Cases by Issue - Miscellaneous

Dept of Commerce v. U.S. House of Representatives - Oral Argument

Fri, 09 Jan 2009 14:50:14 +0000

Case:

Dept of Commerce v. U.S. House of Representatives

Media File:

98-404_19981130-argument.mp3

Related Transcript:

1998_98_404_argument.xml

Transcript:

Argument of Seth P. Waxman

Chief Justice Rehnquist: We'll hear argument now in No. 98-404, the Department of Commerce v. the United States House of Representatives, and William Jefferson Clinton v. Matthew Glavin.

General Waxman.

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

Article I, Section 2, Clause 3 of the Constitution requires that representatives be apportioned based on the number of persons in each State.

And to effectuate that requirement, Congress is directed to provide for, quote, the actual enumeration, to occur every 10 years, in such manner as Congress shall by law direct.

In modern times, as the census has faced increasing challenges, Congress has delegated authority to the Secretary of Commerce to conduct a census in such form and content as he may determine.

Following exhaustive study and the unanimous recommendation of the Census Bureau, the National Academy of Sciences, and other professional groups, the Secretary has determined that for the 2000 census, employing statistical sampling, in addition to other means of enumeration, will best achieve the constitutional goal of determining the number of persons in each State.

The important...

Chief Justice Rehnquist: General Waxman, I understand there are... there are two kinds of statistical sampling involved here.

And I want to ask you about the first one... rather the second one... which I... I gather is a series of 750,000 housing units, selected randomly.

And they will then be used to adjust the figures from census tracts?

Mr. Waxman: That's correct, Mr. Chief Justice.

If... just a small correction in the premise of the question.

There are three methods of sampling that the Census Bureau proposes to conduct.

One is not challenged by... at least directly... by any of the plaintiffs in this case.

But the third one, the integrated cover-ment measurement portion of the survey, is actually quite similar in... in the means by which it will done... is going to be done... as in 1990, the post-enumeration survey that the Court discussed in Wisconsin v. City of New York.

That is, after the first two phases of the census are completed and there is an initial enumeration roster with respect to every census block and tract, the...

Chief Justice Rehnquist: Well, that initial enumeration is first based on responses and then based on follow-up interviews?

Mr. Waxman: That's correct.

There are... there are three phases, Mr. Chief Justice, to the 2000 Census.

The first phase will be a... a series of mailings to every individual household, an 800 number for people who don't want to respond by mail to call in their answers, the distribution of questionnaires in malls and public libraries and other places.

That's the first phase.

The second phase involves what's called non-response follow-up.

And that includes both an effort to physically visit a certain number... up to 90 percent of the houses in each census tract, and the use of statistical sampling to impute the population characteristics with respect to those homes which did not send in... mail in their census information and were not located personally.

Justice Scalia: But when you say up to 90 percent, there... there is going to be an intentional effort not to do 100 percent?

Mr. Waxman: No, there... Justice Scalia, there is an intentional effort in this census to obtain census information from every household that is known to exist by mailings, by a Be Counted program, by telephone, by the Internet.

The Census Bureau has determined that in order to make the population totals for apportionment purposes more accurate, it will not have enumerators physically go to every single house that did not respond to those initial requests for information, but rather will go to enough houses so that 90 percent of every household in each census tract has been the subject of a, quote, physical count.

And it will then use statistical sampling on a completely random basis... and I think this is key, because none of the plaintiffs have alleged, nor could they, that they have been injured in any way by the effort... by the attempt to use sampling...

Chief Justice Rehnquist: Let... let's... let's stay on the question of describing this... this procedure.

Mr. Waxman: Yes, sir.

The... once the initial enumeration roster is completed by means of the mail-in, the non-response follow-up, which is both physical and sampling, the national vacancy check, which uses sampling to impute population, there will be what's called an initial enumeration roster.

The Bureau will then conduct, much as it did in 1990, but on a much larger, more sophisticated scale, using a completely separate cadre of individuals, it will, on 25,000 blocks of the country, selected in advance according to methodologies that have been specified, survey intensively every single one of those households to determine the extent to which the people show up the second time that weren't identified the first time or were identified the first time and weren't identified the second time.

And any discrepancy in information that any person gives will be the subject of a follow-up visit.

The results of that procedure, the inter... integrated coverage measurement, it is in effect a quality check on the initial enumeration roster.

And using the system of dual-system estimation that the Court described better in Wisconsin v. City of New York than I could standing here, it will adjust the results of the initial enumeration roster to more accurately reflect the total number of persons in each State, district...

Chief Justice Rehnquist: So... so you will get the initial returns from the census.

And then you send... send out follow-up people to try to contact those who were not contacted.

But then you use this to kind of change the results from that, as I understand it?

Mr. Waxman: Yes.

The in... integrated coverage measurement is a means, a highly reliable statistical means, of correcting for inaccuracies.

That is, improving the quality of the... the results of the initial enumeration roster.

Chief Justice Rehnquist: How can you know in advance that there are inaccuracies?

Mr. Waxman: Justice... Chief Justice Rehnquist, there... every effort to enumerate the population, from the 1790 Census until now, has produced only an estimate of the true population totals in each State.

That's agreed.

That's understood.

We now have the means... the... the Census Bureau and statisticians have developed the means, really beginning in the 1940's and on, to be able to ascertain just how far from the true number the enumeration efforts are... are...

Chief Justice Rehnquist: But how can you know... but if... if you have this census, which is a very... and it's inaccurate, it doesn't reflect the, quote, true number, how... how do you know what the, quote, true number, close quote, is?

Mr. Waxman: Well, the... I recall that was the... that was the question that was asked of my predecessor in City of New York v. Wisconsin, as the subject of an explanation in the Court's opinion in that case.

And I don't think I can improve upon it.

But the demographers and statisticians have means for very accurately estimating both what the national population is in the country, using something called demographic analysis, and sub-national population totals, using a combination of demographic data and the results of prior censuses.

Justice Souter: Well, why do we need... why do we need a census then?

Mr. Waxman: Well, because there... there is a requirement in the Constitution that every 10 years the respective number of persons in each State be determined.

That is the constitutional goal.

And the actualization of that goal is the actual enumeration, which is done every 10 years and which must be done in the means... manner by which Congress directs.

Now...

Justice O'Connor: Well, most people would think that actual enumeration meant a count.

I mean that... that's what immediately springs to mind.

And how do you get around that?

Mr. Waxman: Well, I think it depends how you define... actual enumer... most people would think actual enumeration means a count in the sense of determining the number of persons.

If... if I am told to conduct an actual enumeration of the people in Camden Yards during an Oriole... Orioles game that I'm at, and I'm given 30 minutes, the best means that I may have to do that is by a statistical sampling of some sort, rather than trying to count people one by one.

I...

Justice Scalia: And you would call that an actual enumeration; you sort of scan Camden Yards and say, it's the best I can do, it's 25,000, you would call that an actual enumeration?

Mr. Waxman: Well, the wordsI don't think would come up very likely in the context of Camden Yards.

But if one is talking about what the constitutional phrase means, Justice Scalia, I think it's very, very important to look at the actual wording of the constitution... this constitutional clause, which is included on page 1a of each of our opening briefs.

The first sentence states the constitutional goal.

That is, that you base apportionment on the total number of persons in each State.

The second sentence actualizes that goal.

The very first words of the second sentence says: The actual enumeration

That is the... the... the determination of the number of persons in each State.

And by what manner shall it be conducted?

Every 10 years and in the manner by which they shall choose.

Those are the words of the Constitution.

And in fact...

Justice Scalia: What... what...

Mr. Waxman: they very... I'm sorry.

Justice Scalia: What, in your judgment, is excluded by the adjective?

mean they could have said.

t seems to me they went out of their way to say an actual enumeration.

Mr. Waxman: Well, the... the...

Justice Scalia: If... if... if estimation by statistics or anything else is not excluded, what is excluded, rolling the dice or... or what?

Mr. Waxman: Well, we know for...

Justice Scalia: It says.

hat is the adjective there... what does it bring to our... to our decision here?

Mr. Waxman: as defined then as it is now as that which comprises action.

That is, it is... the enumeration will really be done.

The data will be collected by the Federal Government every 10 years and tabulated to determine the number of persons in each State.

Justice Scalia: You say it means not a phony enumeration, not a false enumeration; is that... is that all it means?

Mr. Waxman: Well...

Justice Scalia: It has to be a real enumeration?

Mr. Waxman: You see, that is our understanding of what it means.

It... it is an emphatic adjective.

They could have said.

Justice Scalia: ut for that we would have thought a phony enumeration would do, had they not put in?

Mr. Waxman: don't think so.

I think if they had said

"The enumeration shall be conducted every 10 years. "

it would have been clear in light of the goal, and particularly in light of the concerns that were expressed during the proceedings of the Constitutional Convention, that reliance not be had on existing State records, or efforts by individual States to produce...

Justice Souter: All right.

Isn't... isn't that sort of the clue that... that the wordis not so much excluding as contrasting with what follows it?

And what follows it is not so much an arbitrary assignment of representatives, but an assignment which I suppose was based, just as you said, on State records and what everybody more or less guessed.

Mr. Waxman: That's...

Justice Souter: Isn't that a plausible explanation for why the wordis not redundant here?

Mr. Waxman: Yes.

In fact, it... it... the records of the... in the records of the proceedings, the... the phrase is actually used,in contradistinction to, quote, conjectural ratio, which is what the framers understood they were doing in the first apportionment.

That is...

Justice Ginsburg: General Waxman, do you mean actual enumeration is to be contrasted with what the article says, that is, actual enumeration in comparison to three from Mass... three from New Hampshire... was it... eight from Massachusetts, 10 from Virginia... that's the comparison for the actual enumeration in place of what was going... the enumeration going in?

Mr. Waxman: That's right.

The... the actual enumeration refers to the... a good faith, empirical effort to determine the number of persons within each State.

Which is the goal of the first sentence of Article I, Section 2, Clause 3.

And the record of the proceedings, the... the various debates and the... and the successive drafts of what became the Census Clause, are all focused on determining the number of persons.

Edmund Randolph's original suggestion and the draft Constitution that was approved by the Convention spoke of determining the number of persons.

And none of the drafts that occurred in between and none of the debates that occurred in between differed materially from that or evidenced any concern whatsoever about the means by which that number would be determined except in two respects: One, that it be conducted at preset regular intervules... intervals, which eventually became 10 years; and, two, that it be conducted in a manner in which they... that is, Congress... shall determine

Chief Justice Rehnquist: Well, was there much... much in the way of an option or alternatives in 1787 to conducting a door-to-door census?

Mr. Waxman: There certainly were not the options that are available now in many, many respects.

They didn't have available to them, as we have had since 1940, imputation techniques.

They didn't have...

Justice O'Connor: Do we know how the early censuses were taken?

Mr. Waxman: We... we have a very good record of how the early censuses were taken.

And there is a... a scholarly text that is cited in our brief... I think it's called 200... that goes quite methodically through.

But if you look at the first Census Act, the Census Act of 1790, the very first sentence in that Act... it's Chapter 2, Section 1... essentially equates enumeration with, quote, cause the number of inhabitants to be taken.

And when it then goes ahead and talks about the oath that the marshals who would be collecting this information from each household had to take, that they would make a just and perfect enumeration and transfer the enumeration to Washington, it then goes on, in Section 3, to make clear that what it is that they were transferring was, quote, the aggregate amount of persons.

And so we think those two sources, plus the Capitation Clause of the Constitution, which equates the actual enumeration with census...

Justice Scalia: They had... they had estimation techniques then...

Mr. Waxman: They...

Justice Scalia: as we have it now.

Now you may say they were cruder, but they certainly had estima... they must have used estimation techniques for the initial allocation among the States, right?

Mr. Waxman: That... well, it prob... apparently, according to the records of the Convention, was somewhat cruder than that.

Because when they actually did the initial allocation, some States were given additional members based on the representation that their population would grow or was likely to grow.

That's why it was a conjectural ratio.

But, Justice...

Justice Scalia: But you began... you began with some estimation, right?

Mr. Waxman: Justice Scalia...

Justice Scalia: And the difference now is that we're better at estimating than we were then, and that makes estimation okay?

Mr. Waxman: The... the point here... I think that there is... it's easy to say, you know, they talked about an actual enumeration, not an actual estimate.

But if one understands the wordsas an empirical, good faith process to come up with the best approximation of the number of persons.

It may very well have been... indeed, I think it was true, as Justice O'Connor suggested... that the best means for doing that in 1787 and 1790 and in successive decades was to get Federal employees to go visit ho... as many homes as possible, and ask them how many people are in... in those houses.

Justice Scalia: I would think just the opposite, frankly.

I would think that the difficulty of finding people in the early frontier days was much greater than the difficulty of... of actually finding the people today.

You... you'd have to send somebody out into the wilderness to see how many mountain men are out there.

Why not... you know, why not estimate how many... how many went through St. Louis, or whatever?

It seems to me an estimation would have been much... much more likely to be used then than it is now.

Mr. Waxman: Well, I... with all respect, I don't know how likely it would have been to have been used then, Justice Scalia.

It's a long, long time before I have any empirical, firsthand knowledge.

But I do know that there is... that the Secretary has determined, with the su... overwhelming support of the scientific statistical community, that the actual number of persons in each State will be determined with a significantly higher degree of accuracy by the use of the science of statistical probability than the estimate that will be produced relying on methods that have been...

Justice Breyer: Is that... is that what we're interested in for purposes of apportionment?

I mean I take it that there is no objection to sampling for... nobody objects, everybody uses sampling for purposes of giving money out...

Mr. Waxman: The... the... under Section 141(a) of the...

Justice Breyer: Yeah...

Mr. Waxman: the Constitution doesn't speak to...

Chief Justice Rehnquist: No.

Justice Breyer: But I... I mean here, there is no argument among anybody.

Everybody agrees, nobody disagrees with you, you can use sampling for giving out money.

We're only concerned with allocating 435 representatives among the States?

Mr. Waxman: Correct.

Justice Kennedy: All right.

Justice Breyer: As long as that's the case, I take it, even if we were more accurate in five of the States and a little more accurate in two of the States, in terms of getting to what you call the real number, that would still be worse for purposes of apportionment.

Because if we're off by 50 percent across the board, it works perfectly.

If we're off by 80 percent across the board, it works perfectly.

It's the same division of representatives.

Mr. Waxman: Your... your...

Justice Breyer: It's... it's only if... it's only if you... you get differences in the errors that it begins to make a difference.

Mr. Waxman: If I understand your point...

Justice Kennedy: Yeah.

Mr. Waxman: it's precisely the same basis for Secretary Mosbacher's determination in not... in 1991, not to adjust the physical enumeration with the results of a post-enumeration survey.

And we were here just a few years ago defending the reasonable... the lawfulness of that determination as a reasonable determination, based on the fact that the Secretary was unable to conclude that although the... the total popu... there would be greater total accuracy if the physical enumeration results were adjusted, he could not conclude that there would be greater distributional accuracy.

Justice Breyer: All right.

So now you're saying there... there... all these scientific groups agree that if you're allowed to go ahead with this sampling there will be greater distributional accuracy; that is to say, the relationship of Indiana and California will be, compared one to the other, closer in terms of accuracy?

Mr. Waxman: That... that is precisely the point.

Justice Scalia: Yeah.

Mr. Waxman: And not only has the Census Bureau and three National Academy of Sciences panels, that Congress directed the Census Bureau to work with and refer to, concluded that, but we've... we've cited in our reply brief the General Accounting Office has cited that particular strength of this as a principal benefit of conducting the 19... the 2000 Census in the manner in which the Secretary proposes he do it.

Justice Breyer: Then can I go back to the Chief Justice's question?

My... my understanding of this is that on method one you will get some mail surveys back... think of a particular census block, I guess if... maybe there are 30 housing units... I don't know if I have the right terminology.

Mr. Waxman: Approximately.

Justice Breyer: All right.

So you'll get, like, questionnaires back.

And you'll count people in terms of the answer to the questionnaire.

And then where you don't get a questionnaire back, you send somebody to the house.

And then when you don't get either, you do a little estimating.

That's the first method.

Mr. Waxman: Well...

Justice Breyer: Is that right, basically?

Mr. Waxman: it's...

Justice Breyer: Crudely?

Mr. Waxman: it's right to the extent that the... the Census Bureau has determined, for a variety of reasons... that I can explain to the Court if it wishes... the Census Bureau has determined that, unlike in 1990, when it conducts the non-response follow-up portion... that is, who didn't mail in anything from their home or from a mall, or who didn't call us or send us their information by Internet... they are not going to attempt to have a physical follow-up visit with every home in every block.

Justice Breyer: All right.

Unidentified Justice: Yeah, but this... no, this is... so that... let's think of census block A.

Justice Breyer: And census block A roughly we counted in the way we did.

And then there are certain hundreds of thousands of those census blocks all over the country... or maybe millions.

Now, in method two, we're going to take census block B, which is one of our 750,000 sample blocks.

Mr. Waxman: There's 25,000 census blocks.

Justice Breyer: Or 25,000 sample units.

It's one of the cells that we're really going to look at.

And there, I take it, we physically go out with people and literally dig up everybody.

I mean we go not just door to door, we really... we really do this thoroughly.

Is that what happens?

Mr. Waxman: I don't know that we'll be going to the extent of digging up everybody, but...

Justice Kennedy: Yes, right.

Unidentified Justice: [Laughter]

Mr. Waxman: But I think... I have... I...

Justice Scalia: We've tried to get away from that, yes.

Unidentified Justice: [Laughter]

Mr. Waxman: When we talk... when we talk about actual residents, we're generally referring to people who have...

Justice Scalia: All right.

Mr. Waxman: the ability to be vertical.

Justice O'Connor: So, but in any case, as to that...

Mr. Waxman: But can I... can I just...

Justice Scalia: Yes.

Mr. Waxman: Can I just correct one...

Justice Scalia: Yes.

Mr. Waxman: I want to make sure that the Court is not under a misapprehension as to how the ICM is going to work.

For the 25,000 blocks that are chosen for retest during the second... in the ICM phase, the initial enumeration will have a physical visit in the non-response follow-up phase to every home.

That is, there will be no sampling for non-response follow-up in the 25,000 blocks that are going to be the subject of the ICM.

Because the purpose of the ICM is to determine the accuracy or determine the quality of the initial enumeration effort.

Justice Kennedy: Now...

Mr. Waxman: Now I'm ready for your question.

Justice Breyer: in the second... we're at the second one... and the second one, in our 750,000 sample blocks, we really are thorough.

We do real, actual enumeration beyond belief.

Is... is that right?

I mean it's really very, very actual enumeration.

It's certainly the most complete actual enumeration.

Mr. Waxman: It...

Justice Breyer: And then we extrapolate from those 750,000 to the X million that we didn't have time to do that thorough on... to do that thorough a count on?

Mr. Waxman: Well, what will happen as a result of... in the ICM process, the... the results of the ICM and the results of the initial enumeration phases will be very carefully compared.

The differences will be reconciled, and... according to different categories of persons, according to demographic characteristics, according to post-strata.

Justice Breyer: So my question was the same as the beginning.

If you were going to do this with the second phase, what... what at that point does the first phase have to do with your final answer?

Mr. Waxman: Well, the first phase... one cannot arrive at the... under the... under the Census 2000 plan, one cannot arrive at the number of persons in each State without both phases.

Justice Scalia: May I ask...

Mr. Waxman: It... you... you just couldn't do it... we're not proposing to do what sometimes has been referred to as a sample census.

That is, we have a phase at which we are attempting to obtain information from every household in the United States, and a phase... and this is what aggrieves the plaintiffs... a phase at which we will use a sample to adjust for errors that inevitably occur in the initial traditional physical means of enumeration.

Justice Stevens: General Waxman...

May I ask an elementary and rather stupid question?

As of what date during the year is the census supposed to determine the number of people?

Mr. Waxman: April 1st is Census Day.

Justice Stevens: So you don't count people born after April 1st?

Mr. Waxman: No.

Although one of the great sources of error is that people fill out their questionnaires later or, in non-response follow-up, somebody may come to the household in July or September and they count somebody who was born after that day, or somebody who had died the day before.

Or they show up to do the post-enumeration... the... the non-response follow-up in South Florida in July and discover that all the residences are apparently vacant.

I mean one of the things that I think it's important for the Court to recognize, because what the Census Bureau is proposing to do now is something that is significantly different than what has been done before.

But it's not as sharply different as the other side, I think, would suggest.

Since 19...

Justice Ginsburg: General Waxman, may I... may I ask you something that relates to the questions you were asked by Justice Breyer?

And your answers confused me.

You said, of course, for other purposes, you can use the method that you say is the... the one that the scientists agree on.

Would you... suppose you were to lose this case, would you indeed conduct two census... censuses?

I thought one of your positions were that, practically, the answer to this question drives what you would do for the other purposes.

Or would you conduct two censuses?

Mr. Waxman: Practically, the answer to this question... if the Court agrees with us, will make conducting the decennial census much easier, cheaper and more efficient for the Bureau.

But if this Court were to determine that sampling, neither sampling in the non-response follow-up stage or in the national vacancy check stage or... or ICM, could permissibly be used under the... under the statute or the Constitution for determ... for apportionment purposes, the Secretary would be... is required under Section 195 to use sampling in census-taking for all other purposes; that is, intrastate, district...

Justice Ginsburg: But if the decision went the other way, couldn't you say, well, it's not feasible to use it for the other purposes, because it would cost so much to run it two ways?

Mr. Waxman: I think, Justice... Justice Ginsburg, it's clear that if we lost this case on the merits, the Census Bureau would proceed and conduct the census for... for apportionment purposes without the use of any sampling in the non-response follow-up stage.

Justice O'Connor: They'd do it like they always have done it.

Mr. Waxman: They would... they would do that the way they did it in 1990.

Justice Breyer: Yeah.

Mr. Waxman: They would then... the Secretary would then need to determine whether it is feasible... and it certainly does not seem infeasible... to go ahead and conduct the ICM... that is, the integrated coverage measurement survey, and adjust all other State... all other population totals... that is, for Federal funding purposes or districting purposes... and produce...

Justice Ginsburg: Are there any other purposes... the other purposes... the briefs mention redistricting, intrastate redistricting and distribution of Federal funds... are there any other purposes, or are those three...

Mr. Waxman: Those are the... those are the principal purposes of the decennial census that the Secretary is required and authorized to conduct under Section 141(a).

There are other provisions of the Census Act that authorize the Secretary and the Bureau to conduct empirical surveys and censuses for other persons.

For example, upon request by any State or local government.

But the point is that... and this actually goes to the... directly to the standing of the Glavin plaintiffs... the point is that no matter what this Court decides with respect to the issue presented in this case, the Secretary will be required, if he considers it feasible, to use sampling in determining all population totals for all purposes other than the apportionment of representatives among the States.

Justice Souter: General, are you going to get to standing?

Mr. Waxman: I was just waiting to be asked.

Chief Justice Rehnquist: I... yes.

Justice Ginsburg: Just before you do, may I ask about the posture of this case?

It was decided on summary judgment.

So I thought we must therefore assume everything that you say about this leading to a more accurate count is so.

Of course that was never tested in an adversarial way.

Mr. Waxman: That is absolutely correct.

With respect to standing, let me just say the following few things.

The House of Representatives is attempting to direct, through litigation, the execution of the census laws.

But under our system of separated powers, legislation, not litigation, is the means by which Congress gets this done.

The Constitution provides that the census shall be conducted in such manner as Congress shall, by law, direct, not by lawsuit.

With respect to the Glavin plaintiffs, they have virtually abandoned the claim that they will suffer injury in any manner protected by the Constitution or the Act.

None of them has established that it is imminent, or certainly impending, that the Secretary's plan will cause his or her State to lose a seat.

Justice O'Connor: Well, I thought... now wait a minute... I thought there was evidence in the record from Indiana that it was virtually certain that Indiana will lose a seat under the new plan.

At least that's the expert witness's affidavit.

Mr. Waxman: Justice O'Connor...

Justice O'Connor: Isn't it?

Mr. Waxman: that is what the ex... that is what Dr. Webber...

Justice Breyer: For Indiana?

Mr. Waxman: For Indiana, he concluded that it was virtually certain.

Justice Kennedy: Right.

Mr. Waxman: It is sig... very... we controverted that, both in terms of challenging the methodology that he used and his specific conclusion about Indiana.

And it is perhaps for that reason that the district court did not find that it was likely or imminent that Indiana would lose a seat.

And here is what Mr. Glavin's counsel told the court about Indiana in the court below, at page 85 of the transcript.

He said: The government spent all its time disputing whether or not Indiana was going to lose a congressional seat on the basis of Dr. Webber's data

To simplify this case, we'll concede it; Indiana is not going to lose a House seat.

I don't care.

It doesn't matter.

Because there's intrastate vote dilution.

We don't think that for purposes of summary judgment against the government the district court could conclude, or this Court could conclude, that it was imminent or certainly impending that Indiana would likely lose a seat.

Chief Justice Rehnquist: Well, let's... let's think for a moment, General Waxman.

I mean the... the census has to be taken, one way or another, I guess, next spring.

Now if the Court were to reverse the district court here, not on a question of law or not on a question of written law, but on the grounds that it shouldn't have granted summary judgment, it should have itself decided factual issues in dispute, I daresay we would have no definitive pronouncement on the legal questions involved here probably before... we would do well to get one in June.

Mr. Waxman: Well, I... that is true as far as you've taken it, Mr. Chief Justice.

Our position is, leaving aside... even if one accepts the facts as alleged below and not conceded below, the district court made findings of fact.

It did not find that Indiana was likely to lose a seat.

And there simply is not a cause to conclude that any other State is either imminent or actually impending in loss of a seat under the method of equal proportion.

And the reason is...

Justice Kennedy: Because that seems to me to contradict your argument on the merits.

The first half hour you were saying how important it is to do this.

And now you're saying it doesn't make any difference.

Mr. Waxman: No, not at all.

It's very important to do it.

I am just... we are suggesting... and I will at this point be the first to say that I may be wrong on this.

This Court, over the last term, has disagreed with the government's position on standing in many cases.

But it seems to us that the plaintiffs in this case are seeking an advisory opinion.

The Glavin plaintiffs, none of them have shown the... what this Court considers injury in fact, that...

Chief Justice Rehnquist: Who... who could challenge a disputed census procedure then?

Mr. Waxman: Well, I think, certainly after the census is taken, it could be challenged in the way that... that...

Chief Justice Rehnquist: Well, but... well, what good does that do anybody to... you mean to say do a census over again in 1993 because it wasn't done correctly in 1990?

Mr. Waxman: No, I don't think a remedy would be to require that the census be done over again.

And this Court has... has... has considered challenges to the means by which the census has been conducted after the fact on several occasions.

Justice Scalia: How would you challenge it after the fact?

You... you would compare the figures that... that you came up with under this new system with what?

Since you haven't done it under the old system...

Mr. Waxman: Well...

Justice Scalia: how can you show that you've been injured?

Mr. Waxman: The... you have... you have to prove that you likely... that your State like...

Justice Scalia: No, but your experts would come in, just as they came in below, and say well, you were using the 1990 census... census figures, that... that's...

Mr. Waxman: Not... not...

Justice Scalia: that's what was used in rebuttal to the Indiana argument, that, well, you were using the 1990 figures; things have changed since 1990.

Mr. Waxman: Not at all.

Not at all.

The Census Bureau will publish, as it's required to by law after the census is conducted, the results of the mail-in procedures, the results of the non-response follow-up results; that is, both the physical efforts at non-response follow-up and the 100 percent non-response follow-up, using ran... sampling on a random basis.

All of those numbers will be available to plaintiffs after the fact...

Justice Scalia: But you will...

Chief Justice Rehnquist: Some... some court would decide what the population of the United States was in 19... in 2000?

Mr. Waxman: Mr. Chief Justice, courts use imperfect census data all the time, particularly in districting... redistricting cases that occur long after the census is conducted.

And I acknow... we acknowledge that devising remedies for a violation is frequently a difficult task.

What the Court probably should do is re... would do in that instance is remand to the Secretary for a determination of the likely consequences, if any, under the method of equal proportions.

It may very well be... we don't have to reach it in this case... that the 90 percent number that is, quote, the way it's always been done in the past, is sufficient to constitute an actual enumeration.

I'd just like to say a few words about the... the statute, where... which I haven't had the opportunity to address today.

But it's our view that Section 141(a) of the Census Act has... it could not possibly be clearer.

It is the only command in the code for the Secretary to conduct the decennial census and the apportionment census.

And the language has an entirely...

Justice O'Connor: Well, but you have to read Section 195, too, don't you?

Justice Breyer: You... you have to...

Mr. Waxman: Exactly.

Justice O'Connor: apply both.

Mr. Waxman: You... you...

Justice O'Connor: And certainly 195 was thought for many years to preclude the use of sampling for purposes of apportionment.

Mr. Waxman: We think that the only way to harmonize the reading of the two statutes is to read the except proviso of 195 as meaning what it says.

Which means this isn't saying anything about the apportionment census.

Justice O'Connor: Well, don't you think that before it was amended in '76, that everyone thought it precluded using sampling?

Mr. Waxman: Before it was amended in '76, Justice O'Connor, everybody thought...

Justice Scalia: But didn't they?

Justice O'Connor: Didn't they think that?

Mr. Waxman: I'm answering your... I'm trying to answer your question.

Everybody thought that sampling in the apportionment census... at least sampling in lieu of an effort to reach everybody... was prohibited.

What we submit to the Court is that it was not that clause... sampling was prohibited before 195 was enacted because... for two reasons.

There was a provision, Section... old Section 25(c) of the Census Act... that required that an enumerator visit every house and record the number of persons present.

And a sample in lieu of that would have been impermissible.

There was also a... a determin... I don't know about a determination... but both the Congress, in '57, and the Bureau, in '57, indicated that a sample census or a sample survey would not be consistent with the statutory term.

nd in 1976... well 25(c) was repealed in 1964.

And with respect to the implicit meaning of the word,in 1976, Congress said in the most direct way it could that the census should be conducted in such form and content as the Secretary may determine, including the use of sampling procedures.

Now, the reading that the other side wants to give this would... that is, that Section 195 prohibits sampling for apportionment purposes and requires it where feasible for all other purposes, deprives that amendment of Section 141(a) of any meaning at all.

There's nothing left for those words to do.

And what's most significant to us is that by the time Congress enacted this amendment in 1976, the Census Bureau had been using imputation techniques... in 1940, in 1950, in 1960, in 1970, and in 1970... and this was known... this was published by the Census Bureau and the subject of discussions in mentions in House reports and in hearings... the Census Bureau had used statistical sampling in two different respects in the 1970 Census to correct the State population totals by one and a half million people.

There was a sampling used in the national vacancy check and sampling used in something... in the Southern States... in something called Peapock.

Justice Breyer: I mean the obvious thing which I think they'll say as soon as they begin to talk, your opponents, is... is that 141 is an introductory section; 141 says take a census of population.

Then 143 says take a census of agriculture.

And 161 says take a census of government.

And then, when you get to 193, at the end, it begins to tell you more detail.

And so they'll say that's... that's what they say in their briefs... but what... what is your response to that, that these introductory sections give the basic authorization, and of course they give it broadly, and then the later sections limit how you do it?

That's their... I think that's, as I understand it, a basic argument that they make.

Mr. Waxman: Our first argument is that whichever provision is more specific or more general, the first principle of statutory construction is to read the two provisions to the extent... in a manner in which harmonizes them if that can be done.

But if this comes down to specific versus general, Section 141(a) is much more specific.

It is the only provision that directs or allows the Census Bureau to conduct the apportionment census.

In fact, 141(b) makes it clear that's what's being required in 141(a) is the apportionment census.

Section 195, which talks about sampling, refers not just to the decennial census or censuses in general, it refers to anything that the Secretary will do under this chapter.

May I reserve the remainder of my time, please?

Argument of Maureen E. Mahoney

Chief Justice Rehnquist: Yes, you may, General Waxman.

Ms. Mahoney, we'll hear from you.

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

I'd like to turn first to the issue of justiciability.

Congress passed the '98 Appropriations Act to authorize this litigation to proceed in this Court before the census was taken.

Because it found it was absolutely critical to protect the concrete interests of the House of Representatives and also to authorize private parties, who may be injured as well, to bring this controversy to the Court so it could be resolved in time to provide meaningful relief.

The House does not expect this Court to find that it has standing to resolve the issue of standing if the private parties have... have established standing and if that judgment is affirmed.

It would be perfectly appropriate, and we would agree that the Court should simply not reach the issue of the House's standing in those circumstances.

But if for any reason this Court finds that the private parties do not have standing, it should find that the House does; that the district court properly determined that in these rare and unusual circumstances that Congress acted well within its constitutional authority to provide a cause of action for the House to come to court to resolve this... this legal issue, this legal dispute which has created an impasse between the branches, and to provide relief so that the House will receive the information that it has requested and needs to perform its legislative functions and so that its own composition will not be unconstitutionally and unlawfully altered.

These are concrete interests.

These are interests which are cognizable.

And... and there is no bar to the resolution of inter-branch or inter-governmental disputes under this Court's precedence.

Justice Souter: Ms. Mahoney, what is your response to the... I guess to the objection that if this is a sufficient basis for standing here, the Congress, as a practical matter, can place any obligation on some agency of the executive branch to provide it with information on a concrete subject; and if it ends up not liking the... the information that it gets, in effect, can sue the executive branch on matters that certainly impinge on the respective policy responsibilities of the two branches?

Are we opening up a very large door if we accept your argument?

Ms Mahoney: I don't think so, Your Honor, for several reasons.

First of all, there has to be a substantial nexus between the challenge to the executive branch conduct and the request for information.

And that of course is satisfied here because, since the beginning of our history, Congress has always relied upon the executive branch to provide it with a report of the population numbers, determined in accordance with the constitutional requirement for an actual enumeration, and the Census Act requirements that it be based on an actual count.

And so I... I think that that nexus is clearly satisfied here.

Second, I think this Court could, and should, find that the only kinds of actions that should be challenged... subject to challenge... would be those executive branch actions which have traditionally been subject to challenge.

And again, here that is clearly satisfied...

Justice Kennedy: By whom?

Chief Justice Rehnquist: By whom?

Ms Mahoney: By parties who have concrete injuries.

Justice Souter: Yeah, but in this case, there is no tradition of challenge by the House of Representatives.

Ms Mahoney: Your Honor, there's no tradition of challenge by the House.

But in United States v. Nixon, this Court said that what you look to is not... not the... not the caption.

You look to see whether the... the issues, whether the... the challenge to the conduct is one which has traditionally been reviewed or not.

And there the issue was whether the President had properly invoked ex... executive privilege...

Justice Souter: Well, but the answer is going to be no across the board here, isn't it?

I mean this is... this a the first-time thing.

Ms Mahoney: Well...

Justice Souter: There's no tradition of challenge... as I understand it, there's no tradition of challenge either by the House or by private parties.

Ms Mahoney: There is a tradition of challenging the census, Your Honor... census decisions that have been made.

This Court, in Franklin and Montana and in Wisconsin, entertained challenges by private parties to the decisions that had been made by the executive with respect to the conduct of the census.

Justice Souter: Did... have we done it before this past census?

Ms Mahoney: Have you done it... excuse me?

Justice Souter: Before this past census.

Ms Mahoney: Well, Your Honor, the...

Justice Souter: How far back does it go?

Ms Mahoney: Those three cases all came, I think... I believe since 1990.

But they specifically rejected the executive's claim that those were non justiciable...

Justice Scalia: It's not much of a tradition.

Unidentified Justice: [Laughter]

Justice Scalia: What...

Justice Stevens: Of course, they were all after the census figures were available.

Ms Mahoney: Yes, Your Honor.

But the... the really... I think the district court fully considered the issue of ripeness, and found that here there is really no dispute that the use of sampling in this case is likely... is... is... is going to lead to an... an alteration in the apportionment of the House of Representatives.

And... and therefore, to present it with a prospect where not only has its composition been unlawfully altered, but it's also been deprived of the information that it would need in order to correct that problem.

And that's the... that really is the purpose of the report.

Justice Scalia: Ms. Mahoney, in... in what other areas have we stepped in to resolve a dispute between the two political branches rather than letting them duke it out?

Ms Mahoney: Yes.

And of course we did try to duke it out, Your Honor.

That... those efforts were exhausted.

Justice Scalia: Well... well, the President thinks that you've succeeded in duking it out.

Ms Mahoney: The President signed this legislation.

We came to court because this was a... a reasonable way to resolve this.

The two cases, Your Honor, where I believe that are most germane would be United States v. Nixon, where of course the controversy there... there were only two parties in that case before this Court... it was a subordinate executive branch official and the... the President himself...

Justice Scalia: Yeah, it was the executive branch against itself.

Give me a case where it is the Congress against the President.

Justice O'Connor: Or one house of the Congress against the President.

Ms Mahoney: There are two cases.

Chadha was a case.

It did have a private party.

But the... but the...

Justice Scalia: Give me a case without a private party.

Unidentified Justice: [Laughter]

Ms Mahoney: Senate Select Committee v. Nixon.

It was not heard by this Court, but it was a statute, in 1974, that authorized the Senate Committee to bring the action in court to challenge the assertion of executive privilege.

There were no private parties.

The... the D.C. Circuit did exercise jurisdiction in that case.

And...

Justice Scalia: When was this decided?

Ms Mahoney: I believe it was 1974.

Justice Scalia: Oh, during the period when the D.C. Circuit was notorious for its expansive view of standing.

Unidentified Justice: [Laughter]

Ms Mahoney: Well, Your Honor, in that case, the statute specifically authorized review.

The executive branch has... has long, I think, acknowledged their view that in fact the Congress does have the power to come to court in order to enforce subpoenas.

The... an opinion of the Office of Legal Counsel has taken that view.

And really, this position is... is firmly rooted in this Court's precedence throughout this century that says the Constitution does afford Congress with the means necessary to take the... to use compulsory process to make sure that it gets the information that it needs for its legislative functions.

Justice Scalia: I don't like injecting us into... into a battle between the two political branches.

I... I think they may survive.

I'm not sure we will.

Ms Mahoney: Your Honor, I think that in these circumstances where it is a narrow cause of action, it is one that is expressly created for this precise purpose, where the branches have reached an impasse, have tried to work it out, and it is...

Justice Kennedy: Well, they... they haven't reached an impasse, because Congress basically has enacted a statute, and then gives its own separate houses the standing to challenge it.

That... that... it seems to me that destroys all discipline that's required for a separation of powers system.

And I... I don't know how... how would you confine this?

Well, it's... it's a census.

It's important because of how the House of Representatives itself is composed.

I mean is that... is that the limiting principle?

Ms Mahoney: Your Honor, the fact that it is the composition of the House itself is very important here.

Because that is a concrete interest under this Court's decision in 67th Minnesota Senate, where it found that a State legislative body that was directly affected by orders pertaining to its own composition did have standing, did have cognizable interests...

Justice Kennedy: But the national separation of powers was not involved in that case?

Ms Mahoney: No, Your Honor, it wasn't.

But it did go to the issue... I think we have to separate the issues here.

And... and one is whether these are cognizable at all within an Article III sense.

And I think certainly this Court's decision in... in Beans establishes that the compositional interests, a legislative body's compositional interest, is cognizable.

And it is firmly rooted in the text.

It is something that Cong... that the House has guarded throughout its history and has made every effort to make sure that the size of the delegation conformed to the constitutional requirements.

And of course here that constitutional requirement is that the numbers be determined in accordance with an actual enumeration.

And...

Justice O'Connor: Does it matter at all that that language,,was just put in there by the committee on style, when the drafting history shows that what was used in the Constitution was?

hen it goes to the committee on style, and it comes back.

oes that matter?

Ms Mahoney: Well, Your Honor, I think in... in the Nixon case, this Court... the Judge Nixon case... this court said that of course the version that was ultimately adopted by the Convention is the one that is entitled to the most weight.

And I think if we look at the... at the way this proceeded, it was first that a census be taken.

It was then that the numbers be taken.

And it was then that an actual enumeration be taken.

And that it... the best reading, of course, is that the actual enumeration was most consistent with what was intended from the outset.

And if we look to what the 1790 Congress thought those words meant... I'd like to expand on what the Solicitor General said here, because I... I think perhaps he left the impression that there was authority to use estimates.

And in fact it's quite the contrary.

That even though at the time the... the States were very familiar with how to do estimations... and Thomas Jefferson himself had done an estimation of the population of Virginia in 1792 that is thought to have been very accurate... the 1790 Act specifically requires that the marshals only prepare schedules that list every household in the Nation, identify the number of people in the household, the sex and the age, and provides that the... the... they can only report the aggregate amount of each description of persons within their respective districts.

In other words, they can only report the people who have been described.

And Madison, at the time that this was adopted, referred to the fact in the debates that... of the difficulty of taking the census in, quote, the way required by the Constitution.

And I think there really is not much doubt, from the 1790 practice, which of course has been followed all throughout history...

Justice Stevens: Ms. Mahoney, can I ask you a question that's sort of the converse of the question Justice Scalia asked about what doesmean if it doesn't mean, you know, the very narrow confinement?

What... what, in your view, would be permissible if a census-taker got no response from a particular address, went to... say it's a large apartment complex and everybody in the neighborhood knows it's... they have lots of undocumented aliens that live in there, but nobody is going to tell you how many because they just don't want to reveal the information?

What does... what does the Constitution permit the census-taker to do to find out how many people live in that apartment complex and other similar apartment complexes?

Ms Mahoney: I think they can ask the neighbors.

They can ask the postman.

Justice Kennedy: And say no... they say, we're not going to talk.

We...

Ms Mahoney: They...

Justice Scalia: we don't want to tell you about what's going on.

Ms Mahoney: Your Honor, they can't guess.

When it's all said and done...

Justice Stevens: So they... what do... do they put down zero then?

Ms Mahoney: That's right.

Justice O'Connor: Okay.

Ms Mahoney: It is an objective standard.

The whole point here was that the Framers said, we want an objective standard.

We do not want something that will invite subjective...

Justice Stevens: But they would know that there were a lot of people in there.

They couldn't find out how many.

So the objective standard would require you list it as zero?

Ms Mahoney: I think so, Your Honor.

Justice Breyer: Even if the lights go on and off in the evening?

Unidentified Justice: [Laughter]

Ms Mahoney: Your Honor, it certainly... maybe in some sense you could say it would be more accurate to put one than zero.

But we know that in 1790, I mean if a bridge went out and they couldn't get to a town, they couldn't put... put it down on their schedule unless they had the name and could identify the people.

And they were subject to fines if they included...

Justice Ginsburg: Ms. Mahoney, I know we're going over to the merits now, but I would like you just to stay with the standing a moment longer.

Because I don't see a stopping point, other than Congress says, gee, this is really important; we want you to resolve it, Court.

And I also don't catch what you said about the legislature exhausted its legislative remedies.

Well, it would have... it didn't... it didn't pass the first bill over the President's veto.

So it's not a question that... it failed in that endeavor.

Could the legislature even now say, well, we don't like what the President and the Bureau of Census is doing, so we're going to say no funds for the Census; what about that remedy?

Ms Mahoney: Your Honor, then... then the House will suffer the injury.

The problem here, unlike most circumstances, is the House's injury cannot be solved through its own unilateral action.

Justice Kennedy: Sure it can.

Justice Scalia: But it could if they had enough votes.

It can... it can refuse to appropriate money for the White House staff.

It can say, we're not going to give you any money.

There... there are 900 ways that the House can... can stymie the President if it has the political will to do it.

And you're telling me it doesn't have the political will, so we should solve the problem for the House.

Ms Mahoney: Your Honor, if I could go first to the example of withholding money for the Census.

If... if the House withholds money for the Census...

Justice Scalia: Well, I wouldn't do that.

Justice Kennedy: I wouldn't do that.

Justice Scalia: I'm withholding money for the White House.

Unidentified Justice: [Laughter]

Justice O'Connor: The White House staff.

Ms Mahoney: If I could... if I could answer Justice Ginsburg's question.

Withholding money for the Census of course will cause the harm.

Because the House will be un... unlawfully composed in 2... in 2002.

Justice Ginsburg: I'll go with Justice Scalia's, withhold money from whatever.

Ms Mahoney: Withholding... well, what we can say, Your Honor, is that they tried to pass legislation which would reaffirm the prohibition in Section 195.

In fact, it said 195 prohibits the use of sampling for purposes of apportionment.

It did that in disaster relief legislation.

And the President, nevertheless, vetoed it.

Justice Scalia: The wonderful thing about not appropriating money is that you don't have to pass legislation.

All you have to do is not pass legislation.

Unidentified Justice: [Laughter]

Ms Mahoney: Your Honor...

Justice Scalia: You see.

And that's the way Congress usually makes its will felt in these disputes with the President, who has the veto power.

It says, okay, you can't veto non-legislation.

We are not going to appropriate money for the White House.

Justice Stevens: Why can't the House do that?

Ms Mahoney: Your Honor, I think that this has become an intractable controversy.

It is one where there really is no reasonable solution.

The parties determined that there were concrete injuries here and that this was a reasonable solution.

Justice Scalia: When you say it's intractable, you mean the President has won and the House is unwilling to do whatever further is necessary to... to bring the President to heel on the point.

Ms Mahoney: Your Honor...

Justice Scalia: But that's a political dispute.

Justice O'Connor: We don't get into that kind of stuff.

Well, Ms. Mahoney, I suppose if the Glavin plaintiffs have standing, we don't have to worry about whether the House does, do we?

Ms Mahoney: That's absolutely correct.

If they have standing, this Court need not... not reach the issue...

Justice Stevens: But what do we do about the... it's a summary judgment and so forth on the Indiana plaintiff then?

Ms Mahoney: In... in the other case?

Justice O'Connor: I mean who has that...

Ms Mahoney: I'm sorry.

Justice Stevens: who... who... which individual has been hurt, and how has that been demonstrated?

Ms Mahoney: In... in that case, I think Mr. Carvin will be speaking to the... to the issue of standing in the... in the private plaintiff case.

Justice Stevens: Oh, okay.

Ms Mahoney: But I do think that there are... there certainly is substantial evidence to indicate that there will be harm to the individuals.

And it doesn't have to be proven with any degree of certainty.

We are talking here about a procedure that was established by the Framers and also by the Congress to prevent the use of sampling.

Justice Breyer: All right.

When you... when you looked this up... this is meant to be somewhat supportive, but... because this is a case in which Congress and the President have asked this Court to decide this question; it's not a case of we're doing it without their permission.

They passed a statute saying to decide it.

Now, if we were in fact... if we were in fact to say there is no standing in this case for the House, then I take it your argument is that then the House and the Senate couldn't subpoena witnesses from the executive branch?

Ms Mahoney: That's...

Justice Breyer: I mean it's the same kind of issue.

How often... how often in the past has that occurred?

You've probably looked into this.

My impression is it's fairly common, but it may not be common at all that they subpoena witnesses.

Ms Mahoney: The House subpoena witnesses on a regular basis I believe, Your Honor.

And the House has come to court... I mean, excuse me... the Senate has come to court in order to enforce its subpoenas.

Justice Breyer: Many times?

Chief Justice Rehnquist: A few?

Ms Mahoney: I think approximately six or seven times.

And I believe only once against the executive branch.

And that was when...

Justice Scalia: And of course, if the executive is willing to flout the Congress, the executive might well be willing to flout this Court if it felt that... that its assertion of executive privilege was important enough.

I mean I... I don't see how you solve these inter-branch disputes by dragging in the third branch.

Ms Mahoney: Your Honor, I really believe that was rejected in United States v. Nixon.

There, this Court was confronted with a situation where the President said, this is not a case or controversy because I have invoked executive privilege, my subordinate disagrees with me, he cannot come to court to challenge my decision invoking executive privilege, this is not a case or controversy, and this Court unanimously held that the fact that both parties are members, officials of the executive branch cannot be viewed as a barrier to suit, because we have to look behind the captions.

And one of the things that this Court stressed is that there was a regulation in place at the time, of the Department of Justice, which authorized the executive branch official to come to court in order to get issues of executive privilege resolved, and this Court said, we must respect and enforce that regulation.

And I submit, Your Honor, that if there is reason to decide that controversy based upon the fact that there was a regulation in place, that certainly when the President has signed legislation that authorizes us to come and have this controversy resolved, that provides an even greater basis to respect and enforce the judgment of the United States Government that it is appropriate to resolve this controversy, especially where the issue here is not one that is of the type that raises special sensitivities of prosecutorial discretion, or even executive privilege.

It just how to interpret the Constitution in the Census Act.

And those issues have been subject to review in this Court several times in the last decade, so I think that this really was a very appropriate response, especially where here the House itself is essentially captive to the executive branch's decision to proceed with an unlawful plan that's going to alter its composition and deprive it of the information that it needs in order to take corrective action or pass new apportionment legislation.

Justice Ginsburg: But you agree, do you not, that for intrastate redistricting and for Federal funding purposes this is lawful, it is not only lawful but required by the act if feasible, or do you take issue with that?

Ms Mahoney: Your Honor, we have not made that part of our case because our standing derives from the interest in protecting the House's composition, which pertains to the size of the delegations in the States, but I do not... so we haven't briefed the issue, but I do not think that it is at all clear that that is the correct answer to the question.

I think when you read the Census Act it certainly indicates that the tabulation of population that is done in the decennial census is supposed to be made without the use of sampling, and that it does not authorize the Secretary to go and make some different tabulation of population.

Justice Ginsburg: So you think for any purpose, it can't be used for redistricting intrastate or for distribution of Federal funds.

Ms Mahoney: I think that's correct, the population numbers, unless Congress steps in and authorizes it, and...

Justice Ginsburg: That seems to leave nothing for 141 under the statute.

Ms Mahoney: Actually, Your Honor, I think 141 clearly is a general reference to the Secretary's authority to use sampling.

Of course, the decennial census covers, it's not so much funding and that sort of thing, it's the myriad of information that has to be collected.

The decennial census is the census of population and housing and matters pertaining to population and housing.

That's probably 30-some subjects that gets addressed, and really the point of 195, and the point of 141, is to allow the Secretary the authority to use sampling to make inquiries with respect to all of that kind of information, but not to determine the population for the decennial census.

Certainly to determine the population for the mid-decade census.

195 would allow the Secretary to do that, but I don't think that the Census Act could readily be read to support the view that the Secretary is required to go out and conduct an actual enumeration of everyone in the United States by household under the decennial census and then go back and do it over using sampling for other purposes.

I think that the distinction is between the determination of the population in the decennial and the gathering of all the other information, and that that is the best reading of the act, but that is not... it is not actually squarely presented by our case, because we are here challenging the methods that are being used to determine the size of the State delegations.

I'd also like to just make it clear in terms of what actually is being done here in terms of sampling.

For nonresponse follow-up there will basically be the judgment that what the plan provides is that the Census Bureau will deliberately not try to go and find out who lives in 10 percent of the households in the country, deliberately.

They will send the mailing, and that will be that.

Thank you, Your Honor.

Justice Scalia: Thank you, Ms. Mahoney.

Argument of Michael A. Carvin

Chief Justice Rehnquist: Mr. Carvin, we'll hear from you.

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

I'd like to pick up with the point that Ms. Mahoney was just addressing, because I want to make sure that the factual premise for our standing is clear.

I think the key point for the Court to understand is that there will be no 100-percent actual enumeration in 2001.

There will be no 100-percent head count.

What the Census Bureau will do is enumerate 90 percent of the households, and then will do two statistical estimations...

Chief Justice Rehnquist: You say 90 percent of the households.

Does that mean 90 percent of the households in each tract, or 90 percent en masse?

Mr. Carvin: Both, Your Honor.

They will try and achieve, Mr. Chief Justice, 90-percent in each census tract and, of course, in the aggregate that will be 90-percent of the households...

Justice O'Connor: Well, I guess they'll give the forms to every household.

Mr. Carvin: Yes, that's correct, Your Honor, and they...

Justice O'Connor: So they're not trying to get 90 percent.

They're trying to get them all, but they know that judged on past experience they're not going to get a return over about 67 percent.

Mr. Carvin: Precisely, Justice O'Connor.

They anticipate that about 67 percent of the people who they mail out to will mail back to them, and then so assume you'll have 30 percent of the people in a census tract will not have responded, to make it simple.

What they will do is then go send an enumerator to 20 percent of the households, in other words, to get to 90 percent.

Justice Stevens: Let me just clarify one thing.

Supposing they'd sent... they tried to send them to the remaining 30 instead of just the 20.

Your case would still be the same, wouldn't it, because they won't get answers from all of them.

Mr. Carvin: I... no...

Justice Stevens: I mean, say they... in other words they... on the first go around they tried to get the 100 percent instead of the 90.

Mr. Carvin: Yes.

Justice Stevens: But they failed to get it, and they only got half of what they try.

Mr. Carvin: Right.

Justice Stevens: And then... could they then use sampling?

Justice Scalia: You'd say no.

Mr. Carvin: As to the ICM, that is true.

Justice Breyer: Yes.

Mr. Carvin: We object to both...

Justice Stevens: So I don't understand the significance of the 90-percent argument, is what I'm trying to say.

Mr. Carvin: It's significant for standing purposes, Justice Stevens, for this reason.

We need... we argue that the 100-percent head count is the only permissible means of apportioning the population in 2001.

Justice Ginsburg: Has there ever been a 100-percent head count?

Hasn't there always been people missed, as Ms. Mahoney responded?

Mr. Carvin: Yes.

I have to answer that on two levels, Justice Ginsburg.

There's always been a 100-percent head count of those people who could reasonably be found through traditional enumeration techniques.

No one has ever thought that that included every person residing in the continental United States, but clearly it was always... every census has made a good faith effort to count 100 percent of the households that they know are occupied.

This is the first time that the Census Bureau has decided it will cost too money... too much money to do that, so what we're going to do is estimate 10 percent of the population, roughly 27 million people.

Justice Ginsburg: But you must agree, because of the summary judgment posture of this case, that the scientific evidence is all in favor of the Government to the effect that you will get a more accurate count of the population their way.

Mr. Carvin: As... on the summary judgment on the merits we do not contest that it is more accurate, because that's a disputed issue of fact, so no, we are saying regardless of its relative accuracy it is nonetheless illegal and unconstitutional.

For standing purposes, my point is that you can't have an apportionment if you accept our allegations as true in 2001, because you won't have the 100 percent apportionment number.

So this is no different than the Census Bureau saying tomorrow we'll enumerate 50 percent of the houses, or not conduct any census at all, and that hurts two kinds of people.

It hurts people who will benefit from the apportionment in 2001, like, it is undisputed, the State of Georgia, which will gain an additional seat.

They would be in a better position if the Census Bureau had done its constitutional duty.

It will also hurt, to return to your question, Justice Stevens, in Indiana people who are likely to have more Congressmen under the 100-percent head count than they will retain under defendant's sampling.

Justice Souter: How can that matter be resolved at the summary judgment stage?

I mean, I didn't dwell too long on the counter-affidavits, but among other things it was clear that the counter-affidavits challenge the very factual basis of the selection figures on which you base your claim, so how can that be resolved at the summary judgment stage?

Mr. Carvin: Well, under Lujan, remember, they are moving for summary judgment on standing.

We are the respondents, and under Lujan you must accept the allegations in our affidavits as true.

Justice Ginsburg: Yes, but then there's something between dismissal and summary judgment, and even if we say yes, under Lujan you got past the 12(b)(6) stage, how do you go automatically, as, frankly, the district court seems to have done, said, well, we must assume in favor of the plaintiffs so they get their foot in the door, and then that foot in the door, it seems to me they've gone all the way into the house, and then we judge the merits.

Mr. Carvin: This procedural posture is identical to the City of New York line item veto case from last year.

Plaintiffs were moving for summary judgment on the merits, the Government was in essence moving for summary judgment on standing, and what the Court did in that case was look at the affidavits and see if they had alleged facts that, if true, would show likely injury, and that is exactly what Indiana has done here.

But the other important point, I think, to focus on here is that we are like, the Indiana plaintiffs are like the people in Lujan who had lived next to a federally licensed dam.

As the Court held in Lujan, they would have standing to insist upon an environmental impact statement to be built... to be done before the dam was built.

Justice O'Connor: Yes, well, Mr. Carvin, let's stick with this point for just a minute.

The district court in the Glavin case said that general factual allegations of injury may suffice to establish the Article III standing.

Mr. Carvin: Uh-huh.

Justice O'Connor: Now, let's just suppose that we disagree with the district court and think that while that might work for a motion to dismiss...

Mr. Carvin: Uh-huh.

Justice O'Connor: that it won't work for summary judgment, that there you have to show standing.

So what do we do here?

Do we have to go through the record and try to figure out whether there was enough standing, then, for a summary judgment in connection with the Glavin claimants?

Mr. Carvin: No.

I think all the Court need do is read our affidavits from our expert, as the district court had done.

Justice O'Connor: Well, they were disputed, of course, by the other side.

Mr. Carvin: Well, actually, Your Honor, in terms of intrastate redistricting, they were not disputed in any way, shape, or form.

Justice Scalia: Let's talk about intrastate redistricting.

What is your point?

What is your point on that?

Mr. Carvin: Our point is that...

Chief Justice Rehnquist: Intrastate?

Mr. Carvin: Intra, Mr. Chief Justice, and what I mean by that is that we have three counties, Delaware County, Cumberland County, and Bergen County, who, it is undisputed, are likely to have less population under the Government's sampling plan than they would have under the 100-percent enumeration and, as I say, please read their affidavits, read their briefs.

The Government nowhere alleges that it is remotely conceivable that it is possible that those three counties will do as well under their plan as...

Justice Ginsburg: But I thought the issue here was only apportionment among the States, and you're getting into... there is a dispute on it, but it hasn't been resolved by any district court.

General Waxman told us that for other purposes intrastate, what the census wants to do is okay, and Ms. Mahoney says, well, we don't think it's okay, but it's not yet in issue.

Mr. Carvin: It is not yet in issue because they've never come up with such a plan.

In other words, there's no dispute that this plan, where they will use one population number for apportionment, redistricting, and funding, will hurt us because it will cost us money.

Justice Ginsburg: But I didn't think you could allege in this case that's before us now anything other than the interstate apportionment.

Mr. Carvin: No.

We are alleging injury intrastate.

The reason it is unlawful is because you cannot use a sampling population number for apportionment.

Justice Scalia: You have a New Jersey statute which requires the intrastate apportionment to be done pursuant to the census.

Mr. Carvin: Right.

Justice Scalia: Just as in the New York State case last term, the line item veto case, there was a New York State statute that required the money to go a certain way, and we said, close enough for Government work.

Mr. Carvin: Justice Scalia...

Justice Scalia: Now... so when the New Jersey State statute refers to the census, it obviously refers to whatever census is going to be taken.

Mr. Carvin: Right, and the only way the Solicitor General can avoid that, Justice Ginsburg, is hypothesizing that for the first time in American history the census is going to come up with two population numbers.

It will use the head count number for apportionment, and then it will use the sampling number for redistricting and funding, but there's no administrative decision to do that.

We have no idea if the States will use the sampling number for redistricting...

Justice Breyer: Excuse me.

Justice Scalia: I thought that it was conceded here that they are not going to do a head count number.

Mr. Carvin: I'm sorry, they're... we are now talking... the Solicitor General's point is that our injury will not be redressed by the district court's injunction, and the reason it won't be addressed is because they could come up with a different plan, this two-number census plan, but it is certainly conceded that, absent judicial intervention now, there will only be one population total and that will, of course, injure us.

Justice Scalia: But that certainly depends on what the New Jersey statute means by census, doesn't it?

Mr. Carvin: Precisely, and obviously the New Jersey statute has always been interpreted as the number produced by the census...

Justice Breyer: By intrastate, are you talking about State legislators or Congressmen?

Mr. Carvin: Well, actually, of course, congressional districts are within a State.

Justice Breyer: Is that what you're talking about?

Mr. Carvin: I'm mainly focusing on State legislatures.

Justice Breyer: State legislatures?

Mr. Carvin: Yes.

Justice Breyer: The problem is, the act talks about, it gives you standing to any resident of a State whose congressional representation or a district could be changed.

Mr. Carvin: Right, but...

Justice Breyer: I take it if we take State legislatures, then we're going to have to get to what I'd call the prudential question of what this act means.

Chief Justice Rehnquist: I mean...

Mr. Carvin: I may not have been clear initially.

State legislators do congressional redistricting.

It is the State legislatures that draw congressional districts...

Justice Breyer: Well, that's true, but so what?

Mr. Carvin: and so obviously, if our population is reduced within a State, we will have a smaller share of both congressional districts and...

Justice Breyer: But you have no problem if you can show that your population is reduced significantly compared to others, because then you fit around... but Justice O'Connor was pointing out that that seems in dispute, and so if that's in dispute, and we don't know what's going to happen to Indiana's population, how does it help us to say that the legislature may change its makeup?

Mr. Carvin: Again, Justice Breyer, it is not in dispute.

It is... and please, ask Solicitor General Waxman when he returns if he can argue, and if... if there's any affidavit in the record which suggests that Cumberland County, Delaware County, or Bergen County is just as likely to have the same amount of relative share of population under defendant's sampling plan as it is under our plan.

Justice Souter: Well, I don't think there's any question about there being an affidavit that makes those specific references, but I think what's bothering a number of us is that there is an affidavit which basically goes to the assumptions upon which all your calculations are based, and I may be missing something, but assuming there is an affidavit of that sort, why is it significance for intrastate redistricting different from its significance interstate?

Justice Scalia: There may be a reason.

I just don't know what it is.

Mr. Carvin: Yes, Justice Souter.

The affidavit says that the diminution in Indiana State's population may not result... may not be severe enough for Indiana to lose a congressional seat.

There is no affidavit or similar argument that these counties in the State of Pennsylvania will lose population, and if you lose population, even if it's not enough to cost you a Congressman, nonetheless your funding goes down and your intrastate representation goes down, and the Census Bureau has made an administrative finding that the adjustment that occurred in 1990 is predictive of the results that will occur under the adjustment that they will use in 2000.

When they argued that sampling was more accurate than a head count, they had to figure out what results we could anticipate under a head count and they looked solely at the results of the 1990 census and assumed that those results would be replicated down to the census tract level.

So since they have found that the results of the '90 statistical adjustment are predictive of the 2000 statistical adjustment, they can now not turn around and for standing purposes deny that the '90 statistical adjustment that we have set out in our facts will again be replicated in the 2000 statistical adjustment.

Justice Ginsburg: But the have done that in an affidavit.

Justice Scalia: They have done that.

Mr. Carvin: Again, they...

Justice Stevens: Their affidavit does that.

Justice Scalia: It says you can't use the 1990 figures, doesn't it?

Mr. Carvin: This... well, but again, it says you can't infer from the '90's figures that you will lose enough population to cost you a Congressman because...

Justice Stevens: In Indiana.

Justice Scalia: Okay.

Mr. Carvin: Because the method of equal proportions turns on such small...

Chief Justice Rehnquist: I see.

Mr. Carvin: changes in populations.

But at the general level of saying, you will lose population, yes, these people who were adjusted downward in 1990, they actually had populations subtracted from these counties while everyone else was, of course, having population added to them.

Justice Scalia: So you're saying that affidavit doesn't affect the New Jersey intrastate...

Mr. Carvin: Precisely.

Justice Breyer: Even though it affects the Indiana.

Mr. Carvin: And that was the reason I conceded below that you don't need to focus on Indiana.

I would like to make the additional point that Indiana...

Justice Scalia: Why did you raise New Jersey, then, just in a footnote?

What is it, footnote 11 of your brief?

I mean...

Mr. Carvin: Well...

Justice Scalia: this is a major part of your argument, and it is all contained in...

Mr. Carvin: Your Honor, we've never filed...

Justice Scalia: Appellees have satisfied this standard with respect to their claim of interstate vote... well, wait, that's... contrary... well, I'm sorry.

Mr. Carvin: Your Honor, we had page limitations, and we only focused on disputed facts.

Justice Scalia: Footnote 25, it was.

