler: I think what you really do... I don't think the federal government, if we are going to have the traditional federal system, which is espoused really as far back as Weston against the City of Charleston, in which they said at that time that the doctrine of immunities springs from the very union of the states and the national government.

I realize you can also justify that under the Supremacy Act which, I think, several members of this Court have made that statement.

I have no quarrel with that, but certainly as far as the reciprocal immunity which is granted to the states that results from the nature of the compact.

There is no provision in the Constitution of the United States to that effect.

As a matter of fact, the case, of course, went through the South Carolina constitutional court and by a four to three decision the majority said there is nothing in the Constitution of the United States which says we can't do this.

The dissenting judges said the very nature of the system makes it impossible for the state to tax the obligation of the federal government, because to do so... and I thought the interest rate comment was marvelous... even though Congress provide that the money be lent at ten percent, if the states can tax it, the Treasury of the United States will be powerless to borrow.

And, that is... See, the burden takes place, according to Chief Justice Marshall, the very existence of it creates a burden on the contract which has a sensible impact on the interest of the... influence on the contract itself.

And, furthermore, when one government can control the provisions, the actions of another government, then you obviously have that type of governmental interference which I personally believe the federal system precludes.

Unidentified Justice: Of course, the doctrine of intergovernmental immunity kind of reached a high point in the 1870's or 1880's and then some of this Court's cases in the 30's rather drastically cut back on this, especially where states are concerned.

Huger Sinkler: I think you did, but I think you have got good distinction.

Take, for instance, the most famous of all the people who were really affected by this case, Chief Justice Hughes, who in Wilcutts against Bunn, reaffirms and points out that the difference between the imposing of tax on capital gains and on the interest on bonds is that one transaction... The transaction between the state and its lender has been finished and that is a totally new transaction which results in part from the acumen of the person who bought the bonds.

Unidentified Justice: Did that case involve intergovernmental immunities?

Huger Sinkler: He quotes Weston and reaffirms everything that I've I said.

Of course, Governor Hughes started the great debate with his message... As governor with his message to the General Assembly of New York in January of 1910 and that produced the language and the 16th Amendment came into focus.

There was this great debate which was joined in by Senator Bora, by Senator Elihu Root, and President Taft himself, on the basis of the apparent success in persuading the public, the 16th Amendment was adopted.

Hughes twice took a curtain call on the scene.

He was a Justice in the case of Brushaber against Union Pracific, the first case following the adoption of the 16th Amendment, which held that it merely sought to accomplish that which Pollock denied, the right to tax rents, interest, and income.

Hughes, of course, writing Willcutts against Bunns as Chief Justice, reaffirms all of that.

Unidentified Justice: What about federal taxation and the salaries of state employees?

Huger Sinkler: Well, there the taxes paid by the individual employee... It is a nondiscriminatory tax so widespread that it does not affect... This honorable Court has held that it does not affect--

Unidentified Justice: Well, I suppose it might increase the state's cost of its labor force.

Huger Sinkler: --I think it probably might but that is an incidental cost that this Court saw fit to declare--

Unidentified Justice: Suppose the government, instead of speaking about registered bonds, just subjected to income taxation all of the interest on all state bonds?

Huger Sinkler: --Well, if you do that--

Unidentified Justice: And, of course, that tax would be paid by the holders of the bonds.

Huger Sinkler: --Let me suggest to you some of the... The taxes paid by the state itself, the fact that there can be a tax makes the state pay the tax.

Now, when we sold these bonds, we had no choice of taking... of issuing coupon bonds.

That would have been ridiculous.

We couldn't get a market on that.

We obviously had to sell fully registered bonds.

I did provide the proceedings that if this litigation resulted the way I hope it would, we might later issue coupon bonds, but from a practical standpoint, we issued bonds.

I think the difference in cost to the State of South Carolina on a $65 million issue... We paid 8.1.

I think it would run to perhaps 11.

I am comparing South Carolina's AAA credit... IBM is AAA credit.

IBM is obviously more--

Unidentified Justice: So you think South Carolina is paying an increased interest, the equivalent of the tax burden on the holder?

Huger Sinkler: --Yes, we pay it.

We obviously pay.

There is no question about it.

The market would demand otherwise.

People don't buy such state bonds.

They are looking for the net interest cost.

That is all very carefully calculated.

Now, this TEFRA also put in a provision which limited the deduction that banks might take for borrowed money, and I suppose all bank money is borrowed money.

When they came to calculate their income tax, it included 15 % of the tax-exempt interest.

Now, that is not challenged, because I think the Court could levy a tax without... The Congress could levy a tax without any exemptions.

I think that is a totally different situation.

But, immediately after that 15 % went into effect, rates were adjusted by major banks so that they ended up by the issue of paying that additional tax.

It is inevitable.

There is no possible way that the issue can escape the tax.

But, I think even worse, the consequences of this is the consequences of Congress taking over the local affairs of government.

Chief Justice Warren E. Burger: Ms. Voss?

ORAL ARGUMENT OF SUSAN LEE VOSS, ESQ. AS AMICI CURIAE

Susan Lee Voss: Mr. Chief Justice, and may it please the Court:

An immeasurable and heavy financial burden has been put on the key sovereign operations of the states by the enactment of this particular section of TEFRA against a dubious benefit to treasury, enforcing the prevention of tax evasion.

Moreover, the Solicitor General has suggested in his brief that tax exemption of municipal bonds as a matter of constitutional right is a debatable proposition.

My portion of this argument will try to show the financial consequences of the effects of those two propositions and why this appeal to the Court's original jurisdiction is necessary for the protection of the states.

Unidentified Justice: Ms. Voss, there are many things the federal government does by way of congressional or regulatory requirements that end up costing states a lot of money.

So, how does the financial burden alone support your argument?

Susan Lee Voss: This particular financial burden goes to the basic premise in the Constitution of federalism, something which has been guaranteed to the states since constitution law started.

You can trace it back to McCullough versus Maryland if you wanted to.

But, each day this law is in effect... In Texas alone, you have at least one issuer going to market, paying somewhere between $5,000 and $14,000 in registrar fees that they didn't have to pay before a year.

Now, you are talking of each one of 3,395 Texas issuers goes to market one time, about $17 million annually in additional registrar costs.

These are costs that these issuers did not have to bear before.

There are about 47,000 municipal issuers in this country.

And, those registrar costs hit the little issuers a lot harder than they hit the big issuers.

One of the big guys like the University of Texas that doesn't really usually go to market for less than $20 million at a time is going to pay lower registrar fees than some little school district that can barely issue on its tax base maybe $1 million to renovate a 60-year old schoolhouse.

And those figures only represent the registrar fees.

Additional attorney's fee are extra, additional costs of documentation are extra.

Registrar fees do not even include the postage for mailing out the interest checks.

Unidentified Justice: And the income from the oil wells.

Susan Lee Voss: I beg your pardon?

Unidentified Justice: And the income from the oil wells at the University of Texas.

Susan Lee Voss: Well, that is permanent university fund money.

But, we are not just talking about a financial burden alone.

It is a financial burden that is going to help cripple the ability of issuers to perform their governmental functions.

You are talking about a jail.

As many of you probably know, Texas probably has five inmates to a cell that was meant to hold two and is under federal court order to improve conditions.

Unidentified Justice: General Voss, could I ask you,--

Susan Lee Voss: Yes.

Unidentified Justice: --supposing the federal government were to have regulations with the kind of disclosures a borrower has to make when it issues bonds and they say you have to file a registration statement and tell where you are financially solvent and all that sort of thing which is costly to hire accountants to prepare the statement.

Could they require a state issuer to comply with rules of that kind do you think?

Susan Lee Voss: As as a matter of marketing bonds, state issuers presently comply with those sorts of requirements.

Unidentified Justice: No, but assume... Could the federal government compel them to, and, say, could they change those to make them more burdensome without violating their--

Susan Lee Voss: That particular issue has never been challenged as to its constitutionality.

The states have been complying with it as a marketing matter and I have serious questions as to its constitutionality.

Unidentified Justice: --It seems to me your argument would apply to that as well.

You are basically arguing that there is no power in the federal government to impose any burden whatsoever upon a state issuing bonds which is a rather extreme position.

But, that is your position, I take it?

Susan Lee Voss: Yes, sir.

When you have something like the jail renovations which are required to be done and there is no money to do them because you had to replace a school that burned down and you had increased cost of issuance on those bonds... Probably the school burned down because you knew you needed the fire house over there, but you didn't have money for that, because you had more cost of issuance on the sewage treatment plant.

You are talking about serious problems with that.

And, as to the removal of the income tax exemption altogether, you are going to foreclose many issuers from the market place completely.

The only attraction that their paper has in the market place right now is that tax-exempt feature.

Unidentified Justice: Of course, we don't have to decide that in this case, do we, whether or not the federal government has the power to tax the income from municipal bonds?

Susan Lee Voss: No, that is not before you, sir.

South Carolina has made an appropriate call as the real party in interest to the jurisdiction of this Court as constitutionally provided and it is simply inconceivable that an act of Congress could deprive the state of that forum, particularly with the financial burden to our governmental functions that this law has created.

I submit that this is as appropriate case for this Court's original jurisdiction.

Chief Justice Warren E. Burger: Mr. Claiborne.

ORAL ARGUMENT OF LOUIS F. CLAIBORNE, ESQ. ON BEHALF OF THE DEFENDANT

Louis F. Claiborne: Mr. Chief Justice, and may it please the Court:

Let me say straight away, lest the contrary impression has been given by our concentration on jurisdictional obstacles to this Court entertaining the case, that we are not in the least shy in reaching the merits.

If the Court concludes, contrary to our submission, that the Anti-Injunction Act is not a barrier, we are not reluctant to meet South Carolina's constitutional challenge.

And, while this Court is not required to hear the case, the Secretary is content that the merits be decided here.

Indeed, we submit, as has been said, that the constitutionality of the statute is sufficiently clear that the Court could properly dispose of the case at this stage on this motion for leave to file.

After all, what is... And, all that is involved here is an indirect... is only indirect requirement that all obligations which extend for more than a year, no matter by whom issued, whether by the United States, by corporations, by states and municipalities, if issued to the general public, shall be in registered form.

Now, this is in no sense discriminatory.

It is only the mildest intrusion on states' sovereignty.

It seems to us far less so than the requirements sustained, for instance, for withholding income tax from state employees.

Unidentified Justice: What is the government's interest, Mr. Claiborne?

Louis F. Claiborne: Congress determined, on the basis of elaborate hearings and evidence before it, that there are bonds where one common means, device, for avoiding gift tax, estate tax, capital gains tax on the exchange of those bonds, that is was moreover a haven for illegally obtained monies and finally its right to add that theft and interstate transportation of stolen securities is facilitated when bonds are in bearer rather than registered form.

Those considerations, all of which bear on plain powers of Congress inferred by Article I, fully justify the federal interest in enacting this statute.

Unidentified Justice: Since I am old enough to remember when registered bonds were rather frequently encountered, they disappeared over the years.

Certainly there can't be much federal government interest in getting to the tax as such.

Louis F. Claiborne: Quite candidly, Justice Blackmun, this is not a revenue agency measure.

It has a revenue aspect.

It is an exercise of the taxing power in that it is necessary and proper means to attempt to diminish tax evasion and tax avoidance.

In that sense, it is an exercise of the taxing power.

But, the object of the exercise is not to raise additional taxes.

Unidentified Justice: Except that the government... the Congress retreat from the withholding of interest and dividends that makes this argument sound rather hollow, doesn't it?

Louis F. Claiborne: It may be that there is some tension between those two contradictory actions of the Congress, but we are here defending that portion of the legislation which did pass and which, to some degree at least, avoids what is otherwise determined to be a common way of avoiding, as I say, both gift and estate taxes and also capital gains taxes.

Now, the burden imposed on the states as a result of this is surely less than the burden imposed by many other federal regulations, including the one I have just mentioned, the requirement of withholding.

And, as to the costs, the additional costs imposed on the states, we have not attempted to produce counter affidavits, but it is fair to surmise that there would be offsetting economies in the area of insurance and handling, and, of course, the statute does not require that the bonds, though issued in registered form, be issued through certificates.

Unidentified Justice: If the burden is a factual matter, you are suggesting that we ought to surmise that there would be offsetting benefits really doesn't dispense with the necessity of some sort of an inquiry if a there is a factual... if the factual question of burden should play a part in deciding the case.

Louis F. Claiborne: Quite so, Justice Rehnquist, though I take Justice O'Connor's point that the exact degree of the burden is not constitutionally relevant so long as there is a plain exercise of the power Congress under Article I and even, accepting the allegations of the plaintiff states, no impermissible burden imposed on the power of the State of South Carolina or any other to raise revenues.

This is simply a question of what form of revenue shall be raised.

It is not an attempt to tax the interest on all state and municipal bonds.

And, of course, it is in no sense a prohibition or inhibition on the states' power to raise monies.

We would answer Justice Stevens' question, whether if this statute were not in the form of a tax, but was simply a uniform requirement imposed on all issuers of all obligations of a certain character, that they be in registered form.

We would defend that statute in the same way that we do this one.

Unidentified Justice: Mr. Claiborne, may I ask, if our decision is to grant the motion for leave to file, would it be necessary to appoint a special master?

Louis F. Claiborne: We would say not and we would say not for the reasons I have suggested in invoking Justice O'Connor's comment.

It may be that the Court will feel that the degree of the burden, as Justice Rehnquist suggests, is a matter which... and the question of whether there are, indeed, offsetting economies, is one that appropriately requires the hearing of evidence, in which event a master--

Unidentified Justice: But, that would be the only inquiry that need be made?

Louis F. Claiborne: --As I see it, Justice Brennan.

That is the only potential question that a master might be able to take evidence and help this Court toward its--

Unidentified Justice: Mr. Claiborne, does the federal government have the authority to withdraw altogether the tax exemption on income from state and municipal bonds?

Louis F. Claiborne: --Justice Powell, we would say yes.

Unidentified Justice: The government does have the authority?

Louis F. Claiborne: We so allege.

Unidentified Justice: Yes.

Louis F. Claiborne: We do not think it is necessary for the Court to reach that question in this case.

Unidentified Justice: But, is there a limiting principle, and, if so, where is it?

Louis F. Claiborne: Well, if contrary to our position, the United States cannot deny exemption to state and municipal obligations altogether, then there must be a limit.

We would say that this doesn't approach that limit since it doesn't deny the exemption to all registered bonds and merely requires that in order to earn the exemptions the bonds be issued in that in that form.

Unidentified Justice: But, that is a matter--

Louis F. Claiborne: Which is a traditional form.

It is not an exceptional requirement.

Unidentified Justice: --Could the federal government do what it has done to the rest of the public and that is start with a very low income tax on state and municipal securities and gradually move it up?

Louis F. Claiborne: Justice Powell, I haven't had an opportunity to consider that question.

I would suppose that the power to tax when abused amounts to destroying the states'... how to raise revenue, but this Court has said we sit here to assure that that limit is not reached.

What that limit is--

Unidentified Justice: The power to tax is not limited by the 10th Amendment?

Louis F. Claiborne: --The power to tax may be limited, but it is not eliminated by the 10th Amendment.

Unidentified Justice: Mr. Claiborne, you don't concede that this is a tax on the state, do you?

It is a tax on the bond holders.

Louis F. Claiborne: It is a tax on the bond interest.

I am assuming, for the purpose of answering Justice Powell, that the state's immunity does run to the bond holder, otherwise, there is no question of a limitation.

Now, we have invoked jurisdictional barriers to this Court's entertaining the case and we have done so because we deemed it our duty to bring to the Court's attention what seemed to us plain obstacles to reaching the merits in this case.

It is principle that no court should decide that which it lacks jurisdiction to decide or that it ought not be decided prematurely is a principle of more importance than the result in any given case.

It is important for the maintenance of the Court system.

And, in this instance, it is important for the government's interest.

It is familiar that few things are more salutary to our tax system than the rule embodied in statute for over a hundred years that no suit will lie to enjoin the collection of taxes.

And, indeed, most states... I don't know whether it be true or not with respect to South Carolina and Texas, but it is the general rule in most states that they have a light rule with the respect to enjoining of the collection of their own taxes.

Unidentified Justice: Mr. Claiborne, is your position about the power of Congress to limit the Court's jurisdiction somewhat contrary to Marbury versus Madison?

Louis F. Claiborne: We, Justice O'Connor, do not view it as a contradiction with the dictum in Marbury versus Madison because it seems to us that this is simply a procedural limitation on when this Court, as any other court, may entertain an action of this kind.

It is common ground, I take it, that a statute of limitations governs this Court in the exercise of its original jurisdiction as it governs every other court.

Unidentified Justice: Can the Congress limit the remedies that this Court can provide in the exercise of its jurisdiction, its original jurisdiction?

Louis F. Claiborne: We would say, yes, Justice O'Connor, that at least so long as the rule is uniform and non-discriminatory against the Court and it is simply a rule of procedure which announces when an injunction is appropriate.

For instance--

Unidentified Justice: By that argument, can Congress limit the term in which this Court can sit or establish filing fees that would determine what cases could be taken?

Louis F. Claiborne: --Not what cases could be taken in terms of classes of cases.

My impression is that Congress does set the tone of this Court by statute.

But, I assume there are limits there.

I don't suppose the Congress could say this Court shall not sit for two years.

I assume, on the other hand, that it is permissible, as is present law, that the Congress may say that the Court shall begin its new term on the first Monday in October.

Unidentified Justice: If you were correct on the jurisdictional point, is there any way at all that South Carolina could get a hearing on its question in any court?

Louis F. Claiborne: It is not we who are preventing South Carolina from testing the issue by issuing their bonds, albeit it may be that those bonds may have to be issued in order to find purchasers at an abnormally high rate of interest.

But, if they wish to press the matter, that is obviously an available way in which it can be done.

It need not be a large issue.

Unidentified Justice: Well, then, the purchaser himself would have to file a suit, not South Carolina.

Louis F. Claiborne: Indeed.

But, there is no bar to the purchaser either challenging the deficiency in the Tax Court if he has failed to pay his interest on that issue of the bonds he holds or by refund suit in the District Court or the Claims Court.

But, whether or not there will, at the end of the day's practical matter, be an occasion to test the constitutionality of this statute is no reason why no other court can presently entertain this suit.

This Court ought to be driven to take jurisdiction; that is, it seems to us, entirely backwards.

Congress has, in the interest of sparing this Court's burdened docket, given concurrent jurisdiction in a case of this kind to the District Courts and what South Carolina would suggest is that because the anti-injunction statute bars the District Court from entertaining the suit, it out to be bounced back to this Court, the Court of all Courts, which ought to be less hospitable to litigation than the District Courts whose primary role is to entertain original cases.

Unidentified Justice: Well, that goes to the proper use of the discretion of this Court, whether to accept it or not, don't you think?

You are arguing instead that this Court cannot accept it.

Louis F. Claiborne: Justice O'Connor, I argue both.

I say that the legislative bar imposed by the Anti-Injunction Act, just like the legislative bar imposed by statute of limitations, just like the legislative bar imposed by the Norris-LaGuardia Act which, in turn, supplied to all the courts of the United States, which this is one, does apply here, and, hence, if it prevents the District Court from hearing the case, likewise prevents this Court from doing so.

This Court, however, may choose not to determine that issue and may, as a matter of its own discretion with an eye to the congressional policy, determine that it is inappropriate for this Court to do the business which other courts have been prevented from doing in obedience to a legislative policy of such longstanding and with such obvious salutary reasons behind it.

And, therefore, as a matter of discretion, if not as a matter of necessity, this Court ought to decline to entertain the action.

Unidentified Justice: Mr. Claiborne, have you considered the case of Allen against the Regents of the University of Georgia in connection with your argument, whether that isn't a response that you ought to deal with?

Louis F. Claiborne: Justice Stevens, I am aware of that case and it is very relevant to the present case.

I take it, however, that the way in which it was dealt with by this Court's opinion in the Bob Jones case indicates that in the Court's view it is no longer good law any more than the case on which it was based, the Beechnut case which had, in the Court's terms, eroded, if not scuttled, the Anti-Injunction Act.

In Allen, which was a five to three decision on this point, the Court felt constrained to allow, not as an original suit, to concede that the anti-injunction action there did not bar a suit to challenge the requirement that the University collect amusement tax on tickets sold at football games.

And, that may be very comparable to this case.

But, it does seem to us that that was a circumvention of the anti-injunction statute and, more importantly, it seems to us that the Court has so treated in its now current opinion in Bob Jones University versus Simon, and, indeed, in the companion case.

The argument the other way was put as eloquently as could be in the Americans United case by the dissenting opinion of Justice Blackmun and... But, that view did not prevail and it seems to us that that view is precisely the view of what had been embraced by the Court in the Allen case.

Let me say one final thing with respect to the question of Marbury versus Madison and our argument seeming in contradiction with it.

Marbury versus Madison, of course, holds that the Congress cannot add to the Court's original jurisdiction, and, indeed, an argument could be made that, therefore, invoking the Declaratory Judgment Act here would be adding to the jurisdiction of this Court in some sense.

We would not make that argument.

And, in the same vein, we would not hear say that the anti-injunction action, statute, takes away from the Court's jurisdiction.

It simply instructs all courts of the United States when they may hear a controversy, not what controversies they may hear.

And, it cannot be different, whether the rule is that it is too late to hear it, as in the case of the statute of limitations, or too soon to hear it.

Unidentified Justice: Mr. Claiborne, how could the Court ever hear on appeal a case to which South Carolina was a party in connection with this task if we can't hear it here?

Louis F. Claiborne: There could be no such case in which South Carolina was plaintiff, but that is often true.

The reason South Carolina--

Unidentified Justice: Well, you are then saying that South Carolina could never have an adjudication in this Court at its instance.

Louis F. Claiborne: --Well, with respect to this particular issue, I think that is so.

South Carolina, of course, need not sit and tarry on the sidelines when the taxpayer files his refund suit.

Unidentified Justice: If the taxpayer ever does.

As a taxpayer he is going to be getting higher interest rates, what has he got at stake?

Louis F. Claiborne: Well, he would just as soon pocket all that higher interest rate rather than pay half of it to the Treasury.

Unidentified Justice: Well, I know, but he has to hire a lawyer and he is not getting any less out of his bonds than he ever did.

Only South Carolina is getting less out of its bonds.

Louis F. Claiborne: Well, it may be, and this is precisely the argument that Justice Blackmun made in Americans United, that such a suit might never come about because the organization, among other things, might change its activity or because the contributor wouldn't find it worthwhile hiring a lawyer and going through the cost and delays of filing a suit to which the Court said that is no reason to break the rule of the anti-injunction statute.

Unidentified Justice: Well, the state is a party here.

That wasn't involved in the Bob Jones case.

Louis F. Claiborne: I appreciate that the state has a claim and that the state is different from an ordinary party.

Of course, with respect to ordinary taxpayers, it must happen every day; that people who would engage in a certain commercial transaction, if they were assured of the tax consequences, but not being able to obtain a declaration from a court in advance and not being able to obtain a favorable revenue ruling, simply demur and do not engage in that transaction and the matter is never tested judicially.

That is no reason to allow an advance declaratory or injunctive action.

And, it seems to us, the same reasoning must apply in this case.

After all, the original jurisdiction of this Court was afforded to states in order to available them of a forum which was thought equal to their sovereign dignity.

But, it was not a forum that was meant to be more open or more hospitable than the other forum equally available to the states.

Unidentified Justice: Is there now a withholding on interest on bonds issued by private issuers?

Louis F. Claiborne: My impression is that that statute was repealed and is not presently the law.

Unidentified Justice: So that South Carolina, if it... would be under no obligation now to file any withholding statements or to report to the government how much interest it was paying to people?

Louis F. Claiborne: I think not.

One final thing on that score.

The most recent amicus brief filed, and I am not confident whether the Court has granted leave to file it, but suggests that the alternative to this statute is a requirement that the issuer's paying agent report to whom the bearer bonds have been delivered, keep records of any payments of interest and thereby furnish a trail for the federal Revenue officers to satisfy themselves that there has been no attempted avoidance or evasion of tax.

I am frankly baffled about what is different about conceding that those requirements would be proper and challenging this more straightforward requirement that the bonds be issued in registered form as an issue.

We submit that the Court ought not grant leave to file because, as a matter of the anti-injunction statute applicable here as elsewhere, the Court cannot entertain the suit.

It should not--

Unidentified Justice: Mr. Claiborne--

Louis F. Claiborne: --I am sorry.

Unidentified Justice: --Finish your sentence.

Louis F. Claiborne: But that if the merits are appropriately reached, they are sufficiently clear that the suit should be dismissed at this stage.

Unidentified Justice: Mr. Claiborne, I just wanted to go back for a moment to the Allen case again and be sure I understand your submission, because as I glance again at the opinion, the Court did, in that case, rely to some extent on the fact that you... a state had interest involved, the University of Georgia, the Board of Regents of the University of Georgia was speaking on behalf of the state, and to the extent that you rely on Bob Jones as in effect repudiating the rationale of that case, it really couldn't repudiate that aspect of the case.

So, maybe it at least survived when the person seeking to bring the litigation is the state as opposed to a private university or something like that.

Louis F. Claiborne: Well, I perhaps missed the passage Your Honor refers to in the Allen case.

I had not appreciated that the Court felt that because it was state rather than an ordinary taxpayer the anti-injunction statute prohibition ought to be relaxed.

Unidentified Justice: That was the fact though in the case.

Louis F. Claiborne: It was indeed.

Unidentified Justice: And, I may read too much into it.

It isn't as clear as it might be.

I am not suggesting you misread it.

But, that is really your response to the case, to that case is almost exclusively that Bob Jones has undermined it?

Louis F. Claiborne: Well, that case was wrongly decided as Bob Jones indicates.

Unidentified Justice: The reasoning of Allen is totally inconsistent with the reasoning of Bob Jones, isn't it?

Louis F. Claiborne: Well, exactly so, Justice Rehnquist.

I cannot reconcile them and I don't think this Court attempted to do so in Simon.

But, the Court clearly repudiated the case on which Allen is in turn relying and mentioned Allen as simply following in that erroneous view.

And, while the case is not in terms overruled, I take it its holdings have been effectively eroded I submit.

Chief Justice Warren E. Burger: Do you have anything further?

REBUTTAL ARGUMENT OF HUGER SINKLER, ESQ. ON BEHALF OF THE PLAINTIFF

Huger Sinkler: Mr. Chief Justice, if it please the Court:

I would like to suggest to the Court the consequences of permitting the national government to inject itself into the issuance of state bonds.

I am talking about state bonds issued for state purposes.

I am not talking about industrial revenue or those type of bonds.

If the Congress can tell South Carolina it has got to issue revenue bonds, then it can tell South Carolina that it can only issue bonds of a certain kind or if it issues those bonds, it must issue a different kind of bond.

You are really going to move the seat of government from the local capitals to Washington, because if you just look at the Internal Revenue Act, Section 103 was about two lines until they started this sort of esoteric type of borrowing.

You now find 15 pages and hundreds of pages of regulations.

That is what you are going to have if you once let the camel put his nose under the tent and tell states when they should or should not issue bonds or how they should issue bonds.

I am talking about state bonds for state public purposes, Your Honors.

Unidentified Justice: Mr. Sinkler, may I ask... I don't think you have suggested a response to the government's argument.

The Tax Injunction Act bars this Court's jurisdiction of this suit.

Huger Sinkler: Excuse me, sir?

Unidentified Justice: I don't think you have addressed the government's argument, have you, that the Tax Injunction Act bars this Court's jurisdiction of this suit?

Huger Sinkler: Well, in the first place, Your Honor, I think that this case involves something a great deal more than a tax.

This is referred to in the joint committee reports as a sanction, not a tax, this provision.

But, this is a matter where this Court should take jurisdiction, because this case really involves the right of the national government to impose its will upon the governments of the states.

It is a fundamental question.

Also, he has boldly announced... I didn't think he was going to boldly announced, I thought he would try to get away from it... that the 16th Amendment prevents federal government to tax state bonds which overrules certainly the dicta of this Court for 60 years.

Now, Mr. Sinkler, if we do grant your motion for leave to file, should we appoint a special master?

Not at all, sir.

The facts are here, the facts are here.

The basic question is intrusion.

Unidentified Justice: Well, what if we agree with you?

What should we do at this juncture?

We haven't granted leave to file yet.

Huger Sinkler: I think you ought to let us file our motion.

Unidentified Justice: Then what?

Huger Sinkler: And fight for the briefs and further argument I would assume.

Unidentified Justice: You mean you have some arguments on the merits you haven't presented now?

Huger Sinkler: I think there are a considerable number of arguments.

I think this Court would find itself interested in the history of the whole problem, because case really goes--

Unidentified Justice: But, if you are going to do that, why wouldn't you want the opportunity to support some of your factual obligations about the burdens on the state and maybe the federal government would want to--

Huger Sinkler: --I would have no objection to that.

Unidentified Justice: --have testimony with respect to what kind of a basis there is for requiring registered bonds.

Huger Sinkler: We certainly would have no objection to it, Your Honor.

There happens to be about a half trillion dollars of coupon bonds outstanding now that are not covered by this thing.

Unidentified Justice: Yes.

Huger Sinkler: So that the result the government seeks is not going to come about probably for a great many years.

Unidentified Justice: Mr. Sinkler, you have asked for a preliminary injunction, I thought.

Huger Sinkler: I was denied that, Your Honor.

Unidentified Justice: So that is out of the case?

Huger Sinkler: I was denied that.

I didn't know anything about appealing.

Unidentified Justice: You can renew the motion right now, I suppose.

[Laughter]

You will take it with or without a master, right?

If we take jurisdiction, you don't care whether there is a master or not?

Huger Sinkler: That is right, sir.

Chief Justice Warren E. Burger: Thank you, counsel.

The case is submitted.

We will hear arguments next in Russello against the United States.

Featured:

Texas v. New Mexico - Oral Argument

Wed, 18 Feb 2009 07:11:15 +0000

Case:

Texas v. New Mexico

Media File:

65orig_19830330-argument.mp3

Related Transcript:

65orig_19830330-argument_transcript.xml

Transcript:

ORAL ARGUMENT OF R. LAMBETH TOWNSEND, ESQ. ON BEHALF OF PLAINTIFF

Chief Justice Burger: We will hear arguments first this morning in the original jurisdiction case, the State of Texas against the State of New Mexico.

Mr. Townsend, you may proceed whenever you are ready.

Mr. Townsend: Mr. Chief Justice and may it please the Court, this is a suit to enforce the Pecos River Compact.

Texas and New Mexico intended the Compact to equitably apportion the waters of the Pecos River between the states.

The Compact contemplates continuing administration of the Pecos River in conformity with the terms of the Compact.

The Compact imposes upon New Mexico, the upstream state, the obligation not to deplete by man's activities the state line flow below that available to Texas under the 1947 condition.

The controversy between the states as to the meaning of the 1947 condition precipitated this lawsuit.

The Special Master rejected the conflicting contentions of the states concerning the 1947 condition and defined the 1947 condition in his 1979 report.

His 1979 report was confirmed in all respects and his definition of the 1947 condition was approved.

Since that time, we have been attempting to translate the definition of the 1947 condition into water quantities to provide a numerical standard by which compliance can be measured.

The states disagree as to the procedure to implement the definition of the 1947 condition.

As a result, numerous hearings have been held and the Master has issued his report and recommendations.

The Master has recommended that the New Mexico motion to dismiss the suit be denied, that the Texas motion to substitute the double mass analysis for the river routing as the accounting procedure be denied--

Unidentified Justice: But without prejudice to the--

Mr. Townsend: --Without prejudice for further consideration at the Commission.

Also, he recommended that the United States representative on the Pecos Commission or some third party be vested with the power to participate in Commission deliberations and to vote when the states are not able to agree.

He then recommended that the matter should be returned to the Commission for the performance by it of its duties and that the Court retain jurisdiction.

Unidentified Justice: --Mr. Townsend, do you think the Master rejected Texas' motion to use the double mass analysis on the merits, or did he just decide that it shouldn't be decided until other issues are resolved?

Mr. Townsend: I do not believe that he rejected the double mass on its merits.

Unidentified Justice: The language is unclear, is it not?

Mr. Townsend: It's... the Master found the double mass to be an accounting procedure useful in the inflow-outflow method.

However, he was concerned about some language that the engineer advisors to the Compact negotiators used in their report, and based on their statement the allocation shouldn't be based on a straight line he felt it was not proper for him to use the double mass.

Texas contends that Texas has addressed the concerns of the engineer advisors and that double mass is based upon a curvolinear basis as opposed to straight-line percentage.

Texas believes that the Master has not rejected the double mass on its merits.

He... there are not sufficient findings in his report to reach that conclusion.

The primary position of Texas is that this suit not be dismissed and that the Court retain jurisdiction so that the disputes between the states may be resolved by whatever means the Court deems appropriate.

If the suit is dismissed, Texas' only alternative is to take... to try to take steps to institute an equitable apportionment of the waters of the Pecos River between the states.

However, Article XIV of the Compact provides that it takes the action of the legislatures of both states to terminate the Compact.

So this Compact provision may prevent Texas from seeking the remedy of equitable apportionment.

However, Texas believes that this Court has jurisdiction to continue the suit to a complete resolve of the disputes concerning the Compact.

Texas accepted the Master's recommendation that a tie-breaker vote be placed upon the Commission.

This was not a Texas idea.

Texas has never argued this, but Texas accepted that as a practical solution to an ongoing problem.

Because this is not a Texas idea, we prefer to rely upon the argument of the Master contained in his report for support of that recommendation.

Texas would like to move to its alternative exceptions in the event the Court does not accept the Master's recommendation that a tie-breaker vote be placed upon the Commission.

Unidentified Justice: In other words, you feel we have the power to impose that tie-breaker proposition, even though this is a compact between states?

Mr. Townsend: Yes, Your Honor.

We feel that you do have the power to do that because it would carry out the express intent and purpose of the Compact, and those primary purposes were to provide an equitable apportionment of the use of the waters, and to remove the causes of present and future controversies.

Unidentified Justice: What is the basic trouble with the Commission?

Why can't the states' representatives agree?

Mr. Townsend: As the Master has found, the good faith differences as far as engineering judgments as to the procedure to implement or to determine whether or not compliance with the Compact is continuing.

Unidentified Justice: Certainly the Compact is deficient, isn't it, in this respect?

Mr. Townsend: It's deficient.

This particular compact, like many other compacts, provides for a unanimous vote, and there are no mechanisms to resolve impasses when the commissioners cannot agree.

Unidentified Justice: So the... either you appoint a tie-breaker or you make the determination yourself that the Commission should make.

Mr. Townsend: Your Honor, I believe that the Court--

Unidentified Justice: That's your second suggestion, isn't it?

Mr. Townsend: --Our second suggestion is that the Court retain jurisdiction and as--

Unidentified Justice: And proceed to determine the--

Mr. Townsend: --Whether or not New Mexico has fulfilled its obligations.

That necessarily requires--

Unidentified Justice: --And to do that despite the fact that the Compact calls for that decision to be made by the Commission?

Mr. Townsend: --The Commission is granted the power to make certain factfindings concerning the obligations.

Unidentified Justice: But you think we have the authority to take the place of the Commission in that respect?

Mr. Townsend: Yes, Your Honor, because--

Unidentified Justice: Just like we have the authority to appoint a tie-breaker, you think.

Mr. Townsend: --Well, I think it's within this Court's jurisdiction to fashion remedies to resolve the dispute.

Unidentified Justice: Yes.

All right.

Well, where is... what's the source of our authority to appoint a tie-breaker?

It's not the compact itself by construction, is it?

Mr. Townsend: It's not... you're right--

Unidentified Justice: You can't construe the compact as authorizing?

Mr. Townsend: --Not any specific terms other than--

Unidentified Justice: Well, then, what do you think is the source of our authority to appoint a tie-breaker?

Mr. Townsend: --According to the Master, it's your equitable powers to do the essence of equity, is to do equity and fashion a mode.

Unidentified Justice: Well, he cited nothing to support that.

Do you have anything to suggest?

Mr. Townsend: The only other thing that I have to suggest that is the case of Virginia versus West Virginia, which has been cited by the parties for the proposition that the Court can enforce its judgments even though that may require or involve state governmental instrumentalities.

Unidentified Justice: And you don't think that's different in the case of... don't you think that's different where the states themselves have entered into a compact?

If this had just been a dispute between the states, I could see the merit in your argument, but is that true when there's a compact that the states have entered into?

Mr. Townsend: Well, in Virginia versus West Virginia there was a compact, and the court, in reaching its conclusion, held that the congressional power to consent to agreements between the states necessarily implied the congressional power to legislate an enforcement of that compact.

But the court determined that the fact that Congress can legislate a solution does not prevent the court from exercising its jurisdiction under Article III to resolve a controversy between the states.

Unidentified Justice: When you strip the form away from this idea of a tie-breaker, wouldn't the tie-breaker in effect be a super-special master who would merely advise this Court in which way to break the tie?

Mr. Townsend: I would envision the tie-breaker to be an ongoing participant in the Commission.

Unidentified Justice: Well, then it would be contrary to Vermont against New York and to other cases from this Court.

Mr. Townsend: If he's viewed as an arbiter, yes.

Unidentified Justice: As a super-special master particularly with--

Mr. Townsend: Exactly.

Unidentified Justice: --Certainly then it would be outside of our decisions entirely.

Mr. Townsend: I agree.

I believe the Master's idea is a novel one and we are not necessarily--

Unidentified Justice: Don't we have to declare the compact unenforceable, non-enforceable?

Mr. Townsend: --To do--

Unidentified Justice: I don't see how we can act under the compact.

If you get rid of the compact, then I could understand, but to say that we are a tie-breaker under the compact to me is not quite correct, because it's not mentioned in the compact.

Where would you find the authority to... where would you find the authority to, if we didn't appoint a tie-breaker, to go ahead and exercise the authority of the Commission?

Mr. Townsend: --Well, I believe that it's a controversy between the states, be it, even though the Compact is involved, is within the Court's jurisdiction under Article III, controversies between the states.

Texas has alleged that New Mexico has violated the Compact.

In order to determine whether or not New Mexico has violated the Compact, there must be an implementation of the Master's definition of the '47 condition to create the numerical standard by which compliance can be measured.

Unidentified Justice: Well, why would this be much different... why is what Texas is asking much different than saying there is a dispute between New Mexico and Texas over the apportionment of water and just like if you're litigating that without a compact you would look at the boundary that Congress has established between Texas and New Mexico to decide, you know, where the Pecos flows from New Mexico into Texas?

Here, in addition, you've got another statute of Congress, a compact, which says something about the water rights in the states.

Why couldn't the Master simply treat that the same way he does the boundary statute and say we've got two Federal statutes here and we've got to work with them?

Mr. Townsend: I believe that he can, and that has been our... that's the argument of our alternative exceptions, that the determination of the measure is necessary in the inquiry of has there been a violation of the Compact, and in Texas' opinion that is a judicial inquiry, a judicial function and was stated in Prentiss versus Atlantic Coast Lines, 211 U.S. 210, a 1908 case.

We have not cited that, but in that case it states that a judicial inquiry investigates, declares, and enforces liabilities based upon past or present facts and under existing law.

And I believe that Texas contends that that is the situation with this law suit, that the Compact could have been written without a Commission to make a factfinding, and it would have been... the duty would have been upon the states to do their own accounting to see that there was compliance, and if the states felt like there was non-compliance then its remedy is exactly what it is today under the Compact.

Unidentified Justice: If one state accuses the other state of violating the compact, the only way you can get redress is for the other state to admit they did wrong.

Is that what the Compact says?

Mr. Townsend: Well, Your Honor, I think it would also encompass us proving that the other state did wrong.

The Compact provides that the findings of the Commission are not conclusive in any court.

It specifically provides that, so the Compact negotiators were anticipating court action to enforce the Compact.

There are no enforcement powers in the Pecos River Commission as enforcement powers are in the usual range of federal administrative agencies and others.

Unidentified Justice: Well, is there anything more to it than verbiage about a tie-breaker?

Suppose it said that I just will decide this as the Master and he had not said a tie-breaker.

Mr. Townsend: We have been requesting the Master to do exactly that, Your Honor.

Unidentified Justice: That's what I thought.

Mr. Townsend: And we have argued that the Court should make that decision, that it can make that decision, but we accepted his recommendation because it seemed to be a practical solution.

The... Texas is, as I said--

Unidentified Justice: May I ask you a question right here?

Mr. Townsend: --Yes, Your Honor.

Unidentified Justice: Is it correct that what the tie-breaker would do would be to resolve disputes on some of these underlying findings, how much water was available in 1947 and so forth?

Is there any issue that you would submit to the tie-breaker that the Master could not himself decide if he didn't suggest that he wasn't... didn't have the expertise to do so?

He has this rather strange paragraph in his opinion, that it's an awfully tough case and he doesn't have the expertise to decide it.

Mr. Townsend: That's right, Your Honor.

Texas believes that the Master can make any of the decisions necessary in determining whether or not the Compact has been violated.

Unidentified Justice: It would seem to me that both sides really are in agreement on that, if I'm not mistaken.

The only person who's balking is the Master.

Mr. Townsend: It appears to be, Your Honor.

That's the case.

The United States has--

Unidentified Justice: The United States says the same thing.

Mr. Townsend: --contends that this Court has jurisdiction to continue the law suit and to make all necessary determinations in that suit.

Unidentified Justice: How many days has he actually spent in hearings on this case since it was last here?

Mr. Townsend: Last March we had approximately two weeks of hearings and I became involved in the suit in 1981 and we have probably had a total of 15 days of hearing.

Unidentified Justice: And during those hearings have you... have they been spent receiving evidence or has a lot of the time been devoted to negotiation and argument?

Mr. Townsend: The last two weeks... the two-week period in last March was receiving evidence, and the evidence was that... presented... Texas presented the double mass analysis as the accounting procedure and then it submitted evidence as an alterative a river routing procedure that it felt, believed to be an accurate procedure that would accurately depict that definition.

Unidentified Justice: You didn't rest exclusively on your double mass analysis, as I understood it.

You had an alternative theory of how to figure out the numbers, don't you?

Mr. Townsend: We had an alternative theory, and that's the double mass.

Unidentified Justice: And that... evidence pertaining to that is in the record, but there's no resolution--

Mr. Townsend: It's in the record.

No resolution.

We were anticipating a resolution of those issues in the report, but the Master has taken a different tack.

Unidentified Justice: --Those hearings were pursuant to a pre-trial order?

Mr. Townsend: Those hearings were pursuant not to the original pre-trial order.

Those hearings were pursuant to an order that was issued, I believe, in December of '81 and the hearings were in March of '82.

Unidentified Justice: Mr. Townsend, the Compact itself, in Article VI seems to indicate that unless and until a more feasible method is devised and adopted by the Commission that the inflow-outflow method will be used.

Would it be your position that if the Court were to direct the Master to proceed, that notwithstanding that clear provision of the Compact, that some other method should be considered?

Mr. Townsend: Your Honor, the double mass analysis is an inflow-outflow method.

It is an accounting procedure that can be used in--

Unidentified Justice: Yes, except it says the method as described in the report of the engineering advisory committee will be used.

Mr. Townsend: --All right.

In respect to that, what is described in the engineering advisory report is a statement that the inflow-outflow method involves the determination of the correlation between the index of the inflow and the outflow from the basin.

That, in the view of the Master and in view of the Texas, is the inflow-outflow method described and defined in the report of the engineer advisors.

What also is contained in the report of the engineer advisors is a river routing study that is what we have been referring to throughout as the S.D. 109 river routing, which produced the Plate 2 standard of measurement.

In the 1979 report, the Master found that river routing to be incorrect, inconsistent and contained omissions.

Therefore, he held that river routing to be a nullity and that is why he defined the 1947 condition in the terms that this Court approved.

So when you revert... the Compact specifically says that the 1947 condition is that situation described and defined in the report of the engineer advisors, just like the language in Article VI.

So by the Master's early ruling, he has made that phrase, as described and defined in reference to the river routing, a nullity.

There is a void at that point and Texas contends that the controlling language is 149 of S.D. 109, and that is where the statement is that the inflow-outflow method involves the determination that the correlation between the upstream... or the index of the inflow and outflow from the basin.

Texas contends that if the Court were to remand it back to the Master to proceed, then he is left with the choice as to any inflow-outflow method to depict the 1947 condition and is not restricted to a river routing.

Texas proposed the inflow-outflow method because the Master repeatedly expressed his concerns about the river routing.

The river routing has too many, he continually said, the river routing has too many unmeasured values, too many judgment-dependent techniques.

That has caused the problem between the states and he was... expressed his desire that some other method could be used.

Texas proposed the double mass.

The double mass eliminates the judgment-dependent techniques and eliminates the unmeasured values.

And with that understanding Texas proposed this as a solution and a superior method to the laborious river routing.