I mean... and this is your whole case.

Mr. Carvin: Right, Your Honor, but it wasn't contested.

It wasn't contested below, it's not contested...

Justice Scalia: All the more reason to devote your brief to it...

Unidentified Justice: [Laughter]

Justice Stevens: rather than footnote 25.

Mr. Carvin: And if I haven't made it clear, I hope I have clarified in argument that this is in accepted facts, that the States will use the census number for apportionment absent judicial intervention for intrastate redistricting, and that will cost us voting power.

Federal agencies will use the census number to distribute funds, and that will cost us money.

So I don't think that this is a situation, the additional point I guess I'd make, is where we need to prove it was scientific...

Justice Ginsburg: But the answer to your question was that this is going to happen to you anyway, because we are permitted to have the two census things.

Mr. Carvin: Oh, no.

It would only happen to us if the Census Bureau makes an entirely different decision than is already made.

For example, last year in Akins they could have denied plaintiff in that case, Mr. Akins, APAC's membership numbers if they'd used a different rationale to withhold APAC's membership information, but this Court held quite clearly that it doesn't matter if the agency can make the same decision pursuant to a different legal rationale, because plaintiffs have ability to challenge the legal rationale that is motivating this plan, and no one argues that they can implement this plan, that they've got to come up with a different plan.

But just as speculation about what the Government will do doesn't give plaintiff standing, the Government can't defeat standing by speculating about some other plan that it might come up with for the first time in American history, so in terms of what they are going to do, it will injure us, and it is irrelevant that they could legally injure us if they came up with a different plan, just as it was irrelevant in Akins.

Justice Breyer: Can I ask you, what about their main point?

They say that there's a statute which says, except for population... except for apportionment purposes the Secretary shall if feasible use sampling, and then they say, a few paragraphs earlier it does say that the Secretary shall take a population census in any form he wants, including sampling, and unless that thing I last said was meant to allow him to do what you don't like, it would be meaningless.

Mr. Carvin: Well, but as you pointed out earlier Justice Breyer, all 141 does is authorize sampling as specified in the subsequent statutory provisions that deal directly with sampling.

The Solicitor General argues that the word sampling in 141 is therefore somewhat redundant, but the presumption against redundancy has been incredibly rebutted in this statute, because the Solicitor General simultaneously concedes that the Solicitor General's authority for nonapportionment sampling under 141 is controlled by section 195, that you need to read section 195 into 141 for nonapportionment sampling.

Also, of course, it's inherent in the statutory scheme.

They use the word sampling four times.

Every time they gave the Secretary authority in 1976 they threw in, including sampling.

Now, we know that wasn't intended to mean anything, because in 14(d), which deals strictly with mid-decade apportionment and therefore deals... mid-decade census, and therefore has nothing to do with apportionment sampling, it deals strictly with nonapportionment sampling, they have the same language, and they say the Secretary can do nonapportionment sampling.

That is entirely meaningless, because everyone agrees that under section 195 the Secretary already had authority to do nonapportionment sampling, so the reference to sampling in the mid-decade sentencing provision was entirely meaningless, showing conclusively that Congress didn't intend for this language to have any substantial import.

My final point is, even if the grant to the Secretary is ambiguous, the defendant's plan is still unlawful, because clearly, if you are making a major change in policy after 190 years, this Court has ruled in seven different cases cited throughout our briefs that that change in policy needs to be done through a plain statement rule.

It needs to be done clearly and unambiguously, and that has certainly not been accomplished here.

Moreover, of course...

Justice Ginsburg: Mr. Carvin, may I just ask one...

Mr. Carvin: Sure.

Justice Ginsburg: clarification?

On your position about that string of six States, are you saying... is your position that all of those states would lose seats, or at least one of the six?

Mr. Carvin: My position is that all of them have a realistic possibility of losing a seat, and since this is a case, like an environmental impact statement, where the alleged refusal of the Government to provide information is what is at issue, they need not show that providing them the information will definitely benefit them.

Justice Souter: No, but is the possibility realistic because one of them will, or because there is a realistic possibility that more than one of them will?

Mr. Carvin: Both are true, perhaps two or three, but again, we're not relying on that part of our affidavit.

The uncontested part of our affidavit goes to the counties losing funds and intrastate redistricting power.

That's uncontested.

What is contested is that one or two or three of those six States might lose a Congressman, but as again, under Lujan, we need not show that if they gave us 100 percent actual enumeration number, we will definitely benefit.

We need only show that it might benefit us realistically, just like an environmental impact statement might realistically benefit you.

You need not be caught in a catch 22, where you challenge the Government's refusal to provide information, and the standing requirement is, you must show that the information will definitely benefit you, if the reason you don't have the information is because the Government has unlawfully refused to provide you with that information.

So under any theory of standing, we have it both on an interstate basis, and on an intrastate basis, and as the Chief Justice pointed out earlier, this Court will be in no better position to resolve this factual question in 2001, because in 2001, as today, there will not be a 100-percent actual enumeration number.

So if you insist the plaintiffs show you that we will have 10 Congressmen under the 100-percent head count number and we will only have 9 under the defendant's sampling plan, no plaintiff will ever be able to make that showing, because there will never be a 100-percent actual enumeration number, since they have decided to stop at 90 percent in counting people, and they have decided to statistically estimate the rest of those people up to 100 percent.

And to return very briefly to the Constitution, if actual enumeration is a process, then clearly, the only process it contemplates is counting.

Chief Justice Rehnquist: Thank you, Mr. Carvin.

Mr. Carvin: Thank you.

Rebuttal of Seth P. Waxman

Chief Justice Rehnquist: General Waxman, you have 3 minutes remaining.

Mr. Waxman: Thank you, Mr. Chief Justice.

Justice Stevens, you were asking about what happens... asking Ms. Mahoney what happens if no one's home, and the implications of her answer is that what the Census Bureau has done consistently since 1940 is unconstitutional in their view, because since 1940 the Census Bureau has been using imputation techniques to assign population figures to residences or locations that are known to exist but where it is not known whether anybody lives there or not.

Justice Scalia: That is not a challenge here, is it?

Mr. Waxman: Excuse me?

Justice Scalia: I mean, that may well be, but it's not under challenge here, is it?

Mr. Waxman: It's not under challenge here, but it's highly relevant, Justice Scalia, to the question of whether what has been going on and what the Constitution requires is a.

Justice Scalia: ince 1940.

Mr. Waxman: Since 1940.

Similarly...

Justice Scalia: Not much of a tradition, either.

Mr. Waxman: Similarly, it's also highly relevant to the meaning of the 1976 amendment that gave the Secretary the authority under 141(a) to use whatever means he thought desirable, including sampling, that in 1970 there was not just imputation but statistical sampling in two different instances that added 1.5 million people to the initial enumeration total.

Now, the plaintiffs in the case have made much of the fact that there is little legislative history to support the notion that Congress in 1976 affirmatively wanted to permit sampling, but the legislative history on their side both on 1976 and in 1957 is deafening.

There were hearings all the time in the 1970's about what the Census Bureau was doing, and the undercount, and talked about what they had done.

The Census Bureau had published reports about what it had done in 1970 to use sampling to correct for the undercount.

In 1976 they had a hearing about using dual system estimation to correct the 1980 undercounts, and there is not one word in the reports that accompanied the 1976 amendments or any of the debates that suggested that anybody thought there was anything wrong with using statistical sampling to increase the accuracy of the effort to count to get information from every person.

On the issue of House standing, as anybody...

Justice Scalia: Now, but you're not using it to increase the accuracy.

I mean, you can say that if you do a 100-percent head count and then use statistics to try to get the people you didn't get in the 100-percent head count.

But as described, and I think it's an accurate description, you don't do 100 percent.

You don't even try to do 100 percent head count.

You just count 90 percent.

Mr. Waxman: Justice Scalia, the Census Bureau and the National Academy of Science panels and the GAO all agree that the Bureau's method for conducting the nonresponse follow-up, which uses some statistical sampling, will be at least as accurate as if they had done physical nonresponse follow-up, and it will increase the overall accuracy of the census because it will be conducted in 5 weeks rather than 14 weeks and permit the ICM part of the process to be conducted with more... better trained people, and at a time that is closer to Census Day.

It has been recognized... thank you, Mr. Chief Justice.

Chief Justice Rehnquist: Thank you, General Waxman...

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Clinton v. City of New York - Oral Argument

Fri, 09 Jan 2009 14:50:05 +0000

Case:

Clinton v. City of New York

Media File:

97-1374_19980427-argument.mp3

Related Transcript:

1997_97_1374_argument.xml

Transcript:

Argument of Seth P. Waxman

Chief Justice Rehnquist: We'll hear argument now in Number 97-1374, William J. Clinton v. The City of New York.

General Waxman.

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

Constitutional principles of separation of powers govern both the standing and merits issues of the case.

With respect to standing, this Court recognized last term in Raines v. Byrd that the Article III inquiry is especially rigorous when plaintiffs challenge the allocation of constitutional power, yet here, in the New York case, the State, which is not even a party, has not been denied a single dollar in medicaid reimbursement and the Secretary of HHS has not even determined that it should.

In Snake River, the plaintiffs include no entity whose taxes could possibly be affected by the challenged cancellation and they have not shown that the cancellation interfered with any transaction from which they likely would have benefited.

On the merits, the President's cancellations violated neither Article I nor the separation of powers.

The Presentment Clause was fully satisfied when the President signed the Balanced Budget and Taxpayer Relief Acts making them laws.

When the President subsequently cancelled sections 4722(c) and 968, he was not returning portions of the presented bills while signing other portions into law.

He was implementing a limited discretionary authority to execute the law as it had been enacted by Congress.

Cancellations under the Line Item Veto Act do not prevent Congress from making whatever laws it wants.

Congress could readily have exempted sections 4722 (c) and 968 from the President's authority.

It chose not to do so and, indeed, it identified section 968 in the Taxpayer Relief Act as an item subject to cancellation.

Justice Kennedy: Is this more constitutionally defensible than what we might call a pure line item veto in which he--

Mr. Waxman: It is.

Justice Kennedy: --In which he can veto the minute that... before the bill ever becomes law, and is the reason for that because for a moment in time, at least, there's a little law?

Mr. Waxman: No.

Justice Kennedy: Or a big law?

Mr. Waxman: No.

The critical reason is the point I just identified, which is in a true line item veto, which everybody understands is unconstitutional, the Congress does not retain control to determine which spending or tax items the President can't cancel.

If the President has the authority... and this is critical.

If the President has the authority to cancel a provision before it becomes a law, under the Presentment Clause he can cancel a designated tax or spending item and then sign the law and Congress has thereby deprived itself of the opportunity to create the law.

Here, the President signs the law and it becomes a law under the Presentment Clause, and when he does so, if the law contains a designated cancellable item, Congress has made a law telling the President that, subject to certain determinations and certain considerations, and certain certifications, you have a single, binary choice.

You can either spend the money as provided, or you can spend it for deficit reduction by putting that money into a lockbox, and in that manner the President is executing the law that Congress has enacted, not vetoing an item or repealing a provision that Congress has enacted.

It's no different, I sus... I suggest, for Article I purposes, than if, instead of enacting the Line Item Veto Act, Congress had simply decided to put in as section 1 of every spending and taxing bill that it enacts what is now section 961 of the Line Item Veto Act.

It says, we have the following spending and taxing provisions, but subject to these articulable principles and these constraints, the President may decide, if he signs this law, not to do certain things.

Justice Kennedy: Well, so far as the locked box is concerned, this bill is the same as a line item veto.

I mean, it's in a locked box that's going to contribute to reducing the deficit.

So that's not a distinction between the two.

Mr. Waxman: Well, I think the... I think it's... the lockbox feature of this, which is the feature that gives the President a single binary choice, tends to make this much less of a delegation problem under separation of powers than might otherwise exist, because in contradistinction to cases in which the Court has upheld, for example, delegation of authority to the FCC or the SEC to essentially create an entire code of conduct for the securities industry, the Line Item Veto Act is not... and in this respect I think it's unique and uniquely constrained.

It's not self-executing.

The President can't do anything with his cancellation authority unless Congress subsequently passes an act that has a cancellable item in it and does not provide that the President's authority will not be subject to cancellation.

It's almost the... a mirror image of the Impoundment Control Act.

Justice Kennedy: But that's... that also sounds to me the same as what we might call the pure line item veto.

Mr. Waxman: Well, the--

Justice Kennedy: A single, simple binary choice.

Sign it or X it out.

Mr. Waxman: --The problem... the constitutional deficiency in the line item veto, the... a pure, a true item veto, is that it violates the Presentment Clause, which provides, among other things, that the bill that the President signs making it a law has to be the bill that each... a majority of each House of Congress enacted, and if the President can excise a provision before he signs the law, that's violated and, as this Court has indicated--

Justice Scalia: But Mr. Waxman, you wouldn't... General Waxman, you wouldn't say that that's remedied if, by the simple fact that it only applies to later laws where Congress says he can do that.

I mean, I don't see how that argument carries any water at all.

Mr. Waxman: --Well--

Justice Scalia: Your argument that, after all, he cannot exercise this function on any legislation, but only later legislation where Congress chooses to let him exercise it.

You wouldn't say that that would make an invalid line item veto provision good, would you?

Mr. Waxman: --I... if... there are two bases for a constitutional challenge to this authority.

One is under Article I and whether... and asks the question whether, in fact, the operation of this statute violates the formal requirements of the Presentment Clause or, in effect, effects a repeal.

The other large issue is whether this represents a violation of the separation of powers as applied to Congress through the "non-delegation doctrine", and we--

Justice Scalia: Right, but what I'm suggesting is, I don't see how the fact that it only applies to later legislation where Congress lets it apply has any bearing upon either of those questions.

Mr. Waxman: --Well, if it... it has a bearing on the Article I issue.

I don't think that the timing of this relates to the scope or breadth of the delegation except... I take that back.

I think it relates to both.

What Congress... by making this bill... this act forward-looking, what it basically is saying, Congress has reserved for itself the right, in every subsequent spending or taxing bill that has a cancellable provision, to decide, at the time that it passes those bills, whether it will or will not allow the President to exercise that authority.

Now--

Justice Scalia: That's fine, but once it decides that it will, you have the same problem, that the... I mean, you may argue that it's no problem on other grounds, but I don't see how it becomes--

Mr. Waxman: --Well--

Justice Scalia: --no problem simply because Congress has said the President can do it.

Mr. Waxman: --There are many historical examples where Congress has given the President authority to, if you will, repeal the effect of a prior enacted statute, but--

Justice Souter: Yes, but not to repeal the statute, and I mean, that's the difference.

Mr. Waxman: --Well--

Justice Souter: The examples that you give are sort of the kind of fact-finding examples in which, if the President finds a given fact to be the case, then a consequence follows and he must declare that consequence and implement it, but that's not what we've got here.

Mr. Waxman: --Well, I... with all due respect, Justice Souter, this is not a repeal of a provision.

Repeals of provisions of acts, or acts themselves, have got to follow the Presentment Clause.

There's no question--

Justice Souter: Well, but I mean, that's the... you say it's not, but that's one of the questions.

Mr. Waxman: --I... let me try and explain why it--

Justice Ginsburg: Well, is the effect is... in effect, is it... it says the law is no longer there.

The law is no longer applicable.

You can call it a different word, but it's the same thing.

It's gone.

Mr. Waxman: --Well, Justice Ginsburg, let me try and respond to these two questions in two ways.

First of all, under the lockbox provisions of 691c, a cancelled provision does retain real, legal budgetary effect.

It removes the amount... that amount of money under Gramm-Rudman-Hollings and the Budget Enforcement Act from Congress' ability to spend that equivalent amount of money.

Under the Budget Enforcement Act, ordinarily, if a particular provision were vetoed, or not... money were not used by the President, Congress has the authority, up to the budget baseline, to enact another provision and spend that money.

A cancellation of a provision in this act requires that that money be devoted to deficit reduction, so first of all it is not true that it has no remaining effect, but even--

Justice Scalia: Well, that's just an effect on Congress' own internal rules.

Mr. Waxman: --No.

Justice Scalia: Is it?

Mr. Waxman: No.

Justice Scalia: Isn't it?

Mr. Waxman: It is not.

The Budget Enforcement Act as amending the Gramm-Rudman-Hollings Act of 1985 are statutes, laws that bind Congress and the President.

They provide mandatory sequestration authority in the President and in Congress in the event that the baseline is exceeded, and what the lockbox provision of the Line Item Veto Act does is to say, if this is not an issue of whether the President wants to implement this provision or not.

The President must implement this provision in accordance with the law that Congress enacted, and that means that you can either spend the money, give effect to this provision to build a new dam in West Virginia, or take the money that would have been spent for that and put it in the deficit lockbox which, under the Budget Enforcement Act, means that you cannot by... enact a compensating piece of legislation to otherwise spend the money.

It reduces the amount of money that Congress and the President can spend.

But even if it didn't have that effect, we think that even without the lockbox provision this act would be constitutional, because there are many examples, and I respectfully submit that they are not all so easily distinguishable, Justice Souter, of instances where Congress has given one of the other two branches the authority to take acts unilaterally that repeal not the provision but the effect of the provision.

I mean, maybe the best example is the Rules Enabling Act, which provides under 28 U.S.C. section 2072b, that the court may promulgate rules for the district courts of procedure and evidence and that any... and that those rules will v. Degas--

Justice Breyer: What's the... I don't want to cut you off because you're giving other examples, but I'd like an example that is the closest you can come to the following, that Congress passes a law that says next year Mr. Smith, Mr. Jones, and 18 other people will not have to pay taxes amounting to $18 million.

And then it says to the President, Mr. President, as you wish, in the national interest you can decide whether Mr. Smith or Mr. Jones or any group of the other 18 will, in fact, pay taxes, up to $10 million.

Now, is there... the standard being, in the national interest.

So he can choose to tax four people, 16 people no people, as he wishes, without a standard but for the national interest.

Mr. Waxman: --Well--

Justice Breyer: Now, what example is there that's the closest, in the past, to the President having that kind of authority to pick and choose whom to tax, whom not to tax, with the standard of the national interest being the only control?

Mr. Waxman: --Justice Breyer, the question that you're raising is raising a question not under Article I but under the delegation doctrine.

Justice Breyer: That's right.

That's right.

Mr. Waxman: I want to make sure that I understand--

Justice Breyer: That's exactly right.

I'm accepting all your arguments up to that point, hypothetically.

Mr. Waxman: --I'll bank that.

[Laughter]

The... under the delegation doctrine, the question always is, after... well, at least in this century, whether Congress has supplied an intelligible principle or whether, as... under the test that this Court frequently announces, it is constitutionally significant if Congress clearly delineates the general policy, the public agency that is to implement the policy, and the boundaries of the delegated authority.

Now, in your question you have posited an example in which Congress has given the President no intelligible principle other than the national interest.

I think that raises a much more difficult question than we have here, because an argument could be made that the President is constitutionally required to act in the national interest, but the issue would be, is the principle sufficiently intelligible.

Now, the best cases that we have for the historical precedence for giving the President discretionary authority to cancel limited tax cuts or revenue-generating or nonrevenue-losing provisions would be the cases that are recited in J. W. Hampton and in Skinner, where the President was often authorized to decide whether or not to collect duties or tariffs and several of these temporary provisions were permanent, and I think... you know, it's--

Chief Justice Rehnquist: But those were based on factual determinations that the President was entitled to make under the statute, weren't they?

Mr. Waxman: --They were, and the issue... sometimes the determinations were specifically outlined, as in Field v. Clark, where it was very specific, and sometimes they were very, very general, and the issue then is only whether the President has a sufficiently intelligible principle.

You know, what's interesting about these old cases, and there are many, many of them, is that these were authorities that the President was exercising.

This was discretion he was exercising at a time in our country before we had an income tax and when in general the very large portion of the Federal revenues were raised by tariffs and custom duties.

Justice Kennedy: Well, in Justice Breyer's hypothetical, you and he seemed readily to agree that we can just look at this as a delegation problem.

From the taxpayer's standpoint, this was a law that's been cancelled, and the taxpayer has an expectation the law's not going to be cancelled unless both Houses of Congress agree on it.

Delegation is not just a subset of this larger problem, it seems to me.

Mr. Waxman: No.

Justice Kennedy: I don't think that larger problem goes away with Justice Breyer's hypothetical.

Mr. Waxman: I didn't mean to suggest that it would.

I... there are two different bases for constitutional challenge.

One which I was discussing with Justice Breyer is whether or not there is a delegation of authority that exceeds what Congress may do under the Separation of Powers Clause.

The other constellation of issues relate to Article I, and I respectfully suggest that with respect to these limited tax cuts the Article I problem is even less than with respect to the other provisions, because this is not an example of the President repealing a provision of the law that Congress has enacted.

With respect to the limited tax cuts under section 691f, the Joint Committee on Taxation is required to go through and specify in the actual tax bill which provisions of the bill are limited tax cuts subject to the President's cancellation, so... and that's exactly what was done in this case in the Taxpayer Relief Act.

There is a provision in which the Congress has said, attention, Mr. President, please look at the following provisions.

These are limited tax cuts as to which you will have cancellation authority if you wish it.

Chief Justice Rehnquist: How does that affect a constitutional question?

Mr. Waxman: Well, it... what it demonstrates, Chief Justice Rehnquist, is that what the President is doing is not repealing a provision of a law that Congress has enacted, but executing a discretionary authority that Congress has given him.

Let me give you an example that was helpful to me when I first started thinking about this problem.

If Congress enacted a law... and there is a very precise historical precedence for this.

Congress passed a law that contained 10 different spending items, but they put a provision in that basically said, in legalese, look, Mr. President, we think all 10 of these projects are worthwhile, but we're very concerned about the deficit, and we don't really think that the country ought to be funding more than eight of them.

Use the following factors and pick whichever eight of the 10 you want.

Nobody, I suggest, would suggest that there is an Article I problem there.

The President--

Justice Souter: Well, if the factors are not factual, someone would suggest that.

Mr. Waxman: --They--

Justice Souter: If the... if in your example the factors that the Congress specified were straight fact as opposed to normative factors, we'd be back in the old cases that you and I referred to earlier, but if the example is a normative example, as in the public interest, then those cases are not authority, and you have, it seems to me, a very different Article I problem.

Mr. Waxman: --I--

Justice Scalia: Or at least if you make some of those 10 not simply refusal to spend money, but elimination of taxes.

I mean, you could get anything through on the basis of the prior authority the President has always had simply not to expend money which Congress has authorized but not... not compelled him to spend.

That's easy.

But make some of those 10 tax provisions.

Mr. Waxman: --Well, again, this Court in Skinner stated that the standard for separation of powers analysis with respect to tax provisions is no different than it is with respect to spending provisions or any other provision in the Constitution under Article I.--

That is, the same standard of nondelegation applies, and it applies with particular force here because in the tax provision the Line Item Veto Act provides that the Congress will specify for the President in the actual bill that's... taxing bill that's presented to him which items he should... he may or may not cancel.

Now, that may be... that may leave a delegation doctrine issue if you think that he doesn't have sufficient intelligible principles, but it is not a question of the President, by exercising a discretionary choice that Congress gives him in the law that's passed, an Article I problem, unless I'm seriously astray.

Justice Ginsburg: Is there anything like, here's a laundry list of items, Mr. President.

Here's a capital gains treatment for so-and-so, and relief from taxes from so-and-so.

We don't want to take the political heat for making the choice, so you pick.

That sounds to me like legislating.

I mean, whatever legal dressing that you give to it, it's saying to the President, you make this hard choice that we don't want to make.

We're giving out all these plums to everybody and we don't want to take away any of them.

You do it.

Mr. Waxman: And what's troublesome about your example, Justice Ginsburg, relates not to Article I, because the law has been passed and signed by the President, but to the separation of powers.

Congress cannot, we know, delegate its law-making power.

It can't delegate the authority to make the laws, and if it just passes a law that says, here are two things we think are really nice, but we don't really have the money to spend and you just pick whichever one you want, I think the Court would appropriately say, look, the Congress has delegated its law-making function because it has not provided a "intelligible principle" by which the executive can exercise his discretion.

In this case--

Justice Souter: What is the constitutional distinction between what you call law-making and law-repealing?

There isn't any.

Mr. Waxman: --Between law-making and law--

Justice Souter: In Justice Ginsburg's example an appeal is being effected, and that is law-making.

Mr. Waxman: --If Congress... there is... it is not our contention that a repeal of a law can be effectuated by any means other than those specified in Article I.--

It is our contention, Justice Souter, that when Congress passes a law that contains two spending or taxing or tax cut provisions and says to the President, with whatever principles or not, you may choose which one of these to execute and which one not to, the President is exercising a discretionary authority that Congress has given him, and if they've given him sufficient intelligible principles, it's constitutional.

Now, in the--

Justice Kennedy: Well, of course, that... this case is different, because it says you have... you can either implement both, one, or neither.

Mr. Waxman: --But--

Justice Kennedy: That's what this case is.

Mr. Waxman: --Well, first of all, the Line Item Veto Act applies to three very, very specifically defined provisions relating to spending and revenue that account for a very small portion of the Federal budget deficit, and it provides that before an item will be cancellable it must satisfy each of three criteria, and even if it does, the President must make three different... make certain determinations.

He must take into consideration a number of factors that are specified, and he must identify for the Congress a number of factors in his cancellation message.

Chief Justice Rehnquist: Well, General Waxman, you say it applies only to a very small amount of spending, but if we uphold it here, it could then be extended to a vast amount of spending.

I don't see that's a constitutional distinction.

Mr. Waxman: I think there would be a different question... we might be prepared to defend it, but there would be a different question if the President was given the authority to cancel existing items of direct spending, which would be the equivalent of the repeal of the effect of a prior law.

Here, we're only talking about new spending, discretionary spending and new items of direct spending account for one-third, approximately one-third of the Federal budget.

The discretionary spending part is the same authority that the Presidents have clearly had since the first Congress not to spend the full amount of appropriated funds or to... you know, to act with almost complete discretion under lump sum appropriation authority.

Justice Scalia: This is--

--You equate with spending letting people keep their money, and that is to say, not enforcing a tax?

I mean, I'm not sure that's a proper equation.

Mr. Waxman: Well, I'm not suggesting that there is--

Justice Scalia: Appropriations bills have always been treated differently, and when you extend it from simple appropriations and say the President, even though it's been appropriated, doesn't have to spend it, to... to the fact he can be given the option, you know--

Mr. Waxman: --No, Justice Scalia, I... I was--

Justice Scalia: --It's your choice, enforce the tax or not.

Mr. Waxman: --We're not saying that.

It's not our position that, because the President has had historical discretionary authority, when Congress has given it to him, to decline to spend items or to abolish agencies, or transfer agency functions, therefore there's no difference with taxes.

The point I was making with the Chief Justice was the analogy between discretionary spending and what the law calls new items of direct spending.

With respect to the tax provisions, this ship is prepared to stand on its own bottom, which is, we think that there is independent historical precedent for Congress giving the President the discretionary authority to decline to implement certain revenue provisions upon the application of certain intelligible principles.

Justice Breyer: But throughout on that, on the particular... it's the same point, that I want to get something you almost said, and you stopped--

Mr. Waxman: Thank you.

Justice Breyer: --just before you said it, and that is the reason that the... to uphold the tax provisions, you say, is not to give the President total authority under the Constitution to rule by decree, should Congress want him to do it, because there's an intelligible principle.

Mr. Waxman: Yes.

Justice Breyer: And the intelligible principle, you say, is not just, do what's in the public interest, it is...?

Mr. Waxman: The intelligible principle is that... first of all, in order for there to be a targeted tax cut, there has to be a baseline tax, but the President must determine, number 1, that cancellation will reduce the Federal budget deficit, and this is not, by the way, as the other side contends, an ipso facto claim, because many tax provisions are enacted on the notion and on the budgetary assumption that they will generate additional economic activity and raise taxes, and in that instance the President would not be able to make that determination... raise money and provide more taxes.

Secondly, he must determine that it will not impair any essential Government function, that it will not harm the national interest, and in making those determinations the President is directed to consider the legislative history, the construction and purposes of the law which contains the item to be cancelled, which might relate, in the case of the State--

Justice Stevens: How much time does he have to make these determinations?

Mr. Waxman: --He has 5 days after he signs the bill, which would give him a maximum of 10 days.

Now, in the context of the... in the regime of the Budget Enforcement Act and Gramm-Rudman-Hollings, where OMB and CBO are required to make daily... weekly, if not daily calculations about where we are in terms of the budget baseline and the spending caps, there is a very important purpose to be served by requiring the President to decide yes or no, whether or not a particular item will be cancelled, and then to give the Congress the authority, particularly with respect to annual appropriations bills, to try and file... to enact, consider and enact a disapproval bill.

I mean, the irony of the--

Justice Scalia: General Waxman, would you give... I'm coming back to Justice Breyer's question.

Would you give me something a little more... that I can sink my teeth into?

You've told me what these things that the President cancels cannot be.

They cannot do this, and they cannot do that.

That limits the universe of what he can cancel.

Now, once that universe is limited... they can't be this and they can't be that... what must they be?

Mr. Waxman: --Well, they must--

Justice Scalia: What is the criterion?

I mean, to say you've just limited the universe of possible cancellations--

Mr. Waxman: --Are we talking about tax benefits here?

Justice Scalia: --Anything, the tax benefits or the elimination of spending.

Mr. Waxman: The President... the only--

Justice Scalia: What is the criterion when he selects it?

You've told me what he can't cancel.

Now, how does he decide what he must cancel?

Mr. Waxman: --He must determine, number 1, is this a cancellable item, which in the case of tax provisions, he's helped with by the legislation he's considering.

Justice Scalia: All right.

Mr. Waxman: Because Congress tells him that.

Justice Scalia: That just limits the universe.

Mr. Waxman: Right.

Second of all, he must... he cannot cancel unless he makes the three determinations that I've said.

Justice Scalia: All of which just limit the universe.

Mr. Waxman: Right, and--

Justice Scalia: The universe is limited.

We have the universe.

Mr. Waxman: --That's right, and--

Justice Scalia: Now, how does he make the decision?

What is the criterion that Congress has given him to pick what to cancel?

Mr. Waxman: --May I answer?

He is given in the statute a multitude of factors that he must consider and certify to Congress, and within that realm he has discretion, much less discretion than the FCC, or the SEC, or the ICC have been given.

Thank you.

Argument of Louis R. Cohen

Chief Justice Rehnquist: Thank you, General Waxman.

Mr. Cohen, we'll hear from you.

Mr. Cohen: Thank you, Mr. Chief Justice, and may it please the Court:

I think the problem with the Line Item Veto Act is quite basic.

The legislative power is the power to write Federal statutes in their exact final form.

That power is vested in Congress, nontransferably.

The President's role in the legislative process is limited to approving or returning in whole each bill that's presented to him.

The act gives the President the power to edit tax and spending bills--

Justice O'Connor: Well, technically the President has to sign it, so it goes into effect, so you're really having to deal with what happens after that.

Mr. Cohen: --Yes, but what we have here, Justice O'Connor, is a device of saying, sign the bill first and then you can immediately cancel the parts you don't approve.

The two steps taken together signing and cancelling, together produce a statute that was not passed by either House of Congress.

A post-enactment line item veto is functionally equivalent to a pre-enactment line item veto.

Justice Scalia: They say no.

They say that the statute... the provisions he cancels are not utterly ineffective, that they still have some legislative effect, namely the lockbox effect.

What is your response to the lockbox argument, that those provisions at least have that effect of preventing future appropriations?

Mr. Cohen: My response is that in my case, the Snake River case, where we're talking about cancelling a provision of the Internal Revenue Code, I don't think there is any lockbox effect, but even in the spending--

Justice Scalia: The lockbox applies only in he spending area?

Mr. Cohen: --I think that's right, but even in the spending context a lockbox is simply a congressional declaration that it won't otherwise spend money pursuant to a provision that Congress... that the President has cancelled.

Justice Scalia: That it won't, but it can, can't it?

Mr. Cohen: Well, it can by passing a new law.

Justice Scalia: Well, which the President has to sign.

Mr. Cohen: Which the President has to sign.

Justice Scalia: I mean, it can do anything by passing a new law.

Mr. Cohen: Yes.

I think that's my point, that the President's action here is final, and it takes congressional action to restore the appropriation that the President has cancelled or the tax provision that the President has cancelled.

Several of General Waxman's arguments it seems to me pose the following hypothetical.

He suggests that because Congress is aware, when it passes a later statute, of the earlier Line Item Veto Act, it's no different from putting a cancellation provision in each bill.

I think it is different in certain ways, but I also think that Congress couldn't do that, either.

If Congress were to pass an Internal Revenue Code of 1999 with a special provision saying, the President may cancel any one or more of the provisions of this law if the cancellation would raise tax revenues and not harm the United States, Congress would be abdicating its constitutional responsibility to write tax statutes, and I think the Court would say that as a matter of Article I law the Congress is giving the President something that the Constitution requires it to do.

Justice Scalia: Suppose they add to it, and the cut must be in the public interest, convenience, and necessity.

Mr. Cohen: Well, I said not contrary to the national interest.

I don't think that helps.

Justice Scalia: Oh, you think that's--

Mr. Cohen: No, I think that's the same.

Justice Scalia: --Well, gee, we let the FCC do that.

Why wouldn't we trust the President at least as much as we trust the FCC?

We at least elect the President.

Mr. Cohen: I think what we let the FCC do is regulate in the public interest as defined in a statutory context.

Justice Scalia: There are many judgments that the FCC makes that are really constrained by nothing except public interest, convenience, and necessity, quite a few.

Mr. Cohen: But the public interest itself has a historical and a statutory context.

We know what the FCC's responsibilities are.

We know who it regulates.

But I don't think you need even to get to the question whether this is delegation running riot, because I think you--

Justice Scalia: It isn't running riot.

It's just a little bit.

I think that's what saves the FCC.

Well, it isn't the whole economy.

It's not like... you know, not like what Franklin Roosevelt tried to do with... in the sick chicken case.

Mr. Cohen: --That's right.

Justice Scalia: But... it's very limited.

But this is very limited, too.

It's just a certain number of provisions--

Mr. Cohen: No, it's 70--

Justice Scalia: --of a certain sort.

Mr. Cohen: --It's 79 provisions, 79 tax provisions.

It could be 179 tax provisions.

I don't see the difference between this and passing an entire code in which you say the President can cancel any of the provisions of this code if he determines that doing so would not be contrary to the national interest, which is all that this statute says, and I think what's wrong is that he is, by doing that, producing a truncated statute that Congress didn't pass, a--

Justice O'Connor: Well, does your argument rest on our determining that somehow we look at it all together and decide that the Article I requirements were never met in the first place, or that, okay, it went into effect and it's an unconstitutional repeal?

Mr. Cohen: --Justice O'Connor, I think I win either way.

I think that if you say there's no substantive, intervening event between these two steps, a long-winded President could take both steps literally in the same breadth, if he were alone in the room he could sign them in either order and just report what he's done, that there is no substantive distinction, and that this is a device to get around what General Waxman concedes would be unconstitutional.

But I also think that if you take that first step seriously, as a separate step, we now have an enacted law that the President is unilaterally repealing.

To be sure, Congress has given him the power to repeal it, but the question is whether Congress could constitutionally do that.

Justice Kennedy: Is the locked box provision in all respects constitutional, in your view?

At least it does give the President a choice between two different kinds of laws.

He spends or he locks, and the locking mechanism, according to the Government, has some very substantive, important effect.

It's different than just vetoing.

Mr. Cohen: Well--

Justice Kennedy: Is the Government right about that?

Mr. Cohen: --No.

First of all, as I said before, Justice Kennedy, it has no application to my Snake River case, which particularly relates to the Internal Revenue Code, but second, the lockbox I don't think saves a bill that says, you may declare a particular provision to be without legal force and effect.

The President isn't deciding to spend the money in some other way.

He's simply cancelling--

Justice Kennedy: Well, they say it's now going to have legal effect because it's in the locked box, and that's just a... that's another legal effect.

Mr. Cohen: --It's no--

Justice Kennedy: It's different, say, from simply vetoing.

Mr. Cohen: --Well, it's no different from the legal... I don't think it's any different from the legal effect of cancelling any other appropriation which Congress would therefore have to reappropriate if it wanted particular money spent.

Justice Scalia: Mr. Cohen, are you going to address the jurisdictional issues?

I hate to ask this question, but you know--

Mr. Cohen: Yes.

I think--

Justice Scalia: --what's it to you?

[Laughter]

None of these provisions directly affect your client at all.

Mr. Cohen: --Yes, they do, and I really think our standing case is quite straightforward.

Congress passed section 968 for the specific purpose of helping farmers buy processing facilities through their cooperatives.

This particular farmer and cooperative, Mr. Cranney and Snake River, were personally working actively to buy such facilities with the anticipated help of section 968.

Justice Scalia: It helped you to buy them by helping the seller to sell them--

Mr. Cohen: Yes.

Justice Scalia: --right?

Mr. Cohen: Yes.

Justice Scalia: But what it did immediately was to help the seller to sell them.

If we had the seller in front of us, who said, I'm denied this tax benefit that I was going to get for selling the facility, I could understand it.

But what if you had a tax break that applied to somebody who was about to buy a car, and the automobile manufacturer comes in, he says, you know, he didn't buy the car because you took away the tax break.

Would he have standing to come before us?

And that's essentially the position that you're in.

Mr. Cohen: I think somebody who had taken sufficiently concrete steps toward... toward--

Unknown Speaker: Buying it?

Mr. Cohen: --Toward buying a car could have standing to challenge the cancellation of a tax provision that changed the price of the car.

Here, the evidence--

Justice Scalia: I won't try to reduce it to the absurd, if--

Mr. Cohen: --Well--

Justice Ginsburg: --Are you relying on Congress' finding that the way to help the farmer's coops is to give this break to the potential seller?

I mean, it was Congress'--

Mr. Cohen: --Congress' finding and the Government's concession that that was the purpose of the statute, which they finally made in their reply brief, plus, the only evidence, and there is evidence in this case, which is Mr. Cranney's declaration, which is that he and Snake River were actively working, that there had been two actual transactions, that one of the actual transactions was more expensive because section 968 was not available, that they were working on another transaction which was premised on the availability of section 968--

Justice Scalia: --I assume it was a transaction that was beneficial to both parties, or they wouldn't have entered into it right?

It was a voluntary deal.

Why isn't the seller here?

I mean, you would think if this beneficial deal were destroyed by the law the seller would have had an objection, too?

Mr. Cohen: --Well, he simply chose not to litigate.

We're not talking just about one transaction.

Cranney's declaration also says there were ample other facilities available.

They... and that Snake River was interested in buying more than one facility... this was--

Justice Scalia: I'm not just--

Mr. Cohen: --an active program that Congress wanted to assist, and the assistance was--

Justice Scalia: --It might seem very reasonable for this case, but I really worry about what kind of standing law we establish if we say that someone who was indirectly benefited by a tax break and which... even if you add, and which indirect benefit was envisioned by Congress.

Congress often envisions all sorts of indirect benefits from a tax break.

It's going to stimulate the economy.

I mean, every... you know, there'll be more sales of hot dogs at the ball park or something.

Can the hot dog vendor bring suit?

Mr. Cohen: --It's got to be sufficiently specific, targeted toward a small group of beneficiaries, with beneficiaries who are actively pursuing it.

It seems to me that we're very much in the position of the plaintiffs in Associated General Contractors, the position of plaintiffs in Bryant v. Yellen, people who are interested in a business opportunity which they are actively pursuing, and an illegal act concretely and significantly, importantly interferes with their pursuit of a valuable business opportunity.

Each case has got to be judged on its own merits on this kind of thing, but I think Judge Hogan's conclusion that it was highly likely that these plaintiffs would have been able to do particular transactions taking advantage of section 968 is amply supported by evidence that the Government never chose to challenge.

Justice Ginsburg: And respect whether that was the raison d'etre for Congress passing in this.

It wasn't the processor, but it was the coop--

Mr. Cohen: Oh, I think that's very clear.

I think that's very clear.

The congressional sponsors said that.

The structure of the act makes that clear.

It singles out... doesn't say the processor can sell to anybody it wants to and he gets the benefit.

It says the processor gets the benefit selling--

Justice Scalia: --But that's not part of the--

Mr. Cohen: --The President agreed to that.

Justice Scalia: --That's not part of the Article III analysis.

We don't ask for purposes of Article III whether you're within the scope of the intended benefit.

That's--

Mr. Cohen: I think--

Justice Scalia: --That's discretionary.

Mr. Cohen: --I think you ask for purposes of Article III whether the plaintiff has a sufficiently concrete--

Justice Scalia: Right.

Mr. Cohen: --interest so that--

Justice Scalia: Right.

Mr. Cohen: --he would--

Justice Scalia: It goes to concreteness, which--

Mr. Cohen: --personally benefit in a tangible way--

Justice Scalia: --Right.

Mr. Cohen: --from the court's intervention.

I think--

Justice Scalia: And no proximity requirement.

There's no proximity requirement, just an Article III, just concrete injury, no matter how remote.

If you can show that that ripple in the pond affected you, no matter how remote it was--

Mr. Cohen: --No.

Justice Scalia: --you have Article III standing?

Mr. Cohen: No.

I think he has to have... there has to be a realistic possibility, at least, of a transaction.

Here a transaction was highly likely, and there has to be a significant--

Justice Scalia: That doesn't go to remoteness.

That goes to whether you can show that it actually hurt you.

You say you... if you can show that it actually hurt you, no matter how remote from the... from what you're complaining about--

Mr. Cohen: --I think the Court's opinion in Bennett v. Spear makes it clear that you can have a chain of causation and you don't have to have the last link in the chain--

Chief Justice Rehnquist: --Thank you, Mr. Cohen.

Mr. Cohen: --Thank you.

Argument of Charles J. Cooper

Chief Justice Rehnquist: Mr. Cooper, we'll hear from you.

Since we're already on the subject of standing, why don't you start with that for the New York petitioner... the respondents.

Mr. Cooper: Mr. Chief Justice and may it please the Court:

Certainly, Justice O'Connor.

My friend General Waxman says that the plaintiffs in the New York City case have not got standing because they have not been denied a single dollar, and it is true that we haven't been denied a single dollar, but we nonetheless have actual harm and we have a very serious threat of imminent harm.

First, with respect to actual harm, what if section 4722(c) had said that the United States Treasury will indemnify the State of New York, dollar for dollar, for any lost medicaid funds if HCFA doesn't grant the waivers?

Your Honor, losing that insurance policy would clearly be an injury to my clients.

The insurance industry is based upon the notion that that is a valuable commodity, and trillions of dollars exchange hands every year on that reality.

We had something much better than an insurance policy against loss from an adverse decision.

We had a favorable decision, so as a--

Justice Kennedy: I'm wondering, on your indemnity example, it would be at least premature to bring it.

Suppose the chances were 99 percent that the indemnity would never have to be paid, could you then sue... oh, well, we might need this indemnity?

Mr. Cooper: --Your Honor, when I leave this Court I'll get in my car, and the chances are extremely slim that I will run into you, but I won't get into my car without liability insurance, and I've paid a lot of money for that liability insurance, Your Honor.

Here, the chances that they're going to waive... that they're going to deny our waivers are very good.

Justice Kennedy: Oh, but it's different, because your conduct is affected by knowing you have the insurance policy, and that's not true here.

This was an after-the-fact enactment by the Congress, so it's quite a different hypothetical, really.

Mr. Cooper: Well, Your Honor--

Justice Kennedy: It's as if there were already an injury and there might not be a lawsuit.

Mr. Cooper: --No, there was an injury before we received section 47229(c).

The Government said that the medicaid funds belonged to them and under the statute, that was true.

They were the property of the United States.

After the cancellation, as a matter of law, that money belonged to my clients.

Now, once the cancellation has gone into effect, the United States Government again says that as a matter of law, the medicaid laws, the money belongs to them.

Justice Scalia: It belongs to your clients, or does it belong to New York State?

I guess I'm not up on these--

Mr. Cooper: Your Honor, New York State has enacted State laws that pass through that loss.

This burden will land on our shoulders.

Justice Scalia: --Ah, but that's the problem in New York law.

It isn't... in other words, it isn't this statute that prevents the money from getting to your clients.

It's a New York statute, right?

Mr. Cooper: That's true, Your Honor.

Justice Scalia: You're saying that because there is this other thing, res inter alia... inter alius acta, right, something that pertains to somebody else, you won't get the money.

What if you had a wager with somebody that you'd get the money, and that cancellation causes you to lose that wager, would that give you standing to come before us?

Mr. Cooper: Your Honor, I doubt the wager could be enforced--

Justice Scalia: Oh, no, this is in a State that allows... encourages wagering, as a matter of fact.

[Laughter]

Mr. Cooper: --Your Honor, we have much more than a wager here.

We have a law of many years standing, or many laws of many years standing in New York State which say that if these waivers are denied, if the taxes themselves are declared impermissible, it follows as a matter of State law that the health care providers must pay... must essentially give that money back.

Justice Souter: So the only contingency on your argument is whether the Secretary is going to act to bail you out, and your point there is, the President in effect has said that she won't, is that it?

Mr. Cooper: Your Honor, that's not the only contingency.

Justice Souter: What's... what else?

Mr. Cooper: Well, Congress could pass--

Justice Souter: Okay, under existing law.

Mr. Cooper: --another law--

Justice Souter: Under existing law.

Mr. Cooper: --Under existing law--

Justice Souter: You know, New York could change it's law, too, but under existing law, there's the one contingency left, right, and you're saying that does not count against us for standing because the President in effect has said that's not going to happen, otherwise I wouldn't be reducing the deficit.

Mr. Cooper: --Your Honor, that's true.

I mean, the President has not allowed the United States Congress to grant these waivers.

It is unlikely in the extreme he's going to allow little old HCFA to grant us these waivers, and Your Honor, the fact that there is another method for New York to achieve complete relief doesn't reduce in any way the value of the method that has already yielded complete success.

Justice Stevens: Mr. Cooper, I don't know why you didn't accept the wager hypothetical.

It seems to me a wager's a lot like a lawsuit, that if you have a lawsuit, a wager pending which you may win or may lose and Congress passes a law and says you lose, it seems to me you're hurt.

Mr. Cooper: Yes, Your Honor.

Justice Stevens: So I think a wager's a very good example, is what I'm suggesting.

[Laughter]

Mr. Cooper: And I certainly accept your vast improvement over my answer.

Justice Scalia: Can I ask you one--

--And that's all it takes, just that you're hurt?

Mr. Cooper: Excuse me?

Justice Scalia: If you're hurt, you can sue, right?

Mr. Cooper: If you're injured in fact--

Justice Scalia: Injured in fact.

You're way out at the edge of the pond and a ripple reaches you.

So long as you prove that the ripple reaches you, you can come into court.

Mr. Cooper: --Your Honor--

Justice Scalia: No matter how many intervening actors, New York State, you know, the agricultural coop, whatever.

Mr. Cooper: --Your Honor, I wouldn't be making this argument if I were here to say that New York might pass laws that would then shift this burden onto my shoulders.

That would be speculative.

But New York has passed the laws, Your Honor.

This will happen as a matter of law unless New York repeals its laws, which is no less speculative than if Congress acts now a third law to adjust these rights and interests.

Justice Ginsburg: Why didn't the State join this lawsuit, Mr. Cooper?

We don't have the State of New York in here, and that's puzzling.

Mr. Cooper: Your Honor, the record isn't revealing on this, and I have nothing other than rumor and speculation to offer to you on that issue.

Justice Ginsburg: Well, then, don't.

Mr. Cooper: But--

Justice Scalia: It's disappointing though, you know.

We went into a big wind-up last year also, without a pitch, and you would have thought that whoever wanted to bring it back would have gotten somebody who had been immediately affected by this case, and it's astounding that we get two people who are... you know, they're down the line.

Well, there are probably a lot of people who don't want to lose all their profits by paying lawyers.

[Laughter]

Mr. Cooper: --Well, that answer definitely has some seriousness to it.

There are a lot of people in the back of the canoe not pulling an oar in this case, Your Honor--

Justice Breyer: Can I ask you one--

Mr. Cooper: --but we're injured, and that's the issue, perhaps downstream, but--

Justice Ginsburg: --With respect to the... another piece of this threshold issue, you have no individuals in this group unless... you have a couple of unions, and they have members, so what is the harm to the unions and their members that would give them standing to be in this assemblage of plaintiffs?

Mr. Cooper: --Their harm is one step farther downstream, I will grant you.

It is that the loss of $2.6 billion in medicaid matching funds is going to have a very real and very serious effect on health care providers in the State of New York and will be visited directly in terms of the employment opportunities of those health care providers which the unions represent.

But I don't have to rely upon my union members, in my opinion, to satisfy the individual requirement of the Line Item Veto Act.

That term is amenable to an interpretation that it would include the other clients that I represent, Justice Ginsburg, and to interpret it the way General Waxman suggests would really be quite absurd.

It would make no sense at all for Congress to want this case in this Court for resolution of this constitutional issue as quickly as possible and then say only natural persons can take that expedited route, and all other persons, municipalities, States, my clients, have to go through a lengthy sojourn through the normal litigation process, including the court of appeals.

Justice Breyer: Can I ask you one question on the merits, if you're finished with the standing?

Mr. Cooper: I certainly am.

I'd love to get to the merits, Your Honor.

Justice Breyer: I've one... the question I have, which is really my only question here, is this.

Assume with me for a second that the Solicitor General... assume... is right that this isn't really a legislative veto statute.

That's the title, but that's not what it's about.

There is a law, a law of the United States.

The budget has been signed.

Then the question is, could Congress delegate to the President the authority... and let's take what I think is the hardest part, the authority to take 100 human beings that have received in 100 provisions 100 tax benefits, all different ones, and the Congress says to the President, Mr. President, those people will not be taxed next year, but we give to you the authority to pick and choose among them and impose certain taxes on them, according to a standard.

Now, I take it what he says is, the standard has to be... it has to be really revenue-raising, it can't harm an essential function, it has to be in the national interest and, Mr. President, you have to read the bill, you have to give your reasons, you have to look through the entire thing carefully, taking into account its history and purposes, and probably a word that might come to mind is, is it pork?

All right.

Assuming that they tell the President to do all that in respect to taxes, how is that different than telling the FCC to go look through people in the communications area and give licenses or not, or make other rules and regs or not in respect to "the public interest"?

If you can do the one under the Constitution, why can't you do the other?

Mr. Cooper: Your Honor, we don't tell the FCC that it can rescind a law, that it can render a law of no force and effect.

That's what Congress has told the President he may do.

General Waxman has said that repeals must satisfy the Presentment Clause, and there's no room for General Waxman or anyone else to argue otherwise.

Justice Scalia: What about the lockbox effect?

Do you maintain there is no effect once there is a cancellation?

Is there an effect on what Congress can later enact?

Mr. Cooper: Let me answer this, what different effect would there be if the statute, instead of using the term cancel, and defining it to mean repeal, had said repeal?

There would be no difference in the operation of this statute.

And with respect to the lockbox specifically, Your Honor, that simply makes clear that the President has only a repeal power.

He doesn't have a power of revision.

He can't take that money and do something he would prefer to do with it, and neither can Congress.

But if Congress wants to spend that money again, whether it's in a lockbox or not, what does it have to do?

It has to pass a new law.

And without the lockbox that would be true.

With the lockbox, that is true.

The only difference is, it may well be that they have to add another sentence to the statute that they enacted.

Justice Kennedy: No, but the lockbox puts into effect, as I understand it... correct me if I'm wrong... certain mechanisms under the Budget Deficit Reduction Act.

Mr. Cooper: Yes.

Well--

Justice Kennedy: So that here the President is making one of two choices, each of which alter the situation from where it was before the law was enacted in the first place.

Mr. Cooper: --Your Honor, I have to confess I've never met anyone who understood entirely the operation of the lockbox, but it... one thing that simply cannot be escaped or blinked is the fact that when the President cancels a provision, under the act itself, it extinguishes the authority.

It extinguishes the law itself.

That operates on the law, not the money.

This isn't a spending discretion, and the Solicitor General has made a very powerful presentation for the proposition that Congress can give sweeping spending authority to the President and has since the First Congress.

We don't resist that.

Justice Stevens: May I ask you, Mr. Cooper, because I frankly am troubled with this lockbox idea, but is it any different if, after the particular item is put in the lockbox, than if it had never been enacted in the first place and, if so, what is the difference, the particular provision that goes into the lockbox?

Mr. Cooper: Your Honor, I honestly am not entirely sure, but I will grant the Solicitor General that it may well be that that money is treated differently than if it had never--

Justice Scalia: It's counted against what expenditures have been made.

Even if the President ultimately doesn't use it, it's counted, since the law has been passed which authorized it.

Mr. Cooper: --Yes, but I think it's a function of fact that the money came into existence, the authority to spend the money came into existence, which is the only difference between that and a true line item veto, so that reality is what gives rise to the necessity--

Chief Justice Rehnquist: Thank you, Mr. Cooper.

The case is submitted.

Attribution:

The Oyez Project

Featured:

Plaut v. Spendthrift Farm, Inc. - Oral Argument

Fri, 09 Jan 2009 14:49:59 +0000

Case:

Plaut v. Spendthrift Farm, Inc.

Media File:

93-1121_19941130-argument.mp3

Related Transcript:

1994_93_1121_argument.xml

Transcript:

Argument of William H. Allen

Chief Justice Rehnquist: We'll hear argument next in Number 93-1121, Ed Plaut v. The Spendthrift Farm, Inc.--

Mr. Allen, you may proceed.

Mr. Allen: Mr. Chief Justice, may it please the Court:

The petitioners contend that section 27A(b) of the Securities Exchange Act, 1934, was a valid exercise of the legislative power, and that the decision of the Sixth Circuit Court of Appeals invalidating that statute primarily on separation of powers grounds was erroneous and should be reversed.

This Court has recognized since its decision in The United States v. The Schooner Peggy that final judgments may be subject to congressional influence even in the case of a final and appealable judgment as long as the case is pending.

I think this--

Unknown Speaker: You say... you say a final judgment.

You mean a final judgment in, say, a trial court, or do you mean a final judgment that has run through the appeal process and has become final against direct review?

Mr. Allen: --Your Honor, I am referring to a final judgment in a case that is still within the appellate process.

I'm distinguishing between a final judgment in a pending case and a final judgment that has become... has become final through the expiration of the parties' right to further appellate review, and I refer to that as a final case, and I think those distinctions are important to an understanding of the argument that the petitioners make.

Unknown Speaker: Which are you calling which?

The one where there's no further review possible you're going to call what?

Mr. Allen: I'm saying that a case becomes final at that point.

Unknown Speaker: Okay.

Mr. Allen: Up until that point, the case is pending, although a final judgment may have been entered in that case, final in the sense that the court has issued its result in the particular dispute.

It has pronounced what the result of the adjudication is, but the case is still somewhere within the appellate process and is therefore still pending, and it's... as I was saying, under The United States v. The Schooner Peggy, if a final judgment is entered in a case that still is pending within the process, the appellate process, and Congress in the exercise of the legislative power changes the law at that point, under The Schooner Peggy and its progeny, I think it's clear that the court must apply the law as ordained by Congress rather than affirming its earlier final judgment that was rightfully rendered and conformed to the law which prevailed at the time that it was rendered.

Unknown Speaker: If Congress intended the law to be retrospectively applied.

Mr. Allen: Well, I think that that's correct, Your Honor.

The issue that... or the... what this case calls for, I think, is to specifically identify the institutional interest of the court that requires separation of powers protection and requires the adoption of the absolute rule that was adopted by the Sixth Circuit, and that final judgments in final cases are absolutely sacrosanct and are forever beyond the reach of Congress, at least in private actions involving the adjudication of private statutory rights.

Unknown Speaker: Has this Court ever upheld a legislative invalidation of final judgments of an Article III court?

Mr. Allen: I think that it has.

The closest statute, or the closest analogy here, Your Honor, I believe is the statute in The United States v. Sioux Nation of Indians.

Unknown Speaker: Well, but in Sioux Nation it involved the Government and the opinion of this Court at least said Congress did not interfere with the finality of the court of claims judgments and went on to justify it on the theory that a new action had been created, so how does that support your position?

Mr. Allen: Well, actually, I think... I agree that the holding in United States v. Sioux Nation does not directly address the question that's presented in this case.

In fact, I think for separation of powers purposes Sioux Nation was actually a more difficult case than is presented by section 27A(b), because 27A(b) clearly changed the law.

It made a substantive change in the law and provided a mechanism by which this case and the defined group of cases could be reinstated for further adjudication by the courts of the new statutory rights.

Unknown Speaker: In another sense, Sioux Nation was an easier case, since the party defendant was the Government, the party who had the benefit of the prior judgment, and I think the Court opinion suggested that the Government as a litigant could waive rights but it might not be able to impose the same sort of waivers on other parties who are not the Government.

Mr. Allen: Your Honor, I understand and agree that that language is in the opinion.

However, I believe that that really addresses more squarely the due process argument in this case rather than the separation of powers issue, which I believe is really specifically why Congress should be prohibited from enacting a statute which authorizes the restoration of a case to pending status for further adjudication of rights that are created in that statute.

Unknown Speaker: Well, that's certainly not what Sioux Nation said.

I mean, the case's own description of its holding does refer to separation of powers.

It says that Congress'... this is a quote...

"mere waiver of the res judicata effect of a prior judicial decision rejecting the validity of a legal claim against the United States does not violate the doctrine of separation of powers. "

So we were using simply a waiver of res judicata by the Government as a vindication of the separation of powers validity of the case.

Now, you may persuade us that's wrong, but that's at least what we said.

Mr. Allen: Well, Your Honor, I agree that that's what the Court said, but I do believe that this is a different case than Sioux Nation.

It is different because, again, the Court, or the Congress changed the law and created new rights, and I think the difference, or the constitutionality of the statute is illustrated by postulating a statute that very well may violate and be unconstitutional under separation of powers principles as well as due process principles, and that would be a statute involving private statutory rights that calls for the following:

The judgment in favor of the plaintiffs in Civil Action Number 1234 is hereby set aside and remanded for further trial or for retrial on the same facts and on the same law, with the further congressional admonition that you will continue to retry this case on the same facts and the same law until you obtain the result that Congress wants, to wit, judgment for the defendants.

Now, that is a statute that... involving private rights that I think would clearly be a judicial act, no change in the law, simply setting aside a judgment with an instruction to retry the case and attempt to come up with another result.

I--

Unknown Speaker: --Suppose Congress changed the statute of limitations and then added a second clause which said, res judicata shall not apply in any 10b-5 case that has been commenced after a certain date, and sets that date 5 years back, so that all cases can be reopened if they've been filed within 5 years.

Mr. Allen: That presents a little bit more difficult problem than is presented by this case.

I think, again, referring to the institutional interests of the Court that are protected by the separation of powers doctrine, the Court has an interest in preventing impairment of the judicial power and the exercise of the judicial power, and I think there may be limits under the separation of powers doctrine for legislation which just wholesale reopens masses of cases that might overwhelm the judicial system.

Unknown Speaker: Is it just a question of straining our resources?

Mr. Allen: Well, I'm saying that that might be an aspect of it, Your Honor.

I... that may not be the whole story.

I think the--

Unknown Speaker: Well, isn't the whole story that the judgments of this Court and of the Article III courts ought to be rendered without fear of their being corrected in a supervisorial way by the political branches?

Mr. Allen: Well, Your Honor, that gets, again, back to the identification of the institutional interest that's being served by the rule that you're suggesting, which is that judgments are inviolate and that the rights that are fixed in those judgments are forever beyond the reach of Congress.

I don't believe--

Unknown Speaker: Let me suggest an institutional interest.

There are things that the President can do which neither Congress nor this Court can affect.

It's his call.

What he says goes.

There are things that Congress can do that neither the President nor the courts can affect, and what Congress says goes.

I have always thought that the same applied to the third independent branch of Government.

There are some things that the courts do that neither Congress nor the President can affect, but you're telling me no, that they--

Mr. Allen: --Well, I think there are some things that--

Unknown Speaker: --They can... you can issue an opinion, but ultimately they can send it back and say, do it again.

Mr. Allen: --Well, Your Honor, I don't believe they can just send it back without more.

We contend that they can change the law and the fact that the parties whose rights are affected, or the... involved in a prior adjudication and a final judgment that became final, is not the bright line between the constitutionality of the legislative act, or does not define the constitutionality of the legislative act.

The Congress makes the laws.

It's the duty of the court to apply the laws, and to apply the laws as they are at the time the court acts.

The court has an institutional interest in the integrity of the judicial process, and I don't think that Congress should be able to come along and run through and interfere with the process of finding facts, determining and applying the law, and coming to a result, but Congress can, in its discharge of its political and policymaking functions, change, enhance, withdraw, contract the private rights of parties, and I don't think that the--

Unknown Speaker: It can create whole new rights, couldn't it?

Mr. Allen: --Indeed, Your Honor, yes.

Unknown Speaker: So long as the Due Process Clause didn't prevent it, it could retroactively create a new right.

Now, I think you would come up with some due process problems if you did that, but short of those due process... it can do that, but it didn't do that here.

It wants the Court to repronounce the prior right which it said no longer existed.

The Court said, finally and ultimately, this right does not exist.

Mr. Allen: Your Honor, I... I think that that... I understand the point that you're making.

I don't agree, though, that the fact that the judgment has become final is the bright line here, and that it limits at that point forever more the power of Congress to affect those private rights.

Another example that might shed some light on this would be a statute which restores the aiding... or, creates a cause of action for aiding and abetting a violation of section 10(b) and makes that retroactive and establishes a limitations period for 10 years.

Let's postulate that some individuals might have been sued for aiding and abetting a violation in the past, prior to the enactment of the statute, and the court held that no such cause of action existed, and that judgment became final.

There's no question that that judgment would have been correct when rendered, but is that group of people forever immunized from the reach of Congress simply because they happened to be party to an adjudication that adjudged that no such cause of action existed.

Unknown Speaker: No problem.

I think you're absolutely right, but I think you'd come flat up against the brick wall of due process.

I don't think you could create a--

Mr. Allen: And I think that's an important point, that upholding the statute in this case is not going to open the floodgates.

There still are limitations out there under the Due Process Clause and the Separation of Powers Clause that would not make every final judgment in a final case canon fodder for Congress.

Unknown Speaker: --What would those limitations be as to the separation of powers?

So long as the congressional action just deals with a few cases?

Mr. Allen: No.

I think that, again, I'm not sure where the outer limits of this would be, and I don't think it's necessary to define the outer limits of it under the Separation of Powers Clause.

Actually, I think that the limits might come in the due process rationality test.

Unknown Speaker: So you say, in effect, very likely the Separation of Powers Clause doesn't provide any limits.

Mr. Allen: Well, I think it does.

Unknown Speaker: Then what are they?

Mr. Allen: Well, the limits are that the separation of powers doctrine prohibits the direct exercise of the judicial power.

I think that the judicial power, the essence of it is the process of finding facts, of determining and applying the law, and reaching a result, and I think that if Congress unduly interferes with that, and again, the statute that I postulated as an example, it simply sets aside a judgment that that kind of legislation is the kind of legislation that the separation of powers doctrine was intended to prohibit.

Unknown Speaker: No, but that can't be it.

I mean, the executive does that all the time.

Administrative law judges apply to law to the facts and come out with a decision all the time.

Congress used to do it before there was a claims court.

It used to consider the facts of law and come up all the time... applying facts to law and coming up with a decision is not the essence of the judicial function.

Mr. Allen: Well--

Unknown Speaker: The other two branches do that all the time.

Mr. Allen: --Well, I--

Unknown Speaker: So you've got to come up with something else that makes us different.

I had thought it was the fact that we could render final decisions, but you tell me that's not it.

Mr. Allen: --Well, you can render final... you can render final decisions, and those decisions are final, but I don't think that they are forever immune from further congressional action.

Unknown Speaker: Thank you, Mr. Allen.

Mr. Dreeben, we'll hear from you.