The Pecos... in regard to the claim that continuation of the suit would require this Court to perform administrative functions, Texas replies that this is not... this is a suit to enforce the Compact.

This is a suit to enforce Federal rights that are created by the Compact, since it is the law of the Union, and that it is completely a judicial function to determine those rights, even though it may require making those difficult decisions concerning the engineering procedures.

Texas submits that this process is easier than the difficult processes involved in an equitable apportionment suit, because the Compact limits your inquiry to a certain extent.

Admittedly, it's not simple, but it is not as difficult as an equitable apportionment.

Unidentified Justice: Did the Commission adopt the river routing method ever?

Mr. Townsend: The Compact, yes, Your Honor, they did.

The Compact negotiators used the river routing, and that was going to be the basis.

And the RBD... excuse me.

Unidentified Justice: That wasn't stated in the Compact.

Mr. Townsend: The Compact stated that the 1947 condition is that situation described and defined in the report of the engineer advisors, and when you look at the report of the engineer advisors there is a river routing.

Unidentified Justice: And has the Commission proceeded on, purported to proceed on that basis?

Mr. Townsend: The Commission has not proceeded very far, Your Honor, but they were attempting to utilize the river routing in S.D. 109 from the beginning of the Compact administration.

Unidentified Justice: Well, why is it consistent with the Compact to adopt another method for determining the 1947 condition?

Mr. Townsend: Because the Compact requires the use of an inflow-outflow method and there are more inflow-outflow methods than the river routing.

Unidentified Justice: Although you say the legislative history of the Compact indicates that the river routing was anticipated to be the method to be employed.

Mr. Townsend: That was the method at that time, in 1949.

The double mass is an outgrowth... I think is a method that has been used by engineers, but the present-day superiority of it is due to the fact of the advancement and statistical analysis and to computers and to the present day we believe that the Commission should not necessarily be saddled with an antiquated approach when there is something else available.

Unidentified Justice: May I ask, do you understand the result of the first report in this Court's decision, the last time the case was here, that entirely repudiated the report of the Engineering Advisory Committee or just said it shouldn't be controlling?

Mr. Townsend: I agree with the Master, Your Honor, that he has found the RBD to have been adopted by the Commission solely for the purposes of finding facts between 1950 and 1961 and then, I think, '62, and not used... adopted by the Commission for future purposes, accounting purposes.

So Texas submits that RBD has been utilized for a limited period but not accepted as the standard for the future and that the Master is correct in his finding.

I have retained a few minutes for rebuttal and if there are no further questions, I will--

Chief Justice Burger: Very well, Mr. Townsend.

Miss Uram.

ORAL ARGUMENT OF CHARLOTTE URAM, ESQ. ON BEHALF OF DEFENDANT

Mr. Uram: Mr. Chief Justice and may it please the Court, Justice Stevens, you asked whether all sides agreed that the Master could make all the necessary determinations, and Mr. Townsend answered yes, and that's correct, except that the parties disagree on the nature of the Court's review and the extent to which it can take action on behalf of the Commission or action that's delegated to the Commission.

The Court here is presented--

Unidentified Justice: But isn't it true that one of the problems is getting an understanding of some of the basic underlying facts... how much water... how much of the water was flowing in 1947 and so forth?

And the Commission is supposed to make some of those findings and has been unable to do so.

Is it not correct the Master could make those factual findings if he would decide between the contending parties?

Mr. Uram: --No, Your Honor.

That is where we disagree.

Unidentified Justice: I see.

Mr. Uram: The Court in this case is presented with two very different ways of dealing with disputes from interstate compact agencies.

One way, New Mexico's way, takes a standard administrative and statutory law approach.

The compact is a law.

The commission is a statutory agency and the Court's review is structured, it is limited accordingly.

The other approach, Texas' approach, would require the Court to get into the detail of disputes between compact agencies and in instances rewrite compacts, write rules and methods under compacts.

Unidentified Justice: I take it from your brief and what you say that you say we have no more authority to do what Texas suggests or the Master has, that he has no more authority to go forward than we have to appoint a tie-breaker.

Mr. Uram: That's correct... not to do the things that Texas asked.

The Master can review the decision that the Commission made.

There is a particular decision that the Commission made that brought the parties to the court and was the subject of this dispute for the first eight years of the case.

Unidentified Justice: Well, then, how is this problem going to be resolved?

You say they can't agree.

The Master has no authority, and we have no authority to appoint a tie-breaker.

Mr. Uram: There is something for the Court to review to resolve the dispute.

Justice Blackmun asked what the problem was here, and the problem here is that the Commission made a decision.

That decision, the adoption of the review of basic data, is not a finding of fact.

And that decision is similar to an administrative rule, a rulemaking by an administrative agency.

It sets the standard to be applied to make findings of fact and those findings of fact go to whether New Mexico is delivering the correct amount of water to Texas.

So the Commission unanimously... Texas and New Mexico agree... adopted this review of basic data.

In 1974, over a decade after the Commission had adopted it and begun drafting further documents based on it, the State of Texas repudiated the review of basic data and brought this law suit.

The Court then went on to determine... to make various determinations regarding the Commission's authority to adopt the review of basic data after the Court in 1980 decided the Commission had authority to make such a change.

Texas then raised dispute as to specific items in the review of basic data.

She complained about eleven specific decisions.

We are now down to four.

We have only four items remaining in that dispute.

New Mexico urges the Court to direct the Master that his role is to review those four remaining items as the Court reviews an administrative decision.

Unidentified Justice: Miss Uram, the Master found that the review of basic data was developed only for the period of 1950 to 1961 and so it does not answer the questions for the future.

I mean, that was the Master's determination.

Mr. Uram: That's what the Master said, and the first time he said it was in 1979 in his last report, but at the time that he said it then he also he had not yet reached the consequence of that decision or that issue and indeed there had been no discussion of it before 1979.

Unidentified Justice: The United States in its brief also, if I remember correctly, indicated that we certainly can't decide everything based on the review of basic data, that maybe it's a guideline to be employed but that it won't solve all the problems.

Mr. Uram: The review of basic data may not solve all the problems, but the Master's understanding or ruling that the review of basic data was not to be applied in the future was wrong.

The Compact is set up so that there should never be a time when there is not a method to be applied.

It established a method in the first place.

It said that you're supposed to use the method as to the inflow-outflow method, as described in the report of the Engineering Advisory Committee.

That method should continue to be used until the Commission changes it.

The Commission has authority to change it.

So that method continues until the Commission changes it.

The next method continues until the Commission changes it again, and the Compact does not envision adoption of a method to be applied only for a limited period.

It is an ongoing administrative measure, a technique, and in fact, when you look at what the Commission did here, the Commission did not say we adopt the review of basic data to be used for findings of fact for a 12-year period.

They had worked a decade making the corrections in the review of basic data so that the routing method could work.

After they worked a decade, they said we adopt it for use in all actions and findings, for all actions and findings of the Commission.

And then they went on, clearly explaining their intention to use it that way.

They told the Committees to go ahead and prepare the next set of findings and prepare a draft inflow-outflow manual, both based on the review of basic data.

So the Master erred when he said that the review of basic data was intended to be used only until 1962 and certainly the first eight years of this litigation indicate that everyone understood that the review of basic data was still the subject of this suit.

It was... the entire pre-trial order is written toward the early phases, the question whether the Commission acted within its authority to adopt it, and then whether certain technical portions are valid.

Unidentified Justice: Basically are you requesting that the Master quantify the water as of 1947 and then provide for annual distribution techniques?

Mr. Uram: No.

Texas is asking that the Master come in and make those kinds of determinations.

The determinations of how you translate the 1947 condition, what standard or method you use, are contained in the review of basic data.

The Master's role in an administrative law context, which is the one New Mexico urges as the appropriate one here, is to review the method and say whether it is valid within the statute... a standard, traditional type of judicial function.

Instead--

Unidentified Justice: Well, Miss Uram, what is the authority for your position that the Master and, ultimately, this Court can sit as a reviewing court to review the findings of the Compact agency?

Ordinarily, those sort of things are set out in the statute, that the agency does certain things and then a court does certain other things, and here you're just kind of superimposing this Court on the agency without any statutory structure.

Mr. Uram: --You're correct, Your Honor.

Ordinarily--

Unidentified Justice: Doesn't the Compact itself say that the determinations of the Commission are reviewable in the Court?

Mr. Uram: --Yes.

It says findings of fact are reviewable in court.

Unidentified Justice: Does it say in what court?

Mr. Uram: No.

It says in courts or in administrative agencies findings of fact are prima facie evidence.

Unidentified Justice: Well, this would be the first agency, I think, that had its findings directly reviewable in the Supreme Court.

Mr. Uram: That's probably true, Your Honor.

But the... this Compact, you will recall, was signed in 1948 and the Administrative Procedure Act was signed only two years... was enacted only two years before.

In modern compacts one will see a good deal of the type of language one sees in the Administrative Procedure Act, with specifications as to period for review and so forth.

But certainly in an early compact like this, the language will be somewhat different.

But the basic framework is the same.

The... since World War II particularly we have been seeing an increase in the growth of compacts and these compacts have had interstate agencies charged with positive powers.

Those compacts have not simply been an adjustment of a one-time dispute.

They have positive inter-governmental powers, and the question is how is the Court going to deal with disputes from these agencies.

Unidentified Justice: Do these more recent compacts that you refer to which specify agency authority and court review specify the court in which the review shall take place?

Mr. Uram: In some instances, they do.

For example, the Washington Metropolitan Area Transit Authority Compact, the one that governs transportation here in the District of Columbia, specifies that review from certain types of things shall go to one type of court and review from other types of things will go to another type of court.

Unidentified Justice: Neither specify this Court, I take it.

Mr. Uram: I don't recall that they do.

But what we have here is we have a situation where undoubtedly there will be disputes between states on how these... on decisions that these agencies make, and if those disputes are brought to this Court, the question is how should the Court deal with this.

Should the Court be called upon to jump in and make all the findings that are delegated by the compacts to commissions?

Is that the correct role of the Court?

Or is it, rather, to take that great body of administrative law which has been developed in the last 40 or 50 years and use the principles there to--

Unidentified Justice: What standard of review?

What standard of review by the Court?

Mr. Uram: --Well, the standard... I would think the appropriate standard would be the one that the Court used to apply before it had statutes such as the Administrative Procedure Act.

The Court would look to whether the action is constitutional, whether it complies with the statute, whether it was done properly under the procedures in the statute, and whether it was reasonable.

So there are... there are standards to look to.

They are basically in the Compact, and we urge the Court that the states here, they agreed to shoulder these responsibilities themselves.

Unidentified Justice: But isn't it true that all the examples you give are situations in which there is a neutral factfinder or a neutral administrative law judge of some kind to start with?

Here you have a situation in which there are two parties, either of which can veto the findings, and if you have a situation in which one decides to be obstinant... and I'm not suggesting either has... and just doesn't agree to anything, you simply can't apply the principles you describe.

Mr. Uram: Well, we have here a special situation.

That's correct, Your Honor.

But we have a decision to be reviewed and there doesn't seem to be any reason--

Unidentified Justice: It seems to me one of the initial problems is you have a lot of decisions that haven't even been made in the first instance.

Mr. Uram: --Oh, well, you see, Your Honor, the situation is really a little simpler than it looks.

There is a lot of detail in the case and it does give one the impression that the situation's more complicated than it appears to be.

Unidentified Justice: You identified four specific controversies that remain unresolved.

Mr. Uram: Yes.

Unidentified Justice: Now is it possible that the Master could, if he felt himself qualified to do so, could have decided each of those four issues?

Mr. Uram: Yes.

The Master--

Unidentified Justice: Well, why do we have to worry about administrative review?

Isn't it just a question of somebody going ahead and making the decisions?

Mr. Uram: --Well, because Texas says that... Texas tells the Court not to look at those four issues any more but to choose another method.

Unidentified Justice: Well, he agreed a few minutes ago that the Master simply hadn't decided some things that would have moved the case along.

Mr. Uram: That's correct.

Unidentified Justice: You seem to be saying the same thing.

Mr. Uram: We say the Master--

Unidentified Justice: You identify different issues.

I understand that, but apparently he hasn't decided any of these issues.

Mr. Uram: --We agree on the same four issues.

The place where we part is that Texas says the Master can substitute another method, one that's never been brought before the Commission, for the method that the Commission decided on.

Unidentified Justice: But they also have an alternative position, that even if he doesn't buy the double mass analysis argument, go ahead and use the routing approach.

Mr. Uram: That's correct.

But then we part again.

Unidentified Justice: And you won't get either.

Mr. Uram: Because New Mexico says after you've made this basic decision the dispute will be resolved and the matter should go back to the Commission for administration.

The appropriate body to make corrections in the review of basic data is the Commission.

The Court says what is invalid, if anything's invalid in those four remaining disputes, and then sends it back to the Commission for correction.

Texas--

Unidentified Justice: Well, has the Commission already decided all those four?

Has the Commission already addressed those four issues?

Mr. Uram: --The Commission adopted the review of basic data.

These four issues are challenges to the review of basic data.

Unidentified Justice: Yes.

Mr. Uram: And, Justice White, I don't even know if these four issues remain, because Texas in open court before the Master said that if she had a hearing on the double mass method she would waive any remaining issues on the review of basic data.

So if this case goes back to the Master and takes an administrative law rather than an open-ended approach, the Master would not then have to go on and make findings of fact and determine how much water was at a certain point at a certain time.

That would not be his responsibility.

That would be the responsibility of the Commission.

The matter should then be remanded to the Commission.

Unidentified Justice: What if they continue in their present state of mind?

How is this matter going to be resolved?

Mr. Uram: Let's take the... if the matter is remanded to the Commission, in 1980 Texas counsel said that if New Mexico prevailed on the review of basic data there would be no problem working things out because Texas would abide by that decision.

So all the Commission would have to do, if everything works as it should, is proceed with the... to apply the review of basic data to make findings of fact to the present.

It could also proceed to consider the double mass diagram if Texas chooses to bring it before the Commission.

Unidentified Justice: But it would require the Commission to go back and quantify the datas based on the principles established in the review of basic data.

Mr. Uram: That's correct.

There would be additional engineering and other types of decisions that would need to be made.

Now let's take--

Unidentified Justice: And at this point they've been unable to agree for some years.

Mr. Uram: --They had a dis... it's not a situation where they've been unable to agree.

The language of impasse and deadlock has made the problem sound as if it is an extraordinary problem we have here, and certainly unanimity does cause some additional delays and problems, but the problem here is--

Unidentified Justice: Is the problem that two of you couldn't agree and they had to put a tie-breaker in?

Is that the problem that's here now?

Mr. Uram: --The problem here is--

Unidentified Justice: Is that the problem?

Mr. Uram: --Yes and no.

Unidentified Justice: Well, assuming that it is, does it make any sense to send it back to those same two people?

Mr. Uram: Yes.

Unidentified Justice: On the same point?

Mr. Uram: Yes, because what happened--

Unidentified Justice: Well, what makes you think they'll agree now?

Mr. Uram: --Because one of them questioned the Commission's authority to do what it had done, and questioned the validity of what was done.

If the Court completes judicial review and it completed the first phase... yes, there is authority... the second phase is, is it otherwise valid.

If the Court completes it, the Commission has its answer.

This is what the Commission fell into dispute about.

The Commission agreed to something.

It continued to operate that something for a time.

Then one of the parties decided that in fact it no longer agreed with its earlier agreement, and it brought various claims that were legitimate legal claims to the Court.

The Court should review those legitimate legal claims.

In the meantime, the Commission hasn't acted and it has been a long suit.

So increasingly, as time goes on, everyone gets more concerned about the impasse and the deadlock on the Commission.

Well, the problem's a fundamental one.

If we could resolve this fundamental problem, which is nearly completed, the Commission would at least have its answer to the first phase, to the thing that blocked the Commission.

They worked for 20 years.

They were able to agree for 20 years, and they had problems then.

But they were able to agree.

They came to the review of basic data and they agreed upon it.

Now we have--

Unidentified Justice: You certainly do suggest that Judge Breitenstein really had no conception of what the case was all about, that he should just have referred it back to the Commission.

Mr. Uram: --Judge, this has been a very difficult case for the Special Master.

The parties have been pulling the Special Master in many directions and I'm sure with the degree of detail it's been frustrating for him.

But we have had some conceptual difficulties in recent times, but particularly with where the case is going.

Part of the problem is the issue of unanimity, and the Court has indicated a concern as well.

What does unanimity do here?

Why is it in the Compact?

Isn't it going to create distortions in the way these compacts work?

And perhaps I can take just a moment to discuss the two reasons for having unanimity in the Compact and then discuss a worst case situation... what happens if the states simply do not agree when you get back to it.

The obvious reason for having a unanimity requirement in the Compact and, as counsel for Texas correctly pointed out, that's a common requirement in interstate water compacts.

But the common reason is that the states here are delegating to an administrative body the authority to make decisions that will affect those states in the future, and they will agree to do this interstate cooperation.

It is in everyone's interest, but at the same time they want to protect their citizens and their sovereignty.

So the way that they retain control of the obvious state protection is in this unanimity requirement.

The delegation here to the Commission was unusual for its time.

In its day, it was unusual to have a commission given the authority to change the method for administering the compact.

So one can see that the states had some concern that they not be bound in ten or 20 or 50 years by something they have no say over.

The other reason for unanimity requirement is one suggested by the scholars in the field.

Interstate relations are different from other kinds of relations, and to the extent that they succeed, they succeed on the basis of cooperation.

So what compacts try to do when they require unanimity is to set up a way that the compact will work.

Now Texas has said that there's no enforcement mechanism here.

The legislative history in Senate Document 109 at page 124 indicates that it was anticipated that when the states came to a finding the upstream state, New Mexico, if it was not delivering sufficient water, would then proceed voluntarily, without any court enforcement, to go and make the necessary decisions under the Compact to shut certain users down.

The unanimity requirement is tied with other measures to push the states to come to such agreement, and the measures here are the binding nature of the compact and the difficulty of getting out of it.

The states had had disputes for 30 years--

Unidentified Justice: Well, of course, if nothing ever happens under the compact, probably no one wants to get out.

Mr. Uram: --If... I'm sorry.

I don't quite understand.

Unidentified Justice: Well, if there isn't any enforcement mechanism and, as you say, the procedures are voluntary, then a party who feels that the compact isn't giving that state the fair share that the agreement provided for may feel very strongly something should be done but the party which feels that it's really getting the lion's share, which I suspect may more often than not be the upstream state, may be perfectly content with a rather ineffectual compact organization.

Mr. Uram: Well, let's apply it to this specific situation, and I disagree with the characterization, Your Honor, that it is ineffectual.

I think it's set up to function in a different way than modern statutes because of the interstate nature of the disputes.

But applying the notion to this particular situation, is New Mexico, as an upstream state, in an position where she should be happy with the Compact.

She is satisfied with the Compact, but lest the Court be confused about what New Mexico's doing under the Compact, she limited her uses to the 1947 condition.

She made a compromise and she has been shutting down users.

She has been controlling use on that river.

She shut down about 14,000 acres in the 1950s and '60s to comply with the Compact.

When people use water illegally we have a Special Master, we have metered wells in that area.

That is an unusual requirement.

We go out and we track violation and we enforce this requirement.

We take our statutory obligation very seriously and we... that is why we are before the Court asking for it and trying to explain our view that the Court really can't change a requirement on us 50 years down the road or 40 years down the road, doesn't have the authority to do that.

Only the Commission can change a requirement.

What the Court's role is is to review the Commission dispute that brought the parties to the Court.

Unidentified Justice: But having said all that... and I'm sure the state is acting in good faith... it nevertheless remains true that even in good faith you may be shortchanging the downstream state, because they obviously in good faith think they're getting less water than the Compact calls for.

Mr. Uram: And the--

Unidentified Justice: And if there's a stalemate, that can't help them.

Mr. Uram: --That's correct, Your Honor.

The stalemate is something that may cause a problem to Texas.

It may shortchange Texas if New Mexico is not delivering the correct amount of water to Texas.

We are not taking advantage of that situation, though, Your Honor.

I assure you that New Mexico has continued to enforce the 1947 condition obligation as she understands it, and if the Commission... and as the Commission decided, you know, we're relying on the Commission's earlier decision which we have been defending all through the law suit.

Unidentified Justice: That decision showed there had been some shortage, 5,300 acre feet, and that--

Mr. Uram: It's a total of 5,000 acre feet, but it did not go on to decide that New Mexico was responsible for that shortage.

Unidentified Justice: --Was it attributable to man's activities?

Mr. Uram: Well, they didn't make a decision one way or the other.

That's an unusually small amount of deficiency, but that indicated to New Mexico that she was doing something right.

If upon completion of judicial review it turns out that New Mexico was doing something wrong, New Mexico... let's say the Master reviews the remaining issues and says that certain things were done improperly.

The Commission then goes on, having the benefit of judicial resolution of that particular dispute.

Let's say the Commission goes on to make the further determinations.

Then the situation would be one where New Mexico would say all right, we have a deficit of this amount and would then proceed to take the necessary action to shut down users on the river, as required by the deficit.

Unidentified Justice: May I ask one other question?

Your basic position is the Court can't rewrite the Compact, in your exception.

Mr. Uram: That's correct.

Unidentified Justice: Didn't the Court do exactly that a few years ago?

Mr. Uram: I'm sorry.

I didn't hear the rest.

Unidentified Justice: Didn't the Court do exactly that a few years ago in accepting the Master's redefinition of the 1947 condition?

Mr. Uram: No, Your Honor, I don't think they did.

The difference here... we had a term to be interpreted there, a 1947 condition, and there was a question of when it began and whether it was a real or artificial condition.

Did it begin on December 1, December 30, March 20?

Was it a condition that was meant to be reflected on the river, or was it a condition technically defined somewhere regardless of what the real condition was?

So there the Court was defining a particular term.

The difference here is that Texas is asking the Court not to define a particular term in a statute but go to into uncharted areas and regardless of what the Compact requires require a tie-breaker or require a new method or make certain findings that are delegated to the Commission.

So it's not a matter of interpreting, which is a standard judicial function.

It is a matter of taking on the entire administration of the Compact and rewriting it, as Texas sees fit as well.

So that is the basic dichotomy in the presentation of the two states.

It's two completely different ways of... two completely different ideas of what the Court's role should be in interstate compact commission disputes.

New Mexico asks the Court not to take that broader role and throw itself into the suit as if this were an equitable apportionment suit, when it is in fact a compact suit, to recognize that the states agreed to shoulder that responsibility under the Compact.

They agreed to do that.

They agreed that the Compact would be binding and that agreement is something which New Mexico, as I indicated before, has tried to honor through all the years of this dispute.

New Mexico asks the Court to put this case back on course first by recognizing the binding nature of the interstate Compact, secondly by giving structure and form to judicial review in interstate compact commission cases and, third, by returning the appropriate responsibility to the administrative compact... by returning the responsibility under the Compact to the appropriate administrative body, which is the Commission.

Thank you.

Chief Justice Burger: Do you have anything further, Mr. Townsend?

ORAL ARGUMENT OF R. LAMBETH TOWNSEND, ESQ. ON BEHALF OF PLAINTIFF -- REBUTTAL

Mr. Townsend: Thank you, Mr. Chief Justice.

The upstream state benefits from delay in decision and confusion in the Commission.

Such injures Texas.

This is not a suit to review administrative actions, and I believe counsel for New Mexico misspoke herself about the Compact providing for a review.

It clearly states that the findings of fact made by the Commission shall not be conclusive in any court but shall constitute prima facie evidence.

That is not the language used in the conventional standard of review, the conventional standard of review being that the administrative decisions are conclusive if they are supported by substantial evidence and not the result of arbitrary and capricious actions.

That is the standard that New Mexico is trying to impose upon this particular Compact, and this Compact Commission is quite different.

First, it's not a Federal agency.

Second, it does not use the language of... the conventional language of substantial evidence review.

It has no enforcement powers, and the Court in Dyer versus Sims recognizes that this Court finally determines the nature and scope and enforcement of these compacts.

Unidentified Justice: So you think any determination of the Commission would be subject to de novo determination in a court.

Mr. Townsend: According to its express terms, it would be prima facie evidence and the party would have an opportunity to rebut and to contradict findings of the Commission.

Unidentified Justice: So you wouldn't review it on the record?

Mr. Townsend: You would not review it on the record.

There's no due process procedural mechanism to protect and to present a record as Mr. Justice Stevens, I believe, pointed out.

There's not an objective, non-biased body that's reviewing the facts, that can take the testimony of both sides, and make a decision.

Unidentified Justice: Tell me.

Your opposition says that the Commission adopted the BRD or whatever it is, and directed that a manual be prepared, and then what happened?

When did all this so-called disagreement start?

Mr. Townsend: The disagreement started--

Unidentified Justice: This deadlock.

Mr. Townsend: --I believe after the RBD was used for findings of the delivery between 1950 and 1961.

Unidentified Justice: Yes.

Mr. Townsend: For that period it directed them to continue to perfect and to iron out problems that were even in that.

Unidentified Justice: The Commission anticipated that that method be used in the future, didn't it?

Mr. Townsend: Well, it anticipated that a river routing be used and that the river routing for the findings for that period be continually perfected, so it was not saying here is the yardstick and this is the yardstick we're using forever.

It said keep on working on it.

And that's where disagreement came and there has been--

Unidentified Justice: A disagreement ever since.

Mr. Townsend: --there is not a decision since then.

Unidentified Justice: Since '61?

Mr. Townsend: Since '61.

And, as a matter of fact, using RBD, the findings did find a substantially more than 5,000 acre feet as being under-delivered, but Texas excused a substantial portion... I believe 40,000 or something in that neighborhood... but excused it.

And so the result was this 5,000 that they didn't go forward with.

So it was not a complete... a small amount.

Thank you, Your Honor.

Chief Justice Burger: Very well.

Thank you, counsel.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

California v. Arizona - Oral Argument

Sun, 20 Jun 2010 20:43:03 +0000

Case:

California v. Arizona

Media File:

78orig_19790109-argument.mp3

Related Transcript:

78orig_19790109-argument.xml

Transcript:

Argument of Allan Goodman

Chief Justice Warren E. Burger: We'll hear arguments next in number 78 Original, State of California against Arizona and the United States.

Mr. Goodman, I think you may proceed whenever you're ready.

Mr. Allan Goodman: Mr. Chief Justice, and may it please the Court.

This case comes to this Court upon the State of California's motion for leave to file a complaint against the State of Arizona and against the United States.

By our motion, we seek to invoke this Court's original and exclusive jurisdiction to finally determine title to sovereign lands along an 11.3 mile reach of the Colorado River.

The lands in this -- an issue in this action are sovereign lands and were at the time of California's admission to the union within the bed of the Colorado River.

Along the river as the Court knows there have been many accretive and avulsive changes.

These river movements' generated serious confusion and controversy until 1966 when by an interstate boundary compact ratified by Congress in that year, the political boundary between the two states was set and permanently fixed forever more.

Justice Harry A. Blackmun: Is it agreed Mr. Goodman that lands in question here are within the political boundaries of California?

Mr. Allan Goodman: Mr. Justice Blackmun some of the lands are within California entirely, some of the lands like a stride of the interstate border the 8.6 mile southern reach of the river, it has the political border running approximately through the center, but just approximately it does vary, but the political boundary will not change as a result of this litigation, it will remain the same.

The problem we have here again is who owns, how much of the last riverbed does California own, how much of the last riverbed does Arizona own.

The United States is a party because United States is a principle upland owner.

It owns the lands adjacent to the river and as the Court knows the boundary line between the two states is the middle of the main channel, in order to fix the main channel we must also know the bank lines.

Justice William J. Brennan: But there's no question I gather Mr. Goodman as to the definition of the lands in dispute, is it?

It's only if the ownership of those lands?

You can put on a map exactly what lands you're talking about.

Mr. Allan Goodman: We have put them on generally, one of the disputes maybe over which riverbed is an issue here there were several main channels of the Colorado River at different times.

Justice William J. Brennan: And that have changed the boundaries of the lands and disputes?

Mr. Allan Goodman: That would make a substantial difference is to where the sovereign lands were located.

As Your Honor may recall the test is one of navigability of the water course and the question now is where was that water course on the date of California's admission in 1850 and where has it moved by non-accretive changes thereafter.

So California, in 1972 because of the concern over the problem of location of its sovereign lands began a study at the request of the State Legislature.

Four years were spent on that study and a set of maps was prepared.

During the course of the study we communicate – the Solicitor General has his maps on his desk right now, we communicated with the US Department of Interior --

Justice William J. Brennan: We don't have them here, do we?

Mr. Allan Goodman: They're not part of the record in the action.

The exhibit to the complaint describes by meats and bounds Your Honor, those lands.

Justice William J. Brennan: I see, it doesn't help me too much.

Mr. Allan Goodman: It doesn't help me too much either [Attempt to Laughter] Your Honor, it requires some elaboration.

Justice William H. Rehnquist: These are questions of title not boundary, right?

Mr. Allan Goodman: That is correct Your Honor, these are questions of title.

They're -- boundary questions only if one defines a location of the State's land, it's a boundary question, this will not change the political boundary of the river.

Justice Byron R. White: But you're asking, you want your title quited (ph)?

Mr. Allan Goodman: That's correct Mr. Justice White.

Justice Byron R. White: Usually to acquire a title you say what property you're acquiring title to?

Mr. Allan Goodman: We have done that in the exhibit to the complaint Your Honor.

We have taken as a result of the study which was done in 1970 --

Justice Byron R. White: I know, but suppose the defendants say that you haven't described the lands correctly?

Justice William J. Brennan: Depending upon what you've said to me – asked me earlier as to the navigability of 1850 and so forth?

Mr. Allan Goodman: They would have to, they could then respond quite in that manner.

Justice Byron R. White: First of all, what I mean, the question -- I suppose many questions of fact could arise in this case, it's just isn't a question of law and order?

Mr. Allan Goodman: No, it's not a question of law only Your Honor but --

Justice Byron R. White: That's all I wanted to know --

Chief Justice Warren E. Burger: Your answer to the question of Mr. Justice White which was put in terms of your title and you are representing the State of California.

Now, you're answering that question in terms of the Sovereign's title or the tile of some of the citizens of the Sovereign.

Mr. Allan Goodman: We're answering solely on behalf of the Sovereign, if I made or began to respond to --

Chief Justice Warren E. Burger: Very important difference, isn't it, that you have to keep in mind here.

Mr. Allan Goodman: Yes.

These are solely Sovereign lands that --

Chief Justice Warren E. Burger: The Sovereign, the tile of the sovereign lands brings us probably a clear original jurisdiction case whereas the title of the individual citizen claimant brings another question, doesn't it?

Mr. Allan Goodman: Yes, it very well may Your Honor.

Justice Lewis F. Powell: These lands on the Arizona side, are they political boundary?

Justice Byron R. White: No.

Mr. Allan Goodman: Some of the lands are on the Arizona side in the 2.6 mile upper reach of the river.

They're entirely within the California, and the 8.6 mile lower reach as you described the political boundary.

We know if I could respond your earlier question of the Court that we are in the right ballpark because we discussed with the United States and with the State of Arizona.

Their claims in fact, the exhibit to the complaint here is based upon aerial surveys done by the United States government earlier so we're in the right –-

Justice William J. Brennan: What I was trying to get at I'm afraid I haven't understand it fully yet.

Is there an agreement between you, the United States and Arizona that you can draw a map exactly what land you were talking about, title of which you want quited (ph)?

Mr. Allan Goodman: We're as far as --

Justice William J. Brennan: I mean just answer that yes or no.

Mr. Allan Goodman: The answer for that is no Your Honor.

We've been attempting - if I could say, we know we're in the Colorado river, we presented our information to the State of Arizona and the United States and asked them to agree.

They simply would not agree and that is the reason why we're before the Court today.

Justice Thurgood Marshall: Alright, but what about this land there, do you agree to that?

Mr. Allan Goodman: They simply will not give any -- give us an answer yes or no.

Arizona told us we would have to sue them in order to get a response.

Justice Thurgood Marshall: But do you agree with that that is the map of existed?

Mr. Allan Goodman: Well, this is the map adopted by the California State Land's Commission which is the basis for the Exhibit A to our complaint.

Justice Thurgood Marshall: So you don't mind that, do you, you agree to that then?

Mr. Allan Goodman: Yes, we're quite sure.

Justice Thurgood Marshall: What does the government agree with that?

Mr. Allan Goodman: I don't know I'm afraid Mr. Justice Marshall that you have to ask this to the Solicitor General.

I do not know whether they agree or not.

They have said in their response.

Justice Thurgood Marshall: I agree with my brothers.

I have great problems in deciding when I don't know what I have.

I'm going to decide a strip of land which I don't know anything about and I don't know where the land is, belongs to California?

Mr. Allan Goodman: Well, I think should the Court grant the motion and appoint a special master then the master would take it, take evidence on the subject and the lands would become fixed.

We think we're in the right ballpark and the parties can agree if I make –-

Justice Thurgood Marshall: For example, you've got a strip the land here that I can understand, but you say you don't know where the strip of land is.

Mr. Allan Goodman: No Your Honor California knows where the strip of land is.

Justice Thurgood Marshall: You say you know where you think it is?

Mr. Allan Goodman: Well, we know where the land is.

The problem is created by the meanderings of the course of the river that is the essential problem in all interstate boundary river cases, if you will, and the problem is to establish the exact perimeters of that land.

This case is no different than interstate river boundary case in that respect.

Justice William H. Rehnquist: Well, your meats and bounds description will vary from Arizona to California because they use different meridians.

Mr. Allan Goodman: We've accounted for that Your Honor in the description.

It's done of the California Coordinate System with certain --

Justice William H. Rehnquist: San Bernardino Basin Meridian.

Mr. Allan Goodman: That's exactly correct, Your Honor.

There are two principle issues of a legal nature before the Court at this time.

The first one is whether this case is within this Court's original and exclusive jurisdiction or whether is Arizona phrases the question may Arizona consent to an action in a District Court.

The United States and California both agree on this issue that Arizona may not consent to that jurisdiction.

The second issue has made the United States to be sued in this Court or is sued probably about only in the District Court.

Let me turn now into the issue of original and exclusive jurisdiction or the issue of consent.

Justice Harry A. Blackmun: Unless the presence of the United States causes the controversy really doesn't overlook?

Mr. Allan Goodman: Your Honor I don't think so, because as this Court said, albeit indicted United States versus Nevada.

The presence of the United States as a party is not; would not change the essential original jurisdiction of the action.

I believe the language is, at least the Court's language was that this clause - the section is construed as applicable to suits involving conflicting State claims by one State against another regardless of the presence of the United States as a party, and of course has concurrent albeit not exclusive jurisdiction actions between the State and United States.

Arizona's contention however is based we submit upon a misconstruction of the term jurisdiction.

As we define it, it is the authority to hear and adjudicate disputes and in this particular instance, States and the United States because of their status as parties confer that kind of jurisdiction.

The answer, the basis for our contention is found in Clause 1 of Article 3 of Section 2 of the Constitution, which does confer those two types of jurisdiction.

Justice Harry A. Blackmun: Are you suggesting that --

Justice Byron R. White: Are you suggesting that it is because of the Constitution that Arizona and California may not litigate in the District Court even if both of them consent?

Mr. Allan Goodman: No Mr. Justice White --

Justice Byron R. White: Is it just because of the statute of Section 1251?

Mr. Allan Goodman: I recognize that early on this Court held that the Clause 2 of Article 3 Section 2 did not preclude suits between states and lower courts, but the Congress in the first judiciary act --

Justice Byron R. White: Yes.

Mr. Allan Goodman: Continued to this day provided that until 1948 it was, if the suit - if any State were a party after 48 if the controversy were between two states that this Court had exclusive as well as original jurisdiction.

The problem with Arizona's contention is that they are confusing if you will, the question of whether a party can be served with the question of whether a Court has power to adjudicate to hear and decide the dispute.

Justice William H. Rehnquist: Well, what you do with 1346(f) then, it says that District Courts have exclusive jurisdiction.

Mr. Allan Goodman: Mr. Justice Rehnquist, the answer to that lies in the legislative history of Section 1346(f).

When the section was enacted as part of Public Law 92-562, it began as S216.

At the time of introduction, there was no word exclusive in Section 1346(f), but the justice department sent a letter which is quoted, a part of which is quoted in our brief and footnote in our motion which indicates, which says that the purpose of the addition of the term exclusive was to preclude suits in the State Courts, the United States did not want to be named as a party in State Court, but to have its claims adjudicate solely in Federal Courts.

That's the only purpose for the term exclusive was to surmount the problem created, for example, or discuss, for example, in trials Charles Dowd Box Company versus Courtney, whereby State Court's have concurrent jurisdiction unless it is specifically excluded, that is a sole meaning for the term exclusive.

Justice William H. Rehnquist: Certainly your answer doesn't comport with the use of the terms in Section 28 USC 1251 with the Judiciary Act of 1789 where the Congress said the Supreme Court shall have original and exclusive jurisdiction of where it was talking about this Court as opposed to lower Federal Courts.

Mr. Allan Goodman: I think the term exclusive are used in two different respects Mr. Justice Rehnquist, in 1346(f) the sole purpose of the term is to preclude suits in State Courts and that's worn out by the legislative history.

There's nothing in the legislative history, which indicates any intention to preclude this suit from hearing cases which are within its original jurisdiction, and let me continue on that point, because it's very important for a party to construe 1346(f) as precluding a suit in this Court would be to be denying this Court jurisdiction vested in this Court by the Constitution.

It has been clear since at least Marbury versus Madison that the Congress does not have the power to either increase or decrease this Court's original jurisdictions.

So 1346(f) cannot be read to borrow a suit in this Court.

Justice William H. Rehnquist: You say as a matter of prudence we ought to construe it that way even though there is some doubt in order to avoid the Constitution.

Mr. Allan Goodman: Exactly, in order to avoid the unconstitutional construction, the legislative history should be relied upon to confer to construe 1346(f) constitutionally.

Justice Harry A. Blackmun: Mr. Goodman if we should deny leave to file.

What will California do?

Mr. Allan Goodman: Mr. Justice Blackmun, I don't think we have any remedy then, we have no other form in which we can litigate both against the United States and against Arizona.

Justice Harry A. Blackmun: Well, you certainly could sue the United States alone and California Federal Court, I take it and would Arizona commend then?

Mr. Allan Goodman: By our understanding of the jurisdiction provision Your Honor, under Article 3, we could not sue both Arizona and the United States in District Court, there is no statute --

Justice Harry A. Blackmun: That was my question.

If you sue the United States alone in California Federal Court, hasn't Arizona indicated it would commend?

Mr. Allan Goodman: It has said that it would consent, but my first argument is Your Honor that Arizona doesn't have the power to consent, because number 1, Article 3 Section 2 clauses 1 and 2 do not permit and Section 1251A1 provides this Court shall have exclusive jurisdiction in actions between the states to say, also to say --

Justice William J. Brennan: Well, that's an argument that there would just be no jurisdiction in the District Court though Congress has said there shall not be.

Mr. Allan Goodman: That's exactly correct Mr. Justice Brennan.

Justice Byron R. White: Then you could also sue, could you sue Arizona alone in this Court?

Mr. Allan Goodman: We could sue if the Court granted leave Arizona alone in this Court.

However, we need the United States because we cannot fix the center line of the river without knowing -- also having the bank lines to term it and the United States.

Justice Byron R. White: Could the government commend here optionally?

Mr. Allan Goodman: Well, they have suggested as much and that would be fine with us.

Justice William J. Brennan: But only as the part of the land.

Mr. Allan Goodman: And that's exactly the problem Mr. Justice Brennan, because we feel the entire area has to be adjudicated.

Justice Byron R. White: What the government says is if we take it here someday they all come in, but limited only to a given segment, is that it?

Mr. Allan Goodman: That's my understanding of this Mr. General's brief Your Honor.

Justice Harry A. Blackmun: I think you should cover everything with simultaneous suits here and in California Federal Court.

Mr. Allan Goodman: Mr. Justice Blackmun, we would not have one judgment binding on all the parties if we try to do that and that's our problem, we had two separate judgments.

The United States contention, if I could respond to that is that 2409A of Title 28 and 1346(f) constitute a waiver of sovereign immunity only as the District Court from my discussion of the problem of the legislative history in Section 1346(f), it's clear to us and we submit that the Court should so hold that 1346(f) was only intended to bar suits in State Courts.

Second, we don't think the United States give sufficient way to 2409A that is the section which waives sovereign immunity, also waivers of sovereign immunity should be liberally construed.

The United States construction was extremely narrow and if it's granted it would mean that there would be no form in which we could sue both the Federal Government and Arizona.

Justice William J. Brennan: What you would be able to do is bring in this Court both the State and United States as to all the lands and disputes.

Mr. Allan Goodman: We want to do it in one action so that we can have one enforceable judgment.

We are concerned about the or if I'd submit Your Honor as a court of equity this Court has the power to combine the two defendant parties so that we have one effective degree.

Otherwise again, we do not have a form and if I may Mr. Justice Brennan what is worse if this Court denies our motion and we have no and if we're left to suit against the United States in District Court and the United States then disclaims ownership under 2409A Subdivision D the District Court must then dismiss the action it specifically provides that there shall be no jurisdiction in which case California and Arizona would be coming back to this Court again and it would be clearly within the Court's original jurisdiction.

Chief Justice Warren E. Burger: We'll resume there at 1 o'clock, the council.

Mr. Goodman you may proceed, I see you have supplied us with these maps now.

Mr. Allan Goodman: Mr. Chief Justice and may it please the Court that is correct.

Justice William J. Brennan: Yeah, thank you.

Mr. Allan Goodman: You're very welcome Mr. Justice Brennan.

Chief Justice Warren E. Burger: At some point, someone will explain the map.

Mr. Allan Goodman: Very well Your Honor, the clerk's office was kind enough to make copies of them during the lunch-recess.

The Court has before it a part of the facesheet of the administrative maps and what describes on the second and larger page, the chronological history of the movements of the river prior to 1946 the upper left the Court will see the river it wasn't essentially a natural State that maybe a subject to dispute during the course of the litigation, it gradually moved to the point in the fifth map, lower right in set five, where the Court and it's difficult to see we'll see -- the Court may see the political boundary coming down from almost the center of that box in a dash line.

It goes through what is described as a pilot channel, and then curves back around to the right, through the Colorado River from a main channel, that is a political boundary, roughly down the center of the pilot channel.

This litigation however includes the area also north of the pilot channel, which described as Palo Verde Lagoon, that area is entirely within the State of California.

The area which is below the intersection Palo Verde Lagoon and that little V to the South is the point where the sovereign land and title question describe the interstate border again.

Justice William J. Brennan: Now what's the segment that the government says that might be willing to consume?

Mr. Allan Goodman: Mr. Justice Brennan, it's the upper segment it's the North of -- the Court will see the pilot channel on the Palo Verde Lagoon that area to the north is a segment.

Point to it on the map, so we can identify them already up above, I see it.

Mr. Allan Goodman: It's up above that right, right there.

And now, the government's contention is there are pre -- there are surveys which are more than 12 years old and even if there weren't by 1346 F the government can only be a suit in the District Court.

However, as I indicated before lunch to argue that means that the Congress has removed jurisdiction from this Court and that of course is contrary to Marbury v. Madison. Very briefly with respect to Arizona's contention that it can confirm jurisdiction, again that is party jurisdiction and the case is which Arizona cites to the extent that they supports it's position or party jurisdiction questions can we serve this defendant in a District Court.

They do not go to the question of the power of the Court to hear and decide the case and our position is under Article 3 sec (2) that power is vested and under 1251 (a)(1) that power is vested solely in this Court.

Justice William J. Brennan: Do you mean this by the -- I mean you don't mean by the -- by the Constitution.

Mr. Allan Goodman: Yes in response to earlier question I answered that, I didn't mean to --

Justice William J. Brennan: Because Congress said that two states could litigate in the District Court, they could.

Mr. Allan Goodman: That's correct.

If Congress so said, the Congress has been very specific in this case.

Indeed that reading I think is borne out by this Court's opinion -- certain of the dictum, this Court's opinion in Illinois versus City of Milwaukee and other recent cases where the Court that was not considering questions between two states, with a state and instrumentalities, which the Court found to be local and not State entities, but the inverse the situation described there is the one where regional jurisdiction is exclusive because two states are parties.

I think on page 93 of 406 US that statement appears.

Justice William H. Rehnquist: Mr. Goodman, I would just love to take up the time of the rest of the Court.

I've debated disqualify myself in this litigation because of the fact I was involved in a good deal of private litigation.

So is this the entire Arizona, California boundary that California seeks to litigate?

Mr. Allan Goodman: In our request for continuing jurisdiction Mr. Justice Rehnquist, we do ask the Court to decide that question.

We don't think however that the Court needs to decide or request on the continuing jurisdiction point at this time.

I'm aware that Your Honor was involved in some litigation reported north of Needle's area --

Justice William H. Rehnquist: Yes.

Mr. Allan Goodman: Along the border this dispute is south of blithe.

The principles will be very similar that will be factual difference only I would expect.

The legal principles are very important.

They are important not only for the parties here, but to other states which have inter-state boundary problems resolving from River movements.

Justice William H. Rehnquist: My concern was familiarity from expert testimony as to factual matters not with the legal matter.

Mr. Allan Goodman: This case is extremely significant since Pollard's Lessee v. Hagan, it's been clear that question to the sovereign lands adjudication is appropriate for this Court's decision.

In this particular case, California needs to know the location of its sovereign lands and confirm its title, so that we can one protect them from environmental degradation and two construct recreational resources, the river has become a tremendous focal point for recreation and before the State can properly respond for the need, we have to know where our title is, so that if we construct facilities we can do so.

Justice William H. Rehnquist: Well, as the United States an indispensable party here.

Mr. Allan Goodman: How are they?

Justice William H. Rehnquist: Are they?

Mr. Allan Goodman: Yes, Your Honor we think that we cannot litigate the question of the central line without having the United States because it is the owner of the upland.

Justice William H. Rehnquist: And the United States position is that you shouldn't be able to get into any court.

Mr. Allan Goodman: I think the technical strict reading would be yes, they say that they would intervene in this Court.

Justice William H. Rehnquist: But they say that they haven't given concern.

Mr. Allan Goodman: That's correct.

Justice William H. Rehnquist: And they say that you are not subject to Arizona and you can't litigate in the District Court.

Mr. Allan Goodman: That's correct.

Justice William H. Rehnquist: So there is no judicial.

Mr. Allan Goodman: Our position on that Your Honor was 1346 F is being read by the United States to deny the purpose.

Justice William H. Rehnquist: I understand.

Mr. Allan Goodman: Okay. I thank the Court very much.

Argument of Louis Claiborne

Chief Justice Warren E. Burger: Very well, Mr. Claiborne?

Mr. Louis Claiborne: Mr. Chief Justice and may it please the Court.

The first question before this Court is must this case be in this Court?

We very much wish we could answer that question no, partly on the ground that this Court is enough for the business, but the concern itself which is relatively minor acreage and it's not a boundary dispute it's simply a matter of title to land.

And, I mean I had so does the Office of the Solicitor General have enough other business.

We would welcome a ruling that accept the Arizona's argument to the affect that this litigation maybe appropriately begun in a District Court.

But unfortunately, we've not found the weight of that conclusion.

As this already been made clear, the obstacle is not Article III of the Constitution.

It's simply the provision of the District Court sec 1251 (a) (1), which seems plainly to confine a controversy between two States to this Court alone by using the word exclusive.

It's clear, of course that the importance of two States is not requiring that the case be in this Court.

They must be on opposite sides; they must be adversaries that were clearly settled in the Pyramid Lake case United States versus Nevada reported in volume 412 in the United States reports.

But here California and Arizona are on opposites sides of the case and so far it appears do dispute title to at least a part of the land put in question by California's complaint.

It might be argued that because the United States is sought to be made a defendant, one looks not at 1252 (a)(1), but rather at 1252 (b)(2), which provides that when the United States and a State of parties the jurisdiction of this Court as many can cut.

It seems to us was however that the presence or absence of the United States does not change the basic fact, which is that this is a controversy between two states.

And indeed again in the Nevada case this Court adverted to the fact that the State parties there were not adverse and accordingly there wasn't exclusive jurisdiction in this Court.

The Court did not notice the presence of the United States as pointed has having any bearing on it one way or the other it seems to us that was plainly right.

Chief Justice Warren E. Burger: The situation being Mr. Claiborne, if there were not problem between the two states which you had private action require title, private on either one side or the other, but with Federal riparian rights involved, where the Federal Government just intervene in that private action?

Mr. Louis Claiborne: Mr. Chief Justice, the private parties could by Virtue of 2409(a) sue the United States, sovereign immunity having been waived by the Congress in the appropriate District Court and there would have been no problem or whatever.

In deed that would be the situation even if one State were a defendant, it's only that the two states are disputing title that presents the problem here.

Justice Byron R. White: Would Arizona be an indispensable party if California sued the United States in the District Court, which it could?

Mr. Louis Claiborne: Mr. Justice White, I would have thought for the same reasons that the United States is an indispensable party, so would Arizona.

So long as it declines to accept the Davis Lake study, which California has put before it in which it inferentially or widely disputes.

Justice William H. Rehnquist: Mr. Claiborne, jury 2409(a) has waiving sovereign immunity only for suits in the District Court?

Mr. Louis Claiborne: 2409(a) itself, Mr. Justice Rehnquist, of course does not say that, but at the very time when that statute was written Section 1346 of the judicial court was amended by the same legislation, so as to provide that suits under 2409(a) shall be within the exclusive jurisdiction of the District Courts.

110 read exclusive that differently then in Section 1251, perfectly explained I think has correctly said that Attorney General of California that the purpose they have just came from attorney general.

The purpose was to prevent the government's being sued in a State court.

The question of original cases simply did not occur to the mind of Congress, it seems recently obvious.

But, on the other hand, it seems hard to read the word exclusive in the same judicial code as meaning all Federal court's generally in one case and in 1251 meaning a particular Federal Court.

Justice William H. Rehnquist: But if you read exclusive in 1346 as meaning exclusive of this Court, there are, to put mildly, grave constitutional difficulties, are they or not?

Mr. Louis Claiborne: I would have thought not Mr. Justice Rehnquist.

After all, if it had not been for 2409 nothing in the Constitution waives the sovereign immunity of the United States in the case if the suit by a State, that is always been the constitutional rule that a State could not sue the United States without it's consent and that problem has been resolved over the years by the United States agreeing to be Plaintiff or agreeing to intervene.

This waiver statute is constitutionally have its limited purpose of allowing suits only in the District Court.

It maybe nonsense as a matter of policy, it is a matter of Constitutional Law when you are talking of --

Justice Byron R. White: What is the basis for your saying that the United States is indispensable party in this case?

Mr. Louis Claiborne: Mr. Justice White, for the same reason that California has joined this is in the first place that the location and width of the bed which is half of which they claim in the old bed of the Colorado River affects Federal lands on either side of that area.

I mean to say this it may clarify matter a little California --

Justice Byron R. White: Why can't California and Arizona settle their dispute in litigation without having the United States around?

Mr. Louis Claiborne: Well, Mr. Justice White the first problem is where they would do that.

Justice Byron R. White: Well, they do it here?

Mr. Louis Claiborne: The United States is willing to facilitate matters at least in part by intervening so as to make that possible.

We haven't found a way of making it entirely possible without waiving a limitations defense in affect.

Justice William H. Rehnquist: And that's why the United State submits to this North of the.

Mr. Louis Claiborne: I would make that more clear than it's just been, north of this pilot cut junction, which is the smaller distance to the North on the map, the 2.7 miles I believe it is.

The United States surveyed and the survey was proved and published in 1961; that was a survey not as of that date, but survey of where the old bed had been previous to that cut that is to say 1946 and 1947.

2409 in waiving sovereign immunity has provided that the United States shall not have its title put in the issue with respect to any Federal claim more than 12 years old.

If we were in the District Court, we would be invoking that statute limitation with respect to California's claim is against North of the pilot cut.

We say this statute doesn't apply in the Supreme Court, but on the other hand if we are going to follow the spirits of the statute by agreeing to intervene we are also be entitled to follow the spirit of limitations provisions by invoking.

Justice William H. Rehnquist: Do you think the -- what authority do you need to submit to an adjudication in this Court to settle this title?

Does it take some conventional action?

Mr. Louis Claiborne: At least whether the matters have been litigated or not I'm not aware Mr. Justice White but it's always be fought the attorney general and solicitor general had authority to…

Justice William H. Rehnquist: Himself to way by becoming plaintiff and to do that by intervention.

Justice Byron R. White: Maybe becoming plaintiff, but he just, he wouldn't have authority just to not raise your sovereign immunity defense here as a party defendant.

Mr. Louis Claiborne: It might come to the same thing Mr. Justice White it's always been fought proper to do by informally --

Justice Byron R. White: So what is the limitation that you would insist on this Court to become a third party to this case?

What limitations they --

Mr. Louis Claiborne: Only that we would limit the controversy to that portion of the land South of the pilot cut that is to say the 8.6 miles as shown on this plan, on the ground that the Federal title North of that has been established by the survey.

It's been unchallenged for 12 years.

Justice Byron R. White: Or it just are there some -- are there some legal principles involved in this case or is it all just a factual fake?

Mr. Louis Claiborne: Mr. Justice White, it's difficult to know what's involved in the case at this stage of course --

Justice Byron R. White: If it's there is a major if the major part of its legal principle would be settled by litigating the segment south of the pilot cut.

Mr. Louis Claiborne: Well, indeed, Mr. Justice White.

Justice Byron R. White: Is that clear if you were allowed to come in only as to that lower segment what then is the status of title as to that Northern segment?

Mr. Louis Claiborne: There is -- there remains a difficulty at California --

Justice Byron R. White: But then how are we ever going to solve the outsider with those views?

Mr. Louis Claiborne: I regret to say that the result as I see that the United States being indispensable as to whole of the area.

The United States not having waived its sovereign immunity as to the Northern segment, the suit could go forward is between the two states for that Northern segment.

And that's why I say that our intervention will not only limit, our participation and our title, but limit the law suit to the portion below the cut.

Now if the principles of what California seeks to elaborate by the use of this action and they haven't explained what they mean by that.

We for our part conceived that this whole bed having been dried by artificial creation of a cut is governed by the Rules of Revulsion that one half of it belongs to each of the two States.

Justice Byron R. White: Whose rule State or Federal?

Mr. Louis Claiborne: I think in this instance they're common Mr. Justice White.

Justice William H. Rehnquist: Mr. Claiborne, if you are right as the indispensable parties within the logic of your position require that we dismiss the case as between the States even though you don't make any intervention at all?

Mr. Louis Claiborne: There is precedent Mr. Justice Rehnquist for this granting leave subject to an undertaking by the United States, which I now give to intervene within a specific period of time so as to allow the suit to go forward.

Justice William H. Rehnquist: Well, let me ask you this supposing if the United States is sued in the Supreme Court of Los Angeles County to acquire title.

Do you think the United States attorney in Los Angeles can walk into that court and say he now gives leave for the United States to be sued?

Mr. Louis Claiborne: No Mr. Justice Rehnquist I think he would properly be instructed to oppose or simply to plaintiff to make no appearance.

Chief Justice Warren E. Burger: Do you think the attorney general can give leave to be sued in the Supreme Court of Los Angeles County?

Mr. Louis Claiborne: I think he can by way of intervention certainly if there were jurisdiction --

Justice Byron R. White: The State Court.

Mr. Louis Claiborne: If there were jurisdiction otherwise?

Justice Byron R. White: Yeah, I know, but I thought what you said earlier, I forget these numbers.

There isn't any jurisdiction in the State.

Mr. Louis Claiborne: Well, I'm perhaps was indulging of on assumption hypothetical that I shouldn't have the answer of course is yes Mr. Justice Brennan.

There is no jurisdiction in any State Court.

We say there is no jurisdiction in any court, but this Court and accordingly, of course, he should oppose and not to intervene, but it's a matter of who can waive sovereign immunity that problem doesn't arise any differently in a State Court and it does in a Federal Court and leave can be given.

Justice Byron R. White: Really, I would take it the suit in a State Court of Attorney General went in said sure, here we are service, sue us and he got a judgment against the United States still went very good.

Mr. Louis Claiborne: It might be more respectful to the Court, Mr. Justice Brennan to appear for the purpose of opposing --

Chief Justice Warren E. Burger: It would good until this Court or perhaps Court of Appeals got hold of it and said there was not jurisdiction, but officially it would be a valid judgment?

Mr. Louis Claiborne: Indeed, Mr. Chief Justice and it would be wasteful of judicial resource.

Justice Byron R. White: And suppose we have raised file subject to the United States meaning that the United States intervene within whatever reservations within that reservation.

Mr. Louis Claiborne: Safe thing to do.

Justice Byron R. White: There was an adjudication which settled the title to some particular land say the land South of this cut, I would suppose you would think the land with the title would be settled there then.

Mr. Louis Claiborne: There is got to be a --

Justice Byron R. White: If you intervene then submitted with respect to.

Mr. Louis Claiborne: Exactly so.

Justice Byron R. White: Well, then what becomes of the suggestion that that title to land in a suit against the United States or involving the United States is within the exclusive jurisdiction of the District Court. Can you waive that too or --?

Mr. Louis Claiborne: Mr. Justice White I don't think 1346 therefore to be read in saying that the government's title can only be tried in a District Court.

It simply that the congressional waiver of sovereign immunity is by inadvertence we assume limited to that Court.

Justice Byron R. White: There is the exclusive jurisdiction now.

Mr. Louis Claiborne: Indeed and I can get around those words, but I don't.

Justice Byron R. White: It certainly deprives the State Courts of jurisdiction doesn't it?

Mr. Louis Claiborne: But this would not know Mr. Justice White.

Justice Byron R. White: You think it deprives the State Court of Jurisdiction, but not this Court to adjudicate the title to the United States.

Mr. Louis Claiborne: I don't think 1346 deprives the State Court any more than, it's only suits under 2409 that limited to the District Court.

A suit in this Court is not a suit under 2409 and accordingly it may proceed in this Court as many such cases have in years before.

Mr. Chief Justice perhaps because of what we said in our brief I should add this one word with respect to our conclusion our submission with respect to the disposition of the case.

We had said in May that perhaps the Court order hold this motion or deny it without prejudice to re-filing.

Time has passed.

I'm going to say that the United States has done very little about way of attempting to investigate or negotiate a settlement.

So far as I'm aware of Arizona has done no more and accordingly at this late date it would be our submission that California is entitled now to have it's title tried and we would accordingly withdraw suggestion of postponing action and urge this Court to grant the motion with the undertaking of the United States that we did intervene within 180 days so as to allow it's title South of the party cut to be the final result.

Justice Byron R. White: Mr. Claiborne before you sit down it just one thing I did not understand.

If this Court were to construe the word exclusive in 1346(f) is just for closing an action not the State courts, but not for closing an action in this Court, why would you, did you, did I correctly understand you to say that the action would not be a 2409 action and if so why wouldn't it be.

Mr. Louis Claiborne: Because an action in which the United States is plaintiff or intervener is not an action which is governed by 2409, 2409 simply waived the statute, when the United State is neither plaintiff nor intervener.

Justice John Paul Stevens: No, but supposing United States is a defendant as I seek to name them, supposing we held it could be, why couldn't it still be a 2409 action and you still have your 12 year defense.

Mr. Louis Claiborne: Well, if the Court Mr. Justice Steven withhold that the United States can be suit in this Court of because 2409 has waived sovereignty of this Court as well as the District Court then the only thing that prevents that is the word exclusive in 1346 (f) and if we construe exclusive is just excludes State Court's jurisdiction had all the problems solved.

All the problems with respect to the sovereign immunity of the United States.

Justice Byron R. White: And also with respect to your 12 year defense, you still fit a certainty.

Mr. Louis Claiborne: I may say that we can think of no good reason while the government ought to be subject to suit on its title in a District Court and not in this Court.

We cannot suppose that Congress was that solicitors of the Solicitor General.

Now it may have been solicitors of this Court's burdens, but there isn't the slightest indication of that in the legislative history.

We must assume that they simply overlooked that such suits bringing into play the title of the United States did occasionally when States were involved arise originally in this Court. Whether this Court is free to remedy that omission by Congress is the question.

Justice Byron R. White: The only problem is the world exclusive in 1346 (f).

Mr. Louis Claiborne: That is entirely right.

Justice Byron R. White: Okay.

Argument of Russell Kolsrud

Chief Justice Warren E. Burger: Mr. Goodman, excuse me, yes Mr. Kolsurd.

Mr. Russell Kolsrud: Yes Mr. Chief Justice may it please the Court.

I would like to initially discuss a question and answer post by the Solicitor General which is essence of this action and that is must this case be heard only before this Court and Arizona's positions is not it must not.

I think the simplest answer to this case is to recognize that 1346(f) can be read as a grant of concurrent jurisdiction by Congress to the District Courts regardless of the parties.

This has been done, this sort of approach has been taken prior to 1948 when the Judicial Court stated that cases that begin in which a state was a party had be brought before the United States Supreme Court.

That post quite a few problems in cases where the United States brought an action against the State and the only jurisdiction was this Court.

There were many at places for example, in the Safety Appliance Act in U.S. versus California this Court stated that, that particular legislation was actually a grant of concurrent jurisdiction in actions by United States against a State, so that the District Court could in fact hear that case.

The same can be done right here in this action.

Any case that is brought any case with the United States has title to property that is brought by any person, the District Court should have jurisdiction to hear the case regardless who the parties are, that would be a grant of concurrent jurisdiction and would also permit this Court to allow those types of cases to go elsewhere.

The actual essence of this case is whether the language in 1251(a)(1) means exactly what it says, it says that jurisdiction must be exclusive in all controversies between two or more states.

This Court's original jurisdiction has been variously interpreted since 1789 of the date of the First Judiciary Act.

Recently this Court has implied if not stated indicted that there is an element of discretion in the interpretation of 1251(a)(1).

The most noteworthy is the recent decision in 1976 of Arizona against New Mexico.

In that case this Court stated that it should interrupt 1251(a)(1) in the same manner that the Court would interrupt Article 3 Section (2) Clause (2) of the Constitution, which is the original jurisdiction, grant of power in the Constitution.

Now if this is correct that means that there is some discretion in 1251(a)(1) and if that's true, then the only, the only question before the Court right now.

Justice William H. Rehnquist: I am not clear what do you mean discretion.

Mr. Russell Kolsrud: Discretion to here I think that the word were that this Court would exercise its original jurisdiction only in appropriate cases, so the question is, is this an appropriate case?

Justice William H. Rehnquist: But it wasn't the intimation in Arizona versus the New Mexico that it wasn't appropriate because the State really it wasn't representing its own interest, but rather the interest of a private plaintiff.

Mr. Russell Kolsrud: That was one aspect of the case, the concurring opinion of Mr. Justice Stevens indicated that, however I think the Court's primarily concern was that Arizona was actually the issues presented by Arizona were actually being tried in a separate lawsuit in New Mexico by sort of a project and other private citizens, although Arizona was not involved in that case, the issues themselves were being adjudicated in New Mexico.

So it was somewhat different in that.

The point is, is this an appropriate case for this Court.

We think not.

The nature of this case it's a quite title action.

It does not involve the larger issues of jurisdiction, doesn't involve problems of a State's sovereign powers to regulate the laws within its own boundaries.

Justice William H. Rehnquist: It doesn't call for boundary dispute.

Mr. Russell Kolsrud: It's not a boundary dispute at all as a matter of fact it's merely a question of who owns, where do you draw the lines between two land owners in California, it's factual.

Unknown Speaker: What you're saying is, California is to sue United States in the District Court.

Mr. Russell Kolsrud: We think California can and should sue both Arizona and the United States in District Court in California.

Unknown Speaker: How did you get waive or sovereign immunity on -- United States.

Mr. Russell Kolsrud: Well, sovereign immunity on part of United States has helped in waive, presume to 2409A -- Arizona.

Unknown Speaker: This thing would be sued under the 2409A.

Mr. Russell Kolsrud: Yes.

Unknown Speaker: But how about, there is also a fight between the two states, what about that dispute, why isn't that within the exclusive jurisdictional of this Court?

Mr. Russell Kolsrud: It is within the exclusive jurisdictional of this Court under 1251A1 question is, is there way to get around that and put this case.

Unknown Speaker: And that's you are going to get to that I think, this your discussion, argument, is it?

Yes, we have discussion and even though it is within our exclusive jurisdiction.

But under Arizona and New Mexico you're suggesting we have discussion nevertheless to let the case be decided in the District Court.

Mr. Russell Kolsrud: Yes --

Unknown Speaker: Well maybe so but how about of the power of the District Court?

Mr. Russell Kolsrud: To hear the case we have controversy between two States.

Unknown Speaker: Yeah.

Mr. Russell Kolsrud: Okay, the power of the District Court, I think we have to look at the principles behind article three.

The District Court has a power to adjudicate controversies between states regardless of the subject matter.

Unknown Speaker: How but the statute?

Mr. Russell Kolsrud: 1251A1, referring to.

That statute.

Unknown Speaker: I think that under, as far as the Constitution is concerned Congress could let two states litigate each other in a District Court.

Mr. Russell Kolsrud: Yes.

Unknown Speaker: But how about 1251?

Mr. Russell Kolsrud: Well our argument is it is we can read the statute, we know what it says, our position is that the reasoning and the policies the principles behind the idea of a state having to be sued only in the United State Supreme Court don't apply here.

Therefore we have, we would prefer everybody agrees in the District Court.

California would like to be there, United States will like to be there, Arizona would like to be there.

The only impairment is that language of 1251.

This Court has in numerous cases, I think in the most, one of the most the reason is the Ohio versus Wyandotte Chemicals case in 401 US, now although that case involved only a dispute by the State of Ohio against citizens of another State.

Nevertheless the reasoning given by this Court for declining jurisdiction is relevant to this case.

Justice William H. Rehnquist: But there was original but not exclusive.

Mr. Russell Kolsrud: Yes that's true.

But Justice Harley went through some substantial about of reasoning and policy arguments behind the Article 3 Grant of jurisdiction discussing first of all the need for discussion in this Court to decline to accept various cases within the original jurisdiction and secondly the reasons that a State as a plant has the right and authority to bring any case to the Supreme Court.

Justice William H. Rehnquist: Due you think Wyandotte is consistent with of the subsequent opinion Illinois versus Milwaukie.

Mr. Russell Kolsrud: Well the subsequent opinion in Illinois versus Milwaukie, the result I think it is a very consisting yes.

And actually some of the language in Illinois versus Milwaukie would support the idea that a state such is Arizona couldn't waive whatever protection 1251A1 is supposedly affording Arizona so that we could intervene and have the issues the adjudicated in the District Court.

Justice Byron R. White: What body of law would govern this litigation is there any State law in it or is it all Federal.

Mr. Russell Kolsrud: The quite title action in California, that's the -- generally speaking the law of the State or the locality would be controlling as far as local -- as property law is concerned.

So in California the local law of California generally would be applied.

Chief Justice Warren E. Burger: You mean that is between the lines or the contending private parties, what about the Victorian federal rights?

Mr. Russell Kolsrud: Well those I would think as well would be governed by local law.

Chief Justice Warren E. Burger: Or State law.

Mr. Russell Kolsrud: Yes State law.

Although that itself is another issue, there are some problems that we have with that as well.

Chief Justice Warren E. Burger: If by controlling all of the state law or there is, that certainly is another reason to have some judges ruling on it, you know something about that particular state law.

Mr. Russell Kolsrud: Yeah and the judges in the District to California certainly handle quite few quite Federal actions and are quite confident to handle that sort of a problem which is one of the policy reasons under Constitution that a state should not have to go anywhere but United States Supreme Court to adjudicate whatever cases they may have and that onetime was that no other court was confident to handle the problem.

In this instance I think the factual problems that we have within cases primarily factual, it can be adjudicated in District Court.

Now Arizona has also we have argued that, that we can waive whatever protection there is under 1251A1.

The analysis and reasons for that argument are the same as for there is -- as the reason that this Court has.

Chief Justice Warren E. Burger: So just jurisdiction.

Mr. Russell Kolsrud: Discretion to decline to hear the case.

As a defendant the Constitution was to protect, the idea was to protect the state from compulsory process, the State's prestige dignity was such that should not be compelled to be sued anywhere but in the United State Supreme Court.

Well on this instance what was actually meant to be a favor is a burden as a sovereign we should be able to submit ourselves in the jurisdiction of that Court to have the issue decide, so long as the Court has subject matter jurisdiction in this case it does.

Justice Byron R. White: That's a problem is when -- because 1251 does talk about jurisdiction.

Mr. Russell Kolsrud: Yeah, 1251.

Justice Byron R. White: And if it said that no District Court so however have jurisdiction of suit between two states that's really what it says.

Mr. Russell Kolsrud: That's what it says.

Justice Byron R. White: And you wouldn't think you could concept, you can't confer jurisdiction.

Mr. Russell Kolsrud: Well we cannot confer jurisdiction we think the reasons for that are, do not apply here plus there is question whether the 1251A1 actually itself would bar the sued in District Court.

If you look at the Constitution, in section 2 it states that the judicial power of the United State shall extend to first of all, all cases in law and equity arising out of the Constitution and statutes and also all cases of maritime and admiralty jurisdiction, in other words cases based upon the cause of the subject matter.

Secondly Article 2 or Article 3 sections two states that judicial power extends to controversies between two or more states.

And then in the next class which is the grant of original jurisdiction.

The Constitution states that in all cases in which the state shall be a party, the Supreme Court shall have original jurisdiction.

That can be read and reasonably read to mean that the original jurisdiction of this Court extends only to controversy between states that involve cases the subject matter of which are either under the Constitution involving questions of Federal law or the other cases maritime and admiralty.

This case doesn't fall under that.

Justice William H. Rehnquist: If your case aims against Kansas at 111 U.S. 449.

Mr. Russell Kolsrud: Yes.

Justice William H. Rehnquist: But the language of Chief Justice rate there that the evident purpose of clause you are refereeing to was to open and keep open the highest Court of the nation for the determination in the first instance of suits involving a state or a diplomatic or commercial representative.

Mr. Russell Kolsrud: That would now be in consistent because I had stated that, I believe the idea that a, the Court should be opened to ambassadors and states that would not be foreclosed, just may not be exclusive.

The exclusivity idea came from Congress in first judiciary act.

Justice William H. Rehnquist: But don't you have to argue if the Congress was prevented from doing that by Article 3.

Mr. Russell Kolsrud: I don't understand.

Justice William H. Rehnquist: Don't you have to argue that not that article 3 required Congress to make the jurisdiction exclusive in 1251 but then it prevented it from doing it.

Mr. Russell Kolsrud: The Congress has prevented from making an exclusive.

Justice William H. Rehnquist: Yeah, by Article 3.

Mr. Russell Kolsrud: Yeah that could be, that has been -- that has been argued but has been rejected.

Justice William H. Rehnquist: Well, what is your argument that the jury just made, perhaps I misunderstood.

Mr. Russell Kolsrud: My argument that I'm just making is just, this is not a case the subject matter of which arises under the Constitution.

Although it's a controversy between two states it is not a case that is -- arises under the Constitution or the laws of the United States.

Justice William H. Rehnquist: That's contrary to Ames, isn't it, where it's says keep open the highest court of the nation for determination of suits involving states.

Mr. Russell Kolsrud: Yeah, that would -- it would be contrary to Ames to the extent that it would exclude something other than a case arising under the Constitution.

Justice John Paul Stevens: Wouldn't your argument also apply to boundary disputes?

Mr. Russell Kolsrud: Yeah, that's another problem with that argument, yeah.

And the boundary dispute is, it could possibly be argued to be a case arising under the Statutes of the United States.

I realize that is, it's not -- hasn't been adhered to before, but it is a sort of a problem that that has to be looked at now in this case especially.

Unknown Speaker: So the boundary disputes might arise in the statutes what the Admission Statutes or.

Mr. Russell Kolsrud: Yes, when Congress passes the Admission Statutes, so that could be read as the case under the Statutes of the United States.

Chief Justice Warren E. Burger: Let me just start Richard just in response to the question about the Ames case.

Suppose the truck owned by the State of Arizona is going over into California as I'm sure they often do and they run off of an overcast and do a couple a thousand worth of damage to the bridge possibly any amount you want.

That's a suit between two states potentially isn't it?

Mr. Russell Kolsrud: Into the accident.

Chief Justice Warren E. Burger: In this -- in this Court can we take that damage case in this Court under the Constitution as you see it?

Mr. Russell Kolsrud: We certainly it could because it would be a controversy between two states although the act itself it would be well under I wonder what postulated a moment ago wouldn't be, because it would not be a case of rising under the Constitution or the Laws of the United States.

I realize if that argument has some problems.

Chief Justice Warren E. Burger: I was addressing that rather a sweeping language that seem to embrace cases simply because one state was blaming against the another without reference to any federal question or question arising under the Constitution.

Mr. Russell Kolsrud: Well, if you take the words literally controversies between the two states that would definitely be a controversy between two states.

Although that the Constitution doesn't really say that either, the Constitution states that the judicial power shall extent to controversies between two states.

Not all controversy between states, it doesn't exclude anybody, but it doesn't include them all either.

This sort of a case ought not be here.

It's a factual case, there are not critical sovereign issues and that itself could be an issue.

What exactly we're talking, when we're talking about sovereign lands, here California says they are sovereign lands.

Well, there is an argument that the 1966 compact had an affect on that and it may not be plus the United States is involved.

And now we think under 1346 F that is a grant of concurring jurisdiction at the very least and if it is then every case, not only this one, but every case where there is a controversy between two states and the United States is defendant can go to the District Court and that will happen quite often in this litigation.

And finally I would like to make one more point on this continuing jurisdiction, point that California wants this Court to take.

There is no controversy right now on the remaining aspect of this rule.

The only controversy there is right now is a Davis Lake study.

This Court has repeatedly held that unless there is a bona fide controversy, a case, a wrong, some right that's its susceptible with judicial determination then this Court will not take jurisdiction of it because there is, it's not justiciable under the Constitution.

So thank you very much.

Rebuttal of Allan Goodman

Chief Justice Warren E. Burger: Mr. Goodman.

Mr. Allan Goodman: Mr. Chief Justice may it please the Court.

Arizona speaks of the possibility that 1346 F makes 1251 A1 a grant of concurrent rather than exclusive jurisdiction and talks about the pre 1948 judicial code.

We submit that the Congress's amendment of the code in 1948 makes the plain language very clear and then it's the plain language that has to control here and that's the plain language of 1251.

As professor James Moore, the special consultant advisors of the 1948 code stated in his previous commentary on the judicial code, “A large of number of changes many of considerable importance, have been laid here -- have been made the code should be construed with this in mind and where plain language works to change in formal law this change should be given effect” that's at page 83.

In fact what occurred in 1948 was, there was a change in the prior law, prior to 1948 the statute provided for exclusive jurisdiction where any case was a party this Court in US versus California in 297 U.S constitute that as permitting a grant of concurrent jurisdiction to lower courts, but Congress changed all that in 1948 and our submission is that that change in addition to reasons I gave during my opening preclude the construction which Arizona advances.

As for whether this is an important case we submit that it is.

These are indeed sovereign lands.

We didn't think there was any dispute about that their lands which inured the California by virtue of its sovereignty and Arizona by virtue of its.

There is no dispute about the importance of those lands that's been clear since Pollard Lessee v. Hagan, whether we want to be here or not.

We understand that the Court has a tremendous appellate workload and we've read the list of cases which were cited in a concurring opinion recently this term but we regret to say that under our construction we have no choice, that's what Congress has said and there is simply no alternative.

The issues are important for other states as well.

The choice of law question which Mr. Justice White raised in a very intriguing one, under Nebraska vs. Iowa 406 U.S, it would appear that as to lands located within each state, the law of each state would apply.

The question as to the law of the boundary between Federal and State land is particularly intriguing because as the Court knows these lands.

Justice Byron R. White: And not by Finally --

Mr. Allan Goodman: Finally, Your Honor we think it doesn't exist after Corvallis.

Justice Byron R. White: I know but how about Corvallis.

Mr. Allan Goodman: That's exact, thank you Honor I was just with respect to Mr. Justice Rehnquist's opinion for the Court in Corvallis, this land near to the state under the equal shooting doctrine by virtue of our sovereignty and thus it is a Constitution which should determine what rights arise and how those rights are decided as to that federal land.

I think that adds to the distinction after.

Justice Byron R. White: Do you mean the choice of Laws of Constitutional question?

Mr. Allan Goodman: That's right.

Justice Byron R. White: But what if you decide the State Law decide to govern.

Mr. Allan Goodman: I think Mr. Justice White in this case State Law may have.

Justice Byron R. White: Entirely, the entire controversy.

Mr. Allan Goodman: Yes, may govern the entire controversy, the question, the next question that comes is was the affect of the source of the States Law, source of the grant upon the United States contention of 1346 -- can the Congress affect or change the grant, excuse me, can a grant of -- can the inuring of the trust land in the states is superseded by a grant, by a Statute of the Congress.

Unknown Speaker: Let me ask you just before you sit down the -- suppose this Court said that well the United States doesn't want to come in here, it claim its indispensable, but we don't think it's indispensable all if California wants to go ahead against Arizona in this Court, it may, if it's wants to would you want to?

Mr. Allan Goodman: We don't think that we can get effective judicial relief in this Court under the circumstances.

Unknown Speaker: So your answer is no, you'd rather have the case you would ask the case to be dismissed as United States isn't --

Mr. Allan Goodman: We have no choice because we couldn't enforce that decree.

Justice William J. Brennan: That was part of this, suppose if we say yes.

The fight is between the states is here what California wants to bring a suit against the United States in the District Court it's free to do that and then we, the point is the master – the District Judge is going to decide District Court case.

Mr. Allan Goodman: But Mr. Justice Ben, I can only respond with the question that is would we then have one judgment or two I think the answer is we would have two judgments.

Justice William J. Brennan: He would be, he would wearing a hat with a --

Chief Justice Warren E. Burger: Red ribbon on it.

Justice William J. Brennan: As a special master he would be wearing his District Court hat on the.

Mr. Allan Goodman: So they make two judgments.

Justice William J. Brennan: Sure, so what.

Mr. Allan Goodman: Well, if I may take the Chief Justice's analogy the judge would be wearing two ribbons and the colors would be different and the question on appeal than again…

Justice William J. Brennan: Just be aware, you know.

Mr. Allan Goodman: Well that was our first question.

Chief Justice Warren E. Burger: There is no appeal from us in the one case.

Mr. Allan Goodman: But in the second one what would it occur, I simply don't, you don't have to answer for that question I submit that the only sensible way.

Thank you Your Honor it's for this Court to take this case thanks, thank you very much.

Chief Justice Warren E. Burger: Thank you gentlemen.

The case is submitted.

Featured:

Pennsylvania v. New Jersey - Oral Argument

Thu, 23 Aug 2012 18:17:05 +0000

Case:

Pennsylvania v. New Jersey

Media File:

68orig_19751203-argument.mp3

Related Transcript:

68orig_19751203-argument

Transcript:

Argument of Lawrence Silver

Chief Justice Warren E. Burger: We will hear arguments next in 68original, Commonwealth of Pennsylvania v. State of New Jersey.

Mr. Silver, you may proceed whenever you are ready.

Mr. Lawrence Silver: Mr. Chief Justice and may it please the court.

Chief Justice Warren E. Burger: A motion for leave to file a complaint.

Mr. Lawrence Silver: I am aware of that, Your Honor, but I think in order to fully understand the issues relating to that, some explanation has to be made of the underlying Tax statute that would be brief as to that.

Chief Justice Warren E. Burger: The statute was raised from Austin v. New Hampshire?

Mr. Lawrence Silver: The statute similar to the one declaring constitutional in Austin v. New Hampshire.

Chief Justice Warren E. Burger: There is a familiarity with that.

Mr. Lawrence Silver: Of course, the Pennsylvania in 1971 passed the Domestic Income Tax and, in response to that, New Jersey passed its Commuter’s Tax known as the Transportation Benefits Tax Act.

It taxes both Pennsylvania citizens who cross over to New Jersey and New Jersey citizens who cross to Pennsylvania, but immediately exempts those persons and, in fact, even does not require the filing of a return.

The issue, therefore, is whether or not that statute falls squarely within the holding in Austin, and we think it does.

The issue before the court raised by New Jersey’s motion, our position, is whether Pennsylvania, as a state, has standing to sue first for declaration that that statute is unconstitutional and the injunctive relief which should follow and, the second issue, whether or not has standing to seek the retroactive application of such determination and an accounting and repayment for the funds collected by New Jersey.

Justice William H. Rehnquist: Your case, then is different from Maine in Massachusetts that, in your case, it has not been established that the New Jersey tax is unconstitutional.

Mr. Lawrence Silver: There is no court declaration as to that.

We have two aspects.

We have a first hurdle to get over.

They already have the Austin case, which we do not.

In the first instance, we would ask the Court first to take jurisdiction to determine whether or not the statute is or is not constitutional.

I might add that I hope to explore the issue to be so clear as to really require summary disposition of that matter by the Court.

Justice William H. Rehnquist: What standing does Pennsylvania have to challenge the New Jersey tax insofar as it bears on Pennsylvania citizens?

In Austin, the challenge was by individual taxpayers claiming violation of privileges and immunity.

Mr. Lawrence Silver: Mr. Justice Rehnquist, we assert several issues standing as to our first count.

The first issue and I think the most important one is that, perhaps with the exception of the Commerce Clause, what keeps the nation together is the Privileges and the Immunities Clause, and it is our contention that Pennsylvania as a state suffers a trespass against it when its citizens’ privileges and immunities are violated.

The support for that proposition, first, I think is in Ward v. Maryland.

Also, in footnote 5, Mr. Justice Marshall’s opinion in Austin where James Madison requested information on what is to prevent the trespassers of one state against another state.

The answer was the Privileges and Immunities Clause, that Pennsylvania has been independently harmed by the fact that there is a violation of the privileges and immunities of its citizens and I might add, in support of that proposition, this Court’s opinion in Travers v. Towne and Yale Manufacturing Company, there, there was a corporation whose act was nothing more than withholding the money of its employees.

This Court permitted that corporation to assert the privileges and immunities of its employees.

Now, Pennsylvania, I would like to add--

Justice William H. Rehnquist: It was acting as a withholder and as a conduit of the money at least.

Mr. Lawrence Silver: Yes, but it did not allege that its privilege and immunities were being violated but that its employees’ privileges and immunities were violated, and their standing to raise that was sustained by this Court.

I would add also, I think the answer is contained in Mr. Justice Marshall’s opinion at 6-62 in which it is said that the issue that privileges and immunities, in terms of maintaining peace between the states that the constitution seeks to establish is such an important issue that it has a high degree of judicial inquiry.

That is language that I believe to be the converse in terms of the required level of standing.

Now, Pennsylvania also asserts its interest parens patriae to represent its citizens, stand in the shoes of its citizens to seek a declaration that a statute of a sister state is unconstitutional.

Justice William H. Rehnquist: Can you do that in the case where the other defendant is a state under the Eleventh Amendment?

Mr. Lawrence Silver: I think so, Your Honor, because in Pennsylvania v. West Virginia, West Virginia passed a statute which said that before you export natural gas to any other state, you must ensure that the demands of West Virginia are first satisfied.

Pennsylvania, by its self as well as in behalf of its citizens’ parens patriae together with Ohio, commenced original actions in this Court seeking a declaration that the statute was a violation of the Commerce Clause and this Court permitted Pennsylvania in that case to seek a declaration that a sister state statute was unconstitutional.

The question that you raise in addition to the one that I think I have tried to answer is the other aspect and that is the Eleventh Amendment.

The Eleventh Amendment only precludes, as I understand it, money judgments as against a sister state except the area under the exceptions of ex parte Young but that only--

Justice William H. Rehnquist: Ex parte Young does not involve any judgments of any kind against the state.

It is an injunction against state officials.

Mr. Lawrence Silver: An injunction, but I would assert, first of all, that the Eleventh Amendment does not only preclude suits against states but only suits by individuals against states.

Justice William H. Rehnquist: Would it not preclude a suit where the state is really not suing in the classical boundary sense or water diversion sense but, instead, really on behalf of its own citizens in a parens patriae capacity?

Mr. Lawrence Silver: Your Honor, I think that first of all, as I have said, that the trespass of the Privileges and Immunities Clause as to its citizens is an independent and separate trespass in Pennsylvania, as I think the opinion in Austin supports that proposition.

Justice William H. Rehnquist: It certainly does not say so.

Mr. Lawrence Silver: I agree, not in a clear language but I think that the history of the Privileges and Immunities Clause in this Court’s treatment of it would certainly support that proposition.

In addition, I do not think that the Eleventh Amendment comes up in the New Hampshire v. Louisiana where the state is really not acting in its sovereign capacity but seeks an avoidance of the Eleventh Amendment and there cannot be an assertion that Pennsylvania is trying to walk around the Eleventh Amendment by some act of an assignment of bond claims as there was in New Hampshire v. Louisiana.

Justice William H. Rehnquist: But, nonetheless, it is perfectly clear that a group of citizens of Pennsylvania could not get together and sue New Jersey in the Federal Court.

Mr. Lawrence Silver: For two reasons, first of all, they may be able to sue an officer.

Justice William H. Rehnquist: Right.

Mr. Lawrence Silver: But that is an Eleventh Amendment problem.

Justice William H. Rehnquist: For New Jersey.

Mr. Lawrence Silver: That resolves the Eleventh Amendment problems, Mr. Justice Rehnquist.

It does not resolve the problem created for those people under 28 USC 1341, the Anti-Tax Injunction Statute, which precludes a citizen from utilizing the Federal Courts to enjoin a tax in Federal Courts unless there is a plain speedy remedy.

Justice William H. Rehnquist: But those are two reasons where citizens of Pennsylvania cannot sue the State of New Jersey.

Mr. Lawrence Silver: That is correct.

Justice William H. Rehnquist: We certainly should not, under our regular jurisdiction, simply allow that to be circumvented in a dressed-up original action here.

Mr. Lawrence Silver: Your Honor, I do not think it is a dressed-up original action in a sense that 28 USC 1341 specifically limits its operations to the District Courts implying, I think, the congressional intent that where there is a dispute between the states, that the state may clearly go to this Court, that to suggest that it is an Enron to stand the jurisdiction of this Courts on its head and that this is the perfectly proper place to go because Pennsylvania, as I intend to demonstrate in the argument, has suffered an injury in addition to the injury suffered by its citizens.

Unknown Speaker: Mr. Silver, somewhere in your argument, would you refer to Massachusetts against Missouri?

This is heavily relied upon by New Jersey and not cited in your brief.

I want to be sure, I know your answer to that.

It does not have to be now.

Whenever you get to it.

Mr. Lawrence Silver: Okay, I would assert also that I think that as to the merits of the case, in terms of once the court reaches the issue, New Jersey has conceded with one exception, that their statute is precisely similar to the statute declared by this court to be unconstitutional in Austin, except with one aspect and that aspect is that the use of the money is to go to transportation purposes.

This Court in a long line of opinions has said that there are really two aspects to any tax.

The first aspect is the imposition.

The second aspect is the use.

And, the Court has often said that whatever the use is, if the use is improper, we would enjoin the use but an improper use will not declare unconstitutional, a proper tax and, likewise, I would assert that the only assertion by New Jersey to distinguish their act is one that is really relevant.

Going back to the issue of the original jurisdiction of this Court in terms of the retroactive relief that we seek, the Pennsylvania gave a tax credit, it does give a tax credit, to all of its citizens who pay income tax to another state, I might add that every state which surrounds Pennsylvania, has domestic income tax with the exception of New Jersey.

This is a tax credit, Your Honor.

Now, we do provide for a tax credit as to all states.

I think that Pennsylvania has within its constitutional powers, as was stated by Justice Marshall in Austin, has the power and the authority to grant such a tax credit.

The fact that its tax credit also creates harm for it does not preclude it from complaining for one retroactive relief and the money judgment in this court.

Yes, Mr. Justice Powell?

Justice Lewis F. Powell: But certainly, it would not require to grant the tax credit, would it?

Mr. Lawrence Silver: No, Your Honor, it does not.

Justice Lewis F. Powell: So it was voluntary political action on the part of Pennsylvania.

Mr. Lawrence Silver: That is correct.

Justice Lewis F. Powell: Can a controversy within the meaning of the constitution between states arise or a state voluntarily not under any constitutional compulsion brings abode now what you call is a controversy?

Mr. Lawrence Silver: I think so, Your Honor.

If a state has the power to do something, it need not release that right and power to accommodate the unconstitutional acts of a sister state.

If Pennsylvania has the right to act properly in this way and does act within its power, and by the exercise of its proper power, is harmed by the constitutional acts of another state, I think that it does create a controversy.

Pennsylvania need not accommodate or surrender its proper right to accommodate the unconstitutional acts of a sister state.

Now, the alternative that Pennsylvania could do, Pennsylvania could amend its statute and say “we will give you a tax credit for every state except New Jersey because we think their statute is unconstitutional.”

That is the very type of conduct that the Privileges and Immunities Clause was designed to prohibit retaliatory actions by one state against another state and, in fact, I would even suggest there is a possibility that if we passed such a tax exemption exempting only New Jersey citizens, that Pennsylvania would also be in violation of the Privileges and Immunities Clause, if not of the Equal Protection Clause by singling out New Jersey but until New Jersey statute is declared unconstitutional, Pennsylvania has of course the right to give such a tax credit.