Argument of Michael R. Dreeben

Mr. Dreeben: Thank you, Mr. Chief Justice, and may it please the Court:

The court of appeals holding in this case rests on the view that there is an indispensable attribute of finality in judicial decisions that is completely immune from any congressional action, and accordingly, the court found this statute invalid under the separation of powers doctrine.

Our position is that there is a sense in which judicial decisions do have an attribute of finality, but it is not in the sense that the court of appeals found it in this case.

The attribute of finality of a judicial decision is fairly accurately captured by the opinions that were rendered in Hayburn's Case, namely, a decision of an Article III tribunal is not subject to further review in another branch of Government, the executive branch, or Congress.

The courts cannot be required to render a decision that depends for its finality on another branch's action.

On the other hand, the differentiation in the Constitution between legislative and judicial powers does not prevent Congress from prescribing new statutory rights that may be enforced between private parties despice the fact that there was a final judgment entered between those parties under former law.

The essence of this case is that Congress has changed the statute of limitations--

Unknown Speaker: It didn't change the substantive law, did it?

Mr. Dreeben: --It did not change the substantive law of liability under Rule 10b-5, which is an important point that I think diffuses any possible due process concern in this case.

The conduct at issue here was unlawful when it was undertaken, and there has been no change in that rule whatsoever.

What has been changed retroactively is the period of time within which a suit under 10b-5 may be brought.

Unknown Speaker: Mr. Dreeben, let's assume that Congress stopped right there, and let's assume that it made it perfectly clear that with respect to the, we'll call them the blind-sided plaintiffs who suffered in the aftermath of Lampf, that with respect to them there was... the old statute of limitations was reinstated, and that, as it were, by definition this was intended to have retrospective effect.

Those plaintiffs could then... if Congress had stopped right at that point, those plaintiffs could then have filed a motion under Rule 60(b), could they not, for vacation of the judgments against them and reinstatement of their causes of action under the new congressional statute?

Mr. Dreeben: They could have filed such a motion, Justice Souter, and some courts would have granted it on the basis of changed statutory law that would entitle them to reopen the judgment.

Unknown Speaker: Well, would there have been any invalidity in that ruling?

Mr. Dreeben: No, I don't think that there would have been any invalidity in the ruling.

Unknown Speaker: Would there have been a reason to rule otherwise?

In other words, the reasoning, I suppose, of the courts would have been that these people were blind-sided by what we have to accept was simply a lightening bolt of legal change, and that therefore they have a strong reason for equity on their side, assuming there is no due process problem, and I do so assume in the very fact of the retroactive effect of the statute.

Why wouldn't it have been virtually an abuse of discretion not to allow their reinstatement if they filed under Rule 60(b)?

Mr. Dreeben: I think that if Congress had manifested its intent to apply that new statute of limitations for the benefit of what you have called the blind-sided class, it would have been an abuse of discretion not to reopen the case and to provide for further proceedings on the merits of the claim.

Unknown Speaker: All right.

Do we have the option, then, in this case, to say that just as we try to avoid the resolution generally of constitutional issues that we don't have to reach, that what should have occurred in the lower courts was the consideration of applying Rule 60(b) in combination with the new statute of limitations and not even reaching the issue of whether Congress itself can mandate the vacation of the judgment?

Mr. Dreeben: I am not sure whether in this particular case a Rule 60(b) motion was made.

There were some cases raising this issue of a Rule 60(b) motion.

Unknown Speaker: Well, I'm assuming for the sake of my question it probably wasn't made here, but shouldn't a court have said, shouldn't a trial court have said, in effect, I'm not going to reach the constitutional issue unless you somehow tell me that I've got to reach it because we can't get to the same point by applying the statute, by applying the statute of limitations under Rule 60(b), and shouldn't the Court have done that?

Mr. Dreeben: Well, the reason why some courts may not have done that is, there is a line of 60(b) law that changes in statutory law does not justify reopening of an otherwise final judgment, and it may be in the view that that was the requirement under 60(b) that those courts wouldn't have chosen that avenue.

Unknown Speaker: A rule--

--Well, furthermore, I--

--A rule suggested by the separation of powers.

Mr. Dreeben: No, I don't think that it is a rule suggested by the separation of powers, Justice Scalia, because what is going on in these cases is that Congress has acted legislatively to change a governing rule that was conceded by everyone when this Court... when Lampf was before this Court, namely, what should the statute of limitations be for a statutory cause of action?

Unknown Speaker: But under your answer to Justice Souter, you indicated that it would be in that hypothetical that you put, an abuse of discretion not to apply the new law, but that means that the law is, in itself, a mandate to reopen.

Mr. Dreeben: Well, it--

Unknown Speaker: And I don't see how you've cured the problem.

Mr. Dreeben: --I would agree, Justice Kennedy.

I don't think that it would add up to a significant difference if a court fell that it was mandated by legislation to reopen a judgment under Rule 60(b) from reopening the judgment under section 27A, subsection (b), if both actions were taken because of a belief that Congress required it.

The--

Unknown Speaker: If we assume that there's no due process problem in the enactment of the new statute of limitations, then basically, doesn't the question of abuse of discretion turn on a kind of traditional notion of equity?

In other words, should those who are blind-sided be given a second chance, and if that is in fact the criterion, is it fair to say that it's the mandate of Congress, rather than the application of a kind of garden variety criterion for reopening judgments, which is operative here?

Mr. Dreeben: --I don't think it's quite as garden variety as all that, Justice Souter.

The cases that have addressed whether final judgments should be reopened because of changes in statutory law do not clearly indicate the courts must reopen final judgments that were otherwise not appealed, and I believe that it is for that reason that Congress prescribed a rule of law in section 27A, subsection (b), that in effect amends Rule 60(b) for this particular purpose and requires courts to reopen otherwise final cases for the application of new substantive law.

There is nothing in that legislative action that is improper.

Congress could, if it wished, take over the entire function of promulgating Rule 60(b), could change the categories that are currently in it that permit reopening.

Certainly if it does so in a way that is consistent with the general historical trend of Rule 60(b) law which has evolved over time, there would be no question whatsoever about the promulgation of such a rule of procedure.

Unknown Speaker: Isn't this an effort by Congress to restore a doctrine that this Court abandoned, that is, the double whammy of Lampf and Beam?

Congress is saying, for this class of plaintiffs we are ordering the Court to go back to Chevron Oil v. Huson?

Mr. Dreeben: I think that's essentially what Congress did in this case.

In view of the fact that Lampf and Beam came down on the same day, you have a class of plaintiffs whose cases in effect retroactively became untimely, and the Court declared in Beam that it was not going to engage in what is essentially a legislative function of weighing the equities of various similarly situated plaintiffs and determine which ones get the benefit of a new rule and which ones do not.

Congress stepped in with what is a very legislative act, balancing equities that the Court itself does not have freedom to balance, and determining certain plaintiffs, whose cases were timely filed under the law of their circuits when they were brought, should have an opportunity to go back to court and reach... have the merits of their cases adjudicated.

Unknown Speaker: Did we announce in Lampf that we were changing the law?

Did we say that the law used to be differently but from today on, we, the Supreme Court, are changing it?

Is that what we did?

Mr. Dreeben: Lampf is probably--

Unknown Speaker: I thought we pronounced the law was this way and had always been this way.

Mr. Dreeben: --That is generally the way that this Court operates when it interprets a statute.

Lampf may qualify as a rare exception to that, because the Court very freely conceded that there was no underlying statutory right that Congress had ever created or that it was ever aware of, and that in fashioning a statute of limitations the Court was forced to act in a manner that it isn't comfortable acting and is uncharacteristic for it, namely, determining what the proper legislative solution would have been if Congress had addressed the question.

Unknown Speaker: But Congress did not pass a statute of limitations for the future, did it?

Mr. Dreeben: That's correct.

Unknown Speaker: All right.

So I've a human question, rather than an institutional one.

I'd always thought that the human purpose underlying separation of powers was to prevent what I'd call a vendetta, where one group of people decide to pass a law, then apply it, then adjudicate it as well.

Now, why isn't this one of the strongest cases of vendetta one can imagine, an unpopular, small group of people who, in fact, are affected by a law that applies to no one else, that does not apply to the future and therefore doesn't affect general policy, and is retroactive, and reopens a closed judgment by a court?

If there's a stronger example of a vendetta, I'd like to know it.

I mean, that's what I'm concerned about in terms of the policy underlying separation of powers, and I guess if they're taking away money from somebody, as I suppose they are, why isn't that also a violation of the Due Process Clause?

Mr. Dreeben: Well, Justice Breyer, they're not... first of all, this law doesn't take away money--

Unknown Speaker: If it has any effect at all, it takes away money, otherwise its null and void, isn't it?

I mean, it has no effect... nobody cares about the cases where the plaintiffs are going to lose.

Mr. Dreeben: --Well, the... if money is taken away it's because the defendants committed securities fraud under then existing law.

Unknown Speaker: No.

It's also because somebody reopened a statute of limitations in a closed case.

I'm not... I'm telling you... I'm saying this to put forth as succinctly as possible what's bothering me about the case.

Then I'm interested in what your response is.

Mr. Dreeben: Let me explain why Congress believed that it was fair, rather than constituting any kind of a vendetta.

It was the essence of fairness to restore the right of these plaintiffs to litigate on the merits--

Unknown Speaker: I don't mean abstractly fair.

Maybe that's a loaded word, by... I put that in quotes.

I simply mean, by a group of people who are legislators assuming functions that normally would be carried out by other branches, the separation of powers being a guarantee that there will not be aiming at these particular persons in a way that normally involves functions of other branches.

Mr. Dreeben: --Well, any retroactive legislation will apply, necessarily, to cases that can be identified, and the Court has upheld not only retroactive legislation under the Due Process Clause, but has upheld legislation such as in Robertson v. Seattle Audubon Society that was enacted with the specific purpose in mind of affecting a particular pending case, so I don't think that by itself, retroactivity constitutes a separation of powers problem.

What Congress was doing here was something quite similar to what the Court itself had done under the rule of Chevron Oil v. Huson, namely, taking into account that people rely on what the statute of limitations is when they choose to bring a lawsuit.

Plaintiffs in these cases relied on the statute of limitations in their respective jurisdictions, and this case, for example, was filed before any Federal court had ever applied a Federal statute of limitations to a Rule 10b-5 case, borrowing it from another section of the securities laws.

When this Court decided Lampf, many people who justifiably relied on the existing state of the law were surprised, or Congress could have so found, and this Court, while it could have taken action to protect similarly situated plaintiffs under Chevron Oil v. Huson, and it had indeed taken such action in other statute of limitations cases where the statute was, in effect, retroactively made shorter, had declared in Beam that it would not take action to protect these particular cases.

And Congress really was stepping in to restore a level playing field to the parties who had relied on existing law in bringing their lawsuit.

It did not determine what the outcomes of this lawsuit would be.

That would raise a wholly different and more difficult separation of powers problem under Klein, if Congress had in fact dictated what the ultimate merit outcome would be of a lawsuit between private parties.

It did nothing of the kind here.

It restored parties to the places they would be under then-existing statute of limitations law.

It did not even declare that the suits must be reinstated.

The plaintiff must show that his suit would have been timely under the law that prevailed in this jurisdiction.

Unknown Speaker: It does seem to me we have to assume, for your argument, that this is all quite fair and reasonable, that what the Court did in its prior opinion was a surprise, that it did not declare what the law had been but, rather, that it changed law, and then I'm rather stuck as to how you can say... how this Court could say that, unless it said it in the opinion.

Mr. Dreeben: I don't believe, Justice Breyer, that the Court has to say that.

All the Court has to recognize is that Congress could legitimately have viewed it as a change in law by virtue of the fact that this Court's holding was a novelty in this Court's jurisprudence.

Thank you.

Unknown Speaker: Thank you, Mr. Dreeben.

Mr. Olson, we'll hear from you.

Argument of Theodore B. Olson

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

As the questions from the Court have already suggested, this case tests whether the ultimate repository of judicial power in the United States shall rest with the judiciary or with the Congress.

Section 27A is deceptively simple, but it is at once a great deal more and a great deal less than what its proponents claim.

Simply put, what it is not is a new statute of limitations.

What it is, is an instrument that directs Article III courts to redecide decided final cases and it instructs them in substantial part, with respect to an important legal issue in those cases, exactly how they must be decided.

Unknown Speaker: Mr. Olson, you have no question that if one of these cases is still pending, if an appeal were lodged after Lampf and Beam, and it was just sitting there, that that case could go forward?

Take two plaintiffs identically situated, one gets the word from Lampf and Beam and says, I give up.

The other one says, although it's hopeless, I'm going to file an appeal, and the court of appeals is backlogged, I'm going to let it languish.

That person has a good claim that could still go forward.

Mr. Olson: There are two answers to that, or at least two that come to my mind, Justice Ginsburg.

In the first place, we do not concede that there wouldn't be significant separation of powers questions with respect to the cases that are not final, but we are dealing with cases that are final.

This Court made the distinction between final cases, and has repeatedly made the distinction between final cases.

To answer your question, even assuming that the statute would be constitutional with respect to the pending case, in Beam, in Federated Department Stores v. Moitrie, if I'm pronouncing that correctly, this Court has said that the final line and the importance of judicial power is that distinction between when a judgment becomes final and when it is not final.

Unknown Speaker: Let me understand you better you what you said.

You are not conceding that the legislature could not extend, while a case is still alive, could not extend the statute of limitations.

Isn't the statute of limitations, the time in which a claim is alive, a peculiarly legislative function?

Mr. Olson: I... we submit, or we concede that the statute of limitations is a peculiarly legislative area.

Unknown Speaker: And that's there are... there are many cases where a statute of limitations is extended while the claim is still alive.

Mr. Olson: Under some circumstances, the Court has permitted that to occur.

There are limitations, we submit.

It may depend on whether or not there has been an actual decision in a case and where the case is, and when... and the extent to which the rights of individuals are affected.

The important additional--

Unknown Speaker: Suppose... let's take this case, and Congress had reacted to Lampf and said, we don't think it should be the 90 limit, we think it should be a 5-year limit, so we're enacting a 5-year limit, and it applies to all cases to which it could lawfully apply.

Mr. Olson: --If the cases were open, it would be, I concede, a considerably more difficult case.

It's important to emphasize that Congress in this case did not enact a new statute of limitations at all.

The statute of limitations for buyers and sellers of securities is as this Court decided in the Lampf decision.

Buyers and sellers of securities similarly situated, and the law today, is the statute of limitations as decided in Lampf.

Unknown Speaker: I'm just trying to get an answer from you about Congress' power.

We've been concentrating on the court's power.

It was my understanding that Congress could extend the statute of limitations, that there wasn't any question about that, and that the problem in this case is that there is a final judgment and some people were placed out of court, some people were still in court.

I don't understand the problem that you're suggesting that exists.

Mr. Olson: I submit that there is a spectrum, Justice Ginsburg, that when the Congress of the United States extends a statute of limitations, its power is greater where the cases have not been brought or the cases have not been litigated.

If the cases are already in the litigation process, and decisions have been made by Article III courts, and if the Congress is instructing the courts to set aside those decisions, those raised, for me, separation of powers questions and due process questions that are not completely resolved, and they are difficult to resolve.

They are more difficult than if the litigation hasn't commenced that far.

But, as I stress, that is not this case.

Congress tried, or considered extending the statute of limitations and enacting a new statute of limitations.

In fact, it did not have the votes to do so.

It specifically... its sponsors specifically said, we tried to change the statute of limitations and we did not have the votes to do so, and of course the other distinction here, the distinction that's important to the court, and important to this Court and important under Article III, is that there was a final judgment.

In short, what section 27A does, it has, even though statutes generally have prospective application, section 27A has only retrospective application.

Unknown Speaker: And is that the key, because if the... if... I mean, is it... does it violate separation of powers always, to open up a closed judgment?

I mean, suppose that Congress wanted to change one of its tort statutes for the future.

It said, 6 months is too short, we want 2 years, and the statute says it's 2 years for everybody, and then it says, apply this 2-year statute to closed cases insofar as due process allows.

Mr. Olson: I--

Unknown Speaker: Now, that would focus it, because insofar as due process allows, you can't do it, but now, is there any objection to that--

Mr. Olson: --I do believe, Justice Breyer, that as I believe Justice Scalia was suggesting in his questions, that if there is a... what the judicial power is is to... and I go back to Marbury v. Madison, is to decide the rights of individuals, and that it is fundamental to that judicial power--

Unknown Speaker: --This is a--

Mr. Olson: --to render final decisions.

Unknown Speaker: --The legislation is a class.

You see, everybody's thrown into it.

You have... what I'm thinking.

Mr. Olson: Yes.

Unknown Speaker: Everybody, and now you're saying that separation of powers stops that legislation applying to a person with a closed judgment even if it doesn't violate the due process clause.

Mr. Olson: I believe that it may, Justice Breyer.

I would refer Your Honor to--

Unknown Speaker: Because... it does that because?

Mr. Olson: --Well... to the decision of Federated Department Stores v. Moitrie.

I hope I'm pronouncing that right.

It's the 1982 decision--

Unknown Speaker: There's no R. It's Moitie.

Mr. Olson: --Moitie, excuse me, thank you, Chief Justice... in which the Court... this Court considered that issue in the context of a judicial decision changing a rule of law and efforts by parties then to reopen under Rule 60, and I think this may address the question that was raised by--

Unknown Speaker: But you see what I'm trying to think of.

Not... I'm trying to get the due process out of it, and they're not focusing on an individual case, and they're not intending to do anything but as a class treat everybody alike, past, present, and future.

So they're not examining the judgment, they're doing nothing but general legislation.

What separation of powers principle bars that, if due process doesn't?

Mr. Olson: --I believe that if... the separation of powers issue that's important there is that decisions of Article III courts, when they become final, finally adjudicate the rights between the parties, and even that legislation of general application cannot set aside those judgments except in extraordinary circumstances.

We are aware of no case--

Unknown Speaker: All right, so what they do is, they say, don't open it, we're giving all those people a new cause of action.

Mr. Olson: --Well, I think that that would... that... it would raise similar questions as the Court... as this Court said in the Sioux Nation case describing the Klein decision of the last century.

The limitation on jurisdiction, appellate jurisdiction, was just a means to an end.

The court would probably look at that in this similar context.

I will stress, though, that this case is vastly different than that case, because once we've looked at what section 27A does not do, it's also important to focus specifically on what section 27A does do.

It applies only to cases, not to persons, not to litigants, only plaintiffs and defendants.

It applies only to a finite and identifiable class of plaintiff... cases, those that were pending on a certain day in history.

Number 3, it declares in imperative and unequivocal terms what courts must do with those cases.

They must--

Unknown Speaker: What if it didn't do that?

What if that last feature were--

Mr. Olson: --If it was discretion, if it was a matter of discretion?

Unknown Speaker: --It would--

--It would simply be a 60(b) issue.

Mr. Olson: It would be a--

Unknown Speaker: Assuming that the retroactive feature is not a violation of due process, assuming that, would there be any separation of powers problems if the courts simply acted under 60(b)?

Mr. Olson: --I don't think... I hadn't thought of it quite that way.

I don't think that there would be a separation of powers problem except that I would again refer to the Federated Department Stores case and the fact that as far as I could tell in my research for this argument, I have never found a case in which sections of Rule 60(b) was used to set aside a final judgment and to reinstate the rights of the parties based upon a change in the statute.

I've never seen section--

Unknown Speaker: It seems to me you're on the horns of a dilemma.

If you must reopen under 60(b) you violate the separation of powers because it's the same thing as a mandate.

If you have the option to reopen or not reopen, I can't imagine it wouldn't violate due process.

A court can either take account of the congressional change of law, or not take account of it as the court sees fit.

If that's due process, I don't... if that isn't a violation of due process, I don't know what is.

Mr. Olson: --I agree with you, Justice Scalia.

Unknown Speaker: Well, is it always a violation of due process if two different courts in effect view the equities differently?

Mr. Olson: No, because the... as I understand this Court's due process jurisprudence, it is an important and essential difference to the procedural due process of individuals when courts, acting according to established procedures, decide the rights of individuals and litigants.

It's another thing entirely under the Due Process Clause when a legislative body comes in and attempts to redecide, or to decide, what the rights are between individuals, and that is where the Due Process Clause joins the separation of powers--

Unknown Speaker: But there, your due process objection is in effect to the retroactivity of a rule applied to a class which has already been adjudicated, so you're saying, yes, there is a due process problem in effect in the very notion of retroactivity, because there can only be retroactivity here to a class which has been subject to prior adjudication.

Mr. Olson: --I agree with that, but I also feel that the fact that it's the legislator... legislature coming along to redecide cases and redeciding the rights of individuals, if I understand your question correctly, Justice Souter, that would be an additional answer that we would submit.

This statute--

Unknown Speaker: Mr. Olson, is there any relevance at all to the fact that no rights about the conduct, whether there was a fraud, whether there wasn't, involved here, the only question resolved was whether the case was brought on time, and so we're not dealing with what did the parties do and was it proper under the law, but simply, how much time was there to open the court's door?

That was the only question at issue, and that is a determination that I think you would concede, how much time do you have to sue, is for the legislature to decide.

Mr. Olson: --Well, I would respond to that in this way.

In the first place, the configurations of the 10b-5 remedy were for the legislature to decide, but as Justice Scalia pointed out in his concurring opinion in Lampf, a great deal has been imagined with respect to the 10(b) right.

This Court was attempting to--

Unknown Speaker: I'm asking you for the 10(b) right and, indeed, all other rights that Congress creates or that this Court says we should imply.

Isn't it for the legislature and not for the court to say how much time someone has to knock on the court's door?

Mr. Olson: --Yes, except to the extent that when this Court is construing a legislative enactment and giving flesh to that legislative enactment in terms of when and under what circumstances a private right of action under that enactment may be prosecuted, this Court has imagined and attempted to discern what the legislature would have done.

Mr. Dreeben in the Morgan Stanley argument last term, and Mr. Allen today, has said that the same result would occur based upon their arguments if Congress decided to reverse this Court's decision last term in Central Bank of Denver.

The other point that I would--

Unknown Speaker: Weren't we... whatever limitation period we were constructing in Lampf, it was an endeavor to determine what Congress meant.

We were not dealing with some judicial notion of laches.

Mr. Olson: --That's correct.

Unknown Speaker: The question was, we recognize that Congress has the power to set time limits.

There isn't any question about--

Mr. Olson: No question about that, just in the same way that Congress had the power to decide whether aiders and abettors could recover, just as Congress had the power to decide whether buyers or sellers should have a right of action under section 10(b).

My point in answer to your question is that the statute of limitations is not some different species of law.

This Court has repeatedly said that the statute of limitations is an important part of the judicial process.

It's the part... and this Court in Lampf decided that it was a part of the balancing process that Congress would have... the 73rd Congress would have engaged in when it decided how long people would have the right to bring an action.

My point is that neither the Government nor my opponent contends that there would be any difference in this case if it was the aiding and abetting defense, or the in pari delicto defense, or other aspects of the section 10(b) right.

The other point that I would make is that this was very much like a bill of attainder.

The legislative history makes it clear that the Members of Congress that addressed section 27A were disturbed by and unhappy with this Court's decision in Lampf.

They named the plaintiffs that they felt... by name, by individual name, that they felt were unfairly deprived of their rights, they named the defendants by name who they said should not benefit by their greed, and therefore the decision by this Court should be set aside and, furthermore, there was considerable discussion... it's impossible to tell how dispositive it was... that certain Members of Congress were concerned about the fact that it would make it better for the Government if more plaintiffs won more 10b-5 cases because it would cost the Government less in terms of the savings and loan bailout.

So that very much like Klein, and very much opposite to the Sioux Nation decision, Congress was requiring courts to set aside their judgments in order to benefit the Government, in part.

Unknown Speaker: --Mr. Olson, could Congress have created a new cause of action somehow and waived any res judicata effect of prior--

Mr. Olson: I find no decision from this Court that would suggest that Congress could do that with respect to the res judicata effect of prior decisions when individuals were involved.

I recognize that, and to return to the Sioux Nation point, in that case, Congress and the executive branch, the Solicitor General, and this Court, determined that all that was involved in the Sioux Nation case was waiving the res judicata effect of a judgment against the United States and acknowledging a debt that it felt, the Congress felt at the time that statute was passed, it may have owed.

Unknown Speaker: --Well, would that be a separation of powers problem as applied to individuals, or a due process problem.

Mr. Olson: Well, as applied to individuals, I still think that it could be both, because I believe... this case is somewhat difficult to differentiate intellectually from... the due process aspects from the separation of powers aspects, because I believe it may have been Justice Breyer's question that focused on the fact that the significant reason for the separation of powers discussed by the framers of the Constitution was that if you concentrated power... or the power of the legislature, the power to make the law, with the power to enforce the law, with the power to decide how it would be applied, that would be the very definition of tyranny, so the separation of powers is intended to protect individual rights just as the Due Process Clause is.

I believe that the doctrine of res judicata, the finality of judgments, is a significant and fundamental component of the judicial power.

It's also something that exists to protect individuals.

The summary... in summary--

Unknown Speaker: May I ask you a question, Mr. Olson, because I'm not quite sure of either your opponent's view or your view on this.

Supposing, going back to the aiding and abetting business and the other case, supposing Congress today passed a statute authorizing a cause of action for aiding and abetting a 10b-5 violation and said, it shall be brought... applied a case that's 10 years... arose 10 years ago.

Would that be constitutional?

Mr. Olson: --Believe that both of our positions are clear.

Mr. Allen I believe said in his argument that he believed that the Congress would have the power to do that.

Unknown Speaker: Would have, or would not have?

Mr. Olson: I believe that he said... I hope I did not mishear.

Unknown Speaker: I didn't really understand what he was saying.

Mr. Olson: Well, I thought that he said that.

Unknown Speaker: But let's... why don't I just ask what you think?

Mr. Olson: I was going to make that point affirmatively, that I do not believe that Congress would have the power to do that to the extent that the rights of individuals had been adjudicated--

Unknown Speaker: Even though the prior case... the holding of this Court in the 10b-5 case we had before was that there simply is no such cause of action.

Mr. Olson: --Yes.

Unknown Speaker: Now, why does such a holding prevent Congress from creating such a cause of action?

Mr. Olson: Well, with... again, that would become complicated, and I think my answer is more of a due process answer than a separation of powers answer to the extent which the Court is deciding something that you may be forced to pay damages to someone for something that you did 10 years ago when you didn't have to--

Unknown Speaker: Well, would that be equally true if there'd been no case in this Court in the meantime?

Mr. Olson: --I think that I would go back--

Unknown Speaker: I think what you're saying is Congress can't create a 10-year-old cause of action.

Mr. Olson: --Well, that's part of my answer.

The other part of my answer is the answer that I gave before.

I think this Court would see through it in a moment, that what it was... that legislation would be no more than a means to an end, like the Sioux Nation court characterized the Klein situation, that Congress was coming along, setting aside judgments in order to pick winners and losers after the fact, and I think that that would bother this Court a great deal from the standpoint of separation of powers, because it would be a subterfuge.

This statute... it's interesting, because this statute embraces all of the weaknesses that one might identify with this character of legislative activity.

The interesting thing is that what Congress did here is strip... what this Court customarily does, as articulated in Marbury v. Madison, is decide the rights of individuals, and decide cases, and decide how they should come out, and decide what the law was when the transactions occur or the conduct occurred.

Congress has now taken away all of that effect.

The rights of individuals are now as decided by Congress, but Congress didn't change the prospective effect of the Lampf decision, it made the Lampf decision into something that didn't affect individuals, it didn't affect plaintiffs or defendants in the Lampf case if you uphold section 27A.

Unknown Speaker: Are you saying, Mr. Olson, that Congress could do more but not less, unless... I thought you said in answer to my question, suppose Congress said we don't like 3 years, we're going to make it 5, and everybody would cover... be covered.

Mr. Olson: There's two answers to that.

One, there's a right way and a wrong way for Congress to do similar things.

Chadha is an example of that, although this is certainly not at all like Chadha, but the fact is that the Congress under some circumstances can do other things.

What it can't do... and that's about as well as I can do with that question, because unless the facts are specified it's more difficult to be more specific.

Unknown Speaker: Congress, reacting to our Lampf decision, says, we think 5 years is a reasonable time.

We also think there are many people who have a reliance interest in what they thought the law was, they proved to be wrong, so we want to cover those people, treat them in the way we're treating the people that we are legislating for, as we have a right to do.

We want everybody to have 5 years, and that includes people with cases pending, people who have been... whose actions have been dismissed, and people who are filing their complaints today.

Mr. Olson: I still think, Justice Ginsburg, that that would create problems under the Due Process Clause and the Separation of Powers Clause, depending upon which cases and which individuals one was looking at and where they were in the spectrum, and the extent to which the legislation acted, in fact, prospectively if the decision had been--

Unknown Speaker: But tell me what Congress could do if Congress is of a mind that it wants to enlarge the time that people can bring this 10(b) claim, and it wants to cover as many people as possible--

Mr. Olson: --Well, this--

Unknown Speaker: --and says, we know... one thing that we do know is our prerogative to set time limits for the bringing of Federal actions.

You said there's a right way and a there's a wrong way.

What is the right way for Congress to accomplish that objective of getting as many people in under what it thinks is the proper time limit?

Mr. Olson: --I'm not certain where the line would be.

It is a difficult question to answer.

I do believe, although it is not before this Court, that cases in which the issue is pending, under my... Mr. Allen's definition, decided by a district court, for example, but on appeal, would still create constitutional questions.

Where Congress is simply enlarging the statute of limitations which has not been litigated, with respect to a claim that has not been litigated at all, I think Congress' power would be a great deal greater.

But this case is all the way at the far end of the spectrum.

Unknown Speaker: I just wanted to know if you could tell me what was the right way.

You have said that this way is the wrong way.

I don't see--

Mr. Olson: Well, one of the--

Unknown Speaker: --in your answer so far that there is any right way.

Mr. Olson: --Well--

Unknown Speaker: You seem to be saying that Congress can deal with from this day forward but not for the past.

Mr. Olson: --Well, the... this Court has said--

Unknown Speaker: Maybe there is no right way.

Is there a possibility that there is no right way to overturn a judicial decision--

Mr. Olson: --Not--

Unknown Speaker: --that adjudicated private--

Mr. Olson: --Not--

Unknown Speaker: --Is that a possibility?

Mr. Olson: --Well, of course, and that's what I am hoping that I've said.

Unknown Speaker: Well then, say that.

I mean--

Mr. Olson: Well, but I think that--

[Laughter]

Unknown Speaker: --And you think there is no way in your argument, not that Congress... there was a right way but Congress--

Mr. Olson: No way with respect to final judgments.

Unknown Speaker: --Would you go so far as to say a statute allowing setting aside of a judgment obtained by fraud or by bribery or something like that could not obtain final... authorize the setting aside of final judgments?

Mr. Olson: No.

Congress has done that, or this Court and Congress--

Unknown Speaker: How does it get that power--

Mr. Olson: --has done that with Rule 60(b).

Unknown Speaker: --Is that just the limit of its power?

It only can do it where there's fraud?

Mr. Olson: Well--

Unknown Speaker: What if the judge was hypnotized for that class of cases.

[Laughter]

Could they set aside all judgments in which judges over 90 years old were hypnotized and gave... presumably gave a stupid judgment?

Mr. Olson: --I... in the first place, Rule 60(b) is a codification of what--

Unknown Speaker: No, but forget 60(b).

Could they pass such a statute for a limited class of judgments that they detected created... they thought created a very--

Mr. Olson: --I--

Unknown Speaker: --special doubt about--

Mr. Olson: --I do not believe so, Justice Stevens.

Unknown Speaker: --Fraudulent judgments are invalid judgments.

Mr. Olson: Yes.

Yes, but--

Unknown Speaker: Stupid judgments are not invalid judgments, right?

[Laughter]

Mr. Olson: --That's exactly--

Unknown Speaker: That's the distinction.

[Laughter]

Mr. Olson: --That's exactly what--

Unknown Speaker: A clear distinction.

Mr. Olson: --the Court said in Federated Department Stores.

It doesn't matter whether the decision was wrong.

Once the judgment is final, that fixes the rights of parties.

If I can make just one additional point with respect to section 27A, and I think I was about to finish making it, that this 27A is a very peculiar statute in that it completely and exclusively reversed the roles of the courts and the Congress.

The court's decision is now purely prospective, such as like the one that... like the Moitie decision that the justices of this Court rejected in the--

Unknown Speaker: Some people think the Lampf case reversed the roles of Congress and the courts, too.

Mr. Olson: --Well, but this Court didn't.

Unknown Speaker: Some of us.

[Laughter]

Unkind of you to point that out.

Mr. Olson: And, of course, this Court's decision, since it no longer affects the litigants either in that case or the cases that were pending, strips the... allows the Court to be stripped of its power.

Unknown Speaker: You said there's really no middle way, in for a calf, in for a cow.

Lampf is and was the law, even if a lot of people thought it wasn't.

You have to go all the way down that line.

There's no possible compromise.

Mr. Olson: Justice Ginsburg, section 27A(a) is not before this Court.

The Court denied cert in that case, and a petition for cert that was filed in that case.

We're only talking about the final judgment part of section 27, not only the judgment part of 27A(b), but the final judgment part of 27A(b), so we're only looking at one piece of it.

I would make some of those arguments with respect to 27A(a), but those aren't before this Court.

What is before this Court is a classic exercise by the Congress of changing the results of this Court.

If it can change the results in Lampf, it can change the results in other decisions having to do with section 10(b).

If it can change the decisions of this Court and other courts with respect to the securities laws, it can change the results in this Court under ERISA, or RICO, or some other statute.

If it can change the result in Lampf and a group of cases, it can change the result in a single case.

There is no principled stopping point.

This is an egregious exercise of judicial power and an egregious weakening of the judicial power, and it is unconstitutional.

Thank you.

Chief Justice Rehnquist: Thank you, Mr. Olson.

The case is submitted.

Unknown Speaker: The honorable court is now adjourned until Monday next at ten o'clock.

Attribution:

The OYEZ Project

Featured:

Freytag v. Commissioner of Internal Revenue - Oral Argument

Fri, 09 Jan 2009 14:49:36 +0000

Case:

Freytag v. Commissioner of Internal Revenue

Media File:

90-762_19910423-argument.mp3

Related Transcript:

transcript.xml

Transcript:

Argument of Kathleen M. Sullivan

Chief Justice Rehnquist: We'll hear next in argument No. 90-762, Thomas Freytag v. Commissioner of Internal Revenue.

Ms. Sullivan, you may proceed whenever you're ready.

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

This is a tax case with implications for up to 3,000 taxpayers and a billion and a half in alleged tax deficiencies, and it involved one of the longest trials below in the tax court's history... 14 weeks of evidence, complex financial testimony, 9,000 pages of transcripts, 3,000-plus exhibits.

But we won't tax you with any of the substantive detail of that tax case, because the sole issue before this Court is the authority of the special trial judge who presided over and, we assert, effectively decided the case.

We will raise issues both of the statutory and the constitutional authority of the special trial judge.

But I'd like to start of course with the statutory claim, because should you reverse this case, agreeing with our statutory claim, you would avoid the need to reach the constitutional question.

Now, the statutory framework that governs the special trial judges is straightforward.

It's set forth in Internal Revenue Code 7443A, which is reprinted at A100 in the cert. petition.

And it divides the work of the tax court potentially between the regularly appointed tax court judges, who now number 19, and special trial judges whom Congress has authorized the chief judge of the trial court to appoint and to remove at his pleasure.

Now special trial judges are governed by 7443A, B, and C.

And to make it simple, they have two kinds of function.

The special trial judges may hear and decide certain specified kinds of tax cases, specially specified declaratory judgment claims and small tax claims involving amounts under $10,000.

They may hear and decide those cases set forth in 7443A(b)(1) to (3).

(b)(4), the sole provision at issue in this case is the catch-all provision that says they may also hear but not decide any other proceeding.

Now let me try to clarify the points of agreement and disagreement between petitioners and the Government with respect to the statutory claim.

Petitioners and the Government agree completely that Congress did not authorize special trial judges to decide (b)(4) cases.

(b)(4), coupled with (c), precludes decision by a special trial judge.

Our difference with the Government... the heart of our statutory claim... is that in this case he did decide--

Unknown Speaker: Well, it precludes... it precludes making the decision of the court.

Ms Sullivan: --That's correct.

It--

Unknown Speaker: I'm not sure if it precludes making the decision, which is subject to the review of the court, in de novo proceeding.

Ms Sullivan: --That may be right, Justice Kennedy.

That is not what the tax court rules permit.

So our argument is that the tax court rules here are in violation of the statute even if the statute is properly read the way you describe to permit reports by special trial judges subject to de novo review.

Our key argument here under the statute is not only that the conduct of the judge below here amounted effectively to a decision in the case, but that the tax court rules ensure that special trial judges will effectively decide (b)(4) cases.

And I'd like to point out it... precisely how we read the rules to do just that.

The tax court rules... the key rule here is rule 183.

And we've reprinted that, if you wish to look at it, in the cert. petition appendix at A91.

Now the key features of that rule that we argue preclude what Justice Kennedy said might be permissible within the statute are rules (b) and (c).

Specifically I'd like to start with (c), if I might, on page A92.

Tax court rule 183(c), which is the governing rule in (b)(4) cases and was the rule at the order--

Unknown Speaker: What page of the... this is--

Ms Sullivan: --Cert. petition appendix A92.

Unknown Speaker: --A92.

Thank you.

Ms Sullivan: Specifically, Mr. Chief Justice, the last sentence of that paragraph (c) on A92.

You'll see in that sentence that the action on the report... and now we're talking about what the regular tax court judge to whom the case returns after the special trial judge has finished a report.

If you look at 183(c) last sentence, it provides... last clause of the sentence... that the findings of fact recommended by the special trial judge shall be presumed to be correct.

In other words, the tax court's own rules, Justice Kennedy, in answer to your question, preclude de novo review of the kind that is typical in other settings in the Federal Government where adjunct adjudicators are operating under the real... not merely formal... supervision of a regular judge.

To connect up to Justice O'Connor's question earlier, had magistrates' decisions in suppression hearings not been reviewable de novo, they would not be in compliance with the statute... the Magistrates Act... and may raise other constitutional questions.

But here de novo review of the kind that is typical under the Magistrates Act is actually precluded by the tax court's rule.

Unknown Speaker: When you say... when you say de novo review, Ms. Sullivan, you mean complete examination of every question of fact without any presumption of correctness at all?

Ms Sullivan: Not necessarily, Mr. Chief Justice.

We at least mean in order for the statute to be complied with that the regular tax court judge to whom the report of the special trial judge returns must at least demonstrate as he... as the district court must over in the magistrate setting that he has looked at or engaged with... looked beneath the findings of the special judge to the record and the arguments of the parties below.

Unknown Speaker: Well, you... do you mean demonstrate by some sort of a written opinion of his own?

Ms Sullivan: Not necessarily, but at least by the operation of a general rule that provides that this engagement will take place.

That's the kind of rule that is in place in the Magistrates Act.

Unknown Speaker: Well, but you're saying as I understand it that this particular tax court rule which we're talking about here ensures that the special judges will end up deciding the cases.

Now, I... I don't read the rule that way.

It seems to me that you could say that if you're talking about a factual finding being... presumed to be correct, you could apply the clearly erroneous standard.

Ms Sullivan: That's right.

And the only... the only circuit court to interpret the statute has read it to require clearly erroneous review.

But the problem with the rule goes further than the... its application of the clearly erroneous standard if you wish to read it that way.

Notice that in rule 183, there is no opportunity to for the parties to see or to object to the special trial judge's report between the time it is written and filed with the regular tax court judge and the tax court judge's issuance of the opinion.

The first--

Unknown Speaker: Ms. Sullivan--

Ms Sullivan: --Yes, Justice O'Connor.

Unknown Speaker: --Did the... did the petitioners here agree to the assignment to the special trial judge?

Yeah.

Ms Sullivan: Look... there are three key moments in the case, Justice O'Connor, in answer to that question.

When petitioners came to the tax court back in 1982, they sought adjudication of their alleged deficiencies before a regular tax court judge, and they were so assigned to regular tax court Judge Wilbur, presidential appointee.

Judge Wilbur began to try the case... try the case from June 1984 through November 1985, when he suddenly became ill.

So there was no pre-trial consent to the special trial judge presiding in the case.

First key moment in the case is in November 1985, after this illness sets in, when... in mid trial... the petitioners consented to have a special trial judge, special trial Judge Powell, sit as an evidentiary referee while the proceedings were videotaped so that Judge Wilbur could still make the decision in the first instance based on the videotape.

Time goes by... December 1985 to June 1986.

Special trial Judge Powell does conduct the proceedings.

And then after the trial is complete, after all the evidence is taken, in July 1986 for the first time is it proposed by Chief Judge Sterrett of the tax court that Justice... Judge Powell, special trial Judge Powell, actually file the report under the provisions of (b)(4).

So there was a mid-trial consent to his continuing the case as an evidentiary referee.

And there was a post-trial consent to his filing the report.

Unknown Speaker: So, your answer is, yes, there was consent.

Ms Sullivan: Yes.

Unknown Speaker: I... if that's the situation, I'm not sure that we would reach any problem with the rule.

Ms Sullivan: Justice O'Connor, let me be clear on a distinction between this case... the Freytag case... and the Peretz case which you just heard.

In Peretz there was an issue of waiver of the statutory claim.

There is before this Court no issue of waiver of the statutory claim.

The Fifth Circuit held that the statutory claim was not waived by the petitioners' mid-trial consent to evidentiary refereeing or post-trial consent to the filing of the report.

The Government didn't cross-petition and has raised no claim of statutory waiver here.

So, in contrast to Peretz, I believe the statutory question really must be reached.

As to the question of whether the constitutional claim can be waived, we argue quite simply that it's a structural claim of precisely the kind that you, speaking for the Court, Justice O'Connor, in CFTC v. Schor said waiver should not affect.

But just to return to the third key moment in the trial if I could, it's October 21st, 1987, when we argue that the key decision effectively by the special trial judge is realized.

To answer your question, Mr. Chief Justice, October 21st, 1987, is the day on which the Chief Judge of the tax court, Judge Sterrett, does two things on the same day.

Number one, he issues an order reassigning the case to himself from special trial Judge Powell, who sometime in the proceeding 4 months had filed a report with the Chief Judge of the tax court.

Second, on the same day, he adopts and a... he states in an opinion that he agrees with and adopts the findings of the special trial judge.

Unknown Speaker: You're going to tell us now what's wrong with that?

Ms Sullivan: Yes, Justice Blackmun.

The problem with that two-sentence... a signature plus two sentences added to the 55 pages of the special trial judge's report... is that there is no basis to suppose there was meaningful review or therefore meaningful supervision that would enable us to accept this as the decision of the tax court rather than of the special trial judge himself.

Unknown Speaker: What if... what if it were 5 days?

Ms Sullivan: Justice Blackmun, as I've said before, we rely on the presumption of administrative regularity under the tax court's own rules, even if you should indulge the Government's speculation that it might have been 5 days.

I would add the Government does not disagree with us that a rubber stamp would be ultravirus against statutory authority.

The Government simply tries to suggest that perhaps it was 5 days or 2 days or 14 days... who knows?

The parties can't know, because they have no opportunity to see the special trial judge's report or know when it is filed or object to it, unlike the procedure in the Magistrate's court.

But supposing it was 5 days, Justice Blackmun, we argue that the tax court's rules, which we should presume were followed here, preclude de novo review, permit at most clearly erroneous review and, because there is no opportunity for the parties to object, do not put the regular tax court judge to any obligation to look beneath the special trial judge's own findings.

Unknown Speaker: Well, that... that's the very reason why I wonder why you're making such a big point out of the same day.

Ms Sullivan: Ah, yes.

Well, it's an alternative argument, Justice Blackmun.

We do think that there is nothing... absolutely nothing in this record to suggest that the regular tax court judge actually reviewed the case.

In fact, October 21st, 1987, is the day he reassigned it to himself.

And if you look at tax court rule 182(b)... if I could turn you back to A91 for a moment.

A91, tax court rule 183(b), you will see the appropriate sequence for the reassignment of a case from a special trial judge to a regular court judge.

The special trial judge shall submit his report to the chief judge.

And the chief judge will assign--

Unknown Speaker: Reading from page A91?

Ms Sullivan: --Page A91, rule 183, paragraph b, final two lines of the rule... final three lines.

The special trial judge submits a report and at that point the chief judge will assign the case to a division of the court.

Turning over to the next side of the page, rule (c).

Rule (c) says the division to which the case is assigned may adopt, modify, reject, or as happened here, simply adopt verbatim completely the rulings of the special trial judge.

If we presume administrative regularity, Justice Blackmun, there can be no inference other than that.

October 21st, the case came--

Unknown Speaker: The first... Judge Sterrett was chief judge.

Ms Sullivan: --That's right.

Unknown Speaker: He knew what was going on.

Ms Sullivan: Well--

Unknown Speaker: He must have known what was going on.

Ms Sullivan: --Actually, Your Honor--

Unknown Speaker: I'd like to ask him.

He's present in the courtroom--

[Laughter]

Ms Sullivan: --Like the line in Annie Hall where Woody Allen says, I just happen to have Marshall McLuhan right here.

[Laughter]

I won't ask him, Your Honor.

What I would like to point out not that... we cast no aspersion on Chief Judge Sterrett personally in the least.

What we are doing here in the absence of any evidence that there was meaningful review is arguing about what we should presume from the regular procedures of the tax court that Chief Judge Sterrett can be expected faithfully to adhere to.

And the published rules of the tax court say you reassign the special trial judge's case to a judge of the tax court and then that judge reviews it.

Unknown Speaker: Ms. Sullivan.

Ms Sullivan: Yes, Justice?

Unknown Speaker: Would you be satisfied with the usual expression that I think you and I have seen of an appellate court judge who says, I have reviewed all of the objections of appellate and find no merit in any of them?

Is that what you want?

Ms Sullivan: I believe we might accept that, Justice Marshall.

But the fact is under the tax court's rules, the chief judge of the tax court could not review all of the objections of the parties to the special trial judge's findings because they never got to see them.

Up until 1984, the tax court had provided by its rules for exceptions by the parties to the special trial judge's report and an opportunity to try to get the tax court judge to reject some of those findings.

That opportunity was eliminated in 1984.

One more fact in answer to your question, Justice Blackmun, that in fact it was not clear that Chief Judge Sterrett would be the judge of the regularly appointed tax court judges to whom the case was reassigned.

The stipulation... the agreement by the parties to which Justice O'Connor referred earlier was to permit Judge Powell, the special trial judge, to make a report of his findings for reassignment either to Chief Judge Sterrett or to Judge Wilbur, the judge who had become ill and whom, even up until October 21st, 1987, the parties believed might still be the one to get the case.

So you cannot presume on this record that judge... Chief Judge Sterrett would have paid attention to the case specifically at any moment up until he reassigned the case to himself, October 21st, 1987, the day he also issued his--

Unknown Speaker: Ms. Sullivan--

Ms Sullivan: --Yes, Mr. Chief Justice.

Unknown Speaker: --I wonder if questions of these rather detailed facts are fairly subsumed under the questions presented in your writ of petition... writ of certiorari?

Ms Sullivan: Mr. Chief Justice, we think clearly so and in haec verba, our first question was not contrary to the Government's suggestion, does the statute permit assignment of special trial judges only to preside at (b)(4) cases.

Our question presented and the one accepted... granted the review in the Court was, as you can see from the first page of our cert. petition, are complex tax cases allowed to be assigned to a special trial judge for trial and effective resolution.

In fact, effective resolution is the heart of our statutory claim and it was the ground on which the Fifth Circuit decided below.

The Fifth Circuit decided there was no rubber stamp, and hence, we were out of luck.

We claim that, regardless of whether you call it a rubber stamp or not, the tax court's rules ensure that, as happened in this case, the usual opportunities for supervision and control that one would expect in an adjunct adjudicatory scheme like this are missing.

In other words, just to put our point succinctly, Congress did not and could not have intended special trial judges in large, complex, multiparty, multimillion dollar tax shelter cases... alleged tax shelter cases such as this one... Congress did not and could not have intended such cases to be in effect decided by the autonomous actions of a special trial judge.

Now, if there are no further questions on the statutory claim, I'll move on to our constitutional argument.

As I mentioned at the outset, should you agree with us that the statute was violated by the tax court's rules and conduct in this case, you would then nonetheless need to reach... sorry... should... if you agree with us on the statute, you need not reach our constitutional claim.

But should you disagree with us on the statute, let me state as simply as I can what the key points of difference and agreement are between us and the Government.

Now, of course, we deal here with one of the plainest texts in the Constitution... the appointments clause that permits Congress to delegate the power to appoint inferior officers to the President alone, not at issue here, to the heads of departments, or the courts of law.

Now, if I could dispose quickly of the employee point and the court of law point, I will get to the key point of difference between us and the Government, which is whether or not the tax court may possibly be considered an executive department for appointments clause purposes and thus its Chief Judge the head of that department.

I think the employee point and the court of law argument can be dismissed quickly.

It is beyond serious dispute that special trial judges are inferior officers of the United States.

They are far more than mere ministerial aides.

They... and every court to have decided this question has agreed.

In terms of this Court's own definition there can be no doubt that they satisfy every formal definition of what an officer is.

They hold office created by Congress.

Justice O'Connor?

Unknown Speaker: Well, have we really gone into any depth in defining who is an inferior officer and who is an employee?

Ms Sullivan: The cases that we cite in our brief of Germaine from the late 19th century and Burnap, a Justice Brandeis opinion from the early 20th, are perhaps helpful in resolving the question of who is and isn't an officer.

But we would rely more heavily on your statement more recently in Buckley that the function... the functional test for an officer is whether he exercises significant authority pursuant to the law.

Now, there can be no doubt that a special trial judge, whether presiding, or as we argue he did here, deciding the case, is exercising significant authority.

In fact we would argue that there's a parallel here between special trial judges and magistrates, except that magistrates are more effectively supervised under the practice of the article III courts by their... the district courts under article III.

But in any event--

Unknown Speaker: Plus your argument here is at--

Ms Sullivan: --Yes, Justice Scalia.

Unknown Speaker: --cross purposes with your argument earlier--

Ms Sullivan: How's that?

Unknown Speaker: --your argument earlier.

I mean, well, the more... the more authority the special judge has the... to decide the case conclusively, the less likely he's just an employee and vice versa.

The--

Ms Sullivan: That's right, Your Honor.

It's... it's more clear, but we absolutely disagree that the officer is demoted to employee when he is merely presiding.

We think that's in appropriate.

He... a magistrate does not cease to be an officer and become a merely employee when he is carrying out pretrial hearings as opposed to disposing of a case.

And just as a lawyer is still a lawyer, protected by the attorney-client privilege, if she's at the xerox machine, just as the President is still President when he's walking the dog on the White House lawn, so a special trial judge cannot become an employee just because he is performing a task that could have been performed by an employee.

So we would respectfully say... respectfully suggest that even if there were effective supervision consistent with the statute, the special trial judge would still be an officer.

And thus, even in presiding in (b)(4) cases, would raise the constitutional issue.

But in any case, if you agree as... that the special trial judge is an inferior officer, we agree fully with the Government that the tax court cannot be considered a court of law for purposes of the appointments clause.

Unknown Speaker: --How about the... all these other courts that Mr. Griswold describes in his brief... the claims court, the territorial courts, the land courts, the District of Columbia courts.

Those all executive departments?

Ms Sullivan: Territorial courts we think are unreached by any appointments clause constraint, because when Congress exercises its territorial authority, it is acting in effect as a State.

Separation of powers concerns don't apply.

As to nonterritorial article I courts--

Unknown Speaker: What is the District of Columbia, by the way, in your particular dichotomy here?

Ms Sullivan: --I... I'd have to put it over with the territorial courts for purposes of the last remark.

I--

Unknown Speaker: I see.

So they... and again... tell me again, you say they are a department there?

Ms Sullivan: --You need not reach the question whether they're a department because separation of--

Unknown Speaker: Well, I know, but I'm curious about what your answer would be even if we don't have to reach it.

Ms Sullivan: --Not a department if you had to reach it.

Not a department if you had to reach it.

Unknown Speaker: So they are courts of law within the meaning of the appointments clause.

Ms Sullivan: Not courts of law or executive departments.

For appointments clause purposes--

Unknown Speaker: What are they?

Ms Sullivan: --they are out... you need not decide that.

You need not decide--

[Laughter]

--any question about the fourth branch of Government here.

Unknown Speaker: No we... assume we want to.

[Laughter]

Ms Sullivan: Assuming you wish to issue... I can't assume you would wish to issue an advisory opinion on the status of the fourth branch.

Let me just say that the Government has argued that there are only three branches.

Everything in the Federal Government has to fall within those--

Unknown Speaker: Yes, but what I'm... I'm asking--

--What do you argue... what do you argue as to the status of the courts that Justice Stevens mentioned?

Ms Sullivan: --We argue that they are not empowered under the appointments clause to appoint officers because they are... you need not reach it but if you had to... they are neither courts of law nor--

Unknown Speaker: Well, they were empowered by statute to appoint clerks, who are inferior officers.

Ms Sullivan: --Maybe employees.

You've never held they're inferior officers.

Maybe employees.

Unknown Speaker: Well, let's assume for a moment they were inferior officers.

The clerks of the court are pretty important.

They're officers of the court.

Our clerk is an officer of the Court.

Now, if they are inferior officers, you would... and the courts exercise judicial power beginning with the... Justice Marshall's opinion in the very early case, why are they not courts of law?

And if they're not... if they're courts of law, why is not this tax court also a court of law?

Ms Sullivan: They are not courts of law because they lack the independence guaranteed article III courts through the salary and tenure clauses of article III.

Courts of law in article II must mean courts of law in article III.

Unknown Speaker: Do they exercise the judicial power or are--

Ms Sullivan: They may do so.

They may exercise the judicial power of the United States.

But the appointment power does not follow the judicial power wherever it may go.

And all bankruptcy judges appoint their clerks--

Unknown Speaker: --Well, we're asking what is a court, and you're saying it exercises part of the judicial power, and Congress calls it... calls it a court.

We call it a court in Palmore.

And you say it's not a court?

Ms Sullivan: --Absolutely for appointment clause purposes.

Because remember the purposes of the appointments clause on which we and the Government agree... the purpose of the appointment clause was to--

Unknown Speaker: Which you and the Government now agree.

Ms Sullivan: --Now agree after many changes of heart on the Government's part, which is why you cannot rely on the executive branch to preserve and champion the appointments clause in this case.

[Laughter]

But on the waiver point--

Unknown Speaker: And that's why maybe the appointment was if... with the courts of law then.

Ms Sullivan: --On courts of law... to be... courts of law and heads of department make sense if the goal of the Constitution is to distance from Congress the awesome power to appoint executive officers.

What distances an entity from Congress?

Either the independence that you and the other article III judges enjoy through the tenure and salary clauses, which article I courts lack... or protection through the political might and muscle of the President.

The tax court... and it's like in this respect the courts Justice Stevens mentions... lacks... uniquely lacks both those attributes.

They are not independent like article III judges.

They are not executive... or controlled or supervised or protected by the President.

Unknown Speaker: Well, Ms. Sullivan is it your position that in the case of a territorial court, Congress could provide that the Speaker of the House would appoint the judges?

Ms Sullivan: They might raise in... certain... certainly not.

That... well, it would not raise an article III problem.

It might be in Congress, and the key point is that--

Unknown Speaker: The appointments clause just wouldn't apply in your view?

Ms Sullivan: --The appointments clause would not apply.

Unknown Speaker: Well, what's our closest case to support--

Ms Sullivan: The answer to your question is yes, that our argument would permit Congress to make that--

Unknown Speaker: --And what's the closest case--

Ms Sullivan: --hiring decision.

It's not an appointment.

Unknown Speaker: --What's the closest case from this Court that supports that position do you think?

Ms Sullivan: There's no case I know of that supports that position, so long as Congress is not appointing itself officers of the United States, as you ruled it couldn't do in Buckley, an appointments clause is not presented.

If I could just conclude, Your Honor, and save the rest of my time for rebuttal if there's any left.

Unknown Speaker: Well, let me ask you one other question though.

Ms Sullivan: Yes, Justice Stevens.

Unknown Speaker: If they're... if they're not courts of law and they're an executive department, as you agree with the Government, why then isn't the chief judge the head of the department?

Ms Sullivan: Not a department, can't be a department, no executive functions whatsoever.

The tax--

Unknown Speaker: What are they?

They're not a department and they're not a court of law.

Ms Sullivan: --It may be that Congress should not... in the Government's view perhaps in other view... people's view... perhaps Congress should not create entities that are outside the tripartite structure of Government but it has.

Unknown Speaker: Well, maybe they shouldn't have.

What is your view as to the status of these tribunals?

Ms Sullivan: Congress moved it out of the executive branch in 1969.

It cannot be in the executive branch.

Congress did not put it in the judicial branch.

It is not in the legislative branch.

It is neither executive, judicial, nor legislative.

Last point, we don't necessarily--

Unknown Speaker: That... that's like the FCC and the independent regulatory agencies who are considered... who are considered heads of... heads of departments.

They have their chairman on it.

Ms Sullivan: --They might well be.

Key point in our case is that the legislative courts are not the same thing as the independent agencies.

The Government's main argument is not that the Constitution has been complied with here.

It's that if the Constitution were complied with, the Government says the FCC, the FTC, the SEC might lose their appointment power.

Well, that's just not so.

The legislative court known as the tax court is distinct from the agencies in very significant ways.

It's budget goes straight to Congress, not through OMB.

It elects its own chief judge.

The President hand-picks the chairmen of the agencies and can be expected to control them.

We respectfully request that the case be reversed and remanded for a new trial before the--

Unknown Speaker: Thank you, Ms. Sullivan.

Ms Sullivan: --regular tax court judge.

Thank you.

Unknown Speaker: Mr. Roberts, we'll hear now from you.

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

Petitioners claim that the appointment of a special trial judge to hear and report on their cases which is authorized by the plain language of section 7443A(b)(4) is unconstitutional under the appointments clause.

There are two reasons that this Court should not reach that claim.

First, petitioners waived it by consenting to have their cases heard by a special trial judge in the tax court and waiting to raise their claim until it reached the court of appeals, which quite properly declined to consider it.

Second, the special trial judge assigned to hear and report on petitioners' cases under subsection (b)(4) performed duties that may be performed by an employee and do not require an officer of the United States.

The appointments clause is therefore not implicated on the facts of this case.

First, the waiver point.

When the regular tax court judge became too ill to continue hearing petitioners' cases, the chief judge did not simply reassign the cases to a special trial judge.

He issued an order proposing such a reassignment and inviting any objections.

Hearings were held to consider objections.

Petitioners, represented by counsel, discussed with the chief judge the issue of reassignment and settled upon terms under which they would consent to the reassignment.

One taxpayer did object, and his case was severed.

Petitioners never did object.

And even after the tax court decision, in two motions to reconsider, never once raised the appointments clause problem.

Now, the reasons for a waiver rule I think we've seen this morning--

Unknown Speaker: Well, Mr. Roberts, I guess the first part of the argument here today went to the statutory argument, and as to that it was asserted that there was no waiver of the argument that the tax courts own rules are improper.

Justice Roberts: --Your Honor, the petitioners did waive that argument as well in a sense that they did not raise it before the tax court.

The Fifth Circuit however went on to consider it.

And therefore, under the rule that matters, although not raised, are actually decided... may be reviewed, we agree that that question may be reviewed.

We think it's--

Unknown Speaker: So that question is before us, and do you... are you going to address yourself to part (c) of the rule that says the findings of fact recommended by the special trial judge shall be presumed to be correct?

Justice Roberts: --I'll do so right now, but before I do so would point out that that issue is a very good indication of why we have a waiver rule.

The question of how the tax court interprets its rule 183, how a regular tax court judge handles the report of a special trial judge when he gets it, are all matters that the tax court could have definitively resolved if it had been asked to do so.

Instead, because of petitioners' default, this Court is asked to decide that... those questions of technical tax court procedure in the first instance and in a decisional vacuum.

Now--

Unknown Speaker: At what point would it have done so?

On a petition for a rehearing after Judge Sterrett's decision?

Justice Roberts: --Well, petitioners today argue that rule 183(c) prevents the tax court from exercising de novo review.

Now, if that's the case, they should have known that when the Chief Judge proposed to reassign their case to a special trial judge for hearing a report under rule 183(c).

The rule said the same thing then as it does today, and yet they raised no objection at that point.

That was their opportunity to do so.

They had an opportunity to do so also after the decision in two different motions to rehear.

Unknown Speaker: Mr. Roberts, before you get into the substance, what about the argument that you didn't cross appeal... that the... that the court of appeals did decide the waiver point, decided against you, and you didn't cross appeal?

Justice Roberts: It decided two waiver points.

One, the issue they permitted petitioners to raise in the court of appeals was whether or not this type of a case can be assigned under subsection (b)(4) to a special trial judge for hearing and report.

Petitioners' argument was (b)(4), which says any other proceeding actually means any other small proceeding like the ones in (b)(1)... (b)(1) through (3).

They permitted them to raise the issue.

So that one is not... not waived.

But the Fifth Circuit did not decide petitioners' constitutional claim.

They quite properly decided that that was waived.

Now, to return, Justice O'Connor, to rule 183, and in particular (c).

There is a last sentence to the rule, but there's a first sentence as well.

The first sentence describes what a regular tax court judge is to do with the special trial judge's report.

And it says he may adopt it.

He may modify it, reject it, call for briefing, call for oral argument.

He may receive additional evidence or may recommit the report with instructions.

That in our mind indicates, as section 743A(c) makes clear, that it is the regular tax court judge and not the special tax court judge who decides the case.

That reading is confirmed by the fact that the interaction between the regular tax court judge and the special trial judge is a matter that is purely internal to the tax court.

It... petitioners object that they didn't have an opportunity to review the report before it went to the regular judge.

They didn't have--

Unknown Speaker: Mr. Roberts, surely what matters is what he must do, not what he may do.

Is it enough to say that he may decide the case himself if he wants to?

Justice Roberts: --He is--

Unknown Speaker: It seems to me, to support your position, you have to say he must.

Justice Roberts: --He must, and--

Unknown Speaker: I know all this is... all the sentence you rely on just says he may.

Justice Roberts: --No, section--

Unknown Speaker: Whereas the last sentence says, due regard shall be given to the circumstance of the special trial judge had the opportunity to evaluate... blah, blah, blah... and the findings of fact shall be presumed to be correct.

Justice Roberts: --The sentence that I read says may because it lists a number of things, including some that are inconsistent that he may do.

He may adopt it; he may reject it.

The statute, after setting forth the categories of cases that the Chief Judge may authorize a special trial judge to hear, says that in the first three categories the chief judge... the court may also authorize the special trial judge to decide the case.

He may--

Unknown Speaker: Well, Mr. Roberts, just... if we thought that the last sentence of that rule required the tax court division to which the report is assigned to give the special trial judge's recommendations a presumption that they are correct... a clearly erroneous standard of review... now, if that... if that is our reading of it, is that consistent with the authorizing statute?

Justice Roberts: --Well, with respect, there are two different points in your question.

There's a difference I believe between a presumption of correctness and a clearly erroneous standard of review.

Unknown Speaker: Take them both.

Justice Roberts: I--

Unknown Speaker: Is... are they consistent with the statute?

Justice Roberts: --The first is.

The rule says that the findings of fact shall be presumed to be correct.

The rule does not say what it takes to overcome the presumption.

The tax court has.

In its Rosenbaum decision, it's indicated both by what it says... said, which is that the language does... in no impairs or dilute their responsibility, and by what it did, which was a reweighing of the evidence in the case and in many instances reaching a conclusion different from that of the special trial judge.

The tax court has indicated that it reads its rule as proposing... as... the presumption is in effect as we said a starting point from which the tax... the regular tax court judge must consider the proposed findings of the parties.