That it may be harmed as a consequence does give it the right to complain in a Court.

Now, the reasons for the retroactive application are set forth in our brief, but New Jersey was unnoticed certainly at the time of the passage of the Act, certainly at the time of the filing of the Austin case, and certainly at the time, this Court issued its Austin decision and it is a constitutional tort feaser.

It should not be permitted to maintain the benefit that it has achieved by reason of its unconstitutional acts and, therefore, we would assert that it is not only within the power but the proper power of this Court to say to New Jersey “you have unconstitutionally collected a tax and you may not be able to keep that tax.”

To do otherwise were to basically encourage states to come so close to violating the Privileges and Immunities Clause that if they are wrong, they get to keep the bounty which, in Pennsylvania’s case at this point, is approximately $29 million.

I would say that—

Unknown Speaker: Part of the individual taxpayer is entitled to eat into that bounty?

Can they get it back?

Mr. Lawrence Silver: Your Honor, they took a tax credit in Pennsylvania for which they were relieved of tax liability in Pennsylvania.

Unknown Speaker: If they kept their tax back in New Jersey, is that not tax come in Pennsylvania when they get it back.

Mr. Lawrence Silver: Whether it is a taxable income is not an easy question, but we would assert that it would require an amendment of the prior return because the prior return would show a tax credit.

Unknown Speaker: There will be the Statute of Limitations all over that.

Mr. Lawrence Silver: We should hope not, Your Honor.

I believe it is a three-year Statute of limitations.

Justice William H. Rehnquist: If Pennsylvania should succeed in its efforts in this Court to get the money back, could New Jersey plead the judgment of this Court in an action by individual taxpayers of Pennsylvania seeking to recover moneys as were done by the individual taxpayers in Austin?

Mr. Lawrence Silver: I should think so, Your Honor.

Justice William H. Rehnquist: Why?

Mr. Lawrence Silver: Because first of all, the judgment of this court, if we would get all the relief that we request, would first have to determine Pennsylvania’s prior right to the tax moneys.

Justice William H. Rehnquist: Right.

Mr. Lawrence Silver: And that judgment, therefore--

Justice William H. Rehnquist: But then you want money too, do you not?

Mr. Lawrence Silver: Certainly.

Justice William H. Rehnquist: And you want money not to go back to the individuals who paid the New Jersey tax but you want money to go into the coffers of the Pennsylvania State Treasury.

Mr. Lawrence Silver: That is correct, Your Honor, because it is the coffers of the Pennsylvania State Treasury which effectively has been diverted to New Jersey.

Justice William H. Rehnquist: But then, why when the individual taxpayer comes and sues the State of New Jersey and says “your tax was unconstitutional,” and New Jersey says “we have already paid money into the general fund of Pennsylvania,” why should he not be able to answer and says “fine, that is great for the State of Pennsylvania but this came out of my pocket and I got to get it right to get it back in my pocket”?

Mr. Lawrence Silver: As I said, I think the judgment of this Court would determine that Pennsylvania has, since the funds were diverted from it and the judgment of this Court would have to make that determination in order for us to be successful, that that judgment could be pleaded that the individual taxpayers do not have the right following a judgment of this Court.

Justice William H. Rehnquist: How could we foreclose individual taxpayers who were not parties to this action?

Mr. Lawrence Silver: I guess this is the notion of I think collateral estoppel, Your Honor.

Justice William H. Rehnquist: Well, it is a rather unique version of collateral estoppel.

Justice Byron R. White: I am not sure it would be that.

I admit that they would not state a cause of action.

Mr. Lawrence Silver: That is right.

I am sorry.

I think you are right.

It is not collateral estoppel.

I think you are right, Mr. Justice White, and that is that they do not have the right to the money and that this Court would determine that Pennsylvania’s right for security.

Unknown Speaker: That the money would never end up in their pocket.

It would either end up in New Jersey’s or Pennsylvania’s pockets.

Mr. Lawrence Silver: That is right.

Unknown Speaker: You do not pay the tax to one or the other jurisdiction.

Mr. Lawrence Silver: That is correct.

That was the point of Mr. Justice Blackmun’s dissent in Austin.

Justice William H. Rehnquist: Even though in Austin the individual taxpayers got the money back?

Mr. Lawrence Silver: That remains to be seen, Your Honor.

I am not sure that that did occur.

I will allow--

Unknown Speaker: At any event, even if you cannot get the money you want to stay in court and have the law invalidated.

Mr. Lawrence Silver: Certainly.

We certainly want, first, the prospective relief to enjoin the statute, and I just might add that if this court would grant leave at least as to what I consider to be the easier issue as to the declaratory and injunctive relief, we would file then a motion for preliminary injunction to enjoin possible retroactive question after January 1 of this year because, at that time, again the returns will start being filed for the tax year of 1974.

In order to avoid a much more difficult collection problem that already exists, I would file at that time a motion for preliminary injunction.

Now, I think the question, although I really have not addressed that Mr. Justice Blackmun in those terms in your request that I address myself to Massachusetts v. Missouri has really been answered in the dialog between Mr. Justice Rehnquist, Mr. Justice White, and myself in that the question in Massachusetts v. Missouri was the mutual exclusiveness of the claims and what I think we have been talking about is whether or not the claims of the taxpayers and the claims of Pennsylvania are mutually exclusive.

We claim that they are, that since the moneys were diverted from the Treasury of Pennsylvania and, in fact, if the court is going to have retroactive relief in terms that the Pennsylvania taxpayers just the administrative problem of returning it to 60,000 Pennsylvania taxpayers over a period of three years, would be much easier to serve than Pennsylvania’s attempt to collect that money, if the money went to the pocket from which it was taken, and that is Pennsylvania Treasury.

And really, what the issue involved in Massachusetts v. Missouri is an issue relating to mutual exclusiveness, and what I think the Court’s decision in that case was that the issue between the states could not be resolved by this Court because both Courts, although could come up with inconsistent judgments, those inconsistent judgments were not necessarily mutually exclusive.

The only other question that is raised, I believe, by New Jersey’s brief that I wish to deal with is the issue as to whether or not this Court can give a money judgment, and I think that it has in the case of Virginia v. West Virginia which is not cited in our brief but it is at 38-202 and has ordered the judicial sale for the purpose of satisfying a possible judgment in South Dakota v. North Carolina at 192-286.

Also, I think this Court has always been troubled I believe over its ability to execute judgments in original actions and I think, I would refer to this Court’s opinion in Griffin v. Thompson which Mr. Justice Daniels said at 43 US 244 that there is an inherent power in every Court to exercise and execute upon its judgments and, frankly, I think he says without this power, Courts would be wholly impotent and useless and that this Court has the power under its original jurisdiction to establish whatever necessary common law requirements are to effectuate the judgment, and I think the assertion that there is an ability to effectuate this Court’s judgment is a red herring case.

Let us get the judgment I think and then worry about how to execute it.

I think there is an argument that New Jersey’s public officials who have to obey the constitutional laws of the United States would have to, under their oath, obey the judgment of this Court.

I would reserve any remaining time for rebuttal.

Chief Justice Warren E. Burger: Mr. Skillman?

Argument of Stephen Skillman

Mr. Stephen Skillman: Mr. Chief Justice and may it please the court.

This matter is before the Court on a motion for leave to file an original action.

The sole issue properly before the Court, therefore, is whether the Court has original jurisdiction over this matter.

It is the position of New Jersey briefly stated that this matter does not lie within the original jurisdiction of the Court because the State of Pennsylvania has no cause of action against New Jersey.

Its brief, in support of the motion for leave to file, relies exclusively upon the Equal Protection Clause of the Fourteenth Amendment and Article 4 Section 2 of the Constitution.

It is clear that these clauses offer protection only to individuals, in this case individual taxpayers, and not the states.

If anyone’s rights under these clauses have been violated, it is the Pennsylvania residents who have paid the New Jersey commuter benefits tax and not the Commonwealth of Pennsylvania nor may the Commonwealth pursue this matter on behalf of its citizens as parens patriae.

It has been suggested by counsel for Pennsylvania that if there has been some type of violation of the constitutional rights of the citizens of the Pennsylvania that there has, therefore, been a trespass of some sort upon the Commonwealth of Pennsylvania.

No cases are cited for this proposition and its consequences would be rather breathtaking.

This court has had hundreds upon hundreds of interstate tax cases coming forth through the years not only under the Privileges and Immunities Clause, but under the Equal Protection Clause and of course, most frequently in the business context, under the Commerce Clause.

If this case comes within the original jurisdiction of the Court because there has been a violation of the constitutional rights of the citizens of Pennsylvania and, therefore, a trespass upon the Commonwealth of Pennsylvania, it would be difficult to see how all the rest of the interstate tax cases involving not just the Privileges and Immunities Clause but also the Protection Clause and Commerce Clause would not also come within the Court’s original jurisdiction and greatly expand that jurisdiction.

Now, there also is a significant Eleventh Amendment aspect to the attempt by the Commonwealth of Pennsylvania to bring this case as an original action insofar as they seek a judgment for money damages against the State of New Jersey.

It is clear that, under the Eleventh Amendment, the individual Pennsylvania taxpayers could not bring suit in Federal District Court for the collection of any retroactive tax benefits.

It, therefore, should be equally clear that the Commonwealth of Pennsylvania cannot dress this matter up as an original action and circumvent the bar of the Eleventh Amendment and seek a money judgment against the State of New Jersey.

It was essentially for these reasons.

Unknown Speaker: Your brother cited to us a couple of cases which he says are cases of original jurisdiction of this Court I think, one in 238 US and another in 192 US, in which he says the Court has entered money judgments against the state, but I suppose the plaintiff in that case was the state suing on its own behalf and not on behalf of its citizens.

Mr. Stephen Skillman: That is correct.

The main precedent on that particular point is the case of Virginia v. West Virginia where, at the time, the State of West Virginia was established.

There was an allocation between the two states of the then existing bonded indebtedness of the State of Virginia.

Clearly, a cause of action of the State of Virginia and the Court did recognize that a money judgment might be entered under those extraordinary circumstances.

Here, however --

Unknown Speaker: That is in 238 US, is it?

Mr. Stephen Skillman: I believe that is the latter of the two cases in 238.

The other case is the South Dakota v. North Carolina case where I believe over a sharp dissent, South Dakota was permitted to take an assignment by way of gift of a bonded indebtedness between certain of its citizens and the State of North Carolina and to sue under that but, again, it was at the point that the completed gift was made it was an obligation between the state and the other state.

Here, on the other hand, it is clear that the obligation, if any, is an obligation that would run between the taxpayers of the Commonwealth of Pennsylvania and the State of New Jersey.

So, that extraordinary form of relief is not available here.

New Jersey relies very heavily, as indicated in its brief, upon Massachusetts v. Missouri where the Court found that the interstate tax conflict involved there did not fall within its original jurisdiction.

The Court specifically held that no justiciable controversy was presented by Massachusetts’ contention that the Missouri Taxing Authorities had improperly refused to exempt the assets of the estate of a Massachusetts domiciliary from the Missouri taxes, a very similar situation to the one we have here where the Commonwealth of Pennsylvania is claiming that notwithstanding the credit provisions of its own laws that the State of New Jersey should not have enacted a statute which would bring those credit provisions in to play.

Justice William H. Rehnquist: But the underlying hypothesis, as I understand it, in Massachusetts v. Missouri was that each of the states could tax the particular estate consistently with the constitution.

Here, I take it, Pennsylvania takes the position that New Jersey cannot consistently with the constitution impose this tax on citizens of Pennsylvania.

Mr. Stephen Skillman: I do not think there is any question under the Travers and Chaffer case that two states could impose a tax upon the same income, and I think what the Court was referring to there in terms of legal mutual exclusivity was one where the constitution bars double taxation.

Here, we have not constitutional bar against double taxation.

We have an argument that there may be a violation of the Privileges and Immunities clause by virtue of the imposition of New Jersey’s tax because of the particular tax structure of New Jersey but no inherent or intrinsic constitutional bar against double taxation, and I think that that is the main response to it.

Unknown Speaker: Do you think Massachusetts v. Missouri then turned on the concept of the bar of double taxation or the claim that those two states could not tax the same estate?

Mr. Stephen Skillman: I think partly on that, and also I think that the opinion also should be read partly as an attempt to explain what the Court had held only a few months before in Texas v. Florida where they had entertained an original action in a case involving five different states seeking to tax the estate of a single dissident, and I think that the mutual exclusivity also was meant to deal with that problem and to try and limit the parameters of that rather unusual case which Justice Frankfurter in dissenting had expressed fear might greatly expand the number of original actions being brought before the --

Unknown Speaker: It was the Hetty Brown Estate or something.

Hetty-somebody, was it not?

Hetty Green?

Mr. Stephen Skillman: Green, I think is the name.

It is the name that comes to mind.

Unknown Speaker: But nevertheless, the claim here is that the constitution prevents New Jersey from imposing the tax in this case.

Mr. Stephen Skillman: That is certainly Pennsylvania’s claim, yes.

It is true and recognized that the constitutional claims which Pennsylvania seeks to advance on behalf of its citizens would, if sustained by this Court, result in an increase in the tax revenues of the Commonwealth of Pennsylvania but this would be equally true in almost any case in which a state taxation provision were declared invalid because credits and deductions for taxes paid to other taxing authorities are so common place in the taxing schemes of all states that this would be a very frequently consequence of any declaration of unconstitutionality of a tax.

So, again, if this is a foundation for the Commonwealth of Pennsylvania proceeding directly against the State of New Jersey, the same jurisdictional principle would extend to the great majority of interstate tax disputes that come before the Court, that have come before the Court, through the years and with a few unusual exceptions of Massachusetts v. Missouri and Texas v. Florida have been brought by the individual taxpayers who claim that their individual constitutional rights had been violated.

Now, while Pennsylvania’s proposed complaint only mentions the Equal Protection and Privileges and Immunities Clauses, their supporting brief refers to the water diversion and escheat cases where the Court has fashioned what is called a federal common law in its role as arbitrar of interstate disputes.

The short answer to Pennsylvania’s reliance upon those cases, I think I have already given, and that is that neither Austin v. New Hampshire nor any other state tax case with a possible exception of Texas v. Florida has been decided on that type of a basis.

However, if the Court were to conclude that these cases were the appropriate jurisdictional framework for resolving this matter, we would ask that the mater on its merits also be treated as an interstate dispute to be resolved in accordance with principles of federal common law.

In other words—

Chief Justice Warren E. Burger: We will resume there at 1:00.

You may continue.

Mr. Stephen Skillman: Mr. Chief Justice and may it please the Court.

I would like to comment briefly if I may upon the presentation and argument of the Commonwealth of Pennsylvania.

I think that the most salient feature of that presentation is that the Commonwealth relies upon the water diversion, escheat cases and other cases in which the Court has fashioned a general federal common law in its role as arbitrar between the states in the federal system.

However, having established, as they conceive it, the jurisdiction of the Court under these cases they then abandon them and on the merits instead of relying upon principles comparable to those in the water diversion cases or asking the Court to fashion principles similar to those in the water diversion or escheat cases.

On the merits, they then turn around and ask the Court to consider this case as one involving denial of constitutional rights of individual taxpayers of the Commonwealth.

The State of New Jersey would have no objection to the Court entertaining under its original jurisdiction, this matter under principles comparable to those that have been fashioned in the water diversion or escheat case.

It would require rewriting of a good deal of constitutional history since these cases have previously, with one or two exceptions, been considered under the Privileges and Immunities and Equal Protection and Commerce Clause as applicable to taxpayers, but New Jersey would have no objection to this area of interstate tax disputes being reconsidered under those principles and under the original jurisdiction of the Court.

Justice William H. Rehnquist: Do you mean that it kind of transfered all disputes about the authority of the states to levy taxes under interstate commerce from other Courts to this Court under its original jurisdiction?

Mr. Stephen Skillman: At least to the extent that those cases properly may be viewed as involving a fight between the states as distinguished from essentially fights between taxpayers which, again, goes back to the merits of the case.

Justice William H. Rehnquist: But if this can be viewed as a fight between states, what interstate commerce taxation problem cannot be?

Mr. Stephen Skillman: I think that that is the problem that the Commonwealth has and it is seeking to proceed in that fashion.

All we are saying at this point is that we are asking them to be consistent.

If they are asking the Court to entertain original jurisdiction under the analogy of these other cases, then we would ask that the merits also be considered under the analogy of those cases and we would urge that if the case were so considered, and I am stating this in a hypothetical really Justices, that if the case were considered, the State of New Jersey would have a very persuasive case.

There is a tremendous outflow of money from New Jersey residents to the States of New York and Pennsylvania in a very small inflow of money under the statutes that are under the statute that is involved in this case and in the comparable statute that is applicable to the State of New York.

Unknown Speaker: Well, then we presumably would have not just New Jersey against Pennsylvania but we would have to join New York and Delaware and Maryland so that everybody could be heard from.

Mr. Stephen Skillman: There are no such taxes comparable to those involved here applicable to Delaware and Maryland.

There is a comparable tax under a different tax statute applicable to the State of New York.

So, it would be a case involving certainly the States of Pennsylvania and New York.

Unknown Speaker: Suppose that we had granted originally the motion for leave to file, could you not be making much the same argument to support a motion to dismiss or a motion for judgment on the pleadings, if you had made one?

Mr. Stephen Skillman: On the jurisdictional point?

Unknown Speaker: No, just for judgment in your favor on the grounds that maybe they have got standing but they are just not entitled to the judgment.

Mr. Stephen Skillman: That this plaintiff does not have a cause of action?

Unknown Speaker: Yes.

Mr. Stephen Skillman: Yes, I definitely we would be making --

Unknown Speaker: That it is a cause of action.

Mr. Stephen Skillman: Yes, we would be making the same argument.

Unknown Speaker: And I suppose if your paper, whatever you filed, you would not objectively construe to include a motion for judgment on the pleadings.

It is a motion to dismiss really.

Mr. Stephen Skillman: It is a brief in opposition to their motion for leave to file, but I do not think—

Unknown Speaker: You have not filed an answer.

Mr. Stephen Skillman: We have not filed an answer.

Unknown Speaker: Because there has not been a complaint file.

Mr. Stephen Skillman: That is right.

The motion for leave to file has not been acted upon.

Unknown Speaker: While counting, Mr. Skillman, if we were to disagree with you and we were to grant the motion for leave to file, what follows in this case?

What kind of an answer can you give us that you have not already given us in resisting the motion for leave to file?

Mr. Stephen Skillman: That would certainly depend on what the Court said as to Pennsylvania’s status.

Unknown Speaker: The bottom line is the motion is granted.

Let us say that is the only line.

That is all we do.

Chief Justice Warren E. Burger: Just an order.

Unknown Speaker: Just an order, then what happens?

Mr. Stephen Skillman: Well, I think that we would give a series of responses in the disjunctive.

I think that the first response we would give would be comparable to the one that we have already have given.

Unknown Speaker: You have motion to dismiss and you said precisely what you are now saying.

Mr. Stephen Skillman: Pennsylvania has no cause of action.

I think that we would have to, in order to cover ourselves if I may put it that way, also argue on the merits and distinguish the New Jersey situation from the New Hampshire situation involved in Austin just on the contingency that the Court might—

Unknown Speaker: At least with all the arguments below, would there be any role for a master to play, for example, in a case like this?

Mr. Stephen Skillman: Yes.

Unknown Speaker: You would?

Mr. Stephen Skillman: I think that once the court recognize that Pennsylvania has standing to raise the constitutional contentions of its taxpayers or, if I put it in a different way, if this case were brought in what we could conceive to be the proper forum that there are a number of factual issues that would need development.

Unknown Speaker: Can you suggest what they are?

Mr. Stephen Skillman: One is how New Jersey goes about funding the interstate transportation projects that it does fund with the revenues derived from this tax.

The Court recognized in Toomer versus Witsell that differential tax burden upon residents and non-residents in a given tax is not per se intrinsically, automatically unconstitutional, rather if there is some reasonable basis for it, some reasonable basis for it, some reasonable justification for the disparity, it may be upheld.

Unknown Speaker: I do not think there is any area in the between denying motion for leave to file and a full blown trial of the merits.

Do you think there is any room for holding that they have never seen a cause of action?

Mr. Stephen Skillman: I do think there is room for that.

I understood the inquiry to be what our response would be if the Court were to grant leave to file and ask us to address the merits but not indicate any ruling on the standing question.

Unknown Speaker: To dismiss the case?

Mr. Stephen Skillman: As long as we were able to reserve the right to speak to the merits should that motion be denied.

Unknown Speaker: You might file an answer and that is the decision of the Court.

Mr. Stephen Skillman: Yes but, as I say, I think we would cover that in the disjunctive, first of all, as to Pennsylvania’s claim of its own which I think would be saying essentially the same things we are saying now but--

Unknown Speaker: And it would be only if you lost out on all those motions, after all the pleadings and then we get to the point where we have to decide what point of action.

Mr. Stephen Skillman: And we would have a number of factual issues.

First of all, as to the allocation of the revenues.

Unknown Speaker: New Jersey still does not have an income tax, does it?

Mr. Stephen Skillman: No, it is still trying.

Unknown Speaker: It is trying awfully hard, but rather unsuccessful.

Mr. Stephen Skillman: That they may eventually come and it would be a very—

Unknown Speaker: I do not suppose you can say what New Jersey would do if Pennsylvania decided that it would not give a credit.

Mr. Stephen Skillman: I think New Jersey would certainly have to reconsider its position on this tax very substantially.

Unknown Speaker: I suppose you could say there is one thing it would not do, and that is to tax everybody or would a possibility?

You would just quit exempting New Jersey-ites so that Pennsylvania would then give the credit?

Mr. Stephen Skillman: New Jersey has been striving for the enactment of an income tax for a long time, so it would be highly speculative as to what the consequence of that would be.

As to Pennsylvania’s granting of the credit in this situation, and I do not want to go into the merits further than I really should but I should just note, that this was not something that New Jersey conjured up in the middle of night and did without consultation with Pennsylvania before this tax was enacted, and it was enacted right on the same time that Pennsylvania enacted its income tax.

There were discussions in a conference between the governors of the respective states, their personal counsel, and the attorney generals of those states.

So this is not, at least it was not initially, the type of conflict or attempt by the State of New Jersey to raid Pennsylvania tax revenues that might have been portrayed and, again, that would be another area that factually would have to be explored if the court were to reject our contention that Pennsylvania does not have standing to pursue this matter on behalf of its taxpayers.

Thank you.

Chief Justice Warren E. Burger: Mr. Silver?

Rebuttal of Lawrence Silver

Mr. Lawrence Silver: Your Honor, just very briefly I, during lunch or recess, would like to further amplify my answer to Mr. Justice Rehnquist’s remark or questions to me.

There is no doubt that New Jersey did consult with Pennsylvania and extended certain courtesies, but I think this Court should know that, first of all, their tax is almost a mirror image of ours.

In fact, some of our embarrassment, the same typographical and grammatical errors that appear on our Act also appears in New Jersey’s Act.

I think it is essential and important to know that every single time, we have changed the rate, which has only been two times that initially it was 2.3% and New Jersey had it at 2.3% and when we changed it to 2% New Jersey immediately changed theirs too and that I think, in answer to your question Mr. Justice Rehnquist, the target here has been Pennsylvania and not its citizens and truly, in support of this position, I would rely on Mr. Justice Blackmun’s dissenting opinion.

One of the reasons, one might ask is why has not a citizen attacked it?

Because, if he attacks the statute and he is successful, he pays the same amount of money in Pennsylvania by reason of what New Jersey has done in terms of retaliation and it is Pennsylvania’s Treasury that is being harmed by this statute.

Unknown Speaker: Are you being animus against Pennsylvania as a sovereign entity rather than just to decide to collect as much money as possible?

Mr. Lawrence Silver: Well, Your Honor, this statute does not tax all non-residents and that is a point that I think should be emphasized.

This tax statute says the Commissioner of Transportation shall select a border state which has a critical transportation problem and, under this statute, they did not pick Delaware or New York.

They only picked Pennsylvania and the rate is the exact same rate as Pennsylvania’s rate.

It is, and it was enacted right after our tax was acted.

So, it is a rate by New Jersey, a courtesy, I agree but nonetheless a rate upon the Treasury.

A courteous rate, but nonetheless an unconstitutional one.

And although we might have gotten into intellectual discussions about parens patriae, etcetera, the primary argument which I had in my brief and relied on it on perhaps more academic arguments but I think arguments that are meritorious, but I think the easier argument is Pennsylvania is the real party harmed.

Unknown Speaker: With the argument the taxpayer’s suit raising the Equal Protection point that you seem to be hinting at?

Mr. Lawrence Silver: Well, it might be, but New Jersey’s Courts could very easily adapt Mr. Justice Blackmun’s position in his dissent and say “you have no standing because you have no injury, because if you win, you lose because you pay the money.”

Unknown Speaker: This was a constitutional decision.

We could always take care of that, could we not?

Mr. Lawrence Silver: Yes, Your Honor, in three years or so when the retroactive relief we would be seeking would be many more millions of dollars than it is already, and I might add, we have waited three years and I think the answer is really contained in Mr. Justice Brennan’s statement, there has been substantial efforts to get New Jersey to pass an income tax, and I concede that if they tax their citizens the same way they are taxing our citizens, we would not have the same constitutional underpinnings for this argument.

It became abundantly clear in July, Mr. Justice Brennan, that New Jersey was not going to pass an income tax, and in August we filed our action.

And, Mr. Justice Rehnquist, if I just may say one more point, this is not a subtle attempt to utilize the original jurisdiction of this Court to vindicate what is essentially a private right.

This is not an attempt like in New Hampshire v. Louisiana to take an assignment of bonds but it is an attempt to rectify and to protect Pennsylvania’s fisc.

It is a direct interference with Pennsylvania’s interest.

Now, to do that, they must assert its unconstitutionality and, upon that, must be the infringement to its citizens or the infringement, as I have suggested, to itself.

Unknown Speaker: But, of course, Pennsylvania has had within its own power at all times to prevent that injury.

How about the old common law maxim of volenti non fit injuria that if you have it within your own power to prevent the harm, you cannot come to court and complain about it?

Mr. Lawrence Silver: I think that the kind of harm we could prevent is in the nature I think of the last clear chance rather than if you have the constitutional power to do something properly and you would exercise that power within your right to avoid the unconstitutional acts of another.

I think that New Jersey has relied on what is a floodgates argument, that if the Court opens itself up to this case there will be a floodgate problem.

I think not, if you grant all of the relief that we request and even if you grant part of the relief, but I think the issue that we have said is that what must be prevented is for a state to enact a statute which so clearly comes close to constitutional violations, that all we ask is that if a state does violate the constitution that it pay back the money that it has improperly got, that is not a penalty but that is a substantial deterrent that states should and I ensure you will consider in the enactment of legislation in the future, and by granting that relief states will steer clear of the kind of constitutional violations that have been suffered in this case.

I would just respond to one matter that came up in argument before lunch.

I think that the matter that their brief in opposition can be treated as a motion to dismiss and I think that the arguments can be resolved on the merits at the present posture on the legal issues.

Certainly, regardless of what New Jersey would do in terms of an answer, we would file a motion for file for summary judgment or an alternative judgment on the pleadings of waiting their answer, but the issue as to the constitutionality of a tax is a legal question.

This Court can look at the statutes without any reference to any facts.

The statue is clearly there.

The only argument I just would, not reiterate but just, remind that I made is the fact that New Jersey may use this tax for transportation purposes does, if the taking is wrongful to begin with, the use does not save it even if the use were as a donation to the fisc of Pennsylvania, as meritorious as Pennsylvania would find that to be, we would still say that such a meritorious use, a donation to our Treasury would not save the unconstitutional taking.

Thank you.

Chief Justice Warren E. Burger: Thank you, Gentlemen.

The case is submitted.

Attribution:

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Pennsylvania v. New Jersey - Oral Argument (No. 69 ORIG)

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Case:

Pennsylvania v. New Jersey

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69orig_19751203-argument.mp3

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69orig_19751203-argument

Transcript:

Argument of Joseph E. Brennan

Chief Justice Warren E. Burger: We will hear arguments next in 69 Original, states of Maine and Vermont and the Commonwealth of Massachusetts against New Hampshire.

General Brennan you have the benefit of the arguments that has just been completed and of course we have had the benefit of them, and so, we take it that you will pick up where they left off and give us something that you haven’t heard this morning and this afternoon.

Mr. Joseph E. Brennan: Well Mr. Justices may I please the court.

I will certainly try to and much of our thunder, frankly has been stolen in many respects.

The facts in this case really are not in dispute.

The action of the plaintiff states is in the Sovereign and Proprietary Capacities to recover funds diverted by the unconstitutional New Hampshire income tax.

This tax was imposed in 1970.

It was challenged in 1971 by Maine's citizens, with strong support from the State of Maine.

It was held unconstitutional in March.

It is violative of the Privileges and Immunities Clause.

As we see it, the essential ultimate question is, “Whether or not New Hampshire should benefit from such unconstitutional conduct with this unconstitutional tax scheme, by retaining the proceeds of that scheme which amount to some $13.5 million which were diverted from the plaintiffs’ treasuries.

We say that the plaintiffs are the appropriate parties.

We say they were hurt, as was intended by the State of New Hampshire.

For the individual tax payers to bring this action, or to bring an action, assuming they can get over standing issue, assuming they can show some injury would be as has been said earlier “repetitious or be costly.”

Any damages that were awarded would have to be turned over to the plaintiff states so there would be absolutely no Incentive for them to do it.

Chief Justice Warren E. Burger: What if I sanctioned, it will go to them?

Mr. Joseph E. Brennan: I think a class action might be available, but again they would run into the same problem withstanding that class wouldn’t be hurt.

The party that is hurt is Massachusetts, Maine and Vermont.

They bore the burden.

Their treasuries did not receive money, they would otherwise have received had it been not for this unconstitutional tax.

Chief Justice Warren E. Burger: Any way they could have avoided that a long the lines that Mr. Justice Rehnquist suggested in a question?

Mr. Joseph E. Brennan: Well, in reference to the possibility of retaliation, the cases of this Court have emphasized, several times and as recently as Austin against the Policy of Retaliation.

Chief Justice Warren E. Burger: Well, other than retaliation?

Mr. Joseph E. Brennan: There is no other way that I am aware of Mr. Chief Justice.

Unknown Speaker: Could you not change your law?

Mr. Joseph E. Brennan: Well, if we were to change our law that would mean, to amend the law, and not to give the tax credit.

That in effect could be Retaliation against our residents who work in New Hampshire and we then would not be retaliating against our residents who may have worked in 39 other states where we give tax credits.

Chief Justice Warren E. Burger: But if you did not have your law in the first place, you would not be here today?

Mr. Joseph E. Brennan: I am sure --

Unknown Speaker: I am just arguing my dissent and I was alone so [Laughter] do not be concerned about it.

Mr. Joseph E. Brennan: We submit that the states here are not stand-ins for the individual tax payers, that they are suing in their own right, that under Article III, Section 2 of the Constitution, that the Supreme Court is the proper forum, that this Section contemplated that one state should not be compelled to go into the jurisdiction of another state to seek a solution.

Therefore, the New Hampshire courts or administrative agencies are not the appropriate forum and in reference to that retaliation, we feel that the decisions are clear, that the policy is against it, that the State of Maine should not try to visit -- double sense on its own tax payers just to retaliate for what was apparently gonna be a short lived illegal tax scheme.

This Court -- the plaintiff states again did not -- the fact that they did not retaliate, it is suggested by New Hampshire that we should be barred.

We submit that type of argument really does not wash.

In Texas versus Florida, 306 U.S.

where one state threatens to deprive the other of its lawful taxes, this creates an appropriate basis for action by this Court.

In essence we are saying that, again and much of it is just reiterating what has been said before, we are the real party and interest, we have been hurt.

The individual tax payers really would not hurt to any major degree and if they did recover, they would have to turn the money over to us.

And again, this is an action between states.

This is the appropriate forum.

Any recovery the individuals got would be a nullity.

The plaintiff states could not have avoided it without risking violating the Privileges and Immunities Clause themselves or the Equal Protection Class.

And to --

Justice William H. Rehnquist: Why would any of recovery the individuals got the nullity?

Mr. Joseph E. Brennan: Well, then their tax returns would have to be amended to reflect that there was no payment to another state.

So then the payment would have to made to Maine, Massachusetts and Vermont.

Justice William H. Rehnquist: Is all that as quite as clear as you make it sound?

Mr. Joseph E. Brennan: I believe it is, Mr. Justice.

To refuse to allow us --

Justice Byron R. White: Do you need an injunction?

Mr. Joseph E. Brennan: Well, we need an injunction to get an accounting.

We need an injunction because --

Justice Byron R. White: Do you need an injunction to force New Hampshire not to enforce its tax?

Mr. Joseph E. Brennan: Well, they could do it on their own, but at present they sent out a notice right after this --

Unknown Speaker: What was the result of Austin?

Mr. Joseph E. Brennan: The result of Austin was, they instructed their employers and their states to stop withholding taxes after March 19.

However, they instructed those people to continue to make payments for money that was collected prior to March 19.

Justice Byron R. White: But as far as the future is concerned the harm to Maine will not occur again?

Mr. Joseph E. Brennan: Just to the extent that the money that was collected prior to Austin, they are going to requite returns to be made next year as I understand it, on moneys that are characterized already as unconstitutionally taken from our citizens.

Unknown Speaker: Well I gather that would be as to earnings up to March 19?

Mr. Joseph E. Brennan: Correct, Mr. Justice.

To refuse to allow us to file a complaint based on these facts would encourage petty retaliatory action in the future.

It will encourage states to adapt tax laws of dubious legality in the knowledge that they may be able to return their ill-gotten gains.

On the other hand to accept this complaint would further the policies of non-retaliation long articulated by this Court.

It will would place the states on notice that they must develop their taxing schemes with great care.

Finally, the court should not adapt the rule which might encourage some states beset by immediate physical crisis to give less than careful care in adopting tax laws which may be unconstitutional.

So we will urge you very respectfully to permit the plaintiff states to file a complaint.

Mr. Scotch from Vermont has the other 15 minutes.

Thank you.

Chief Justice Warren E. Burger: Mr. Scotch?

Argument of Benson D. Scotch

Mr. Benson D. Scotch: Mr. Chief Justice and may it please the Court.

I come here to talk about the seriousness and the dignity of the complaint of the three plaintiff states against the State of New Hampshire.

I originally had planned before hearing the earlier argument to dwell principally on the question of retroactivity, for I think no other question raises the equities between the plaintiff states and New Hampshire better than the question of retroactivity.

In approaching this particular equities question, it seems to be we fall back immediately on this Court's own declarations in retroactivity cases.

I think it is important to note that at the time New Hampshire adapted its commuter's income tax case, tax, Ward against Maryland had been decided by some 90 years previous.

Some 56 years ago in this very room, Travis was argued. Since that time -

Justice William H. Rehnquist: This room has only been here for about 40 years.[Laughter]

Mr. Benson D. Scotch: In this building, Your Honor.

Justice William H. Rehnquist: You know, the building has only been here for about --[Laughter]

Mr. Benson D. Scotch: The point is that as far as the [Laughter] as far as the case is concerned, certainly New Hampshire knew what they were doing.

The books have not changed, the buildings may have.

There has been virtually nothing since Travis and the date of the adoption of the commuter's income tax, that would have given any suggestion to New Hampshire that that tax could have have been constitutional.

I think this is very vital.

In the second Lemon against Kutrzman case, this court raised the question of whether decisions of the Court that are first impression that declare new principles of laws should be retroactively applied.

I submit that at the time the commuter's income tax was adapted certainly no case of first impression or any impression had been decided by this Court or even submitted to this Court that would have given them any comfort in the adaption of their commuter's income tax case.

Very important in the question of retroactivity and in the question of equities is the subject of reliance.

I think it is inherent in the number of the questions that the Justices have presented both in the earlier argument and this argument.

In the normal reliance situation, when in Lemon against Kutrzman in the second decision, the Court speaks of the hard facts upon which people rely.

People must rely, making their decisions. Obviously the Court is speaking of two classes of people.

One class is the law giver, the other class is the reliance’s interest and in each of the cases that the Court has decided in the retroactivity area, there has been a separation or bifurcation of the law giving interest, either the legislators and the courts on the one hand and upon those who are rely on the other hand, thus for example in Lemon against Kutrzman, it was the non-public schools that were reliance interest.

Certainly they did not create the laws in which they had to make their decisions.

Same thing in Chevron (ph) against Houston or in the frequent criminal retroactivity cases that come before this Court, most recently in the Peltier case, obviously the considerations that apply were those who are forced to rely to make their day-to-day judgments, cannot make them on the basis of shaping their own law, they are put in a bind.

Essentially, the retroactivity cases in my way of thinking, allocated, divide among two interest parties, both of which are essentially innocent insofar as being able to frame and shape the law.

In the case of New Hampshire adapting a commuter's income tax case, we have a very, very different situation.

As will appear in the record and I would not repeat what is already in the record, at the time and prior to the time that New Hampshire adapted this tax, they were very on very good notice from task force prepared for the Governor that they were grave questions about the constitutionality of the commuter's income tax case.

Mr. Hemp's (ph) opinion which is also in the record, points out how cleverly the Bill was drafted.

It separates those who might complain, but will be unable to complain because they have no standing from those who are the real targets, namely the states.

I would submit to this Court that it appears clear from the legislative history of this Act, that if the three surrounding states did not have tax credits, the commuter's income tax of New Hampshire never would have been adapted.

The most important retroactivity-equities question that I think the Court ought to consider and that I want to address is the preposition raised by this Court in Linkletter.

Will the rule whose retroactive application is sought tend to further or retard the effectiveness of the rule and I would submit in this case, the Court essentially is balancing the legitimate interest and we conceive they are legitimate interests on the part of the states to experiment with new types taxation that fit new social and political and economic conditions within the country.

Balance that interest on the one hand with what I think is an equally serious interest to deter what we refer to in our brief is taxable predatory taxation or tax adventurism or the like.

It is very, very important we feel to consider those interests as being very equal interest, to try to develop policies that will mediate between those interests.

I would submit that if a state acts with full knowledge of the consequences and with full knowledge of the potential impediments in a statute and if that state later is not compelled to face the consequences of what it has done, then I would see no reason why any state should not adapt borderline legislation or perhaps legislation that goes well over the border.

There are no sanctions.

It takes three or possibly five years for these cases to wind their way though the courts.

There would be no sanction or whatsoever.

Chief Justice Warren E. Burger: But do you think the law consist that it takes three to five years before they could get here?

Mr. Benson D. Scotch: No, Your Honor.

Chief Justice Warren E. Burger: Is it a very good reason for our taking an original -- exercising original jurisdiction?

Mr. Benson D. Scotch: In our case, it is distinguished from the previous case to be heard today, Your Honor.

This tax already has been declared invalid by this Court.

This is not the situation that I think Pennsylvania point they allude to, their argument try to suggest would develop, if the Court took jurisdiction of this case.

It is not a very common situation where a legislative history has developed, reflecting a direct intent to act against the treasury of a sister state and where indeed the legislative history indicates that unless the tax laws of the second state were not susceptible to this treatment, the tax would not be adapted at all.

I think this would not be a large case finding decision in that sense.

Justice William H. Rehnquist: But that is a part of presumably the law of the Interstate Commerce Clause, that and you say you have got a strong case here under that because of that fact, but if we start taking these cases, we are going to have to entertain arguments that are presumably a good deal less persuasive than yours, once we let the cases in the Court?

Mr. Benson D. Scotch: I would simply urge, Mr. Justice Rehnquist that in the case of the three plaintiff states here represented, we did not come directly to the Court.

We bided our time in Austin against New Hampshire and it was a long time and costly time.

Justice William H. Rehnquist: Did you put an answer in any of that litigation?

Mr. Benson D. Scotch: We appeared as an -- as an amicus curiae and yes we did, we participated directly.

We felt that was the proper route to go, not alone in terms of the limited original jurisdiction of this Court, but in terms of giving New Hampshire the opportunity through their court system or through their legislators to recant and they did not do so.

We feel at this point that the tax having been declared unconstitutional, this is not a case finding decision.

This is a very unusual set of circumstances and we feel that we have gone to court in the right order, starting with the state where we ought to have started and in that sense it is not comparable at all to the condition of the suit by Pennsylvania against New Jersey.

Not to cast any suggestion about the merits of their original action, but we felt differently at the time and we so conducted ourselves.

I want to address myself to a point that has been raised in several connections by the justices and that is what I call “the so-called litigation question.”

Why should not the states repeal their credits?

I wanna draw a clear distinction between cases like Massachusetts against Missouri or Texas against Florida, where we are dealing with death taxes.

The income tax credit is not only a fact of life today, virtually throughout the country, but in this particular instance our failure to grant the credit would have meant effective double taxation to our own citizens and I would simply urge that in economic realities of an income tax, particularly in today’s economic conditions where wages in our particular part of the country are not high, doubling the income tax of our own citizens in order to re-dress the wrong committed by New Hampshire did not come to us as a really viable alternative.

Mr. Justice Rehnquist --

Unknown Speaker: Mr. Scotch, I do not follow you on the doubling of the tax.

I thought New Hampshire had a credit for that, am I in error?

Mr. Benson D. Scotch: I believe they have a credit for their own citizens, but I believe the outcome is as conceded earlier in arguments where New Hampshire -- where -- I am sorry, where Pennsylvania made reference to the possible double taxation suggests and together with New Hampshire’s own brief in this matter suggest that there would be no falling away of the New Hampshire tax in the event that we dropped our credits.

All that would fall away is that entirely hypothetical tax that was imposed upon citizens of New Hampshire who worked in Vermont and the other two states, that never could be applied because of the way it was drafted.

But it is my understanding that our dropping of our tax credit would directly involve double taxation unless of course as suggested by the Court in the oral argument, unless of course New Hampshire chose at that point to drop it is commuter's income tax, that is a completely speculative matter.

Justice William H. Rehnquist: Really, your distinction between death taxes double and income tax double is really boils down to nothing more than the idea that dead people cannot vote, does it not?

Mr. Benson D. Scotch: No, your honor.

Even in the area of death taxes, we found out in Texas against Florida, where the viable claims are mutually exclusive, this Court will take jurisdiction.

All I am suggesting is that -

Unknown Speaker: Well, what is the real reason in Texas against Florida that the combined asserted tax by all of the states exceeded the --

Mr. Benson D. Scotch: That is right.

They were mutually --

Unknown Speaker: --timely -- timely this Court took jurisdiction?

Mr. Benson D. Scotch: Yes, Your Honor, that is correct.

What I am suggesting is --

Unknown Speaker: It is a long, slow road, even there?

Mr. Benson D. Scotch: Yes it was, Your Honor.

What I am suggesting in answer to the argument volenti non fit injuria, is that we as a state need to consider the injuria, what or what kind of injury are we visiting upon our citizens.

Must we be compelled to take the corrective steps, where there has been harm, deliberate harm as will appear on the statutory history of this Act, I think talking of old common law doctrine, that it was clear common law doctrine, that mitigation of damages need not be taken where the mitigation itself would be unreasonable or would cause undue harm to others.

In fact, I think our old common law case is going back to the 17th Century make clear the right for example, of the Lord of the matter, the defendant servant, I would suggest an equal preposition in our case that the states have not only the right to defend their citizens and the ability of the citizens to continue to work, but probably a duty to do so, I would submit it would have been a number of years before New Hampshire could have practically considered the repeal of its commuter's income tax.

Talking of our own proprietary interest, I think it would be demonstrable from masters appointed in this case to show that the incomes of many of our commuters are at such a level that the doubling of their income taxation would make it economically inconsequential for them to continue working.

Many of our people --

Unknown Speaker: I guess my problem and I would not repeat it anymore, I fail to see the doubling of the tax and it is certainly was not true in Austin against New Hampshire?

Mr. Benson D. Scotch: Well, that is what we are -- I believe and of course this is a matter we can submit further, written document, I believe the tax is written in such a way that the benefit of our -- the benefits uphold of our dropping of our credit, our credit would not accrue to our own citizens.

Well, that is a technical matter.

I believe we are right on it and we will leave it to New Hampshire, perhaps to declare whether that is correct or not.

Unknown Speaker: Again my difficulty basically is to see -- to conclude that New Hampshire was such a rascal always?

Mr. Benson D. Scotch: Well, we -- we in Vermont of course have our own very strong views on New Hampshire (Voice Overlap)

Unknown Speaker: (Voice Overlap)

Mr. Benson D. Scotch: I would like finally if I may to address a remark or two about Massachusetts against Missouri.

I find there is a very expanse if it not a profligate reliance upon Massachusetts against Missouri.

That was a very simple case as I read the case.

All the Court is saying in Massachusetts against Missouri is that Massachusetts has not stated a cause of action.

This was a case of rival, but mutually, allegedly mutually exclusive claims.

Now, it turned out not to be mutually exclusive.

There was no allegation in Massachusetts' papers in Massachusetts against Missouri, that the Missouri tax was discriminatory or that in any way the tax violated any precepts of the United States Constitution in their papers before this Court.

In fact, the sole allegation that Attorney General Deaver (ph) really is able to level in Massachusetts against Missouri that the courts of Missouri will not hear Massachusetts’ claim against the trustees of trust.

The Attorney General of Missouri was able to give that vitali by stating in open court that of course the courts of Missouri would hear a claim by Massachusetts against the trustees and that is all that Massachusetts against Missouri decides.

We are not claiming mutual exclusivity.

We are claiming in effect a direct harm to the interest of our State, a calculated harm and if you will, harm that in terms in common law analogies, it is very similar to a direct common law tort, although we have not so alleged and perhaps that states the case a little strongly.

There is nothing that we can find in Commonwealth of Massachusetts against Missouri that would lend to the general preposition that tax cases that are otherwise justiciable may not come before this Court in original jurisdiction.

It seems to me, if we make out a claim that the three plaintiff states were in fact the targets, perhaps some of this questions go to fact finding that could occur after a master is appointed, but we feel, frankly they are adequately stated on the record submitted with our papers.

We feel very strongly that on that type of theory and not a mutually exclusive theory, there is no reason why this Court, what not to on general principles of equity and common law take original jurisdiction of this case in the manner in which water diversion cases or pollution cases are taken.

For in that sense when we consider direct injury, there really is a very little distinction between those classes of cases.

Chief Justice Warren E. Burger: Mr. Scotch it may not become relevant, but if this case proceeded as you would like to have it proceed and a special master were appointed and a jury were requested as was fairly common a hundred and seventy five years from whence would the jurors be drawn?

Mr. Benson D. Scotch: Well, Your Honor --

Chief Justice Warren E. Burger: Perhaps we do not need to dwell on it, I trust you may have a ready answer for that?

Mr. Benson D. Scotch: Our answer would be, we would hope of --

Chief Justice Warren E. Burger: Not from --

Mr. Benson D. Scotch: Not from the State of New Hampshire [Laughter] we would certainly so argue.

We would also of course rely upon the ability of the Court as demonstrated in -- as demonstrated time and again to exercise what is inherently is equity jurisdiction and of course we would argue that as an equitable matter, a jury would be an appropriate.

Justice William H. Rehnquist: Well, you read Curtis against Lozer, two years ago where we said that if you are going to award damages, you must have a jury in the federal system?

Mr. Benson D. Scotch: Our answer in that question Mr. Justice Rehnquist would be that I believe where a jury is called, the question of liability is at issue.

What we would argue and reply to that is that the question of liability, the question of the constitutionality of the tax at any rate is the question which already has been disposed of by this Court.

All that is left to do is to add up a bill.

How much in fact has New Hampshire diverted, assuming arguendo that our diversion argument will prevail, I would submit to this Court that on the narrow question of adding up the tally and perhaps adding up the interest which we hope also would be added, that is not only an appropriate to require a jury, but that is a jury with essentially --

Justice William H. Rehnquist: But, that is not traditional damage, that is more of an accounting type?

Mr. Benson D. Scotch: That is exactly and that again Mr. Justice Rehnquist reinforces the fact that essentially we are invoking your equity jurisdiction.

The basic question of liability in our view already has been determined by this Court in a prior proceeding and the proceeding which from our point view was the proper one that have brought and in which we participated.

I would like if I might in my remaining time to refer to an issue that raised in the other argument that is not explicitly raised by New Hampshire, but I think as a penumbra matter it may certain be brought up in connection with our case and that is the question of whether the individuals would be necessary parties if this Court would take jurisdiction.

I would like to suggest an answer to that that all three states have maintained their rights against their individual tax payers and if following our successful prosecution of this case in original jurisdiction, any tax payer of the State of Vermont would have appeared in New Hampshire court, claiming the same types of damages, our answer would be and although it would be inappropriate for us to appear as parties, we certainly would apply to appear as amicus.

Our approach would be in that case to suggest to the trial court of New Hampshire that no claim remains.

Any recovery that might be garnered by a citizen of Vermont in a court of New Hampshire would be matched by a contrary claim by Vermont against that citizen based upon a revocation of the credit.

Of course that is a moot issue if we have already received that credit money directly back from New Hampshire.

I guess in short the answer would be no claim remains after our successful prosecution of this case in this Court.

Justice William H. Rehnquist: Even though under your submission, a Vermont commuter into New Hampshire was unconstitutionally required to pay taxes by New Hampshire?

Mr. Benson D. Scotch: That would be Your Honor, damnum absque injuria.

There has been no harm, but the --

Justice William H. Rehnquist: Well, he sure thinks there is harm I would imagine?

Mr. Benson D. Scotch: Not if he has been given full credit by the state of Vermont made in Massachusetts.

He may have been harmed initially, but certainly any money that he would recover would be double recovery for him.

He has been granted a credit.

If he gets another payment from New Hampshire he has been doubly been enriched.

We certainly would not tolerate that and we would state in Court that we would appear in New Hampshire in some appropriate forum to bar that claim.

We just do not think that is a viable possibility in the courts of New Hampshire.

In conclusion, I simply would say that, although we recognize the fierce independent spirit that seems to be apparent today, particularly in our region of the country, that spirit ought to be guided under the mantle of the Constitution and not contrary to it or around it.

That the main point I would like to leave with the Court is that if this is not an appropriate case, to look at the intention of the legislature, to see if any intentional wrong and intentional harm was meant at the time they adapted their statute and in fact effectuated, then I can imagine any such case ever being brought to this Court.

Thank you very much.

Chief Justice Warren E. Burger: Thank you Mr. Scotch.

Mr. Cleaveland, I am sure you will agree that you would not need to repeat any of the arguments that your friend from New Jersey made on behalf of State of New Jersey?

Argument of Charles G. Cleaveland

Mr. Charles G. Cleaveland: Mr. Chief Justice may it please the Court.

I would have to confess that with the arguments that have gone before me, I am certainly in a position of being last, I hope I shall not to be found to be least, but to pass up any discussion whatsoever of the facts of the case, the way that case arose, I think is very familiar to the Court.

I had intended to do to outline the fundamental basis of our objection to this motion for leave to file which is that this Court must in any such case a find a basis upon an actual controversy in order to obtain or to allow the original jurisdiction of this Court to be invoked.

We insist that there is no such controversy presented upon the complaint sought to be filed.

The basis upon which we say that is the case is that in the cases of Texas v. Florida and Massachusetts v. Missouri, a standard was set out in which the plaintiff seeking -- a plaintiff state seeking to invoke this original jurisdiction must have suffered wrong through the action of the defendant state furnishing ground for judicial redress or that plaintiff must be asserting a right against a defendant state of susceptible of enforcement.

The facts alleged in this complaint, demonstrate neither in either an injury in fact to the plaintiff sovereign states, nor that the circumstance which they assign as an injury is in any way caused by an action by the State of New Hampshire, if I may illustrate.

If the injury assigned is the lost of tax revenue, the complaint failed to show that New Hampshire is the cause of it since the immediate cause of the plaintiff’s failure to collect the funds is in their own credit provisions and by which waive the collection of those funds voluntarily and within their own unfetted discretion.

The first requirement of a justiciable controversy between the states namely that of an injury caused by the plaintiff state was applied in the case of Massachusetts v. Missouri and the court held there that since the plaintiff had full constitutional power to tax, the subject matter, no intransigence of the defendant state Missouri whether in the form of improper legislation or capricious administration of proper legislation would result in an injury to the plaintiff.

And simply put, the Court said, look Missouri has a statute on the books which Massachusetts thinks ought to be construed so as to allow Massachusetts the unfettered right to tax.

The Court said, okay, if that is what Massachusetts thinks let them go into Missouri and challenge the State of Missouri to prove that to its court.

The problem there was that Missouri seem to be inclined to administer its statute in a way which Massachusetts did not agree with.

The problem there was that this Court found that either state could proceed in an exhaustive manner to assert and collect the tax that it felt to be due under it is own statute.

That is still a situation in this case.

If the plaintiff states think they are entitled to the money, they have unfetted power to collect it and they have had that power since the beginning of the cause in question.

Justice Byron R. White: What would be the case under New Hampshire statute if Maine did not give a credit for the New Hampshire tax?

Would under your present law you continue to collect the ax from people working in New Hampshire, but who are residents of Maine?

Mr. Charles G. Cleaveland: I believe sir your addressing the question that came up before and that is if during the existence of the New Hampshire tax, Maine had dissolved the credit, would New Hampshire still assert the tax (Voice Overlap)

Justice Byron R. White: Well I do not know (Voice Overlap).

That is not my question.

Under the law as it was written, would have -- it had been collected?

Mr. Charles G. Cleaveland: As the law was written, Your Honor, yes that is correct.

We did not have entirely a so called “sponge tax.”

It was not self destructing in the sense that the credit (Voice Overlap).

Justice Byron R. White: (Voice Overlap) It may be that -- it may be that if Maine eliminated the credit maybe New Hampshire would change its law, but under the law as it was written, the tax would still be payable?

Mr. Charles G. Cleaveland: That is correct, Your Honor and the significance of that I think is this.

Although it may be said that that would constitute a ground for either the Austin case to have proceeded or this case to proceed, I think the -- in the context of an equity consideration of this case, what to show is that the only thing that the plaintiff states had to do in order to really throw New Hampshire’s case into a cold tab (ph) back in 1970, was to repeal that credit.

Now --

Justice Byron R. White: Why would that have done that?

Mr. Charles G. Cleaveland: Keep in mind, sir, that the New Hampshire court rendered its decision upon a finding of no substantial injury in fact.

That was the only thing they decided.

They did accept jurisdiction of the case on the theory that they would allow standing to any tax payer to raise just about any question at all, but they find that they were not entitled really to raise a constitutional issue because they were not injured.

Justice Byron R. White: How about -- repealing the credit would not have knocked the New Hampshire tax into a cold tab (ph)?

Mr. Charles G. Cleaveland: Well, I think it would Your Honor, in the Court.

What I am saying is that as the case would have appeared in the New Hampshire Supreme Court --

Justice Byron R. White: Yes, as far as New Hampshire that you are just saying it would have been declared illegal?

Mr. Charles G. Cleaveland: I am saying -- the possibility is very real, Your Honor.

I think it is something which has to be considered.

Justice Byron R. White: But New Hampshire did not recognize that fact by any provision in this law that said that their tax is contingent upon another state granting a credit?

Mr. Charles G. Cleaveland: That is correct, Your Honor.

I think the effect is one which has to be considered and to some extent they are hypothetical, but I think it is a very certain hypothetical and given the way that New Hampshire Supreme Court decided the case.

In summing up my discussion of Massachusetts v. Missouri, I think it is very easy to read that case as being dispositive of this case simply because the analogy is direct.

Here the plaintiffs have the full power to tax irrespective of the validity of any New Hampshire statute and the rules were entirely the product of their own forbearance in the form of this tax credit.

Now, this court held in Austin that devoidity of the New Hampshire statute may not turn upon the configuration of the statutes of another state, namely Maine.

Well, just so the power of the plaintiff states to have wholly prevented their losses and to recoup those losses now for that matter, in no way depend upon the configuration of New Hampshire statutes.

Justice Thurgood Marshall: You are saying that Maine and the other states have the right to put a double tax?

Mr. Charles G. Cleaveland: That is correct, Your Honor.

Curry v. McCanless, Travis --

Justice Thurgood Marshall: Yeah, but you sort of put right in quotes, do you not?

Mr. Charles G. Cleaveland: The right, well, in the sense that -- yes I have, I would say they have the power, that they have the right, I think it is in a legal sense the same thing whether it would be --

Justice William H. Rehnquist: Not to be double taxation, is it not automatic indication of unconstitutional (Voice Overlap)

Mr. Charles G. Cleaveland: Correct, Your Honor.

What I am saying is, in the sense of an equitable consideration of the plaintiffs’ rights now to come back against New Hampshire to recover the money, the fact that they could have taken action in 1970, which would have literally blown our statute out of the water, constitutionally, is now should be held against them with respect to their right to claim.

Justice Byron R. White: (Voice Overlap) say that double taxation is perfectly illegal and then say that if Maine had repealed its credit in 1970 it would have blown your tax out of the water constitutionally?

Mr. Charles G. Cleaveland: From the standpoint of Maine alone, I am assuming now that the -- let us assume for instance the shape of the Carter case.

Two states have broad-base income taxes and one of them reaches non-residence, the other does not.

The one in which the non-residents are reached is sued on the theory that that is unconstitutional.

The holding of course is that it is not even though it results in double taxation and even though the state in which they reside does not grant a credit.

Justice Byron R. White: Oh, I do not know that -- I thought you said a while ago New Hampshire will certainly be entitled the tax income earned in -- within the state even if Maine tax it also?

That is what --

Mr. Charles G. Cleaveland: If both states have constitutional provisions Your Honor, double taxation does not present any automatic constitutional conflict.

The point I am trying to make is that if Maine has repealed it is tax credit originally or for that matter administratively denied it to persons earning an income in New Hampshire on the theory that the New Hampshire tax is not a valid tax, therefore, it does not exist, therefore no credit.

Either of those two theories, that would have enhanced, excuse me --

Justice Thurgood Marshall: (Inaudible) New Hampshire Supreme Court, would it not?

Mr. Charles G. Cleaveland: That was -- if you want to characterize them as tender mercies Your Honor, yes, it is true, they would be in --

Justice Thurgood Marshall: I say that, you have raised the second point, how does that prevent them from maintaining their action here?

Mr. Charles G. Cleaveland: The thing that prevents them from maintaining the action here is --

Justice Thurgood Marshall: Because when I read the constitution, it says that the State of Maine does not have to go to the Supreme Court of New Hampshire, if it has got an argument with the State of New Hampshire?

Mr. Charles G. Cleaveland: The question is whether it actually has an argument with the State of New Hampshire, Your Honor.

The State of Maine was never a tax payer to New Hampshire.

The New Hampshire statute never had any application whatsoever to the State of Maine as a sovereign.

It created no rights in behalf of the State of Maine, Massachusetts, or Vermont and created no liabilities upon them.

They simply ignored them.

Chief Justice Warren E. Burger: Is that the entire position of the state?

Mr. Charles G. Cleaveland: In a way it is Your Honor.

Chief Justice Warren E. Burger: Do you need any better way if you are right on that?

Mr. Charles G. Cleaveland: I think it is sufficient.

That is why I said I think given only that finding alone I think Massachusetts v. Missouri is dispositive of this case.

I think the --

Mr. Justice Blackmun’s dissent really comes home in an analysis of this case simply because any injury that the three states who are now plaintiffs and have sustained is caused as a matter of congeniality is entirely attributable to to the existence of those tax credits which they were no ways required constitutionally to maintain.

I think in terms of an equitable analysis of the case, they should have been involved in this case from the beginning.

I notice my brother argued that they felt that the proper procedure was to remain in the wings, but to ask them to take part and aid the Austin plaintiffs in raising their constitutional question.

If that so then where were they in the context of raising their arguments with respect to recovery of funds then.

I see a considerable element of the Equitable Doctrine of Laches applying here.

A court of equity which this Court has held itself to be when considering original actions is very reluctant and should be very reluctant to award damages to a plaintiff to allow a recovery against a defendant when the plaintiff has an effect side on his hands and allow the injury to magnify many fold.

That is the essence of my argument in saying that if they had simply taken the action in 1970 and had the courage of their convictions to do so, this case would have had an entirely different configuration in a New Hampshire Supreme Court and the analysis and the theory upon which the New Hampshire Supreme Court held the tax to be valid could not have been made because it is simply was not true.

As a matter of fact, New Hampshire Supreme Court held that there was no substantial injury in fact.

If Maine had repealed the tax credit, they are clearly would have been, there would have been double taxation.

I admitted this much in my argument before this Court in Austin last spring.

Simply put, we think the claims here are not mutually exclusive in the sense of Texas v. Florida.

They are rather precisely analogous to that in Mass. v. Missouri.

The second basis upon which a controversy can be maintained here is that there is a right susceptible of judicial enforcement.

Assuming for the sake of argument, that the Austin decision create a right in someone to a money judgment on the theory that taxes have been collected improperly, that supposed right does not tenure to the plaintiffs sovereign states.

Now, these states were of course not tax payers to New Hampshire.

As I said before they were in -- the statute in New Hampshire had nothing to do with the three plaintiff states here.

Now, the principles upon which the Austin case turn, that is the Privileges and Immunities Clause, did not operate to the benefit of sovereign states.

Since there not persons within the meaning of that provision.

Now, if the right asserted here inheres in anyone it inheres in the former tax payers to New Hampshire who are citizens of the three plaintiff states.

Now, if the state may not hold forth in this Court in such bulk litigation of private claims is settled beyond question.

In New Hampshire v. Louisiana, Illinois v. Michigan, a long line of cases, this Court has denied a state the right to litigate claims on behalf of private citizens in particular.

In Oklahoma v. Cook, Court held that a state is barred from litigating claims on behalf of citizens where the interest of the states arises solely as a result of a statute of the plaintiff state.

Simply put that means that the Court was saying that a state may not legislate its way into the original jurisdiction of this Court, that we submitted is what the three plaintiff states have done in affect with their tax credit provisions.

Now, the plaintiff’s attempted reliance upon the Missouri v. Illinois and Arizona v. California lines of cases is misplaced we suggest.

Firstly, these are uniformly instances in which the remedy of injunction was appropriate to halt the action or activity of the defendant state.

That remedy is simply inappropriate here since the tax was effectively halted by Austin case which arose through conventional appellate channels.

Furthermore, the notion of enjoining state action that -- state taxation excuse me, by application to the Federal Judiciary is the evil redress and eliminated by the Federal Anti-tax injunction Statute.

Any resort to this Court on the theory of Missouri v. Illinois for an injunction is clearly in contravention of the -- at least the spirit of that statute is not the substance of it.

Now, I would mention in reply to a contention that the action taken by New Hampshire was directed at the treasuries of the three states and not a good faith effort to -- if you will experiment in valid state taxation, I think that is a first placed question that comes upon the merits of case which is not before the bar now.

Secondly, it is in large measure an issue of fact which would, if the cases allowed to be filed, require reference to a Master.

And third, it simply does not hold water.

As Mr. Justice Blackmun said, he has trouble seeing the State of New Hampshire as being rascal in this situation.

Quite obviously so do I.

I think the merits of the case of are something which need not be considered now and more appropriately should not be considered now because when the question is one of jurisdiction, a lack of jurisdiction is fatal to a case no matter how strong the case may be on the merits.

The third point, I would like to raise is that the former tax payers of New Hampshire are necessary parties to this action.

This issue had been raised in the prior case and discussed.

I would like to amplify it only to the point of saying that the complaint in this case assumes a very credible element and that is that in the chain between a recovery against New Hampshire by a tax payer, assuming he has the right on the merits to that recovery, from there to that tax payers’ obligation to return that money to his own state on the theory that a credit was improperly allowed, there is an assumption that there is a direct equation there.

There is nothing in this complaint which goes to prove that assumption is correct.

It assumes that the tax payers who are also citizens of those three plaintiff states have no right whatsoever to interpose between a recovery from New Hampshire, assuming the tax payers were the ones to recover and the obligation to return it to their own states.

If the theory of the plaintiffs advanced in this complaint is true, that result would be reached without their interest being represented, without any opportunity for those plaintiffs to even present such a claim, if you will, or set off or however you want to characterize it.

There are certain retroactive problems which may arise in this connection.

The point is that this assumption is made in the compliant.

There was no opportunity for the tax payers themselves to be heard on that matter if the case proceeds on the original jurisdiction of this Court.

If on the other hand one considers “Alright let us bring those plaintiffs in,” then on the holding of California v. Southern Pacific Company in 157 U.S., the original jurisdiction of this Court is defeated, ousted if you will, because the presence of citizens of the plaintiff states is beyond the jurisdiction of this Court.

If they are necessary parties, they are also fatal parties.

I submit that this equation which is the basis of this complaint and is precisely that watershed point upon which the plaintiff states assert their right to the money is something which cannot be assumed over the backs of the tax payers themselves who are the only ones that ever had anything to do with the State of New Hampshire.

Now, this Court applies in consideration of original actions, the accepted doctrines of common law and equity, system of jurisprudence as much as held in Texas v. Florida.

Again to simplify with respect to the application of the Doctrine of Laches, the plaintiffs assert that the State of New Hampshire was in bad faith when it enacted the commuter's income tax.

We say to the extent the plaintiffs claim that New Hampshire should have known that the tax scheme was unconstitutional, so too the plaintiffs are also bound to have analyzed and known that law and should have responded from the beginning in a matter consistent with their convictions.

I think it is patently obvious that the great part, if not all of the injury which they have now sustained are claimed to have sustained could have been obviated by action taken in the original configuration of the cases that came before the New Hampshire Supreme Court.

It is also more likely the case that that same action can still be taken.

I would point out that this case -- that this Court in Austin remanded the Austin case to the New Hampshire Supreme Court for further proceedings consistent with the opinion of this Court.

At last check that case was still before the New Hampshire Supreme Court and there has been no action taken one way or the other.

There has been no request for any action to be taken by the new Hampshire Supreme Court, but it is still an open case in that regard.

Any comment by me would be obviously speculation as to what the plaintiffs might want to do if they were compelled to go into the New Hampshire Supreme Court, but I certainly see no constitutional bar from -- to them doing so.

I think the New Hampshire Supreme Court is an available forum.

I think a class action is certainly an available remedy.

All of this seems to add up to one simple point.

The entire claim that these three states bring is based upon this connection between their own tax payers and their right to the funds.

That was entirely within their control and I think they should be now barred from this Court for a number of reasons, some of which are purely jurisdiction, some of which are equitable, but they all come down to the same point.

It is not too late to come back and try to unwind the situation which could have been avoided with continuities.

Thank you very much.

Chief Justice Warren E. Burger: Thank you gentleman.

The case is submitted.

Featured:

United States v. Nevada - Oral Argument

Thu, 23 Aug 2012 18:16:07 +0000

Case:

United States v. Nevada

Media File:

59orig_19730416-argument.mp3

Related Transcript:

59orig_19730416-argument

Transcript:

Argument of Griswold

Chief Justice Warren E. Burger: This morning in number 59 original, the United States against the states of Nevada and California.

Mr. Solicitor General, you may proceed whenever you are ready.

Mr. Griswold: May it please the Court.

This case is here on a motion by the United States or leave to file an original complaints against the states of Nevada and California.

United States appears primarily in a fiduciary capacity on behalf of the Pyramid Lake Indians of the Paiute Tribe.

United States does allege the ownership of certain lands and water rights and its own right but it would not be here if that was its only claim.

The basic claim relates to the Pyramid Lake Indian reservation in Nevada.

The general location is indicated by the map which we have included in the pocket at the back of our complaint and brief and this is referred to in the complaint.

Chief Justice Warren E. Burger: Unfortunately, Mr. Solicitor General, in the shuffling of papers, my map got lost if you will have -- if you happen to have an extra one.

(Inaudible) supplied another one now.

Mr. Griswold: The map will show that Pyramid Lake is in the upper center, it is fed by the Truckee River which rises in Lake Tahoe.

Lake Tahoe is partly in California and partly in Nevada.

The river runs for 20 miles in California where it obtains most of its water and then it flows for 65 miles in Nevada until it empties into Pyramid Lake.

Unknown Speaker: I am sorry, Mr. Solicitor, mine was missing too.

Do you mind stating that again?

Mr. Griswold: Pyramid Lake is fed by the Truckee River which has its outlet -- which is the outlet of Lake Tahoe.

Lake Tahoe is located partly in California and partly in Nevada.

The river runs for 20 miles in California where it gets most of its water and then it flows for 65 miles in Nevada until it empties into Pyramid Lake.

The Court will note on the map just above the center, the Derby diversion dam and then the Truckee Canal, which diverts a substantial part of the water of the Truckee River into the Carson River system and the Carson River system with the water from the Truckee River produces the Newlands Irrigation District which is the green area in the right part of the map.

The way the map appears, one could get the impression that the Carson River is also an outlet of Lake Tahoe, but that is wrong; the Carson River rises in the mountains to the east of Lake Tahoe and the water from Lake Tahoe gets to the Newlands Irrigation District through the Truckee Canal from the Truckee River and thereby represents water which does not flow on to Pyramid Lake.

Pyramid Lake is 30 miles north of Reno.

It's a remarkable lake.

Some say it's the finest desert lake in the country.

The Pyramid Lake Indian Reservation originated on November 29, 1859 and was confirmed by President Grant by an executive order issued on March 23, 1874.

The Pyramid Lake Indians had a culture which was based primarily on fish on which they lived, and which they used for bargain.

And the lake provided a large and remarkable fishery and the purpose of including the lake in the reservation was to maintain the source of the Indians' livelihood.

Unknown Speaker: Two fishers mentioned somewhere in these papers, the variety of cutthroat trout and then another fish I have never heard of.

Mr. Griswold: Yes, Mr. Justice, that I heard of it in connection with this case, it's spelled cui-ui and is pronounced cui-ui.

Unknown Speaker: Can you say that again?

Mr. Griswold: Cui-ui and it's pronounced cui-ui.

Unknown Speaker: Now, is that a variety of trout?

Mr. Griswold: That is a fish which is peculiar to the Pyramid Lake, the Lahontan cutthroat trout was a very large and successful commercially and otherwise fish which was peculiar to Pyramid Lake.

Pyramid Lake is the geological residue of an older lake called Lahontan and indeed the reservoir created in the Carson River is now called the Lahontan Lake.

And the fish in Pyramid Lake and that's part of the complaint here, the cutthroat trout in Pyramid Lake have been unable to maintain themselves because with the fall and the level of the lake, the fish are unable to get up the Truckee River to spawn.

Now the fish have been taken out and put into fish hatcheries and are now planted in Pyramid Lake and they are also found in some of the other lakes, but without the help of men, the Lahontan cutthroat trout would be extinct now.

It is it and the cui-ui are both on the list of endangered species of the appropriate body of the government.

Unknown Speaker: Are cui-ui found anywhere else?

Mr. Griswold: As I understand it, not any place else, no place else.

And as I say, it's been taken out for planning but --

Unknown Speaker: Is that a member of the trout family or is that something?

Mr. Griswold: I am not enough of biologist to say that, I believe so but I do not know except that I think that it has a -- I think it would go back to millions of years before you had planned a --

Unknown Speaker: Does a cui-ui have the bloodstream too?

Mr. Griswold: As I understand it, they do not.

The cui-ui can apparently --

Unknown Speaker: Reproduce in the way--

Mr. Griswold: I am told that they are stringent family, the cui-ui is.

In 1903, after the passage of the Reclamation Act in 1902, the Newlands Reclamation Project was established by the Secretary of the Interior named after a senator from Nevada.

In 1905, the Derby Dam was completed with the consequent diversion of much of the water from the Truckee River to the Carson River system.

As a result of this and other activities, the water flowing down the Truckee River to Pyramid Lake has been reduced to about 250,000 acre feet while 375,000 to 400,000 acre feet are required to replace evaporation losses and maintain the level of the lake.

Because of this annual deficit of 125,000 to 150,000 acre feet, the level of the lake dropped more than 80 feet since 1906.

Justice William H. Rehnquist: Mr. Solicitor General, does your complaint show what the annual flow in acre feet was before the Newlands diversion?

Mr. Griswold: I am not sure that the complaint does, a material referred to in the complaint, particularly the Pyramid Lake Task Force report of which copies have been distributed to the Court, give figures going back to the 1860s as to the flow into Pyramid Lake.

Unknown Speaker: Mr. Solicitor General, has the lowering of the level of the water in the lake resulted solely from the diversion to the other river?

Mr. Griswold: Yes, Mr. Justice.

The level of the lake probably would have fluctuated because of variations in annual rainfall which the natural runoffs of the river varies apparently from 200,000 to a million, 100,000.

It averages enough to maintain the level of the lake at the level where it was in 1860. Apparently, there has been a constant slight diminution in the lake, but this has become very marked since the diversion of the water by the Derby Dam and the Newlands --

Unknown Speaker: But I understand that Mr. Solicitor General that, that kind is now been arrested as it, hasn't it?

Chief Justice Warren E. Burger: Reversed.

Mr. Griswold: It has been arrested, but it has not been -- necessarily, we can't foresee the future that it would be stopped because of various actions which have occurred, part of which is a substantial rainfall in recent years but others a suit brought by the Indians if I may say so and their desperation in the United States District Court for the District of Columbia to compel a secretary to follow his own regulations and to avoid and prevent wastage of water.

There has been a considerable entries in the amount of water and it is true that in the past six years, the level of the lake has risen by about ten feet so that the net fall of the lake at this point is about 70 feet.

There is a picture of the Truckee River falling into the lake in the Task Forest report on Page 17 which has been distributed to the Court or at least made available to the Court in another copy.

Unknown Speaker: Well, I have seen these --

Mr. Griswold: Well, I am now told only one copy was filed with the clerk.

I thought one had been made for each member of the Court.

I would suggest you look at page 17, you will find a picture of the Truckee River entering in what amounts to a big delta into the lake, the drop was 70 feet makes it impossible for the fish to get up to the river and spawn.

This has destroyed the fisheries, threatens extinction of the trout native to the lake.

It increases the salinity of the land, causes land erosion and threatens continued existence of the lake as a useful body of water.

On behalf of the Indians, through this suit, the United States contends that when the Pyramid Lake Reservation was established in 1859, the United States, by implication, reserve for the benefit of the Pyramid Lake Indians sufficient water from the Truckee River for maintenance and preservation of Pyramid Lake, and for the maintenance of the lower reaches of the Truckee River as a natural spawning ground for fish.

United States claims these rights for the Pyramid Lake Indians with a priority date of November 29, 1859.

Whether this claim is warranted, whether the Indians have these rights is the principle issue before the Court in this case.

Now the Court also -- the complaint also contains reference to a suit which the United States brought in connection with the Newlands project.

Unknown Speaker: Mr. Solicitor General, that Newlands project is the one in the Carson River setup, isn't it?

I don't see the name Newlands on here.

Mr. Griswold: Perhaps it is not, but that is what it is known by and it is so referred to in the complaint.

Unknown Speaker: I am just trying to identify it on the map here.

Mr. Griswold: That whole project, you have one with color?

Unknown Speaker: No, we don't.

Mr. Griswold: Well, I am sorry.

That whole project in the right half, right third of the map is the Newlands project.

It obtains water from the Carson River as to which there also is a suit in the Nevada Courts, one which over a period of 30-40 years operates on the basis of a temporary injunction.

That's all that has ever been issued.

The diversion of the water from the Truckee River to the Newlands project --

Justice William H. Rehnquist: Could you hold up that map, Mr. Solicitor General, I think none of the four of us have the green one?

Or is it upside down?

Unknown Speaker: It's upside down.

How's that?

Yes, yes.

Does Newlands drain into the Colorado?

Mr. Griswold: Oh no, Mr. Justice, Newlands drains into what they call a sink out there and disappears.

In fact, the sink has greatly augmented because of the undo diversion from the Truckee River.

The runoff water from the Newlands project goes into the sink and that has made a new wild life refuge where there are ducks and where hunters go, we would say, using the Indians water for the purpose of erecting a new sporting and non-commercial activity.

Unknown Speaker: Was that on the still water point?

Mr. Griswold: That is on the map beyond still water point and finally, when it gets to still water wildlife management area in nearly upper right-hand corner and the swale which is at the right edge of the map.

Now, there is quite a lot of water there.

That water will presumably be cut down and allowed to go down the Truckee River as a result of the decision of the District Columbia Court in the case requiring the Secretary to conduct a more careful and efficient operation of the (Inaudible) river project.

Unknown Speaker: Is the water in the sump saline?

Mr. Griswold: The water?

Unknown Speaker: Is the water in the sump salt water or fresh water?

Mr. Griswold: In Pyramid Lake?

Unknown Speaker: You are talking about the still water.

Mr. Griswold: That is essentially fresh, Mr. Justice.

I suppose that the water that goes into the wildlife refuge, is essentially fresh.

I suppose that having percolated through the land, it has picked up some salts.

But the water that goes down the Truckee River is particularly fresh, is remarkably fresh.

Unknown Speaker: I just want to know about the end product of the sump.

Is that salt water?

Mr. Griswold: As I understand, it is essentially fresh water and it finally percolates into the ground and disappears.

Pyramid Lake is more saline than freshwater lakes we are used to in this part of the country, but it is remarkably non-saline when it has an adequate water supply.

Unknown Speaker: Has the complaint or other materials before us indicate the extent of the fishing rights that the Indians are claiming?

Is it just broadly to maintain the lake and the fish as they were when the reservation was created?

Mr. Griswold: Well, it isn't even quite that far, Mr. Justice.

We don't ask for enough water to restore the level of the lake to what it was in 1859.

The prayer of the complaint is on Page 14, prays that a decree to be entered declaring the rights of the United States for the benefit of the Pyramid Lake Paiute Tribe of Indians to the use of sufficient waters of the Truckee River to fulfill the purpose for which the Pyramid Lake Reservation was created including the maintenance and preservation of Pyramid Lake and the maintenance of the lower reaches of the Truckee River as a natural spawning ground for fish. Incidentally, I am told that --

Unknown Speaker: Well is the -- is the fishing right one for a sustenance or is it at commercial?

Mr. Griswold: For both, for both, Mr. Justice.

That was the way they used it at the --

Unknown Speaker: What is the commercial end of it?

Mr. Griswold: The commercial end would be that the Indians would sell large quantities of a very remarkable fish for which they would get money, with which they would buy clothes and other kinds of food.

Unknown Speaker: Do they sell the fish here, do they sell the fish to other fish hatcheries or they sell it as food or what?

Mr. Griswold: They have historically, Mr. Justice.

There have been substantial fishery establishments there including the canning of the fish.

This is all greatly restricted.

We are told that by council for the states that there are only 400 Indians who live their now, but there are 500 who don't live there and have an effect been driven away because the economic possibilities of maintaining themselves have gone with the disappearance of the fishery.

Unknown Speaker: There are no treaty fishing rights that are kind of planned here at all, and I understand that you are relying upon the implied reservation of water for the reservation alone.

Mr. Griswold: Yes, Mr. Justice, but the Indians own the lake, so that they would --

Unknown Speaker: (Inaudible) allow these cases where we --

Mr. Griswold: They would have their fishing rights if there were adequate fishes.

Unknown Speaker: Yeah, but they weren't given any fishing rights.

This was a reservation originally in 1859 confirmed by President Grant in 1870s and you are relying on the Arizona Doctrine where they have implied reservation of water.

Isn't it?

Mr. Griswold: Yes, yes, Mr. Justice.

Unknown Speaker: And tell us that historically, these people live by fishing.

That was their economy but there is no fishing rights.

Mr. Griswold: That is exactly our position.

I would suppose that the only question here apparently arises because of this Court's decision in Ohio against the Wyandotte Chemical Company and more recently, in Illinois against Milwaukee and it will be my purpose to try to show that the approach taken in those cases is not applicable here and thus, motion for leave to file the complaint should be granted.

This case does not raise questions of state or local law as was the situation in Wyandotte.

The questions here are federal questions of the sort which this Court has traditionally considered in original suit.

The United States appears as a trustee for an Indian tribe, exercising one of its greatest responsibilities under the constitution.

The questions involved are Federal questions, essentially the effect of the establishment of an Indian reservation by Federal authority and the application to that reservation of the rule of the case of Winters against the United States and the very closely comparable case of Arizona against California to which Mr. Justice Stewart referred where the United States intervened in an original suit on behalf of Indian tribes and this Court made essentially the same sort of adjudication that we are seeking here.

The order in Arizona against California provides that a million in acre feet of water shall be made available to the Indians at the suit of the United States and there is also involved the effect if any, on the rights of the Indians from the establishment of the Newlands Irrigation Project under the Reclamation Act.

A claim made by the --

Unknown Speaker: When did that establish, Mr. Solicitor General, when was the Newlands Project begun?

Mr. Griswold: Newlands Project was authorized in 1903, there was a suit called the Orr Water Ditch suit filed in 1913 in which a final decree was entered in 1944 and one of the questions in this case is what is the effect of that on the residence of the Indians.

We contend that it does not bar the rights of the Indians but that's one of the issues which would be heard if they leave to file, the complaint was granted.

The claim made by the United States relates to the waters of an interstate stream and thus, presents the kind of question appropriate for decision by this Court.

And moreover and most important, this Court is the only tribunal which can make a definitive and final adjudication of the right claimed on behalf of the Indians and Nevada suggests in this brief that the suit could proceed in the District Court for Nevada, despite the fact that most of the water comes from California and an adjudication with respect to the rights of the Indians made by the Nevada Court would not be binding on California or on California citizens.

Nevada says that the Nevada District Court could reach California and its citizens through some sort of a long-arm approach.

Perhaps Congress could authorize this and for a period of four years, from 1922 to 1926, Congress did authorize amount to interstate suits in the District Courts with respect to water and other matters and some of the cases cited here began in that period, notably the Brooks case which was a contempt case for violating a decree which was involved Arizona and New Mexico in a suit brought during the period when the Arizona Court was given jurisdiction over parties in New Mexico.

Congress could authorize it but it hasn't done so and I know of no basis for such jurisdiction in a case like this.

Incidentally, in the careful and thoughtful brief filed on behalf of California here, there is no such suggestion; California does not come forward and say it wants to appear in Nevada District Court.

Unknown Speaker: Is there any possibility for parallel suits in Federal Courts in California and Nevada and then we having them shown into the multi-district panel.

Mr. Griswold: I know of no way the multi-district deals with cases where the Court has jurisdiction with respect to the issue.

Here the Nevada Court would not have jurisdiction over the California water rights.

The California Court would not have jurisdiction over the Nevada water rights and I know of no authority under the multi-district suit to require them to get together and to come to the same conclusion on the questions of fact or of law.

This Court maybe concerned if it takes jurisdiction of the case that it will be involved in a multitude of factual determinations with respect to individual water rights.

Perhaps there are thousands of persons both in Nevada and then California, I think that concern is unwanted.

The basic question here is an important one and it may present some legal difficulties but the problem is one which the Court is well-equipped to resolve.

The question raised here is whether the United States has any right on behalf of the Pyramid Lake Indians, and if so, what is the extent of that right.

If it is established that the Pyramid Lake Indians are entitled to a definite amount of water with a fixed temporal priority then it will be known hot water remains for use in California and in Nevada.

At that point, it may well be that the two states can agree on their relative portions of the remaining water as they have agreed in a compact which is pending before Congress but not approved by Congress but based on the assumption that the Indians have no rights.

The compact does say that it doesn't deprive anybody of any rights but it doesn't recognize that there are any such right.

The United States has no interest whatever in how the allocation to California and Nevada is divided among their individual water users and the District Court in Nevada can make the appropriate allocations among Nevada users if that question too is not settled by agreement.

Now I have mentioned the compact and I don't have time to discuss it.

It obviously is of no legal significance because it has not been approved by Congress.

Incidentally, both senators from California have joined in a statement and I mention this because it indicates the unlikelihood that Congress is going to prove the contract if both senators from California oppose it.

They have joined in a statement in which they conclude, we therefore support the efforts of the tribe and Federal government to obtain a judicial determination in the Supreme Court.

Unknown Speaker: (Inaudible).

Mr. Griswold: Eventually, it might but it seems to me that this basic question of whether the Indians have any right and if so to its extent, it would be helpful to have it heard before master but it would be a relatively simple matter before a master and not the question of allocating water rights among all the people in a great --

Unknown Speaker: More like with tidelands.

Mr. Griswold: It would be very much like the tidelands although perhaps somewhat simpler that that; not involving the massive historical considerations that were there.

Justice William H. Rehnquist: Mr. Solicitor General, do I gather from your answer to Mr. Justice Douglas's question that the government doesn't really seriously press the idea that the case ought to be partially adjudicated here before it's referred to a master?

Mr. Griswold: I don't think it makes a great deal of difference.

What we are -- I think what we are trying to say in that is that it ought to be adjudicated here on the basic issue, do the Indians have a right or not.

Before there is any consideration given to the problem, how you allocate the remaining water.

Now whether --

Unknown Speaker: Excuse me.

What we have here is that this is an argument on motion for leave to file a bill of complaint as I understand it, and they haven't even been responsive --

Mr. Griswold: There haven't been answers and I should think that after the answers have been filed and we know what is denied and what needs to be proved, it would be possible at that point to it could well be that the answers will be filed in such form as to raise only a legal question at least at the threshold.

And that threshold question, do the Indians have a right or don't they, can be presented as a purely legal question.

It becomes a little more complicated when you say, yes they have a right but what is its extent.

For example, the Indians do not claim that they are entitled 375,000 acre feet every year.

Sometimes the water goes down, I think their position would be that they are entitled to an average of 375,000 acre feet over a period of, let's say, ten years.

So that if it goes down one year, some water can be made available to the Newlands Project and it can be made up in subsequent years.

It's undoubtedly true that there have been differences of opinion and conflicts of interest within the interior department about this claim of the Pyramid Lake Indians.

The Bureau of Reclamation and the Bureau of Indian Affairs do not always see eye-to-eye.

It's equally true that the Department of Justice has not advanced this claim in prior proceedings.

The Indians should not be bound about that.

There will be argument about res judicata and merger and bar and our position is that the Indian should not be bound to their great loss by reason of defaults which may have occurred on the part of officers of the United States in the past and I don't criticize them because they were reflecting a national attitude at that time.

It was a great step when the Secretary of the Interior requested the department of justice to start this case in this Court.

It would be something of a tragedy for the Indians if this Court should now refuse to consider the claim made on their behalf.

Chief Justice Warren E. Burger: Mr. Prettyman?

Argument of E. Barrett Prettyman

Mr. E. Barrett Prettyman: Mr. Chief Justice may it please the Court.

I am Barrett Prettyman and I represent the defendant State of Nevada in this original action.

In the few minutes alloted to me I am not going to be able to discuss some of the purely legal questions in our briefs such as res judicata and collateral estoppel and even case or controversy against the state.

I am going to have to rely on our brief for those points.

Instead my argument here is going to be restricted to the reasons why this Court should not in its discretion assuming that it has jurisdiction, why it should not exercise that original jurisdiction in this case.

In case after case, after case, this Court has emphasized, that state should work out problems relating to mutual boundaries or interstate stream themselves, if they can do it and in case after case it was only after such attempts that reconciliation between the states had failed that this Court had agreed to exercise its original jurisdiction.

Now, here what do we have?

We have the two states where the disputed water is located, agreeing after more than 15 years of negotiations on an equitable apportionment of the waters involved.

We have a joint task force that the government participated in after long study finally agreeing on recommendations which as is already been noted, have already begun to increase the water procurement.

As a matter of fact, the water level has risen some 11 and 12 feet in the last few years, ever since the interior department has begun concentrating on their operating criteria and putting them in one shape.

Chief Justice Warren E. Burger: How do the rights of the Indians Mr. Prettyman figure in this negotiation that you have just described?

Mr. E. Barrett Prettyman: Well, in the first place, the Indians originally participated in the taskforce, withdrew, then submitted statements and witnesses in regard to the compact.

They specifically made some objections to the compact as it was originally drafted and those objections were taken into consideration and this is quite important, let me give you two examples.

Originally, the California was given an unlimited right to create extra -- to create extra flow, to create extra water after the original Tahoe Basin was taken care of.

The Indians objected to that and a 10,000 acre foot limit was put on California's right.

In another example the Indians were given a maximum right based on Orr Water Ditch plus municipal and other use which was actually being put to the beneficial use, they could not get anymore water after that.

That was eliminated because of their objection.

So that after their Orr Water Ditch commitment now and after California's share comes out, then the use goes back to Nevada again and the Indians have a full right to get the amount of money -- the amount of water that they can show that they need from that.

These are two examples of objections which the Indians had at the compact and which were taken care of in the compact.

Justice Potter Stewart: The constitution provides the interstate compacts, it doesn't provide to best of my knowledge between -- for compacts between the States and United States.

I suppose your point is that Congress would not approve and it has to do under the constitution of an interstate compact if it wasn't satisfactory to United States but suppose the response to that would be well in this case, it is not the Congress that is the guardian of the Indian wards but it is the executive branch of the government that's the guardian and we can't leave this matter to the self interest, if you will, of states like California and Nevada, that are represented in the Congress by senators and representatives representing those states, but rather it's the executive branch and there is no room on account of constitution at least for a compact among states and the executive branch of the government?

Mr. E. Barrett Prettyman: Well the compact will not become operative until Congress approves it and we think that in view of the fact that the federal government has been intimately involved in the development of the compact that the -- and in view of further of the fact that the State of Nevada is also concerned about the Indians rights and making sure that this level of the lake is at certain level.

We think that they should be presenting their arguments to Congress rather than here in view of this long history of negotiations between the states where finally, unlike these other cases where you had where the states have been unable to come to agreement, we have been unable -- we have been able to come to an agreement and the agreement is such that the Indians could not possibly be damaged.