Now, as I've indicated... given the fact that the interaction between the regular tax court judge and the special trial judge--

Unknown Speaker: Are the proposed findings of the parties submitted to the special trial judge?

Justice Roberts: --Yes, Your Honor.

And--

Unknown Speaker: Mr. Roberts--

Justice Roberts: --And they're, of course, available and go on to the regular judge when he's reviewing.

Unknown Speaker: --At a minimum, Mr. Roberts,

"shall be presumed to be correct. "

means that if everything else is in equipoise, what the... what the special trial judge found prevails.

Doesn't it mean that at a minimum?

Justice Roberts: If it's... if it's a straight tie, then that's what it... that's what it means.

Yes.

Unknown Speaker: Right.

I see.

Is that consistent with the statute?

Justice Roberts: Yes, I believe it is, because I don't think that type of review is abdicating responsibility in any way for a decision.

Now, of course, it has to also take into account--

Unknown Speaker: He in effect decides the case then.

Justice Roberts: --Well--

Unknown Speaker: If what he says goes.

Justice Roberts: --Well, no--

Unknown Speaker: If everything else is in--

Justice Roberts: --because it also has to be evaluated with the... with the... the burden of proof.

One of the parties bears the burden of proof.

And if that party has not carried its burden of proof, if it is an exact tie, then the other party would prevail.

Now--

Unknown Speaker: --Suppose the tax court judge said in exercising my determination whether to reject or accept this depart... this report, I must keep in mind that it is presumed to be correct.

Is that a proper interpretation of the regulation?

Justice Roberts: --Certainly.

It's just... it's just reechoing the rule.

The question is what does somebody--

Unknown Speaker: So that he... so that he must presume it correct before he exercises his discretion to reject it or adopt it?

Justice Roberts: --The question is what weight is given the presumption, and that's not a uniform rule.

Presumed correct doesn't necessarily mean the same thing across the board.

It's the tax court rule.

The place you look to find out what the presumption means is the ruling of the tax court.

And that court has indicated that the presumption is not... certainly not the clearly erroneous standard, but more in the nature, as I said, of a starting point.

And again to get back to the relationship between the regular tax court judge and the special trial judge, it is internal.

Petitioners object, we never had a chance to review the report.

We never had a chance to object to it.

And they say that's very different than the procedure that applies with respect to magistrates.

That's our point exactly.

A magistrate decides a matter that he is... he is hearing... a civil trial.

And therefore, the parties need to be able to review that decision to determine if they want to object and seek further review.

Special trial judge under subsection (b)(4) decides nothing, and therefore, it's perfectly appropriate that there is no opportunity for review and objection, just as there is not an opportunity for a party to review and object to a law clerk's draft that is... that is submitted to a judge.

A law clerk acts as an aide and assistant to the judge, just as a special trial judge does to a regular judge under this provision.

Unknown Speaker: Of course you don't submit proposed findings to a law clerk.

Justice Roberts: Well, I suppose in the district court it's not unusual to have proposed findings submitted to a court, and then a law clerk could do a draft of those and submit it to his judge, who of course has the responsibility for decision.

And--

Unknown Speaker: What does it mean... due regard shall be given to the circumstance of the special judge have the opportunity to evaluate the credibility of witnesses?

Justice Roberts: --Well--

Unknown Speaker: What does it mean to give due regard to that?

Doesn't that mean that you... you defer to... to the finding of fact?

Justice Roberts: --No.

Unknown Speaker: If it doesn't mean that, it's meaningless, isn't it?

Justice Roberts: Well, it may well be meaningless in the sense that the regular judge always the retains the responsibility to decide the case.

Due regard means due regard.

And what the tax court has said, as it understands its rule, that this in no way dilutes or impairs--

Unknown Speaker: Oh, I see.

I see.

Justice Roberts: --their responsibility to decide the case.

Unknown Speaker: I see.

You think due regard means no regard?

[Laughter]

Justice Roberts: No, I think due regard means due regard.

And in... and in the case of credibility determination, the regular tax court judge will give due regard.

But he gives regard in such a way, as the tax court has made clear... and this is a decision for the tax court in interpreting its rules... does not impair or dilute the regular judge's responsibility to decide the matter.

Unknown Speaker: But he's not... he's not going to interview the witnesses.

To give due regard to that individual's ability to see the witnesses is to defer to that... to that individual's judgment.

And nobody would read it in any other way.

Justice Roberts: Well, with respect, Your Honor, the tax court has, and the Rosenbaum decision is a good example.

There they went through and overturned findings of the special trial judge on credibility matters.

Now, they were reversed by the D.C. Circuit in the Stone case precisely because they said, you didn't give enough deference. But--

Unknown Speaker: But the good [inaudible], which their rule requires, I'd reverse them, too.

Due regard means due regard, not no--

Justice Roberts: --Absolutely not, Your Honor, because the tax court has not acquiesced in the Stone decision.

It of course is a national court, and it said the Stone court got it wrong.

We don't review this under a clearly erroneous standard.

And they shortly thereafter changed their practice so that it is now purely internal and confirms the relationship between the regular tax court judge and the special trial judge.

Unknown Speaker: --Well, Mr. Poberts, to get back to my question, which you never did answer, suppose it does mean it's reviewed under a clearly erroneous standard.

Would that violate the authorizing statute in your view?

Justice Roberts: I think it might well, Your Honor.

Unknown Speaker: Okay.

Justice Roberts: In the sense that a clearly erroneous standard is closer... the statute requires that the regular tax court judge in this category of cases make the decision.

Unknown Speaker: Yes.

Justice Roberts: And I think under a clearly erroneous standard that may be abdicating too much of his statutory responsibility.

Unknown Speaker: Well, what if it's just a presumption?

Justice Roberts: Well, if it's a presumption of the sort that it is here, as the tax court has told us... essentially that means that's where you start... now, let me see what the evidence is, let me review the matter... then it's perfectly consistent with the statutory language.

But I would like to point out that the case has evolved somewhat even today.

If petitioners' objection was that rule 183(c) was invalid, it seems a curious way to proceed in raising that objection to raise an appointments clause problem.

If a... for example, by analogy if a district court judge was allowing his or her law clerk to do all the work and then just rubber-stamping everything, I don't think our first reaction would be that that violates the appointments clause because the law clerk hasn't been appointed by the President and confirmed by the Senate.

No.

We'd say that what the district court is doing is wrong.

And the way you correct things that a district court does that is wrong is you appeal.

Now, the questions presented--

Unknown Speaker: Well, I take it there would be some concern if there was a rule that the law clerk's draft was presumed correct.

I mean, they might think so.

[Laughter]

Justice Roberts: --I recognize I'm... as treading on sensitive grounds but--

[Laughter]

--if the presumption... if the presumption is simply that this is a starting point and now the judge... I'm going to look at everything, I think that that would still be fine.

But the questions presented before this Court do not say that rule 183(c) of the tax court's rules is invalid.

That's not subsumed within... within the questions presented.

Now, what a special trial... tax court judge does, apart from hear... submitting the report, is of course conduct... preside at the hearing.

His duties in that respect are in no instance greater than the duties of the special masters that this Court regularly and routinely appoints in cases.

We know that those special masters are employees.

They cannot be officers of the United States, because Congress has not, by law, vested that appointment authority in this Court.

And therefore, by analogy the special trial judge is also an employee in... when he performs those responsibilities.

Unknown Speaker: I'm trying to think, Mr. Roberts... and not since I've been here anyway... but do we ever, when we have a special master here in original case and the parties don't agree with the disposition of the special master, do we ever adopt the decision of the special master without giving a hearing?

Justice Roberts: I don't know either way, Your Honor.

The--

Unknown Speaker: I think we don't.

Justice Roberts: --Well, in this case, of course--

Unknown Speaker: Before the Court.

Justice Roberts: --Before the Court.

In this case, of course, the same power is available to a regular judge.

He can call for oral argument.

He can call for additional evidence which is a feature that is plainly inconsistent with any clearly erroneous standard of review that I'm... of which I'm aware.

That usually is restricted to the record before the reviewer.

Here he can call for additional evidence, if he needs more evidence.

And he can just send it back and say, you know, try again and start over.

Now, the special trial judges have other duties that are not at issue in this case.

Under (b)(1) through (3) they may be authorized to decide the matter.

But petitioners cannot rely on that statutory provision.

They have not been injured by any assignment under (b)(1) through (3).

They have no standing to object to that.

The Buckley case, Buckley v. Valeo, makes clear that in considering appointments clause challenges, you look to the particular duties that are being challenged.

In that case, the court held that the Federal Elections Commission was improperly constituted under the appointments clause.

But it also said that the FEC as constituted could continue to perform certain of its responsibilities... those that did not require an officer of the United States.

So whether or not an officer of the United States is required under (b)(1) through (3), it is not required under (b)(4), and that is the only provision that is at issue in this case.

Now, if the Court disagrees with us on the waiver point, and if the Court disagrees with us on the employee point, it will then be necessary to reach the constitutional issue.

And our position is that the section 7443A(b)(4) is not unconstitutional--

Unknown Speaker: May I back up just a second?

You're saying because... that they don't have standing to challenge the status of the officer because, even if duties under (1), (2) and (3) would have been required... were performed by an officer of the United States, but if this assistant judge is performing those duties, the appointment would be invalid, wouldn't it?

Unless there... I mean... the constitutional issue would be presented as to... I don't quite understand why you're saying they don't have standing to make that argument.

Justice Roberts: --Because the duties that are required... that require an officer of the United States... an officer of the United States can perform duties that do not require an officer that may be performed by a mere employee.

And that is the case certainly we think with respect to (b)(4)--

Unknown Speaker: Oh, I see your... I see what you're saying.

Justice Roberts: --does not require an officer... and therefore, that he may do other things which he did not do in this case that require an officer... don't give them standing to complain about those.

If the Court does reach the constitutional question, and I would urge the Court not to because there are available certainly the waiver point and the employee's point... and the constitutional question is a very sensitive one that goes to the core of our structure of Government, and would be a peculiarly inappropriate case for the Court to reach out and decide that issue.

But if the Court does go ahead and do that, we believe that the appointment can be sustained because the chief judge of the tax court is the head of a department in the executive branch.

In Buckley v. Valeo, to cite the case again, the court, referring to the appointments clause, said that the departments referred to are themselves in the executive branch or at least have some connection with that branch.

As the Second Circuit recently held unanimously in the Samuels, Kramer case, the tax court fits within that definition.

We know it's not in the legislative branch.

We know that it's not an article III court.

Unknown Speaker: Now the Government take... now take the same position with respect to all these other courts that I referred to before?

District of Columbia, territorial courts... all those are in the executive branch?

Justice Roberts: Your Honor, each case has to be considered on--

Unknown Speaker: I understand.

Justice Roberts: --on its merits.

I think with respect to the territorial courts and the District of Columbia courts, there Congress is acting pursuant to its authority to establish local governments.

Unknown Speaker: Right.

Justice Roberts: So the clause may not apply directly.

The claims court is a particularly unique entity because it may well be an adjunct of the court of appeals for the Federal circuit, which has the authority to remove claims court judges.

Unknown Speaker: Well, tell me again why the different power of Congress is exercising... creating the District of Columbia courts and territorial courts... but why does that make the appointment clause issue any different?

Justice Roberts: Well, because we don't... because Congress in those instances has the authority to establish a local government, and a local government that need not comply with the tripartite separation of powers in the Federal Government.

Those entities... it may difficult to classify them as either executive--

Unknown Speaker: Well, you don't think that Congress could... or maybe you do... appoint a territorial governor?

Justice Roberts: --No.

I think in that instance the appoint... when the Federal entity is doing the appointment, the appointments clause applies with full force.

The question would be could Congress authorize the territorial court in a territory to then make an appointment.

And I think there because the territorial court may well be equivalent of a State court, a local entity, the appointments clause may not apply.

But when it's the Federal Government itself making the appointment, it applies in full force.

And no, the Congress could not appoint territorial officials.

Unknown Speaker: But I don't understand your answer to Justice Kennedy.

If the appointment clause doesn't apply, why couldn't Congress appoint the... a governor of the territory?

Justice Roberts: Well, I think it does apply in that instance, because it would do violence to the... to the separation of powers that is at the base of the appointments clause.

The question is sort of the... further on down the road, is... does the appointments clause apply to the appointing activities of the territorial entities.

And because I think they may well be creatures that don't fit into the tripartite system, because they partake of the local governing authority, that the clause may not apply.

Unknown Speaker: Then Congress could appoint the staff of the governor and the staff of the court.

Justice Roberts: No, Congress could authorize the court to appoint its staff even though we may have trouble saying that that's an executive department or a court of law.

But I think when Congress is doing the appointing, it still must act consistent with the appointments clause.

Unknown Speaker: Well, are you resting on the appointments clause or just a concept of congressional power?

Justice Roberts: Well, it's an... it's an interplay between the appointments clause and Congress' powers with respect to the territories and the District of Columbia which gives rise to creatures that are hard to fit into the terms of the appointments clause.

Now--

Unknown Speaker: Well, the appointments clause gives some power of courts of law to make appointments.

Do you think, as for the territorial courts, they could have authorized this Court to appoint the clerk of the territorial courts?

We're certainly a court of law.

Justice Roberts: --I don't see any objection to that, no.

I think they could have.

Now, if the tax court is going to exist as a constitutional entity, it must be in the executive branch, because there are only three branches.

Petitioners are correct.

That is our view.

And we know that it is not in the legislative branch, and it is not an article III court.

They say that it... there are reasons to doubt were their words in their reply brief... that it's in the executive branch because it performs adjudicatory functions.

But it adjudicates public rights cases that Congress may leave within the executive under Murry's Lessee, which was itself a tax case.

Now, it's easy, of course, to visualize what the tax court does as being adjudicatory.

It looks, acts like a court.

But it's also quite simple, as is the case in all... in every public rights' case to visualize what the tax court does as being purely executive.

There are officials in the Internal Revenue Service who sit down and decide what a taxpayer owes the Government.

And the tax court, for its formality and separation, is really another level of that, which--

Unknown Speaker: Well, is it absolutely certain and... and have... has this Court ever decided that the term courts of law in the appointments clause is of necessity the same as an article III court?

Justice Roberts: --No, it is an issue of first impression before--

Unknown Speaker: Right.

Justice Roberts: --this Court as I understand it.

I think it's... was correctly decided that way by the Second... Second Circuit recently.

It says the Courts of Law... capital C, capital L... which strikes me as... that naturally refers to the courts of law established under the constitution.

Now, petitioners as we understand it do not dispute that the tax court was in the executive branch prior to 1969.

The question becomes, what happened in 1969 that made it any different?

Congress took language that said this is an agency in the executive branch and substituted language saying this is a court of record under article I.

We agree with the Second Circuits recent decision that what they did was change the label.

They didn't purport in the statute to move the tax court outside the executive branch and didn't purport to put it in any other branch.

The legislative history did say... not the statute, the legislative history... we think that the tax court should be considered an article I court rather than an executive agency.

To our way of looking at it, that's like saying something should be considered an orange rather than a fruit.

It's both.

There... the article I court... quite happy to call it that... but it remains in the executive branch.

And we think that's confirmed by the fact that in 1969, Congress continued the incumbent tax court judges in office.

If Congress were doing something as dramatic as moving the tax court out of the executive branch and placing it somewhere else, it plainly would have no authority to continue those judges in office.

That would be an appointment from one entity to another.

But it did not do that.

It continued them, and quite properly so because it was not moving it from one branch to another.

Unknown Speaker: What are--

--Is it--

--What are the consequences of saying it's still in the executive branch?

Does that mean the Administrative Procedures Act applies and--

Justice Roberts: It may--

Unknown Speaker: --the Freedom of Information Act and so forth and so on?

Justice Roberts: --Those--

Unknown Speaker: All the things Congress tried very hard to prevent.

Justice Roberts: --Well, they may or may not, Your Honor, and it depends on an evaluation of the statute in '69 and of the Administrative Procedures Act.

Congress did not try very hard to prevent that, because they didn't say anything about that in the statute.

If they don't want the Administrative Procedures Act to apply, it's an... there is an easy way to reach that result.

The Administrative Procedure Act now defines an agency not to include courts of the United States.

It would be a simple... maybe not simple... but a pure question of statutory interpretation whether that excluded article I courts, and it may well.

Unknown Speaker: May I ask how is the chief judge of this court appointed?

Justice Roberts: The chief judge is elected by the regular judges on a--

Unknown Speaker: And is that... is that a valid method of appointing a head of a department in the executive branch?

Justice Roberts: --No challenge has been raised to that--

Unknown Speaker: Well, I know no challenge has been raised, but under your argument it is clearly invalid, is it not, because the appointment was not made by the head of a department?

Justice Roberts: --Well, it would have to be considered, not only a separate office, but what the chief... the... the attributes of the chief judge that are different from--

Unknown Speaker: Well, surely the chief judge is an officer of the United States.

Justice Roberts: --The chief judge is an officer of the United States.

The question is is the difference between the chief judge and a regular judge, does that require a--

Unknown Speaker: Well, it gives him the authority to appoint assistant trial judges.

Justice Roberts: --Yes.

Unknown Speaker: That's pretty importance difference, I guess.

Justice Roberts: Well, it is... it is a difference.

It is not, as I say... it has not been presented or briefed--

Unknown Speaker: But under your argument it is clear that the present appointment of the chief judge of the court is invalid I think?

Justice Roberts: --Well, with respect, Your Honor, I'm not sure that that is clear.

It's an issue that has not--

Unknown Speaker: I know it hasn't been raised, but I'm trying to think of the implications of accepting your argument.

Justice Roberts: --Well, we would have to look at all the added authority--

Unknown Speaker: Can you give me a reason why, consistent with your argument, that the appointment could be valid... the appointment by his colleagues as chief judge?

Justice Roberts: --Well, one question would be is whether or not his additional authorities are such as require a separate appointment.

Unknown Speaker: I see.

Justice Roberts: And it may be, for example, that the head of a collegial body does not have to have a separate appointment particularly here where the collegial body acts together in electing him.

He may be more in the nature of a... I don't know if it's a chairman or... or a--

Unknown Speaker: But not a head of a department with authority to appoint assistant trial judges?

Justice Roberts: --Well, he is clearly the head of this... of this department.

There's no question about that.

He doesn't--

Unknown Speaker: He became head by collegial action that did not have to comply with the appointments clause?

Justice Roberts: --Well, it's a complicated question... answer, but perhaps... and I'm thinking--

Unknown Speaker: A question we can entirely avoid if we assume it's a court of law.

Justice Roberts: --Well, I suppose the question of the chief judge's validity is avoided, but not the question that's before this Court today.

It may be that with respect to... that the tax court as a whole can accept the appointment authority for their chief, but that the chief judge, once appointed, can act as the head of a department.

In other words, the tax court as a whole may be the head of a tax court for the purpose of selecting the chief judge.

But the chief judge himself then is the head of the department for things that only he can do, such as appoint special trial judges.

Chief Justice Rehnquist: Thank you, Mr. Roberts.

The case is submitted.

Attribution:

The Oyez Project

Featured:

Airports Auth. v. Citizens For Noise Abatement - Oral Argument

Fri, 09 Jan 2009 14:49:44 +0000

Case:

Airports Auth. v. Citizens For Noise Abatement

Media File:

90-906_19910416-argument.mp3

Related Transcript:

transcript.xml

Transcript:

IN THE SUPREME COURT OF THE UNITED STATES

METROPOLITAN WASHINGTON AIRPORTS AUTHORITY, ET AL., Petitioners v. CITIZENS FOR THE ABATEMENT OF AIRCRAFT NOISE, INC., ET AL.

No. 90-906

April 16, 1991

The above-entitled matter came on for oral argument before the Supreme Court of the United States at 10:13 a.m.

APPEARANCES:

DAVID L. SHAPIRO, ESQ., Deputy Solicitor General, Department of Justice, Washington, D.C.; on behalf of Respondent United States, supporting the Petitioners.

WILLIAM T. COLEMAN, JR., ESQ., Washington, D.C.; on behalf of the Petitioners.

PATTI A. GOLDMAN, ESQ., Washington, D.C.; on behalf of the Respondents.

PROCEEDINGS

10:13 a.m.

CHIEF JUSTICE REHNQUIST: We'll hear argument first this morning in No. 90-906, Metropolitan Washington Airports Authority v. Citizens for the Abatement of Aircraft Noise.

Mr. Shapiro.

ORAL ARGUMENT OF DAVID L. SHAPIRO ON BEHALF OF RESPONDENT UNITED STATES, SUPPORTING PETITIONERS

MR. SHAPIRO: Thank you, Mr. Chief Justice, and may it please the Court:

This case involves a challenge to the constitutional validity of the Board of Review created as part of the administrative structure under which Washington Dulles and Washington National Airports have been leased by the Federal Government to an Airports Authority created by joint action of Virginia and the District of Columbia. The problem in this case, and it is a novel one, arises from the fact that Congress made it a condition of the lease that the Airports Authority create a Board of Review, that this Board of Review have veto power over certain significant actions of the Airport Authority, and that the Board of Review shall consist of Members of Congress to be selected by the Airports Authority from lists to be furnished by the Speaker of the House and the President pro tem of the Senate.

The problem was addressed by the court of appeals after holding that the controversy was justiciable, and the court of appeals made essentially two determinations. First, that the Board of Review was exercising Federal power and that its constitutionality had to be analyzed on that basis; and second, that when it was analyzed on that basis, its existence, its authority, and its composition violated the principle of separation of powers.

We contend that the court of appeals was wrong on both scores. First, and very significant to the analysis, we contend that it was wrong in concluding that for purposes of separation of powers analysis the Board of Review was exercising Federal power. The authority of the Board of Review derived from the joint action of Virginia and the District of Columbia in accordance with Federal conditions that were laid down in the act.

Secondly, we believe that the conditions laid down in the act, although they do raise significant separation of powers questions in the unusual circumstances of this case, do not violate that basic separation of powers principle.

If we may first address the rationale of the court of appeals, we note that it is at best only half-heartedly defended by the respondents. We think that choice was correct, that the court of appeals' rationale was wrong. The Board of Review is not created by Federal law. The Board of Review was created independently by the joint action of the State of Virginia and the District of Columbia in accordance with conditions laid down by Federal law.

But Virginia and the District of Columbia were not coerced into creating that board any more than South Dakota was coerced into raising the drinking age to 21 as a condition of receiving Federal funds. Indeed we believe that the inducement, which admittedly did exist, was probably a good deal less than in that case and than in the case of Steward Machine Company against Davis.

QUESTION: Mr. Shapiro, by the same logic I suppose you would be -- you're defending an effort by Congress to structure some kind of board of review with effective veto power, as this board has, over, for instance, the Federal funding of aid to the States for transportation or health services or welfare benefits, or anything else that the Federal Government provides money for. I mean, that would be your theory, and it would be a means by which the Congress could in effect have a veto exercised by members of its appropriate committees.

MR. SHAPIRO: Your Honor, we believe that this branch of the analysis doesn't solve the problem. It only poses the question. That is we think that the fact that the board itself was not created by Congress leaves a difficult constitutional analysis --

QUESTION: Well, Congress certainly had a gun pointed at the heads of Virginia and the District of Columbia, which wanted to establish an airport authority, and Congress said fine, you can do it but you're going to give us the veto in effect.

MR. SHAPIRO: But we believe, Your Honor, that in terms of this Court's analysis and in terms of practical realities it was an offer they could refuse. That is it was not the kind of coercion that this Court has said literally destroys the independence of the State actor.

Now, as I said, we believe that that simply poses the constitutional issue. We have tried to explain in our brief that the constitutional issue that is posed by these conditions is a very difficult and serious one.

QUESTION: Why does it just pose it, Mr. Shapiro? If you say that there is no Federal power being exercised here, isn't that an end of the separation of powers problem?

MR. SHAPIRO: Well, there are -- there are two possible conceptual approaches to this, Your Honor. One is the one you just suggested, that is taken I think perhaps by the petitioner, to say if it's done by the States and if they weren't coerced, that's the end of it. The respondents take the opposite conceptual approach and say if Congress has attached this condition, then Congress is asserting itself in a way in which it is not allowed to by the Constitution.

QUESTION: Well, but there -- which is to say that there is Federal power being exercised. But you are contending that there is no Federal power being exercised. And if there is no Federal power being exercised, that's the end of the thing, isn't it?

MR. SHAPIRO: Well, the Federal power takes the form of a condition. We see the question as being the question whether the Federal power in the form of a condition is an unconstitutional condition because of its implications for the separation of powers.

QUESTION: So you say there is Federal power being exercised in the form of a condition.

MR. SHAPIRO: By Congress, yes.

QUESTION: Oh. Well, I thought you were saying there was no Federal power being exercised.

MR. SHAPIRO: No, I'm sorry, Your Honor. I was saying that we think the court of appeals was wrong in saying that the Board of Review is exercising Federal power in the actions that it takes, that the Board of Review effectively is a Federal agency and has to be analyzed as such. If that were true, it seems to us clear that it would violate both the incompatibility --

QUESTION: Well, I mean, nobody contests that the statute that Congress passed is an exercise of Federal power. Is that all you're saying? That's the only Federal power, the statute?

MR. SHAPIRO: That's correct. And the granting of the lease by the Department of --

QUESTION: Well, Congress certainly had the power to pass the statute.

MR. SHAPIRO: Yes, it did. Yes, it did.

QUESTION: Well, then that's the end of the case. The Federal power involved -- the only Federal power involved, you tell us, was the statute. Congress certainly had authority to pass that. There is no Federal power involved in the exercise by the board. What is left?

MR. SHAPIRO: I think what is left is the question that Justice O'Connor raises about whether or not Congress may properly use conditions like this attached to Federal statutes as a way of effectively usurping executive authority.

QUESTION: But it's not -- that would be a valid argument if they were using the condition in order, unconstitutionally, to exercise Federal power. But you're telling me that at the end of the rainbow there is no unconstitutional exercise of Federal power. So therefore it can't be an unconstitutional condition because there is nothing unconstitutional about it. Congress passed a statute, which it can do, and this board is not exercising Federal power. Where is the unconstitutionality?

MR. SHAPIRO: We -- well, what we are concerned about -- first of all we believe that in this case what exercise of Federal power there was did not violate the Constitution. But change the case, for example, to a case in which Congress had reserved the authority to appoint members of the board. Then of course there would be the additional exercise of Federal power involved in the appointment, or Congress had reserved the authority to remove members of the board.

Now, one of the arguments that is suggested by the court of appeals, and that I think is adopted by the respondents, is that there is in this case additional exercise of Federal power in the form of a kind of de facto appointment and removal power existing in Congress. For example, it is suggested that, by removing members of the Board of Review from relevant congressional committees, Congress can effectively remove them from their position of authority in State office. So that would be an additional exercise of Federal power.

QUESTION: Just to finish up your response to Justice O'Connor, do I understand that the Government's only problem, the executive branch's only problem with this statute is a federalism problem, not a separation of powers problem? It's just the unconstitutional condition because it impinges on the States. Is that the only problem the executive branch has with this?

MR. SHAPIRO: No. No, it is not, Your Honor. We do, in addition, have a separation of powers problem. We think that problem is answered in the context of this case. We don't think it can be answered in all of the hypotheticals that Justice O'Connor raises in her question, because we think that if Congress were to use this condition device as a way of putting Members of Congress into essentially executive roles in the playing out of Federal programs at the State level, that that would be a usurpation of executive authority and interference with the executive role.

QUESTION: Well, Mr. Shapiro --

QUESTION: Does the Government take a position as to whether the Members of Congress who are appointed to this -- these State, or State boards, or this board set up by the States, whether their term on the board survives their term on the committee in question?

MR. SHAPIRO: Yes, Your Honor. We believe that the requirement that the members of the Board of Review be both Members of Congress and in most cases members of certain relevant committees do constitute solely qualifications for appointment. We think that is clear from the structure of the statute, that subsection 1 refers to appointment of 2456(f). Subsection 2 refers to fixed terms of office, which in our view do not require that, once appointed, those members of the board either continue to be Members of Congress or continue to be members of the relevant committees.

Incidentally, the only time, as I understand it, that that has come up, when Senator Kassebaum did cease to be a member of the relevant committee, she did resign from the board. But our view under the statute is that that's not required.

QUESTION: I suppose if you interpreted the Constitution that way, a senator who has to be a citizen to be elected, should he abandon his American citizenship during his 6-year term, could continue to serve, because it's only a qualification for taking the office and not for continuing in it?

MR. SHAPIRO: I -- I don't know whether the language of that is identical to the language here. I think the language here is clear --

QUESTION: But Mr. Shapiro, even on that assumption, does that really answer the issue that Justice O'Connor raised? And that is, let's assume there may be incidents in which individuals may continue to serve though they don't remain Members of Congress or of the committees. There's still a problem to be answered, and that is that, as you put it, there is a, appears to be a de facto exercise of Federal power over -- in this case over the actions of a non-Federal board of directors. Congress is still de facto being allowed to exercise power, isn't it?

MR. SHAPIRO: We don't think with respect to removal that it is, Your Honor. That is we don't think Congress has either de jure or de facto removal power.

QUESTION: No, but with respect to the authority that they exercise in their approval or disapproval power over the actions of the board.

MR. SHAPIRO: Oh. Yes, Your Honor. That's a related question which we think is relevant to Justice O'Connor's question. That is are the Members of Congress who serve on the Board of Review themselves exercising congressional power? Are they agents of Congress in trying to resolve this difficult separation of powers issue.

QUESTION: And I took it that was one of the concerns in her question --

MR. SHAPIRO: Yes.

QUESTION: -- as to whether a similar structure could be erected --

MR. SHAPIRO: Yes, yes.

QUESTION: -- in relation to welfare money to the States, highway money to the States, and so on. What is your answer to that?

MR. SHAPIRO: Well, our answer to that is that in the unusual circumstances of this case we don't think the members of the Board of Review themselves are exercising congressional power or acting as agents of Congress. And that's because both in form and in substance we believe that the Members of Congress are serving as individual representatives of users. The statute specifically says they are to serve in their individual capacities as representatives of the users of the airport.

QUESTION: Mr. Shapiro, are they representatives of all users or of users who have free parking spaces?

(Laughter.)

MR. SHAPIRO: Both. Both.

QUESTION: You think they are typical users?

MR. SHAPIRO: There is no question that the parking spaces were a matter of some interest. The legislative history confirms that.

(Laughter.)

QUESTION: But not to other users.

MR. SHAPIRO: But they also have interests that are shared more broadly by all users, and indeed the legislative history suggests that they are concerned with their need to use the airport as individuals. And it's also true that that is a need that is -- excuse me, Your Honor, my time is up.

QUESTION: Thank you, Mr. Shapiro.

Mr. Coleman, we'll hear now from you.

ORAL ARGUMENT OF WILLIAM T. COLEMAN, JR. ON BEHALF OF THE PETITIONERS

MR. COLEMAN: Good morning, Mr. Chief Justice, and may it please the Court:

The basic issue here is are the congresspersons who under the statute act in their individual capacities as members of the State-created review board, quote, "officers of the United States," end quote, or as review board members do they exercise any Federal power pursuant to the laws of the United States. If the answer to these two questions is negative, as it clearly is, then the Authority's governing scheme created by the Commonwealth of Virginia and the District of Columbia does not violate present Federal separation of power doctrine.

We agree with the Government that the review board members do not exercise any Federal power. The transfer act so states. The statutes of the Commonwealth of Virginia and the District of Columbia so state. The review board got all of its power and was created under bylaw 4, which is on page 152 of the record, and therefore they are not exercising State power.

QUESTION: Well, Mr. Coleman, isn't the reality, though, that the members of the board are required to be Members of Congress, or at least a certain number of them, and they have to be members of a certain committee of Congress? And it's arguable that when they cease to be they must be removed. Now, if that is the case, is there not an exercise of Federal power on a continuing basis?

MR. COLEMAN: No, Your Honor, with all due respect. In the first place, your first question is directed to the appointment.

QUESTION: Um-hum.

MR. COLEMAN: The speaker suggests the name. It's up to the board of directors, the State agency, to select. And Mistretta and Bowsher each teach that where there's the governmental, the Congress who suggests the name, but if the appointing authority has the discretion to select among that group, then you don't have violation of article -- the article II, section 2, clause 2. So therefore, even if those people are suggested by the speaker, the fact that they are appointed by the board takes away that problem. With respect --

QUESTION: Mr. Coleman, as I understand your position, the phrase that these people shall act in their personal capacity cleanses it all. I think you would maintain that even if it were provided that this board would consist of both Houses of Congress, the Members of both Houses of Congress acting in their personal capacity, it would still be okay, wouldn't it?

MR. COLEMAN: Well, Your Honor, that would make it a harder case. But --

QUESTION: It would make it a different case. It wouldn't be harder for you, because they would still be acting in their personal capacity.

MR. COLEMAN: Well, it may be harder, some of them -- one of the --

QUESTION: No --

(Laughter.)

MR. COLEMAN: So that's a harder case. But if the determination is that they are selected by State people and they are not exercising State power, then it doesn't violate the Constitution. In a constitutional debate it's dramatic the extent to which the people struggle to make sure that a Federal official still had the right to serve in State office. And that's what happened here.

Now, with respect to the second part of your question, our position, it is clear, Justice O'Connor, that there is no power of removal by the Congress. And the fact that they used the word de facto reminds me of that Justice Jackson opinion where he says if we use a word like quasi, you know that you're really covering up a disorderly bad, because clearly you're saying you want to (inaudible). Here the statute says only that the nominees shall consist of. Secondly, the lease which you have to read says it shall be made up and selected from the list of.

Thirdly, they are appointed for a specific term. And as you know, Chief Justice, in your appointment with Smithsonian, you were appointed but you lose office the moment you're no longer Chief Justice. That's in the statute. That's not in this statute here. Fourthly, the appointing authority, namely the board of directors, specifically say that they can be removed for cause.

So I think under all of your cases it is clear here that you have to find that once these people are appointed by the board of directors, they cannot be removed by the Congress, and they can only be removed by the board of directors or State agency.

QUESTION: Mr. Coleman, in your research of, among the doings of the founders, that it is clear that people could hold both Federal and State office, but is there anyone who said that you could hold State office or be nominated to State office by virtue of your Federal office? That is ex officio that a State can provide the Speaker of the House shall be our Governor, or the Speaker of the House shall be our --

MR. COLEMAN: Well, Your Honor, that's not this case here. The moment you said officio --

QUESTION: I know it isn't, but this is a case where it is not just Federal officials who happen to run for State office or get appointed separately for, independently of their being Federal officials. They acquire this State office only ex officio, only because they are Federal officials. Now, is there anything in the sayings of the founders about that?

MR. COLEMAN: No, but there is in your cases, Your Honor. I think Mistretta is right on the point. There the statute says a person had to be an article III judge, but yet you held the fact that they were an article III judge didn't mean that once nominated by the head of the judicial conference that the President couldn't select them, and by selecting them that they were not functioning as article III judges.

QUESTION: Well, you're not blaming me for that, Mr. Coleman.

(Laughter.)

MR. COLEMAN: Well, I think you would know more about that case than the other people because you dissented.

QUESTION: But of course there was no question in that case that they were exercising Federal power. We didn't have to reach that question. Here the question is whether or not the congressmen, because they are appointed as congressmen, are not exercising Federal power. Suppose on this board five, six of the board were Members of Congress. No difference to your case?

MR. COLEMAN: Well, the nine persons are selected from the group of 107 Congressmen and 47 Senators. And, but they are appointed by a State agency, and therefore they are exercising State power.

QUESTION: Well, but as a practical matter a Congressman's powers during the time he is in office as a Congressman, his committee assignments, his perks, are all controlled by the Speaker. And it seems to me very, very clear that a Congressman who serves on the board can have his actions de facto reviewed by Federal authorities, particularly legislative officials.

MR. COLEMAN: Well, but they, but the statute says no, he serves in his individual capacity. What you're saying is the people that pass the statute are going to violate statute. And it seems to me if that happened, if that [ILLEGIBLE WORDS] you may well then have a grounds for removing for cause.

QUESTION: But, Mr. Coleman, all of our separation of powers jurisprudence looks to the practical effect of the constraints and the compulsions and the authority that a Federal agency has over its own officials, and in this case the Federal entity is the Congress.

MR. COLEMAN: Well, can we look to the practical? Here you have a situation where, whatever is happening, there is no power being exercised on any other Federal branch of the Government. Too, here, you have the executive agreeing and standing up, not only negotiating this in the lease, but in addition signing the statute, but standing up at the bar of this Court saying that this does not in any way infringe on my executive power.

QUESTION: But this Courts sits to protect the executive against its own improvidence from time to time.

(Laughter.)

MR. COLEMAN: Yes, sir. But there is no case, Your Honor, there is no case where you have ever held that there was an incursion on the executive power when the executive stands up at the bar of this Court and says my power is not being intruded upon. Secondly, there is no case where you have ever determined --

QUESTION: Yes, but in the legislative veto cases the executive from time to time has taken the position that veto was all right, I think, had he not?

MR. COLEMAN: Yes. But in the case that --

QUESTION: In the one that was argued here.

MR. COLEMAN: But the Chadha case he stood at the bar of this Court --

QUESTION: Right.

MR. COLEMAN: -- and said it wasn't all right.

QUESTION: Yeah.

MR. COLEMAN: In addition --

QUESTION: It just shows the executive's views on these issues can change in different administrations.

MR. COLEMAN: They can change. But as you know, that Justice Powell in the Nixon v. GSA said that once the executive stands up to the bar of the Court and says that my powers are not being infringed upon, that that in itself should cause the Court to give great weight to whether you're going to strike down the statute.

I will reserve the rest of my time for rebuttal.

QUESTION: Very well, Mr. Coleman. Ms. Goldman, we'll hear now from you.

ORAL ARGUMENT OF PATTI A. GOLDMAN ON BEHALF OF THE RESPONDENTS

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

There is no dispute that Members of Congress could not exercise the powers that are assigned to the Board of Review if the Federal Government still ran the airports. There is also no dispute that Congress could have required the Airports Authority to submit its actions to Congress for a specified period of time, or ever for approval in the form of a statute. The question here is whether Congress can make its delegation of authority over the airports subject to a condition that requires nine Members of Congress to exercise significant ongoing authority over those airports.

Four factors of the Board of Review arrangement bear directly on this issue. First, the Board of Review arose out of a Federal condition that is contained in a Federal statute and a lease of Federal property. Second, that condition requires nine Members of Congress to comprise the Board of Review. They must all be recommended by the congressional leadership, and eight of them must serve on the congressional committees that have oversight responsibilities over the airports.

The third factor is the powers exercised by the Board of Review. There is no question that the types of powers that the board exercises are executive in nature. And the fourth factor is the nonseverability clause, or what we have called the drop-dead clause. Congress has decided in the statute that if the Board of Review cannot exercise its powers, neither can the Airports Authority. And the significance of this factor is that Congress made that decision, not the District and not Virginia, and also that Congress believed that the power its Members would exercise was an essential element of the transfer.

QUESTION: Ms. Goldman, what if instead of the transaction we have here Congress had simply said we're going to give a year-to-year lease to the Metropolitan Airports Authority, no Members of Congress on the review board at all, but the review board totally independent decides to abolish parking places for Members of Congress and Justices of the Supreme Court. And the chairman of the House Commerce Committee calls the members of the review board over about a month before the first year of the lease is due to expire and he says I really don't think Congress is going to renew this lease if you do that, and they accordingly change their mind. Now, there would be nothing wrong under separation of powers with that, would there?

MS. GOLDMAN: There would be not -- no official ongoing role that Members of Congress play. Of course Congress still has the power, the retained congressional power to pass statutes and to decide whether the lease could go forward, but that's the kind of power Congress can exercise. Its mingling in the affairs may be improper, but it probably would not rise to the level of the separation of powers violation.

QUESTION: Of course if Congress wanted to renew the lease, if Congress was content with the parking spaces it got but the executive was not content because the executive had not gotten parking spaces, the President could veto the lease renewal in that situation, couldn't he? I mean, it would be the normal process of legislation by which Congress would have to act, rather than --

MS. GOLDMAN: Assuming that statute was required, then the President would have that power.

QUESTION: It's quite a different process than just having some individual Members of Congress or a committee of Congress decide to do it or not.

MS. GOLDMAN: It's a very different process, and that's precisely what's wrong with this arrangement. Members of Congress are carrying out day-to-day operational responsibilities over these airports.

It's important to recognize too that Congress did not give up the airports, and that it independently obtained this power. It refused to give up the powers that are exercised by the Board of Review. In essence this is an incomplete delegation of power. Congress gave up a large measure of the power, but not the power over the master plan and the budget and regulations. These powers it kept for the Federal Government, and it assigned these powers to nine of its own Members. As retained Federal powers, these powers cannot be exercised by Congress in this way.

QUESTION: You say assigned it to nine of their Members, but it does provide that the Members are to act in their individual capacity.

MS. GOLDMAN: It does, but that label does not change the fact that the board must consist of nine Members, that they must be recommended by the congressional leadership.

QUESTION: What do you do about the Chief Justice being on the board of the Smithsonian, being chairman of the board of the Smithsonian, which goes back quite a ways?

MS. GOLDMAN: We certainly don't want to be accused of laying a hand on the arc of the covenant, as Justice Holmes said, and fortunately I don't think we have to in this case. I think the powers that are exercised by the Smithsonian may be different in nature. They may not rise to the level of significant authority --

QUESTION: They're artistic powers, is that --

(Laughter.)

MS. GOLDMAN: I'm not familiar with the day-to-day functions that the board would exercise, but it may be that those powers are not as significant to be a Federal office under the laws of the United States, so Members of Congress may be able to exercise those functions. Here, though, the functions are clearly executive. Members of Congress could not exercise these functions in the Federal scheme, and Members of Congress could not in their individual capacity exercise a veto of the sort that was struck down by this Court in Chadha. That individual label would not save that arrangement.

If Congress is going to exercise this type of power it must do so through the bicameralism and presentment clauses.

QUESTION: Let me ask you a question, Ms. Goldman. There are six congressional regions of the Smithsonian, and I presume they act in their individual capacity, don't they? They're not acting as a Member of Congress or as a member of a congressional committee.

MS. GOLDMAN: I believe that their appointment and service is inextricably tied to their role as a Member of Congress.

QUESTION: Well, what distinction are we talking about here then, between acting in one's individual capacity and one's presumably official capacity? Is that the alternative?

MS. GOLDMAN: Well, in the Federal scheme Members of Congress only have one identity, and that is their official role. Because of the incompatibility clause, Members cannot take off their congressional hat and become individuals serving in some Federal kind of position. In the situation of the Smithsonian their service is tied with the term of office, as we believe it is here as well.

QUESTION: So you would have no issue to raise by the mere fact that some Members of Congress happen to end up on this board if it were not for the fact that membership on the board -- that membership in Congress is a qualification for membership on the board? I mean, that's really the essence of your point. You're saying if that were not so, then it, it would in fact make sense in the normal course to say that they were acting in their individual capacities.

MS. GOLDMAN: If Members of Congress are appointed to a State office, they are not serving as Members of Congress but are clearly serving in an individual capacity.

QUESTION: And their congressional membership is merely incidental. And you're saying the fact of the qualification is what removes it from the category of what is merely incidental.

MS. GOLDMAN: It is both the qualification, the requirement that they be Members of Congress, and also that that requirement came at least in part from Congress. So that in this situation we have congressional aggrandizement, where Congress, by passing a statute that establishes this condition, has required that its own members get power over Federal property.

QUESTION: And why isn't the same -- why doesn't the same problem exist for the congressional members of the Smithsonian?

MS. GOLDMAN: It may not because the powers they exercise may not be as significant of a type of executive power --

QUESTION: Well, what if the power is the power of a board?

MS. GOLDMAN: It may be then a power that they cannot exercise. I am not as familiar with that arrangement. That's obviously not before the Court. And in Springer that was discussed in the context of the powers exercised by the legislature in the Philippine Islands, and it did not keep the majority from striking down that arrangement.

QUESTION: Do you take the position that a member of the Board of Review loses the membership if the member ceases to be a member of the appropriate congressional committee?

MS. GOLDMAN: Yes, we do. The language of the statute is that the Board of Review shall consist of the nine Members of Congress, eight of whom must serve on the oversight committees. It does not say that the board shall consider these people for appointment or shall appoint them. It says the board shall consist of these individuals.

QUESTION: Is the removal point essential to your argument?

MS. GOLDMAN: It is not. In this case the clear indication is that the Board of Review has the power over the Airports Authority. That is the critical feature.

QUESTION: Ms. Goldman, are you familiar with the national historical publications in the Records Commission?

MS. GOLDMAN: No, I am not.

QUESTION: Well, this is set up by statute, and it provides that on this, which I assume is an arm of the executive, there shall be one judicial member appointed by the Chief Justice, one Member of the House of Representatives, and one Member of the Senate. Invalid in your analysis?

MS. GOLDMAN: If its functions are advisory, it would certainly not be invalid. If it has some operational functions it may not carry out significant powers to be an agency or to rise to the level of an office of the United States. So the answer to that question would depend on the precise powers that are carried out.

QUESTION: Which you don't know.

MS. GOLDMAN: Which I don't know.

QUESTION: Well, the Chief Justice has served on it and so have I and --

MS. GOLDMAN: Certainly the service of judges would not be prohibited under a decision in this case striking down the Board of Review, since there is no incompatibility clause for judges and there would be no aggrandizement if Congress required by statute that judges serve in this type of arrangement. But the service of Members of Congress is a different story because of the aggrandizement factor and the incompatibility clause.

If this arrangement is upheld, the Board of Review would provide a road map for Congress to follow whenever it wanted to acquire a day-to-day power over the operation of Federal property or Federal funds.

QUESTION: But they'd have to do it by statute, and they would have to get the President to sign it or override his veto, wouldn't they?

MS. GOLDMAN: True. They would have to exercise that power through a consent to a compact or statute.

QUESTION: And you would say if the President willingly signed it and thought it was a good arrangement, it would still be invalid in your view?

MS. GOLDMAN: Yes, it would be, because the doctrine of separation of powers is not designed simply to protect the executive branch, in fact its primary purpose is to protect the people against arbitrary exercises of power.

QUESTION: And tell me how that is implicated in this case.

MS. GOLDMAN: In this case the respondents are individuals and organizations that represent individuals who are affected on a daily basis by the operations at National Airport. They are interested in the noise, the traffic congestion and pollution --

QUESTION: Well, protecting the executive here isn't about to cure your problem.

MS. GOLDMAN: It's not about protecting the executive. It's about protecting --

QUESTION: All it will do is delay.

MS. GOLDMAN: It might do more than that by requiring that the Airports Authority take its actions through a democratic process as required by the Constitution. And those processes are designed to protect the people from laws that create too much power to one branch of Government.

QUESTION: Well, if Congress had retained power over the airport, it could expand the airport with the -- and the executive could go along?

MS. GOLDMAN: It could do that. It may have certain interests in mind that may be adverse to other users or to the people in the area.

QUESTION: As you quoted in your brief, the problem with that is that Congress would have to pay for it, as you had an excerpt from some of the debate in which a Congressman said the beauty of it is that we control it but we don't have to pay for it.

MS. GOLDMAN: Exactly. And that same person said that Congress would be eating -- getting its cake and eating it too. And that's the problem with this arrangement is Congress can't do both. It can't give up the power and retain the core power at the same time. It has to do one or the other.

The delegation of the power did have the benefits of ensuring some degree of local control and the ability to raise money through bonds, and to remove the airports from a line item in the Federal budget. It can, the Congress cannot get rid of that responsibility but keep the decision making power over regulations and master plans, the chief executive order and the other powers that are given to the Board of Review.

If this arrangement is upheld, Congress will be able to inject itself into decisions about how the national parks are operated, perhaps grants given by the National Endowment of the Arts, postal operations, legal services programs. And the way it would do this is by delegating those programs in part to the States or private entity, but requiring the States or the private entity to subject their decisions to review by an ad [ILLEGIBLE WORD] committee of Congress, or even one House of Congress, and then Congress would be able to influence and have a mandatory say over how these programs are run.

QUESTION: So is the federalism problem as you see it that Congress has had a hand in creating the very position to which they are directing the congressional appointment?

MS. GOLDMAN: Yes. That is what creates the congressional aggrandizement here, which is the primary flaw in this arrangement. Congress retains --

QUESTION: So do you say that this board is really created by Federal law?

MS. GOLDMAN: It is mandated by a condition. If the State of, Commonwealth of Virginia and the District of Columbia wanted these airports, they had no choice but to have a board of review. It was their statutes that created the Airports Authority, but it was the Federal statute that set out the powers and composition requirements for the Board of Review. So Congress had some say and had some power that it exercised here, and it used that power to give its own Members a veto.

QUESTION: Do you think if there were a 1983 suit against members of the board that it would be an appropriate defense that they are Federal officers?

MS. GOLDMAN: In this situation, because Congress retains significant Federal powers, I think they are Federal officers. However, there could be other Federal conditions that would not create Federal offices. And even if this is not viewed to be a Federal office it would be impermissible, because it is giving Members of Congress powers over Federal property that it cannot have.

QUESTION: Well, I suppose you can concede without sacrificing your position that they're both, both State and Federal.

MS. GOLDMAN: I know no precedent for that, but I assume they have aspects of both. Even if the power that is actually exercised is viewed to be State power, Members of Congress could not serve in those positions under the doctrine of separation of powers. There is enough of a Federal role through the Federal condition to call the doctrine of separation of powers into play, and that doctrine prohibits Members of Congress from exercising these types of powers over a significant Federal interest. And here --

QUESTION: Ms. Goldman, do you think this statute offends more against separation of powers within the Federal Government or more against federalism, Federal-State relationships?

MS. GOLDMAN: This case concerns the Federal separation of powers.

QUESTION: We're not talking about federalism then in the sense of South Dakota against Dole?

MS. GOLDMAN: I don't think we are, because in the kind of condition that was at issue in that case there was a question of who had the power. Congress didn't have the power to legislate and the States did. And I think the rationale is that when the States exercise their power, their political process cleanses the Federal role.

But when you're talking about individual rights under the Federal Constitution, or the doctrine of separation of powers, which in the end protects the people, the State isn't interested in protecting those interests. And that -- the State process doesn't remove the Federal role, the Federal mandate that the separation of powers be violated.

Because of that, a condition is not the right way to accomplish this result. It doesn't erase the problems that are presented by Members of Congress serving in this role.

QUESTION: So you see there would be no problem if Congress said that every State university which obtained Federal funds should have a board of regents, five, six of whom are appointed by the President of the United States?

MS. GOLDMAN: I think there would be a problem in that situation. That's a federalism problem --

QUESTION: What would be the problem?

MS. GOLDMAN: -- that the Federal Government is usurping State power in that instance.

QUESTION: Well, why isn't that same problem present here?

MS. GOLDMAN: Here there is a stronger Federal interest at the outset because of the presence of Federal property in this arrangement. So the power was the Federal Government's power to delegate. And when it delegated these powers it attached conditions which kept --

QUESTION: Well, I assume the President would say the, and the Congress the same thing with expenditure of Federal funds at State universities.

MS. GOLDMAN: If Congress set up a review board that had power over the Federal monies, the connection to the Federal interest may be strong enough for the Federal doctrine of separation of powers to be called into play. But where the power is the power to run a State university, which is State power at the outset and does not change by the Federal condition, the Federal appointment of individuals would probably usurp State power.

QUESTION: But isn't the justification in each case the fact that there is Federal property in the form of Federal money going, and that these are conditions placed upon the Federal money. Don't they ultimately all stand on the same footing?

MS. GOLDMAN: I don't think they necessarily do, because Congress can pass a statute setting out the conditions that are attached to the use of Federal money. If its role ends there --

QUESTION: Isn't the difference that the -- we're not talking about a condition set once and for all by Congress which is binding because it is -- it has statutory significance. It's setting up a condition which imposes a continuing review by Federal officials.

MS. GOLDMAN: That is the -- precisely the difference. If Congress --

QUESTION: Don't we have that in both the State university example and the highway funds example?

MS. GOLDMAN: If Congress sets up an ongoing role over the Federal funds or the Federal property, then it is going too far, and that is Federal power that cannot go to Members of Congress.

QUESTION: Okay. And all you're saying is you don't really have to think of that as a federalism problem. It's a straight separation problem. Is that what you're saying?

MS. GOLDMAN: As soon as there is an on-going role by the Federal Government it is a Federal separation of powers issue.

QUESTION: Okay. And you don't have to put a federalism overlay on it. That's really what you're saying?

MS. GOLDMAN: No. There's no federalism issue --

QUESTION: Okay.

MS. GOLDMAN: -- that comes up in that context. There could be other federalism issues, but the one we're focusing on here is the purely separation of powers one when there is an ongoing Federal role.

QUESTION: Okay.

MS. GOLDMAN: If there are no further questions --

QUESTION: Thank you, Ms. Goldman.

Mr. Coleman, do you have rebuttal? You have 4 minutes remaining.

REBUTTAL ARGUMENT OF WILLIAM T. COLEMAN, JR. ON BEHALF OF THE PETITIONERS

MR. COLEMAN: Thank you, Mr. Chief Justice. It is clear here that the power of appointment is in the State board. It's equally clear that the Congress has no power whatsoever to remove these people. We make it clear in our brief that using the words "consist of" in other Federal statute doesn't mean that once the person is appointed he or she loses his job if he no longer holds the office. You also have the fact that the Federal statutes, when they want to mean that, say that. This one doesn't.

Also, here the, the State makes it clear that it has the power of removal. And we say under your cases where if you're struggling with the power of interpretation, if you can interpret the statute in a constitutional way, you should do that rather than to interpret it in a way which I really don't think is supported by the legislative history.

In addition, there was a lease created here, and that lease lay in Congress, and that lease talks in terms of appoint, not consist of. And Congress did nothing to change that. So that's an additional reason why you should try to interpret the statute the way I suggest.

Finally, our forefathers wanted to create a Federal Government, but they didn't want the Federal Government to be at war with the State government, and therefore it went out of its way to say that people that occupy Federal office could also, if the State wanted, occupy State office. Here you have that type of federalism, and there is no reason to stretch the Federal separation of powers doctrine in this case, where the chief executive of the Federal Government says I'm not being intruded upon, there is no aggrandizement. What aggrandizement can there be when all Congress did was pass a statute which authorized the Federal officials to do what the Constitution said they could do, [ILLEGIBLE WORD] serve in State office.

Now, certain States have rejected this. I think New Hampshire, for example, you have a position, provision, Justice Souter, which specifically says that the Federal official cannot occupy the State office. Virginia could have done that. It didn't do that. In its case it has a statute which says that the Federal officer can occupy the State officer.

And I repeat, unless you find that the congressional person is an officer of the United States, which I think under the statute you can't find, or unless you find that what they're doing is exercising Federal power, then I think here you have to reverse the decision of the court below.

Thank you.

CHIEF JUSTICE REHNQUIST: Thank you, Mr. Coleman.

The case is submitted.

(Whereupon, at 11:02 a.m., the case in the above-entitled matter was submitted.)

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United States v. Stuart - Oral Argument

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United States v. Stuart

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ORAL ARGUMENT OF LAWRENCE G, WALLACE ON BEHALF OF THE PETITIONER

Chief Justice William H. Rehnquist: We'll hear argument first this morning in number 87-1064, United States versus Philip George Stuart.

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

Mr. Wallace: Thank you, Mr. Chief Justice, and may it please the Court:

This is a proceeding to enforce Internal Revenue summonses for bank records in a bank in Bellingham, Washington, that reflect accounts of two Canadian nationals.

The summonses were issued pursuant to a request by Canada under a tax treaty between Canada and the United States that provides, among other things, for exchanges of information to assist each other in the administration of their tax laws.

The United States has such treaties in force currently with 34 countries.

They're collected in Footnote 17 on page [= 41] of our brief.

And these treaties play an important role in the Internal Revenue Service's broad authority to investigate compliance with our Internal Revenue laws by providing the IRS, through reciprocal exchanges with foreign source information that would not otherwise be available to the IRS.

The two most pertinent articles of the treaty are set forth at the beginning of the appendix to our brief on, on page 1A of the appendix following page 48 of our brief, and the Court will note that Article XIX provides that the competent authorities, the executive branch officials designated to administer the treaties, will exchange information that is at their disposal or that they are in a position to obtain, and information may be exchanged directly between the competent authorities of the two contracting states.

And Article XXI says that the Commissioner may upon request furnish our treaty partner with information that the Commissioner is entitled to obtain under the revenue laws of the United States.

These are fairly typical, and they obviously contemplate in appropriate cases, the use of process to obtain records that are not already in the possession of the tax authorities in each state and, indeed, the legislative history of the particular treaty involved here, as we set forth on page 29 of our brief, shows that during the confirmation process, and that's in footnote 11 and the accompanying text, it was contemplated in the Senate that a process such as an Internal Revenue summons would be used to secure information for each treaty partner.

And the specific reference that was made there was to the obtaining of bank records.

And in 1975--

Unidentified Justice: Mr. Wallace, excuse me.

May, may I interrupt for a moment.

Maybe, maybe I'm not seeing something here, but the, the treaty says

"information which its competent authorities are in a position to obtain under its revenue laws. "

right, and, and you rely--

Mr. Wallace: --That is correct.

Unidentified Justice: --on Section 7602.

But as I read 7602, it only authorizes summons for purposes of determining United States tax liability.

Mr. Wallace: Well, that is a--

Unidentified Justice: So, how can you say that you're in a position to obtain it under our revenue laws when you're not seeking to ascertain United States tax liability?

Mr. Wallace: --That is a... certainly a possible reading of 7602, and that very question was debated and decided in the 1975 Second Circuit case that we have cited in our brief, United States against A. L. Burbank Company, in which this court denied certiorari.

The contention was made there that the summons authority conferred by Congress was not sufficiently broad to obtain information of, of... regarding compliance with the treaty partner's revenue laws, notwithstanding the broader perspective that I tried to give the court that this... looked at overall becomes a means of getting reciprocal information that the IRS could not otherwise get about compliance with the American tax laws.

And the Second Circuit held in that case that 7602 should not be interpreted more narrowly.

Not only old this Court deny certiorari, but Congress since has amended 7602 without disturbing that provision, and a large number of these treaties have since been entered into in presumed reliance on this interpretation.

At the time of the Burbank decision, the Second Circuit stated that there were 19 such treaties then in effect.

There are now 34 such treaties in effect.

So, the Burbank decision, we submit, was not only a correct interpretation at the time, but it has built into the fabric of the law and as, in many other instances, if possible, a statute should be interpreted in a way that helps to effectuate the purposes of a treaty, which is also the supreme law of the land.

And--

Unidentified Justice: You don't have any language that would allow that, though, do you?

I mean, the language seems quite clear.

Mr. Wallace: --We have no language.

Unidentified Justice: What's the closest phrase you have that would allow it to be read this way?

Mr. Wallace: I, I don't have a phrase that looks specifically to investigation of compliance with Canadian or other countries' revenue laws, but I, I do think the broader perspective that I have mentioned, that these reciprocal obligations are a method by which the Internal Revenue Service is enabled more successfully to conduct its own investigations is highly pertinent, along with what we submit is congressional acquiescence in this interpretation, not only reflected in amendments of 7602, but in the confirmation of these numerous treaties that look toward the use of compulsory process.

Unidentified Justice: If you did not have the summons authority, the treaty wouldn't necessarily be a nullity, would it?

Mr. Wallace: Not necessarily.

Unidentified Justice: Because the government still has information that it can furnish.

Mr. Wallace: It has information, although a similar argument could be made about the Service's authority to conduct any investigation or engage in any operations.

It's all part of Chapter 78 of the Internal Revenue Code, which includes Chapter 7602.

And, of course, all authority that the Service has to investigate is replete with references to our revenue laws.

So, I'd have to say that a similar argument could be made about furnishing any information under the treaty.

That a question could be raised about the Service's statutory authority.

So, the summons question is not unique in that respect.

Unidentified Justice: Did the Ninth Circuit expressly consider the summons question in its opinion in this case?

Mr. Wallace: It did not expressly discuss this question, but it accepted the holding in the Burbank case.

Its, its holding is that a summons can be used for this purpose if the Service complies with the requirement that it added with respect to a... an analog to a referral to the U.S. Department of Justice.

So, implicit in its holding is acceptance of the Burbank decision.

And, indeed, one could argue that in the absence of a cross-petition, that question is not open because it would change the relief in a manner more favorable to the Respondents here, because the Ninth Circuit ordered a remand that does not preclude enforcement of the summons if that condition can be compiled with by the Revenue Service.

So, as a technical matter, the question really is not open before the court in this case, but we do submit that the Burbank decision is part of the fabric of the law now that should not be repudiated by this court, and, and it it plays an important role in our foreign relations.

What the Court of Appeals did do in this case was put itself in conflict with a later 1983 Second Circuit decision called United States against Manufacturers & Traders Trust Company by holding; that is, the Ninth Circuit's holding, that the supporting affidavits in this case did not make a prima facie showing that the summonses were issued for a legitimate purpose because they failed to state that the Canadian investigation had not reached a stage analogous to referral to the U.S. Justice Department for a, a, a grand jury investigation or for criminal prosecution.

And Section 7602(c) prohibits the issuance of a summons by the IRS when such a referral to the U.S. Justice Department is in effect.

Now, in adding this requirement, we think that the Court of Appeals here erred on two principal grounds.

The first is that the treaty clearly contemplates that the question whether the treaty partner has made a proper request is to be, be determined by the executive branch official designated to administer the treaty, referred to in the treaty as the "competent authority".

As we have explained in our brief, most of the information that is actually exchanged under these treaties is provided directly by the competent authority without any other entity, judicial or otherwise, of the government being involved.

A typical example is compilations of dividend payments by various American corporations to foreign nationals and reciprocal information from the foreign country.

In many instances, the rate of withholding is lower for dividend payments to foreign nationals than it would be under the Internal Revenue Law for a dividend payment to an American.

And the corporations will provide the IRS with a list of the foreign nationals for whom the lower withholding rate provided for by treaty has been utilized, and the IRS without any particular request, even, from our treaty partner will provide compilations of that information to the treaty partner.

Much of the information that is exchanged is exchanged without any particular request and without any use of process.

Now, in those instances where a summons is used to secure information not already in the hands of the IRS, the summons enforcement proceeding, we submit, which is summary in nature this Court has emphasized many times, should not inject the courts into this aspect of treaty administration in making or second-guessing the determination ordinarily made by the competent authority and by the executive branch about whether the request by the treaty partner is a proper request under the treaty.

This is the kind of question that involves sensitive foreign policy considerations.

There quite obviously would be sensitivity to having a court inquiry focusing on the good faith of the treaty partner in making a request for information under the treaty in which the courts would be reexamining and perhaps second-guessing the determination made by the executive branch official charged with that.

Unidentified Justice: Mr. Wallace, I don't know whether--

--May I interrupt you, Mr. Wallace?

I don't really understand that argument because if you have an, an objective test, whether there's been a reference to prosecution or not, why does that involve any inquiry into good faith?

Mr. Wallace: Well, it, it, it, it... this Court starting with United States against Powell has characterized the inquiry to be made in the summons enforcement proceedings as an inquiry into the IRS' good faith in issuing the summons, and good faith is largely translated into whether it's for a legitimate statutory purpose, whether the proper procedures have been followed, whether the information may be relevant as the court said to compliance with the Internal Revenue laws, whether there is a collateral purpose, such as harassing the taxpayer or trying to put pressure on the taxpayer to settle a collateral dispute.

Those are elements of good faith which arguably could arise in, in inquiring into the legitimacy of the treaty partner's request.

Unidentified Justice: Why couldn't you just presume that there was good faith in all matters of that kind and still say you've got to follow the American rule that there has been no reference for criminal purposes yet?

Just have a simple black letter rule to that effect.

That wouldn't question the motives of the foreign treaty partner, would it?

Mr. Wallace: Well, it would question the legitimacy of their normal investigative process.

Unidentified Justice: No, it would just say that's our rule on subpoena enforcement.

We have this rule, and it doesn't.

Therefore, the treaty isn't compiled with.

Mr. Wallace: If the treaty or statute had specified that... you know, I can't argue that that would be an open-ended invitation for the courts to examine good faith.

But what this court's line of decisions has indicated is that it is the good faith of the IRS in asking that a summons be enforced that is the proper subject of investigation in a summons enforcement proceeding, not the merits of the investigation.

The Powell decision, which is the seminal decision in 379 U.S. made that very clear with respect to two issues that the taxpayer sought to have reexamined that went to the merits of the investigation, two rather discrete issues.

One, because the statute of limitations had expired except for fraud, whether there was a sufficient basis to conduct the investigation because there was a sufficient basis to suspect fraud, and the other was whether the Commissioner had properly certified that a, a, a... an additional inspection of records was necessary which had to be certified under the statute when there had already been one inspection of records.

And the Court held that neither of those aspects of the merits of the investigation is something to be raised in the summons enforcement proceeding; that instead, it has to be limited to the kinds of issues that I had averted to a bit earlier and as recently as the Court's unanimous decision in the Tiffany Fine Arts case in Volume 469 U.S., the Court again reemphasized when the taxpayer complained that the IRS was unnecessarily investigating too many licensees under the scheme that was at issue there, and I may quote the Court,

"The decision of how many and which licensees to contact is one for the the IRS, not Tiffany to make. "

And one might add, not the court in the course of a summons enforcement proceeding.

Unidentified Justice: Mr. Wallace, you're, you're really... you're suggesting that this statute would apply against a United States citizen as well; it's not just a citizen of a foreign country, right?

I mean, the treaty would cover the United States citizen who was asserted to be liable for foreign taxes, correct?

Mr. Wallace: Yes, it would.

Unidentified Justice: So, a United States citizen who is being harassed by a by a foreign government, that foreign government can enlist our government in that harassment without any possibility of our courts stopping it?

Mr. Wallace: With respect to the summons enforcement proceeding, what could be shown is that the IRS was not acting in good faith because the IRS did not consider this a proper request under the treaty, but was lending itself to a scheme of harassment concerning information that has no possible relevance to tax information.

Unidentified Justice: But you're taking a position the IRS doesn't have to, have to inquire into that.

That's, that's part of your whole point, that you don't want our IRS to have to inquire into whether there is harassment going on or the good faith of the foreign government.

Do you want the IRS to have to do that?

Mr. Wallace: I, I, I, I would not want to mislead the court into thinking that the IRS rubber-stamps every treaty request for information, even information that is on hand.

But under the treaty, it's the competent authority at the IRS who makes the determination of whether that is a proper request.

But--

Unidentified Justice: I think that's an extraordinary... I think that's extraordinary to have the United States courts engaging in that, and I think it's a hard question.

Maybe if Congress had passed a statute covering this matter, it might have given some thought to that question.

Mr. Wallace: --Well--

Unidentified Justice: But since it hasn't, you're really sort of asking us to make it up.

Mr. Wallace: --If I, if I may say so, Mr. Justice, what makes it seem less extraordinary to us, is that the summons enforcement proceeding, the, the attempt to interfere with the investigation is not the ordinary place in which the merits of summonses for third-party records is debated.

It's usually debated not in that summary context, but later on when there's an effort to use the information against an individual.

And here if there is something that does not comply with the rights of Canadian taxpayers, the defense would ordinarily be raised in the Canadian courts.

That's where Canadian law would ordinarily be debated.

In, in, in Donaldson against the United States in Volume 400, the court held that the taxpayer did not even have standing to intervene in a summons enforcement proceeding in which the IRS was trying to get third-party records relating to the taxpayer's liability, in that case records of his former employer.

It is sometimes mistakenly thought that Congress overruled the Donaldson case.

Congress has left that holding in Donaldson entirely untouched for the category of third-party records that was involved there, employer records or records of a former employer.

There is... that is still good law.

The taxpayer cannot even be heard during the summons enforcement proceeding.

Unidentified Justice: And I'm somewhat puzzled, however, because in your answer to Justice Scalia's question, you said well, the IRS does make... give itself some assurance that the other country is acting in good faith, yet I thought that's exactly what you're telling us we can't require you to do.

Mr. Wallace: You can... in the summons enforcement proceeding, the question is the IRS' good faith rather than the--

Unidentified Justice: I understand that that's your position.

Mr. Wallace: --Yes.

Unidentified Justice: But the question was put to you suppose a country is harassing someone, say, for his political views, and the IRS is in good faith.

It knows that the country wants the material, but you say the IRS does make some investigation on the merits of the request?

Mr. Wallace: It, it does consider whether the request is a proper one under the treaty, that is correct.

But in most instances--

Unidentified Justice: Well, is it a proper request under the treaty if the country is harassing someone for their political views?

Mr. Wallace: --That would... that would depend on whether there is also a legitimate basis for the request that complies with the terms of the treaty.

Not every country with which we have a treaty has our system of government.

You'll notice that among the 34 countries, there are several communist states, and the political branches of our government have determined they will exchange information.

Unidentified Justice: Well, it's still not clear to me when you examine into the motives of another country and when you don't.

And if you indicate that you do, I thought that's exactly what you're... what the Ninth Circuit held that you should do and that you're arguing against.

Mr. Wallace: Well, the Ninth Circuit held that the enforcement court should examine those motives.

In determining whether to honor a request under a treaty, we're dealing with a sensitive area of foreign relations that is ordinarily a, a matter for the executive branch, and those conducting our foreign relations and not a matter to be debated courtroom by courtroom.

And in most instances, this determination whether to furnish the information or not is dispositively made by the executive branch officials.

There is no mechanism whereby the courts could ordinarily interfere with the furnishing of that information, regardless of whether some people might think that the particular government might be harassing particular people,--

That has been something taken into account in negotiating and determining to comply with these treaties.

I just want to advert very briefly to our second major point, which is that neither the treaty nor the statute contains the substantive restriction that the Court of Appeals here added, this search for an analog to reference to the United States Justice Department, and we submit that it is a wholly inappropriate addition because that search reflects considerations entirely of domestic law that do not fit very well, if at all, to any of the foreign systems of law enforcement that we're involved with here.

And a little... in a way, this is a little like arguing to the court that the sun does not revolve around the earth.

Foreign systems are quite different, and what was reflected in the series of cases in which this was developed was an effort by the court and then by Congress to reconcile the IRS's broad investigative authority with the normal rules governing criminal discovery and grand jury subpoenas so as to not have a different rule in criminal cases applying for criminal tax cases and the normal rule applying for other prosecutions.

I would like--

Unidentified Justice: Mr. Wallace, you, you remember what the earliest treaty like this was?

Mr. Wallace: --I, I, I could not say, Mr. Justice.

I'd like to reserve the balance of my time, if I may.

Unidentified Justice: Very well, Mr. Wallace.

Mr. Peery, we'll hear now from you.

ORAL ARGUMENT OF CHARLES E. PEERY ON BEHALF OF THE RESPONDENTS

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

The issue here, Respondents submit, is whether domestic law limits upon IRS summons authority are expanded by the treaty with Canada, which is the subject of these cases.

Should the IRS be required to comply with domestic revenue laws of the United States when it asks the courts to lend their process and their authority to enforce an IRS summons for the purpose of obtaining information for a foreign government?

Under a specific treaty which incorporates and... by reference... and defers to the revenue laws of the United States of America, Respondents submit that the answer properly is the one given by the Ninth Circuit in these consolidated cases below.

Unidentified Justice: Mr. Peery, the subsections, I guess, you're talking about, 7602(c) and so forth, speak of the Justice Department which surely refers to the United States Justice Department, doesn't it?

Mr. Peery: Yes.

There are cross-references in Articles XIX and XXI to the departments of the two governments.

Revenue Canada is referred to specifically, and the Commissioner of the Internal Revenue in the United States is, is referred to specifically.

But, both of them... both of those sections, XIX and XXI of the treaty, refer to the domestic laws, revenue laws of each of the countries, and that's what gets us to Section 7602.

Unidentified Justice: Yes.

But how do you get from Section 7602's reference to the Justice Department to kind of a renvoi-type reference to Canadian procedure.

We don't know that the Canadian justice department plays the same role in collection of Canadian taxes that our Justice Department does.

Mr. Peery: Actually, in these cases I believe we do now know something about the method and approach of the Canadian tax authority and their interrelationship with the Canadian Department of Justice, and it is very much like the system in the United States, so that the burdensome inquiry that the government has raised I submit really does not apply to this case.

In the, the supplemental brief that we filed, we refer to an, an International tax article which appeared just last month which quotes from a section of the operations manual of Revenue Canada instructing its agents specifically how to act with respect to requests for information from the IRS in the United States.

And in that instruction it specifically says that the summons authority of the IRS in the United States may not be used after a referral to the Department of Justice for prosecution, and further instructs its revenue agents that if they want information from the United States, they must ask for it under summons prior to their own referral to their own justice department.

Unidentified Justice: And you think our interpretation of our law should be governed by Revenue Canada?

Mr. Peery: No, sir, I was just saying--

Unidentified Justice: I mean, why... why?

I'd much rather have it governed by our Justice Department than Revenue Canada, if it comes to that.

Mr. Peery: --It ought to be governed by the totality of the revenue laws of the United States, which is what the treaty requires and which incorporates, certainly, 7602 and its procedures and the other treaties.

Unidentified Justice: You bring before us one, one case out of however many treaties Mr. Wallace said there were in which it may be easy to analogize the, the, the revenue system of the country in question with that of the United States, but I, I doubt whether, whether it's possible with a lot of the other countries.

And, and certainly in determining whether the rule you're urging upon us is, is a rule that can possibly have been intended, it's relevant whether we know anything about the internal revenue systems of these other countries.

Just because you pick one country that we might doesn't, doesn't justify us in adopting the rule you're, you're suggesting.

Mr. Peery: Well, Your Honor, we have a specific factual situation in this case, and I, I intend to address the broader rule that this Court is certainly interested in.

But we have a specific treaty with Canada.

Unidentified Justice: The Philippines, for example.

Do we have a, a treaty with the Philippines?

Mr. Peery: I don't know that.

Unidentified Justice: Oh, I see.

They're all listed in the book.

Let's pick the most exotic country that's, that's listed in Mr. Wallace's footnote.

Mr. Peery: Probably a Communist country as counsel--

Unidentified Justice: Right.

Now, how are we supposed to behalf with respect to a referral requirement from such a country?

Mr. Peery: --We point to the treaty with that country which refers specifically to the domestic tax revenue law of the United States, and we tell that country or have the IRS to tell that country that when you make a request of the IRS for information which may require our summons power, then tell us, certify to us that you do not presently have a criminal prosecution matter pending in this instance for which you, you are asking for this information.

I think we can reduce it to, if we need to, to one question.

The Ninth Circuit below posed two questions because they were dealing with a specific treaty and a specific country, Canada, and the government had said and admitted before the Ninth Circuit below that it had that information and could have supplied and would have--

Unidentified Justice: What... but, but, you see, you, you have two different organizations in this country.

One does the IRS investigation and the other does the criminal investigation.

What if you're dealing with a country where there's just one unit that does all investigations?

If it, it, it conducts the investigation and if it digs up enough stuff to prosecute criminally, it prosecutes criminally.

It's meaningless to have this, this referral distinction.

In such a country you could never say there's no criminal investigation pending because there's, there's no distinction between a criminal investigation and an IRS investigation.

Mr. Peery: --Perhaps I misspoke, Your Honor.

I believe I said criminal prosecution.

I make that distinction as a very important one.

The functions of criminal investigation and civil investigation are mixed in our system, and they are abroad.

They certainly are in Canada.

But the, the distinction really should be between investigation and prosecutorial function, and the test, the question that the Ninth Circuit has posed, the two questions which I've reduced perhaps to one, is certification of whether or not there's a pending criminal prosecution matter.

Unidentified Justice: But what, what does that mean when, when you come to apply?

Does it mean that a, a complaint or whatever... indictment, whatever, might be filed in the Philippines has been filed in court?

Mr. Peery: Well, I'm not asking the court system or the IRS to investigate, although they say that they do look into the motivations of the requesting country.

Perhaps that's a question for another case.

Unidentified Justice: But what, what I meant to ask you was you say is there a criminal prosecution.

You put that, it seems to me, as if that's a very definite type of standard.

But, really, what does it mean?

Does it mean are authorities investigating with the possibility of, of filing, filing what would correspond to an indictment or is there an indictment already filed?

Which of those?

Mr. Peery: Well, we... we not only have problems of differences in countries' approach to these matters, but differences in language, and what... I think that a treaty partner asking us for information in this country ought to educate themselves about the difference between prosecution and investigation and should be able to comply with that request.

Unidentified Justice: Well, what... in this country it's one function is in one division and another function is in another division.

But as Justice Scalia points out, in a country where they don't have that separation of functions, the, the question really would be very difficult to answer, I would think.

Mr. Peery: Well, I believe it is.

There are difficulties in administering treaties, but the focus here, as these cases arise procedurally and come before this Court is that the courts of this country, the federal district court in this case is being asked to lend its process and its authority to the enforcement of a summons to get information from another country under a treaty which specifically refers to the domestic revenue laws of the United States.

And I think the answer is that we tell our treaty partners that these are the requirements under the domestic revenue laws of the United States; that there not be a pending criminal prosecution matter for which this information is requested.

And they should comply.

We must do the same with respect to asking for information from Canada.

The briefing indicates that we, we defer to Canada's interpretation of their own procedural requirements and comply with it when we... when the IRS asks for information from Revenue Canada.

Unidentified Justice: What, what would the Canadians or the Philippine government... say, the Philippine government do if they have a single unit that investigates both civil and criminal matters and they are simply studying the file?

Is that a pending prosecution?

Mr. Peery: It doesn't sound like it to me.

But, again, I would require the treaty partner to comply--

Unidentified Justice: But it's... but it's your test, and if you can't even explain to us how the government should answer under its test, then it's not a very strong test.

Mr. Peery: --Well, it is because the entire body of United States law makes a very important distinction between civil and criminal, criminal matters.

There are protections available to the individuals in our country in criminal matters that don't exist in civil.

It's an important concept in, in the law of the United States, and the law of the United States is incorporated into the treaty.

I think we have a right because the language is there in the treaty to require the treaty partner to understand enough about our system to be able to use that distinction in its request for information.

I admit, it's not an easy test.

But I think the way to do it is to refer to the domestic revenue law of the United States, as the treaty does.

Unidentified Justice: Mr. Peery, I guess you are not arguing to us here that under this treaty that the only information sought can be information relevant to an inquiry concerning an Internal Revenue tax of the United States?

You're not making that argument?

Mr. Peery: Well, I think there was, was support at the time the Burbank case was, was argued for the position that absent a specific authorization to the IRS to acquire information for a foreign government, none exists.

I think that restriction was made--

Unidentified Justice: But you are not making that argument to us?

That's not--

Mr. Peery: --I'm not.

I'm not, because of... my understanding was that a certiorari was denied in the Burbank case, and we've not raised that specific argument, although I believe, I believe there's merit to it.

Unidentified Justice: --And the court below did not, of course, rest its holding on that matter?

Mr. Peery: No.

It assumed, as Mr. Wallace has pointed out, that under the Burbank case and others that the summons authority of the IRS could be used to meet its obligations under the... under the treaty.

Unidentified Justice: Of course certiorari denied doesn't mean we agree with it, necessarily.

Mr. Peery: That's true, Your Honor.

Again, I, I feel there are substantial arguments in support of the proposition that absent a specific authority to use the summons for this purpose, none exists.

But certainly where... that gets us into the interpretation of treaties to effectuate their purpose.

Unidentified Justice: You're, you're not raising the argument... you're just, just in case I might disagree with Burbank, you're asking me to imagine what kind of authority I think the United States would have if the United States had authority.

That's what you want me to tell you?

Mr. Peery: Well, the question was asked earlier by the Court of Mr. Wallace, would the treaty be a nullity without the summons authority of the IRS, and I believe Mr. Wallace answered no.

So, the issue is, is raised in, in questioning by the Court.

Respondents submit that the Ninth Circuit's opinion below in these consolidated cases is supported by the language of the treaty contract, the actual practice of the treaty partners and the language and purposes of the subsequent tax treaties between the United States and Canada; that is, the 1980 treaty and the 1985 treaty specifically for the purpose of aid in criminal tax matters.

All of them require the application of the domestic United States revenue laws.

Secondly, a legitimate purpose showing is required under United States revenue laws and, thirdly, use of an IRS summons for the specific purpose of criminal prosecution is specifically rejected by the courts in, in the cases and by Congress in the TEFRA amendments, making that, that use not a legitimate purpose.

The fourth point that I would like to make is that the IRS has admitted that it is its customary practice in domestic cases in applying to the courts for enforcement of their summons to state that there has been no referral for criminal prosecution.

So, it's a matter of customary practice in domestic cases and, again, the treaty refers to the domestic law and practice in the United States.

Fifth, I submit that, that the results of the Ninth Circuit's holding is fair with respect to the balancing of the interests between the individuals and the IRS, it's practical in application, it's efficient and it promotes uniformity between domestic practice and the tax treaty case information requirements.

I submit that the--

Unidentified Justice: May I ask on your view of the matter, do you think it requires an inquiry into the good faith of the Canadian taxing authorities?

Mr. Peery: --No, sir, not at... at this stage, although this Court in LaSalle certainly for domestic purposes has left open the area of institutional good faith.

Again, domestic cases and I'm not--

Unidentified Justice: If we're talking about a domestic matter and we were persuaded there was bad faith on the part of the IRS even though the matter had not yet been referred for prosecution--

Mr. Peery: --Some other kind of bad faith.

Unidentified Justice: --that would defeat the summons enforcement, would it not?

Mr. Peery: Yes, and it should, and that's a proper area of inquiry.

Unidentified Justice: Well, then, why should it not also defeat it in the Canadian context?

Mr. Peery: Well, I, I believe that--

Unidentified Justice: If you're saying the same law applies to both.

Mr. Peery: --Sure.

And I believe that's true.

It should.

Unidentified Justice: So, therefore--

Mr. Peery: I think it's a proper area of inquiry if there's, there's a showing which fairly raises the issue of, of bad faith.

Unidentified Justice: --You'd require... I see.

But if there were, you--

Mr. Peery: I'm saying--

Unidentified Justice: --if the burden is on the taxpayer or the, the, the person resisting the summons, why has that burden been discharged in this case, then?

Mr. Peery: --Because I think there's a difference.

The clearly prohibited purpose of using IRS summons for... in support of criminal prosecution is a different matter.

I mean, it has been discussed by Congress, it's been discussed by this court and other courts repeatedly, and everybody agrees.

It's unanimous, that use of the IRS summons for criminal prosecution purposes is prohibited.

Unidentified Justice: Then why shouldn't it be on the taxpayer's burden, or the, the person raising the issue's burden to say it is being used for such a purpose in Canada?

There's no showing either way, as I understand it?

Mr. Peery: That's right.

We have no information, and the Ninth Circuit, I think, pointed out the real problem.

It's a dilemma.

It's a Catch-22 for the taxpayer at that point because there's no discovery available to get the kinds of information which would be necessary to meet that burden of proof on the taxpayer, whereas the IRS said below that it had that information.

It was given an opportunity to amend its, its summons, its affidavit in support of summons application, and, and it chose not to do that.

This case would have been long over had the IRS gone back, amended its affidavit to show the answer to those two, two questions that the Ninth Circuit posed.

Has it been referred in Canada to the Department of Justice in Canada or is Revenue Canada asking for this information on behalf of the Department of Justice, the criminal prosecution arm?

Unidentified Justice: Mr. Peery, does the record show why these Canadian citizens have the American bank accounts?

Mr. Peery: No, sir, and I have no idea.

I was not involved at that point.

Unidentified Justice: There is--

Mr. Peery: And there's no record.

There is no record to show why.

But, of course, American--

Unidentified Justice: --They're your clients, aren't they?

Mr. Peery: --Yes, sir.

Unidentified Justice: But you have no idea?

Mr. Peery: No.

Of course, there is no prohibition against Americans having bank accounts in Canada, either.

It happens frequently and, of course, there's a great deal of commerce between the two countries.

Corporations have accounts in, in both countries.

Unidentified Justice: Well, they might have been doing business in this country at one time, set up an account, and just kept it.

Mr. Peery: That's what I would assume.

Unidentified Justice: Nothing like that in the record?

Mr. Peery: No, but there's a lot of commerce between Washington State and British Columbia, which is where this, this factual situation arises, and I would assume that these were commercial matters at one time and may still be.

Unidentified Justice: But you don't know?

Mr. Peery: I do not know that, sir.

I submit that the Ninth Circuit's rating of the language of the specific tax treaty, 1942 treaty, which it found applies here, is the correct one; that Article XIX refers specifically to the revenue laws of the two contracting states, the United States and Canada.

It does not refer to the criminal tax laws or the criminal case law of either country.

It's specifically aimed at the revenue laws of the two nations.

Article XXI specifically describes the procedures for requests by the Canadian Minister of the Department of Natural... National Revenue and specifically talks about the kind of information which may be furnished by the Commissioner of the Internal Revenue Service of the United States in the following language:

"Such information as the Commissioner is entitled to obtain under the revenue laws of the United States of America. "

I submit that that language could not be plainer; that the intent when Department of Revenue or Revenue Canada asks the IRS for information is controlled by what is available to the IRS Commissioner under the revenue laws of the United States of America.

They include Section 7602, which was the basis for the IRS petition below for summons enforcement in these consolidated cases.

And 7602 sub (c) prohibits issuance of a summons and the beginning of any action to enforce any summons if a Justice Department referral is underway.

This is a codification by Congress in the TEFRA amendments in 1982 of that bright line test that the minority suggested in the LaSalle National Bank case from this court in 1978.

It was intended, I submit, to distinguish between the civil revenue purposes which are proper areas for investigation by the IRS, a legitimate purpose, and criminal prosecution, which is not a legitimate purpose.

Unidentified Justice: Why is it the United States is concerned as to how Canada goes about investigating tax delinquencies there?

Mr. Peery: Well, I, I think it need not be concerned at this point, certainly, in these cases.

It only is appropriate to apply the domestic revenue laws of the United States when the treaty partner, Canada, asks for Information.

And it's been very important in the development of the case law and the, and the code by Congress for guidance of the Internal Revenue Service that there be a clear dichotomy in the Revenue Service's activities between criminal prosecution, which is not authorized, and civil investigation.

Unidentified Justice: Well, that dichotomy has obviously been enacted in the TEFRA amendments.

But why should it carry over to our concern for the relationship between a Canadian... the Canadian government and a Canadian taxpayer?

Mr. Peery: I'm not urging that we be concerned except insofar as Canada might be harassing a, a United States citizen with respect to the use of its revenue department in asking the IRS to lend its weight to that.

I'm not... that is not the focus of the Respondents' argument and point here.

The focus is that the domestic revenue laws of the United States apply, and if a treaty partner asks for something within the United States and the IRS to get it with its summons authority, it has to comply with domestic United States revenue law.

Unidentified Justice: So you say that that language can be only read in one way?

I, I think that my point is that if the language isn't quite as clear as you think, it doesn't make much policy sense to, to adopt your suggestion if the other one is equally plausible under the language.

Mr. Peery: Well, I think we certainly ought to be reluctant to make an inquiry into the domestic affairs of a, of a foreign government, a treaty partner.

I agree with Mr. Wallace about that.

But, I'm saying that the test and approach applied by the, by the Ninth Circuit does not require that, and that's not this case.

The Revenue Service admitted below that it had information from Revenue Canada that they had not referred the matter to the Department of Justice in Canada and that they were not asking for the information on behalf of the Department of Justice.

So, it would not, in these cases, have required any kind of investigation into the internal workings of Revenue Canada or its Department of Justice.

I submit that the 1980 treaty, which was ratified somewhat after the LaSalle case, actually served to apply the judicial gloss... that is, the entire body of the revenue laws of the United States, and referred to it quite specifically.

The government concedes in its brief on page 4, footnote 3, that the language and purpose of the 1980 treaty are essentially identical to the language and purpose of the 1942 treaty, and its purpose is to obtain information for each of the parties in the same way as if its own taxation were involved.

So, there's another referral specifically in the 1980 treaty to the domestic revenue law of the country who is being requested to provide the information.

Subsection 3 of Article XXVII provides with respect to the, the process that... of construction of that treaty that the preceding paragraphs are to be construed so as to impose an obligation... they're not to be construed, I'm sorry, so as to impose an obligation to supply information not obtainable under the laws or in the normal course of administration of either of the contracting states.

Unidentified Justice: Mr. Peery, can I interrupt you there for just a second?

Mr. Peery: Surely.

Unidentified Justice: These banks that have the information, the one bank I guess, isn't it, somewhere in Washington, is an American bank.

Mr. Peery: Yes, sir.

Unidentified Justice: And the Canadian citizens have an account in the American bank?

Mr. Peery: Yes, sir.

Unidentified Justice: Now, isn't it possible that those Canadian citizens would have an income tax obligation in the United States by reason of interest earned on that account or something like that?

Mr. Peery: It is possible, but there was no domestic revenue purpose indicated.

Unidentified Justice: Well, but at least it would be permissible, would it not, for IRS to say I'd like to check the bank records there to see if these foreign citizens might owe some federal taxes.

Mr. Peery: Certainly.

Unidentified Justice: And if so, that information would be obtainable purely for domestic purposes pursuant to the, to the United States statute.

Mr. Peery: Cerainly, and it can even be a mixed purpose.

Unidentified Justice: Why isn't that the whole answer to the case?

Mr. Peery: Well, it's not, because of the court's concerns and the Congress' concerns about that important dichotomy between civil and criminal.

Unidentified Justice: But there's no criminal... if they're just looking at the American purposes, there is not even a suggestion that there has been any American referral for... to the Department of Justice.

Mr. Peery: That's true.

And if that had been the basis for the inquiry, looking at--

Unidentified Justice: Well, it hadn't been the basis, but it was... it could be done pursuant to American law is what I'm saying.

Mr. Peery: --Yes, it could.

Unidentified Justice: For just that limited purpose.

Mr. Peery: The problem arose because the information was furnished indicated clearly that the authority for the inquiry that the IRS was using was the tax treaty with Canada and Section 7602, and there was an indication that Revenue... that Canada was investigating for criminal purposes creating, certainly, an ambiguity that needed to be explored.

And we, we only asked for the information that the Ninth Circuit required the IRS to provide on remand.

I submit that another reason for the interpretation... in support of the approach of the Ninth Circuit is that... and against the Manufacturers Trust holding by the Second Circuit... is that, that there's no justification in the body of the law or the treaty or in reason to create a separate set of entitlements for, for the IRS commissioner to use... a legal fiction, I submit, in order to get information from a... for a foreign country in the United States in a manner which exceeds the authority for domestic purposes.

In our supplemental brief we've referred to the 1985 Treaty on Mutual Legal Assistance in Criminal Matters, and I submit that that evidences the acknowledgment by the treaty partners, Canada and the United States, of the important distinction between criminal prosecution matters and civil tax revenue matters, and that treaty is now before the United States Senate for, for ratification.

It sets up a separate system and approach for the sharing of information in those matters which are, are criminal tax matters, and I submit quite appropriately.

It uses the Departments of Justice to exchange information, and it is within the context and framework of the criminal law protections that exist for the citizens of this country.

And I think I would urge... what we see from that is that the executive, at least on one hand, agreeing with Congress and with the opinions of the courts is now saying that if it's a criminal prosecution matter, we ought to call it that, have a separate procedure for handling it as a criminal prosecution and proceed that way.

The Ninth Circuit's approach and the requirement on the IRS to make a prima facie showing of a legitimate purpose including the absence of the prohibited purpose of criminal prosecution I submit is fair, and it's to... in the allocation of the responsibilities and information available to the two parties.

It's practical because it, it complies with the practice of the parties, the Revenue Service and Revenue Canada.

It's efficient because it requires the information to be supplied by the, the party which has best access to the that information, and that's the IRS, and it's uniform in that it promotes an identity of approach for the courts to use when they're considering petitions for enforcement of IRS summons, whether they arise in the domestic setting or by means of a, of a request under a treaty.

Unidentified Justice: Mr. Peery, do you know what the... what would happen if the situation were reversed and our government was asking Revenue Canada to investigate American accounts up in British Columbia?

Would they look at this dichotomy prevalent in the United States between a civil investigation and a criminal one, a criminal referral?

Mr. Peery: They look at their own, Your Honor.

Unidentified Justice: They look at their own?

Mr. Peery: I believe the government's brief has pointed that out.

That is the actual procedure, and certainly it's, it's reflected in the, in the recent law review article that I--

Unidentified Justice: And does it parallel ours entirely?

Mr. Peery: --Not entirely, but there is that dichotomy and distinction between prosecution and investigation, and so there's no problem in compliance in Canada with, with that distinction.

Unidentified Justice: Is it true in Pakistan or the Philippines?

Mr. Peery: I would just have to say they have to understand enough about our domestic revenue laws which, which control their rights to information under the treaty, Your Honor.

Chief Justice William H. Rehnquist: Thank you, Mr. Peery.

Mr. Wallace, you have two minutes remaining.

REBUTTAL ARGUMENT OF LAWRENCE G. WALLACE ON BEHALF OF THE PETITIONER

Mr. Wallace: If I may refer the court to the pertinent statutes at the end of our brief, pages 2a and 3a, first of all, Section 7602(b) at the bottom of 2a says that a permissible purpose for the issuance of a summons is to get information about a criminal offense.

That is not the limitation that Congress has placed.

The limitation is in subsection (c) about Justice Department referrals being in effect, and the line drawn there is not a line about whether a prosecution is pending.

It is the question whether Treasury has recommended to Justice that it undertake a grand jury investigation or a prosecution or whether Justice has requested information from Treasury regardless of whether a prosecution is actually pending.

And the reason for this limitation on the summons enforcement authority was explained by the Senate report in language set forth on page 17 of our brief.

It was so as to not to broaden the Justice Department's right of criminal discovery or to infringe on the role of the grand jury.

It was a reason that had to do with the division of functions between domestic institutions in this country and reflected the language of this Court's LaSalle decision.

Unidentified Justice: Well, but if we adopted that, Mr. Wallace, I assume we would have to adopt (b) as well; I mean, that is to say we would not... if we adopted your opponent's argument, we would have to say you also can't use the IRS' power if the foreign country is conducting a criminal investigation, even though there's no criminal prosecution pending.

You can't use if for the purpose of inquiring into a criminal offense.

Mr. Wallace: Well, (b) says you can use it for the purpose of inquiring into a criminal offense, Mr. Justice.

Congress specifically authorized the use of an IRS summons for that purpose and put an end to inquiry about whether the [= IRS] had--

Unidentified Justice: I see.

Mr. Wallace: --had the purpose of inquiring into a criminal defense, and instead drew the bright line about whether a referral is in effect.

Chief Justice William H. Rehnquist: Thank you Mr. Wallace.

The case is submitted.

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Featured:

Mistretta v. United States - Oral Argument

Fri, 09 Jan 2009 14:49:13 +0000

Case:

Mistretta v. United States

Media File:

87-7028_19881005-argument.mp3

Related Transcript:

1988_87_7028_argument.xml

Transcript:

ORAL ARGUMENT OF ALAN B. MORRISON ON BEHALF OF PETITIONER/RESPONDENT MISTRETTA

Chief Justice Rehnquist: We'll hear argument now in Number 87-7028, Mistretta v. the United States, and Number 87-1904, the United States v. Mistretta.

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

Mr. Morrison: Mr. Chief Justice, and may it please the Court, the question presented in this case is the Constitutionality of the Federal Sentencing Guidelines, or more precisely, the Constitutionality of the process by which those guidelines were issued.

To answer the question, it is necessary to know how the guideline system works, and what kind of judgments went into the guidelines.

In 1984, Congress instituted a new system of determinative sentencing.

In that determinative sentencing system, it made sentencing guidelines the centerpiece.

It also recognized that it could not... chose not to issue the guidelines itself.

Rather, it designated in a statute of commission to do the job.

The commission to consist of seven members, three of whom were required to be Article 3 Federal Judges, all of whom were appointed by the President with the advice and consent of the Senate, and no more than four of them could be members of the same political party.

Now, the term guidelines, which is what the commission is directed to issue, is something of a misnomer.

These guidelines are not merely advisory.

They are directions to sentencing judges with which the sentencing judges must comply, unless they find that there is a factor in the particular case which the sentencing commission did not adequately take into account.

And If the sentencing judge diverts from the guidelines, either above or below the guideline, then the party... either the defendant or the Government... has a right of appeal on the grounds that the sentence was unreasonably either too high or too low.

Similarly for the first time ever, both defendant and the Government has a right to appeal if they allege that the Court selected an improper guideline or otherwise misapplied the guidelines.

There is no dispute between the parties that the guidelines constitute the law of sentencing for Federal defendants from November 1, 1987 on, which is the effective date for the guidelines for crimes committed after that date.

In order to determine whether the guidelines are consistent with separation of powers, it's necessary to examine the kind of judgments that the commission inevitably had to make in establishing a guidelines system.

The first question that the commission had to confront with respect to each of the crimes... and this is not simply the Title XVIII, but all of the entire Federal criminal code, and other provisions in other parts of the United States Code... where should the sentence be?

Congress told the commission that the sentencing range for each sentence could be no more than six months or 25 percent maximum to minimum jail time.

So, for instance, for the crime of stealing a $500 Social Security check in the mail, the commission had to decide what the appropriate punishment was for that particular crime.

Did it matter the commission had to decide whether the thief was caught before he spent the money, or whether the amount of the check was not $500, but $1,000, and--

Unidentified Justice: Mr. Morrison, was the commission circumscribed at all by the outside limits of the penalties already prescribed by law?

Mr. Morrison: --Yes, your Honor.

Yes, your Honor.

The commission also had to decide whether those similar kinds of monetary adjustments were appropriate for other kinds of crimes against property, for crimes such as tax evasion, for price fixing, securities fraud, and the like.

Congress told the commission,

"Start with the average sentences imposed in the past, but that you can move them up or down as you see fit in order to eliminate what Congress said were unwarranted disparities."

So, the commission had to decide what factors were properly aggravating and what properly mitigating in a particular crime to decide whether the particular differences were warranted or unwarranted.

That is precisely the kind of process that sentencing judges used to do, before the commission issued its guidelines and they went into effect.

The second major task that the commission had to undertake was it had to rank the seriousness of disparate kinds of offenses.

It was not simply enough to decide the absolute offence level for each crime, but as a practical matter, you had to rank the crimes in comparative degree of seriousness.

So for instance, the commission had to face questions rather like this: how should you punish the sale of six ounces of cocaine, the committing of perjury before Congress, bid rigging in excess of $50 million in Government contracts, the sale of $100 in pornographic materials, or conspiracy to violate the civil rights of a Black family.

The commission chose, within the statutory range of sentencing, to treat all of those disparate offenses basically the same, and that question of how to treat them was a question that they had to address, despite the very dissimilar facts surrounding each of the crimes.

It is of course not the function of the Court to decide whether those analogous sentences for different crimes is right or wrong.

But it's important to note these because it indicates the kind of ranking of judgments that the commission made, these very heavily policy-oriented judgments that are plainly debatable, and that the terms of these debates are about values and about policies, and they are political in the best sense of the word... the kinds of political choices that we normally expect will be made by our political branches.

This ranking of offenses, is inevitable, any time you have a base level system, which they had to have in this case, between 1 and 43.

And while the guidelines themselves don't show the ranking, the equal ranking of disparate crimes, we have attached an addendue to our brief, which goes through each base level offense and shows you what the commission determined to be similar crimes and hence deserving of similar punishments.

There are, in short, no neutral principles that the commission could follow, except its own good sense and personal views about which crimes were more serious or less serious than the others.

The commission recognized in a number of places that it was making policy decisions, most particularly in the policy decisions to substantially increase the amount of time which persons convicted of white-collar crime, such as tax evasion, public corruption, anti-trust violations, securities fraud, would spend in jail.

The third set of determinations, that the commission and to make was to decide who gets to go on probation and who doesn't get to go on probation.

Under the statues, the commission was empowered to lay down the ground rules, and say below a certain level, probation is permissible, but above that level, it is not permissible.

And the District Judge who sentences the individual is forbidden from giving probation to someone whom the commission said was not entitled to probation for that kind of crime, just as much as the District Judge is forbidden from going above or below the sentencing guidelines.

There is, I believe, a graphic example of the effect that the commission's judgments have on sentencing, and how the commission's judgments reflect its views about what kind of penalties are appropriate for what kind of crime.

And The example I refer to is that of the recent sentence of Michael Deaver.

Mr. Deaver was convicted of committing three counts of perjury.

Assume for simplicity it's only one count, because the guidelines become more confusing when there are multiple counts... another matter which the commission had to deal with.

Now, under the commission's guidelines, a single count of perjury is a base level 12 offense.

Because Mr. Deaver had no prior convictions, that would translate into a range of sentence between 10 and 16 months confinement.

Under the commission's guidelines, alcoholism, which was a factor cited in mitigation, would not have been an excuse to go below the 10 months.

It would have been a proper basis for the judge to consider, within the 10 to 16 month range.

Now, of that 10 months, the sentencing commission said five had to be spent in actual confinement... no straight probation, actual confinement.

And five could have been served in community confinement, which means a person can go out during the day and goes to a halfway house or similar facility in the evening.

In actuality, the District Judge in this case gave Mr. Deaver three years jail time, but suspended it entirely.

Under the sentencing guidelines, he could not have done that.

Now, again, the question is not which set of judgments is right or wrong, the sentencing commission's judgments or the District Court's judgments.

The point for these purposes is to recognize that the judgment depends about your notions about this relative seriousness of the crime.

What kind of offenses should people in all cases have to go to jail for?

And this commission has made those judgments in every one of the cases in which it has written a sentencing guideline for.

Unidentified Justice: You take the position that no commission, regardless of its composition, could have been given that power, I take it?

Mr. Morrison: That is the second argument we make.

We make the argument on delegation as our second argument, given the definitions and the relatively few limits that Congress has placed upon the commission.

Unidentified Justice: And if we disagree with you on that, then you fall back on the fact that it's the composition of the commission?

Mr. Morrison: Well, as your Honor notes, those are alternative arguments.

We have placed the sentencing... let me see, the separation of powers argument first in our brief because we believe it is a lesser argument... that is to say, we don't have to say that necessarily you could never issue sentencing guidelines, but that this commission with this composition, these powers and these restrictions couldn't do it.

Unidentified Justice: Well, would it make a difference if the law did not require that judges serve on the commission?

Mr. Morrison: It would make a difference depending upon whether judges were serving on the commission or not.

Unidentified Justice: Well, what if the President under a law that didn't specify that judges would have to serve... and what if the President in fact asked some to serve, and they said, "All right, we will".

Mr. Morrison: In my view, that is un-Constitutional as well.

That is not permissible, to have Article 3 judges serving on commission of this kind.

Unidentified Justice: Even as true volunteers, when it isn't mandated?

Mr. Morrison: I think that... yes, that is also correct, your Honor, because of the nature of the kind of choices that the commission was making.

The thrust of my submission that I have been making here in trying to describe the work of the commission is directly relevant on both the separation of powers issues... because the Court has looked at the functions being performed... as well as the delegation issue, and that factual predicate in this description directly bears on both of them, and not simply on the delegation issue, or on the separation of powers issue.

Unidentified Justice: Well, what about Owen Roberts on the Pearl Harbor Commission, Earl Warren on the Warren Commission?

Mr. Morrison: I believe that all... that many... that those two are factually distinguishable on the grounds that they involved advice-giving and fact-finding.

But the... both the Government and the sentencing commission cite a number of historic examples about other kinds of activities undertaken by various justices at various times.

While I think there are some distinctions between that case and this one, principally because this one involves the making of law in a concrete situation... the most important distinction for our purposes is that in none of those examples was the Constitutionality of the conduct ever taken to court, let alone was it reviewed under this Court's jurisprudence on separation of powers as it has evolved since Buckley in 1976.

Unidentified Justice: Do you think that practice amounts to nothing in determining Constitutionality?

Mr. Morrison: I did not say that, your Honor.

I would not agree that practice amounts to nothing.

I would point out, however, that there has been practice to the contrary.

A number of Justices expressed extreme reservations about doing this, and while not directly citing separations of powers situations in all cases... although Justice Stone has done so... I would say that dating from the earliest days of our Republic, when as reported in United States v. Muskrat, President Washington asked Thomas Jefferson as Secretary of State to ask the Court for an opinion about the meaning of a treaty.

Those... the Justices declined to do so on the grounds that it was inappropriate.

I would suspect that it they had been asked in their individual capacities, as the respondent suggests, as opposed to their official capacity, the outcome should have teen the same.

So, I think that the history is by no means unified all in one direction, but more importantly, I believe that none of the cases ever involved activities of a concrete, far-reaching nature that affects 40,000 criminal defendants a year, as the activities of the sentencing commission do here.

Unidentified Justice: Well, as long as we're giving you these examples, what about the Federal rules of evidence?

Suppose that this Court had promulgated the Federal rules of evidence.

Would that have been Constitutional?

Mr. Morrison: Well, let me divide the answer into two parts, If I may.

As to the rules not relating to privilege, I would say that there would be no difficulty, that those are very close to the rules of civil procedure.

That is, of course, the line that Congress ultimately hit upon.

This Court did, in the early 1970's, pursuant to a Congressional grant, promulgate the rules of evidence, sent them forward to Congress.

Congress saw them, stopped them from going into effect, and ultimately said,

"You can't put them into effect as to privileges."

Now, dealing with the privileges, I would even divide that into two parts.

It seems to me that it we are dealing with the privileges as applies to Federal law and Federal causes of action involving Federal matters, that the Court may have some limited authority there.

But what I believe you have, in the case of privileges, are principally questions of value judgments.

Do we value the confidence between the husband and wife greater than we value the getting at truth?

How do we value the attorney-client privilege... not so much in the context of litigation, but in terms of pre-litigation matters?

And it is my view that that is a far closer question... and I think if I had to come down on it, I would say that the Court could not do these... at least certainly many of the privileges.

Unidentified Justice: And is the historical occurrence that Congress old enact the privileges support for your position?

Mr. Morrison: Well, I would like to say yes, your honor, but I think that it probably had to do more with a recognition of the underlying nature of the controversies in the privilege area... that is, we are dealing with policy choices that are more substantive in nature than procedural.

I recognize that in recent years the Court has said... I mean, just last term... that there is no single dividing line between substance and procedure.

But, on the other hand, the Court has recognized in a number of cases when persons have tried to claim something as procedural to be able to drag it in on the judicial side, the Court has said,

"No, we won't allow that to take place."

So, I think that the efforts to expand procedural have... albeit in a different context... have generally not met with favor, and I would think that they would not apply here to the evidence context as well.

Turning back to the work of the commission, the commission also had to deal with the question of fines within the statutory restrictions.

The commission was given the discretion to decide under what circumstances fines should be imposed, when and how much.

Originally the commission thought about having an ability-to-pay fine system, or is the alternative, a system based on a multiplier of the amount of money lost.

The commission is even now about to hold some hearings dealing with fines for organizations, principally corporate defendants.

But, in the end, as to individuals, it's set up a schedule under which all but the incident must pay fines in an amount within the range set forth in the schedule.

So, turning back again to the Michael Deaver example, at the base level offense of 12, Mr. Deaver could have been required to pay a fine of between $3,000 and $30,000.

In fact, he was fined a $100,000, and again, the answer... the question is, of course, not which set of fines is correct, but it shows how value-laden that part of the system is as well.

Unidentified Justice: Is this argument to say that the commission is treading on judicial, the power of individual judges?

Mr. Morrison: It is certainly the fact that the commission treads on the power of individual judges.

Unidentified Justice: But individual judges have always been deciding what the sentence should be within the statutory range.

Mr. Morrison: In the context of a case or controversy, your Honor.

Unidentified Justice: Yes, and in that process, they have certainly been making their own value judgments about the seriousness of the crime.

Mr. Morrison: But they have done it for the one individual before the Court.

Unidentified Justice: That's true.

Mr. Morrison: They have not laid down precedent.

And the fact that they were doing it for only the individual before the Court was the very fault that the Congress found with the present system, and the reason that they wanted to change it.

Congress didn't like the individual--

Unidentified Justice: Well, what's wrong with... put your finger on what's wrong with the commission doing it.

Mr. Morrison: --The commission is improperly doing it here because we have a commission which includes three Article 3 judges in the judicial branches.

Unidentified Justice: I know, but they aren't... the judges aren't doing... the commission, including the judges on the commission, aren't doing things that judges don't do, or that are improper for judges to do.

Your argument sounds like it's really the fact that the commission is doing it and interfering with judge's judgement in individual cases.

Mr. Morrison: No, your Honor.

I want to be precise in what I'm saying.

It is of course true that judges have always engaged in sentencing, but sentencing is not a unified act.

It's composed of several different elements.

The imposition of a particular sentence in a particular case is what judges have been doing.

What the judges and the other members of the commission are doing here is, they are writing the rules of sentencing not to apply to themselves, but to apply to all judges.

Unidentified Justice: What's wrong with that?

Mr. Morrison: Because they have historically never done that before, and because they are making--

Unidentified Justice: So practice really does make a difference?

Mr. Morrison: --No, and because they are making policy decisions of a kind--

Unidentified Justice: You could say the same thing in the Hampton case.

There had never been an independent agency before, so the Court should have thrown out the whole idea of independent agencies.

There's going to be a first time for lots of things.

Mr. Morrison: --Yes, your Honor.

But I simply wanted to respond to Justice White's statement that this is what sentencing judges have always done.

It's not what sentencing judges have always done, and you are right, there has to be a first time.

And my argument is that sentencing judges should not be doing this, because--

Unidentified Justice: Even though they've always been doing it?

Mr. Morrison: --They have not--

Unidentified Justice: Well, haven't they always been deciding what the sentence should be within the statutory range?

Mr. Morrison: --In an individual case.

They have not always been deciding the general rule.

Unidentified Justice: Well, I know, but it's the kind of judgments that judges have always been making.

Judges always make these judgments.

Now, you say the commission shouldn't be making it to apply to every case, but the fact of them making the judgments is not non-judicial business.

Mr. Morrison: Well, there may be less difference between us than I think there may appear.

Your Honor, of course it is only the translation of the making of these judgments on an across the board basis that creates the problem.

But I do think that there is a difference in kind between laying down and establishing a sentence for a particular individual in a case, and laying down broad rules for--

Unidentified Justice: Well, everybody would agree to that.

Mr. Morrison: --That--

Unidentified Justice: But what's wrong?

What's un-Constitutional about that?

Mr. Morrison: --It is the laying down of the broad rules that causes judges to be embroiled in political controversy.

Unidentified Justice: Mr. Morrison, judges generally have for many years... even before the Sherman Act... decided in an individual case whether a particular combination or conspiracy was in unlawful restraint of trade, haven't they?

Mr. Morrison: Yes, your Honor.

Unidentified Justice: And you wouldn't maintain that they can take it upon themselves to write a new Sherman Act, therefore, would you?

Mr. Morrison: I would not.

Unidentified Justice: It's a different job, isn't it?

Mr. Morrison: That's correct.

Unidentified Justice: Mr. Morrison, have you taken into consideration the large city courts where they have committees of judges that meet with the sentencing judge?

Mr. Morrison: You're talking about the non-Federal system, your Honor?

Unidentified Justice: Where one judge calls in two other judges to tell him... sit down and decide what we're going to do.

Mr. Morrison: Yes, I'm aware of that.

Unidentified Justice: And that's recognized as being valid and good.

Mr. Morrison: Well, it has never been challenged, your Honor, but it is distinguishable on several grounds.

Unidentified Justice: It certainly is legal and valid, and has been in existence for 20 years or more.

Mr. Morrison: It certainly has been in existence.

It has never been challenged, and it probably is not challengeable, but there is a major difference, and that is, the three judges sit down, and they have a meeting, and they decide what's appropriate for sentence.

But only the sentencing judge actually decides.

A judge gets advice from his or her colleagues and decides what's appropriate.

It is not binding.

That system was known to the Congress, and it was one of the things that Congress thought might happen--

Unidentified Justice: What happens if you and I sit down to decide, and I don't agree with you, and the next time we sit down, do you think you're going to agree with me?

Mr. Morrison: --I might, or I might not, your Honor.

Unidentified Justice: You wanna bet?

[Laughter]

Mr. Morrison: But it's not binding.

It's not binding, and that's the difference.

It's the difference between advice which the Congress rejected as being sufficient, and mandatory binding guidelines subject to very limited exceptions, and that is the reason the Congress felt that it was not sufficient.

Unidentified Justice: Well, I suppose in another sense that every time a Federal Judge hands down some ruling on a point of law, they're binding others not before the Court, aren't they?

Mr. Morrison: Well, your Honor, it is--

Unidentified Justice: And in a sense they're establishing precedent?

Mr. Morrison: --Yes, your Honor, but the rules for deviating from precedent, particularly by one judge from another judge in another circuit, or even in the same district, are far less stringent and do not give rise to the same kind of rights that are given rise to when a judge deviates from the sentencing guideline in this case.

Unidentified Justice: Yes, but in a very real sense, judges generally are in the business, at least at the Federal level, of making a good deal of law, in a sense.

Mr. Morrison: Well, they make law, but it's not binding.

I would give the example in this very case, Your Honor... the sentencing guidelines have been before, I think it's approximately 250 Federal judges, who have voted on their Constitutionality.

I do not have the latest count, I think it is slightly more than 50 percent who have decided they are un-Constitutional, and less than 50 percent Constitutional, for a variety of different reasons.

Unidentified Justice: I know, but does any of them include the argument you're just making?

Mr. Morrison: Many of them include my argument.

Some of them include delegation arguments, some of them include due process arguments, some of them include arguments I've chosen not to make.

There are a whole variety, and I would say the same is true on the other side.

There have been cases upheld on grounds that have not been urged by the parties.

The point I make, Justice O'Connor, is to indicate that at least in this particular kind of controversy, no one has felt bound by what their fellow judges have done.

Even in the same district courts, there have been deviations in the same district court, and there have been different defendants being sentenced by different people until this case can be decided.

Now, the policy choices that this commission had to make were inevitable, given the kind of functions that it would perform, and that the Ninth Circuit was correct in describing these choices as political.

And Indeed, that is what the Congress expected, because Congress proscribed the presence of more than four members of the commission from being of the same political party.

That kind of restriction, which is extremely common in executive branch agencies, where we expect our executive branch officials to be making policy, is unique in the judiciary, and it's unique in the judiciary because we do not expect those bodies in the judicial branch to be making policy, making these kind of political choices.

Unidentified Justice: Well, that speaks in favor of the Solicitor-General's argument that in fact this is executive power being exercised.

Mr. Morrison: I agree, your Honor, and that if the power is properly delegable, it must be executive power.

Now, the Solicitor-General has a matter which I'm sure he will tend to, of how he's going to move the commission out of the judicial branch, where Congress so carefully placed it, into the executive branch, but in any event... and I'd like to turn to this now, if I may... we don't think it makes any difference.

That if Congress had placed this body in the executive branch of Government, labeled it 3 judges on it, we don't think that would have made a single bit of difference, and it would have been just as unconstitutional there as it is here.

And the reason we say that is because we go back to the purposes behind separation of powers for the judicial branch of Government.

That the Founding Fathers separated the judges because they wanted them to be independent, and they wanted them to be impartial.

And they were specially concerned about that because they have lifetime appointments.

Now, it's true that they were also conscious of the possibility of tyranny developing when judges were involved in the making of the law or the executing of the law... but the principal concern was that for the Federal courts to be effective, to be seen as neutral arbiters of our law and our facts, that members of the Federal judiciary have to stay out of the political fray.

Unidentified Justice: xxx--

Mr. Morrison: Making policy.

Unidentified Justice: --In all cases?

Mr. Morrison: Openly.

Unidentified Justice: The judges to follow?

Mr. Morrison: That's right, except in the context of a case of controversy where there inevitably will be some policy to be made.

It's when--

Unidentified Justice: Well, when the Court of Appeals decides a case, and in effect makes some new law, or makes new policy, it certainly binds every judge in the circuit.

Mr. Morrison: --It does, your Honor.

Unidentified Justice: And at the trial court--

Mr. Morrison: And it is done in the context of a case or controversy.

Nobody suggests--

Unidentified Justice: --And I won't say what happens if we decide it.

[Laughter]

Well, how about the judicial councils?

Mr. Morrison: --Well, two things about the Judicial councils.

One is the areas in which they have power to act are by and large procedural, or they relate to matters such as discipline, which this Court's decision in Chandler and others recognized are ancillary to the principle function of judges deciding cases or controversies.

The judicial conference could be said to be making policy, but it principally affects the workings of the Court.

These sentencing guidelines are intended to affect primary conduct.

The purpose of the sentencing guidelines, as Congress said, is not to rehabilitate defendants, but to deter them, to punish them.

The message is to go out loud and clear.

Members of the public, if you commit crimes, look at the sentencing guidelines and you will go to jail.

No more hoping for a judge to let you off.

That's the judgement Congress made, and that is a very different kind of judgement than that kind made by judicial bodies, which are largely advisory or operating in the context of a case or controversy.

Unidentified Justice: Well, that judgement Congress did make.

Congress didn't leave that judgement to the commission.

Mr. Morrison: That is correct.

As to the ultimate effect, it did.

Unidentified Justice: Right.

Mr. Morrison: It did.

Unidentified Justice: Mr. Morrison, what if the judges in a particular circuit got together and decided that in order to improve the operation of the criminal system in their circuit, they would develop for themselves some sentencing guidelines, within the ranges established by Congress, and they'd try to get xx l their colleagues to follow them.

Is that improper?

Invalid?

Mr. Morrison: Well, let me say, that took place before.

There were sentencing groups, councils, I don't know the precise appellation... they may have varied from court to court... but they were not mandatory, and that no right of appeal by any defendant or by the Government pertained in the event a judge diverted from that.

And it seems to me that the mandatory nature makes this into a law-making function that is going on here.

But as I said, to me it matters not that there is an attempt here to say that judges are after all not sitting as courts of law, they're acting in their individual capacities when they are deciding these rules... that the judges are commissioners and the fact that they are judges is simply... can be disregarded.

Unidentified Justice: Mr. Morrison, can I interrupt with one question?

If the program had been one that made the sentencing guidelines a recommendation to Congress, in effect, and Congress had then adopted them--

Mr. Morrison: Yes?

Unidentified Justice: --Would there be any Constitutional objection?

Mr. Morrison: If my client had been sentenced under the guidelines, there would have been no Constitutional objection to the sentence imposed on him, because once Congress goes to the Constitutionally mandated form for enacting legislation, I do not believe that my client could go behind it.

I would still say that there has been a transgression of the principles of separation of powers by the Article III judges participating in this system, although it would be of a somewhat different nature.

But nobody would have any standing, I don't think to--

Unidentified Justice: What you're saying is it would still be un-Constitutional even though no one could challenge it?

Mr. Morrison: --I assume no one could challenge it, but I would believe it would be un-Constitutional.

It would be inconsistent with what the Founding Fathers believed should be the properly limited function of Article III judges.

Unidentified Justice: Doesn't the undermine--

--before a committee of Congress about a substantive law?

Mr. Morrison: No, your Honor, I did not say that, and I'm glad you asked me that, because I want to clarify my views on that.

If a judge, not acting pursuant to a statutory mandate, as we have here, and not being directed to produce a consensus determination, not only with Article III judges, but with four people who are not Article III judges, wants to proceed on his own individual basis, and to testify before Congress about a matter relating to judicial administration... it seems to me that under the balancing test that this Court has established in cases such as Nixon v. GSA and Morrison v. Olson, that that would not be a transgression upon the powers of the judiciary or upon any other powers.

Unidentified Justice: Well, what if a judge wants to testify about some pending bill that has absolutely nothing to do with the judiciary?

It may be very bad judgement, but surely he isn't violating the Constitution.

Mr. Morrison: Well, your Honor, I would not say "surely".

I think that's a closer question.

I do not think that judges should... if they tend--

Unidentified Justice: And what provision in the Constitution is it that prevents a judge from going over and testifying about a bill for appropriation for a wildlife center?

Mr. Morrison: --It seems to me, your Honor, that Article III of the Constitution, as most recently interpreted by this Court in Morrison... particularly the part in which the Court said that even the attempt to close down the office of the independent counsel might be administrative acts of the kind inappropriate for a judge.

Unidentified Justice: But we were talking about a court there.

Mr. Morrison: your Honor, I submit that if Congress had said that the function shall be performed by an independent appointing commission, or that if in this case the Court said the Congress described this body as a sentencing court, the outcome would have been the same.

We have, in our system... courts do not decide cases, controversies.

Judges decide cases or controversies, and judges are lifetime appointees--

Unidentified Justice: But that's just pure metaphysics.

Mr. Morrison: --No, I think it's quite a question of reality, your Honor, that a judge cannot remove his--

Unidentified Justice: That's like saying guns don't kill people, people kill people.

[Laughter]

Mr. Morrison, while you're thinking about that--

[Laughter]

Mr. Morrison: --No, I have an answer, I'm just waiting for the applause to die down.

Unidentified Justice: Yes.

What about a judge testifying about sentencing?

Testifying in opposition to capital punishment, for example?

Mr. Morrison: I would say a judge should not testify in opposition.

Unidentified Justice: You think he would be acting in violation--

Mr. Morrison: It is a political act.

We are... what we are having in this situation is that in order to maintain our judiciary in the way that I believe the Founding Fathers envisioned, judges are supposed to stay out of political controversies.

Unidentified Justice: --May they vote?

Mr. Morrison: Yes, your Honor.

[Laughter]

Unidentified Justice: And what if the judge if asked by a--

Mr. Morrison: But it would be improper for them to campaign on behalf of a person for a political office.

Unidentified Justice: --I didn't ask that.

Mr. Morrison: And the difference is because it is visible on the one hand and not visible on the other.

Unidentified Justice: But what if a Congressional committee dealing with a sentencing problem wanted to call in judges and ask them for the reasons they'd imposed a series of sentences in cases, just to better understand the sentencing process?

You tell me that the judges could not respond to that request.

Mr. Morrison: No, I do not believe that.

I did not intend to say that, because if you're talking--

Unidentified Justice: Well, what's the difference, though?

Mr. Morrison: --I think the judges are providing expert explanation of what they did.

Perhaps some of it will turn into advice.

But one of the things we have here is not simply an individual judge acting on his or her own.

We don't simply have a collective group of judges coming in and making a recommendation.

We have a collective group of judges joining with four non-judges, attempting to reach a political consensus, and that consensus then becomes the law of sentencing.

And inherent in reaching that sentence is not merely expert advice, but very value-laden judgments.

Unidentified Justice: I think you said your position would actually carry to the extent that even if it did not become the law, it was subject to further enactment by Congress, you would still object to this whole process.

Mr. Morrison: In this commission process.

Unidentified Justice: Yes.

Mr. Morrison: I believe that judges shouldn't do it.

As I said, the sentence imposed--

Unidentified Justice: I know, you said you think it's un-Constitutional for them to do it.

Mr. Morrison: --Yes, I would have to say that.

Unidentified Justice: I wish you hadn't said that.

We don't really have to get into that.

Mr. Morrison: We certainly do not, your Honor, but--

Unidentified Justice: It's quite a bit different being a member of an agency that promulgates law, which is what you say is the problem here--

Mr. Morrison: --Correct.

Unidentified Justice: --From testifying before Congress.

We really have to reach that problem today?

Mr. Morrison: We do not have to reach that problem, your Honor, but I was asked the question and I do have to answer, I believe.

[Laughter]

The effort to treat the judges here as acting in their individual capacity falters both on the facts of this statute... that is, that Congress insisted that three Article III judges be on board.

They insisted that they sit down and meet with four other non-Article III judges, and that they engage in a process that could fairly be called horsetrading, to come up with a ranking of offenses and appropriate levels of offenses involving some of the most political judgments that we have to make.

And it seems to me that it doesn't matter whether this function was assigned to a court... if it had been assigned to this Court, without the non-judicial members, surely the outcome of the case would not have been any different.

If your Honors had descended from the bench, taken off your robes, gone into a conference room instead of a courtroom, and decided the case in your individual capacities, decided in your individual capacities to issue these sentencing guidelines.

Surely the outcome can't be depended upon whether you're wearing robes, whether you're called "commissioner" or "your Honor".

The Constitution deals with the reality that Federal judges who are appointed for life must maintain their neutrality and their impartiality and because this sentencing commission system fundamentally alters that balance, it is un-Constitutional.

Thank you, your Honors.

I'll reserve the rest of my time.

Chief Justice Rehnquist: Thank you, Mr. Morrison.

We'll now hear from you, General Fried.

ORAL ARGUMENT OF CHARLES FRIED ON BEHALF OF RESPONDENT/PETITIONER, UNITED STATES

Mr. Fried: Thank you, Mr. Chief Justice, and may it please the Court, for more than 30 years, Congress has been troubled and has worked at the problem of grave, invidious, and inexplicable disparities in the Federal sentencing process.

In 1958, it tried some gentle measures.

It put in the judicial councils and institutes to which I believe Justice O'Connor made reference.

That did no good at all.

In 1976, they did something a little bit more drastic: we had the Parole Commission Act, which sought to give the parole commission power to even out the sometimes quite dreadful disparities after the fact, and the Court will be familiar with that from the Adinizio case.

That, too, failed, and it failed because the judges and the parole commission were working at cross purposes, and the sentencing judges would anticipate the work of the parole commission in pronouncing sentence.

So, strong measures were required to obtain equality and honesty in sentencing.

Now, I think that this statute is misunderstood when it is viewed as being unduly rigid.

It provides for 25 percent range in which the sentencing judge may operate.

That should be enough... and allows for departures in a rather wide range of circumstances, provided that the judge gives reasons and explains what he's doing.

Now, Petitioner raises three objections.

He objects that Congress did not do the whole job here, but rather delegated it to an expert independent agency, and then Petitioner complains as to how that agency is constituted, and most particularly about the inclusion of three Federal judges among the seven members.

Turning to the delegation point... because it's a good way to indicate what the commission actually did do... one would have thought, given the very great particularity in the statute, that it would be too late in the day to raise a delegation objection.

In fact, the statute sets not only the goals for the commission, but provides the methodology and makes many of the particular judgments, and as was remarked from the bench, of course, all of this takes place within the maxima which are set out by the particular criminal statues, and which are the basis for the kind of grading of severity to which Mr. Morrison referred.

Turning to the methodology because it's most important; the statue required the commission to begin with actual experience.

And, indeed, the commission surveyed 40,000 cases, 10,000 of them in very great detail, to see what the sentences actually served under actual circumstances involving the circumstances of the case, the circumstances of the offender... what they were.

And not only did the commission start with actual experience, to a large extent that's where it ended.

To a large extent, these guidelines reflect today's practice.

Where the commission departed in these value judgments about which you've heard, they have done so under the explicit mandate of the Act, that for instance, violent offenders, repeat offenders, career criminals, drug traffickers, be sentenced at or near the maximum.

That is not something the commission dreamed up... they were enjoined to do that by the statute.

Similarly, as to white collar criminals--

Unidentified Justice: But the problem is, they've been enjoined to do it for every case.

Mr. Fried: --What I was suggesting, Justice White, is that the commission was enjoined to do it by the statute, and therefore they were not simply following their own policy judgement.

That they were being guided by what Congress had required, and the guidance from Congress here, I submit, was miles greater than we usually encounter in a delegation.

Unidentified Justice: You're making a non-delegation argument, is that it right not?

Mr. Fried: I am, your Honor.

And the suggestion that this is something that Congress might have handed to an advisory panel, then to enact its work, misses the point that these guidelines, in order to be sensible and effective, must be evolutionary.

They must require monitoring of what happens and constant revision, and that of course is precisely the kind of work which is given to an independent agency.