The United States doesn't claim that they are going to be damaged by --

Justice Thurgood Marshall: Do you any they agree with?

Mr. E. Barrett Prettyman: Pardon me sir?

Justice Thurgood Marshall: Do you have any evidence that Indians agree with this compact?

Mr. E. Barrett Prettyman: Well, I think the Indians obviously would much prefer a declaration by this Court that they have a Winters right to x amount of the water.

They undoubtedly would prefer that to the compact.

On the other hand, our position is that if the compact is approved, California's share is so small, it's a maximum 45,000 acre feet.

You have got 560 - 80,000 acre feet of water here involved that they could not possibly be harmed by California's share.

You are going to have plenty of water coming into Nevada and if a problem arises later, then the Indians can sue at the appropriate time either they can sue in Nevada.

Justice Thurgood Marshall: Sue against the compact?

Mr. E. Barrett Prettyman: No, they would not be suing against the compact Mr. Justice Marshall because the compact would leave plenty of water in Nevada for their share.

You understand that the Indians --

Justice Thurgood Marshall: What I don't understand is that the fish has gone?

Mr. E. Barrett Prettyman: Well sir, I beg a differ what if a fish, the United States has told the judge, it could sell or thrive it.

Justice Thurgood Marshall: (Inaudible)

Mr. E. Barrett Prettyman: Yes sir, the fish is thriving today because of great improvement in the level of Pyramid Lake and another things which are taking place there through the Secretary of Interior's operating criteria.

Justice Thurgood Marshall: We know if we grant this motion we would have to give it to a master to find if fish is thriving, isn't it?

Mr. E. Barrett Prettyman: You undoubtedly would have to appoint a master.

If you accept this case, let me tell you what's going to happen.

First of all, the compact is going to come to a halt.

Congress obviously is not going to approve the compact while the issue is now pending --

Justice Potter Stewart: Well, it's been there how many years Mr. Prettyman?

Mr. E. Barrett Prettyman: Compacts has been almost 17 years.

Justice Potter Stewart: That's what I thought, 17 years.

Mr. E. Barrett Prettyman: Number two --

Justice William H. Rehnquist: (Inaudible) approves the compact that's inconsistent with some Indian claim, I would take at the Congressional action would supersede whatever Indian claim might have existed, wouldn't it?

Mr. E. Barrett Prettyman: If you were to take an extreme case where so much water was given to California that in effect obliterated the Indian's rights, I think that there would be authority to do that in the same way that you could takeaway a man's land through an international treaty with say Canada or Mexico.

I think that it would supersede, but I want to emphasize again that there is no question about in this case because if you look at what the Indians are asking, when they say Winter's right, they are not talking about some esoteric theory where this Court says Winters right to put some stamp on.

They are asking for enough water to maintain the Lake namely 385,000 acre feet.

Justice Potter Stewart: Do you call it Winters right?

Mr. E. Barrett Prettyman: Winters right, yes sir.

That comes from the Winters case --

Justice Potter Stewart: Oh!

Mr. E. Barrett Prettyman: -- Mr. Justice, where you have first discussed the fact that there was an implied reservation of water along with an Indian reservation --

Justice Potter Stewart: That's what you mean by Winters rights basically.

Mr. E. Barrett Prettyman: Yes sir.

Chief Justice Warren E. Burger: Mr. Prettyman, going back to the vindication of the Indian's rights after an allocation is made of the greater proportion to the State of Nevada.

Would you remind a little bit for me on how they vindicate that right, that a suit in the district court against the state of --

Mr. E. Barrett Prettyman: Let me show you exactly how it would work.

The compact is approved.

At that point California takes out as I say at a maximum and this really is a maximum 45,000 acre feet.

So you now have over 300,000 acre feet flowing into Nevada.

If, thereafter, the Indians were not getting their sufficient share, in view of your ruling, that their share would be allocated to the state, they would then sue the State of Nevada and the Nevada Federal District Court to get their portion of the 300,000 that was a part of the State's use.

In other words, they would sue Nevada because the only disagreement would be between the Indians on the one hand and the amount of water the Nevada has now collected on the other.

There would be no conflict or controversies with California.

Justice Byron R. White: But you do not suggest that there is any other court right now in which a suit could be filed and would settle this matter?

Mr. E. Barrett Prettyman: We do, although I am not going to take the time to argue it here.

We do claim that California could be brought into the state of Nevada.

There is recent case by the California Supreme Court called Hall versus University of Nevada which we say supports that idea, but I do not have to take that position --

Justice Byron R. White: You took a more persuasive one as away from the two wait on the compact and then sue?

Mr. E. Barrett Prettyman: Well our point is this that if you allow Congress to act, now what has happened here.

The compact has been placed in the Congress.

Their appropriate committees have been asked for the comments of the United States--

Justice William J. Brennan: What has held it up for 17 years?

Mr. E. Barrett Prettyman: Negotiation on what the shares were going to be.

Chief Justice Warren E. Burger: Well, it hasn't been before Congress all that time?

Mr. E. Barrett Prettyman: No sir, no no no it is only been before Congress the last session and this session that is the only it has been before Congress, all of these some 15 years --

Justice William J. Brennan: What is that Solicitor General suggested that senators of California would prefer?

Mr. E. Barrett Prettyman: Well there are two senators which have made statements on behalf of the Indians in California.

I would prefer that Mr. Walston speaking for California address himself to that, but I do not think obviously that is going to control.

Justice William J. Brennan: Well I would suppose as a practical matter, if senators in one of be contracted states opposed there is no chance of Congress would approve it, is it?

Mr. E. Barrett Prettyman: We would hope that they would see the light Mr. Justice and particularly after you do not allow the --

Justice Byron R. White: Well Mr. Prettyman planning the case would necessarily keep parties to the case, including the United States from settling it, would it?

Mr. E. Barrett Prettyman: Mr. Justice if you take this case I can assure you as a practical matter there are a number of things are going to happen.

First of all Congress is going to stop dead in its tracks in trying to prove the contract.

Secondly the various recommendations that have been made by the task force for proving the lake are going to stop because nobody is going to know how much water has to go to the Indians.

The interior secretory is operating criteria which he is now under order to improve here and which he is going to produce still more water, if he has jurisdiction to do it for pyramid lake are going to come a complete hall again because nobody is going to know what we are talking about here in terms of these Winters rights.

I emphasize to you that a Winters right is not some is not some definite specific figure.

You have to go back and find out what the situation was in 1859 at the time the reservation was created, what the Indians were doing, we are not as all sure as the Solicitor General that they were engaged in all this much fisheries for example and we have to go through that entire business.

Orr Water Ditch which is a case which adjudicated we say that very rights that are under consideration here took I think it was something like 20 years for them to come to any conclusion.

Now Orr Water Ditch you understand already gives the Indians 30,000 acre fit a year, that is adjudicated.

And we say that, that actually covers this case in is fully determinative, but even if it isn't, the fact of the matter is that what the Indians want they are either getting or about to get.

They want 385,000 acre feet, that is what their brief says, that is what the United States said, because 385,000 acre feet is going to sustain that lake at its present level, that is what they want.

Now when we turn to that what do we find?

We find that there is been a tremendous amount of water increasing recently into Pyramid Lake because of the changes that I have talked about and we also have these specific recommendations of the task force, some of which you been carried out.

Let me give you an example.

One of the things the task forces recommended was a Cloud Seeding Project.

Well that sounds a little far out, but in true we are now into the third year because of that recommendation of the Cloud Seeding Project and they found in the first two years that there was a 14% and a 10% increase in precipitation as a result of that.

In hard cold fact, that 14% produces 140,000 acre fit of water, a 120,000 of which goes to Pyramid.

This is one of the reason why Pyramid, we think is started back up again.

There are other recommendations that the taskforce made.

They said for example if you enforce your present decrees, if you will go into District court with the decrees that you have right now and enforce them that you will find, and they gave a specific figure of how much of that would produce, 9500 acre feet there.

They talked about certain TCID improvements, the Truckee-Carson Irrigation District improvements which would produce another 85,000 and so we have these recommendations, part of which are being implemented right now and part of which we will be, if the court does not take things over, which we say is already beginning to sustain the lake and would certainly will sustain the lake if you do not take this case in which if everybody is allowed to proceed.

For example if you do not take this case and I might say we think that United States is suing the wrong party, we think here they ought be suing themselves because judge Gesell took the position that the Secretary of the Interior was not properly carrying out his responsibility and his own operating criteria and we say that if you combine these various factors, if you combine the compact, if you combine the recommendations that have been made some of which you have already been carried out, if you add into that judge Gesell's order about improving his operating criteria, you are going to have more than enough water for Pyramid Lake.

We hope, obviously I cannot guarantee that, but we say until these things have had an opportunity to show themselves, until we have had an opportunity and good faith to carry out what's going on here, why should we stop the whole thing right now after the 17 years, bring it all to a halt and suddenly have this Court appoint a special master and go back and begin determining for I do not know how many additional years what the Winters rights says.

If there was a question about what they really wanted from these Winters rights, I would take a different position, but there is no question they want 385,000 acre feet.

Justice Byron R. White: Has the filing of this motion for leave to file interrupted anything?

Mr. E. Barrett Prettyman: Well, it's -- in the first place in United States is not responded to Congress' request for comments, I am sure because of this case and won't until there is some decision here, that is number one.

Number two, there are projects which have been recommended by the taskforce which require money and obviously I do not think the state can be expected to commit any funds, if we are willing to, with not knowing what the Indians were eventually going to get and also I do not think there is any question, but that judge Gesell's order be ignored in affect in ignorance of this Court were to take Jurisdiction because obviously a ruling here would in affect override much of what he has done.

So I think there is no question about what the practical affect would be.

Justice Potter Stewart: The compact is in a judicatory committee, is it?

Mr. E. Barrett Prettyman: Yes sir.

Justice Potter Stewart: Does it go to the committee the -- the committees of both houses?

Mr. E. Barrett Prettyman: Yes sir it is a S. 24 and H. R. 15 at the moment.

Chief Justice Warren E. Burger: Mr. Prettyman if the special master were appointed at the some stage, not necessarily right away, if it's really could grant it, would this necessarily means that the special master would have to retread all of this ground or could he not draw on what the taskforce and what the negotiations have flushed out in the way of evidence?

Mr. E. Barrett Prettyman: Mr. Chief Justice in the United States District Court in Nevada there is a room full of records relating to Orr Water Ditch.

Perfectly true he could go through them but it has got a long hard difficult task ahead of him and I do not want to mislead you for a moment that this is a question of sitting down and reading to a few papers and coming to a conclusion.

Everybody who dealt with this problem has found it extraordinarily difficult, it has taken an awful long time.

May I just end by quoting to you something that was said just last year by the National Water Commission that was appointed by the President.

It said the future utilization of Indian rights on fully appropriated streams will divest prior uses initiated under State law and curiously enough often financed with Federal funds and will impose economic hardship amounting to disaster in some cases on users with large investments made over long period of time.

That is the reason that the state of Nevada is concerned because obviously we have an interest in the Indians in preserving the some 400 Indians, but we are also terribly concerned about the water that goes in the Newlands and irrigates some 64,000 acres of land.

We are concerned about the quarter of million people in the area who --

Justice Thurgood Marshall: Are you talking about ducks?

Mr. E. Barrett Prettyman: Pardon me sir.

Justice Thurgood Marshall: Are you talking about the ducks, you concerned about the ducks in the wet lands?

Mr. E. Barrett Prettyman: Well sir when you get the wildlife --

Justice Thurgood Marshall: Mr. Solicitor General corrected by that then it is all that used for always but that --

Mr. E. Barrett Prettyman: Oh no sir, you mean Newlands used ducks?

No sir Newlands, the stow off from Newlands helps the still water a wildlife refuge, but you have got 64,000 acres of land out there under irrigation sir.

You have got 5000 farmers you have a quarter of million people in the area who are depending upon the water from the Truckee.

We are not talking about protecting ducks.

Justice Thurgood Marshall: Approximately how much is the wet land, it is not, what percentage would it be?

Mr. E. Barrett Prettyman: Well but it spill off sir its what left over --

Justice Thurgood Marshall: Percentage.

Mr. E. Barrett Prettyman: I am sorry I cannot give you the actual percentage but I tell you it is not the original use at all sir.

The it's the runoff that goes down to still water, but we are not talking about --

Justice William H. Rehnquist: That is typical with any irrigation, doesn't it, that you get a certain amount of run off?

Mr. E. Barrett Prettyman: Yes sir, that's correct.

That is the reason for our concern here that yes there are the Indians interest and obviously they have some rights.

We're not trying to do away with those rights.

We did in the compact as United States agreed, but there is also the interest of an awful lot of other people here that we want to make sure are also protected.

We think we are in good faith after these negotiations.

There is tremendous amount of it -- $1.50 million dollars spent on getting this compact.

We think we are entitled now to proceed and if by any chance, it doesn't work, if the light goes down again, they can come back, light can come back very much.

Chief Justice Warren E. Burger: Mr. Walston?

Argument of Jr. Roderick Walston

Mr. Jr. Roderick Walston: Mr. Chief Justice may it please the Court.

California basically agrees with the arguments which have been advanced by the state of Nevada and we feel that very basically the Pyramid Lake problem is presently being solved by many alternative methods at the legislative level, the judicial level, the administrative level and we want the Court to -- as far as California is concerned, the real basic question between the Federal Government and the State of California and Nevada is not really how whether we are going to solve the Pyramid Lake problem, but rather how we are going to proceed to solve it.

Now the Federal Task Force has come in with a report about two years ago and said that, vast amounts of water were being wasted in the Truckee River basin by the Federal Government's own mismanagement of its own Reclamation project, the Newlands project, Task Force had made a number of recommendations provided the Federal Government could improve the facilities and improve the management of these systems and make additional water available for use in Pyramid Lake and if these recommendations are followed and are applied by the Federal Government, the problem of Pyramid Lake will be solved.

Now the same approach was taken more recently in a lawsuit which or in a decision rendered in the Federal District Court in Washinton DC, judge Gesell presiding.

This lawsuit was brought by the Indians against the Federal Government.

The Indians claiming that the Federal Government was violating it's fiduciary obligation to the Indians by wasting all this water in the river and thus failing to maximize the flow of the Truckee River into Pyramid Lake and judge Gesell upheld the position of the Indians and he said that the vast amounts of water were in fact being wasted in the Truckee River by the mismanagement of the Newlands project.

He then ordered the Federal Government to devise a regulation that will provide for salvage water which can go into Pyramid Lake and so if judge Gesell's decision is implemented by the Federal Government and is followed and the water thus required to be made available to Pyramid Lake actually made available again, Pyramid Lake would receive all the water that it needs and the problem would be solved.

So there be no need for this Court or any other Court to really get involved with the question which is being posed by the Federal Government in this case.

As matter of fact perhaps you will find, after judge Gesell's decision is applied and after the Task Force recommendation are followed that there is in fact, enough water in the Truckee River right now to satisfy all the demands which are being made upon it.

Justice Byron R. White: Well this -- assuming that nothing that judge Gesell ordered would be interrupted by the filing of this lawsuit, the filing of the lawsuit might turn out to be an unnecessary act but it would not -- it would be very bothersome, would it?

Mr. Jr. Roderick Walston: I think it would be Justice White --

Justice Byron R. White: Not in terms of whether the water would be available or not, if judge Gesell's orders were carried out as you say they could be?

Mr. Jr. Roderick Walston: If judge Gesell's decision was carried out then Pyramid Lake would probably receive on the average about 385000 acre feet of water per year and this is all the Federal Government is really asking for on the behalf of the Indians in this case but it's very interesting Justice White how judge Gesell has approached the problem and how the Task Force approached the problem, really differs from the approach taken by the Federal Government.

The judge Gesell's approach and the Task Force approach is based on the assumption that we have to preserve existing water usage in the upstream area in the Truckee River basin and this is diametrically opposite from the approach being urged on this Court by the Federal Government.

Suppose for instance, 385000 acre feet of water were flowing through the Truckee River in a very dry year, when less than a normal amount of rainfall occurs in the Sierras, the approach taken by the Federal Government would take the entire 385000 acre feet of water and put it solely for use in Pyramid Lake thus there would be no water left over for any upstream usage.

Justice William H. Rehnquist: They were not permitted any diversions for the Newlands project?

Mr. Jr. Roderick Walston: Not according to the prayer and the government's complaint which I believe is found at page 14 and 15 of its complaint.

They are asking for a set minimum yearly flow --

Justice Byron R. White: I did not understand the Attorney Solicitor General to say that's what they were demanding?

Mr. Jr. Roderick Walston: Well the Solicitor General remarks, I think, very somewhat from his prayer.

If you look at his prayer Justice White, on pages 14 and 15, you will find that they are asking for a minimum flow measured in terms of acre feet to the Pyramid Lake.

And if there --

Justice Byron R. White: Well, the solution of the problem is that so, and I would not say that they are simple but if you think judge Gesell has seized upon adequate solution, it should not be very difficult, it would not take if you are right, for even if this suit was filed, you mean even to arrive a similar result here or to dismiss it and leave it to judge Gesell's decree.

Mr. Jr. Roderick Walston: That is possibly true, Your Honor but I strongly suspect that if a Court takes the case, if this Court takes the case and proceeds the exercise its original jurisdiction in the matter, than the whole Task Force will come to a halt.

Justice Byron R. White: Well, not if -- I suppose you have taken cases in which we specifically said that we did not intend to interrupt a lot of other things going under the court in the same case --

Mr. Jr. Roderick Walston: Well that is – well then you are -- you are really by taking the case merely duplicating, this is our whole point, you are really duplicating what judge Gesell has already found and you are duplicating what the Task Force has already recommended.

If the problem is actually being it solved by administrative and other judicial means then I see no bases or justification for this court actually exercising it's discretion in the case.

Justice William J. Brennan: Is any judicial review being sought of judge Gesell's order?

Mr. Jr. Roderick Walston: No justice Brennan.

I understand that the Federal Government is not going to take an appeal from judge Gesell's decision and that is presumably it should apply judge Gesell's decision and that is provide Pyramid Lake --

Justice William J. Brennan: Well your point is if we accept this case, that enforcement of judge Gesell's decree will stop, is that it?

Mr. Jr. Roderick Walston: I frankly do not know how the Solicitor General will respond to judge Gesell's decree if the Court takes the case, I --

Justice Byron R. White: Well we are going to say the fellow who is under judge Gesell's order wants another solution --

Justice Potter Stewart: Two different groups within the department of interior, we are talking about, aren't we?

Mr. Jr. Roderick Walston: Yes, Mr. Justice --

Justice Potter Stewart: Conservation groups, we're talking about BIA?

Mr. Jr. Roderick Walston: Yes that's correct.

Justice Byron R. White: (Inaudible)

Mr. Jr. Roderick Walston: Yes that is correct Justice White there is the --

Justice Byron R. White: He is the one who is under order, judge Gesell's order?

Mr. Jr. Roderick Walston: Yes that's correct.

Justice Byron R. White: And he is the one who recommended the filing this lawsuit, I understand.

Mr. Jr. Roderick Walston: The filing of the lawsuit we are talking now, yes that's correct.

So in effect the Federal Government is coming before this Court and really asking for a solution of the problem that I think has already been found.

If the court applies judge Gesell's decision, I think the problem should be solved.

Justice William J. Brennan: You do not mean if the court applies, you mean if it is applied and enforced by the Secretary?

Mr. Jr. Roderick Walston: Yes that is correct.

Justice William J. Brennan: And what you are suggesting as I understood you was that we take this case, the Secretary will not apply to force judge Gesell's order, but it will wait on the outcome of this case, is that right?

Mr. Jr. Roderick Walston: Well, I am not I see Justice Brennan, I am not sure what reaction the Solicitor General will take to judge Gesell's decision, if the Court takes the case.

Certainly I don't think that they will follow through with the Task Force recommendations, as matter of fact, the Task Force made a number of recommendations and the Federal Government, I would assume would not comply with those recommendations, if the Court takes the cases.

As a matter of fact, these recommendations have not been complied with so far, Federal Government is in effect, trying to implement it weather modifications scheme which the Task Force suggested but that's the only Task Force's suggestions that has been followed by the Federal Government in this case.

The Task Force found a number of other things that Federal Government can do.

The Federal Government has taken no action on those other recommendations and I would assume that the reason is that it prefers to seek a judicial solution in this Court in which the Winter's doctrine question is adjudicated.

The underlying assumptions behind judge Gesell's approach to the problem and behind the Task Force approach is that the Federal Government itself really controls the lion's share of water flowing though the Truckee River.

Justice William H. Rehnquist: Of course Judge Gesell was limited, wasn't he, in that he didn't have the water users before him so that that was really the only approach he could take?

Mr. Jr. Roderick Walston: That is the only approach he could take, that is right Justice Rehnquist but there is a sufficient solution to the problem, we believe whether it is justice or judge Gesell was in fact saying that there is vast amount of water which is being wasted in the Reclamation project, that the Federal Government has the power to control this waste, it has the power to eliminate the waste and if it follows these suggestions or the order of judge Gesell and the task forces, and makes the water available for use in Pyramid Lake then the whole problem is solved.

I would remind the Court that all the parties who are receiving water now in the Newlands Reclamation project, and all the other parties who are receiving water in Nevada, and all the parties who are receiving water in California are not before this Court either.

Justice William J. Brennan: They were not before judge Gesell?

Mr. Jr. Roderick Walston: No, that's correct, Your Honor, judge Gesell just had the Federal Government before him and he ordered the Federal Government to adopt regulations which I think should solve the problem.

Justice Byron R. White: Could they be brought in this suit?

Mr. Jr. Roderick Walston: They could be, I suppose that they could be.

That raises a very interesting question.

The Federal Government is in effect trying to have the water's right adjudicated on the behalf of the Indians and this is a water right which would be taken out at the share of water which is allocated to the state of Nevada.

Well I don't see how this Court can adjudicate the right of one water user in the Truckee River.

Justice Byron R. White: (Inaudible) didn't it?

Mr. Jr. Roderick Walston: Pardon me?

Justice Byron R. White: (Inaudible) say that the admission of Montana did not supersede an implied reservation of water when the reservation was created just a year before?

Mr. Jr. Roderick Walston: That's correct.

In that case Justice White all the – as my understanding of case is that all the competing water users were before the Court and there was -- the Indians were before the Court and all the other water users were before the Court.

In this case, the Federal government is asserting a water claim on behalf of the Indians and seeking to have this Court adjudicate that water claim, even though there are many conflicting or supposedly conflicting water claims in Nevada which these are of some consideration also.

I don't see how this Court can really adjudicate the water claim which is to asserted by one user in the Truckee basin without asserting the water claims adjudicated by all the Truckee River users.

So we respectfully urge this Court to let the matter proceed and to let the decision of Judge Gesell be implemented and the recommendations of the Task Force be followed.

We think that this provides a constructive solution to problem which will effectively preserve the rights and the uses of the upstream water users.

The people out in the Rene area need water every year for drinking purposes.

The farmers in the Newlands project need water for agriculture purposes and Judge Gesell I think has pointed to a constructive solution to the problem so has the task force if the right problem solved, so the matter I think is pre-maturely brought by the Federal Government at this time.

Chief Justice Warren E. Burger: Thank you Mr Walston.

Mr. Solicitor General we have gone over a little bit and we have heard some estimates as to the impact of what might happen if the relief you seek is granted and perhaps you could spend about three minutes in enlightening us on your view of those estimates?

Rebuttal of Griswold

Mr. Griswold: Mr. Chief Justice the suit pending in the district of Columbia was a responsibility of the Solicitor General to decide whether an appeal should be taken and the decision has been made that no appeal will be taken.

Nevertheless, that case involves only the left-over, only the run off, only the water which does not go to someone else by right.

It leaves – it does undertake to maximize the left-over and it will help the Indians but it gives them no right.

That water can be appropriated by somebody else, it remain surplus water in the river.

It can be appropriated in California, it can be appropriated in Nevada.

The only way that the Indians can be protected is by having an adjudication that they have a right under the Winters Doctrine as applied by this Court most recently in Arizona against California.

I am also advised that the Office of Management and Budget has authorized the filing with Congress of a statement that the Federal government opposes the ratification of the compact until this question is resolved.

I would point out too that in the compact itself, in Article 18 (c), it is provided that the compact does not deal with the rights of any parties which are not specified in the compact and that was intended to leave open the question of what would happen if there was an adjudication of the rights of the Indians.

Justice Byron R. White: District Court – a Federal Court or even a state court would have jurisdiction over -- In a state water adjudication if United States was noticed as to what its claimed rights might have – might be, you would have to enter that to --

Mr. Griswold: Under the case in Colorado the --

Justice Byron R. White: Yes.

Mr. Griswold: -- that would be true.

That was an intrastate stream in that case.

There is no way --

Justice Byron R. White: Well, with respect to the competing claims of Newlands and Pyramid Lake, these are intrastate stream.

Mr. Griswold: With respect to the competing claims in Newlands these are intrastate claims but with respect to the claims in California and I would point out that they are substantial, we have filed a supplemental reply brief here which recounts the or sets out the text of an order of the State Water Rights Board in California which granted a substantial additional amount out of Lake Tahoe saying that in that decision the board assumed to be surplus and unappropriated.

The water from lake Tahoe and the Truckee River flowing by Derby Dam which is not required to satisfy decreed downstream Indian rights and which wastes in the Pyramid lake.

The only decreed rights the Indians have is 30,000 feet for irrigation.

We are seeking hereto establish decreed rights in support, in favor of the Indians to maintain the level of Pyramid Lake.

Justice William J. Brennan: May I ask you Mr. Solicitor general, I thought you said, at least I did not that we would not have to get in or bring in these other claimants --

Mr. Griswold: I think that is entirely right Mr. Justice.

Justice William J. Brennan: What's your observation?

Mr. Griswold: All this Court needs to do here is to determine whether the Indians have a right with a priority --

Justice William J. Brennan: But that would not decide vis-a-vis the other claimants the --

Mr. Griswold: All this Court needs to do here Mr. Justice is to determine whether the Indians have a right with a certain priority.

Justice William J. Brennan: I know but if that priory has to do – mean that that other water users in the area get half the water they used to, you are foreclosing them.

The question is --

Mr. Griswold: No Mr. Justice.

All that they need to do is to determine whether the Indians have a right with a certain priority and to allocate the waters of the stream between California and Nevada who appear as parens patriae and who will represent the water users in those states just as they did in Arizona against California or exactly this was done --

Justice William H. Rehnquist: But that was initiated by the states Mr. Solicitor General.

Arizona and California asserted claims as parens patriae.

Here you are insisting that they assert them even though they are defendant.

Mr. Griswold: The suit was instituted by the states but the intervention by the United States on behalf of the Indians was against this -- The suit was instituted by the States but the intervention by the United States on behalf of the Indians was by the United States and against the states and this Court adjudicated the rights and adjudicated that the Indians were entitled to a million acre feet in that case.

If the Court here adjudicates that the Indians are entitled to a right with a certain priority and allocates that between the two states which is what it did in Arizona against California, then the question of allocating the water to the individual users which is allocated to Nevada in the one case can be handled in the Nevada Court and if allocation to California users can be handled in the California Court --

Justice William H. Rehnquist: Then all these farmers would loose their rights as a result of that adjudication if it were favorable to the Indians without ever having had a day in this Court.

Mr. Griswold: They are represented by their respective states as has been the case in, I think I am safe to saying dozens of cases involving interstate water rights before this Court, where the States appears parens patriae.

Chief Justice Warren E. Burger: Thank you Mr. Solicitor General, thank you Mr. Prettyman, Mr. Walston.

The case is submitted.

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Washington v. General Motors Corp. - Oral Argument

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Washington v. General Motors Corp.

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Argument of Fredric C. Tausend

Chief Justice Warren E. Burger: Original number 45, State of Washington against General Motors.

Mr. Tausend, you may continue.

Mr. Fredric C. Tausend: Mr. Chief Justice and may it please the Court.

Yesterday afternoon I told you what this case was about.

This morning, I hope to persuade you to exercise your discretion to accept this case as an original action.

The States who are Plaintiffs in the amici seek two things.

One, a single unified trial of the antitrust for equitable relief only, and two, a speedy resolution of this litigation so that what now appears to be the most adequate equitable remedy namely retrofit of pre 1968 cars at the expense of the defendants can remain a viable possibility for the Court to administer if it sees fit to do so at the conclusion of the case.

Under the standards which this Court lay down in Wyandotte and Georgia, you must been exercising your discretion ascertain first if there was an alternative forum to which this case may be remitted in the interest of convenience, efficiency, and justice.

Now clearly because this is a Sherman Act, Section 1 case, that forum must be a federal one.

The appellant's alternative forum that comes to mind is the District Court in the Central District of California at Los Angeles, the Multidistrict Court.

Judge Real has served almost two years as the 1407 transferee judge.

He is familiar with many of the facts in this litigation in that capacity.

He has presided over extensive pre-trial hearings I believe there have been at least six.

He has attended portions of a two depositions of officers to the defendants that have been taking to date.

He has read some of the documents which were submitted to him in a brief under seal and he has made it clear by adopting the plaintiff proposed discovery and trial preparation schedule that under his direction these cases could be ready to go to trial in December 1972.

But standing ultimately in the way of that resolution, a single trial in December 1972 on the equitable issues are these defendants.

As I pointed that yesterday, 34 of the governmental cases were brought in Districts other than Central District of California, 23 separate districts as a matter of fact.

So to achieve a single trial at the District Court Level there would have to be transfers to Los Angeles of all 34 cases under 28 USC Section 1404.

And the defendants have announced time and again that they would resist such to transfers and such a consolidated trial.

At page 4 of their supplemental brief which is the cream-colored brief, the next to the last brief they filed in this action.

They assert that the joint trial was not feasible, not feasible.

And at the proceeding before Judge Real in Los Angeles, a week ago Thursday, the defendants indicated just how vigorously they will resist such a transfer on both substantive and procedural grounds if Judge Real attempts to go ahead with it.

I have submitted the transcripts of those proceedings such an the appendix to our brief and I am going to quote for Mr. Cutler, at page 51 of the transcript.

I am going a quote a few remarks and if the Court has the transcript and would like to see the entire context of those remarks that Mr. Cutler made, I'll invite your attention to page 51.

Mr. Cutler told the court and I quote, "I think we would have to say that any decision at this point in favor of transfer and consolidation is something which we would feel bound to seek review."

And then said Mr. Cutler everything would be help up while that was being resolved.

Now, Mr. Cutler's thrust has two points. One, very clearly the defendants intend if they can to hold up everything attacking this transfers and the second point is that they will seek with you which means that ultimately this case is going to reach this Court and probably more than once because the defendants have already taken and interlocutory appeal from Judge Real's order denying their motion to dismiss.

The interlocutory appeal Your Honors was certified in November 1970.

The case was finally argued in the Ninth Circuit on January 1972, it is now subjudicy and certiorari I believe as certain.

So I think the defendants have made it clear that they're not going to let this Court escape the burden of this litigation.

So the question then is I believe, would the burden imposed by accepting original jurisdiction as we urge this Court to do, especially where the Master can be a Federal District Judge who is totally familiar with the case and was indicated that but for the legal obstacles which the defendants are raising, he would most probably be prepared to go to trial on the equitable claims on December 1972.

Is that burden really greater than the burden imposed by the persistent, excuse me, by the persistent threat from the defendants on what can only be characterized as protracted in piecemeal litigation.

And beyond the burden that would be imposed on this Court is the burden which would be imposed on the entire Federal Judicial System if the defendants succeed on delaying the trial to a point where the possibility of equitable relief through retrofit is no longer a viable one because of the delays in time and the cars leaving the road at the rate of 8 to 10 million a year as it accelerates as I explained to the Court yesterday.

Because of that point, at some point on the future money damages would then be the only sensible recourse of the States and the difficulties and complexities of this case will be every bit as great and perhaps greater than the Multidistrict Panel warned up when it assigned these cases to Judge Real.

Now the defendants also will be greatly burden by multiple jury trials and diverse appeals but apparently they are willing to bear this burden in order to avoid paying in this way for their Sherman Act violations.

It is to avoid these burdens on the Court on the Federal Judiciary on the 34 States and New York and to obtain an early end to the litigation and to preserve the possibility of retrofit relief at the defendants expense as a viable remedy for the wrong alleged that we urged this Court now to accept the original jurisdiction of this case, appoint Judge Real as your Master and let us proceed the trial in December 1972, that is my argument.

Chief Justice Warren E. Burger: Thank you Mr. Tausend.

Mr. Cutler.

Argument of Lloyd N. Cutler

Mr. Lloyd N. Cutler: Mr. Chief Justice and may it please the Court.

The defendants urged that this case is governed by your decision at the last term in Wyandotte and that in one important sense it simpler than Wyandotte.

In Wyandotte, you based your decision on two major grounds the availability of another impartial and no less of appropriate forum even though Ohio had not filed suit in that forum and as a cogent reason, a practical wisdom for declining jurisdiction on the light of your other responsibilities the possibility of imminent legislative and administrative relief for the factually and technically complex environmental problem they are involved.

In the present case, the Court need not reason on the basis of the hypothetical availability of other no less appropriate forums or on the mere possibility of legislative and administrative relief.

In the present cases, the same plaintiffs states and the amici states have already filed essentially the same suits against all the defendants and other more appropriate District Court forums where a pre-trial preparation as Mr. Tausend told you or actively proceeding and more over a comprehensive program on legislative and administrative relief or the even more complex environmental problems here both the Federal and the State level is already an on-going fact.

I would like to ask the Court if it would to look at our supplemental memorandum in our position which is the cream-colored memorandum filed on December 23 and if you will turn to the appendix of that memorandum, you will see a compilation of all of these pending District Court cases which have now been consolidated for pre-trial purposes --

Justice William O. Douglas: It says as a matter of the trial strategies from your side, it is impossible to get this trial together in a separate --

Mr. Lloyd N. Cutler: I don't think it's correct to say Mr. Justice Douglas that it is impossible, it is our belief number one that the question of whether these cases should be transferred to a single district for trial and then consolidated for trial is a question that can be best evaluated when the pre-trial proceedings are further along the identity of the witnesses and the nature the issues are better known, the question of whether the cases as they present themselves for the different states are essentially different cases in major aspects such as the quality of the air in the given State the impact of the defendants' activities on the quality of the air in that State and the relationships that have going on between the regulatory authorities and the automobile companies in that State.

Unknown Speaker: Are you suggesting the old --

Mr. Lloyd N. Cutler: No, sir.

I am suggesting that is an entirely appropriate question for the District Courts to resolve under the transfer powers and the consolidation powers when the pre-trial proceedings are further along.

Moreover, if you would look at the appendix, sir, you will see that these plaintiffs, most of them after they filed the single case before you when the time came as Mr. Tausend mentioned when they decided to file District Court complaints to protect against a fairly remote statute of limitations possibility.

They filed those complaints not in one action as they filed before you which they were perfectly free to do.

They filed those complaints as you will see on page 42 of appendix A in some 12 different Federal Districts, eight of them as widely separate as Hawaii and Maine as it happens elected to file a single complaint in the Central District of California.

But the others for reasons best known to themselves elected to file in separate districts thus creating the transfer problem about which they are now complaining.

In fact, they did this after we, in our initial memorandum and opposition to the filing of the complaint here, had said that these courts, original jurisdiction is not necessary if they want to achieve their purpose of the single trial. All they had to do was get together and file a single complaint of the same type in a single District Court which they did not do.

Moreover, even though they failed to do it the District Courts among them clearly have the power to transfer these cases under Section 1404 and to consolidate them for trial under Rule 42.

Should they conclude, despite the arguments, we may very well make to do contrary after the conclusion of the pre-trial discovery that consolidation and transfer are not in the interest of justice.

Justice William H. Rehnquist: Mr. Cutler aren't the differentiating factors which you mentioned in response to Justice Douglas as questioned, primarily wants to do with remedy rather than liability.

Mr. Lloyd N. Cutler: No, they're not Mr. Justice Rehnquist, because liability in a Section 16 action and in a Section 4 action which this plaintiffs have also brought in the District Courts depends first on the proof of an antitrust conspiracy let us say, and second on the impact of that conspiracy on the particular plaintiff.

For example, there is an allegation on these complaints that the defendant conspired to delay the installation of one particular retrofit device on vehicles in the State of California for one year.

We would intend to show not only that we did not so conspire but that if we had, that particular Act could have had no effect or certainly no tangible impact on the quality of the air or any injury to the State of Hawaii or the State of Maine or any of the other States which were not directly involved in that particular Act.

If you will look again at this list of cases at page 42, many of these cases in the District Courts in fact all of those that are brought by States are contained the same allegations that are contained in these cases before you.

But in addition to that they are class actions brought on behalf of all the political units in those States and they are also actions for damages and we would submit to you that the District Courts which have those cases before them are far better able to deal with the plaintiffs present request made to the District Court to drop their damage claims and to deal with the question of how the dropping of those claims is to be resolved among the various members of their classes and to how the question of dropping the damage claims in some but not all of the State cases because California has declined to drop its damage claim and has declined to seek this early equity trial how those problems are to be resolved.

First, to make sure that the dismissal of this class action complaints below is properly approved by the Court and second, how any jury trial or right to jury trial issues under Beacon Theaters are to be resolved.

Unknown Speaker: Those actions you say Mr. Cutler are class actions and that they asked for damages as well as for the injunction?

Mr. Lloyd N. Cutler: That is correct, Mr. Justice.

Unknown Speaker: And are they also -- the class actions are they also parens patriae action?

Mr. Lloyd N. Cutler: All of them plead parens patriae claims including the ones before you.

Unknown Speaker: And in our case today as a parens patriae claim but not a class action [Voice Overlap]

Mr. Lloyd N. Cutler: It's not a class action before you.

Unknown Speaker: And as only for (Inaudible)?

Mr. Lloyd N. Cutler: That is correct and remember of course that you have before you only 18 of the States whereas the District Court has before it some 36 States.

One of which at least has said specifically it does not intend to drop its damage claim and does not intend to seek this early equity trial therefore raising this set of be Beacon Theaters problems that only the District Court, we believe, can resolve since it has all these cases before it.

It has all the classes and it can arrive at the proper resolution of which cases should be tried first.

I want to say in that connection in the light of Mr. Tausend's comments first that what he quoted from my remarks below before Judge Real dealt essentially with the question of when transfer and consolidation where right issues for consideration and not with the question of essentially of power in the District Courts to accomplish those two things whenever that might be required.

Now --

Justice Byron R. White: It's not -- what do you view of the parens patriae, you see -- you say that's what this is in the story?

Mr. Lloyd N. Cutler: I say only Mr. Justice White that these plaintiffs have pleaded their case as a parens patriae claim for the injunctive relief they seek in this Court, whether the parens patriae point is significant and that, I have no idea.

Unknown Speaker: Oh what is that parens patriae?

Mr. Lloyd N. Cutler: This I take it is the issue you have before you and Hawaii case but their claim is that on behalf of all the citizens of their State they are seeking the injunctive relief which they claim to be necessary to improve the quality of the air in their State --

Justice William O. Douglas: Oh they didn't invent that?

Mr. Lloyd N. Cutler: -- for an antitrust violation.

Justice William O. Douglas: They didn't invent that concept, should they?

Mr. Lloyd N. Cutler: No, Mr. Justice Douglas.

Justice William O. Douglas: It's very familiar.

Mr. Lloyd N. Cutler: I am not making an issue of the fact that they have included the parens patriae claim and I don't know that it is significant to your question of whether that you should accept?

Unknown Speaker: Would then we have a case here?

Mr. Lloyd N. Cutler: Well, I believed that they are suing as States and as parens patriae.

They say they bring in this action in their capacity as parens patriae, etcetera, etcetera, etcetera and as proprietors, state lands, properties and resources.

Unknown Speaker: But in any, you don't challenge their standing or their cause of action that you don't say they don't plead the cause of action?

Mr. Lloyd N. Cutler: No sir and in fact we do not challenge the jurisdiction of the District Courts in anyway these defendants are suable and virtually any district, they have not contested the suits pending in any State --

Unknown Speaker: And you don't contest our jurisdiction?

Mr. Lloyd N. Cutler: We of course, we don't contest your jurisdiction sir.

The -- not only is the District Court a perfectly appropriate forum and equally appropriate forum field.

We submit, Your Honors, that the District Court is a more appropriate forum even though I don't think it's necessary for us for you to reach that level of proof.

You have only taken one original antitrust case so far as I know and that is Georgia against Pennsylvania and that case was taken on the express ground as we understand it that the District Courts where incidentally Georgia had not filed.

None of the District Courts reason this Court could have in personam jurisdiction over all of the defendants and that is why you took this as an original jurisdiction case saying in the opinion of the Court though in other respects we assumed it namely District Court jurisdiction would be wholly appropriate.

And here, all of the handicaps of this Court as a trier of fact, since you cannot listen to the taking of evidence in the first instance, cited in the dissents in the Georgia case overwritten in Georgia only for a reason that is not present here would be before you.

This is not, as plaintiffs appear to believe, a simple per se antitrust case and the government never contended when it brought its own suit that it was a per se case.

It's a case that involves the complex history of some 20 years of interaction between governmental authorities and the automotive industry as both of them were gradually coming to realize the significant effects of automotive emissions on the general air quality.

And the case has a unique quality to it that is going to require extensive proof because of it's the first case to our knowledge that involves the, what economist called the principle of externality, namely the incorporation of a feature in a product such as an automobile which is put their for a social or for public purposes and which the individual purchaser of the vehicle does not perceive as having any utility to himself on his vehicle and will not pay an additional price for if you give him a choice.

In fact, in the case of an emission control apart from its cost the purchaser may regard it as a positive detriment because of its adverse effects on fuel equality, on idling, on heating up in traffic and on cold starting and we have filed with the Court since the relief of course that these plaintiffs insist on, its retrofit relief, we filed with you yesterday a recent report submitted to the air quality -- Air Resources Board of California by its staff and February 16.

It's only six pages long and I urge you to look at it because it analyzes all of the available retrofit kits that have been submitted to the State of California which does have a mandatory retrofit law and which will require all of its citizens to retrofit when and as the State triggers the law by certifying a particular device something after years of that law being on the books the State has not yet done.

Plaintiffs have said to you that the problems that this Court faces with its difficulties as the trier of fact could be resolved by appointing Judge Real as your Special Master.

But this really would not resolve the problems you face as a trier of fact.

Judge Real sitting as Special Master would -- could only recommend findings of fact to you on which you could would have to make an independent evaluation and he could only recommend to you rulings on issues of law has plaintiffs themselves seem to admit.

He could do far less himself and he would involved you much more in interlocutory and other reviews of what he was doing if he said as your Special Master then that he and other District Judges sat as District Judges.

They could dispose issues as District Judges which they could not dispose as Special Master.

For example, if there were a plea of the statute limitations answered by a claim of fraudulent concealment or motion to dismiss at the end of the plaintiffs' case.

Judge Real or another District Judge could decide those and the whole case might be over at that point.

Subject only to appellant review and appellant review which might never reach you, and might be resolved in the Court of Appeals and despite what Mr. Tausend has said it's perfectly possible that if these cases are tried in the District Courts they will ultimately be resolved in ways that never make it necessary for this Court, at least to grant certiorari and review any particular aspect of them.

Further, if Judge Real were to function not only as the appointee of the Multidistrict Panel in all of these are the cases but also as your Special Master, he might find a conflict of interest in those two responsibilities.

You might say, can a master serve two masters? But he is responsible to the Multidistrict Panel for the expeditious conduct of the pre-trial proceedings in those other cases.

Supposed we were to say to him at some point that we felt the California case which raises both damage issues still and equitable issues should be tried first because California was the State with which asked the automobile companies in the first instance to appoint a committee and get to work in this area and most of the interaction between the industry and the Government took place initially with the State of California.

And if that case were tried first and we would erase that as the case that should be tried first, the Beacon Theaters problems would be resolved.

How could Judge Real, sitting both as your Special Master in these cases and as the Multidistrict Panel Judge in the other cases, resolve that problem?

He would have to take his orders from you which might to proceed with this case which might be essentially incompatible with his other duties.

Furthermore, you had an experience with a Special Master in the only original antitrust case you ever took.

Georgia, if you'll recall, came to you itself for urgent equitable relief, that is all you took and you appointed a highly confident Master.

Georgia thought probably also it had a simple document case.

One that it put into the Master in one day yet it took this very capable Master, Mr. Lloyd Garrison, four years to hear first the defendants proof of the lack of conspiracy and the essential reasonableness of what they have done.

And to prepare his report and the report itself was some 700 odd pages alone, there were more than 15 volumes of testimony and a dozen-volume of exhibits which you would have had to review.

You were fortunately spared that which might have taken another year because Georgia itself voluntarily dropped its case as mooted by some pending ICC proceeding.