Unidentified Justice: General Fried, do you know of any other agency... let's say this is in the executive branch... do you know of any other agency in the executive branch that has no function whatever except to promulgate law?

Mr. Fried: No, I do not, but I do know of a number of agencies which among their other functions do promulgate--

Unidentified Justice: Indeed, just as rulemaking is almost a necessary incident of being an executive.

You must acknowledge... this is a distinctive entity.

Has there ever teen an agency of the Government that has no function except to promulgate law, other than the Congress?

Mr. Fried: --Well, I ran through that in my own mind, and I was not able to discover one.

Unidentified Justice: I don't think so.

Mr. Fried: But I do think there are agencies which establish laws for others as well as for themselves, and laws which are enforced by others other than themselves.

Unidentified Justice: In the course of conducting some administrative function or other... some other executive function.

Mr. Fried: Well, I think the SEC, when it sets down rules, is making rules for others, and for the enforcement by others, as much as for themselves.

Unidentified Justice: That's true, but I assume that if Congress could do this, Congress could decide that we need a massive revision of securities laws, and could simply compose a commission, so long as the directives are general enough to overcome the bare objections we have against overdelegation... assuming that there's enough standard there, it could just create a commission and say that whatever this commission comes out with shall be our new securities laws.

Can it do that?

Mr. Fried: Well, in this case, of course, the regulations, the rules, have to lie before Congress for six months before becoming effective.

I cannot propose any general objection to what you suggest.

Unidentified Justice: Well, it certainly is a nice... it's a handy way to get around legislative impasse.

You just create an agency to make law, right?

Mr. Fried: Well, I don't think that we have here a way of getting around a legislative impasse which might be what was a problem in the Gramm-Rudman situation... because here Congress had come down to a lot of very specific policy judgments, but there has the need to bring them that last six feet down to earth.

But they'd done an awful lot of the work themselves.

Unidentified Justice: But if this handy device is doable, why has it never been done before?

I mean, it certainly is handy.

Mr. Fried: Well, I can't answer why--

Unidentified Justice: To just simply say, why go through all the trouble of hammering cut a new securities law?

Let's just create an agency and say, hey, promulgate a securities law.

Mr. Fried: --Well, I would answer that question ultimately by saying that I do not know what provision of the Constitution is violated when an independent agency does make general but really quite guiding legislative judgments ultimately specific.

I don't think it violates any provision of the law.

Unidentified Justice: Well, it could be that a certain amount of lawmaking can be given to executive agencies because it inevitably belongs to them, just as a certain amount of lawmaking is given to courts.

It's part of their executive function, and you can augment it to a certain degree.

And perhaps that's permissible, but it's not permissible to create an agency that has no function except to promulgate a law.

Mr. Fried: With respect, your honor, I do not know that provision of the Constitution is violated by that.

Unidentified Justice: If all it does is promulgate a law, what kind of action would you call that?

Mr. Fried: I would call that executive, your Honor.

Unidentified Justice: You would?

Mr. Fried: If they are executing a law which directs them to make more specific the mandates in the statute, which is how we analyze this case.

Now, beyond the delegation, beyond the delegation objection, which obviously is more formidable than I had imagined it to be--

[Laughter]

The complaint is made that the phrase, that this is an independent commission in the judicial branch is a cause for concern.

Should we stumble over the phrase "in the judicial branch"?

A number of things are quite clear: that the commission is not a court, and that is not simply a technical point.

It is not a court because it does not issue judgments in cases, it is not subject to appellate jurisdiction, its judgments cannot be appealed from, it is not issuing final judgments.

And it is not subordinate to any court as are, for instance probation officers or bankruptcy judges.

It is in the judicial branch in a perfectly harmless, Constitutionally harmless sense, and that is, first of all, that it is... its judicial branch connections, which explain the logistics of managing this commission... who makes out the checks, how is the budget submitted, that particular housekeeping rules, such as the Freedom of Information Act, conflict of interest laws, and xx on, will apply?

Similarly, there is a strong administrative connection between the commission and the administrative office of the courts, and the probation offices, which supply it with a great deal of its information.

And that seems to me a set at consequences which Congress might have provided in detail, but in fact, it did so compendiously by stating that this is an independent commission in the judicial branch.

Furthermore, of courses, and much more substantively, this is a way of underlining Congress' very great concern that this be an independent commission... and that, of course, is also thereby accomplished.

But beyond that, I see no reason, I see no need, to engage in a rewriting or severance, or anything else, of what Congress did, because I am unable to discover any harmful, any infectious aspect to that designation.

What the designation does do is perfectly appropriate, and if there is some work that it does do that I have not been able to discover, that is inappropriate, by all means let us sever that, but I don't know what it is.

Unidentified Justice: It's been suggested that that one thing was that Congress didn't adopt it afterwards.

Mr. Fried: Well, Congress was very concerned to insist on the independence of the agency, and very concerned--

Unidentified Justice: They have adopted the Act?

Mr. Fried: --Well, it could have done it one time, Justice Marshall, but the need here is--

Unidentified Justice: It could do it right now, could it?

Mr. Fried: --Indeed it could.

Unidentified Justice: Well, I mean--

Mr. Fried: But the important thing is that this be allowed to evolve, that there be monitoring of the experience, collection of the data... that's a monumental task, and continuous revision... and that is something--

Unidentified Justice: --But you wouldn't have had this headache and this lawsuit.

Mr. Fried: --You wouldn't have had this headache, but you also would not have had the promise of continuous monitoring and revision, which is what is necessary to make something which would really work.

So I think that if it could have been a one-shot affair, that would have been a different story, but I don't think it sensibly could have been a one-shot, one-time affair.

I'd like to turn--

Unidentified Justice: General Fried, if there is a concern... and I submit there is... about preserving the independence and the impartiality of the judiciary, it really doesn't make any difference which branch this is under, does it?

That concern is the same.

Mr. Fried: --I agree, it does not make any difference at all, Justice Kennedy, and I'd like to turn to the objection to the service of three judges on the committee.

Unidentified Justice: when you do that, will you please tell me whether or not in your view the value of impartiality and independence is a value that's protected by the doctrine of separation of powers?

Mr. Fried: Yes, that's precisely what it's my intention to do, because my view is that there is no doctrine and no provision of the Constitution which supports the argument which Petitioner has made.

The framers considered an incompatibility clause, for judges, and rejected... they omitted to enact one, although they did enact one for Members of Congress.

Nor was this an oversight, There are--

Unidentified Justice: Would you concede that the frequent and continuous service by judges on rulemaking and lawmaking commissions might impair the impartiality and the integrity of the judiciary in the minds of the public?

Mr. Fried: --As a matter of policy and judgement, that is a very reasonable concern.

But we are talking about Constitutional--

Unidentified Justice: And you say the Constitution has no concern and no provisions to protect against that encroachment?

Mr. Fried: --I think that in extremes policing the margins, perhaps it does.

But I am struck by the fact that Chief Justice Jay served for six months as Secretary of State as did Chief Justice Marshall.

Unidentified Justice: How many cases were pending at that time, Chief Justice?

[Laughter]

Mr. Fried: I don't know, but Chief Justice Marshall, I believe, signed the commission which was the subject of Mawbry v. Madison.

Unidentified Justice: What strikes me about this argument, General Fried... it seems to me what is remarkable if there is no impediment... as you say, there is not... what is remarkable is that not that this is happening sometimes, but that it has happened so rarely.

It there has been no felt impediment to members of the judiciary serving in executive positions, I'm amazed that you can come up with no more than the number of examples that you've brought before us.

Mr. Fried: Well, I am quite--

Unidentified Justice: There are very capable men and women in the judiciary over the years, and that so few of them should have thought that they had the time and the ability to lend to the public service in the executive branch strikes me as extraordinary.

Mr. Fried: --The matter was discussed, and the only case which I know of which discussed it at some length is United States v. Ferreira, and I think it's quite striking what the Court said in that case.

Petitioner says that Ferreira claims that the Court refused to allow... I'm quoting here from their brief... Article III judges to pass or claims such as we're involved in.

What the Court actually said in Ferreira was that the authority conferred on respective judges was nothing more than as a commissioner to adjust certain claims.

Nor can we see any ground for objection for the power in that case.

That's what this Court said, and when this Court in Ferreira considered the matter, they xx.

Unidentified Justice: So that Congress could provide that every day, every judge in the United States spends his morning on a commission and the afternoon on an Article III bench?

Mr. Fried: I doubt it.

Unidentified Justice: Why?

Mr. Fried: I doubt it.

Unidentified Justice: Why, if there is no Constitutional prohibition?

Mr. Fried: Because at some point, you reach the point where what you've done is impaired the ability of the judiciary to function.

Unidentified Justice: Just from the standpoint of their workload, or from the standpoint of their reputation for impartiality and independence?

Mr. Fried: I think the two begin to merge, at the point you mentioned.

Unidentified Justice: Well, then, the limiting principle is that there is some limitation on whether or not the independence and the impartiality of the judges can be impaired by a delegation.

Mr. Fried: I think there is some limit.

Unidentified Justice: And it's in the Constitution?

Mr. Fried: Well, I think it is gathered from the principles of the Constitution, but the practice--

Unidentified Justice: Well, is it a Constitutional doctrine?

Mr. Fried: --Yes, yes, it is.

But the practice of distinguished Chief Justices of this Court, and the words of this Court indicate that those limits are nowhere near as tightly drawn as Petitioners would suggest.

Indeed, Petitioner draws the limits very tightly, very tightly, and I think that the practice and doctrines of this Court clearly indicate that that tight a drawing has no basis.

I simply don't want, and it would imprudent, to suggest there are no limits.

If there are limits, of course they are Constitutional limits.

So, to that extent, I would certainly agree.

Unidentified Justice: Of course, no judge in this case was required to serve at all.

Mr. Fried: No judge was required to serve, and one can see how--

Unidentified Justice: If all of them, if every judge who was asked to serve had refused, the commission could never have been constituted.

Mr. Fried: --That is correct.

That is correct.

And if the requirement of three judges were thought to be an impediment, that indeed would be easily cured.

Congress could simply indicate in the legislative history that it would be loathe to confirm a commission which did not include three judges, and you would be at the same place.

Unidentified Justice: Wasn't at least one of the Judges a senior judge?

Wasn't George McKenna, a senior judge?

Mr. Fried: Yes, one of the judges is a senior judge, and there was a question about whether that would be all right, and the matter was adjusted to make sure that it would be all right.

That's very useful.

Unidentified Justice: I take it from what you say, General Fried, that if the statute provided that the President could appoint a designated judge, and the judge would be required to serve, that you would agree that would be un-Constitutional.

Mr. Fried: I think that would create a grave problem of the sort Justice Kennedy raises, and a different case.

I would not want to say that for instance, the Sinking Fund Commission, on which Chief Justice Jay served ex officio as Chief Justice, along with the Secretary of State and the Secretary of Treasury, was un-Constitutional, though it was a matter considered by those who were such closer to the framing than we are--

Unidentified Justice: General Fried, I guess you're right that it certainly will make us feel better about it if you tell us we cant be appointed to some things, whether we like it or not, but I'm not sure I see the basis for a Constitutional distinction.

If we approve this, why?

Why can't... If it's, somehow a violation of separation of powers, I don't know why it makes any difference whether the initiative comes from the Congress or from us?

Whether I volunteer for this violative service, or am enlisted into it, I don't know what difference that should make.

Mr. Fried: --Justice Scalla, that is of course not this case, but let's think why that would be bad, because my instinct is as yours; it would be.

I think what would be bad would come out if they designated the second most Junior Associate Justice and you simply refused to serve.

What would happen then?

Could they issue a writ of mandamus?

Would your vote be counted as present, although you were never there?

All of those circumstances suggest that in enforcing such a mandate, they would run afoul of one or another--

Unidentified Justice: Sort of a First Amendment entanglement problem?

[Laughter]

Mr. Fried: --Yes, I think that... I don't think it's cruel and unusual problem this time.

I think that is correct.

[Laughter]

Unidentified Justice: Well, it might be a separation of powers argument, if a judge said, well you can't do this to me, because I was appointed a judge, and you're going to keep me from being a Judge.

Mr. Fried: I gave my judgment.

In my judgment, this prevents me from being a Judge.

I suppose that if the Chief Justice declined to serves, as he is by statute designated to do, on the Board of the National Gallery, or the Smithsonian Institution, I don't think that he could be compelled to do so, and that I think is the answer to Justice Scalla's question.

Now,--

Unidentified Justice: It's a small point, perhaps, General Fried, but on the salary, could Congress provide that service or one of these commissions entitles the Judge to a $25,000 increase for service on the commission?

Now you're hitting it.

[Laughter]

Mr. Fried: --Well, I must admit to you, the question is a fresh one to me.

I right offhand can see no objection to it, and in fact--

Unidentified Justice: I wouldn't worry a lot about that problem.

[Laughter]

Mr. Fried: --Chairman Wilkens, at the time of his designation, was a District Judge, and therefore suffered a n increase in his salary.

Unidentified Justice: Well, isn't the objection in the delightful hypothetical, I propose, that the President could prefer some Judges over others?

Is this an interference with the independence of the judiciary?

Mr. Fried: Well, that is a preference which he can show today, not to members of this Court, and certainly not to the Chief Justice, but even today the possibility of promotion, if it is a promotion--

Unidentified Justice: That's provided for in the Constitution?

Mr. Fried: --Well, unless we beg the question, so is this.

The question of promotion from a District bench to a Court of Appeals bench.

I thank the Court for its attention.

Chief Justice Rehnquist: Thank you, General Fried.

Mr. Bator, we'll hear now from you.

ORAL ARGUMENT OF PAUL M. BATOR ON BEHALF OF U.S. SENTENCING COMMISSION AS AMICUS CURIAE IN SUPPORT OF THE UNITED STATES

Mr. Bator: Mr. Chief Justice, and say it please the Court, the problem that Congress faced when it enacted this statute is well known to this Court.

I'll try to adjust my machinery here... there's too much machinery.

The problem is familiar to this Court from cases like Furman and Georgia and other cases which showed ugly and indefensible discriminations and disparities and irrational distinctions in the punishments that people get in the criminal justice system.

And in those cases, litigants came to this Court and said

"This Court should do something about that."

Now, this case is very different because in this case, the executive departments and the Congress for 10 years put on a massive bipartisan effort, and it said,

"we're going to do something about it."

"We're going to reduce these ugly and indefensible discriminations and disparities in criminal sentences."

And now this Court is being asked to undo this effort and really send us back to what were very ugly days of discriminatory and arbitrary sentencing.

Now, I think really the key to Mr. Morrison's submission here today is simply that this... Congress has never quite created an animal quite like this.

The sentencing commission is not quite like the parole board... its guidelines are not quite like the rules of procedure, and therefore this is un-Constitutional.

But there is no rule of Constitutional law that Congress may not do something that is new.

In this courtroom, this Petitioner must really show that this act violated the separation of powers by really prejudicing one of the branches from doing their Constitutionally-appropriate law.

We really must find actual prejudice under the standards of separation of powers that this Court has promulgated.

Mere atmospherics is not enough, and our central submission, your Honors, is that there is no incursion here on any Constitutional role of the executive, and that this commission and this Act does not prejudice the independence and the impartiality and the performance by the courts of doing their Constitutionally-assigned functions.

Now, this Act is an act that, creates an institutional design.

What are the parts of the design?

Congress says this ought to be an independent commission, and as far as I understand, there was no serious argument that that was un-Constitutional.

Congress said this commission should not be controlled by the political branches or by the Congress or even controlled by the courts, because this agency is not under the comination of the courts.

Second Congress said this agency is to be designated as being in the judicial branch... and there's been talk about what does that mean?

Congress had, I think, very simple purposes in mind in making that designation.

It had practical purposes.

The commission in its daily work works intimately, all the time, with the judicial apparatus, and it just makes logistical and administrative and budgetary sense to put it in the Judicial branch.

Congress had a symbolic functions here in this designation.

As the Senate commission said, Congress wanted sentencing to continue to be primarily a judicial function.

For 150 years, it was the judges' responsibility to sentence.

And that--

Unidentified Justice: As courts, it was the court's responsibility to sentence.

Mr. Bator: --But the general, the symbolism of making the judicial branch responsible for bringing order and good repair into the judicial house of sentencing... Congress thought that it was important to make the Judicial branch responsible for that role.

Congress also had in mind your Honor... it's a precautionary note, and that's the point of independence.

Congress wanted to make sure that sentencing kept free from the domination of the executive branch, which initiates prosecutions.

It wanted to make sure the commissions is independent.

Now, Mr. Morrison's central submission... I think Justice Scalla's questions probe at this issue... is that the problem this statute creates is with respect to the judicial branch, because the judicial has never before been given the task of issuing legislative style rules that so directly affect the liberties of citizens.

They have been given this task that looks like the making of law... and Mr. Morrison says that's incongruous, and therefore un-Constitutional.

But it seems to me, your Honor, that there are clearly important factors which show that this is a separate situation, and a distinct situation, which makes this a congruous assignment by Congress.

Congress had, really, four factors, I think, in mind.

First of all, this job was not given, Justice Kennedy, to the courts or to the judges.

It was given to an agency that functionally functions exactly like a hundred other independent agencies.

It happens to have three Judges.

But this is not the same case as if Congress had said,

"This Court is to issue sentencing guidelines."

The Court does not need to decide today whether that would be Constitutional, although in candor I should tell the Court that our position is that sentencing is so special that sentencing is so closely tied to the fair administration of justice in the courts, that if Congress finds that this Court should be made responsible for helping to bring some order into the task of sentencing, that would be valid.

But that's not this Court's problem today.

The second point about these rules is historical.

This delegation is novel in form but not in substance.

It is for 150 years the courts have already, in their sentencing decisions, exercised virtually unfettered lawmaking power.

Unidentified Justice: Well, they may have decided they wanted to fetter it.

Congress wanted to fetter the power that individual judges had been exercising, because they are the ones who created the problem.

They are the ones who gave the disparate sentences all around the country.

Mr. Bator: I think I agree with that completely, your honor.

In a sense, we had the worst of both worlds, because Congress had created no general standards, so the courts in their individual decisions were making general, implicit, general standards.

The only difference is that they were doing it one by one.

That is, there is a sense in which the courts, the individual judges, were making sentencing guidelines for 150 years, because Congress provided no standards.

And the only difference is that they did it each one for himself, each one for herself.

Unidentified Justice: But that's not a guideline at all.

I mean, I could depart from it tomorrow.

Even the same judge could go over to a different methodology the next case, couldn't He?

Mr. Bator: The judge has unfettered lawmaking discretion.

Unidentified Justice: Well, would you call... I don't call that lawmaking, to decide a particular case, that this defendant will get 15 years.

I don't call that making a law.

I call making a law, all defendants that have this characteristic will get 15 years.

That's a law.

But saying that this defendant will get 15 years... that's not a law at all.

That's the decision of a case.

Mr. Bator: Your Honor, I believe substantively they were making the law in deciding what ought to be the severity of punishment.

Unidentified Justice: Well, I think we're using law in two different senses.

You're not using it in the relevant sense here, it seems to me.

Mr. Bator: They were doing it case by case... of course I acknowledge that.

But the distinction between case by case adjudication and general rulemaking is at its weakest where the Congress provides no general standards, and the courts have to... even it implicitly... create the standards as well as to make the particular application point.

Unidentified Justice: Well, suppose that Congress told the courts, that Congress created a commission with judges on it, judges only, to promulgate rules for damages in libel cases.

Now, really, Professor, the whole justification for our making law at all... and we do all the time... is because we must do so in order to decide a case.

And that's not what the sentencing guidelines are.

Mr. Bator: Your Honor, our position would be that if Congress created an independent agency and said judges ought to be participating in it, and the purpose of the agency is to rationalize and clean up a system of incredible discrepancies in, for instance, the allocation of punitive damages... we think that ought to be Constitutional.

Now, sentencing seems to me an even easier case though, because of the very special role that judges nave historically played in the creation of law and policy with respect to sentences.

But that is within the general ambit of our argument, your Honor, and would a distinguish both of those cases from what we were talking about... the anti-trust guidelines.

There is a jurisprudential difference between sentencing guidelines and anti-trust guidelines.

Sentencing guidelines do not tell the citizens, "This is now illegal".

No sentencing guideline makes illegal or actionable anything that had been done before.

Of course it has an impact on liberties, but it is not jurisprudentially a substantive rule, and that's an important distinction.

I have one more point, your Honors, and that's a separation of powers point.

And it's also a very important practical point.

Overall, globally viewed, the Sentencing Reform Act significantly reduces, rather than expands, the overall power of the judicial branch to make law with respect to sentencing.

Before the Act, the judicial branch exercised a plenary discretion to make sentencing law.

This Act significantly narrows and makes accountable that power.

The doctrine of separation of powers is supposed to have something to do with liberty, and it would be a huge irony if this Court invalidated a statute whose global effect is not to increase but sharply to curtail the prerogatives of one of the branches of Government.

Your Honor, I have not had time to deal with a question of the specific service at judges, and I will leave that issue to the briefs, and also to the arguments made by the Solicitor-General.

I want to add one footnote, if I have time.

In his reply brief, Mr. Morrison makes, I think, an important concession.

He says it would be Constitutional to have a commission in the judicial branch with judges dealing with issues of parole and reduction of good time.

I think that's a fatal concession for him, both at a superficial and at a deep level; at a superficial level, because I don't understand the distinction, at a Constitutional level, between the commission that deals with parole and the commission that deals with the things this commission did.

At a deeper level, I think, the concession shows that sentencing cannot be cabined into the tidy table of organization that Petitioner prefers.

Sentencing has always been a special feature of our jurisprudence.

It's always been a field in which responsibility has been shared among the branches.

Unidentified Justice: Limits on sentencing... the limits or what an individual judge could do in imposing a sentence, has always been the prerogative of the Congress, hasn't it?

Mr. Bator: Has always been the prerogative of--

Unidentified Justice: The prerogative of the Congress.

The pronouncement of the sentence has always been for the judge, to be sure, but the limits within which the judge is permitted to operate in imposing the sentence has until now been with the Congress, has it not?

Mr. Bator: --The Congress, of course, has plenary Constitutional authority to determine what the punishment should be.

Unidentified Justice: I'm just asking whether up until now it is not true that the limits within which each individual judge had to maneuver in imposing a sentence has been up to the Congress.

And the effect of this legislation is to place those limits within this commission.

Mr. Bator: No, your Honor, I don't think so.

Before this statute, Congress in the substantive criminal statute legislated the maximum, and the individual judge had plenary discretion on where to sentence within that maximum.

Exactly that same constraint operated on the commission.

The maximums created by statute continue to bind the commission, and the commission and the judge then operating with the guidelines together are exercising not more authority but less authority than before the sentencing guidelines, because Congress added an awful lot of other, specific, narrowing to the situation.

Unidentified Justice: The commission has established new, lower, maximums... has establishing new, lower maximum sentences for certain offenses.

Mr. Bator: I'm not sure I understand your Honor's question.

But the commission operated as individual judges.

Unidentified Justice: Some offenses which the statute says can be sentenced to 30 years, some of those the commission has said, given certain circumstances, the maximum can only be 20.

Isn't that right?

Mr. Bator: That's true, yes, sir.

That's exactly what the District Judge did before.

The District Judge could say, for this offenses, I will never sentence anybody for more than 20 years.

Unidentified Justice: But he couldn't say that another District Judge couldn't sentence to 30 years.

He could say that he couldn't, or that he wouldn't.

Chief Justice Rehnquist: Thank you, Mr. Bator.

Mr. Morrison, you have three minutes remaining.

REBUTTAL ARGUMENT OF ALAN B. MORRISON

Mr. Morrison: Thank you, your Honor.

Let me turn first to the point that Mr. Bator made regarding the question of whether these kinds of Parole and probation functions could be taken care if in the judicial branch, although they're now in the executive branch.

I thought that our reply brief was clear, but if it's not, I'll make it clear now.

We weren't talking about what judges could do, but I don't think it would matter.

I think the important points is that in those particular circumstances, they would be acting as individual adjudicators, much as the parole commission now adjudicates when a person, or determines when a person is entitled to parole.

We said nothing about judges laying down rules to apply to probation any more than judges now do.

Second, I want to be clear that although Bator says that you have to show actual prejudice to find a violation of separation of powers, last year in this Court's decision in Morrison v. Olson, when discussion the question of whether the independent counsel, the judges could close down the office of the independent counsel in the event the work of the independent counsel was done, the Court did not look to find actual prejudice.

It said that

"we will construe the statute narrowly, lest it be considered that the special court could engage in administrative-type activity."

No showing of actual prejudice to any branch of the Government... a prophylactic rule of the kind that we're asking for here.

It is, I suggest, the fact that if this Commission is allowed to do this that we will have commissions on punitive damages dealing with remedies, on pain and suffering dealing with remedies, on statues of limitations dealing with remedies, at least in Federal causes.

Indeed, we could have the commission re-write the bankruptcy code, for what is the bankruptcy law after all but a series of remedies for pre-existing rights?

And if you do not believe, as I do, that that's sufficiently incongruous for Article III judges to be performing on their own, it certainly seems to me that given our separation of powers to add four non-judges to a commission and to have them make the policy choices offends our basic notions of separation of powers, and for those reasons, the commission cannot stand.

Let me say one final word about the Solicitor-General's notion of need for evolution.

If the Congress had taken the advice of many and passed this statute, these guidelines into law, we would have a very different set of circumstances, for the basic policy choices would have been made, albeit with much advice, by the Congress when it enacted it into the law.

We would then have intelligible principles against which we could determine whether, in the light of experience, the guidelines were working.

We would have a very different situation, so it would be a one-shot act by Congress, followed by a commission which thereafter properly constituted could effectively carry out the law and not leave in place forever.

Thank you very much.

Chief Justice Rehnquist: Thank you, Mr. Morrison.

The case is submitted.

Attribution:

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Featured:

Morrison v. Olson - Oral Argument

Wed, 13 Apr 2011 20:12:30 +0000

Case:

Morrison v. Olson

Media File:

87-1279_19880426-argument.mp3

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87-1279_19880426-argument.xml

Transcript:

ORAL ARGUMENT OF ALEXIA MORRISON ON BEHALF OF APPELLANT

Chief Justice William H. Rehnquist: We'll hear arguments now in No. 87-1279, Alexia Morrison v. Theodore B. Olson.

Ms. Morrison, you may proceed whenever you are ready.

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

The question before you in this matter concerns whether on its face the independent counsel provisions of the Ethics in Government Act run afoul of the constitution of the United States.

This question was raised by the three Appellees in this matter when each was subpoenaed to give evidence before a federal grand jury.

That grand jury was considering matters covered by Title VI of the Ethics in Government Act, and had been referred in 1986 by the Attorney General for treatment under the independent counsel provisions.

The Appellees moved to quash the subpoenas on the basis that Title VI was unconstitutional.

The District Court disagreed and ordered compliance with the subpoenas.

When the Appellees refused, they were held in contempt.

Upon review, a divided panel of the United States Court of Appeals for the District of Columbia Circuit overruled the District Court's finding, and held the statute unconstitutional on a number of grounds.

Indeed, as we indicate in our brief, the court looked beyond the facts presented by this case and reached out for facts not before it in order to found a basis for finding constitutional problems with the statute.

This statute was enacted in 1978 after several years of congressional hearings and lengthy consideration of its provisions.

It has been reauthorized twice: in 1983 and again in 1987.

In each case some fine tuning has been done to the statute's provisions, but its basic approach has remained consistent over the last decade.

With each passage of the Act, continuing it for five year terms, the congressional fine tuning has been done with insights provided from those who have observed operations under the Act, including the United States Department of Justice.

Thus Title VI comes before you having three times undergone bicameral passage in the legislature and presentment to the President.

On each occasion, the then sitting President has signed the bill into law, albeit on the last occasion with expressed reservations about the Act's constitutionality.

Having made its legislative choices in enacting the bill on three different occasions, Congress's role in the independent counsel process ends.

It has reserved for itself no part in the implementation of the independent counsel process.

So unlike the cases presented to this Court in Buckley v. Valeo, INS v. Chadha, and Myers v. United States, there is no concern here about congressional aggrandizement of its powers.

The statute is triggered when the Attorney General receives specific, credible information that one of the high administration officials covered by the Act's provisions has committed a crime.

If the Attorney General determines in his own unreviewable discretion that the specific, credible information constitutes grounds to investigate, he causes a preliminary investigation to be conducted under the Act.

If as a result of that preliminary investigation he finds there are no reasonable grounds to believe that further investigation or prosecution is warranted, he reports that finding to the court, and his final determination on the subject ends the matter.

The court has no ability to appoint an independent counsel.

If, on the other hand, he finds that there are reasonable grounds to believe that further investigation or prosecution is warranted in one of these matters where the statute imports a conflict--

Unidentified Justice: Ms. Morrison, your opponents suggest that that is really a very narrow kind of discretion that is entrusted to the Attorney General, that following the structure of the statute he is almost bound to recommend the creation of a special prosecutor.

What is your reply to that--

Mr. Morrison: --The statute leaves the matter entirely within his discretion.

In fact history, we would suggest, supports the notion that the Attorney General not only is able under the statute to refuse to appoint an independent counsel where matters have been brought to his attention under the statute, but in fact on repeated occasions Attorney Generals have refused to appoint an independent counsel.

The matter comes to him, as would any allegations of criminal misconduct, and he uses, pursuant to the statute, the same standards and the same policies that he would apply to the review of any matter if he were trying to determine whether or not to cause a full-blown grand jury investigation to be conducted within the Department of Justice.

Unidentified Justice: --Except that he doesn't have an unlimited time period in which to conduct that--

Mr. Morrison: That's true.

Unidentified Justice: --It's quite short.

You have said that Congress's function is at an end and that it has not part in the implementation of the law, but in this case Congress or members of Congress did indeed send a letter to the Attorney General, did they not, asserting that there were reasonable grounds to investigate.

What does the Attorney General have to do when the alleged defense consists of false testimony before the Congress, and he gets a letter from the Congress saying that in our view there was false testimony?

Can he possibly conclude within the short period of time that he's left for the investigation that there is not reasonable grounds to investigate--

Mr. Morrison: It would very much depend on the facts before him, Your Honor.

In this matter the congressional, as interpreted by the Department of Justice, encompassed no fewer than four individuals as to whom the Congress believed that their processes had been violated.

Unidentified Justice: --You don't assert that letter from the Congress was inappropriate, Congress can have that participation in the process--

Mr. Morrison: Under the statute, and it would seem to us as a matter of basic, inherent powers, any citizen, any body, any entity would be free under the statute to bring their concerns about administration misconduct to the attention of the Attorney General, and command thereby, simply by making allegations, that the review required by the statute take place.

Unidentified Justice: --What if that letter reaches the Attorney General on the 80th day after his investigation of whether there are reasonable grounds to further investigate continues, and he has ten days to check that out--

Mr. Morrison: The Attorney General has, under the statute as it existed when the matter before the Court was referred for independent counsel treatment, a total of 90 days within which to proceed with the preliminary investigation.

So that information coming to him would trigger the commencement of that 90 day period.

Indeed, under the 1987 reauthorization, the Attorney General gets an additional 15 day period within which to make a determination as to whether or not there is reason to even conduct a preliminary investigation, and then the 90 day period begins to run.

And the statute, in all of its incarnations, has made provision for those occasions on which 90 days does not prove adequate, for the Attorney General to make an application, and he is allowed, under the statute, to go to the court and seek an additional 60 days where he needs that additional time to make his determination under the statute.

Indeed, it is probably worth noting on that point that in the very matter before the Court, the Attorney General did not comply with the 90 day requirement that he act on the allegations referred to him by the House Judiciary Committee.

Despite that fact the 90th day passed, and nothing happened.

Nothing occurred in this matter until the Attorney General, after the 90 day period, made his reference to the court in which he asked that only one of a number of people covered by that House Judiciary Committee report actually be subject to independent counsel treatment.

Once the Attorney General determines that an independent counsel should be appointed, he makes a report to the court providing sufficient information to the court so that it can fulfill its appointing function.

Save for this appointing function thus invoked by the Attorney General, the court, like the Congress, plays no further role in the implementation of the statute.

Granted as an incident of the appointment power, the court defines the independent counsel's jurisdiction.

This, as a matter of practice, has been the subject of the Department of Justice of a specific jurisdictional recommendation in the report that goes from the Attorney General to the court.

In the case before the Court here, the Special Division of the U.S. Court of Appeals actually adopted almost verbatim the jurisdictional recommendation made by the Attorney General in his report seeking an independent counsel to--

Unidentified Justice: --But it wouldn't have to, isn't that right?

Isn't there some flexibility there for the Special Division to determine its jurisdiction--

Mr. Morrison: --Yes, Your Honor.

Under the statute the court is given the information made available by the Attorney General, but is also empowered to define jurisdiction within the bounds established by that report.

Unidentified Justice: --Doesn't that raise some separation of powers concerns?

The extent to which the Special Division is given Executive Branch powers--

Mr. Morrison: We would suggest, Your Honor, that that is not an Executive Branch power in the sense that it is not a substantive part of the investigation conducted.

The court plays no role in formulating the investigative plan, if you will, in determining at whom the independent counsel is look: that is determined by the Attorney General.

The court, in this statute, is given the power to limit, to place bounds on the arena within which the independent counsel may investigate.

I would submit to the Court that it would have been perfectly proper had the Congress determined that once an Attorney General determined a matter was appropriate for independent counsel investigation, the Congress might have provided that the court simply appoint an appropriate person to conduct the investigation, and to allow that person, as any normal prosecutor would, to take the matter and follow the investigation where it lead.

That is what happens in hundreds of federal prosecutor's offices around the country.

A matter comes in, and the investigation proceeds.

But Congress decided not to follow that process, but rather to have neither the Attorney General, who by statute has a conflict here, nor the independent counsel as to whom they wanted to set some definitions or boundaries to make the determination of exactly what the outside parameters of the investigation would be.

But in this case they interposed the court and asked that the court review the matters brought to its attention by the Attorney General, and fashion a reasonable jurisdictional mandate, allowing--

Unidentified Justice: --Does the Special Division determine when the job is over--

Mr. Morrison: --There is a provision in the statute, Your Honor, which would allow... and this provision has not yet been used and indeed may never... the court having fashioned the appointment to say, my appointment authority has now been substantially completed, the independent counsel's task appears to me to be conducted--

Unidentified Justice: --How would they know that--

Mr. Morrison: --The statute specifically provides that the court can do it on the recommendation of the Attorney General, or on its own if it were to come into possession of information--

Unidentified Justice: --As a matter of fact do independent counsel regularly or at any time consult with the Special Division or members of the Special Division with respect to problems that may arise--

Mr. Morrison: --Concerning the progress of the investigation, no, Your Honor.

In this case we did re-approach the Special Division of the court to ask for jurisdiction that would encompass two additional individuals, and that request was denied.

But in the ordinary course, Your Honor, removal under the statute occurs solely and exclusively at the hand of the Attorney General.

Terminating the office, we would submit, was a way for Congress to address its concern that there be no possibility that someone appointed as an independent counsel would overstay their welcome.

Again, this is a provision that has not been used and may never be used.

Removal, in the sense of being terminated for something of substance, is an issue that is left solely to the Attorney General under the statute, albeit that his ability to remove under the statute is limited to for cause--

Unidentified Justice: --Is that subject to review--

Mr. Morrison: --It is subject to review, yes, Your Honor.

Unidentified Justice: --Where--

Mr. Morrison: As the statute existed at the time of the appointment in the current matter, it was lodged in the Special Division.

Subsequently, in the 1987 amendments, that review has been lodged, as it normally would, under an administrative procedure act matter in the District Court.

Unidentified Justice: --Ms. Morrison, speaking of the functions of the Special Division, the Court of Appeals judgment that we are reviewing, that opinion, they point out that the Special Division had written an opinion in this case.

What part of the function did that represent?

Written an opinion on the constitutionality, really, of this special prosecutor statute--

Mr. Morrison: Well, it is interesting because the constitutional question that the Special Division addressed in the matter was actually raised by the Department of Justice in connection with the review by the court of our request for additional jurisdiction.

We went to the Attorney General initially, and asked that our jurisdictional mandate be expanded to include additional individuals.

When that request was turned down, we took the provision in Section 594(e) of the statute, which permitted us to address that question, to the court and asked the court to review the matter in the connection of its role as the definer of jurisdiction, the person who is setting the parameters for the appointed individual to pursue.

Under 594(e), the court took not only our request but also a submission from the Department of Justice, and it ultimately turned out submissions in sort of amicus capacity from the two individuals as to whom we sought to gain jurisdiction, and considered all of those matters in connection with its review of the scope of our jurisdiction.

In connection with the submission made by the Department of Justice, they raised constitutional questions about the statute, particularly as it would be affected by the interpretation that we were asking the court to place on Section 594(e).

And so the question of the constitutionality of the statute was before the court in connection with its consideration of our request which related to jurisdiction.

The court's writing of an opinion, we would suggest, simply is a way for it to explain and make a record of how it addressed that jurisdictional question.

Unidentified Justice: --Ms. Morrison, are you going to take the position today that under the Blair case this Court shouldn't exercise jurisdiction over the case?

Mr. Morrison: We are very concerned about that issue, Your Honor, because of the impact that we foresee the Appellate Court's ruling on Blair, particularly as they hold Ryan affects the Blair holding.

We are concerned about how that might impact federal law enforcement in grand jury proceedings across the country, and so we--

Unidentified Justice: Well, did you raise any objection in the District Court?

Mr. Morrison: --We did not.

Unidentified Justice: So is it perhaps waived, and is that something that the court below relied on--

Mr. Morrison: The court below did find that by not raising the issue in the District Court, that we had somehow waived that jurisdictional question.

The case that they relied on, the Air Florida case, is one that we suggest is not appropriate or not dispositive of the issue, because there there was a question relating to a substantive claim, a new substantive claim that was sought to be raised on appeal.

In a case where the question is jurisdictional, we would suggest that that is something that can be reviewed by any court at any point in the proceedings in order to determine whether it is appropriate to proceed.

We would obviously prefer that this Court reach the constitutional question in this matter.

It would be of benefit to us and to everybody else who is operating under the Act to have the question resolved, and not to have to proceed any further with the constitutional question hanging over their investigations.

However, our concern that the Appellate Court's reading of Ryan and its fairly broad inroads on Blair, as they read it, is a subject that concerns us and caused us to raise the question.

With respect to any investigation conducted under the statute, the independent counsel in three critical respects continues to be a member of the Executive Branch.

Pursuant to the statute, independent counsel are required to follow the established policies of the Department of Justice.

Independent counsel are removable, albeit only for cause, but nonetheless are removable only by the Attorney General.

As I indicated before, no independent counsel is subjected to direct or even indirect supervision by either the judicial or legislative branches.

The Department's routine is interrupted in criminal investigations under this statute only in a very narrow number of cases.

Their policies continue to apply to any investigation conducted, and if there are any court proceedings--

Unidentified Justice: --Well, to the extent the Court of Appeals had a different view, you think it was just wrong that the independent counsel must follow Department procedures--

Mr. Morrison: --Yes, the statute says, that except where not possible, the independent counsel shall follow the written or other established procedures or policies of the Department of Justice.

That is the same mandate that is sent by the Department in its own guidelines to U.S. attorneys operating all over the country.

That is, it is a recognition by Congress, as there is a recognition within the Department, that the peculiar facts or peculiar situations may render it impossible in a given case to follow a particular guideline.

For example: in the situation where an independent counsel is conducting an investigation or prosecution, it may be impossible to follow those guidelines that require specific reporting up a particular chain of command of events leading to the use of a statute that is specifically committed to the discretion of the independent counsel under the statute.

But the words of the statute are clear, it is a mandate except where not possible.

The Attorney General and the Solicitor General are specifically empowered under the Act to appear in any court proceeding in which an independent counsel appears, to urge their view of the law on that body.

The Attorney General has the ability and the obligation, if he finds that an independent counsel is proceeding less than faithfully in executing the independent counsel provisions, to step in and cause that independent counsel's removal.

Like every federal prosecutor, the independent counsel can only indict by use of a grand jury.

The subject of the investigation retains throughout the entire process all of the substantive and procedural rights that are available to any defendant or person being investigated in connection with criminal allegations.

Throughout the process, the President retains the total ability to determine the final outcome of the process by his exercise of the pardon power.

Unidentified Justice: --Excuse me, Ms. Morrison.

What policies and guidelines exist that you are bound by?

What policies and guidelines does the Department have governing special prosecutors... or prosecutors in general--

Mr. Morrison: There is a United States Attorney's manual, Your Honor, that takes up a full shelf in the library.

One full volume of which is devoted entirely to criminal matters that address itself to everything from the considerations to be applied when immunity is granted, to how particular witnesses are to be treated, in connection with determining evidence, the substantive requirements for different criminal offenses.

There is also a Principles of Federal Prosecution manual, which is made available publicly, as is the U.S. Attorney's manual.

So there is an extensive and comprehensive set of materials that constrain the independent counsel's exercise of discretion in even the arenas involving witnesses, much less decisions to bring substantive charges.

Unidentified Justice: --And it is your position that so long as the Department of Justice put something in the manual or establishes it in writing... or I suppose even any unwritten policy would govern you, and you consider yourself bound by that--

Mr. Morrison: Yes, Your Honor.

In fact, the record in this case indicates in a couple of places the same experience that we have had, which is there continues to be communication between independent counsel and career staff at the Department of Justice on matters of policy and procedure, even where there are not written guidelines.

That is, if a question arises about how to handle a particular matter, there is communication with career prosecutors who may have addressed the issue before, and their input is welcomed in connection with making decisions.

Unidentified Justice: --That would not include, I suppose, or would it, guidelines... as I recall there used to be in the days when I was in Justice Department... about before an investigation of certain officials is conducted, matters that could be especially sensitive, the matter would be checked with the deputy attorney general or with the attorney general before it goes forward.

Would a policy like that govern the special counsel--

Mr. Morrison: We haven't had to confront that question in our case, but where the matter has been referred by the Attorney General for independent counsel treatment, I assume that at least in the regard that you are addressing, the Attorney General would have made the determination as to whether or not to proceed, the kind of preliminary check on conflicting Executive or departmental interests that would be applied by the deputy Attorney General under that standard.

The minor deviations from the norm that the independent counsel provisions put in place are really moved or motivated by two mutually reinforcing purposes.

Both of which were considered by Congress at the time that it enacted the legislation.

One precludes the appearance or reality of a conflict of interest that can lessen public confidence in federal law enforcement.

The second provides the subject of an independent counsel inquiry protection against the possibility that a prosecutor, an Attorney General, a Department of Justice anxious to prove its own absence of conflict and neutrality on the issue would bend over backwards in order to appear unconflicted in the matter.

It also gives... the statute also gives the added benefit to subjects of independent counsel inquiry... which has resulted in the majority of investigations to date, I might note... of an independent and therefor much more meaningful clearance or vindication of allegations that ultimately prove to be unwarranted.

Given the limited occasions on which the statute's provisions are invoked and the care with which Congress has circumscribed the number and nature of the limitations on complete Executive control of independent counsel matters, the question arises, does the independent counsel process somehow offend the constitutional brand of Executive authority to the President.

We submit that it does not.

The first and most important element is one I've talked about before, that is, that the statute grants no piece of Executive power to either the Judicial or Legislative Branch.

There is no control in either of those--

Unidentified Justice: --Well, Ms. Morrison, it certainly could be argued that the appointment of the prosecutor is ordinarily an Executive function, that it gives that to the judicial branch, don't you think--

Mr. Morrison: --The identity of the prosecutor, yes, Your Honor.

That is something that is given to the judicial branch, although that, it seems to us, recalls the Appointments Clause issue, which is addressed both in the opinion below and by the opponents in this matter.

We would suggest that the specific provisions of the Appointments Clause, far from raising concerns of constitutional nature in this case, actually directly address the question of whether or not the prosecution function... in the one case example caused by the independent counsel laws... actually speaks to the constitutionality of the statute rather than against it.

The Appointments Clause specifically delegates to Congress authority to make a determination where inferior officers are concerned as to whether or not their appointment properly belongs in the President alone, under the principal officer treatment requiring both President and Senate to participate, or in the department heads or the courts of law.

Unidentified Justice: --Yes, but our cases, I think, suggest it isn't just the Appointments Clause that is involved, but that you cannot assign to one branch certain functions that inherently belong to the other.

Mr. Morrison: That is correct, and we contend that none of that has happened here, Your Honor.

That because the specific Appointments Clause question is addressed in the Constitution itself, and that Congress is given the discretion and authority to do what it has done in this legislation, that the appointment question is addressed specifically by the Constitution and therefore is not a problem, and that after that, the analysis applied by this Court in other cases involving law enforcement as an insulateable aspect of the Executive function, that those two concepts address the Separation of Powers concerns.

Indeed, in Siebold this Court approved judicial appointment of clearly Executive officers performing clearly Executive functions.

That case also provided approval for a statute that provided for no Executive or Presidential supervision or direction of the officers appointed by the court.

Unidentified Justice: Those functions were not exclusively executive, were they--

Mr. Morrison: They may not have been, although even the dissent in that case, Your Honor, speaks about the weightiness of the nature of the Executive function, talking about how that statute went further than any statute to date at the time of the decision in Siebold in granting law enforcement or Executive functions.

Unidentified Justice: --Let me ask about your position on the Appointments Clause as far as the ability of judges to appoint officers.

You wouldn't contend, I suppose, that judges can appoint officers in the military, or would you?

Could Congress vest that in the judiciary--

Mr. Morrison: I think that would create more problems.

Unidentified Justice: --Why would it create more problems?

I mean, the other side argues that that would create less problems because it seems much worse to have the courts appointing the people who are going to present cases to them, which they are supposed to judge impartially, than it would be for judges to appoint officers who are going to go off to fight a war that they have nothing to do with--

Mr. Morrison: But of course that contention, Your Honor, flies in the face of a long tradition of judicial appointment of attorneys to represent parties before them, and in those cases there is inherently the fact that the attorneys being appointed to handle matters that may well end up in that courthouse as litigated matters.

The suggestion in the statute is that courts participating in the appointment cannot in any future way participate in review of any independent counsel prosecutions or cases that flow from the appointment, and so there is a greater insulation there than there would be even in the normal case of court appointment.

Unidentified Justice: --But Ms. Morrison, it is true that in the District of Columbia the court used to appoint members of the school board--

Mr. Morrison: That is absolutely correct, Your Honor, and... on the appointments.

Unidentified Justice: --I don't think it was ever challenged--

Mr. Morrison: Well, there is a case in this Court in which that very process was approved, Your Honor.

So that in our view the Separation of Powers concerns have been addressed by this Court in Siebold, in Humphrey's Executor, in Wiener, and we believe that the principles there cast a much broader net than the one sought by the statute here.

That is, that in an individual prosecution where the Executive has a conflict, there can be some measure of insulation of that investigation, and the limited prosecutorial discretion having to be exercised in that case from pure Presidential control.

If I might, I would like to reserve the remainder of my time.

Chief Justice William H. Rehnquist: Thank you, Ms. Morrison.

We'll hear now from you, Mr. Davidson.

ORAL ARGUMENT OF MICHAEL DAVIDSON AS AMICUS CURIAE, SUPPORTING APPELLANT

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

The Congress has delegated a vital function to the court in the implementation of the Ethics Act, but has striven to maintain that function within the boundaries of the Appointments Clause.

One manner in which the Appointments Clause carries forward the idea of Separation of Powers is by dividing the function of creating an office under law, and the power of appointing a person to fill that office.

In the Ethics Act, the sole power delegated to the court, of substance, is the power of designating an individual to fill an office which has been created by the action of the Attorney General.

Unidentified Justice: Well, Mr. Davidson, you could say that about any cabinet office or any judicial appointment: Congress creates the positions, the Executive designates the people to fulfill them.

Mr. Davidson: And that is the point I wish to make, that this arrangement does not violate that traditional approach.

The function of creating the office and the function of filling the office are indeed separate.

Counsel has described to the Court the manner in which the Attorney General--

Unidentified Justice: Mr. Davidson, in your view are there no limits at all on inter-branch appointments of inferior officers, from one branch to another?

Mr. Davidson: --The textual grant of authority to the Congress is indeed a broad grant of authority, and a grant of authority which this Court recognized in the Siebold case.

But it has been no part of the defense of this statute, that the power is unbounded.

First, as a practical matter, what the Framers did in the context of the clause which grants this discretion is that it created substantial inducements for self-restraint.

Whenever the Senate would agree to a statute that would vest appointment authority in the President alone, or the heads of departments, or the courts of law, it must of necessity forgo its power to advise and consent.

And whenever the House and Senate joined together in a statute that would vest power in the courts of law, they both must agree to forgo any political influence over the appointment.

But moreover, if one looks at the history of the utilization of this clause, from the first idea... not accepted, but proposed... to vest appointment authority in the court to appoint the Attorney General, from the first enactment of authority of the court to appoint marshals when the marshall appointed by the President has a conflict of interest, to that of appointing interim United States attorneys, to the enactment in Siebold and to this Act, one will see that the pattern that the Congress has historically recognized as a valid pattern is one which recognizes the need for an important degree of affinity between the appointment and function and the role of the courts.

And so we do not come before the Court today suggesting that there is an unlimited, unbridled power of the Congress to reach out throughout the Executive Branch, but it is one which is carefully tailored to a function in which the courts may indeed have a recognition of the problem presented.

A function that is vested in the court here is a single function of appointing a counsel who mirrors the essential characteristic of the Judicial Branch.

Unidentified Justice: Well, can you really say it is a single function, because the Special Division is also given the power to define the jurisdiction, is it not?

And to terminate the investigation as well.

Mr. Davidson: As the Congress made clear in the most recent reauthorization of the Act in 1987, the power to define the jurisdiction of the independent counsel is solely the power to carry into the appointment order a description of the authority that is needed to fully investigate the subject matter which the Attorney General has identified.

The Special Division has no power to go beyond that subject matter.

If the independent counsel uncovers the most incriminating evidence about a different subject, the independent counsel's sole opportunity is to go back to the Attorney General and to request an expansion of jurisdiction, and the Attorney General has absolute, unreviewable power to make that determination.

Unidentified Justice: Well, is that what happened in this case?

Mr. Davidson: As an amicus--

Unidentified Justice: Yes or no.

Mr. Davidson: --I believe the Court did not, in this case, exceed its jurisdiction.

What it sought to do--

Unidentified Justice: When an expansion was requested, was the request made to the Attorney General?

Mr. Davidson: --The independent counsel did go to the Attorney General, the Attorney General refused an expansion, and the Special Division, in the opinion which was discussed, concluded that it was bound by that limitation, that it could not go beyond the Attorney General's declination of any further jurisdiction for this independent counsel.

And as for the authority to terminate the investigation, the statute provides for three methods by which an investigation may--

Unidentified Justice: Mr. Davidson, may I interrupt?

Isn't it true, though, that when they went back they did enlarge somewhat the jurisdictional definition that had existed originally, to at least encompass review of these two other individuals?

Mr. Davidson: --The Special Division interpreted the prior application of the Attorney General to include authority to investigate whether the subject of the investigation had engaged in this conspiracy with others.

It made clear that because the Attorney General had decided there could be no prosecution of the other individuals, that the independent counsel would be barred from seeking an indictment of those persons.

But the text, the basis for the Special Division's action remained: the determination by the Attorney General of what the appropriate subject matter of the investigation would be.

On the question of--

Unidentified Justice: I guess the concern is that Article III limits the jurisdiction of the courts to cases in controversies, and at least arguably this statute gives more to the courts than Article III case or controversy jurisdiction would indicate, doesn't it?

Mr. Davidson: --It gives to the courts an Article II appointment authority, just as--

Unidentified Justice: Plus these other aspects, to the extent they are exercised.

Mr. Davidson: --None of those aspects is at the heart of the necessity for judicial appointment here.

The task which is central to the statute is the designation of the impartial investigator.

The Congress, in filling out the details of the statute, have provided for a role which the dissenting judge described as administrator.

Some of that indeed may be, if there were ever a constitutional problem, likely to be severable, and the Congress did insert a strong severability in this statute.

But there is no need to contemplate the exercise of that.

The jurisdiction is a subject matter identified by the Attorney General.

And as to the question of termination, the Congress made clear that that is an auxiliary device or power seldom to be used, and is only the third string in the effort to make sure that independent counsel investigations did not exceed their purpose.

The first method is by the independent counsel's report.

The second method is by the Attorney General's request to the court.

We have simply not approached the situation in which any issue has been ever presented about the termination of investigation, and we assume that the court would honor the boundaries which the Congress has placed on that power.

Unidentified Justice: Mr. Davidson, can I ask you about the matter in gross rather than in the details?

And it seems to me, I am concerned about the reality of affecting the balance between the two Branches.

Anyone who has been in a high level in the Executive Branch has occasion to testify before Congress.

That is not always a happy occasion.

The system has certain conflicts built in it, and that is all very good; it's the way it works.

But isn't the result of this that whenever there is testimony displeasing to a committee of Congress, and the committee believes that the testimony was not forthright, was not fully disclosing and so forth, which happens not infrequently, that committee writes a letter to the Attorney General, and the consequence is unless the Attorney General can determine within 90 days that there is no basis for even investigating further, the individual is subjected to a special prosecutor investigation by someone not appointed by the Attorney General, not appointed by the President, by a staff that didn't sign on simply to investigate but that signed on to investigate him.

That does not really shift the balance of power between the Legislature and Executive officials to any significant degree?

Mr. Davidson: I do not think so, Justice Scalia, and for this reason: committees of the Congress have always been able to refer allegations to the Department of Justice, and whatever political influence committees can bring to bear, they have historically been able to bring to bear.

This statute does not change that.

Rather it channels the communication to a very specific communication to the Attorney General, who is then given the power to investigate.

In 1982, the Congress, out of concern and at the suggestion of the Department of Justice, placed into the law the obligation of the Attorney General to weigh the allegations against the established policies of the Department of Justice.

It is not his duty to simply ask for an independent counsel because a committee of the Congress has asked for it, but is to engage in sufficient investigation to determine whether there are reasonable grounds.

This case is the example of that: the Attorney General's determination was a discriminating determination which exonerated two of the possible subjects of this investigation.

If I may speak for a moment about the removal provision, which we think is quite central to this litigation.

The removal provision is one which the Congress has worked out extensively with Executive Branch.

The first proposals were to vest removal authority in the court, but persuaded particularly by the American Bar Association, the Congress concluded that that might invest a degree of supervisory power in the court which belonged properly in an officer of the Executive Branch.

And so it is the Attorney General who has the sole power to remove an independent counsel.

At first the standard that the Congress utilized was the standard adopted by the Executive Branch in the Watergate matter, where their counsel had engaged in extraordinary impropriety.

But when the Department of Justice returned to the Congress in 1982 and asked for a lowering of that standard to good cause, the Congress responded and lowered the standard to good cause.

And then in 1987, to avoid any question whether the appointing court would have a vested interest in maintaining its appointee in office, the Congress removed authority to review removal of an independent counsel from the appointing court to the District Court, and it further eliminated a special standard of review that had been enacted earlier in the law which would have allowed for review of any error of law or fact.

Now the standard is the standard that the District Court will conclude best accords with statutory and constitutional values involved.

It is the Attorney General who has the first opportunity to construe the statute.

Contrary to the suggestions that have been made that the Attorney General would lack the information upon which to base his determinations, the statute clearly contemplates that the Attorney General will make a reasonable and good faith inquiry to the facts, because he must report on the facts that he has found which would justify a removal.

Unidentified Justice: When you say he must report, you are referring to the Attorney General?

Mr. Davidson: That is correct.

Unidentified Justice: And where does the Attorney General get his information?

Mr. Davidson: He gets that information from the inquiry that he deems necessary to determine whether there is good cause to remove an independent counsel.

Unidentified Justice: How does he go about it?

Mr. Davidson: I presume he must go to the independent counsel, and he must ask the independent counsel questions, and he may engage in any independent inquiry that he would determine is necessary to fulfill his statutory obligation to remove an independent counsel if good cause exists.

Now there is certainly a central idea to the good cause removal provision.

Senator Percy put it well when he said that the clause at least prevents the removal of an independent counsel who is too vigilant in pursuing his responsibilities.

The recent conference report stated the matter in this way: that the independent counsel needs to be able to protect the integrity of his proceedings.

But beyond that, the Congress has not tried to specify in the text of the law the exact parameters of the good cause provision.

There is indeed a message that pervades the Congress's consideration of this matter.

The President is entitled to whatever constitutionally based authority he has and responsibilities he has to assure that the independent counsel, as any other officer of the government, stays within the constitutionally proscribed parameters of his office, and grants due recognition to the constitutional needs that the President may express.

If there is ever an controversy about a specific removal, that controversy would come back before the court, and the same constitutional values that are now urged upon the Court may be heard by the court at that time, but also in light of a record which would better illuminate the application of those values to a specific removal.

My time has elapsed.

Chief Justice William H. Rehnquist: Thank you, Mr. Davidson.

We'll hear now from you, Mr. Martin.

ORAL ARGUMENT OF THOMAS S. MARTIN, ESQ. ON BEHALF OF APPELLEES

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

For covered individuals, Title VI radically alters the structure by which we are governed.

It divests the President of prosecutorial power that even the Appellant admits is Executive in nature, and it transfers that power in part to persons accountable only to themselves and in part to an Article III court.

It displaces the power to prosecute from institutional controls that curb ambition and bias and misjudgment in a single perspective.

Unidentified Justice: Well, the independent counsel, do you think he or she is part of the Executive Branch?

Mr. Martin: The independent counsel performs an Executive function.

The independent counsel is an anomaly in our system.

She performs an Executive function but she is not under the President.

Unidentified Justice: But the independent counsel is part of the Executive Branch in the sense that at least he or she is performing an Executive function.

Mr. Martin: That is exactly right.

Unidentified Justice: And the fact that he or she is not subject to the usual control of the President doesn't necessarily make it unconstitutional.

Mr. Martin: I think it does, Mr. Justice White, for these reasons.

Unidentified Justice: You mean Congress may never create an office in the Executive Branch that is not subject to unlimited power by the President?

Mr. Martin: This case is focused, and narrowly focused, on a single kind of power, and that is the power of criminal prosecution, which this Court has said many times, and all judges have described as inherently and exclusively executive.

It is a special and narrow power.

Unidentified Justice: Well, the power is being exercised by the Executive, by an officer of the Executive Branch.

Mr. Martin: But a power that is being exercised in a way that is not subject to appointment and control.

Madison defined the essence of Executive power in two ways: it is the power to appoint and the power to control those who execute the laws.

Under this statute the appointment power is taken away from the President and given to a court.

Under this statute the power to control is taken away from the President and given either to a court or to a group of people who are without any controls upon them.

I am always fascinated to argue this case because the statute keeps changing every time we do it.

This is a case in which the essence of the argument relates to how much control is allowed to the President.

And I think facing some problems with the constitutionality of this statute, independent counsel comes and says, well, this statute allows all kinds of control to the Attorney General.

But the fact is it cannot be saved on that basis because it is so inconsistent with the legislative history of the statute.

Congress has in its own words declared its intent that the independent counsel be a person totally outside the control of the Attorney General, and that if the statute is interpreted otherwise, its whole purpose is defeated.

Unidentified Justice: But there is a provision that says that the counsel has to obey the written guidelines and unwritten policies of the Department, and the special counsel has acknowledged that that provision means what it says.

Mr. Martin: There is such a provision, and I think the '78 Senate report perhaps puts it on the head as to what that means.

It says, this Section 594(f) should be interpreted more as a goal than as a command.

It was a decision of the Committee that the best procedure was to leave the question of when such written policies of the Department of Justice are to be followed in the discretion of the special prosecutor.

That's Congress's intent.

Unidentified Justice: It's not written that way.

Do you want to read the legislative history or do you want to read the text?

It says, shall be bound by.

Mr. Martin: There are two other aspects.

It says, shall be bound by where possible, and the question is what does that mean and what outs does it give you.

But I understand what the text says.

I think that there are two other aspects of it.

Presidential power, the power to decide how to exercise discretion, whether a criminal matter should be brought, how it fits with national policy, whether matters should be brought in front of this Court or not cannot be reduced to a set of rules.

That is why we have a President.

If we could put it in guidelines we could do away with the President and just put a bunch of books on the shelves and have people follow those guidelines.

The essence of the Executive is the ability to make policy judgments based upon specific facts of complex kinds of interests and to resolve them.

So it is not resolvable by a set of guidelines.

In addition, while there are guidelines in the Department of Justice, from what we can tell and from what commentators have said, and as set forth in the brief of the three Attorneys Generals, those guidelines concern an extraordinarily limited... as they have to be... part of the total discretion of the Executive Branch.

So the provision, I think, both, if you interpret it consistent with its legislative history, is not binding.

In any event it is not enforceable.

You do not know what the special prosecutor, often, is doing and how she is proceeding, and in any event it doesn't provide enough control to allow the President to faithfully execute the laws, because he cannot make, at all the various stages of prosecution, the kinds of decisions which are put in his hands and his hands alone by the Constitution.

Unidentified Justice: But the President doesn't have a day by day supervision of the Department of Justice.

Don't we all know that?

Mr. Martin: He certainly doesn't, Justice Marshall, and--

Unidentified Justice: He does?

Mr. Martin: --He does not.

You are absolutely right, and that power, by Congress's enactment, the Attorney General is the hand of the President with respect to the execution of those powers.

Unidentified Justice: Does he do the day by day supervision of the United States District Attorney in Utah?

Mr. Martin: He has--

Unidentified Justice: Does he?

Mr. Martin: --I suspect that the right answer to that is with respect to some matters he makes no consultation with the United States Attorney in Utah, but as to matters where he or the President chooses to exert the power which is essentially Executive, yes, he can, he can direct the United States Attorney if he want to, and that power is the essence of the constitutional scheme.

And if we want to complain about him, the United States Attorney, we can go to the President, who is accountable to the people.

Unidentified Justice: Impossible under an independent prosecutor.

Mr. Martin: Right, because--

Unidentified Justice: But shouldn't a prosecutor be independent?

Mr. Martin: --A prosecutor--

Unidentified Justice: What's wrong with it?

Mr. Martin: --The question is independent of what.

Under our system of government, the prosecutorial power was put in a person who is accountable to the people and who is elected by the people.

And the reason for that is our Framers were concerned--

Unidentified Justice: What U.S. Attorney was elected?

Mr. Martin: --Excuse me?

Unidentified Justice: The Attorney General wasn't elected.

Mr. Martin: No, but the President was elected.

Unidentified Justice: Well, you told me that the Attorney General runs the Department.

Mr. Martin: He is the hand of the President, and he is accountable to the President in that regard.

The concern... it was the Framer's concern.

It's not a question of whether we think in a particular instance it would be a good idea or a bad idea, but the Framers were concerned and their experience with the presence of Executive power in the hands of an absolute person.

They understood jail, they understood the power of an absolute and unaccountable monarch, and it was their judgment that that extraordinary power ought to be put in the hands of someone who was accountable to the people, and put in the hands, invested it in the President and entirely in the President; it is given to no one else.

And no one throughout our history has ever exercised it except--

Unidentified Justice: Let me ask one question.

What branch of the government is the grand jury in?

Mr. Martin: --The grand jury is a unique... has been described as a unique animal and I think--

Unidentified Justice: I agree it is unique.

Which branch of government is it in?

Mr. Martin: --I'm not sure it is in any branch of government.

Unidentified Justice: Is it independent?

Mr. Martin: Some judges have described it as independent.

It has very limited functions.

The grand jury does not exercise the President's power.

Unidentified Justice: Well, I guess it returns indictments, doesn't it?

Mr. Martin: The grand jury cannot return indictments without the United States Attorney signing the indictment.

Ultimately, it is the President's power to exercise the law.

Unidentified Justice: There have never been grand juries that didn't act independently?

Mr. Martin: Have there been grand juries that did not?

Unidentified Justice: That acted without the guidance of an Executive official?