So we would say to you, Your Honors, that the District Courts left to themselves, we believe and with whatever appropriate appellate review first the Courts of Appeal when which you have always relied in the past in antitrust cases and which you have been very unhappy to see eliminated from the review of direct appeals by defendants in government antitrust cases.

You could rely on them to see that the proceedings were going forward expeditiously.

Judge Real, I can assure you sitting as the Multidistrict Panel Judge is applying the lash very vigorously to all us and the defendants in this case far from doing what Mr. Tausend has said have been taking the initiative below in pretrial discovery.

We filed our first wave discovery requests something like a month before they were required to be filed.

The plaintiffs have not yet filed this.

We initiated the taking of depositions of some of our older witnesses.

And we have said to Judge Real who incidentally has not yet approved the December trial date and has not yet adopted on any permanent basis the plaintiffs program but wants to see the reaction of these classes in municipalities first.

We have said to him that we are prepared to go forward as to accept any target date for the completion of pretrial and to go forward as rapidly as any case involving 20 years of history in this rather abstruse technology in these relationships with various government agency would permit.

Justice Byron R. White: Mr. Cutler, do you say that some of these cases in the District Courts are essentially different from each other?

Mr. Lloyd N. Cutler: Some of the State cases we would submit, Mr. Justice White, are sufficiently different from one another so that it might not be expeditious to put them all together in one big single consolidated trial.

Justice Byron R. White: Well if the -- if there was a Special Master appointed -- if we took jurisdiction and appointed a Special Master and he face the -- these same States, would you suggest that he may have to try different States separately?

Mr. Lloyd N. Cutler: Yes, Mr. Justice White we would, should you take original jurisdiction and depending on whether the pretrial discovery in proof work out as we believe it would and the sharpening of the issues work out as we believe it would.

Justice William O. Douglas: My understanding of the Federal -- new Federal law is if the Federal standard would apply into cars manufactured after a certain date and that the petition here is talking about cars especially on the road you have, isn't that right?

Mr. Lloyd N. Cutler: That is part of the relief he is asking Mr. Justice Douglas but it's the only part on which he is concentrating and urging you to take original jurisdiction of the case.

Justice William O. Douglas: My question is this, as a matter of Federal law that phase of the problem is what do States to work out as they might choose, is it not?

Mr. Lloyd N. Cutler: That is correct sir.

Justice William O. Douglas: So you could have 50 different standings for a retrofit?

Mr. Lloyd N. Cutler: Pardon?

Unknown Speaker: For a retrofit as you would say for what kind of device would be put on the car or ready in use owned by a driver in a State?

Mr. Lloyd N. Cutler: One thing in California, and other in Idaho, and other in Washington?

Unknown Speaker: That is correct. [Voice Overlap]

Justice William O. Douglas: But we're not dealing with an overall Federal rule.

The only Federal Rule is a -- a federal rule that leaves it to the States --

Mr. Lloyd N. Cutler: That is correct Mr. Justice Douglas and this was an advertent thing.

The Senate and the House when they passed the Clean Air Amendments of 1970 considered imposing a mandatory retrofit requirement and concluded that a retrofit program was not manageable at the Federal level, this is at pages 25 to 32 of our -- of that same memorandum, and should be left to the regions the air quality regions and the States which means essentially the States.

Justice Byron R. White: Well, let's assume we have jurisdiction and then Special Master proceeded.

I take it that, that in suit like this Federal Law govern -- that in your submission a suit like this as to determining the existence of an antitrust violation and the remedy Federal law would govern?

And would you or are you suggesting that the action of Congress would suggest to the Special Master into this Court that in that although as a Federal Law would govern the remedy that we would borrow state law or state standard?

Mr. Lloyd N. Cutler: What would actually happened Mr. Justice White as the plaintiffs have conceded below is that a remedy from this Court would be worthless without the enactment of a statute in each state requiring every car owner to install a retrofit device whether it was paid for by him or furnished at the cost of a billion dollars by us and to maintain that device there after.

Now the interesting thing is and all of this state in --

Unknown Speaker: Let's assume the question was, what kind of a -- let's assume that it was found that there was an antitrust violation under the federal standards.

Now on the remedy, what kind of retrofit device would --?

Mr. Lloyd N. Cutler: All you could do --

Unknown Speaker: It would be ordered to be installs in California as compared the Illinois?

Mr. Lloyd N. Cutler: Assuming you have any power under Section 16 to order the sort of a remedy a retrofit remedy today, all you could do I believe, would be the order the installation of such of the device as the State by legislation or regulation might or might not require.

Justice William O. Douglas: Does the State have some leeway under the Federal Law?

Mr. Lloyd N. Cutler: Well, not only does it have leeway, the States disagree very widely despite what they say here about whether there should be retrofit, the State as I started to say moment ago sir, have filed their so called implementation plans with the Environmental Protection Agency as to what they intend to do on air quality.

Justice William O. Douglas: If we --

Mr. Lloyd N. Cutler: If we file those with you yesterday not a single State Mr. Justice Douglas of these 34 of plaintiffs and amici has said it intends to adopt a retrofit program.

Several of them have said that retrofit is unnecessary or impracticable or would have minimal effect.

These various States that are before you today and we filed this paper with you yesterday analyzing this public filings have all said that they do not intend to seek a retrofit program.

The only one that has said the contrary is California and California is not seeking an original remedy from you or in early equitable trial.

It intends to proceed on its claim for damage.

Justice William O. Douglas: He took the case and we had hearings then a decree, that would not in anyway touch the Environmental Protection Agency, would it?

Mr. Lloyd N. Cutler: It would not -- it might Mr. Justice Douglas.

Justice William O. Douglas: In what way?

Mr. Lloyd N. Cutler: In this way that the Federal Government decided that the thing if the Federal Government by which in the sense you're a part should concentrate on was emissions from new cars and that the manufacturers face very substantial problems in working out the technology and incurring the cost necessary to meet those standards.

If it's a still a very near thing whether we are going to meet this new standards or not but if on top of our obligations to meet standards on new cars, which none of us have yet figured out how to do, this Court or any other court should impose on us a substantial retrofit obligation amounting to some billions of dollars in the production of 50 million units for that purpose it might have a very substantial effect on the EPA Program.

Unknown Speaker: Well, I thought part of your argument was the Congress has said in the situation like this state law is to be the governing standard?

Mr. Lloyd N. Cutler: Congress has said that the question of whether a car should or should not be retrofitted are cars already on the road cannot be manage at the Federal level and should be left to the state.

Unknown Speaker: If we were saying -- if we were saying federal law governs this suit that we must look to state law to see what the federal standard should be and a State that says there is no retrofit law in our State?

Mr. Lloyd N. Cutler: There would be no evidence.

Unknown Speaker: There would be no remedy if you --

So, either you can have dirtier lawsuits under the Federal Act?

Mr. Lloyd N. Cutler: I am not sure I understand that.

Are you speaking with respect to old cars?

Unknown Speaker: There's no effect on old cars.

Mr. Lloyd N. Cutler: Well the State could decide or --

Unknown Speaker: There's no effect on Idaho but Idaho could --

Mr. Lloyd N. Cutler: But Idaho could also decide that it does not want dirty air quite that emissions from old cars in Idaho are not a problem.

That carbon monoxide in Idaho is not a problem, that hydrocarbons in Idaho are not a problem, and that oxides of nitrogen are not a problem and that is not a useful expenditure of resources to cure air pollution.

Unknown Speaker: Then Idaho would not be one of these complaining parties in this course?

Mr. Lloyd N. Cutler: And yet the very States, as I said, that are here before you and in the District Court demanding this retrofit at defendants' expense have just filed plans with EPA saying none of them saying that the intend of propose a mandatory retrofit program and yet this plaintiffs have conceded below that no remedy any court should grant with work unless the State pass such laws.

Justice William H. Rehnquist: Well, Mr. Cutler might it not have be reasonable on the part of the State to say, we will not impose the Retrofit Program at the expense of the individual car owner but if the automobile committees can be made to pay for it, we would be perfectly willing to support it in that instance?

Mr. Lloyd N. Cutler: Perhaps so Mr. Justice Rehnquist.

But I think that very question or that posture would bear on the alleged urgency of this remedy and the fact that the remedy may be disappearing unless the States do something about it.

California which has the most urgent problem has decided to go ahead and rely on its claim for damages.

If the relief were really that urgent other States would do the same and certainly this defendants should be not be deprived of the fullest opportunity to prove (a) that there was no antitrust violation, (b) that if there was one it had no impact on that particular State, and (c) even if it did have an impact, the air quality requirements in that State were not such as to justify this drastic remedy which goes far beyond anything that's ever been called for under Section 16.

Chief Justice Warren E. Burger: Thank you Mr. Cutler.

Mr. Tausend, do you have something further?

Rebuttal of Fredric C. Tausend

Mr. Fredric C. Tausend: Yes, I do Your Honor.

Your Honors, this is not an air pollution case.

This is not retrofit case.

This is not a nuisance case.

It is an antitrust case for equitable relief only and it is true that we have emphasized in urging you to accept the original jurisdiction the widely possibility of seeking as we do now and seeking at the end of the trial retrofit relief for pre-1968 cars as the most adequate remedy if we proved the antitrust wrong.

Unknown Speaker: Well, isn't that the only remedy that you are seeking that is in addition of what the government already had?

Mr. Fredric C. Tausend: Well --

Justice Byron R. White: Aren't these defendants already entered an injunction?

Mr. Fredric C. Tausend: Yes, we are not seeking preventive relief Mr. Justice White.

We are not trying to collaterally supplement --

Justice Byron R. White: Well, what do you want in addition to what the Government already has?

Mr. Fredric C. Tausend: The other possibility as we hold out are possibility of additional devices on new cars if the technology of speed or an accelerated research program which we're not particularly emphasizing at this times and might raise additional problems but we do want to keep the equitable relief flexible although we think and we're pretty sure that the partly because of what the defendants have said and what technology seems to be producing that the retrofit device making those cars manufactured doing the period of the conspiracy clean cars which they would have been, but for the antitrust conspiracy is the most fitted device.

But I want to make clear that we're not asking this Court today to decide that issue.

We're asking this Court because we think it would be pre-mature.

It came before Judge Real and he said it's pre-mature.

And we quoted in our reply brief the Judge Real said, "At the end of the trial when the evidence is in, it is possible that plaintiffs, the States will be able to show facts to this Court sitting equity that will justify the kind of relief they seek."

Unknown Speaker: Do you agree that Congress has left the retrofit matter to the States?

Mr. Fredric C. Tausend: Well, in legislating Your Honor, yes I do.

Congress has said that in respect to the pre-1968 cars, the standards of the emissions are up to the States but I do not think that, that says anything about what would happen if antitrust violation --

Justice Byron R. White: Alright.

Let's say that we took jurisdiction and found an antitrust violation and then would we be free in case of what Congress has said the fashion here, our own standards with respect to the used car, the cars on the road?

Mr. Fredric C. Tausend: I certainly think so, Your Honor.

Congress certainly has not given any indication to abandon the field in any of this.

Justice Byron R. White: What Congress have said that as far as the past is concerned that the federal law should at the very least look to the States --

Mr. Fredric C. Tausend: Well Con --

Justice Byron R. White: -- for standards?

Mr. Fredric C. Tausend: I think Yes Mr. Justice White Congress made a political a compromise.

They passed the law and they said we're on the facts that we have before us.

We're going to set emission standards based on things done to new cars.

Justice Byron R. White: Did you address yourself to this matter in your brief?

Mr. Fredric C. Tausend: Well, we addressed ourselves yes in our reply brief and particularly in our --

Justice Byron R. White: Now, we ask you about what were the governing law would be in this case.

Mr. Fredric C. Tausend: Well, on that point we address --

Justice Byron R. White: And you say it's federal law but in the process of fashioning federal law, do we have to look to the state law borrow state law in light of what Congress has said?

Mr. Fredric C. Tausend: No, because I think very different considerations are involved except possibly for this.

I think what -- you not only have federal law versus state law here Mr. Justice White, I think you also have something that isn't really a pre-emption argument at all which is the role of a legislative body in regulating the air and the role of a Court of Equity in remedying any antitrust violation.

Now it just so happens that the antitrust conspirators, the antitrust defendants effectuated their conspiracy in an area which affected the air.

But I -- and so I don't think it's a choice of law or question in that case at all.

I think when the equity court comes to render the decree it's going to have to consider the state of the art.

It's going to have to consider by that time, Mr. Justice White, it's entirely possible that federal law will govern used cars because Congress has not necessarily indicated an intention to stands still on this and the EPA, the Federal Agency has a real role in directing the States and stimulating the States in respect to the retrofit inspection programs which they have indicated they may start --

Unknown Speaker: Is Congress free to specify the standard applicable in original actions?

Mr. Fredric C. Tausend: I don't believe so. I believe that the standard applicable on original action is set in Article 3 of the Constitution and derives from the powers of this Court and the only -- the only thing there is that because this Court in original action such as this one not State against State sir, but State against Citizens of another State is concurrent with Federal Court --

Unknown Speaker: Well, you are relying on this congressionally set standard in bringing this action namely the Sherman Act?

Mr. Fredric C. Tausend: Yes.

Unknown Speaker: I suppose you --

Mr. Fredric C. Tausend: Of course --

Unknown Speaker: If Congress is free to provide the law that would govern original actions on this one?

Mr. Fredric C. Tausend: You mean to take away jurisdiction from this Court?

Unknown Speaker: I didn't say jurisdiction, I just said the law.

I have specified the law.

Mr. Fredric C. Tausend: I see.

I see not the exercise of the discretion but the law applicable.

They have specified the law applicable in specifying the Sherman Act and --

Unknown Speaker: I didn't make it to control the remedy.

Mr. Fredric C. Tausend: I would have very serious question with a congressional imposition on the powers of a Court of Equity to grant equitable relief.

And if I may refer to Guaranty Trust versus York, which is not in our brief, it's 326 U.S. 99.

Mr. Justice Frankfurter in that opinion wrote a rather extended dissertation on the powers of equity and where equity powers on the Federal Court came from.

Justice William H. Rehnquist: How about the Norris-LaGuardia Act Mr. Tausend? Certainly that --

Mr. Fredric C. Tausend: Yes, I think there are instances where the Court stands could be state and some like that but that haven't happen here Mr. Justice Rehnquist. In fact, that to the contrary all that, that I see that happen is that Congress isn't ready yet and hasn't been ready yet to apply emission standards to used cars.

That's really all it's happen.

It might be by the time this Court was ready to decide this case and I think that a lot of the reason why Congress hasn't been ready yet to do that is who pays for it.

Now, Mr. Cutler mentioned the Court --

Justice Thurgood Marshall: For which could we make the car owner do it?

Mr. Fredric C. Tausend: Could this Court make the car owner do it?

Justice Thurgood Marshall: Make him accept it.

Mr. Fredric C. Tausend: Well, I think this and --

Justice Thurgood Marshall: The answer is no.

Mr. Fredric C. Tausend: You could not make him accept the right of it.

Justice Thurgood Marshall: Right?

Mr. Fredric C. Tausend: Yes I think that is right Mr. Justice Marshall.

Except for this, I think that the relief, the equitable relief could be conditioned on a state enactment of retrofit law or some other retrofit administrative requirement.

Justice Thurgood Marshall: We could make the State pass the statute?

Mr. Fredric C. Tausend: I think.

I think.

Pardon me sir?

Justice Thurgood Marshall: Can we make the State pass a statute?

Mr. Fredric C. Tausend: I think you could get condition relief on it I don't think you could direct the State to pass a statute but I think that Court of equity could and frequently does condition relief --M

Justice Thurgood Marshall: Could we now order or require one of the States is not involved to do so?

Obviously no.

Mr. Fredric C. Tausend: No.

Not one that's not involved.

Now, there are I'd like to talk about two things because I think you couldn't get to the States that are not involved because they wouldn't be any antitrust case and they wouldn't be involve in the antitrust decree.

But I think you could condition or the Court of Equity could condition the granting of the equitable relief on meeting certain standards and one of the standards would be that the retrofit be put on the car so that the cars can be made clean.

Now, I'd like to mention two things in our context.

One is Mr. Cutler referred to the cost of equitable relief and how this cost would somehow interfere with the efforts of the automobile companies to go ahead and meet the 75 standards.

I think that argument simply has no place here at all.

And I would like to put in perspective.

The cost of these devices according to these defendants is approximately $20.00 a device.

We're talking now today about 50 million used cars.

Each year, at least 8 million go off the road so we are talking at most about less than a billion dollars in the light of an antitrust conspiracy that lasted 15 years and in the light of net after tax revenues of General Motors alone in 1971 of over $2 billion.

So I am not saying it's a little amount of money that is involved.

But it's not the kind of gigantic staggering cost that Mr. Cutler has indicated at the Court would be involved.

And secondly, it should be pointed out which is exactly what the defendants want to accomplish that as we go on, each year eight million leave $116 million is depleted from the obligation that these defendants could meet if retrofit is the correct and adequate remedy.

And I would like to say that Mr. Cutler did say that when I quoted him, he was talking in 1404 about a pre-mature argument that the -- that it would be premature to transfer at this time.

But he went further at that at page 53 of the transcript and he said and I assume he still believes it.

There is a major substantive issue as to whether Section 1404 meant that the transferee judge in effect could transfer cases to himself for trial.

I would like to say who is in this case.

Mr. Cutler has said there are 18 States and California isn't in.

Well, California did sign the amicus brief and which it said if the Court agrees to entertain his complaint amici will seek leave to join as plaintiffs here.

Now, they haven't changed that position.

California is under just a little bit tighter gun than some of the rest of us and it's because their State is getting very close already.

They passed the statute in November 1971 requiring retrofit when devices are certified and made mandatory by the Air Resources Board.

In February 1972 Report which Mr. Cutler submitted late yesterday to this Court, there is an indication of how that is proceeding devices are just about ready to certification and as we are worried about a trial being postponed long enough so that the equitable relief is no longer viable as cars go off the road, so California is concerned that when the retrofit law goes into effect and when cars start being retrofitted at the expense of California, the equitable remedy may not be adequate now as we point it out in our brief --

Unknown Speaker: You mean if under that law does the State, pay the car?

Mr. Fredric C. Tausend: No.

Under that all the individual citizen of California pays the cost and that's why there concern that they would need and even quicker resolution of this but it would be sometime in 1972 before their equitable relief becomes a less viable remedy to them.

Unless this Court, as we indicate in our brief can under Vane versus Barnard and related cases direct that the wrong be repaired at the expense of the defendant and make restitution.

Chief Justice Warren E. Burger: Thank you Mr. Tausend.

Thank you, Mr. Cutler.

The case is submitted.

Featured:

Ohio v. Wyandotte Chemicals Corp. - Oral Argument

Thu, 23 Aug 2012 18:13:57 +0000

Case:

Ohio v. Wyandotte Chemicals Corp.

Media File:

41orig_19710118-argument.mp3

Related Transcript:

41orig_19710118-argument

Transcript:

Argument of Paul W. Brown

Chief Justice Warren E. Burger: We’ll hear arguments next in number 41 Original Jurisdiction, the State of Ohio against Wyandotte Chemicals.

Mr. Brown, you may proceed whenever you’re ready.

Mr. Paul W. Brown: Mr. Chief Justice, may it please the Court.

We have here a case which involves mercury pollution in the Great Lakes, an immense problem which has become more max as we have factually realized that the mercury pollution is extremely damaging to health and life of our citizens.

Now, we address this action to the original jurisdiction to this Court under Article III, Section 2, cl. 2 of the Constitution and we think that the Court has in an exceedingly clear way outlined the cases in which such an action is proper.

We think the Georgia versus the Tennessee Copper Company is extremely in point and the New Jersey versus New York is extremely in point and that each of these cases provide in a similar factual situation that this Court will hear a complaint so addressed by a state against the citizens of another state and against the residence of a foreign country.

In each instance, the factual -- the facts are identical in that.

Acts were committed the situs of which was outside of the complaining state but which created a nuisance within the state and this Court intervened for the purpose of enjoining.

Justice Byron R. White: What law do you think the Court applied in the Tennessee case?

Mr. Paul W. Brown: In the Tennessee case, I think it applied the common law of the --

Justice Byron R. White: What common federal law or --

Mr. Paul W. Brown: The common -- no, the common law of the State of Georgia.

Justice Byron R. White: But there was some discussion of that matter would be about -- what --

Mr. Paul W. Brown: It seems to me that here we must.

Justice Byron R. White: (Voice Overlap) what’s the applicable law?

Mr. Paul W. Brown: It seems to here it hasn’t occurred to me that we could apply in this case anything except the common law of the State of Ohio where the nuisance occurred.

Justice Byron R. White: So you are claiming under a federal statute?

Mr. Paul W. Brown: No, we are not claiming under a federal statute.

We are claiming under the federal constitution the right to file.

We have no federal question here.

Justice Byron R. White: Well, you aren’t stating a federal cause of action?

Mr. Paul W. Brown: We are not stating a federal cause of action, we are filing this under the common law of the State of Ohio and addressing our complaint as was done in these other two cases --

Justice Byron R. White: Did the complaint say that the defendants have violated the federal statute?

Mr. Paul W. Brown: No sir, it does not.

If it does it wasn’t intended that it should.

Justice Byron R. White: So, you're strictly seeking a --

Mr. Paul W. Brown: A common law --

Justice Byron R. White: A federal forum to have adjudicated a cause of action under Ohio law?

Mr. Paul W. Brown: Right and our right to do so, arises from the Constitution and from these two cases and only from that.

Justice Byron R. White: Do you think we’re obligated to apply Ohio law?

Mr. Paul W. Brown: I think you're obligated to apply Ohio common law with regard to whether or not this constitutes a nuisance and I think you're obligated to apply Ohio common law with regard to questions of damages which may arise in the case.

Justice John M. Harlan: Could I ask you a question, Mr. Brown?

Mr. Paul W. Brown: Yes.

Justice John M. Harlan: Mr. Brown, this suit was brought by you as Attorney General today and of course you have the merit to bring it, if you’re no longer Attorney General, does the State still wish it’s appointed?

Mr. Paul W. Brown: It does.

I have been appointed special counsel by my successor to come here and argue the case at this time.

We desperately want it to be maintained, we think this is our only forum.

We think that if we go to a lower federal court, we are confronted by the fact that we do not have a federal question nor do we have diversity of citizenship.

Justice Byron R. White: Well, I know but that’s the exact the same or say that the party -- do you think it’s not exclusive?

Mr. Paul W. Brown: We do not fall within the exclusive jurisdiction but there is no other except our state court and the purpose for including in the Constitution.

The requirement the state might come here for original jurisdiction or so that we might not have to do exactly that.

That we might not have to confront our adversaries in their court, in their state court with this question which is so important --

Justice Byron R. White: In your state court?

Mr. Paul W. Brown: In their state court, in our state court also we could.

Justice Byron R. White: In your state court, you could have sued the facilities hence, in your own state court?

Mr. Paul W. Brown: We could.

Justice Byron R. White: Well, it might be more than (Inaudible)?

Mr. Paul W. Brown: We felt that the purpose for including in the federal constitution the requirement, the right, this forum as original jurisdiction, was so that this would not be necessary between the state and the citizens of another state.

Justice Byron R. White: The Congress (Inaudible)?

Mr. Paul W. Brown: It is not explicit.

Justice Byron R. White: So, are you suggesting that?

Mr. Paul W. Brown: No.

No, we could sue in our own state and we could of course sue in the foreign forum, but we take the posture that we do not need to as Georgia did not need to or as New Jersey did not need to.

Justice Byron R. White: Do you think the choice is yours not the state?

Mr. Paul W. Brown: I think it’s ours and I think this Court has already defined the cases in which he will hear such cases.

The Massachusetts versus Mellon case outlines the factual situation which is again identical to ours and that is one where we are filing suit in our proprietary capacity and we are protecting our citizens in their rights to air, water, and land and of course anyone who argues as do our opponents in their brief that we do not hold title or we are not to be fires of Ohio land and water for this purpose are entering into a legal quibble.

We feel that we are properly here, we feel that this Court has carefully defined in the two cases cited -- Georgia versus Tennessee and also in New Jersey versus New York that this is a proper court.

We think that except from our own court, it is the only we have no federal court available to us except this Court and we think that the concern of the people of Ohio and each people of the Great Lakes District with the ecology of the Great Lakes is so real that this Court ought to grant our motion.

Justice John M. Harlan: What is this specific relief that you're asking for the commission?

Mr. Paul W. Brown: We’ve made our prayer quite general issue (Inaudible) observed.

I think we ought to go in -- we’ve asked for an injunction, we've asked for damages In lieu of that and we've asked for compensatory damages.

We feel that under the cases that we've read, we are entitled to all of these things or some of them at least if for some reason we can't enjoin further, dumping of mercury, metallic mercury into the Detroit and St. Clair River then -- and if that metallic mercury which has been placed in the river by the defendants, polluters here with no other status than polluters who have within three or four days after discovering that they should not pollute found ways of substantially reducing the pollution.

If we cannot get injunction and removal then we think we have very properly asked this Court for damages and we think that we asked for damages for two purposes.

One, to give Ohio in money those things that it has lost which are its natural resources and belong to all of its people.

And two and I think this is most important to say the polluters generally who are not fearful of injunctions because they continue to produce and continue to pollute until they are enjoined from so doing.

But to say to them in the future, damages will be awarded for the State or its natural resources in those instances where you have placed into the public water and air, commodities which can be removed if it only with the great difficulty.

We rather enjoy being confronted by the defendant saying it’s impractical for us to remove this mercury from the river the St. Clair and the Detroit River.

We don’t believe it is because metallic mercury there in the river is at the point where it was discharged into the river by Dow Canada has been tested and checked in it comes to 1,400 to 1,800 parts per million of metallic mercury still embedded in the slime and industrial debris at the bottom of that river, it’s there.

The thing that we've learned in the last few years is that this metallic mercury by the action of the small living animals in the bottom of that sludge.

In the absence of oxygen are able to convert metallic mercury into mercury which can be assumed that would -- and which enters the food change and this of course is what was discovered in 1969 which brought about the order from both Ohio and from Ontario that fishing be stopped in the lakes because it was discovered that more than 50% of the fish tested exceeded mercury content of 0.5 parts per million in a ratable portions.

Now, some of them exceeded this by so much that it is dirt line, fearsome and dangerous because some of the more 8 parts per million of mercury -- methyl mercury in the flesh of these fish and some of them in Lake St. Clair where as much as 10 parts per million.

Now, in Japan where they had 116 deaths for severe neurological damage from which arose from the fact the people in Minamata Bay area where consuming fish arose in instances where the fish had only double that amount, only double that amount and the deaths that occurred and the neurological damage that occurred was so severe that they were included in those number 16 cases of children who were born with birth defects because of the inclusion of this methyl mercury in their food.

Now we are -- sir?

Justice Hugo L. Black: Do you think that Congress has power to pass a law allowing create a cause of action to part of the State for damages for this injury?

Mr. Paul W. Brown: I think the right already exists for -- if I understand your question for Ohio to ask for damages against those who polluted in this instance --

Justice Hugo L. Black: On the federal law or state law?

Mr. Paul W. Brown: This is under the state common law sir.

We don’t have a federal law.

There is no federal law on this -- there is no federal bar to this action.

This is argued in the briefs of Dolan and not in the brief of Wyandotte.

Wyandotte admits that there is no federal bar that neither the treaty nor the international commission bars our action.

The Solicitor General agrees with us that there is no federal bar.

The Solicitor General I think will argue this in detail and I leave part of this to him for that purpose, but there is no bar that we’re properly within the jurisdiction of this Court and that the only question and that we are here as a proprietor and we are seeking damages for all the people and that these cases every case here reflects our rights so --

Justice Hugo L. Black: Can you that?

Can you seek damages for all the people?

Mr. Paul W. Brown: Sir?

Justice Hugo L. Black: Can you seek damages for all people?

Mr. Paul W. Brown: We seek damages, yes sir for the State’s right as a proprietor of its natural resources for all of its people.

Now, you do have and you have decided cases which are cited in the defendant’s brief and which this Court did not take original jurisdiction in cases and which the damages were sought for a particular group of people and those cases do not apply here because our address our plaintiff --

Justice Hugo L. Black: If the State can have a cause of action under its common law why couldn’t its legislature create one?

Mr. Paul W. Brown: We do have one already sir.

The action is there for damages.

Justice Hugo L. Black: So this legislature create one and set out its boundaries and so forth for the damages and for the (Inaudible)?

Mr. Paul W. Brown: There is one there sir and we could use it except under the Constitution we’re entitled to bring our action in this Court and I feel that this --

Justice Hugo L. Black: So, what statute?

Have you cited that statute?

Mr. Paul W. Brown: It’s Article III of the Constitution Section 2 cl. 2 of federal constitution and there is a 28 United States Code annotated.

There is -- this right is formalize in the federal statute that says, --

Justice John M. Harlan: Could I ask you this question?

Mr. Paul W. Brown: Yes.

Justice John M. Harlan: Assuming that you all seem to agree in both sides that there's technical jurisdiction in this Court and retain this case.

I assume you also agreed the Court has discretion as to whether or not it should exercise jurisdiction which is technically conferred upon it?

Mr. Paul W. Brown: I don’t agree.

Justice John M. Harlan: You do not agree?

Mr. Paul W. Brown: I do not agree.

The work “discretion” occurs in a footnote in the Solicitor General’s brief.

The real way this Court should determine whether or not it accepts is either is to follow the guidelines which have already been set up by this Court in Massachusetts versus Mellon in which this Court said that the state merely had -- merely being a party did not give a right to come in here.

It must also have a justiciable lawsuit and we have such, we have a lawsuit.

It doesn’t fall within any of the cases in which in this Court in which a state has been precluded from action and it does fall within those on the right side of the jurisdictional guidelines which were drawn by this Court and very clearly stated in Massachusetts versus Mellon.

There are some other cases which the defendant argues which do not apply.

The defendants in this case have set up a number of strong men.

They as polluters have tried desperately to use every measure to continue to pollute.

Justice Byron R. White: What would you -- what’s you reaction, it may not go to jurisdiction but in terms on the injunction phase of the case, what’s the significance of the fact that if it is a fact that Wyandotte has seized to pollute and that Dow Canada is under an Ontario order to hold its pollution down to a certain level?

Mr. Paul W. Brown: These are factual questions which we would get to in the merits.

But we do not think they have seized to pollute.

In fact, we have indications that Canada does not think that they have seized to pollute and that Canada is about to file further judicial action there against Dow.

Now we have this --

Justice Byron R. White: Now, let’s assume it were true that they have stopped polluting completely? Let's’ just assume what we are talking about.

Mr. Paul W. Brown: I think this is a ploy that polluters generally use.

In other words, when you catch me, I will stop.

Justice Byron R. White: You say that --

Mr. Paul W. Brown: They are still introducing mercury to the water, they admitted at least to the point of half of pound a day.

Justice Byron R. White: Do you say that shouldn’t go to jurisdiction and it should be a matter for the Special Master on motion?

Mr. Paul W. Brown: I think it should be a matter for the Special Master.

Justice Byron R. White: Or on motion to dismiss or something like that for failure to state a claim or something else?

Mr. Paul W. Brown: If we fail to prove our case then of course we will lose, but we have to prove that they not only have polluted but the pollution continues.

In addition to this, metallic mercury concentrated at the point which the effluent is dumped into the river by Dow and by Wyandotte it is still there on the bottom of the river and it’s still being leached away by the passage of water there over it, and is still being acted upon by the bacteria throughout the lakes so that you continue to get pollution which was cause and brought about by their original action.

In addition to that, this proceeding is going to be -- have to be constantly monitored because the amount of sewage and other industrial waste that is in the lake made by other changes began to react upon this metallic mercury at an ever increasing rate so that we may get a higher rate of mercury pollution in the fish themselves without the addition of any additional mercury.

Justice Byron R. White: Well, I suppose there are other sources of mercury besides this particular defendant?

Mr. Paul W. Brown: We believe we can show that the chlor-alkali process of making caustic soda and the chlorine is the process which provides by far the greatest percentage in amount of this particular pollutant mercury.

Justice Byron R. White: But there are other contributors to mercury (Voice Overlap).

Mr. Paul W. Brown: No other, there are.

We believe the evidence would clearly show there are no other substantial polluters that these people are the only substantial polluters in this particular area and we believe that if there are other substantial polluters we would be delighted to have the defendants make the parties after wherein here on the merits.

Justice Potter Stewart: But of course that’s -- that all.

I appreciate your answering my brother White question but that all does go to the merits?

Mr. Paul W. Brown: It does go to the merits and I am afraid that --

Justice Potter Stewart: What you’ve become relevant if has or when this motion to file a complaint is granted, then only then --

Mr. Paul W. Brown: Right and I am afraid that the judgment with regard to our motion may turn upon your anticipation of what the merits are and hence, I must strongly state that the facts are with us and against our opponents.

Justice Potter Stewart: Well, I would assume that the ordinary concepts of pleading we have a motion to file a complaint then we could assume the allegations of the complaint are true for that purpose of that motion.

Mr. Paul W. Brown: That’s right.

Justice Potter Stewart: But the real problem here, our initial problem and what this -- the argument on this motion is directed to I would -- should suppose would be the jurisdiction of this Court, its original jurisdiction.

As you say, there seems to be no doubt of that jurisdiction under Article III of Section 2 and action by a state against citizens of the different States.

And then an answer to my brother Harlan, I understood you to say that it was your position that the Court had absolutely no jurisdiction in this area.

What I think you say -- what I think you said, meant to say no discretion to this area that since the Constitution conferred jurisdiction that was it.

But I think perhaps you meant and perhaps what you did say was that in light of the deciding cases --

Mr. Paul W. Brown: Right.

Justice Potter Stewart: The Court should allow the complaint to be filed and in the light of its decided cases, the Court’s discretion was limited by those precedents and would require filing of the complaint.

Mr. Paul W. Brown: You’ll have to write some new law if you want to exercise discretion in this case.

Justice Potter Stewart: If we want to deny this motion, right?

Mr. Paul W. Brown: Right.

Justice Potter Stewart: But now --

Mr. Paul W. Brown: Right now, I was going to Supreme Court of Ohio and we have the same complaint made to us.

We were final and hence, we had a certain discretion.

Justice Potter Stewart: Right

Mr. Paul W. Brown: But under the cases which have been written and under the Constitution and laws on the books, we are entitled to be here and the only question that I would have any difficulty with answering is the question of the exact shape and form of the final decree in this Court, which is also something we must reach when we develop all the factual background.

Now, what Ohio wants to do --

Justice Potter Stewart: Just to get back to the -- what I have thought was really the only thing before us and that is motion to file a bill of complaint.

Mr. Paul W. Brown: That’s all there is before us, sir.

Justice Potter Stewart: And not a matter of beyond the facts of the case whether your allegations are correct or incorrect, certainly not a matter of relief yet but a motion to file a complaint and I understand your position that under the decided cases, under those precedents is motion ought to be granted.

But I -- you do concede, do you not that Article III, Section 2 does not confer at compulsory jurisdiction in and of its own terms on case of this nature, don’t you?

Mr. Paul W. Brown: It seems to me (Voice Overlap) If we address our --

Justice Potter Stewart: I mean Massachusetts against Mellon said --

Mr. Paul W. Brown: It said that we had to be a party and in additional we had to have lawsuit, it’s exactly what it said.

Justice Potter Stewart: Right.

Mr. Paul W. Brown: When we are a party and we do have a lawsuit.

Justice Thurgood Marshall: Are there rights beyond, the rights of every other citizen which in my question.

Am I correct if this alleged pollution affects others and the state people in the State of Ohio?

Mr. Paul W. Brown: It affects individuals and groups differently then it affects the public generally but this has never been a test under any case that I read.

Justice Thurgood Marshall: Does it not affect people of other States other than Ohio?

Mr. Paul W. Brown: It does.

Justice Thurgood Marshall: So, Ohio doesn’t have any unique position on this injury?

Mr. Paul W. Brown: It has unique position factually with regard to injury and that 80% of the fish, if we’re going to discuss that 80% of the fish are in the Ohio waters.

Most --

Justice Thurgood Marshall: If you’re uncertain that this Court must take jurisdiction, why did you file a motion?

Mr. Paul W. Brown: We filed motion intended to petition.

Justice Thurgood Marshall: Why didn’t you just file the complaint?

There is nothing else we can do but take it.

Mr. Paul W. Brown: Well, there is something else you can do sir and I beg your pardon if you gather that I say nothing that you have no discretion.

Of course you have an existing discretion to deny any case and there would be nothing I, as an applicant to the Court could do about it because the finality of your judgment.

But Mr. Justice Stewart has said exactly what I think my position is and that is the Constitution is clear, the federal statute is clear and the cases that this Court has here before decided are clear and those which we've cited say we have a right in these particular facts to address ourselves to your Court in this way.

And those which have denied this Court to others for reasons which have been stated, those reasons do not apply to us or to our action.

Justice Potter Stewart: And it’s your submission I guess it’s agreed that you could not bring this -- you cannot file this complaint in a federal district court?

Mr. Paul W. Brown: We could not and there is an amicus briefs filed by the Attorney General (Voice Overlap).

Justice Potter Stewart: Let me ask the question.

Mr. Paul W. Brown: Sir, I'm sorry.

Justice Potter Stewart: Because there is no diversity and because there's no federal question?

Mr. Paul W. Brown: Right.

Justice Potter Stewart: Is that correct?

Mr. Paul W. Brown: And this was raised also by Kelly from Michigan the Attorney General who joined with us as amicus been sought this Court to intervene.

Justice Potter Stewart: And why couldn’t you file it in a Common Pleas Court in the State of Ohio?

Mr. Paul W. Brown: We could file in a Common Pleas Court in the State of Ohio but because we have the right as we view it under the Constitution to say this is our Court.

The Supreme Court was conceived by those who drafted the Constitution to be the Court of the State under these circumstances as we come here, again, the urgency of the matter.

The urgency of the matter which rest upon the fact that this polluters, Dow chemical principally Dow chemical of Canada has introduced into the Sarnia River beginning in 1949 and proceeding up to and including the present amounts of mercury known to be a poison and they have done this at a rate which they admit to have been as much as 200 pounds in one day and at an average rate of 30 pounds a day.

Justice Byron R. White: Well, why couldn’t the Common Please Court and the appropriate County in Ohio handle that situation just as well if not a little better than we can?

For one thing, they’re far more conversant with Ohio common law than with this Court be and secondly, I don’t see why matters might or would not move just as expeditiously in that court?

Mr. Paul W. Brown: Well, problems immense and the people are concerned.

Justice Byron R. White: The Common Pleas Courts of Ohio are used to immense problems, aren’t they?

Mr. Paul W. Brown: True.

I believe there is another problem.

The connection between Dow and U.S. maybe easily proved that connection between Dow and Ohio may not be so easily proved.

In other words, we can get a connection between Dow of Canada which would justify a court in saying that we have proper service, also a question which will have to arrive at a later date.

Justice Byron R. White: That problem of personal service. (Voice Overlap)

Mr. Paul W. Brown: The problem of personal service is here, better handled than there.

Chief Justice Warren E. Burger: Haven't you brought an action in the Common Pleas Courts of Ohio (Voice Overlap) not including the Canadian Corporation?

Mr. Paul W. Brown: No sir, we have brought an action Common Pleas Court of Ohio against one who is charged with being a polluter in Ohio, the Bitrex who is also a producer of chlorine and caustic soda using this mercury cell method.

Chief Justice Warren E. Burger: How is their case different from the basic case here laying aside the jurisdiction of the Canadian Corporation?

Mr. Paul W. Brown: Their case is different, vastly different and that we have found they are not a substantial polluter and that there's no factual background.

Chief Justice Warren E. Burger: If you couldn’t have sought that action here against the Deitrick Company, could you not?

Mr. Paul W. Brown: We could not have because then we would not have the jurisdiction here.

We can address ourselves here only to residence of other states or to foreign residence.

Chief Justice Warren E. Burger: Is Deitrick is an Ohio Corporation?

Mr. Paul W. Brown: Deitrick is an Ohio corporation.

Chief Justice Warren E. Burger: I think.

Mr. Paul W. Brown: And some of our opponents may seek that to make them parties to this case but we could not.

Chief Justice Warren E. Burger: Very well, Mr. Brown.

Mr. Strauss.

Argument of Peter L. Strauss

Mr. Peter L. Strauss: Mr. Chief Justice and may it please the Court.

The United States has filed its brief amicus curiae and appears here today an invitation of this Court and as the Court knows from our brief we express no view that whether in this particular case, the Court should as a matter of discretion grant lead to Ohio to file its complaint and I may suggest that perhaps I really have a very little to talk about since the party is do seem --

Justice Byron R. White: Do you see any doubt about our discretion to parties being it was the last resort to anything (Inaudible)?

Mr. Peter L. Strauss: No, I find none and I think one thing that might have been mentioned.

I find no doubt.

And one thing which might have been mentioned while there are these prior cases which point in very much the same direction as Ohio’s complaint to the New Jersey versus New York City and particularly -- and in particular has a remarkable factual congruence with the asserted facts of the complaint here.

Those cases were all decided before the present federal statutes and before the prominence at least of perhaps certain matters under the Boundary Waters Treaty weren’t relevant to that in any event in this Court in its opinions in those cases albeit after the merits have been decided was quite emphatic about how they’d rather have.

The federal statutes or some kind of conference procedures or something of the sort and it seemed incumbent upon us to address ourselves as we have in our brief to the question whether indeed those statutes foreclose the remedy in this Court.

And to give the Court the types of information that it might wish to use in exercising that discretion.

Justice Byron R. White: Mr. Strauss, just for a moment, where do we get our discretion to refuse to hear a case that is within our original jurisdiction, what is the theoretical basis for that?

Mr. Peter L. Strauss: I Suppose what we’re speaking of here is the case that's not only within this Court’s original jurisdiction but also within the original jurisdiction of another court --

Justice Byron R. White: Yes.

Mr. Peter L. Strauss: -- that when the Court’s jurisdiction is exclusive and original, the Court quite properly could be said not to have jurisdiction but when it believes that there’re may be a remedy in another court something on the order of Doctrine of Forum Non Conveniens at which I think quite appropriately takes into account the other responsibilities that this Court has and its --

Justice Byron R. White: Sort of an abstention doctrine?

Mr. Peter L. Strauss: That’s right, its capacity to sit as a finder of fact which is called on to be and on the other side you do have the aspects that Mr. Brown was speaking of its appointment really as a court before the state and you do have one of the States (Voice Overlap).

Justice Byron R. White: Sort of like an adversity action when it’s proper to abstain staying even though there’s jurisdiction?

Mr. Peter L. Strauss: Somewhat similar to that I think the considerations are different.

Chief Justice Warren E. Burger: Would it not be more perhaps like the abstention doctrine applied or state courts have jurisdiction and precisely the same range of remedy?

Mr. Peter L. Strauss: I'm not sure I follow the question.

Chief Justice Warren E. Burger: Well, in three-judge court cases that come here frequently, we sometimes sustain as we did last year in Reetz against Bozanich when there was a challenge to the Alaska statute.

Mr. Peter L. Strauss: Well, I think there one has --

Chief Justice Warren E. Burger: But we have jurisdiction as Justice White suggested that we remanded the state court because there was a possible remedy there.

Mr. Peter L. Strauss: I think there one has certain considerations of federalism which are quite important.

There's been some discussion this morning about the capacity of this Court is distinct from an Ohio court to determine Ohio law and that certainly is a relevant factor.

Now, I may say that I think there may be -- that may turn out to be somewhat more dispute about the actual jurisdiction of this Court than does appear from the papers in their present state.

And in particular with respect to the jurisdiction over Dow Chemical of Canada and that’s the principal matter I intend to talk about this morning.

It is agreed that the questions of personal jurisdiction and service of process are not yet raised similarly any questions about indispensable parties.

And issues of that sort would have to await decision of a later time and it does seem to be general agreement that injunctive relief at least would be within the court’s power to order, although there are some dispute again with regard to the Canadian defendant.

So I don’t feel I have to spend much time on the Wyandotte Corporation’s claim.

They addressed themselves only to the Federal Water Quality statutes and in this respect I simply want to restate what’s said out in much greater length in our brief.

What are certainly from Ohio’s point of view and I think in terms of the relief it’s asked from this Court.

Realistically, deficiencies in those remedies which the Court ought to -- ought very much to bear in mind.

In particular, the remedy is prospective only, it operates only as a means of stopping future pollution and it’s heavily laden with the administrative delay besides, except for oil which is dealt with in a separate provision 33 U.S.C. Section 1161.

The Act imposes no obligation on someone who has polluted in the past to remove the polluting substances which he has introduced into the waters or to bear responsibility for the damages which those substances of course but leaves those matters to the courts or to other agencies to a suit such as this one.

An injunctive remedy for nuisance is common in this Court’s original jurisdiction as its already been pointed out and that it’s also clear that this Court could order removal of a nuisance which would not abate of its own force as this mercury is alleged to be.