Mr. Martin: I think there have been grand juries that have acted in that way, Justice Stevens.

Unidentified Justice: And I'm still not sure what your answer is.

Is the grand jury part of the Executive Branch or the Judicial Branch?

Mr. Martin: I think it is not part of either branch.

Unidentified Justice: It's not part of either.

Mr. Martin: It's not part of the prosecutorial function of the Executive Branch, because then it would have to be under the President, and it is not part of the Judicial Branch either.

Unidentified Justice: In this case, if you should prevail, what happens to the grand jury that has issued these subpoenas?

Mr. Martin: If we should prevail I assume that the grand jury that issued these subpoenas would be dismissed, because it is supporting the actions of an inquiry which would not be constitutional.

Let me--

Unidentified Justice: Is it your position, Mr. Martin, that Congress cannot condition the President's removal power if once we find that the office is strictly an Executive function, that Congress cannot place any limits on the President's power to remove from that office?

Mr. Martin: --I do not take that absolute position, but I do take this position: that under a removal standard, if you have an officer that is exerting classic constitutional Executive functions, if he is prosecuting, that officer has to be subject to the control of the President, and it may be that control--

Unidentified Justice: Now you say control, the President ordinarily would exercise that control by appointing a person in the first place, choosing who it was to be, and removing the person if the President doesn't like what they are doing, yet you agree that Congress can place some limits on the President's removal authority.

Mr. Martin: --You could have situations... for example, there is the old case of the military cadet.

Now that person who was subject to military discipline was always in the President's control, and Congress placed some limit on the removal power of the president, and the Court sustained that particular situation.

In this situation, by contrast, the conference report in the Congress is very clear that the good cause removal standard is at the heart of the mechanism protecting the independent counsel's ability to act independently of the President's direct control.

Even if the independent counsel fails to abide by Presidential order, she cannot be removed, so--

Unidentified Justice: Well, she can be removed for good cause, can she not?

Mr. Martin: --She can be removed for a kind... the problem with good cause is the question is what is good cause, and the legislative history--

Unidentified Justice: But that would be, good cause would not include refusing to obey the order of the President.

Mr. Martin: --Not according to the legislative history.

This statute was intended--

Unidentified Justice: Or the statute, I suppose.

Mr. Martin: --This statute, unlike Bowsher, where a removal clause was intended, apparently, and was exercised to generate control in the Legislative Branch, this removal clause was intended to make sure that the Executive cannot control, and therefore it separates the Executive from one of its primary functions, first appointment and then control.

Let me say a few words, if I can, about the claim of the independent counsel that of course the Attorney General maintains the ability to make decisions at the threshold with respect to whether an independent counsel shall be appointed.

The Congress, first of all, describes the Attorney General's function as a screening function.

As Justice Scalia has said, it has to be done in a very short time period.

But more importantly, it has to be done in a situation in which the Attorney General is denied investigatory tools: he can't use a grand jury, he can't use compulsory process.

So, for example, in this case Congress put in front of the Attorney General four volumes, two and half years of investigation, and said decide in 90 days without any investigatory tools whether or not further investigation may be warranted.

That question stacks the decks too much.

It provides the Attorney General with no real choice--

Unidentified Justice: But Mr. Martin, isn't it likely that the Attorney General had some knowledge of what had been going on for that two and a half years?

I mean, it didn't come totally out of the blue.

Mr. Martin: --It did not come totally out of the blue; that is certainly correct.

Unidentified Justice: He had the whole FBI available.

Mr. Martin: He had the whole FBI available, but the criteria which is imposed on the Attorney General is to make a decision in a short time period as a screen--

Unidentified Justice: Yes, but I think your constitutional argument would be the same if it was six months or a year, wouldn't it?

Mr. Martin: --I think the difficulty constitutionally is that the Attorney General is not given the choice that he normally has, if it were a situation where you or I were involved, to decide, well, I need further investigation, or I need to use a grand jury, or I need to dispose of it in one of many different ways for national policy reasons or national security reasons.

Instead he is given one choice and one choice only, which is to take it out of the Executive Branch and to give it to someone who is subject only to the control of his or her own personal views.

There was some discussion earlier about the power to expand, and again the legislative history, I think, makes clear what's the court's role here.

First of all, it matches a person to the particular prosecution, and then it decides what shall be prosecuted.

In the Iran-Contra--

Unidentified Justice: Mr. Martin, I doubt whether we are going to use the legislative history to cause language which on its face can be interpreted in a constitutional fashion to be interpreted in an unconstitutional fashion.

I mean, the chances that we would do that are rather slim, don't you think?

Mr. Martin: --It certainly is true, but it is also true that the language cannot be interpreted in a way wholly inconsistent with the legislative history or to defeat the legislative purpose, as the Schor case said.

But let me look at the language--

Unidentified Justice: Try us, if the difference is between constitutionality and unconstitutionality.

Do you know of any case where this Court said, gee, on its face this statute could be constitutional, but the legislative history requires us to interpret it in such a fashion that it is unconstitutional?

Can you give me one case where we have done that?

Mr. Martin: --No.

But I can give you the specific language that I rely upon for this question of defining.

The statute says the Attorney General assists in defining jurisdiction.

The statute in its own language says the court defines with respect to jurisdiction.

In the Iran-Contra matter, for example, materials have been lodged with this Court.

It was the Court that decided to add the matter of Nicaragua as a response to a Senate recommendation; it was not the Attorney General who decided that.

The Special Division in a number of cases adds additional people or related matters to its jurisdiction.

So the role of the Division is not a ministerial one.

It is one which Congress has thought was a substantial one, an important power.

Unidentified Justice: What specifically does the statute say about the role of the court in defining the jurisdiction of the prosecutor?

Mr. Martin: It's very short: it says the court shall find the jurisdiction of the prosecutor, and it doesn't say, and it indicates that the Attorney General shall provide a report to assist in that process.

It places the power squarely on the court; there is no question about that.

Unidentified Justice: It doesn't in any way direct the court to a presumption to follow the recommendation?

Mr. Martin: It does not, Justice Rehnquist.

It does not.

Unidentified Justice: Do you contend that the definition of jurisdiction in this case was unconstitutional in any way?

There may be some other cases the court might define the jurisdiction in a way that would be totally intolerable, to go investigate the Soviet Union or something.

But what does that got to do with the case before us?

Mr. Martin: In the case before us, for example, one of the matters which the court resolved the independent counsel could investigate was the matter of a conspiracy claim with respect to Mr. Olson, a matter that the public integrity section of the Department of Justice had decided not to investigate further because there was so little evidence.

In other words, it fell below this frivolous threshold.

Unidentified Justice: It did not expand the jurisdiction to indict anyone except Mr. Olson, did it?

Mr. Martin: No, but it did expand it beyond the matters that were referred to by the Attorney General, and included matters that were rejected by the Attorney General.

Unidentified Justice: You think that is unconstitutional?

Mr. Martin: I do think it is unconstitutional to reverse decisions that the hand of the President makes in enforcing the criminal laws.

Unidentified Justice: If the Attorney General said, I think there is probable cause, or reasonable cause or whatever the statutory language is, to investigate charge A, and he names one statute, could the court authorize the independent counsel to investigate the possibility of violating related statutes?

Or must he just confine it to the particular statute--

Mr. Martin: The statute, again... the language doesn't say anything but define, the legislative history suggests the power to add related matters.

Unidentified Justice: --But is it your submission that if the Attorney General gives a specific reference naming only one criminal statute and one target, possible defendant, that any enlargement of that scope of jurisdiction to include a second statute would violate the constitution?

Mr. Martin: No, our submission is not based upon the expansion activity of the Attorney General, it is based upon the fact that the matter is taken out from the Executive Branch altogether so that he can no longer control what the prosecutor does, and with respect to all the prosecutorial decisions which affect individual rights and subject a person to all the power of the state, all through that process the Attorney General and the President are without control.

And that is what this statute does by its language and by its legislative history was intended to do, and that displacement of the President is, we think, the problem.

Garland concerned the pardon power of the President, and you may recall the issue there was whether from the pardon power of the President there could be excluded out a certain class of offenders.

That is to say those people who had raised their hands against the nation in the war between the states.

And the Supreme Court took up that matter and decided unequivocally that that could not happen, that Congress can neither limit its effect nor exclude from its exercise any class of offenders.

When the Constitution gives the pardon power, when it gives the execution of the laws and the obligation to faithfully execute, it gives that with respect to you and me and with respect to every governmental employee.

You cannot carve out certain kinds of people and say they are in a separate system.

I would like to speak a little bit more about the Appointments Clause for just a minute.

There has been a great discussion here about how one should interpret the Appointments Clause, and it seems to us that there are a number of criteria.

First of all, that it should be interpreted consistently with the purposes of the Clause, which is to create accountability and not to place appointments in a Branch which is not subject to the people.

I think it should be read in tandem with the function of appointments.

In a number of cases, Myers through Buckley, this Court has said that the appointments function is tied to the faithful execution obligation, and it should be read in terms of that as well.

And thirdly, it should accommodate the specific requirements of Article III, that the courts remain separate and independent, requirements that are reflected in a constitutional history in which there is no indication of court appointment of executive officers.

The Appointments Clause here is relied upon not just for an appointment, but for the transfer of power from the Executive to the independent counsel--

Unidentified Justice: Well, the Siebold case certainly is relevant, isn't it here?

Were there any Executive functions involved in the people appointed in the Siebold case?

Mr. Martin: --The Siebold case is critical, and the Court viewed the Siebold case as on in which the functions fell somewhere in between the Executive and Legislative functions.

It surely did not involve court--

Unidentified Justice: I guess the Court thought it involved some Executive functions, didn't it, didn't the court think it involved?

Mr. Martin: --It was stipulated by the parties, and the Court took no issue with that characterization.

What the Court did say is that--

Unidentified Justice: And the Court did recognize some inter-branch appointment power in Siebold.

Mr. Martin: --It recognized that in situations where with equal congruity it could be placed in either Branch, then the Congress had that power, if you call it inter-branch.

What it did not say is that one could use the Appointments Clause to take power from the core of one Branch and remove it.

One could use the Appointments Clause, for example, to take your constitutional power to decide First Amendment cases and put it in some other Branch of government, or put it in some place which is totally independent, some separate and new entity.

Siebold relied heavily on the concept of congruity, which I think must be a concept of looking to the other parts of the Constitution.

In this situation, can it be congruous with the Constitution to not only allow the appointment of such a person, but use the Appointments Clause to transfer power and to involve the judiciary in elements of Executive action that it has never been involved in.

Let me say a few words, if I can, about the judicial participation.

As the judiciary appoints the independent counsel and the courts have defined its jurisdiction, the judiciary has used its powers, as members of the Court have said, to issue advisory opinions, to sequence investigations.

There is a natural invitation for the judiciary to involve itself more and more in the process of the independent counsel.

It has hand-picked these independent counsel, and has hand-crafted their jurisdiction.

This presents an enormous problem for the appearance of impartiality of the judiciary.

The court is a participant in the Article II power.

It first of all participates--

Unidentified Justice: May I interrupt?

I really wonder about that argument.

Judges have been appointing defense counsel for years to represent indigents.

Why is there any greater appearance of impropriety in this situation?

Don't judges know that they are separate from the lawyers that appear before them?

Mr. Martin: --I think the question of impropriety is a question of degree of intimacy.

Unidentified Justice: But do you see any impropriety at all in our appointing counsel to represent an indigent defendant?

Mr. Martin: I do not.

Unidentified Justice: Well, why is there if you do it on the other side?

What is the difference?

Mr. Martin: There are a couple of differences.

One, the court has a particular role with respect to prosecutors.

For individuals the court stands between the prosecutor and the individual to protect--

Unidentified Justice: There are many, many cases in the state courts where the special prosecutors have been appointed by judges when the regular prosecutor couldn't handle the matter for some reason or other.

I just don't see any impropriety involved.

Mr. Martin: --Well, if you disagree on the question of appointment alone, it seems to me that when you go to the next step, when the court defines jurisdiction it steps over the line.

Justice Marshall--

Unidentified Justice: On that definition of jurisdiction, I looked again here at the reference by the Attorney General.

It was to see if there was any violation of 18 U.S.C. 1505, 1001, or any other provision of criminal law.

So you certainly can't say here that it's the court that gave it too broad a definition.

Mr. Martin: --Of course the question is not just what was done here but what the statute--

Unidentified Justice: Well, but this case involves what was done here.

Mr. Martin: --In this case, then I would ask you, and the Court might well wish to look at as well, those parts of the record which the Special Division had in front of us, and which was indicated specifically that public integrity section had declined, for example, to even take a look at the conspiracy issue because it was too frivolous, and that is precisely the issue which is added by the Special Division in its reinterpretation.

So I think there is a square conflict.

Unidentified Justice: Mr. Davidson, following up on Justice Stevens comment, what do you have to say about the federal courts appointing interim United States attorneys?

Mr. Martin: I think the answer has to be resolved by looking in two directions: Article III and Article II.

In an Article III direction, when you appoint interim United States Attorney, it is not a specific matter.

That person is to handle the general matters in the United States Attorney's office.

In addition, the Court does not go beyond it; it doesn't sit down with a United States Attorney and say, now here are the matters I want you to handle in this particular... here is the scope, here is the particular investigation, here are the laws which you will investigate.

Unidentified Justice: But it's still an inter-branch appointment.

Mr. Martin: It is still an inter-branch appointment.

It may not be constitutional.

If you look at the Article II side of it, I think the difference is absolutely enormous.

Unidentified Justice: Are you questioning the constitutionality of that as a theoretical matter?

Mr. Martin: It need not be reached here, but the Court in the Solomon case, which is the one case which said it was constitutional, relied heavily that in that situation the United States Attorney goes right into the Executive Branch, and he is subject immediately to the control of the Executive Branch, and Attorney General, if he wants to, can remove him immediately.

So it doesn't involve the displacement of power from one Branch to the other.

That's why I say when you look at these issues of what you can do on the Appointments Clause, it is important to look at what its ramifications are for the various parts of our Constitution, for Article II and Article III.

Unidentified Justice: In other words, who appoints the Librarian of Congress--

Mr. Martin: I don't know the answer to the question, Justice Blackmun.

Unidentified Justice: --Well, the President, of course.

And it is confirmed by the Senate.

The very title of the Librarian of Congress would indicate this is an inter-branch appointment, also.

Mr. Martin: And that is why I don't think this case ought to be resolved by a mechanical rule.

I think the way to resolve this question is to look at what the particular appointing power that has been suggested here, the particular statutory framework that is urged to be founded on this appointing power, and whether exercise of that kind would be consistent, in the words of the Siebold court, would be incongruous with the other parts of our Constitution.

It is important, I think, not to read the Appointment Clause separate and apart--

Unidentified Justice: My only point is that our history in practice is rife with examples of inter-branch appointments.

Mr. Martin: --I don't think there is anything in our history... to add to your point... where someone was appointed by a court to handle, independently of the Executive Branch, one of the core functions of that Branch.

Unidentified Justice: Yes, but you used the term core function.

One of the questions is whether this is a core function, because in colonial times the governor didn't have all that much to do with the appointment of prosecutors.

They were done by justices of the peace, the grand jury independently, there are a lot variety there, and a lot of private prosecutions.

Mr. Martin: And yet our forefathers, the Framers, knowing that process decided to vest the Executive power--

Unidentified Justice: Yes, but did they, by using the word Executive power, necessarily refer to this power which had not been exercised to the same extent by the chief executive of the colonies or the crown in England or any of that?

Mr. Martin: --The answer is that it is not explicitly stated in our constitutional history.

I think the indication of what has happened since then, that that power has always been put in the hands of someone who has been appointed by the President or the--

Unidentified Justice: In other words, you rely on practice subsequent to the adoption of the Constitution rather than the contemporary practice for your position.

Mr. Martin: --The contemporary practice in the states was, I think, part of what Congress decided, what the Framers decided not to follow.

They decided on a separation of powers and decided not to follow a system in states, which often merged the various kinds of powers in the way you've mentioned.

Chief Justice William H. Rehnquist: Thank you, Mr. Martin.

We'll hear now from you, General Fried.

ORAL ARGUMENT OF CHARLES FRIED, ESQ. AS AMICUS CURIAE, SUPPORTING APPELLEES

Mr. Fried: Thank you, Mr. Chief Justice, and may it please the Court:

We raise a number of particular objections to the independent counsel statute: to the total exclusion of the President from her appointment, from the very significant limitation on the President's power to direct and remove the independent counsel, and on the inappropriate involvement of the judiciary in the appointment, direction, and removal of the independent counsel.

But our central objection is that this statute strips the President of purely Executive function, criminal prosecution in an important class of cases, and lodges that function in one almost wholly untethered to the President, and at the same time it deprives the Congress of its power of advice and consent, but worse, it absolves the Congress of its weightiest and most painful duty, which is the scrutiny of the Executive Branch, backed up by the painful duty of impeachment.

Now the Appointments Clause problem, to our mind, is simply the most extreme of the constitutional anomalies in this statute.

It was Justice White, in a separate opinion in Buckley v. Valeo, who said the appointment power was a major building block fitted into the constitutional structure.

By removing that block, this is only one of the several ways in which this statute deforms that structure.

Now, one of the reasons that are offered for these constitutional anomalies, the importance to the public to feel that Executive officers would be investigated and prosecuted with vigor and impartiality.

And the instance which the Appellant and all of her amici urge is the Watergate episode.

That is the episode which is thought to teach the necessity for this provision.

With respect we submit that that episode teaches the exact opposite lesson.

True, the dismissal of Special Prosecutor Cox was regrettable, but it was not a constitutional catastrophe.

Had Special Prosecutor Jaworski been dismissed, had the Watergate task force been disbanded, had those prosecutions been abandoned, that would have been another matter.

But everyone knows that those prosecutions proceeded to their denouement without missing a beat.

And they did so not because of jury rigged constitutional innovations such as we have here, but because of public pressure and the long, deep shadow of Congress's power of impeachment.

That is our constitutional system, and that is precisely how our Framers envisaged that the matter should work.

To be sure, it did not work without struggle and strain, but it is a central fallacy of this statute to think that a supremely political object... and I use the word politics in its high sense, of those occasions which concentrate the moral and practical sense of the people... can be accomplished without politics, that in some sense it can be turned over to serene persons operating outside of the political process, platonic guardians of sort.

Now, in Humphrey's Executor the Court described an appropriate occasion for such percipiences.

It said that it's appropriate to have a commission whose duties are neither political nor executive, like the Interstate Commerce Commission, and that commission can then exercise the trained judgment of a body of experts.

That is not what the special prosecutor, what the independent counsel does, and it is profoundly wrong to absolve the political branches of their responsibilities, and hand over those responsibilities to persons who act totally untethered to any politically responsible person.

This temptation is a temptation to which the Congress yielded on one other occasion, in the Gramm-Rudman trigger mechanism.

And this, it seems to us, is a more severe and a more dangerous instance of that fallacious view of the Constitution because the liberty of the subject is involved.

Now turning to the question of the Appointments Clause and who is subject to Presidential appointment, the Appellant and her amici relentlessly misunderstand our submission.

We do not say that every subordinate person is an inferior officer.

I do not know whether I am principal officer or an inferior officer, but it is quite clear and it is made clear by statute that I am subordinate to the Attorney General and to the President.

What we say is that subordinancy is a necessary condition for a person being an inferior officer, and it is hard to imagine any officer in the government who is less subordinate in her function than is the independent counsel.

The independent counsel is considerably less subordinate than am I, and than is the Attorney General of the President.

Unidentified Justice: To whom were the election inspectors in Siebold subordinate?

Mr. Fried: They were subordinate to the court, I suppose, Mr. Chief Justice.

And as to the Siebold case, I think it is important to note that the functions they were performing were functions which it was recognized could be performed by the Congress itself.

Which brings me to Justice Blackmun's question regarding the Librarian of Congress, and one might add to the Librarian of Congress, the Public Printer, and the Comptroller General.

Unidentified Justice: And the Architect of the Capitol.

Mr. Fried: And the Architect of the Capitol, all of whom are appointed by the President.

It is not entirely clear whether they are officers of the United States or officers of Congress, but if they are officers of the United States, it is quite clear that the Appointments Clause, as it relates to inferior officers, must lodge that appointment either in the President or in the courts of law.

There is no alternative so there's no particular anomaly or any particular problem that Congress decided to lodge the appointment of the Librarian of Congress in the President.

So I think those particular group of cases do not cause the difficulty.

It does seem that by allowing this kind of cross branch appointment, we cause the question of who is an inferior officer and who is a principal officer to bear far too much weight.

It really is not particularly important whether the Solicitor General is an inferior or a principal officer, an inferior officer like the Cadet in Perkins who figures so prominently in the Appellant's brief.

It isn't important because it's quite clear that the Solicitor General, like the Cadet in Perkins, is wholly subordinate to a person in the Presidential chain of command.

It is only when you have cross branch appointments that it becomes crucially important to decide whether a particular person is important enough, subordinate enough to be subject to the inferior officer clause or the principal officer clause.

We submit that these are problems which the framers did not intend us to face and that we need not face, because the appropriate thing to do is simply to recognize and to maintain the integrity of each of the branches, and not countenance a system which would allow the Executive Branch to be shattered into a thousand small offices, each of whom would be appointed by courts of law.

Now, there's one further point that needs to be mentioned regarding the control of the independent counsel by the Attorney General.

It does seem to us that the picture of the prosecutorial function which the Appellant and her Amici offer is one which is scarcely recognizable to anybody who has ever wielded that power.

I think that power is best described by Mr. Justice Jackson when he was Attorney General in the Attorney General's amicus brief.

That is not a power, the prosecutor's power is not one which is exhausted by viewing her as an automaton who mechanically processes evidence and law by something called a bureaucratic set of policies.

Do we prosecute for a felony when more than one ounce of marijuana is involved.

What is involved is judgment.

What is involved is discretion.

That was the lesson which Justice Jackson taught in that splendid address to young prosecutors.

And that kind of judgment, that kind of discretion, we urge, is a kind of discretion which can only be safely lodged in somebody who is responsible to an elected official, an elected official who if he does not properly control that responsibility is subject to Congressional oversight and if need be, impeachment.

I thank the Court for its attention.

If there are no further questions.

Chief Justice William H. Rehnquist: Thank you, General Fried.

Ms. Morrison, you have one minute remaining.

ORAL ARGUMENT OF ALEXIA MORRISON, ESQ. ON BEHALF OF APPELLANT -- REBUTTAL

Mr. Morrison: Mr. Martin indicated in his argument that the case that he thought might be important to the Court discussed the President's pardon power that's constitutionally textually committed to the President personally.

In this matter, we are talking about enforcement powers that are created by statute, and Congress has found within its appropriate power, we think, that individual matters of criminal law enforcement should not be matters of politics.

Unless there are further questions?

Unidentified Justice: I have just one since you're not going to use the rest of your time anyway.

What do you interpret the meaning of the words, if possible, to be in that provision that says you must follow the Attorney General's written guidelines and policies, if possible.

When would it not be possible?

Mr. Morrison: I believe the statute says, except when not possible.

Unidentified Justice: All right.

Mr. Morrison: And I made reference before to the fact that there are certain policies within the Department's written guidelines that require checking up the chain of command.

Some of those would be checks that would not be possible under the independent counsel statute where the independent counsel is acting in lieu of the Attorney General for purposes of let's say an immunity grant.

So that in those instances, it would not be possible to follow the established policies of the Department.

Chief Justice William H. Rehnquist: Thank you, Ms. Morrison.

The case is submitted.

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Featured:

Phillips Petroleum Co. v. Mississippi - Oral Argument

Wed, 13 Apr 2011 20:11:59 +0000

Case:

Phillips Petroleum Co. v. Mississippi

Media File:

86-870_19871109-argument.mp3

Related Transcript:

86-870_19871109-argument.xml

Transcript:

ORAL ARGUMENT OF EUGENE GRESSMAN ON BEHALF OF PETITIONERS

Chief Justice William H. Rehnquist: We will hear argument this morning in No. 86-870, Phillips Petroleum Company v. Mississippi and Saga Petroleum.

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

Mr. Gressman: Than you, Your Honor.

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

This is an equal-footing case.

It arises out of the fact that Mississippi became a member of the Union in 1817 on an equal footing with the original 13 states.

The "equal footing" doctrine in this context means that each new state that enters the Union, like Mississippi, acquires sovereign title from the United States to certain underwater lands to be held in trust for the benefit of all the public.

Now, in this situation, and in an unbroken line of decisions of this Court, dating back 145 years, to the case of Martin v. Waddell, this Court has uniformly stated that the sovereign title that attaches to a subsequently-admitted state, relates only to lands beneath navigable waters that are usable by the public for commercial purposes of navigation or other commercial activities, such as fishing.

This has been the unbroken line of authority in this Court, that state sovereignty equals title to lands under commercially navigable streams, rivers and lakes.

And by "navigable", this Court has always meant "navigable in fact".

Now, it is our position that the decision below by the Mississippi supreme court is diametrically opposed to this long line of authority in this Court.

For example, on page 10A in the Opinion below, as it appears in the Appendix to the Petition, the supreme court of Mississippi says that the top of the page that,

"It is our view that as a matter of federal law, the United States granted to this State in 1817 all lands subject to the ebb and flow of the tide and up to the then-mean high water liable without regard to navigability. "

Now that is incorrect; it is inconsistent; it is in conflict with every decision that this Court has ever rendered.

He cites, for example, the court cites Illinois Central Rail Road Company v. Illinois.

One turns to that reference, that citation to the Illinois Central case and we find the Court announcing that

"ownership by the crown... and therefore, by any sovereign State, of title to lands under waters, is founded not upon the existence of tide over the lands, but upon the fact that the waters are navigable. "

Unidentified Justice: Mr. Gressman, excuse me.

Is it not possible to read all of those cases as extending the doctrine rather than limiting it; that is, as saying,

"if waters are navigable, the. "

trust

"doctrine applies, whether or not the oceans' ebb and flow extends to those waters. "

Is that interpretation not... although if the ebb and flow does extend to the waters, the "trust" doctrine does extend to the waters, the "trust" doctrine applies despite their non-navigability.

Is it not possible to interpret all of... is there any of those cases that would be inconsistent with such a theory?

That is, navigability is the extension of the "ebb and flow" jurisdiction?

Mr. Gressman: No, Your Honor, I do not think that is a fair reading of the Decisions of this Court.

I do not think that this Court has ever addressed a case before today where all that you had were non-navigable waters plus a tidal influence.

In every case--

Unidentified Justice: We have not addressed it either way: we have not said "yes", and we have not said "no".

Mr. Gressman: --That is true, but I think that if you look at the purposes of the "public trust" doctrine, this Court has consistently said that the purpose of the doctrine, the purpose of the "equal footing" doctrine, is premised on the public need to use the waters as navigable highways of commerce, and that is the critical fact that justifies reading the Decisions of this Court as meaning that, if you have a non-navigable body of water that happens to be subject to tidal influence, that kind of underwater land can never become part of the public trust domain for the very reason that there is no purpose served; there is no commercial navigability that is possible.

And therefore, the reason--

Unidentified Justice: What do you do about the last ten feet of the ocean, near the shore, which last ten feet are not navigable?

Does that mean that that portion is not subject to--

Mr. Gressman: --Certainly not, Your Honor.

Unidentified Justice: --And why is that?

Mr. Gressman: Every navigable body of water, be it the ocean, the Mississippi River, or any other large body of water, has at its shore, or at its edges, a non-navigable shoreline.

Unidentified Justice: Right, now, how do you know where the ocean ends?

Why is it not reasonable to say that the ocean ends at the point where the ebb and flow stops?

Mr. Gressman: Because--

Unidentified Justice: Once you have accepted the principle that "navigability" is not the test... as you just have... you have to decide where the ocean ends: why does it not end where the ebb and flow start?

Mr. Gressman: --There are various explanations of that.

That is a natural phenomenon, of course, and if the body of water is subject to tidal influence, such as an ocean, one can measure the extent of that navigable body of water by the mean high water mark of the tide.

That is not to say that you are granting state ownership of the entire body of water because of the tidal influence, because you are simply measuring the inner boundary of that body of water by the tide.

At the same time, you see, this was part of the confusion that grew out of the English experience where all navigable rivers, due to the geography of England, were the same as tidally-influenced waters: the tide ebbed and flowed to the ends of most of the navigable rivers.

And so it became... a synonymous expression of the royal ownership of the navigable of the tidally-influenced waters of England.

But we found in this country that that kind of reliance or reference to tidal influence certainly does not explain how the state gets domain over fresh-water streams that have no tidal influence.

And it took a number of cases, particularly the Genesee Chief case, which dealt with the Admiralty jurisdiction, to dispel the notion that the critical element with respect to the extent of federal admiralty jurisdiction extended only to those rivers that were tidally influenced.

Another point, Your Honor--

Unidentified Justice: Mr. Gressman, certainly Chief Justice Taney's Opinion in Genesee Chief, as Justice Scalia says, extends Admiralty jurisdiction to navigable waters that were non-tidal, there is nothing indicating that all tidal waters were not also included.

Mr. Gressman: --As long as they were navigable.

Unidentified Justice: Well, but I do not... when you say that Admiralty jurisdiction extends to "tidal waters", and then you go on and say

"even if they are not tidal, it extends to them if they are navigable. "

I do not know if the necessary inference is that the tidal waters which are not navigable are excluded?

Mr. Gressman: Not necessarily, as long as they are navigable.

Take the Mississippi River, for example.

And this is the problem... one of the problems that Genesee Chief was talking about: you take the Mississippi River.

Now, the Mississippi River is navigable for 1,000 miles, but the tidal influence is only for 30 miles up the river.

Now, if you were to say that the public domain or Admiralty jurisdiction extends only for 30 miles, as long as there is a tidal influence, that made it impossible to extend Admiralty jurisdiction to the remaining navigable port... freshwater portions, of the Mississippi River.

And this is intolerable.

Unidentified Justice: The collision of the Genesee Chief took place on Lake Ontario, I thought?

Mr. Gressman: Well, but I think that an example, perhaps, is better shown... I think he talked about examples of various rivers in this country, like the Mississippi, but I think that affords an example of what he was talking about.

Let me also add that what we are dealing with in this case is not a navigable body of water that happens to have a non-navigable shoreline.

What we are talking about here is a discrete, inland tributary that contributes fresh water from the uplands and flows into a navigable body of water known as the Jordan River.

Now, it cannot be said that the "public trust" doctrine was ever designed to extend public ownership up into interior streams completely surrounded by private riparian owners, streams that do not constitute part of the shoreline of a navigable body of water.

I give an example of that from Justice Fields' concurring Opinion in the Knight v. U.S. Land Association case, where he pointed out that it would be absurd to suggest that the Chesapeake Bay, which obviously is a navigable body of water tidally-influenced, that you would consider as part of Chesapeake Bay, the Potomac River as far up as the tide affects the Potomac River, and it does affect the tide all the way up to Washington, D.C.--

He said,

"it is absolutely absurd to say that the Potomac River is a part of the shoreland, or the boundary, of the Chesapeake Bay; that the tidal influence that is effected on this independent river, or stream, must stand or fall on its own navigability, not derivative from the body of water into which it flows and is not... certainly, does not constitute part of the shorelands or the tidelands of the navigable Chesapeake Bay. "

And he said,

"It was incredible that anybody should suggest that. "

Yet that is exactly what the State of Mississippi is claiming here: they are claiming that, because this little, discrete, independent drainage stream that has no more use, no more function than to drain the heavy excess rainwater off the uplands, that because that has some tidal influence, therefore that must be considered part of the public domain, as if it were constituted some kind of a shoreland or a tideland or a tidewater of some other concededly navigable body of water.

The State of Mississippi has never revealed what navigable body of water these little, discrete streams are a part of.

Are they a part of... are they a tideland of the Jordan River, or are they the tidelands of the Bay of St. Louis?

An inlet of the Gulf?

Or are they the tideland of the Gulf of Mexico, which is only five or six miles away?

We do not know.

Unidentified Justice: Of course, Mr. Gressman, under their theory it really does not matter, does it?

Mr. Gressman: Well, it does not matter except to say that it is totally incorrect as a statement of the basis on which you impose public trust dominion.

Public trust dominion, as this Court has said over and over again, depends upon the navigability of the body of water over which the state seeks this trust dominion.

And now, if it is a true tideland; if it is a shoreland; a mudflat; a beach of a navigable body of water, that need not deter us because that is simply a physical fact that most navigable bodies of water do have non-navigable shorelands... tidelands, tidewaters... however you want to describe them?

Unidentified Justice: Mr. Gressman, the Submerged Lands Act, of course, has language that your opponent suggests affects the resolution of the problem: it says that all lands permanently or periodically covered by tidal waters are included as lands beneath navigable waters.

Do you think that that has some bearing on this case?

Mr. Gressman: No, Your Honor.

The submerged land act... and this was fully explored, by the way in Justice Rhenquist's Opinion in the State Land Board v. Corvallis Company in footnote no. 4 of that Opinion, at 429 at page 371 that the effect of the Submerged Lands Act merely was to confirm the states' title to beds of navigable waters within their boundaries as against the United States claims.

And it does not alter the scope or effect of the "equal footing" doctrine.

And quoting from the Bonelli case, which in other respects was overruled in Corvallis, quoting the Bonelli case, this Court stated... and I think this is a critical restatement of the... applicable law here:

"A state cannot base its claims to lands... that means underwater lands... that are unnecessary to a navigational purpose. "

Now, that means that the state can claim domain only over those waters considered by and of themselves that are necessary to serve as public highways of commerce a navigational purpose... a commercially navigational purpose.

And that is the whole history; that is the whole meaning; that is the whole rationale... for the "public trust" doctrine, which has been incorporated into the "equal footing" doctrine.

And the Court below simply turns away from that long history and states that lands... that title: property title, can be based solely upon the ebb and flow of the tide without regard to navigability.

That is just totally inconsistent with this Court's long line of decisions.

I do not know any case that has ever said that you can base public title solely on the basis of the ebb and flow of the tide.

Unidentified Justice: Oh, no.

I do not think it says you cannot, either.

Mr. Gressman: Well, the inference is that if, from the fact that, if public title, public trust title, is the equivalent of navigability purposes, shall we say... that necessarily excludes from the public trust concept those waters that are not suitable for commercial navigation.

And that is what this Court must have met in Illinois Central, and in other repeated declarations when it said that, "tidal" depends not on

"ebb and flow of the tide. "

but on the "susceptibility to commercial navigation".

And that is the whole reason behind the doctrine, that is, to preserve the highways of commerce.

Unidentified Justice: But that was not the reason.

That was not the sole reason at common law, Mr. Gressman.

There were all sorts of things that attached... in particular, fishing rights, whether it was navigable or not... the fishing rights in ebb and flow waters belonged to the king, and not to private owners.

Mr. Gressman: No, Your Honor, the English common law, going back as far as 1604, in the River Banne case... and that has never been questioned in subsequent cases as far as I know... stated that there is a clear distinction between a navigable water and a non-navigable stream.

And that the king owns and controls the navigable waters, but the non-navigable waters are subject to private riparian ownership, and that has been the history of the common law in this country.

Unidentified Justice: Even if the tide reaches them?

Mr. Gressman: I would say

"yes, if it is not navigable by virtue of the tide reaching them. "

Unidentified Justice: But if you read Chief Justice Taney's Opinion in Genesee Chief, you get the impression that at least that Court thought that navigability and tidal characters were coterminous in England.

Mr. Gressman: Well, they were because of the peculiar geography of England... such a small country that all this was set forth, explained not only in Genesee Chief, but down through the years and Illinois Central repeats this history again--

Unidentified Justice: But then you never would get a situation in England where the river was navigable but non-tidal, or tidal but non-navigable.

Mr. Gressman: --Possibly not, but that was... that situation did not exist in this country.

I mean, it was an entirely different situation, because here, as I used in the Mississippi River example.

You have a certain portion of it that is both tidal and navigable.

Whereas above the tidal influence, you have waters that are not subject to the tide.

Unidentified Justice: Yes, but what I am uncertain about is how good an authority your River Banne case in England is in 1604?

Which simply is applying the "public trust" doctrine in England where the two were really coterminous?

Mr. Gressman: Well, even in England, I suppose there are little streams... discrete little steams... tributaries, that are not navigable.

I mean, that is the way Nature is.

I mean, they can... Nature makes these large, navigable bodies of water by having a series of discrete, little streams and rivers.

And that reference appears in a lot of the early common law cases, that it is these discrete, little streams and rivers that do not pass through the control of the Crown, but they are reserved for the private riparian landowner, and that has been the history in this country.

The little streams that run through farmlands, or somebody's back yard; a little creek... that is not subject to state control.

And if it just happens to have... unless it rises to the level of navigability.

Navigability is the one criterion that is consistently referred to as the test of the "public trust" doctrine.

I wish to reserve the rest of my time for rebuttal.

Chief Justice William H. Rehnquist: Thank you, Mr. Gressman.

We will hear now from you, Ms. Sones.

ORAL ARGUMENT OF KATHY D. SONES, ESQ. ON BEHALF OF RESPONDENT

Kathy D Sones: Mr. Chief Justice and may it please the Court:

The case, as Mr. Gressman stated, is one of the "equal footing" doctrine and the limits of each state's public trust, the question can be answered when we review these two doctrines together.

Each new state upon entering the Union did so on an equal footing with the original 13 states and received all lands that were subject to the ebb and flow of tide regardless of the navigability of the water.

Each new state could define the nature of her boundaries and the physical extent of the public trust lands, as the original 13 states did.

Each of the original 13 recognized a public trust interest to shorelands that were subject to the ebb and flow of the tide and then defined the extent of the public trust shorelands either judicially or legislatively.

The State of Mississippi's main concern is to preserve the ownership of the lands in question for the use and benefit of the public and this, by necessity, included the development of mineral resources.

The ownership of the properties in question remained unchallenged until these leases were issued on these state waters for ail and gas purposes.

At that time, the individuals who owned the lands adjacent to these tidelands sought to take these tidelands from Mississippi's public trust lands.

The State then proceeded to defend its title in these lands, and this case is significant not only to Mississippi, but to all states which have a coastline.

This case can potentially impact thousands of acres nationwide where states have relied upon their theories of what they owned in their public trust lands.

Unidentified Justice: Well, Ms. Sones, I guess the... Petitioners here had been paying taxes on these lands all these years on the assumption they owned them?

Kathy D Sones: Your Honor, the lower court ruled on the issue that the payment of taxes was not at issue in this case simply because--

Unidentified Justice: That may be, but is it not correct?

I mean, the assumption of everyone had been that the lands had been owned by the Petitioners for the years since Statehood and before?

Kathy D Sones: --Justice O'Connor, it is true that the Petitioners allege that they had paid taxes on the lands in question, but the State's--

Unidentified Justice: Well, and they held some titles that purported to cover the lands in question?

Kathy D Sones: --The title which they had were quitclaim deeds... in the nature of quitclaim deeds, by Acts of Congress.

Unidentified Justice: And they had paid taxes on it and that was the common assumption until the State issued the mineral leases?

Is that right?

Kathy D Sones: That was their assumption.

Unidentified Justice: Well, is that right?

She is asking just a fact.

Kathy D Sones: It is correct, Your Honor.

Unidentified Justice: Yes, thank you.

Kathy D Sones: One fundamental principle of law that we are concerned with here--

Unidentified Justice: It is a long time... it is over 150 years that they have been paying taxes, is it not?

Kathy D Sones: --Your Honor, we would assert that the payment of taxes on these lands really did not affect what ownership that the State had in these properties.

Unidentified Justice: Yes, but the State of Mississippi or its subordinate municipalities gladly accepted the payment of taxes?

Kathy D Sones: The municipality, even though it may have accepted payment of taxes on these properties, the lower court ruled that this issue did not resolve the question as to the title.

Unidentified Justice: I know what the lower court ruled, but the fact is there.

And you cannot overcome it, can you, as a factual matter?

If you prevail in this case, I suppose those taxes will no longer be paid.

Kathy D Sones: On these 42 acres, they would not be.

Unidentified Justice: Well, do you not suppose that if we were to Affirm, there would be additional lands that are now in private hands, or use, that Mississippi would in the future claim as part of its public trust?

I suppose that we would not expect the State of Mississippi to stop with these 42 acres.

Undoubtedly there would be other lands in the State that Mississippi would extend its claims to, if we were to Affirm?

Kathy D Sones: Your Honor, this is not a new issue in the State of Mississippi.

The State has always claimed--

Unidentified Justice: But is that correct?

Kathy D Sones: --Your Honor, there would be other lands that are affected by this.

Unidentified Justice: Yes?

How much land do you suppose, in all?

Kathy D Sones: The State of Mississippi currently has at least around 600 acres that are tidally-influenced.

We do not suggest that this would change any rights of ownership that these people have in them.

These are lands which the State claims by virtue of the ebb and flow of the tide.

We only have the one other case that is at issue with this one, where the same issue is involved.

So as far as we know, the stability of titles will remain as they are with the exception of the one other case that we have.

Unidentified Justice: Ms. Sones, with respect to the 42 acres that are in dispute here, would taxes paid on that as a separate parcel, so that a separate tax payment was made for lands entirely subject to tidal influence, or was it just a part of a larger parcel?

Kathy D Sones: These lands were not issued separately.

They were all one big parcel.

The parcel that Petitioners own would have been in the nature of 640 acres, more or less, and they would have paid taxes on the whole amount, without any exceptions to this.

Unidentified Justice: And now 42 acres of that 640 are being disputed by the State?

Kathy D Sones: Yes, Your Honor.

Unidentified Justice: And the State did accept the money as a tax payment, did not understand that it was tendered to purchase the property, did it not?

Kathy D Sones: No, Your Honor, these were donation claims where the Petitioners actually got their property.

To determine the property rights of states and of individuals in the Public Trust area, we must look to the law of this nation as it existed in 1817 when Mississippi came into Statehood.

Mississippi came into Statehood on an equal footing with the other states, and title to the lands which the federal sovereign held in trust vested in Mississippi at that time.

The public trust was created and funded and title to these lands in the trust became the property of Mississippi.

Mississippi adopted the common law of England which divided lands into three categories.

Lord Hale in De Jure Maris, stated that there were fresh water streams, the seabed, and tidal waters.

The tidewaters at page 378 included,

"arms and creeks of the sea so far as the ebb and flow of the tide, as well as the foreshore between the high water mark and the low water mark. "

In reliance upon the English common law, 14 states use the main high tide line in determining their line of ownership.

Some states use the low water line; and other states... the other coastal states... use some variation of the main high tide line.

These compilations can be found in a 1960 report that Colonel Gee made to the American Society of Civil Engineers.

As the Coastal States' amicus brief indicates, there is no uniformity in the law as to what each state has done with the lands under its public trust.

The lead case in this area is that of Shively v. Bowlby, an 1892 case which discussed at great length what the common law of England purported to do.

The test asserted by Petitioners is that of a "navigability-in-fact" standard, something that was added once the propellered Genesee Chief case was handed down.

And this was to give the Western interior states public trust lands which they did not have since they did not have a coastline.

Shively, in summarizing the original 13 states law, made it clear that there was no uniformity in what each state had done with the lands under its tidewaters within its borders, but clearly stated at page 341,

"each state has dealt with these lands according to its own views of justice and policy, reserving its own controls over such lands as it considered for the best interest of the public. "

"Great caution is necessary in applying precedents in one state to cases arising in another. "

Mississippi has always used the "ebb and flow" rule, and employed it to the parcels here in question.

All of these parcels, these 42 acres, have daily tidal influence and are truly

"arms and creeks of the sea. "

as discussed in the treatise discussed by Lord Hale.

Every navigable waterway has certain areas which are not navigable in fact, as Justice Scalia indicated.

There would be some areas close to the shore; there would be estuaries which would not be navigable... even on a fresh water river, there would be areas near the river bank which would not actually be navigable, but this does not take away the definition of a navigable waterway.

The law looks for certainty, and there is certainty to the main high tide line which Mississippi uses.

By taking the main high tide line, a finite line is established by the use of surveying instruments, by the use of tidal datums over an 18.6 year period; and to use any other rule in our State to determine where the ownership of the State lands ends, just would not be consistent with the public trust lands in the decisions of our State.

Unidentified Justice: Let us not exaggerate it too much: there is a certain amount of... a degree of uncertainty, in the "tidelands" rule as well.

I mean, to determine how far up a river the tide actually ebbs and flows... I assume it diminishes little by little until there is finally one molecule of water that moves up and down.

That is not a very easy thing to calculate, is it?

Kathy D Sones: It is not an easy thing to calculate, Justice Scalia, but it can be done.

It is something that the National Ocean Survey does by the use of tidal datums by gauges they place in the water, and these... the actual boundaries of the main high tide line can be established by the use of these gauges and by the use of photogrammetry, which is the use of taking aerial photographs and actually marking out where the tide line would be established, and this is done by a metes and bounds description.

It is a finite description of how far the tidal influence reaches.

This is done over a period actually over 18.5 years for the tidal epic, but this is something that can be done by watching the gauge rise and fall every day, and they take the mean high tide line of all the high tides and the low tides together.

Unidentified Justice: May I ask you a question... excuse me?

We are talking about in this case tributaries to the Jordan River, is that right?

Kathy D Sones: These are tributaries on the east bank of the Jordan River... I am sorry, the west bank of the Jordan River, and this land is bounded on the south by Bayou LaCroix, which is a navigable, in-fact, waterway.

Unidentified Justice: Now, is the Jordan River a fresh-water river or a salt-water river?

Kathy D Sones: The Jordan River is salt-water river.

Unidentified Justice: And are the tributaries also salt-water?

Kathy D Sones: These tributaries are also salt-water.

They, like any other waterway, also have fresh water that comes into them by drainage... you know, every time it rains you have a runoff.

And so, at times, these rivers may in fact, be more fresh-water than salt-water.

Unidentified Justice: To the extent they contribute anything to the Jordan River, are they not fresh?

Kathy D Sones: They are salt-water as... at times they would be fresh-water.

Unidentified Justice: To the extent they contribute water to the Jordan River, are they not entirely fresh?

Kathy D Sones: To the extent they contribute to it, the Jordan River backs up into these tributaries.

Unidentified Justice: So that it is the effect of the backup that raises the level.

Well, would it not be possible that a tributary that your rule would apply to would be made up entirely of fresh water?

And just have the tidal influence raise the level of the water somewhat by reason of the backup?

Kathy D Sones: It is possible that they could be mostly fresh water, if you go for a long period of time without any rain, then the salinity content of any of these areas would be very high.

These would be times--

Unidentified Justice: Well, I suppose in that case, they probably would not get much influence from the tide, either, would they?

Kathy D Sones: --Well, the tide would not change, since it is coming in from the Gulf of Mexico.

The tidal influence would always be the same.

It is the amount of the fresh water, the actual runoff form the rain that would make a difference.

Unidentified Justice: What is the purpose... and your opponent argues that the purpose of the "public trust" doctrine should be kept in mine, and it focuses on discrete bodies of water that can be named either as "bays", and so-forth... what is the purpose of the "public trust" doctrine as to what we are talking about in this case?

Kathy D Sones: The "public trust" doctrine is used in Mississippi and the Record indicated what interest the public actually has in this land.

There were testimony of at least seven witnesses who indicated that they had fished in these waters, in these 42 acres.

They had fished for some salt water fish, including flounder and bluegill and catfish, and these areas were used by the public at least for 50 years, by one witness.

Another witness stated that the mouths of the little bayous were fished because the fish would come out with the tide.

These also were used by the public for hurricane protection of their vessels.

When a hurricane was coming in, everybody would take their boat in and hide them in some of these estuaries that are in question.

They were used for loading dock... well, there was a loading dock adjacent to one of these parcels where actually one of them was used to haul paper wood and pulpwood across these waters.

The parcels were designated in the Record as a

"small bayou, a bayou, an inlet, a bayou with several tributaries, and as a channel. "

But all of these waterways connected to a navigable, in-fact, waterway: the Bayou LaCroix or the Jordan River.

So they are all actually "creeks of the sea".

They are

"arms or creeks of the sea. "

They are important estuaries in that their fish and other aquatic life that grow and prosper, the waters with their underlying soils have historically belonged to the people of the State of Mississippi.

Unidentified Justice: Ms. Sones, if the decision below was correct, that the public trust land extends even to discrete, separate, small tributary streams, conveying fresh water into a tidally-influenced area, apparently, according to the brief of the American Land Title Association as amicus, if that is correct, there are literally millions of landowners throughout the United States who would be divested of their property contrary to the understanding and expectation of those owners and the title insurance company that have insured their title through the years.

Is that a concern that we should we should have in viewing this decision?

: Because it would extend, of course, beyond the boundaries of Mississippi.

Kathy D Sones: It is a factor, but not one that we feel is something that would actually change land titles.

For the states that have been using "ebb and flow" as the test of ownership, there would be no change in the title... the title, to tidally-influenced waters.

Their assertion is that it would impact on titles, but in Mississippi, this has always been the law that we use the "ebb and flow" test.

Because of this, we do not feel that it will disrupt titles in our State or others, as they have indicated.

Unidentified Justice: How deep are these bayous?

Are they as deep as the one in Louisiana?

Kathy D Sones: These bayous... some of them.

Some of these bayous are--

Unidentified Justice: That is pretty deep.

Kathy D Sones: --are I would say anywhere from two feet to four feet on up to 15 feet... the Jordan River itself is about 30 feet deep, and it is commercially navigable.

Unidentified Justice: But some small bayous are also deep?

Kathy D Sones: And some of these are also deep, particularly when the tide comes in.

They are bayous just like Louisiana's bayous.

The Submerged Lands act of 1953, which was discussed earlier, we feel confirms the State's title in tidally-influenced waters to the main high tide line.

We do not assert that this changes any title that the State has.

This is just a confirmation of what Mississippi already had in its tidally-influenced waters.

There additionally were instances in the Record which show that a 14 foot flatbottom boat could get in on these waterways and actually navigate on them.

These were people who came in to fish and to swim or to bathe.

These were uses that the public has made of these areas and if the public is deprived of these areas, we are... this will undermine an important right that they feel they have in these 42 acres.

We are looking to make sure that our land, as we have established it, the main high tide line, is used in this case, because the public needs to know where the definition of the boundary is.

This is something that they have always thought they had by virtue of the fact that testimony had revealed that they had gone up in these waterways and they have used it for all sorts of purposes, particularly fishing.

The test asserted by Petitioners, the "navigable-in-fact" test, was a test that was applied to interior waterways.

Now, because these two waterways which we have in question here, the Jordan River is a "navigable-in-fact" waterway; the Bayou LaCroix on the south boundary, is also navigable.

They do not assert any particular way to define where the cutoff will be.

We would have to employ some other arbitrary rule on these waterways to take them out of the public domain, such as the quantity of tonnage, or the depth of the waterway, or perhaps the type of vessel that could navigate on the waterways.

Unidentified Justice: And anyway for some tributaries further up the Mississippi, are you not... or is the Mississippi tidal... throughout the State?

Kathy D Sones: The Mississippi River, as Mr. Gressman indicated, is tidally-influenced up about 30 miles.

Unidentified Justice: So above that you are going to confront this same problem anyway.

It is not as though you are coming out the way you want as to... would avoid the necessity of determining where a navigable river ends, and how much of a tributary to a navigable river is part of the navigable river, that is still going to be a problem, is it not?

Kathy D Sones: It is our contention that where you have a "navigable-in-fact" waterway, you will always have some areas that you cannot navigate over.

It might be a few inches toward the shoreline, but if you had determined that it was navigable-in-fact waterway--

Unidentified Justice: I understand that, but are you going to answer my question?

Kathy D Sones: --I am sorry, Your Honor?

Unidentified Justice: My question is, the confusing difficulty you were just referring to, cannot be totally eliminated even if we come out the way you want us to on this case.

It is still going to be necessary to determine with respect to navigable rivers that are above the tidal level where the navigable river ends.

That is still going to be a problem is it not?

Kathy D Sones: That is still going to be a problem, but that is a different type of law employed for fresh water as opposed to tidally-influenced waters.

We would assert that the "ebb and flow" rule would be dispositive of this case because we are using it to mean "high tide line" as our definition of State boundaries.

We respectfully request that Mississippi be allowed to continue our stewardship of the public trust domain over all lands that are tidally-influenced up to the line of the main high tide, and to protect our investment in the future of our State's public lands.

Unidentified Justice: May I ask one other question before you sit down?

When I was asking you before about the fresh water and the salt water, you indicated that some of these tributaries were used for fishing.

I think your opponent's brief said that some of them had also been used for things like cattle grazing and normal pursuits that would not be associated normally with the "public trust" doctrine.

Is that correct as a matter of fact?

Kathy D Sones: There was a witness who testified in the lower court that he had cattle that he saw at times would graze down to some of these areas in question, and also the Jordan River, which is primarily a salt water river, but you would find this on any waterway that also flows from the Gulf of Mexico or any other salt water body where at certain times of the year, if you had a lot of rain, the cattle could come down there and graze, but at other times the salinity content would be so high that it would be impossible for them to drink out of that water.

He also further stated in his testimony that there were wells and other ponds on the land itself for the cattle to graze.

You know, this was just at odd times that the cattle could graze from these waters.

Unidentified Justice: Thank you.

Chief Justice William H. Rehnquist: Thank you, Ms. Sones.

Mr. Gressman, you have three minutes remaining.

Mr. Gressman: Thank you, Your Honor.

I would just say immediately that neither the Jordan River nor these little tributaries are primarily salt-water in content.

There is a very low salinity rate, and they are basically carrying fresh water either from the uplands or further back up the Jordan River area.

But in any event, I would certainly state in further confirmation of Justice O'Connor's query about the impact of an affirmance of this decision upon the many landowners who have for generations thought that they had title to the little streams and rivers that run through their property.

And by the way, Lord Hale, who Ms. Sones quoted, also said, among other things, that

"there are little rivers which are private forming no part of the King's Highways. "

Again, I reiterate, that the king's highways... the public highways today, are devoted... are there for the purpose of carrying on the commercial activities of the public, be it navigation, or fishing or whatever.

And when Ms. Sones refers to the fact that there was an occasional fisherman engaging in fishing operations, he was not doing that as a commercial operation; and in any event, our problem is not what some lonely fisherman may do today, it is what was the purpose?

Was there a commercial navigability purpose to these lands in 1817?

Because that is where the federal question begins and ends, and we are concerned only with whether these lands, underwater lands, were commercially navigable in 1817 at the time of Statehood?

And what has happened thereafter is of no consequence in determining that federal question.

Now, with respect to the impact of this: there are untold numbers of landowners in Mississippi whose title to non-navigable, little streams running through their property will be put in jeopardy.

More than that, there are before this court in the form of amicus curiae all twenty-two coastal states.

Upon the Affirmance of the Mississippi court doctrine--

Chief Justice William H. Rehnquist: Your time has expired, Mr. Gressman.

Mr. Gressman: --Yes, they would be--

Chief Justice William H. Rehnquist: The case is submitted.

Mr. Gressman: --The case is submitted, right, Your Honor.

Thank you very much.

Attribution:

The OYEZ Project

Featured:

Alaska Airlines, Inc. v. Brock - Oral Argument

Fri, 09 Jan 2009 14:48:29 +0000

Case:

Alaska Airlines, Inc. v. Brock

Media File:

85-920_19861201-argument.mp3

Related Transcript:

1986_85_920_argument.xml

Transcript:

Argument of William T. Coleman, Jr.

Chief Justice Rehnquist: We will hear arguments next in Alaska Airlines against Brock.

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

Mr. Coleman: Good afternoon, Mr. Chief Justice, and may it please the Court:

The issue here is would Congress have enacted the remaining provisions of the Section 43 Employment... Employee Protection Program in the broad language it did if it had known that the one-house legislative veto provision, exclusively applicable thereto, set forth in the same section, was unconstitutional.

First, the relevant facts.

Having made new entry and additional air service possible by replacing economic regulation with competition, Congress recognized that the Airline Deregulation Act of 1978 would expand airline employment.

The CAB and now the Department of Transportation already have authority to impose labor protective provisions as a condition of government approved private transactions.

Nevertheless, late in the legislative process, Congress added Section 43 to provide a single integrated employee protection program.

The House and Senate had each passed bills providing for government assistance, money paid by the government to airline employees who lost their job because of deregulation.

The House bill, in the traditional form of employee protection, conditioned the exercise of authority under the Deregulation Act, for example merger authority, on certification by the Secretary of Labor of protective arrangements similar to those set forth in Section 5(2)(f) of the Interstate Commerce Act.

Benefits paid by the airline would be reimbursed by the Government.

The Senate bill involved a completely new concept of employee protection.

If an airline went bankrupt or had a 15 percent workforce reduction caused by deregulation, its employees would be entitled to Government financial assistance, and, solely to offset the Government's cost, the right of first hire by other pre-1978 certificated carriers; the same Section authorized the Secretary of Labor to issue regulations to effectuate the existence program and the duty-to-hire program.

All regulations were subject to one-house veto.

In reaching a compromise, the conference committee deferred several important basic policy decisions relating to benefit levels and eligibility for assistance in hiring preference.

Instead, it directed the Secretary of Labor to adopt, within six months of October 24, 1978... and that date appears in the statute, Your Honor... all regulations necessary to provide financial benefits and hiring preferences.

That delegation was subject to a unique set of procedural and time restraints that ensured Congress' active involvement in the program's development.

Congress reserved ultimate regulatory authority through the right of either House to exercise the legislative veto.

Section 43, nor anywhere else in the Deregulation Act, is there a severability clause.

In 1979, the Secretary of Labor proposed regulations to implement both the financial assistance and the hiring preference aspects of the program.

Final regulations were submitted to Congress on January 19th, 1981, but withdrawn 14 days later, which is long before the 60 day legislative period that they were to lay before the Congress.

For several years thereafter, there were no regulations; there was no employment protection program.

Then on June 23rd, 1983, this Court held legislative veto provisions unconstitutional.

Only thereafter were the regulations promulgated.

And they attempt to effectuate only the hiring preference.

Fourteen covered airlines challenged the regulations--

Unknown Speaker: Mr. Coleman, could I interrupt you right there, because it's something I'm not clear about in the statute.

During this four or five year period between the enactment of the statute and the finally... 1983, when they did promulgate regulations, did the statute have any effect at all?

Mr. Coleman: --We don't think it had any effect at all, Your Honor.

But to answer you completely, there is one case in the Southern District of New York where a plaintiff has claimed that the statute does have effect with respect to the right of first hire.

Unknown Speaker: The first hire provision?

Mr. Coleman: It's not spelled out in the statute, and this raises a question that you get from time to time, where there's a statutory provision which doesn't say you have a private cause of action; do you?

And that's on litigation.

But other than that, I know of no instances.

It's the position of the airlines that the statute has no effect.

Certainly it's the position of the airlines that the regulations completely change whatever effect the statute--

Unknown Speaker: Well, I understand that.

I mean, they spell out... they give lists of employees and things like that, too.

Mr. Coleman: --Yes, yes.

Unknown Speaker: But your position is that until the regulations were promulgated, the statute was basically a nullity?

Mr. Coleman: That's our position, Your Honor.

And also, in that connection, I'd like to call your attention in the petition, in the appendix to the petition for cert, which is... which is the record in this case, on page 49, with respect to the regulations, it's stated that the regulations were issued to effectuate the section which deals with the right of first hire.

In other words, that certainly the Administrator thought that he needed these regulations to effectuate the purpose of the statute.

Unknown Speaker: Well, at least to completely effectuate it.

At least it would be arguable.

Mr. Coleman: It says, effectuate it.

Unknown Speaker: It might be arguable that even without the regulations, there were some employee rights that were--

Mr. Coleman: But not clearly these regulations.

It's these regulations that we're trying to upset.

Unknown Speaker: --Right.

Mr. Coleman: And also, since you also have before you the record, I'd like you to look at page 46A, where you see... where the Administrator says, his authority that he's acting under is Section 43(f), and that's the section that has the one-house veto in it.

Unknown Speaker: Mr. Coleman, do you disagree with the argument that the... that what the legislative veto was mainly directed at, what consisted of the main degree of discretion here, was not the issuance of regulations dealing with the right of first hire, but rather, the regulations dealing with the obtaining of Federal assistance, that that's what the Congress was worried that the Secretary was going to do something--

Mr. Coleman: We disagree 100 percent, Your Honor.

When you read every page that the Government cites in this book here, you will find that what is being described is the employee protection program.

There is one program.

And that program consisted of both parts.

Another evidence of that fact, and the Government calls your attention to the Zorinsky amendment, where he said that he wanted to exclude the financial payment part, but he wanted to have the right to hire part.

They don't tell you that when you look at the amendment you will find that with respect to the right to hire part, he still had the veto provision.

And so we say, it goes to both.

Because when you read the statute, when you reread the statute, you will find that it's impossible to work out the program that's in the regulations without having the regulation.

When this was before Judge Gesell, he determined that the legislative veto provision of Section 483 was inextricably bound with the remainder of that Section, and that Congress would not have enacted the remainder of the Section 43 in its absence.

He therefore declared the entire Section 43 unconstitutional.

The Court of Appeals reversed.

The language and structure of Section 43, as it emerged from the conference, House conference, Senate conference, showed that the legislative veto was essential in the unique legislative-executive partnership established in Section 43 to develop a single integrated employment program for protection.

Respondents ignore the veto's importance in the structure of Section 43, relying mainly on the lack of a big floor debate, espousing the virtues of legislative vetoes.

But this Court has said, on many occasions, the statute itself is the most important aspect of Congressional intent.

And as Dean Griswold said in that wonderful casebook he had on tax, don't think great thoughts about the Internal Revenue Code; read the statute.

And so therefore, I would ask the Court to look at the statute.

It appears beginning on page 38A in the appendix.

The heart is Section 43(f), which provides elaborate and detailed constraints on whatever regulatory authority was granted the Secretary, who incidentally, was the head of an agency not otherwise involved in air deregulation or subject to the aviation committee of Congress.

Look at Section 43.

It contains four interrelated provisions.

Unknown Speaker: --Section 43(f).

Mr. Coleman: 43(f), yes, sir, which is on page 42A.

The regulations to be issued are those, quote, necessary for the administration of, and, quote, to carry out Section 43.

All regulations must be promulgated within six months after October 24, 1978.

All proposed regulations must be submitted to the aviation committee for 30 legislative days.

All final regulations must be submitted to Congress for 60 legislative days, during which period either House may disapprove them.

These four interrelated constraints on the Secretary's authority was exclusively applied to Section 43 to ensure active Congressional participation in adopting and EPP program by many of the same committee members who drafted the Act.

It is quite significant in establishing the tight time restraints, Congress reserved to itself a substantial amount of time for this legislative-executive collaboration.

And that, I call your attention to Section 43(f)(4).

It is also significant that of the four interrelated constraints, two were added by the conference committee.

The legislative veto has always been a part of the controversial Senate EPP proposal.

But in reaching the compromise, Congress decided to defer certain basic policy questions dealing with the scope of the program.

It therefore made the veto substantially more effective by strengthening the collaborative process; by retaining ultimate authority over the Secretary's regulations, both Houses of Congress, who each had... incidentally, had different viewpoints with respect to labor protection--

Unknown Speaker: Mr. Coleman, I presume all of this goes to formulating the answer which you think we should come to to the proper question.

Mr. Coleman: --Yes.

Unknown Speaker: Now what is the question we should ask?

Mr. Coleman: The question you should ask is, whether, when you read this statute, would Congress have enacted the statute in the form it did if it did not have the legislative veto?

If you conclude that they would not have, then you at that point, you determine that the Section is unconstitutional.

Unknown Speaker: What if we are in equipoise?

We can't really figure out either way?

Mr. Coleman: Judge... Mr. Justice, that-would be very unfamiliar to almost anybody on this Court to be in equipoise.

You all do come down one way or the other.

But leaving that aside--

Unknown Speaker: Just imagine.

Mr. Coleman: --Pardon?