The Court did such a thing in Pennsylvania versus the Wheeling Bridge Company in 13 How. of its reports and we think it easily follows also from the Wyandotte Transportation Company decision of a few terms ago that removal might be accomplished by the provision of the funds such as Ohio seeks and towards the defendant could pay moneys to be use for that purpose.

I may say, we do have some difficulty with the claim of Ohio for compensatory damages, but it doesn’t seem to us that that claim is necessarily excluded from this Court’s jurisdiction.

In the past, the Court has rejected such claims as Mr. Brown points out because it was clear that they were intended for the benefit of particular individual.

In North Dakota versus Minnesota and particular the State segregated its claim that was $5,000.00 for us and a million dollars for the farmers who were paying the expenses of this litigation.

There is no such differentiation here and we really don’t know how Ohio intends to use the money at which it receives.

It may be remarked in the first place that Ohio has undoubted proprietary interest here and we can't say as could be said in North Dakota case what proportion that proprietary interest bears to the damages that might be assessed nor is it excluded I think that in assessment of damages could be used in a way that bears very strongly on the nuisance remedy.

Now the defendants makes a great deal in their brief of the difficulty of calculating the sums that would be required to remove the mercury from the lake bed and of the enormity of that financial burden.

I would suggest and it has been suggested by some commentators that an appropriate way of calculating monetary relief in such circumstances and perhaps the simpler one is to assess the damages which have been done and then to use those funds for that removal purpose and certainly it doesn’t seem to me excluded on the complaint that that’s what Ohio would do.

Certainly, it ought not to be the case but because the one level of funds is so hard to compute in so amount -- and so amends in amount that the polluter should simply go away scot-free.

And finally, I would point out in this regard that if Ohio were using the funds in this particular way as a means of remedying the nuisance it couldn’t be claimed as the defendants do that there were some risk of double recovery because although the measure might be the same as could be obtained in the suit brought by an individual.

The use and the remedy would be entirely different.

I come now to the principal area of controversy of importance to the United States and that is the possible liability of Dow Chemical of Canada or of its parent Dow Chemical Company for acts done at the company’s Canadian factory whose effects are felt in the United States.

Now these two companies appear quite strongly to insist that any assertion of jurisdiction by this Court might provoke in international incident or undercut in international treaty and we want to make it claim that it’s the view of the United States that no such consequences would occur.

The power of American courts to redress torts whose effects are felt on American soil is we believe indisputable.

The company has also raised certain doubts regarding whether the Court could provide an effective remedy.

This goes essentially to matters of discretion but we do point out certain respects in which more facts are needed before a final conclusion can be reach.

Let me begin with the issue of liability, I think all of us would agree on a simple case in which issues of causation are not obscure in case of the individual who is standing on one side of Niagara River fires a rifle across it and it kills the person on the other side.

The person -- if the State in which the individual was murdered is able to secure jurisdiction over the person of the sniper.

And that of course is not a question that’s here today.

There could be no dispute of its power to try him for murder.

International law recognizes that right and I don’t think the party seriously contests it.

The situation is the same if instead of sending a rifle bullet he sends sludge which causes a public nuisance on the other side of the river.

Again, to the extent that a public nuisance may be prosecuted as a crime -- there could be no dispute that the recipient state may prosecute the individual if it may obtain service on him before that crime.

A Canadian court would feel as competent as an American court in those circumstances and the only way an international incident could arise would be if some improper means have been used to secure jurisdiction of the defendant or a due process where somehow denied in the course of the trial and both of which we are quite certain will not happen in this proceedings.

There might be some question whether a judicial decree obtained in civil proceedings would be enforceable in the courts of the other jurisdiction.

And that is -- we don’t -- we think it should be quite clear to this Court that if it ultimately does grant relief a judgment to Ohio then judgment will then be Ohio is to enforce as part of the same situation and Ohio may indeed have some difficulty in enforcing that judgment in Canadian court.

And that's a matter to where trouble return --

Chief Justice Warren E. Burger: Then you would say of course it’s up to Ohio, do you?

I’m not quite sure I follow you.

Are you suggesting that the courts have no responsibility for enforcement of their own judgment?

Mr. Peter L. Strauss: In Canada, excuse me.

Chief Justice Warren E. Burger: Oh!

Mr. Peter L. Strauss: So far as enforcement to the judgment --

Chief Justice Warren E. Burger: That’s in terms of territorial jurisdiction?

Mr. Peter L. Strauss: That’s right.

That’s right.

The suggestion is made that the fact that this is a public nuisance suit here makes a difference.

I think the argument is essentially that only the United States could bring an action for public nuisance against a person who is resident in a foreign country and producing his nuisance from that point.

As if only the United States could prosecute the sniper on the banks of the Niagara River or a murder which he causes in New York State, I think to state the proposition in that way is to answer under the Constitution.

The States are forbidden from engaging in diplomacy but Ohio doesn’t seek to involve the Canadian Government in any respect in this case.

It charges an offense to its domestic laws felt on its own soil against the particular individual who may or may not be within its power to bring to justice and if the individual is within its power.

It is only because it is available to domestic service of process.

Canada need never be consulted in its territory is never entered upon.

Ohio obtains the judgment and seeks to have it enforced as I said before if it must take it to Canada, Canadian courts will then decide what recognition to give the judgment.

That will be a Canadian domestic matter.

There are of course alternative ways of dealing with the situation.

Ohio might have come to the United States and requested the United States to take this matter up with the Canadian Government as a diplomatic matter.

That was done in the case prominently mentioned in the briefs the Trail Smelter case in British Columbia.

But this is merely an alternative on a required motive proceeding and as we said out at length in our brief, the Boundary Waters Treaty of 1909 provides no mechanism for the mandatory resolution of pollution disputes concerning boundary waters.

In this connection, I think I ought to correct a misapprehension which Dow Chemical of United States at least have with regard to the Boundary Waters Treaty.

They twice mentioned Article II of the treaty as if it had some bearing on this case may be found at page 3-a and 4-a of the brief of Dow Chemical of Canada.

That Article applies, well I think and perhaps the quickest way to do this is to suggest the three different sorts of -- three different situations that one may have across the Canadian-American boundary.

And we have a river that runs across the boundary and may be interfered with upstream or downstream and then one may have waters like Lake Erie which sit on the boundary.

Only waters on the boundary are designated boundary waters under the treaty.

Article II provides as to a river which runs across the boundary that if someone on the upstream ended it interferes with its use and that might conceivably include pollution although it has never been so adjudicated, then and in that circumstance only a downstream individual may come into the courts of the Upstream nation and litigate in that forum the issue of the damages which is done to him and is entitled to have that litigation resolve in his favor under the laws of that nation as if he were a citizen thereof.

Now, that is a specific remedy and if that were applicable in this case, Ohio would be able to go into the courts of Canada and get relief against Dow Canada.

It’s not applicable here because we’re dealing with boundary waters not a river which crosses the boundary and the result is that Ohio hasn’t much less certain remedy, I would say than it would have if Article II applied.

Nonetheless, the failure of the treaty to deal with that situation in the view of the United States does not at all exclude the possibility of the remedy which Ohio is seeking today.

The remedy which Ohio is seeking is recognized an international law and there is nothing in the treaty which excludes it.

It seems to us that the principle stated by this Court in New Jersey versus New York City is equally applicable here.

If the defendant is before the Court and I'm reading from page 482 of volume 283 of the Court’s opinion that the defendant is before the Court in the property of plaintiff and its citizens that is alleged to have been injured by such dumping is within the court’s territorial jurisdiction the situs of the Act creating the nuisance whether within or without the United States is of no importance.

And turn very briefly to the problems of enforcement at which chiefly is I think this Court has already recognized should await later resolution.

The first observation is that to the extent money damages are possible there is really no issue about enforcement nor is there any possible disability regarding this Court’s power to give injunctive relief so far as that injunctive relief applies on this side of the boundary.

If the Court has jurisdiction over Dow Canada’s person it may enjoin Dow Canada requiring it to remove the mercury from the American half of the St. Clair River or of the Detroit River or of Lake Erie and there should be no question to this Court’s power to do that.

There are I think some problems involved with granting injunctive relief which would necessarily take effect in Canada or to put -- excuse me, to put it in other way which would require that aid of a Canadian court.

I think, if the Court wherever to conclude that that were necessary it could fairly apprehend that the aid of a Canadian court might not be forthcoming.

But as we understand its complaint, Ohio asked only that Dow be enjoined from producing the objective to effects on the American side of the boundary.

And the cases are legion which state that such an injunction is proper for an American court to enter the Salton Sea cases, the United States versus -- excuse Steele versus Bulova Watch Company, Vanity Fair Mills versus Eaton.

All of these cases quite clearly comprehend that where an effect is felt within the United States, the United States court having jurisdiction of the parties has the authority to enter an injunction requiring that that effect be seized and as we understand that is all that Ohio seeks in this case.

The point is that it begs the question to state as Dow does.

The Dow Chemical of Canada’s conduct has been wholly fund and that therefore this Court lacks jurisdiction to correct it.

On the allegations of the complaint, it must be assumed that the tortious conduct is extended to this country and if that’s the case there is no principle of international law that bars this Court from entertaining Ohio seeking.

Thank you.

Chief Justice Warren E. Burger: Thank you Mr. Strauss.

Mr. Moelmann.

Argument of John M. Moelmann

Mr. John M. Moelmann: Mr. Chief Justice, may it please the Court.

On behalf of the defendant Wyandotte Chemicals Corporation, we have raised no question of jurisdiction in this Court.

It is our position that it is a discretionary matter within the Court sound discretion and therefore we have urged certain prudential considerations to suggest to the Court how its discretion should be exercise.

There are not only considerable legal precedents but there are practical precedents.

The questions have indicated the legal precedents are not as well-established as Mr. Brown would have the Court believe.

The cases of which he speaks I believe were cases that either fell within the round of cases of exclusive jurisdiction or they were cases where there were no mechanics setup by the statutes for administrative agencies to afford relief and therefore the Court exercise its discretion because the applicant had no other place to go for a relief.

For the Court to accept this motion is our belief that it would not only contravene national and state policy which relates to these complex problems of pollution, but also has an international aspect to it under the treaty.

I'll confine my remarks solely to the national and state problem because my colleagues representing Dow have very ably handled the international problem and I'm sure they won't discuss it with you.

The complexities of ecology are involved here as well as the complexity of remedies.

The statutes of this United States as well as the various States have set up a very complex organization for handling the matters of pollution through administrative agencies and this is so important because the matter of pollution as being a problem within this country is relatively new.

For instance, nobody knew that mercury in water created any problem before last March 1970, less than a year ago.

These companies said, we’re emptying water into the streams and the lakes felt that they were doing something that was not injurious to anybody.

Wyandotte had continued the same operation for over 32 years and under the inspections of the State of Michigan through their Water Resources Commission which inspected them periodically, never raised any question about mercury.

There was no known problem and still science is not aware that there is even a problem now in so far as the metallic mercury which is inorganic being put into water creating the methyl mercury which is organic and which is ingested by fish.

Nobody has been able to prove that that comes from the inorganic mercury.

As you all know, mercury is very heavy, it goes into water and it sinks right to the bottom.

Dow has its plant up at Sarnia.

The Wyandotte Plant is at Wyandotte on the Detroit River.

Neither of them are on Lake Erie.

Lake Erie is receiving mercury from multiple sources, Mr. Brown has tend to minimize it but it is coming not only from these sources if it can be proven they're coming from there and nobody is quite sure of that.

But there are other companies that are on those waters or on the streams emptying into Lake Erie.

There is much mercury in the air coming from furnaces burning coal and being a heavy substance, it immediately settles on the earth or on the top of the water and the surface waters carry it into Lake Erie and other bodies of water.

There is mercury coming from sewage disposal plants of all the metropolitan areas around that area.

There is mercury coming from less serious things for instance even the dentist run some of it down his sink when he is working on your teeth.

Justice Potter Stewart: Your client’s plant is located at Wyandotte, Michigan?

Mr. John M. Moelmann: Yes, Your Honor.

Justice Potter Stewart: On the --

Mr. John M. Moelmann: On the Detroit River.

Justice Potter Stewart: On the Detroit River which -- is there any of these briefs or documents, a map that would be helpful or any map at all?

Mr. John M. Moelmann: I believe there is one in one of the briefs, is there not counsel?

Yes.

Justice Potter Stewart: Is it in this file very recently?

Mr. John M. Moelmann: Yes, it’s in that.

Justice Hugo L. Black: Where did you say it is?

Mr. John M. Moelmann: It’s in the document that Mr. Justice Stewart had in his hand there.

Page 1, figure 1.

Since the problem of mercury has come to the attention of the public and by the way it was accidentally discovered by a Swedish student who had known that the problem was studied in Sweden in so far as that it had to do with wildlife that consumes seed treated by fungicides and in the fungicides, mercury is used.

And so he knew that that problem existed and when he found by accident some methyl mercury which is the organic type within the fish up in Lake St. Clair and reported to the Canadian Government, they immediately reacted and before they could determine whether or not it was any serious problem, they put a prohibition on fishing.

This set off all the publicity that has been given the problem but the manner in which methyl mercury is developed is unknown to science.

Now, counsel spoke of the Japanese incident.

Before commenting on that I’d like to say that no one in North America or Europe has been known to have been injured by ingesting mercury by eating fish.

The only incident that's known is the incident that occurred in Japan.

And there, the situation was much different because it wasn’t metallic mercury put in the water.

It was organic mercury in the form of methyl mercury which of course is very toxic.

It was in just -- it was induced directly into the water and a place where this village got all of its shellfish and as you know the Japanese eat fish about three times a day.

And therefore, they had a serious problem, but that problem doesn’t exist in this country.

This leads me to the conclusion and a point which I would like to strongly urge to this Court in deciding whether or not it should exercise its discretion and that is that there is no emergency whatsoever in this problem.

I attended the science conference of the University of Michigan held this fall.

Science is working on this problem everyday.

The conclusions I learned from that meeting are few because science hasn’t advance very far in the subject.

But I did learn this, that there is no eminent danger to the American people or the people of Canada and any location.

I also learned that there are many bodies of water on this continent where fish are found to contain as much mercury as the ones in Lake Erie and there is no commercial dumping of mercury at all into those bodies of water.

Justice Potter Stewart: Are there any fish left in Lake Erie?

Mr. John M. Moelmann: This by the way Your Honor does not kill the fish.

Justice Potter Stewart: Well, what's the --

Mr. John M. Moelmann: I really don’t know.

Justice Potter Stewart: (Voice Overlap)

Mr. John M. Moelmann: There are a lot of fish there Mr. Justice Douglas wrote on the subject maybe he could tell you about.

I don’t know how many fish to that.

Justice Potter Stewart: (Voice Overlap) the past but I haven’t been invited in recent years, I understood there’s not much more to catch anymore.

Mr. John M. Moelmann: I understand there are a lot of fish but I think the varieties are not as desirable as they use to.

Justice Potter Stewart: Catfish, that’s all that’s left there, isn’t it?

Mr. John M. Moelmann: That’s right.

Justice Potter Stewart: Well, is there any --

Mr. John M. Moelmann: But there are a lot of problems and this is the subject and which Mr. Justice Douglas wrote that is creating this problem one of which is the phosphates that are continuously dumped in the Lake Erie.

These phosphates have cause an excessive amount of algae to grow in that lake and have removed the oxygen from the water and have cause the type of fish to which he refer to greatly developed.

Mercury, you won't even be aware that it was in the water when you look at it.

Justice Byron R. White: But Ohio state hearing, they closed this for awhile.

Mr. John M. Moelmann: They had it closed a short while and they reopened it.

Yes, Your Honor.

I think they still prohibit the fishing of walleyes.

Justice Byron R. White: Why?

Mr. John M. Moelmann: Well, apparently they seem to develop a greater amount of methyl mercury in their tissue than the other fish.

Justice Byron R. White: So, they (Inaudible) prohibit the fishing of walleyes?

Mr. John M. Moelmann: For walleye, yes.

Now, Wyandotte seized putting any mercury into Detroit River on March 24, 1970 as soon as this problem became apparent.

The Michigan Court took up the problem and a consent decree was entered into by Wyandotte whereby a Wyandotte agreed to immediately set up a temporary means for keeping any mercury to go back into the water and to create a permanent recycling facility by May 1, 1971.

I must regretfully advise the Court that when they -- when enter the problem of revising the whole plant to do this, they found it was uneconomical to do so and the plant will be permanently closed on May 1st -- pardon April 1st of this year.

There is of course the alternate remedies which have been mentioned.

We have this network or federal statutes which have recently been developed to which are the State of Ohio can turn for its relief.

I don’t have time to go into them but the briefs cover them very thoroughly and Ohio has these alternate methods which are much more able to deal with a continuing problem and to work out solutions.

Then the facilities of this Court, if this Court were to take this case, I venture to say it won't be inundated with pollution and litigation.

The facilities of this Court are not set up for that purpose, it would need Special Master.

It’s a kind of a forum non conveniens as far as the litigants are concerned it would be a very expensive type of litigation and we don’t know where we’re going because science hasn’t progress that far.

One of the questions had to do with the prayer of the complaint.

I’d like to just conclude by calling your specific attention to the prayers of this complaint.

First, that as the Court to declare that this is a public nuisance and that it be abated.

It has already been abated.

Secondly, it had asked for an injunction of something which is already seized be entered.

Third, it has set a mandatory injunction to remove all mercury compounds from Lake Erie be entered whereas science knows of no way this can be done.

In fact, a lot of the scientists are saying if it be attempted it will stir up the mercury so it will cause a greater problem.

And this decree could only be concerned with the proportionate share of the mercury in the water that the respective litigants have put in there and proportionate to what everybody has contributed to the situation.

And that has become a fundamental precedent of pollution law.

How will that be determined? You know they can't measure the mercury in the lake because it is so infinite decimal in proportion to the size of the lake.

And lastly, they asked that damages be assessed to compensate for existing and future damages to Lake Erie, the fish and other wildlife, the vegetation and the citizens and inhabitants of Ohio which would be impossible to measure.

It seems to me their prayer indulges in asking this Court to do that which would be futile to take top tribunal of this country into something where we don’t know where we’re going.

Chief Justice Warren E. Burger: Thank you Mr. Moelmann.[Lunch Recess]

Mr. Outerbridge, you may proceed whenever you're ready.

Argument of Ian W. Outerbridge

Mr. Ian W. Outerbridge: Mr. Chief Justice and may it please the Court.

Since of March of 1970, our horizons of knowledge with respect to the problems of mercury pollution have expanded like universe.

In the appendix to our brief and reply the Court will find an article from the Washington Post dated December 28, 1970.

And the Court may know that the International Joint Commission came down with a report of 9 December 1970 and that report was filed both in Washington and Ottawa on the 14th of January 1971.

I would like to review with the Court some of the facts which appear from these two most recent documents.

The first of these is that mercury is omnipresent, it’s present everywhere.

It occurs naturally and the conclusion would appear to be that only 50% of its occurrence is as a consequence of the effluent of manufacturing processes.

The second one is that up to 1.5 parts per million methyl mercury which is above the limit of 0.5 set by the Department of Health has been found in fish caught as much as 42 years ago in the United States and that presence of mercury in those fish is unlikely to attributable to pollution.

Justice Byron R. White: A matter of curiosity, Mr. Outerbridge, how did they --

Mr. Ian W. Outerbridge: They are biological specimen Mr. Justice White.

Justice Byron R. White: Biological specimen?

Mr. Ian W. Outerbridge: Preserved in alcohol.

Justice Byron R. White: And they now tested them?

Mr. Ian W. Outerbridge: They’ve tested them and found mercury present in the flesh of those fish in the quantities that I gave the Court.

Justice Byron R. White: So, those are recent test of this?

Mr. Ian W. Outerbridge: Recent test.

This was reported in the Washington post article of December 28.

Thirdly, the IJC reports that the major source of pollution generally of Lake Erie is the Detroit River and the second largest source of pollution of Lake Erie is reported by the International Joint Commission as being the State of Ohio itself.

Thirdly, the International Joint Commission, this most recent report, discusses mercury pollution but in particular it touches a first priority to phosphorus pollution.

And it estimates the cause that something in the order of $2 billion and urges that both the Governments of Canada and United States commence immediately to clean up Lake Erie and to remove the phosphorus.

This report has been universally well received in Canada or acting Prime Minister Mr. Sharp has committed his Government to implementing the report.

Mr. William P. Rogers, your Government has indicated and this quoted as saying that he has initiated follow-up action in a most urgent way.

There are technological limitations to the association of mercury pollution short of shutting the plants completely and abandoning them as was the alternative selected by Wyandotte.

And the fact of this exister set out in the appendices to the brief in reply.

But by way of comparison, the Court should examine the record file with respect to Detrex Chemical Industries Incorporated of Ashville, Ohio.

Now, this is a company engaged in the same business as my client’s.

Under a cease and desist order of April 13, 1970 by the Government of the State of Ohio, in the material before the Court indicates that on May 11, 1970 and that's the last report we have, after the operational changes in that plant have been completed.

Short of shutting that plant down, their escape was 1.2 pounds per day which escape, I tell the Court, is greater than the escape continuing from my client’s plant in this argument which is less than a pound a day.

And if the Court would look at the draft regulations of the Department of Fisheries and Forestry of the Government of Canada proposed to be introduced when the Government resumes to observe that the Government of Canada recognizes a technological limitation to the ability of mankind to shut off the flow of mercury from this type of an operation, short of shutting down the plant.

Appendix 5 filed that the brief in reply is a list of eight companies provided by your Government upon our request is being known to have discharged mercury in Lake Erie and there are eight that have listed and I would point out to the Court that Dow and my clients are not one of them or is not.

Two of these are companies situate in the State of Pennsylvania, one of them is a company situate in the New York State, one of them is a company situate in Michigan and four of them are companies resident within the State of Ohio.

One cannot refrain from reference to the dictum of Mr. Justice Holmes in Missouri and Illinois 1905 it’s at page 522 whereas here the plaintiff has sovereign powers and deliberately permits discharges similar to those of which he complains.

It not only offers standard to which the defendant has the right to appeal, but it warrants the defendant in demanding the strict disproof that the plaintiff’s own conduct does not produce the result.

I would like to comment with respect to Mr. --

Justice Hugo L. Black: May I ask you what -- how that applies?

Mr. Ian W. Outerbridge: How that applies?

Justice Hugo L. Black: Yes.

Mr. Ian W. Outerbridge: It is my submission to the Court that the State of Ohio can legislatively and can administratively and can judicially take action against the polluters with its all jurisdiction and if they do, then the standard that they adopt with respect to their own polluters becomes the standard that we can comply with and I would say to the Court that we comply with the standard which is much higher than the standard which the State of Ohio expects of its own residents and citizens.

I would like to make one comment with respect to the brief of the Solicitor General.

Reliance is placed by the Solicitor General on a case of U.S. versus Aluminum Company of America and he also fairly mentioned the two cases to the Court Vanity Fair Mills and T. Eaton Company and Steele and Bulova Watch.

It’s my respectful submission that when these cases are examined carefully the only two cases which are governing the problem we’re confronted with is the Steele and Bulova Watch case as amplified and explained in Vanity Fair and T. Eaton Company.

Because in the Vanity Fair case, you’re dealing with precisely the situation we have here of a non-resident, citizen of a foreign country carrying on conduct in that foreign country subject to and regulated by the governments of that foreign country and the conduct is conduct which is approved of by that foreign county.

Now, by that I'm not suggesting to the Court that my Government approves pollution.

I am saying to the Court however, that my Government -- the Government which regulates the company that I represent has enacted regulations and has an effective organization called the Interior Water Resources Commission which regulates examines, tests samples and has approved of the quality of the effluent escaping from the plant in Sarnia.

And in those cases, the principle would appear to be that if the order of the Court is one which would infringe upon the sovereignty of foreign sovereign, then injunctive relief are not to be granted and the Court has no jurisdiction to entertain injunctive relief.

Now, I do not quarrel with the proposition of the law of Ohio, may apply with respect to an action for damages that remarks directed solely to the action that is sought to be maintained for an injunction and for mandatory injunction.

There is a second principle --

Justice Hugo L. Black: Can I ask you, do you mean that if what was being done in Canada undoubtedly abuse the waters, it made life changes for people in the United States that this country would have no power to enjoin?

Mr. Ian W. Outerbridge: I would say Mr. Justice Black that the action would be one which should take place between two sovereigns and short of making war, there's no way in which the courts can enforce the injunction.

Justice Hugo L. Black: Are you talking then about the enforcing that?

Mr. Ian W. Outerbridge: I'm simply stating as a matter of principle that if the resident -- if a national of a foreign sovereign and as resident in the other country and if the order of the Court would infringe upon by that be I submit in conflict with for example if the courts of Ontario were to say that as a matter of necessity it was an importance to them that the industrial complex in Sarnia be maintained because of the labor forces that would be employed there.

And they said that it could go on and must go on, then there would be a clear conflict and that is something which should be resolved diplomatically and not by judicial action.

Justice Hugo L. Black: And nothing would be done even though people would be killed?

Mr. Ian W. Outerbridge: Well, nothing is a rather exclusive word.

Justice Hugo L. Black: I’m assuming -- just assuming.

Mr. Ian W. Outerbridge: I would respectfully submit that the proper course would be to resort to diplomatic action between the two countries long before anybody be -- is killed.

Justice Hugo L. Black: I gather, it would be the only jurisdiction, you think it would exist?

Mr. Ian W. Outerbridge: I believe that is the state of the authorities.

Chief Justice Warren E. Burger: I suppose that’s another way of saying that the Court has no jurisdiction can enter in an injunction, is that your point?

Mr. Ian W. Outerbridge: Yes, and I’d like to come to that further Mr. Chief Justice.

There are line of cases that say that this Court ought not to assume original jurisdiction in the cases where indispensable parties cannot be brought before this Court.

And to adjudicate on the issues presented is my respectful submission that there are number of indispensable parties who cannot be brought before the Court.

My respectful submission that the residents of the State Ohio cannot be brought before this Court constitutionally, that is the four companies who have known to be polluters.

With my respectful submission that the problem of Ontario and the Government of Canada are also indispensable parties because anyone who’s going to tamper with the ecology of Lake Erie must have authority or jurisdiction to bind all of the people who are going to be concerned.

And because these people are indispensable parties on the authority of the Minnesota and Northern Security case and Arizona and California case, this Court ought to decline jurisdiction because people who are indispensable to the orders which this Court must make cannot be brought before the Court.

Justice William O. Douglas: Would the International Court of Justice have a jurisdiction in the dispute of the United States and Canada on this matter?

Mr. Ian W. Outerbridge: I'm sorry I cannot answer Your Honor’s question.

I would say this to you Mr. Justice Douglas that the matter is -- in my respectful submission govern by the International Joint Commission and the proper source and proper course should be to resort to the International Joint Commission.

It is my respectful submission that basic to this case is only one real issue and that is whether or not the legislative jurisdictions -- your Government and my Government, the Governments of the countries, the Government of the States, the provinces whether they can avoid to come into grips with their real responsibility which is to adjudicate and legislate and make decisions with respect to pollution.

Now, they have responsibility and they’ve got ample powers.

Their powers are as greater than this Court in terms of the Executive power.

They have administrative capacities well beyond the administrative capacity of this Court and they are the ones that should be doing the job.

But instead in this action we are in a situation where the State of Ohio and the State of Michigan are, if I may respectfully submit, really shirking their responsibilities and seeking to force that responsibility under the Court.

If the Court accepts responsibility and if the Court assumes jurisdiction, the effect, in my respectful submission, is to consign the whole problem of pollution in Lake Erie which is a very urgent problem with the International Joint Commission urges be undertaken immediately.

It’s to consign that whole problem to the judicial process.

Justice Byron R. White: Mr. Outerbridge, I take it under your submission if Ohio proceeded against one of its own companies to keep it from polluting Lake Erie that there would be some indispensable parties in that action namely the Government of Canada and Ontario wouldn’t be the same -- wouldn’t you have the same problem there, anyone who tampers at Lake Eire is immediately concerning a foreign government?

Mr. Ian W. Outerbridge: Mr. Justice White, I think you're right with this submission I would make to you.(

Voice Overlap) I beg your pardon.

Justice Byron R. White: The question is whether you're right?[Laughter]

Mr. Ian W. Outerbridge: The submission I made to you is that the process -- it’s totally impossible to enjoin one polluter if you don’t enjoin them all.

Justice Byron R. White: So, in Ohio --

Mr. Ian W. Outerbridge: They must all be before the Court.

Justice Byron R. White: So that Ohio would be completely without power to move against one of the companies in Ohio which is polluting like here?

Mr. Ian W. Outerbridge: No, with respect you can move for a simple injunction with respect to anyone of these companies, in any jurisdiction.

You could come into Ontario --

Justice Byron R. White: Including your company?

Mr. Ian W. Outerbridge: Yes, and Ontario, you could enjoin Ontario in Ontario, you could enjoin any company in Ohio in Ohio, you could enjoin any company in Michigan in Michigan.

The problem is with respect to the remedial situation whose going to dig it up and how is it going to be done.

Justice Byron R. White: So, the injunction side of this case, your argument does not go to the injunction side of the case in terms of indispensable party?

Mr. Ian W. Outerbridge: Indispensable parties, they are indispensable to the remedial --

Justice Byron R. White: But not to the injunction?

Mr. Ian W. Outerbridge: Not to the prohibitory injunction.

Justice Byron R. White: That’s rather significant course.

Mr. Ian W. Outerbridge: Not to the prohibitory injunction except if I may just add this that there is no point in making a mandatory order if you can’t stop.

Justice Byron R. White: I understand.

Thank you.

Mr. Ian W. Outerbridge: Thank you, Mr. Justice.

Chief Justice Warren E. Burger: Thank you Mr. Outerbridge.

Mr. McNeal.

Argument of Harley J. Mcneal

Mr. Harley J. Mcneal: Mr. Chief Justice, members of the Court.

In our view in the light of the present knowledge and expertise concerning mercury pollution in Lake Erie, it is respectfully suggested Ohio’s proposed litigation is premature and may very well be ill-advised because of the posture in which the complaint comes to this Court.

With about three defendants, when as my brothers have stated there are many known polluters of Lake Erie.

Mercury polluters, Municipal Government polluters, sewage, phosphates almost innumerable number including other chemicals which are now by reason of expertise being found to be also polluters.

So, in the Court’s discretion, which I believe this Court has in this case in considering the issues raised by the complaint.

I believe with but three defendants, one being a foreign alien this Court would be proper and right and just in refusing to entertain Ohio’s complaint on the basis that complaint involves not only the judiciary but it also involves the political sides of our Government.

Namely the executive and the legislative branches so that in the exercise of this Court’s jurisdiction, it is believe that this Court should examine carefully whether the complaint of Ohio on its phase demonstrates whether there is or is not a lack of satisfactory criteria which would enable this Court in the posture in which complaint comes to make a binding judicial determination which would be determinant of the problem of mercury pollution in the Great Lakes particularly Lake Erie.

When we know New York, Pennsylvania, Michigan and Ontario also are interested in Lake Erie and its pollution.

It seems very difficult for me to understand how this Court with the power that it has would be able to legislate or make a judicial finding which would satisfy Ohio in so far as Ohio’s common law is concerned leaving open a judicial determination of the rights and interests of the other states and that of Ontario.

Further, I believe this Court in exercising its jurisdiction and discretion should ascertain whether there are alternative forums available which could by reason of their structure reach a better determination in the long run and over a long period of time than the narrow kind finds of a judicial decree in the posture that pollution now is.

With the state of expertise and the present knowledge that we have concerning pollution and the number of pollutants and the people involved.

I say this because to me it is most important that this Court consider that provisions of the Boundary Waters Treaty of 1909 which was proclaimed by the two Governments wherein it was stated generally that in so far as Canada and the United States would be concerned pollution of the boundary waters which occurred on one side of the boundary of the other which resulted in harm to the inhabitants of the other side would be determined by means of an International Joint Commission and the history of what the International Joint Commission has done concerning investigation of pollution I believe is most important.

Beginning in 1918, the International Joint Commission handed down a report wherein in that report the International Joint Commission was required to investigate the extent, causes and where the boundary waters were polluted so as to be injurious to public health and unfit for domestic and other users.

In the 1918 report, the International Joint Commission concluded at that time that pollution was very intense along the shores of the Detroit and Niagara Rivers and that a condition existed which would impair the health and excellence and welfare of the citizens.

Now, what have the two Governments done since 1918?

By two joint references, the executive branches of two Governments have referred the problem of pollution to the International Joint Commission under the Boundary Waters Treaty.

In 1946, both Governments requested the International Joint Commission to investigate pollution problems in the St. Mary, St. Clair, Detroit and Niagara Rivers.

And in 1950, the International Joint Commission reported certain water quality of objectives to restore and maintain the waters which they were requested to investigate.

Justice Byron R. White: Mr. McNeal, with what result?

Mr. Harley J. Mcneal: The two Governments approved the recommendations and this resulted in pollution abatement programs being set up by various enforcement agencies in Canada and in the United States.

Now, as late as October of 1964, by another joint reference to the International Joint Commission the executive branches of the two Governments referred an investigation of the waters of Lake Erie and so far as pollution is concerned.

And by my brother Mr. Outerbridge, you have heard him state that the report concerning the investigation of pollution of the waters of Lake Erie was filed by the State Department wherein the International Joint Commission reported and I think it is helpful to summarize what the International Joint Commission found and reported through the State Department of the United States which filed the report.

The International Joint Commission found that until 1968, mercury was thought to be very stable that it could not be established with certainty that the concentration of a particular pollutant on one side of the boundary is due to any specific source on the other side.

Contaminants from both sides of the boundary are affecting and degrading the water qualities of Lake Erie.

In order to achieve effective pollution control, the laws of the Governments interested in Lake Erie’s pollution problems must be coordinated to avoid in action and inconsistency.

The economic cause and social consequences of the pollution problem will be our most difficult one to assess.

The International Joint Commission also said studies are necessary to find solutions to the legislative legal and enforcement problems related to curtailing and eliminating the sources of pollution.

The solution of such social problems may well prove as difficult and time-consuming as the solution of all of the scientific and technical problems involved.

This brings me to my point, this Court exercising its discretion.

In as much as there has been no emergency, in so far as Ohio is concerned because Ohio within 10 days after it declared a fishing ban lifted that fishing ban.

The only species of fish which may not be commercially fished today is the walleye type.

The ban went into effect April 10th in 1970 and I believe as to most other fish was lifted on April 22nd or thereabouts 1970 so that the commercial fish men who were unable to commercially fished and sell fish were held up for a matter of 10 days.

The inhabitants of Ohio are not advised not to buy fish.

The commercial fishermen may sell fish and things are going on in so far as the taking of fish from Lake Erie as they did before.

Now, why is this?

Because at least in the newspaper reports it was found that 87% of the fish that were banned indicating that they were commercially unfit within 10 days after Ohio had put a ban on commercial fishing were found to be well below the dangerous level of metal mercury which was said to be toxic in so far as humans are concerned.

So that my point is that if there is no emergency in so far as Ohio’s position is concerned, this Court exercising its discretion may well refuse to entertain Ohio’s complaint because Ohio has a basis whereby it may bring exception in the Court of Common Pleas in Ohio.

It may resort to the International Joint Commission and contrary to what my brother has Mr. Strauss has said.

I believe under Article II of the Boundary Waters Treaty which reads, “The exclusive jurisdiction and control of the use and diversion whether temporary or permanent of all waters on each side of the line which in the natural channels would flow across the boundary or enter the boundary waters are reserve to that nation.

And that if there is some damage or resulting in any injury on the other side of the boundary that nation which causes the condition shall give rise to the same rights and entitle the injured parties to the same legal remedies as if the entry took place in the country in Canada.

So that I say, in my interpretation of Article II that Ohio has the right to use the good offices of the Ontario courts to present this problem if they want to get at Dow Canada.

They have the right to sue in their own jurisdiction in the Court of Common Pleas in Ohio and under the treaty Ohio has the perfect vehicle to have an adjudication.

My brother Mr. Strauss also said that they also said that under the treaty that no powers of arbitration yet in the Trail Smelter case which is the Landmark case involving pollution where a company in Canada was polluting the air in the State of Washington.

The two nations, Canada and the United States referred the problem to the International Joint Commission. The International Joint Commission took testimony, learned about the issues and reported back to the two Governments with recommendations.

As a result of that investigation and the hearings that were had it was decided that a commission would be chosen a tribunal appointed and that tribunal proceeded to find liability and to assess damages.

These was all done under the Boundary Waters Treaty and under Article X of the Boundary Waters Treaty, it is provided that where there is a dispute between the United States and Canada, the high contracting parties may refer the matter to an umpire chosen in accordance with the proceedings proscribed in the fourth, fifth and sixth paragraphs of the Haig Convention.

For the pacific settlement of international disputes such umpire shall have the power to render a final decision with respect to those matters and questions so referred on which the Commission shall fail to agree.

So that there is built-in to the Boundary Waters Treaty -- a provision whereby if the International Joint Commission so recommends to the two nations that there be a finding of fault and a determination of liability.

This can be accomplished under the terms and provisions of the Boundary Waters Treaty.

Justice John M. Harlan: How does the Ohio treat their action by the Commission?

Mr. Harley J. Mcneal: Consulting the State Department, requesting of the State Department that there is a problem involving pollution of Lake Erie which they believe it comes within the terms and provisions of the Boundary Waters Treaty which will then enable the State Department and the Executive of Department of Canada to consult on the matter and if they come to an agreement refer to the International Joint Commission which in turn will handle the matter to a conclusion.

And this has been done and the Landmark case is the Trail Smelter case to burden this Court with this kind of litigation which would be interminable by reason of the information that one has to acquire, the scientific knowledge that has to be presented, the witnesses who would have to be subpoenaed, who would have to appear would seem to me to be an improper forum.

There are added matters which entitle this Court to give time to decide.

Justice William J. Brennan: Mr. McNeal --

Mr. Harley J. Mcneal: Yes, Mr. Justice Brennan?

Justice William J. Brennan: I understood Mr. Strauss say that the Government’s position is that the treaty does not cover this problem, don’t you pose that’s a representation to us on behalf of the State Department?

Mr. Harley J. Mcneal: I would only say Mr. Justice Brennan that I believe that the Boundary Waters Treaty is the very vehicle which had had this.

Justice William J. Brennan: Well, I know you do.

Mr. Harley J. Mcneal: Yes, sir.

Justice William J. Brennan: But aren’t we in the position of having the -- in effect the State Department tell us that, no, they don’t agree?

Mr. Harley J. Mcneal: Well, I think under -- I think it was an opinion Brady versus Carr which I believe Your Honor wrote that opinion.

I believe it is proper for this Court where there is no Government action taken for this Court to examine whether or not the Boundary Waters Treaty provides the answer to this problem.

And I believe that was the effect and the weight of what the opinion stated in Brady versus Carr.

Justice Byron R. White: But you're suggesting that Ohio just go to the State Department -- State Department is where the answer will be while there really is no effective remedy under the treaty and we couldn’t get you on let’s say reading of the treaty (Voice Overlap) isn’t that a discouraging prospect for the State of Ohio?

Mr. Harley J. Mcneal: Well, Mr. Justice White, I am somewhat at a lost to answer that because the State Department was the vehicle which filed this very report which was filed on January of 14th. So that I cannot conceive of the State Department becoming interested in the International Joint Commission’s report and yet saying that the International Joint Commission isn’t the proper vehicle to determine problems of pollution arising in Lake Erie.

And it just doesn’t seem to fit under the circumstances.

Thank you very much.

Justice Hugo L. Black: May I ask one question?

Mr. Harley J. Mcneal: Yes.

Justice Hugo L. Black: Does the record show any identity of ownership or interest between the Dow Chemical Company of Canada and the Dow Chemical Company of United States?

Mr. Harley J. Mcneal: Mr. Justice Black, the claim was made in the brief filed by Ohio that in as much as Dow Canada was a wholly-owned subsidiary that that then --

Justice Hugo L. Black: Which one is the only wholly-owned subsidiary?

Mr. Harley J. Mcneal: Dow Canada.

Justice Hugo L. Black: Of Canada?

Mr. Harley J. Mcneal: Yes.

Dow U.S. owns all of the stock.

Justice Hugo L. Black: Only on the subsidiary of Dow --

Mr. Harley J. Mcneal: Of Dow U.S.

Justice Hugo L. Black: (Voice Overlap) have to be of America?

Mr. Harley J. Mcneal: Yes sir but we don’t think that the mere ownership of stock if the subsidiary --

Justice Hugo L. Black: They own in Court.

Mr. Harley J. Mcneal: They own all of the stock, but that is only one of the criteria --

Justice Hugo L. Black: (Voice Overlap) they own it should the half?

Mr. Harley J. Mcneal: No, I don’t believe so because Dow Canada is a separate entity.

It has its own contracts --

Justice Hugo L. Black: Section liberty it’s actually owned by the Dow Chemical Company of United States?

Mr. Harley J. Mcneal: Well, they own the stock sir, but I --

Justice Hugo L. Black: (Voice Overlaps)

Mr. Harley J. Mcneal: But I won't concede that it becomes an agent of Dow U.S. because it is conducting its own business within the territory of Canada and has its own contracts and has its own board of directors and it has its own finances an furnishes the Dow balance sheet.

Thank you very much.

Justice John M. Harlan: Now, in this stage, we have now record showing what the exact relationship is?

Mr. Harley J. Mcneal: No sir, that would come --

Justice John M. Harlan: They got to bear allegations at that point.

Mr. Harley J. Mcneal: That is correct Mr. Just Harlan.

Justice Hugo L. Black: Can I ask you about the record, what does the record show?

Mr. Harley J. Mcneal: There is no record Mr. Justice Black.

Justice Hugo L. Black: What isn’t there a complaint?

Mr. Harley J. Mcneal: There is a complaint which says --

Justice Hugo L. Black: What did it show about that?

Mr. Harley J. Mcneal: The allegation is that Dow Canada is a wholly-owned subsidiary of Dow U.S.

Justice Hugo L. Black: So, we do have it in the record?

Mr. Harley J. Mcneal: You have it in the complaint, yes sir.

Justice Hugo L. Black: And it’s not denied for this purpose?

Mr. Harley J. Mcneal: I can't deny it for this purpose.

Thank you, sir.

Chief Justice Warren E. Burger: Thank you Mr. McNeal.

Mr. Brown, you have about four minutes left.

Rebuttal of Paul W. Brown

Mr. Paul W. Brown: All of the directors of Dow Canada or substantially all of the directors of Dow Canada live at Midland, Michigan.

So this is another tie.

The Trail Smelter case took 11 years.

It was not under the commission that reference -- to which reference is made, it was under a special commission and during that 11 years the Trail Smelter continued to pour sulfur by the ton into the atmosphere of the complaining state for the entire 11 years.

Now, my opponent have suggested that Ontario, Canada is satisfied with the progress that's being made to date by Dow Company of Canada and I say to you that I have a letter January 12th here written by the general counsel for the Ontario Water Resources to Michigan --

Chief Justice Warren E. Burger: Is this in the record counsel?

Mr. Paul W. Brown: Sir?

Chief Justice Warren E. Burger: Is this in the record?

Mr. Paul W. Brown: Well, we it in the record the reference to the report of the commission indicating that Dow of Canada was satisfied with the progress and I merely want to respond to that that they are not.

Chief Justice Warren E. Burger: I take that that's a report which we can judicially notice but if you have a letter from someone that is not within the scope of judicial notice.

I would question its appropriateness here?

Mr. Paul W. Brown: I'm sorry.

I will say that much of what has been said is factual and if we get to the factual part of this case, we will prevail the fish to which reference was made which contained mercury can be explain factually.

The entire factual background of location of fish, content of mercury, its poisonous quality and characteristics whether or not they were known or should’ve been known, all can be thoroughly covered and I have it and I'm ready to present.

The case is being well prepared. Ohio wants the opportunity factually to give this case to this Court.

It is a big case, it deserves a big court.

These men desperately want to avoid as polluters being brought before this Court.

I say to you that all of the resources of the State of Ohio that can be brought to bear upon preparation of this case factually are already meshed and proceeding and it will be presented.

A master can do find job of it if all we got from this Court ultimately into decree where a final order barring any further pollution of mercury it would be a fine thing.

And if you added to that money damages to punish these polluters for putting into the Great Lakes water this deadly poison which is not an ordinary pollution, we would’ve accomplish something which would be a deterrent for all other polluters.

I say to you they are still polluting, I say to you the pollutant -- the mercury that they put into the lake still being acted upon by biological forces which are making it more and more deadly.

And I say there is an emergency that will not occasion too much difficulty and a master could well handle this matter.

Thank you.

Chief Justice Warren E. Burger: Thank you Mr. Brown.

Thank you gentlemen.

The case is submitted.

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