Unknown Speaker: If we really... you know, we're very honest, and we say, I really can't tell what Congress would have done.

And suppose we say that.

Mr. Coleman: Well, you then should say, the one thing--

Unknown Speaker: Then who wins?

Does it stay or go?

Mr. Coleman: --the one thing that's clear, you should say at that point, how can I let them issue regulations which clearly were subject to be rewritten by the Congress, and let those regulations stand.

Unknown Speaker: So you're saying, unless we can find that they would have adopted it in this form without this provision, we should strike down the whole thing?

Mr. Coleman: You strike down the whole thing.

Unknown Speaker: And the burden is on those who want to retain the provision without the legislative veto to show that that is--

Mr. Coleman: Yes, that one ought not to be able to come in and say, I have authority to do something, but the person who gave me authority also put a restriction on it.

The restriction is bad, but I still have the authority.

And that's, it seems to me, is the issue that you have before you.

Unknown Speaker: --Put another way, perhaps, the question is, would the principal have given the agent that authority knowing that he could not restrict it?

Mr. Coleman: That's right, yes, sir.

Unknown Speaker: Of course, this principal could have restricted it any time after the Chadha decision by simply repealing this Section of the Act, couldn't it?

Mr. Coleman: It could have restricted it... well, but that's a whole new legislative process.

Unknown Speaker: It requires two Houses of Congress instead of one.

Mr. Coleman: Oh, not only that.

Unknown Speaker: And the President has to--

Mr. Coleman: It also requires the action by the President.

And even if he vetoes it, then there has to be a two-House overrule.

And this is completely different here, because it's clear here that what happened... and this is very dramatic; I've asked you to examine the evidence as to what happened as long as the legislative veto was out there.

Unknown Speaker: --No, but my question is directed to the period after the legislative veto was clearly no longer out there.

Did anybody in Congress say, hey, we better repeal this provision, because otherwise somebody might go ahead and issue some regulations?

Mr. Coleman: No, nobody... nobody... nobody said that, because, frankly, we had a legislative situation which has existed, that on the one hand, the unions wanted much more money.

On the other hand, the airlines felt that the program should be limited only to the airline that was the cause of the loss, or at most, only in those instances where the Act caused the unemployment.

When this was before President Carter, and he finally submitted a program which had both parts, it never moved through the Congress, either way, because the unions thought there should be more money, and the airlines thought the coverage of the regulation was too broad.

And so nothing happened until after the election, and one day before the change of administration, final regulations were published.

Fourteen days later they were withdrawn.

Thereafter, the new administration published proposed regulations.

The legislative veto is still in effect; I mean, at least you haven't declared it unconstitutional yet.

The new administration would not send those regulations up to the Hill for the 30-day legislative period.

It was only after the Court declared the veto unconstitutional that the legislation... I mean, the regulations were sent up.

And then, because one who wanted to change the situation either way, no longer had the effective power over the executive to bring about those changes.

Now, that's the reason why you... the majority of your in Chadha said that you can't have that separation of power.

I'm not going to stand here and agree whether you were right or wrong, because that's already been decided.

But once you decide that, I just ask you that if there's been a legislative process, and on the tough issues both sides stood down and said, let's wait for the regulation and we will have this additional activity before they become effective, and then that is destroyed, can you in good conscience say that that's what Congress intended.

Now, this legislative veto is different from those in a lot of other statutes.

This is not a case where you have a broad, big statute, and you have a lot of different provisions for issuing regulations, and then someplace in the statute, there's a veto provision.

In fact, in the Deregulation Act, there are 25 regulatory delegations, but only one is subject to the one-house veto, and that's the one in Section 43, and it applies exclusively to the employee protection program.

In fact the conference committee rejected the only other legislative veto provision from the Senate passed bill at the same time it was strengthening this particular provision.

Now, as I read the respondents' brief, they concede that the veto was an important Congressional constraint on the financial assistance part of the EPP.

But they then search the legislative history in vain to support their argument that the legislative veto was only essential to a check on the financial guidelines.

And that's where they point to Senator... or Zorinsky, and as I indicated, when he made the amendment, he kept the one-house veto.

But I'd like, more to the point, to take you to the language in the structure of Section 43.

There's nothing in there where Congress limits the veto to regulations implementing Section 43(a)(1), which is the financial assistance subsection.

Section 43 expressly applies the elaborate legislative oversight provisions to all regulations issued pursuant to Section 43.

In fact, as I said, the Secretary here claims that any authority he has comes from Section 43(f).

When you look at the structure of Section 43, you realize that the Congress was talking about one program.

If you have any doubt about that, look at Section 22 of the Senate bill, from which Section 43 emerged.

In that bill, both the hiring preference and the financial payments were triggered by the same 15 percent reduction in workforce, or bankruptcy, and in both cases, there was a legislative veto.

Then look at Section 43 itself.

On page 38A, the title, Employee Protection Program.

And look at the definition section.

And then look at the section which is on page 44A, which is (j), the termination.

And it says that "the provisions of this section"... and that's both the financial payments and the duty to hire...

"terminate on th last day the Secretary if required to make. "

the payment.

So it seems to us, Your Honor, that once you say that the legislative veto is bad, that certainly thereafter you cannot put the parties in the place where they would be.

It is no longer possible to have a committee involved in the rewriting of this provision.

And under those circumstances--

Unknown Speaker: Mr. Coleman, can I ask you one other question?

Mr. Coleman: --Yes.

Unknown Speaker: How do you respond to Judge Starr's argument that one thing is fairly clear, and that is, that after the Congress compromised... he didn't use these words... between the union position and the employer position, they at least decided this much, that there should be some form of employee protection.

And if you sustain your position here, there'll be no employee protection, which would really give the airlines even greater relief than if they'd won the legislative battle about how much the benefit should be?

Mr. Coleman: Well, number one, I think when you reread the battle that went on, you realize that most of the certificated airline did not want the deregulation.

So you start with a false premise.

Unknown Speaker: No, but--

Mr. Coleman: This is not something that the airlines wanted.

But taking yours--

Unknown Speaker: --I mean... I mean... I'm just directing my remarks to employee protection.

Mr. Coleman: --Yes.

Unknown Speaker: They didn't want employee protection.

Or at least this much.

Mr. Coleman: Well, what I say to that is, Your Honor, when you reread that legislative history, you will find what the unions really, really wanted was the financial payments by the government.

Unknown Speaker: Which they're not getting.

Mr. Coleman: That they don't get.

Now I really think--

Unknown Speaker: Now they don't even get their second choice.

Mr. Coleman: --Now I really think... I really think it's unfair for the Government to be here saying that even though Section 43(a)(1) says, there should be financial payments, and if you look at the... if you look at the provision that they say is the determination was, that this changed the public should pay for, they're not going to pay for a penny.

But yet, they have passed regulations which are far beyond the statute.

Put if you just say the regulations are bad, I'll take my chances on the statute.

Because they cannot get out of the statute what they got out of the regulation.

Now it just seems to me that under those circumstances, if... until... and as long as that happened, the process worked.

As long as the Government was willing to come up and take care of its financial contribution, the Congressional process was working.

It was only when they split the program... and I think we've demonstrated that you can't split the program; it's supposed to be one program.

I think I'll reserve the rest of my time for rebuttal.

Argument of Louis R. Cohen

Chief Justice Rehnquist: Thank you, Mr. Coleman.

We'll hear now from you, Mr. Cohen.

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

I propose to argue two propositions.

First, the Court of Appeals chose the proper rule for determining whether an otherwise valid part of a statute must be invalidated along with an unconstitutional part.

And second, in this case, the evidence against throwing the employee protection baby out with the legislative veto bathwater was, as the Court of Appeals said, overwhelming.

The Court of Appeals said it was following the rule articulated in Chadha.

The invalid portions of a statute are to be severed, and the balance sustained, unless it is evident that the legislature would not have enacted those provisions which are within its power independently of that which is not.

Unknown Speaker: 0 xxx.

Mr. Cohen: Yes.

Unknown Speaker: That makes a big difference, don't you think?

Mr. Cohen: But what the Court said in Chadha--

Unknown Speaker: I mean, there Congress told us what to do; that basically, it wants us to salvage as much as we can.

Mr. Cohen: --That's correct.

And after stating the test, which the Court had stated in previous cases, the Court said in Chadha, we need not make that... I think the words were... elusive inquiry here, because Congress has told us the answer.

It is correct that in this case the inquiry must be made, as the Court of Appeals made it.

But the test, as stated in Chadha, is... and I believe the parties are in agreement on this... whether it is evident that Congress would not have enacted the provision that is before us, the duty-to-hire provisions--

Unknown Speaker: Well, are you suggesting that the task is the same regardless of whether or not there's a severability clause, Mr. Cohen?

Mr. Cohen: --Yes, I'm suggesting that it is perhaps easier to satisfy the test when there is a severability clause in which Congress has told you what its intent is.

But the question, in each case, is whether, based on an assessment of Congressional intent, you conclude that Congress... that it is evident that Congress would not have enacted the--

Unknown Speaker: You would factor in the existence of a severability clause, then, as simply... as weighing evidence of what Congress wanted?

Mr. Cohen: --As Congress' direct statement of its intention, yes.

Unknown Speaker: Mr. Cohen, do you think there's a presumption of severability in the absence of a severability clause?

Mr. Cohen: Well, I think that when the Court stated the test as being whether it is evident that Congress would not have enacted the otherwise valid portion in the absence of the unconstitutional part, it was certainly suggesting a presumption or suggesting that the burden of proof must be on those who would strike down more of the legislation than Congress... than the Constitution requires.

Unknown Speaker: Mr. Cohen, while you're interrupted, what is the present status of the monthly assistance clause?

Mr. Cohen: First, it is dormant, and will remain dormant unless and until Congress--

Unknown Speaker: Appropriates--

Mr. Cohen: --appropriates funds.

Its status in this case, I think, is this: It was not challenged by petitioners in their complaint.

The District Court, nevertheless, said that the... that all of the remaining provisions of Section 43 would have to be invalidated along with the legislative veto.

The Court of Appeals reversed, saying the financial assistance provisions are not before us; but saying later in the opinion that all of the remaining provisions are severable.

So I think the financial assistance provisions are not... are not before you.

Unknown Speaker: --Do you think it ever will be made undormant, if there is such a word?

Mr. Cohen: I have no reason to believe that it will.

Unknown Speaker: Do you also... well, I'll ask you: Could we come out with one answer about severability with respect to the monthly assistance provision and another answer with respect to the hire provision?

Mr. Cohen: I think there would be no occasion to reach the first of those questions in this case.

But I think that it would theoretically be possible for the Court, were both questions before it, to conclude that the financial assistance provision must be invalidated along with the legislative veto.

And that would not invalidate the duty-to-hire provisions.

Unknown Speaker: Mr. Cohen, I'd like to come back to the difference between statutes that contain a severability clause and those that don't.

I mean, Congress thinks these things mean something, because they have a regular practice of putting them in sometimes, and not putting them in other times, and they think there's a difference.

Now, what do you assert that difference is?

I thought you said at first that there's no difference at all, but then in response to Justice O'Connor, I thought you said there was a difference.

Mr. Cohen: I think that the presence of a severability clause does not change the test; it changes the task of the Court, which is applying the test.

It means that the Court has to look at the structure of the statute, and the legislative history, to determine Congressional intent without the guide that the severability clause may provide.

Unknown Speaker: What guide is the... I don't... you say it, but I don't understand it.

What guide does the severability clause provide?

Mr. Cohen: What the Court said in Chadha was, that the severability clause told the Court that it was Congress' intention that one of the... that the substantive provision in that case should survive not withstanding the demise of the veto.

Unknown Speaker: Well, then, that's a different test, I would say.

And I would say that when there's a severability clause, you're asserting that so long as the things can mechanically work without the legislative veto, Congress is telling us, apply it.

And whether it can mechanically work is quite a different test from whether... whether Congress would have enacted the one without the other.

I mean, I'm very reluctant to come to a decision in this case that's going to, you know, make no difference between this and cases in which there is a severability clause.

Mr. Cohen: I think that you can come to a conclusion in this case based on the evidence derived from the structure and the legislative history of this statute.

I think that even in a case where there is a severability clause, there can be an open question as to whether the effect of the invalidation of one provision is to change the rest of the statute into something other than Congress intended and enacted.

And... but I think that if the effect of invalidation of one provision is to leave an operative balance of the statute, then the existence of a severability clause, as the Court thought it did in Chadha, pretty much ends the inquiry.

Unknown Speaker: Well, may I just pursue that a moment?

In this case, the question isn't whether there shall be any severability.

It's... the question is how much you sever.

Because even Judge Gesell severed 43 from the rest of the statute.

And you're saying we should only sever the veto from the rest of the statute.

Mr. Cohen: Yes.

It seems to me that one of the reasons why there should be... I think there are two reasons why there ought to be a presumption in favor of severability, and in favor of saving what the Constitution does not itself invalidate.

One of those reasons is that courts have no power to invalidate statutes except the command of the Constitution or the State or inferred intent of Congress.

And the best evidence of what Congress wanted is what it wrote.

And the court should not, I suggest, infer a contrary intent unless the evidence supporting the inference is clear.

But second, if a court doesn't demand a convincing showing before it invalidates a statute... before it invalidates more of a statute than the Constitution requires... there's no stopping place.

And some very large horses will be lost over some very small nails.

In this case, for example, the parties agree that the legislative veto must go.

The question is: How much more must go with it?

Petitioners would cut all of Section 43, but that would leave airline deregulation with no employee protection.

And as we and others, particularly the Airlines Pilots Association and the AFL-CIO, demonstrate in the briefs, there is a good deal of evidence that Congress might not have enacted airline deregulation without employee protection.

I think to get a stopping place, one must apply the test as it was formulated in Chadha, and ask, is it evident that Congress would not have enacted a part of the statute that is not in and of itself unconstitutional if it had known--

Unknown Speaker: Mr. Cohen, how does Congress know how we're going to come out on this thing?

I mean, the people in one House don't know what the people in the other House are saying, or will say, if the other House is going to act later.

It seems to me there's going to be a constant game of legislative chicken with some lawmakers putting in provisions that are arguably unconstitutional; some legislators may vote for them, thinking they'll be stricken and the rest will stand; and others may vote for them thinking they'll be stricken and the rest will fall.

It creates chaos.

Wouldn't be better off to adopt a clear... a clear line that the members of Congress, when they vote on provisions of dubious Constitutionality, will know what the result will be if it falls down?

And what you're proposing is not a clear line at all.

Now, you could adopt a line that says if there's a severability clause, the matter will stand, so long as you can mechanically implement it.

When there's no severability clause, the entire provision to which the legislative veto, for example, is attached, will fall.

Mr. Cohen: --I don't think that works.

And I don't think it works for two reasons.

One, obviously, Congress doesn't always know when it is adopting something that will create Constitutional trouble later on.

But second, the question of severability does not and cannot disappear merely because there is a severability clause, as the... because it doesn't tell you the answer to the question which is in fact the question presented in this case, where do you cut?

If you... the debate between the... between the plurality and Justice Brennan on the question of severability in Regan v. Time, Inc., was a debate about whether the effect of a... the excision of some words in a statute changed the meaning of the statute.

I don't think a severability clause would have resolved that issue.

I think the Court was right when it said in the Jackson case that the presence or absence of a severability clause will rarely determine the issue, and the question is, is the Court going to seek to preserve the balance of what Congress enacted whenever it can.

Unknown Speaker: I have some doubt as to the correctness... perhaps the Court did say this in Jackson... that the presence or absence of a severability clause should never... should seldom make any difference.

That's the best expression we have from Congress addressing to the situation where some part of the statute is held unconstitutional.

Mr. Cohen: I think that you have in this case, also from Congress, the adoption of the remaining portion of the statute as an indication of what it wanted done.

And, again, the problem of where do you cut is the hard... is the hard problem here.

The... if... if the doctrine were that in the absence of a severability clause, everything that might be thought to have been part of a package in any Congressman's mind, with the unconstitutional provision might go, I don't know how you stop short of the work of an entire session of Congress.

Unknown Speaker: Well, at least with the legislative veto provision, which... and there are a lot of them out there.

How many are remaining in existing statutes that have to be determined sooner or later?

Mr. Cohen: The only number I know is Justice White's 200.

Unknown Speaker: Yes, but some of those may have... I mean the legislation may have lapsed since then, I don't know.

Mr. Cohen: And this Court, of course, has affirmed the severance of several.

Unknown Speaker: But at least as to the legislative veto provision, you could say that the entire regulation provision to which the veto is attached falls if there is no severability clause, and it doesn't fall, so long as it can mechanically work, if there is one.

That's quick and easy and clear.

And it eliminates a lot of litigation.

Mr. Cohen: First of all, even if that were said in this case, the duty-to-hire program would not, I suggest, fall with the legislative veto.

And let me turn to that.

The Court of Appeals, I think, was correct when it said that there's ample evidence that the employee protection program was deemed by Congress to be an important aspect of the Act, and not a shred of evidence that the legislative veto was deemed by--

The briefs list the evidence that employee protection was an important part of this complex legislative bargain.

Petitioners only response is that there were also expectations that deregulation would lead to increased employment in the industry.

But of course, this was an insurance program, important even if the patient stayed healthy.

And beside that, as the Senate report makes clear, the Senate feared that some airlines might contract while the rest of the industry was growing, and the duty of growing airlines to give a hiring preference to displaced employees of the shrinking ones--

Unknown Speaker: Mr. Cohen, can I interrupt, because I just realized, I'm not sure I know what the issue is here.

Are they contending that Section 43(f) is invalid, or that Section 43 in its entirety is invalid?

Mr. Cohen: --I think they are contending that Section 43(f) and Section 43(d)--

Unknown Speaker: "D"?

Mr. Cohen: --are both invalid.

Unknown Speaker: But the... but using Justice Scalia's test, only Section 43(f) would fall, and Section 43(d) would survive, because there's no legislative veto with regard to 43(d); is that right?

Mr. Cohen: Well, the answer to that is that there are two different parts of 43(d).

Unknown Speaker: Right, but one of them deals with the preferential hiring; one of the two.

Mr. Cohen: Section 43(d)(1) imposes a duty to hire as a direct obligation.

Unknown Speaker: That's right.

Mr. Cohen: That is not subject to any veto or any other contingency.

It confers--

Unknown Speaker: And my question is whether that section... I should have said, not just (d), but (d)(1).

Is that being challenged in this litigation?

I think it is.

Mr. Cohen: --I think it is.

Unknown Speaker: I thought... I thought Mr. Coleman said he'd be willing to take his chances with the statute; that it's only the regulations that give him trouble.

I'm sure he'd like to see (d) go as well, but I think he... he's willing to--

Mr. Cohen: Well, I'm very happy if he's conceded that Section 43(d)(1)--

Unknown Speaker: --Well, that's what I thought he said.

I guess he'll have time to respond later.

Mr. Cohen: --that Section 43(d)(1) is valid, because it imposes a duty to hire--

Unknown Speaker: And it's your view, I take it--

Mr. Cohen: --a well defined on, directly on a well defined class of carriers, and it confers a right of first hire directly on--

Unknown Speaker: --And it's your view that duty existed during the period before the promulgation of the regulations?

Mr. Cohen: --Yes, and that, by the way, to answer something that Mr. Coleman said, is also the Secretary's view of the regulations, say, at page 47A, nothing in these regulations shall preclude the exercise of statutory rights and duties between October 24, 1978, and the effective date of these regulations.

Unknown Speaker: Certainly (d)(1) doesn't appear to depend for its efficacy on the issuance of regulations.

Mr. Cohen: I think it does not.

Now, the regulations we are talking about are, in part, provided for in Section 43(d)(2), a separate subsection, which gives the Secretary of Labor some assignments, but it gives him, I suggest, no assignments that there's any reason to think Congress would not have given him if it had known it could not have a legislative veto.

It just doesn't delegate any responsibility that there's any reason to think Congress wouldn't have been willing to delegate unconditionally.

It directs the Secretary to maintain and publish lists of available jobs; it authorizes the Secretary to require carriers to provide the necessary information; it directs him to make every effort to assist an eligible protected employee in finding other employment; and then finally, subsection (f)(1) says that the Secretary may issue such rules as may be necessary for the administration of the section.

And if we are to apply the test of whether it is evident, or indeed, whether there is any significant likelihood at all that Congress would have been unwilling to give the Secretary of Labor those assignments if it had known it could not have a legislative veto, the answer is that there is not.

Mr. Coleman implies that the statute leaves gaps to be filled in by regulation.

His principal one is that there is some question, he says, whether an employee was meant to be protected if his unemployment is not demonstrably due to deregulation.

He made that argument to Judge Gesell who pointed out that there is nothing in the statute to support it, and rejected it as without merit.

Now, while there's nothing in the Secretary's assignment in connection with the duty to hire that there's any reason to think that any Member of Congress might have wanted to veto, there is an evident reason for the legislative veto, and that is, that the committees did want to have a second look at the levels of assistance that were to be set by the Secretary under the now inoperative financial assistance program.

That was the hot issue, and indeed, the only mention of the legislative veto in the committee reports, and one of the two mentions of it in the entire legislative history, appears in the Senate report where the Senate committee says, the amount of such payments would be determined by regulations promulgated by the Department of Labor.

These regulations will be subject to Congressional review.

Petitioners response to this is that the duty to hire and the financial assistance were supposed to operate in tandem.

But that is true only in the sense that the duty to hire was the primary remedy expected to reduce the financial burden on the Government from the fallback... from the Government's fallback remedy of financial assistance.

The statute itself provided for financial assistance only until the recipient obtains other employment.

There isn't any reason to assume that someone who wanted to veto the financial assistance would have wanted to veto requiring an airline that was otherwise hiring to give first preference, on whatever conditions the airline prescribes, to displaced employees.

And the... there's nothing whatever to support petitioners' suggestion that the continuation of their duty to hire, notwithstanding the dormancy of the financial assistance program, is either unfair to them or contrary to the intent of Congress.

Their argument that the Congress would not have enacted the duty to hire if it could not have a legislative veto is based on what the Court of Appeals called circumstantial evidence.

They point out that this is the only section in the statute that contains a veto.

But the absence of a veto provision in other sections tells us nothing whatever about whether this veto is an important provision or an unimportant provision.

And in this particular case, the presence of the veto is explained by the financial assistance program, which is not before the Court; and the absence of the veto in other sections is explained by the fact that this is primarily a deregulatory statute.

Mr. Coleman says that there are 25 other regulatory provisions.

He has only listed four of them in his brief.

And I think that we adequately demonstrate that each of the four was a minor and technical one.

Petitioners argue that two other legislative oversight features... the six-month provision and the report and wait provision... show the special importance of this legislative veto.

But apart from the fact that these provisions, too, relate primarily to financial assistance... indeed, the six-month requirement for the promulgation of regulations is directly linked to that in the statute... both provisions make it less likely; both the six-month provision and the duty-to-hire provision make it less likely that Congress, if it had been told, you can't have a legislative veto, would have scrapped the duty-to-hire program.

The six-month provision shows that Congress was sufficiently concerned about labor protection to want to be sure regulations were in place promptly.

The report and wait provision gave Congress a valid method of oversight; that is, the Court observed in Chadha, made the veto even less important.

Petitioners suggestion that the legislative veto was part of a deliberate trade at conference is, I have to say, a figment of their imagination.

The statute itself, the conference report, and the postconference debate, contain no evidence that there was any bargaining that related in anyway to the veto.

Certainly there is no suggestion that the House, which had a bill providing more protection and much more discretion, which did not contain a legislative veto, demanded a legislative veto as the price of accepting the Senate bill.

In sum, if, as I think you should, you assume that even in the absence of a severability clause, which the Court told Congress would rarely make a difference, if you assume that even in the absence of a severability clause, the Court's job is to see whether there is evidence in the structure and history of the statute that Congress would not have enacted a particular provision if it had known it could not have another provision, the answer as to both the statutory duty under Section 43(d)(1), and the authorization to write regulations that were incidental that duty, would clearly, I think in this case, have been enacted in any event.

Unknown Speaker: Am I correct that the only regulations that are required to be issued under the Act are the guidelines under (b)(1), the financial assistance guidelines?

Are they the only ones that are required to be issued?

Mr. Cohen: Yes.

Unknown Speaker: So everything else, in implementing that chapter, the Secretary could have done by adjudication instead of... instead of by rule, right?

Mr. Cohen: Well, let me qualify it to say that the Secretary's own assignments, the assignments to prepare and maintain and publish lists of available jobs, and to obtain information from the airlines for that purpose, are assignments that presumably called for him to issue regulations.

Unknown Speaker: Really?

You think that's a regulation, publishing... periodically publishing a comprehensive list of jobs available?

Mr. Cohen: No.

Unknown Speaker: That's not a regulation.

Mr. Cohen: No, no, no.

Publishing, the mechanics for that process, publishing regulations; which is what these regulations do, which say that airlines shall file information about available jobs with the Secretary and so forth.

Unknown Speaker: I'm not sure.

I'm not sure you would need regulations for the Secretary to do anything else under this Act, except the financial assistance portion.

So in requiring the approval of Congress, really the only thing for which the approval of Congress was unquestionably required was the establishment of the guidelines for the monthly assistance payments.

And the rest could conceivably have been done without regulation anyway, and could have been beyond the control of Congress.

Mr. Cohen: Well, I think it's correct that Congress not only... that Congress did not... not only didn't expect to veto any regulations with respect to the duty to hire, but that there's no sign that they had any affirmative expectation that whole provision, which is the only thing before us, would involve the issuance of regulations at all.

Unknown Speaker: There's no requirement there that he issue any regulations.

Whereas there is for the monthly assistance computation.

He's mandated, guidelines are mandated.

Mr. Cohen: That's correct.

And when Congress does to say, regulations shall be sent up to us within six months, it says, the regulations under subsection (b) relating to the financial assistance program, and such other regulations as the Secretary may wish... may wish to promulgate.

And that's what the statute says.

If the Court has no further questions, I would ask it to affirm.

Rebuttal of William T. Coleman, Jr.

Chief Justice Rehnquist: Thank you, Mr. Cohen.

Mr. Coleman, you have four minutes remaining.

Mr. Coleman: Justice Scalia, your question, that's the reason why I called your attention to 46A of the record.

The Secretary says that his authority that he's exercising to issue these regulations is that authority contained in Section 43(f).

He cites no other authority.

Unknown Speaker: This is on page 46A of--

Mr. Coleman: Of the appendix, which is the record in the case.

Unknown Speaker: --Right, right.

Mr. Coleman: He says--

Unknown Speaker: Oh, authority, Section 43(f) of the Airline Deregulation Act.

Mr. Coleman: --That's what he says he's acting under.

Now, our position is that the entire Section 43 is null and void.

I would just urge you to read the legislative history--

Unknown Speaker: Oh, but that's not the point.

I don't doubt that he's acting under 43(f).

Mr. Coleman: --Yes.

Unknown Speaker: What I doubt is that he had to be... he had to act under... he had to issue any rules and regulations under 43(f).

Mr. Coleman: Well--

Unknown Speaker: You see, by reason of... by reason of 43(d)... I'm sorry, (b)(1), he had to proceed by regulation with respect to financial assistance.

But I see nothing in there that required him to proceed by regulation with regard to employee hiring.

Mr. Coleman: --Well, I'd like to disagree with you, Your Honor, because--

Unknown Speaker: I mean, he might do it.

He's authorized to issue regulations.

But--

Mr. Coleman: --if you go on and read that... if you go on and read the rest of the section, that he's also required to issue the other rules and regulations which the Secretary deems necessary to carry out this Section.

Unknown Speaker: --Where are you reading from?

Mr. Coleman: I'm reading the same Section you're reading from, from (f)(2).

It says, he's supposed to issue the guidelines with respect to the money, but also, any other regulations which he deems necessary to carry out this section.

Unknown Speaker: If he wants to.

He has to do it within six months.

Mr. Coleman: That's right.

Unknown Speaker: But there's nothing that says he has to issue any regulations.

If he issues them, they have to be issued within six months.

Mr. Coleman: But the one issue he had to issue was the financial regulation; he's never done it.

Unknown Speaker: Well, that's right.

And that one--

Mr. Coleman: And it seems to me that if you have a statute where the one thing it's clear that he was supposed to do, he hasn't done, I don't think you then say, well, I'm going to save another part of the statute where it's clear that the regulations that he's trying to issue is to enforce the second part of that statute.

Unknown Speaker: --I have no doubt he's proceeding under (f).

But my point is, he didn't have to proceed under (f).

He could have done it without the issuance of regulations.

Mr. Coleman: I mean, if he moved on another... if he cited some other authority, I may not be in Court.

But it seems to me, when the Secretary says, I'm proceeding under this Section, he's got to defend his authority under that Section.

I'm not saying he may not have another section.

And what I'd like to say just in closing--

Unknown Speaker: I'm not sure you understand why I think it important, Mr. Coleman.

I think it important because there is no way, as this statute is set up, for the Congress... for the Secretary to do an end run around the legislative veto as far as financial assistance is concerned.

The only way he can get financial assistance out there is by issuing regulations.

He is mandated to do it by regulation.

He could have done an end run around the legislative veto on the remaining portion, because--

Mr. Coleman: --He could not.

He could not, sir.

Because if he'd done what he was supposed to have done under the statute, he would have had both up there, because he was supposed to have one program.

In conclusion, may I say, as I understand your cases, you really have two sets of cases.

One set says, if Congress does four different things exercising four different powers, and you determine that one of the four is invalid, does that mean that the other three are also invalid?

It seems to me that's the El Paso Railroad Case; that's Carter Coal Company; and all those cases.

A separate and distinct set of cases is where Congress exercises one power and puts a condition on that power, can you say that the condition is invalid, but you leave the executive with the power?

And it seems to--

Chief Justice Rehnquist: Your time has expired, Mr. Coleman.

The case is submitted.

Unknown Speaker: The Honorable Court is now adjourned until tomorrow at 10:00.

Attribution:

The OYEZ Project

Featured:

Bowsher v. Synar - Oral Argument

Fri, 09 Jan 2009 14:48:35 +0000

Case:

Bowsher v. Synar

Media File:

85-1377_19860423-argument.mp3

Related Transcript:

1985_85_1377_argument.xml

Transcript:

ORAL ARGUMENT OF LLOYD N. CUTLER, ESQ. ON BEHALF OF THE APPELLANT COMPTROLLER GENERAL

Chief Justice Burger: The Court will hear arguments first this morning in Bowsher v. Synar and others.

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

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

This case involves the constitutional interplay between two statutes, one passed in 1921 and the other in 1985.

In a larger sense, it involves the validity of the concept of the independent officer of the United States first approved by this Court in Humphrey's Executor, and Congress before and since that time has enacted many laws creating officers of the United States duly appointed by the President and confirmed by the Senate who serve for a fixed term, independent of presidential direction, and are not removable by the President at will.

The 1921 Budget and Accounting Act created the Office of the Comptroller General and assigned to him the same functions previously performed by the Comptroller of the Treasury, an officer of the executive branch.

He was to serve for a fixed term, and he was to be removable only for cause after hearing by the passage of a law to that effect.

The 1985 Balanced Budget and Emergency Deficit Control Act assigned an additional reporting function to the Comptroller General.

The Comptroller General's report, under the '85 act, determines whether Congress has met the specified deficit reduction targets, and if not, what reductions under a statutory formula are required in order to meet that target.

The report then triggers a presidential order which commands those reductions unless Congress responds by enacting some different law that meets the target by a different mix of tax increases or deficit reductions, or modifies or suspends the law in its entirety.

The District Court held that this '85 act function assigned to the Comptroller General was incompatible with the removal power granted to Congress under the 1921 act by the enactment of a removal law because, said the District Court, that removal power, even though never exercised, created a here and now subservience of the Comptroller General to Congress that made it impermissible for him to perform this reporting function under the 1985 act.

If the Court permits, since we have three counsel arguing for the appellants, we have tried to organize our argument so that I will deal with the status of the Comptroller General under the 1921 act and the removal clause--

Chief Justice Burger: Mr. Cutler, if the Comptroller General were removed for any one of the four reasons... I think there are four reasons specified in the statute... is there any review by anyone of that action?

Mr. Cutler: --Oh, it is a law.

I suppose its constitutionality would be reviewable by the removed person or perhaps on challenge by the President if he had been excluded from his constitutional removal power.

Chief Justice Burger: Would it be any different from a removal by way of an impeachment?

Mr. Cutler: I would suppose, Mr. Chief Justice, that a removal by way of impeachment would... I don't know whether it would be judicially reviewable by this Court, for example, as to whether it complied with the statutory standards.

It would be a difficult point, particularly of the President, since the Chief Justice would have presided in the impeachment, but I believe certainly a removal pursuant to this statute by the passage of a law would be subject to a constitutional due process or other challenge by the removed person or by the President on the ground that he has been excluded.

In any event, the power, as you know, has never been exercised in the 65 years since the statute was passed.

Mr. Ross is going to deal with the additional function assigned to the Comptroller General under the '85 act, and Mr. Davidson is going to deal with the additional argument rejected below that the delegation of this '85 act function to any officer of the United States, even in the executive branch, would be void for overbreadth under the delegation doctrine.

In reaching its decision, the District Court did not consider the legislative history of the 1921 act or the validity of this 1921 removal provision within the context of the '21 act, and we submit that that was a fundamental error.

The District Court declined to do that because, it said, courts never choose which of two allegedly incompatible statutes to strike down, that they always act to strike down the statute under which the plaintiff claims that his injury occurred, and in that case, of course, this would be the 1985 statute.

But as we have cited in our briefs, in Glidden v. Zdanok, this Court did precisely the opposite.

The Court there was dealing with an assignment statute authorizing the assignment of the Court of Claims and Customs and Patent Appeals judges to regular, other regular Article 3 courts.

That was the statute that allegedly injured the plaintiffs in those cases, and the Court, instead of striking down that statute, which was arguably incompatible with earlier statutes giving advisory jurisdiction, advisory opinion jurisdiction to those two courts which would interfere with their Article 3 status, decided that Congress had intended to make them Article 3 courts from the beginning, and that if necessary, the objectionable jurisdiction provisions in the earlier statutes would have to fall.

And when the District Court thought it was confronted with a similar problem here, we submit it should have adopted the same reasoning.

Justice Blackmun: You feel that the Glidden case is primary authority for your position here.

Mr. Cutler: We do, Justice Blackmun.

Justice O'Connor: Well, Mr. Cutler, aren't we guided in determining severability if some portion of the statute is found to be unconstitutional by the expressed intent of Congress, which in this case would indicate that Congress had some fallback position which it articulated should be followed?

Mr. Cutler: There is no question that in the 1985 statute Congress had a fallback provision if any part of the so-called reporting function, using the Comptroller General and acting on the reports of OMB and CBO, were found unconstitutional, but one would never reach that issue if, by examining the 1921 act, one had concluded that the removal provision in the 1921 act was itself unconstitutional and a nullity, particularly since the time of Myers v. the United States--

Justice O'Connor: Well, but aren't we reviewing the 1985 act?

Mr. Cutler: --You are reviewing the 1985 act on the ground that a presumptively constitutional provision in the 1921 act is incompatible with the delegation of functions under the '85 act.

If that presumptively constitutional provision which has been used as a sword to strike down the 1985 act is found to be unconstitutional on its face, or found on the other hand not to create a here and now subservience to Congress with respect to the many administrative or executive functions being performed by the Comptroller General under the 1921 act, then you would have to conclude that the '21 provision is a nullity and that it should not interfere in any way with the validity of the delegation functions under the '85 act.

Justice Rehnquist: Well, what if we did follow your suggestion and decide that the removal provision of the 1921 act were invalid under the Constitution, how would that leave the position of the Office of Comptroller General as to removability?

Mr. Cutler: It would leave it, I would submit, Justice Rehnquist, it would leave the 1921 statute silent on removability.

Justice Rehnquist: And what would be the result?

Mr. Cutler: And then under this Court's decision in Wiener, if you concluded that the '21 statute had created the Comptroller General as an independent officer of the United States serving for a fixed term of years, you would imply that the President had no right to remove him at will but might have a right to remove him for cause, something this Court has implied in the absence of statutory language but not held.

Justice Rehnquist: If you concluded that the Comptroller General were more like Myers than Wiener, then you would say that the President could remove him at will.

Mr. Cutler: If you concluded that he were a purely executive officer, that would be the case, yes.

Unidentified Justice: It seems to me that you really risk interfering with Congress' intent far more when you tamper with the 1921 act than if you adjudicate the 1985 act.

Mr. Cutler: I would submit not, Justice Rehnquist because Congress clearly intended in the 1985... the 1921 act to establish the Comptroller General as an independent officer of the United States because he was to receive these administrative functions, like settling the government's account, bringing suits to collect the government's claims, and setting the accounting standards for the government.

The whole argument about the 1921 act, President Wilson's veto, the arguments that were made to the Court in Myers about the '21 act were all premised on the assumption that the Comptroller was an independent officer of the United States.

During the debate on an attempt to override President Wilson's veto, which asserted the ground, among others, that he had the sole power to remove an officer of the United States when he was given the power to appoint, and that Congress could not take part in the process, the whole argument which was adopted by the Court in Myers is based on the premise that he is an independent officer of the United States and not an officer of Congress as the Solicitor General is urging before you today, in contrast to what the Solicitor General in the Myers case urged.

He said the Comptroller General was an executive officer.

But when the veto provision was up to be overridden, the question... and the override failed... the question was asked on the floor of the House, what if we override, and then President Wilson's veto, or his position is upheld by the courts, would the entire act fall, and the answer was that that was a remote possibility and that if any part of the act fell, to that extent, the act would be unconstitutional.

So we would read that as indicating that Congress would have preferred to have an independent Comptroller General serving for 15 years even if the President had a right of removal, and as we know later from Wiener, his right of removal in those circumstances would be limited to removal only for cause.

Justice White: Well, Mr. Cutler, the United States argues that the removal power by Congress is beside the point, that this officer may not perform these functions assigned to him unless the President has unrestricted power to remove.

Mr. Cutler: That is correct.

Justice White: Now, did the District Court reject that argument?

Mr. Cutler: The District Court never reached that argument.

The District Court assumed that he was an officer of the United States and that the functions were executive functions--

Justice White: Well, do you think that issue is open here?

Would that change--

Mr. Cutler: --I would think--

Justice White: --Would it change the reach of the judgment?

Mr. Cutler: --I think it would, Justice White.

I think the Solicitor General is arguing that should you conclude that a power to remove for cause does not create here and now subservience to the removing authority, which is in effect what was held in Humphrey, but the President had the power to remove for cause, and you still held that the Federal Trade Commission was independent of the President, then the Solicitor General, I take it, would fall back on the argument that these particular functions are within the heart, the core of the executive power.

Unidentified Justice: Purely executive, and so that they may not be performed by this officer unless the President has--

Mr. Cutler: Yes.

Unidentified Justice: --power to remove at will.

Mr. Cutler: On that argument, they could be performed only by a purely executive officer.

Unidentified Justice: And that... is that a broader... if we affirmed on that ground, would that be a broader relief?

Mr. Cutler: On that ground, yes, we think you would then take over the side with you the Federal Reserve Board which itself makes broad, predictive findings of fact and sets policy, the Federal Communications Commission which you have held determines the course of future public policy when it is issuing licenses and deregulating common carriers, and many other commissions.

Unidentified Justice: But that's not broader relief on this particular judgment.

That's just a more sweeping doctrine.

Mr. Cutler: It's a more sweeping doctrine, but should you adopt that doctrine, it would have very serious implications for all of those agencies.

Justice White: Well, it would foreclose, it would foreclose or make beside the point agreeing with you about the validity or invalidity of the 1921 act.

Mr. Cutler: I would... yes, Justice White, if the Solicitor General is correct in that contention, then all the independent agencies except those which are limited to deciding particularized cases based on past facts, what he calls a quasi-judicial function, would be over the side, particularly if you adopt his theory that it is not the removal power in those statutes which would have to be invalidated but the function that is to be performed.

Justice Powell: Mr. Cutler, are there other officers of the United States removable by the Congress?

Mr. Cutler: This is the only officer of the United States who by statute, Justice Powell, is removable by the Congress.

Justice Powell: Yes, by statute, for cause.

Mr. Cutler: That is so, for cause, that is right, other than impeachment.

Justice Powell: Mr. Cutler, what about the Federal Reserve Board members?

Mr. Cutler: The Federal Reserve Board members are removable for cause, under their statute, a term that is not defined.

We have assembled in an appendix to our reply brief the removal provisions and the statutory characterization of the functions of every important independent agency.

Justice Stevens: Mr. Cutler, do you take the position that the removal power in the '21 act is unconstitutional?

Mr. Cutler: We argue that it is not unconstitutional, Justice Stevens, because they never exercise power to remove for cause, which is so difficult to apply and has never happened.

Even the President has never removed an independent officer for cause in a hundred years.

We argue it doesn't create a here and now subservience on the authority--

Justice Stevens: Well, no, I understand that, but it's a different argument.

Mr. Cutler: --Right.

Justice Stevens: But I'm just asking independently, would you say the '21 act is constitutional or unconstitutional?

Mr. Cutler: If you asked me, I would have great difficulty defending the portion of the '21 act which gives Congress a role in the actual removal process because that seems to fly in the face of the ruling of Myers which was not affected by Humphrey's Executor that Congress cannot participate in the actual process of removal although it may lay down the standards for removal.

If that happened, I would say, as I did in response to the other question, that removal provision is a nullity and has been since the beginning.

It is perhaps an open question for this Court whether Humphrey's limitation of Myers to independent officers reaches the portion of Myers that relates to participation of the Congress in the removal process, but should you conclude Congress cannot participate in the removal process, that provision is a nullity.

It is as if it never existed.

And as to severance, Justice O'Connor, if I may return to that for just a moment, in the Myers case itself, the Court was considering a statute that authorized the President to appoint and remove postmasters of various classes by and with the advice and consent of the Senate.

It also provided for the salaries of postmasters and assigned them various functions.

The Court in Myers struck down the removal provision.

It didn't stop the President from appointing postmasters, it didn't stop postmasters from delivering mail, and there was no so-called severance clause in that statute.

Unidentified Justice: I take it you are then somewhat at odds with your colleagues with respect to the validity of the 1921 provision?

Mr. Cutler: We would defend its validity perhaps with less enthusiasm than our colleagues, but I think we all come to the same place.

We all think that the removal provision can be upheld because it does not create a here and now subservience.

But we also think if it does create such a subservience or if Congress per se cannot participate in the removal process, this removal provision has been a nullity since 1921, and it should not affect your consideration of the 1985 act.

Chief Justice Burger: Are you suggesting that the '21 provision may be just partly or slightly unconstitutional?

Mr. Cutler: I am suggesting, Chief Justice Burger, that the removal provision either creates no subservience, in which case it can have no effect on the '85 act except on the Solicitor General's extreme theory, or that it is unconstitutional and has been a nullity since 1921.

Chief Justice Burger: Mr. Ross?

ORAL ARGUMENT OF STEVEN R. ROSS, ESQ. ON BEHALF OF APPELLANTS O'NEILL, ET AL.

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

I appear here this morning on behalf of the Speaker and Bipartisan Leadership Group of the United States House of Representatives.

My argument will proceed in the following fashion: First I will try to describe the functions given to the Comptroller General under the 1985 act.

Secondly, I will describe the history and the necessity for his choice to perform those functions.

And then finally, I will turn to the question of the constitutional appropriateness of that choice.

The 1985 act, Emergency Deficit Control Act, proceeds from a simple proposition.

That proposition is to set statutory targets which in a declining basis... which, when met will result in a balanced budget by 1991.

To meet these deficit target figures a simple process is established.

That process calls for certain calculations.

Those calculations start with economic projections and then, using those economic projections, a forecast of the projected deficit, and then using that projected deficit, comparing it to the statutory target figure, a determination of the shortfall, and then applying the statutory formula, arriving at how to meet that shortfall from taking money from each account.

In making these calculations, the Comptroller General is performing functions similar to the functions that he has always performed.

He makes accounting determinations with respect to the federal budget.

It is, in essence, a pre-audit, telling federal paymasters and disbursing officers how much money they will have to spend.

The District Court accurately described these calculations as the application of law to present and future facts.

Equally accurate, but more colorful, was Judge Scalia's description in oral argument that what this job was was something for a man with a green eyeshade, that it was an accountant's job, not power.

The District Court correctly concluded that the Comptroller General is not responsible for a single policy judgment under the act.

Next let me turn to the necessity for having the Comptroller as the impartial budget scorekeeper, and why he was chosen.

When the proposal first originated in the Senate, these calculations which were always part of the proposal were to be performed jointly by the President's office, OMB, and by the Congressional Budget Office.

When that proposal reached the House, it was not surprising that the House chose not to entrust these functions to OMB whose director, of course, shares office space with the President.

Instead, the House chose to give these functions to the nonpartisan CBO, or Congressional Budget Office.

Since the director of the Congressional Budget Office is appointed not by the President but by the Congress, there were those who raised problems with this proposal.

The proposal was then made on the floor of the House by leaders of both parties, Representative Gephardt, a member of the Democratic leadership, and Representative Cheney, a member of the Republican leadership, that in order to ensure that these calculations are walled off from any possible manipulation, that they be given to the independent, long-tenured Comptroller General.

As the proposal bounced back and forth between the Senate and the eventual conference, this proposal was eventually enacted, and these functions were given to the Comptroller General.

Although the bill had many detractors and many concerns were raised about it, at no time did these detractors raise any concerns over the role of the Comptroller General, nor did the President raise any constitutional concerns over the role of the Comptroller General.

The choice of the Comptroller was consistent with two recent judicial decisions in which district courts had determined in the face of the challenge by the executive that the Comptroller could be given important administrative tasks because he was an independent officer.

The selection was also a recognition of the historic role of the Comptroller, and--

Justice O'Connor: Mr. Ross, wouldn't you concede that the historic role of the Comptroller General is really that of an employee of the legislative branch, in effect?

Hasn't he been considered an arm of the legislative Branch rather than the executive branch, historically?

Mr. Ross: --He has been called by those in Congress and those in the judiciary many things over the years.

He was... and it is not the nature... it's the nature of the function rather than the label that is given to him that should apply.

His function was historically first performed in the United States by a Comptroller within the Treasury Department.

When James Madison urged the first Congress to create such an office, he specifically alluded to the importance that such an office had a unique, independent status, and in fact, urged that the tenure be given would be one which would make him accountable to the public generally, and so that while over the years the Comptroller has, for example, been funded in certain years out of the legislative branch appropriations and in other years out of executive branch appropriations, I don't believe that is the key.

The function of the Comptroller, which is checking the expenditures from the public purse, has always been considered one that is necessary to be performed by an independent officer.

Unidentified Justice: The Comptroller gives opinions, though, on constitutionality of things, doesn't he?

Mr. Ross: To the Congress?

Unidentified Justice: Yes.

Mr. Ross: The Comptroller, as many people, provides Congress with information.

It is well within the purview of Congress' power to require opinions as to constitutionality or as to investigations from many officers throughout the government.

Clearly, if the Congress wanted to, it could require that Commissioners of the FTC come up and give opinions.

Unidentified Justice: Yes, but based on my three years' experience in the Justice Department, my feeling was, you know, that if the executive branch wanted a favorable opinion, you went to the Attorney General; if Congress wanted a favorable opinion, you went to the Comptroller General.

Do you think that is unreasonable?

Mr. Ross: I was going to answer that the Congress calls the Comptroller so often because they respect his competency.

Unidentified Justice: May I ask, in that connection, if his task is to review the expenditure of public funds, I take it he will perform that task upon request by either a congressional committee or an individual Congressman or Senator, is that correct?

Mr. Ross: He will perform various investigative functions upon request of congressional committees or individual members.

Unidentified Justice: Will he do the same thing upon the request of the President?

Mr. Ross: Yes, he does.

He performs various functions for the executive branch.

Unidentified Justice: The same type of investigative checking on disbursements?

Mr. Ross: He would not issue the same type of report, but he does do work for the... for executive agencies.

Unidentified Justice: What percentage of his work assignments do you suppose eminate from the legislature and what from the executive?

Mr. Ross: I think the figures that I last saw indicate that he does a great deal of his work for the legislative branch, over 50 percent, but I don't think it is--

Unidentified Justice: Is it over 90 percent, would you say?

Mr. Ross: --I don't believe so.

Justice O'Connor: What work does he do for the executive branch specifically?

Mr. Ross: He performs certain audit functions at the request of executive agencies who want to rely on his expertise.

My third point is the constitutional appropriateness of the selection of a Comptroller General.

As our brief and as counsel for the Comptroller have pointed out, a long line of cases in this Court uphold the nature of independent agencies performing administrative tasks.

We learn from Humphrey's Executor, Wiener and Buckley that these tasks can be given to an independent officer so long as that officer is appointed by the President, as the Comptroller General is.

In challenging the independence of the Comptroller, the executive fails to cite specific constitutional provisions which the 1985 act or the 1921 act violate.

That is because there are none.

Justice O'Connor: Now, Mr. Ross, you take the position that none of the functions assigned to the Comptroller General in the 1985 act are executive functions in nature?

Mr. Ross: We take the position that none of the functions given to the Comptroller in the 1985 act are purely executive as that term has been used by this Court, in, example, in Myers or as that term was understood in the first Congress in respect to--

Justice O'Connor: You wouldn't concede that there is any executive power component involved in the 1985 act powers given to the Comptroller General?

Mr. Ross: --Well, clearly, the economic projections are a function which are performed by all three branches on a daily basis.

It is the finding of future--

Justice O'Connor: But the bottom line, of course, is picking a figure or figures that will be binding on all agencies of the federal government for purposes of sequestration, for example.

Mr. Ross: --Well, of course, the figure is determined by the statutory formula.

The fact that the Comptroller's findings will be binding is consistent with the way this Court described the role of the Comptroller General in Skinner & Eddy in 1927 when Justice Brandeis observed that the findings of the Comptroller General were binding on the executive branch It is not a new function for the Comptroller to do.

Instead of relying on specific textual provisions, the Solicitor's attack on the statute calls into question an area which Justice Stevens has recently aptly described as one of those vast open spaces in the text of the Constitution which was left by the framers to be filled in by future generations of lawmakers.

In light of this constitutional silence, this Court should be especially wary of overturning an important statute arrived at by important compromise between the political branches.

That is particularly true since the President is not without weapons in fighting for these open spaces, namely, his participation in the legislative process and his well-advertised veto pen.

The Solicitor also raises a number of specific concerns with regard to the Solicitor General's choice.

He says that these--

Unidentified Justice: You mean the Comptroller General, sir?

Mr. Ross: --Excuse me.

Yes.

With regard to the Comptroller General's performance of these functions.

He says that these functions are purely executive, but as I have indicated, these functions, predicting present and future facts and making economic calculations and mathematical determinations, are the type of functions which have traditionally been given to independent agencies.

The Solicitor tries to draw support--

Unidentified Justice: Isn't there some tension between that suggestion and your earlier suggestion that he's just a guy with a green eyeshade?

Mr. Ross: --The predictive nature of his task?

Unidentified Justice: Yes.

It seems to me you ought to... you have to choose between those two versions of what he is doing.

Mr. Ross: Well, I guess it would depend on whether... and the description was Judge Scalia's... whether Judge Scalia viewed accountants as doing any predictive factfinding.

Determining what the economy will look like in three months, six months, nine months or a year is still essentially a finding of fact.

It is not a finding of fact which is reliable as finding present day facts, but it is still a finding of fact.

As I said, these--

Unidentified Justice: How do you compare the Comptroller General's function under the 1985 act with the President's function in preparing the budget?

Mr. Ross: --The President seeks to articulate his choices for national policy by making political, practical and policy determinations as to how much of the federal purse should be spent in various areas and where that money should be derived from.

The Comptroller performs no function even vaguely similar to that.

What the Comptroller does is take that budget as it is proposed by the President and enacted by the Congress and then applies the statutory formula to reduce expenditures in the event that the Congress has not met the target.

Unidentified Justice: Well, isn't that something like correcting the papers of both?

Mr. Ross: No, it does not alter in a single area any policy judgment.

I think the District Court correctly concluded that the Comptroller is not given a single policy judgment, and that is the major difference.

The purely executive function of proposing the budget or proposing legislation involves policy choices.

The Comptroller's function and the administrative task is simply the application of the statutory formula to come up with the bottom line numbers.

Unidentified Justice: Well, that is your bottom... the bottom line in your argument, that he may perform these functions constitutionally?

Mr. Ross: Right, that he may perform these functions constitutionally and that the nature of his tenure, being appointed by the President in strict accordance with this Court's decision in Buckley, and the fact that the removal mechanism is for removal by enactment of a statute using the proper statutory enactment process required by this Court's decision in Chadha do not deprive him of the independent status.

It does not give the Comptroller either de facto or de jure subservience to the Congress or to the President.

In fact, he enjoys a degree of independence which is unique among officers of the United States, but is exactly what both the first Congress had in mind and is exactly what the legislators in 1921 had in mind in creating this--

Unidentified Justice: So you defend the provision in the 1921 act.

Mr. Ross: --Yes, I do.

I think it is--

Unidentified Justice: And you defend assigning these particular functions to him in the '85 act.

Mr. Ross: --Right.

I believe that it is... Congress and the President can choose under the doctrines of the Constitution and this Court to give these types of functions to independent officers.

We also believe that the Comptroller General is an independent officer by virtue of both his appointment and the protected nature of his tenure.

Justice O'Connor: Would you say that these functions could be given to an executive branch officer, Mr. Ross, under a scheme like this with Congress removal power?

Mr. Ross: I'm not sure I follow the question.

Could the Congress--

Justice O'Connor: Could these... you say that the Comptroller General is an independent officer, so it's all right to give him the power that has been given.

Could Congress give this power to a purely executive branch officer having Congress with the removal power that it has retained for itself with this officer?

Mr. Ross: --Okay, let me answer that in two ways.

I don't believe that the Congress could enact a statutory removal mechanism that provides for removal by public law for a purely executive officer.

So that is the second part of your question.

As to the first part, Congress and the President in the legislative process could have chosen to give this function to the Secretary of the Treasury.

I think that would have been a political impossibility.

Justice O'Connor: But you think that somehow the Constitution provides for the creation of these independent officers.

Mr. Ross: It's more that the Constitution doesn't prevent it, and that where the Constitution does not specifically prevent the political branches from utilizing a particular mechanism, this Court owes deference to the choices of those political branches.

Justice O'Connor: And how do you fit that doctrine into what we think of as the separation of powers concept that the framers of the Constitution had in mind?

Mr. Ross: Well, personally I don't believe that each and every function of the government or each and every officer of the government need be neatly pigeonholed into a label of either being executive, judicial or legislative; that I would agree with the description that James Madison gave in Federalist No. 37 that there are times that these functions do not permit such easy labeling.

And so I think that because the Constitution does not require that the... that there be an officer labeled as either executive, judicial or legislative, that as long as those requirements which are contained within the Constitution are met, that separation of powers is properly protected.

Here, the protection which the Court has clearly defined as recently as the Buckley case, is that the power of appointment which is specifically described in the text of the Constitution, could not be given to the legislative branch, and the legislative branch has not seen fit to try to take that power in this act.

Justice O'Connor: Well, I guess the legislative branch has in fact restricted the power of appointment of Comptroller General to a degree, has it not, by limiting the appointment to people suggested?

Mr. Ross: The legislative history of the appointment provision clearly suggests that the Congress intended and expected that the President would retain his right to name whoever he so chose, and the President in naming Mr. Bowsher as Comptroller General made his own choice.

Unidentified Justice: But he had to choose from just three candidates, didn't he?

Mr. Ross: The legislative history indicates--

Unidentified Justice: But the statute provides just three candidates, doesn't it?

Mr. Ross: --It provides that there be suggestions given to the President by the legislative branch.

Unidentified Justice: And he must pick one of the three suggested.

Am I wrong on that?

Maybe I read it wrong.

Mr. Ross: That's what the statute provides.

Unidentified Justice: Oh, I see.

So I am not wrong.

But let me just ask you one question.

I know the red light is on, but you said that they could constitutionally have given this power to the Secretary of the Treasury, but it would have been, as I understand what you said, a political impossibility, which seems to me again inconsistent with the notion that this is just a factfinding function.

Why would it be a political impossibility?

Mr. Ross: There are differences between constitutional realities and political realities.

Unidentified Justice: Right.

Mr. Ross: The fact that it is a factfinding function is enough to justify constitutionally that it be given to an independent officer.

The fact that it was a factfinding function would not have been enough politically to have the Congress give it to someone who shares office space with the President.

Unidentified Justice: Because there's some area of discretion in finding facts, I guess that's what you are saying.

Mr. Ross: Whether it is discretion or not, it need not be discretion for there to be a lack of trust, and the political reality of this bill was that when it came to the House, it was necessary for the House to formulate an officer that all within the House could trust his nonpartisanship.

That officer was clearly the Comptroller General.

Thank you.

Chief Justice Burger: Mr. Davidson?

ORAL ARGUMENT OF MICHAEL DAVIDSON, ESQ. ON BEHALF OF APPELLANT UNITED STATES SENATE

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

Before turning to the delegation argument, if I may pick up on several points which have been discussed, in further response to Justice Powell's question whether there is any other agency of the United States for which there is a provision for congressional removal, there is one.

There has been since 1933 in the Tennessee Valley Authority Act a provision that the Congress could, by concurrent resolution, not even involving the President of the United States, remove members of the TVA board, and yet no one has thought because of that vestigial provisions, as dormant as the provision in the 1921 Budget and Accounting Act, that the Tennessee Valley Authority is a committee of the Congress.

It has functioned in a clearly executive capacity, redeveloped an entire region of the United States, notwithstanding a provision which purports to give to the Congress the power to remove even without the participation of the President.

Unidentified Justice: But how was he appointed in the first place?

Mr. Davidson: By the President with the advice and consent of the Senate, as is the Comptroller General.

And in response to the question what does the Comptroller General do for the executive branch, I would add that in each of our libraries there are 60 or more volumes of Comptroller General decisions, decisions which are rendered principally, overwhelmingly at the request of the executive branch, Disbursing and other fiscal offices, asking for the Comptroller General's ruling on proposed expenditures.

The Comptroller General is able to undertake that function because in the 1981 Act the Congress made the critical decision that he must be an officer of the United States, appointed by the President under the appointments clause.

Unidentified Justice: That isn't entirely a courtesy, though, on the part of the Comptroller General, because the reason the executive branch authorities seek the Comptroller General's ruling is that they run the risk of being surcharged, don't they?

Mr. Davidson: And the reason that they run the risk of being surcharged is that the Comptroller General inherited under the statute the power of the control of the Treasury, to issue rulings which are binding on the executive branch.

When the Congress considered in 1921 how he should be appointed, it was deemed to be indispensable that he be appointed by the President because of that very kind of power.

In 1980 when the Congress provided for the recommendation of names to the President on the appointment of the Comptroller General, the statute was deliberated over several Congresses.

The point made by the Department of Justice that, in order for the Comptroller General to continue to exercise his executive functions, the President must still retain the power, and complete power, to choose any Comptroller General for nomination to the Congress at his discretion.

The statute provides the word "recommend" several times.

The legislative history is absolutely explicit that the President may ask either for names... that's in the statute... or to nominate anyone not on the list whom the President deems should be the recipient of his nomination.

The power of the President to nominate the Comptroller General, to appoint the person who he deems to be the best suited for that position, subject to the advice and consent of the Senate, has not been infringed upon by the 1980 enactment.

If I could turn to the delegation issue, the plaintiffs, Representative Synar and the Treasury Employees Union, ask this Court to affirm the judgment below on the alternative ground that the administrative powers under this Act may not be delegated to any officer, no matter what his or her constitutional qualifications may be.

The district court rejected that contention, holding that the Congress has made the policy judgments which constitute the essence of the legislative function.

Because the Act's administrative mechanism is a standby procedure which may never be utilized after the present fiscal year, in large part plaintiffs' contention is a theoretical argument against the possible implementation of a statute relating to future facts.

But as anticipated, the procedure is being utilized this year to effect a small reduction in this year's estimated $220 billion deficit.

Yet plaintiffs point to no determination of the Comptroller for this fiscal year which is even colorably questionable under the delegation argument, but look ahead, as I will now with my argument, to the fiscal years which will follow.

Unidentified Justice: If the Solicitor General... or, not the Solicitor General, but if the delegation argument were accepted and we didn't agree with you, would the judgment below be expanded or would that give the plaintiffs additional relief?

Mr. Davidson: It would effect the result in this way.

The relief would be the same.

Fallback would be required.

Unidentified Justice: Right, right.

Mr. Davidson: This is an appropriate use of the fallback mechanism.

If the Congress can't delegate this authority to any official, no matter what his constitutional qualifications may be, then the only way to provide--

Unidentified Justice: So the judgment would we really the same?

Mr. Davidson: --The judgment would be the same.

Again, the consequences of the judgment would be vastly different because it would affect the very significant law of delegation.

Unidentified Justice: Yes.

Mr. Davidson: And it would, of course, render it insignificant if the Congress attempted to correct the statute by providing for the delegation of this authority to any other officer.

Congress would be told that it cannot provide for an administrative mechanism, even on a standby basis.

Looking ahead, then, with the plaintiffs to future fiscal years, it is important to note both what the Comptroller General does and when he does it.

The annual budget process begins in January or February, when the President submits his message to the Congress, and continues until October 1st, when it is hoped that the Congress has completed action on the budget for the following year.

The Comptroller General's formal administrative responsibilities under the Act occur in the latter part of this process, on the eve of its home stretch in September, when the Comptroller reports to the President on August 25th about the extent to which the budget which has been enacted to date or, utilizing various assumptions in the statute which would then apply if it has not been enacted, calculates the amount by which the deficit would exceed the amount prescribed in the statute.

The terms of the Act establish that the Congress has fulfilled the essence of the legislative function by establishing policy and prescribing the means of attaining it.

First the law, and not the Comptroller General, determines what the maximum permissible deficit is.

The Comptroller General is simply given no authority to make economic judgments or his own behalf as to what the desirable level of deficit financing should be.

And the law, not the Comptroller General, established the legal rules for the assumptions about what should go into or be excluded from the base of revenues and expenditures.

The law, not the Comptroller General, establishes that any required reductions should be spread across the budget.

It mandates equal sacrifices on the defense and non-defense sides of the budget.

It mandates designated exceptions and limitations.

And then it mandates uniform reduction of all other accounts.

After examining the Act in great detail, the district court concluded that it was not true, as the plaintiffs allege, that the Congress has declined to make the hard political judgments.

It is true that the Act delegates to the Comptroller an important fact finding function.

But those facts, the district court correctly concluded, are no more difficult to ascertain than the facts which are calculated in determining the discount rate, functions which other agencies wielding far more economic power have undertaken without question for years.

In this Court, in addition to renewing their specific arguments which the district court had rejected, the plaintiffs make the further argument that the Act should fail because it was motivated in their view by the desire of Congress to avoid political responsibility.

This new contention founders on the principle that the Court will not inquire into the praiseworthiness of the motives of the Congress.

But moreover, objectively, as the Act is structured and as it in intended, it is designed to promote, and not to avoid, political responsibility.

If in any of the next five years the Comptroller reports to the President and the Congress, on the basis of the law and facts in August of that year, that there will be an excess deficit, then the President is to issue a deficit reduction order.

But the effectiveness of that order is delayed from September 1st to October 1st, for perhaps the 30 most critical days of the entire budget calendar.

What that report does is it informs the Congress of the degree to which expenditures must be reduced or revenues increased to provide for deficit reduction in another manner.

And literally every appropriation, every revenue decision of the Congress in that month, is done with the full knowledge of the legal consequences of not producing deficit reduction in another way.

And then the Act provides that the President shall issue a further order in the month of October, following a subsequent report of the Comptroller.

That report of the Comptroller will identify for the President, for the Congress, and for the public the degree to which the Congress has either attained the objectives of the Act in another way or has not attained those objectives.

Furthermore, political accountability is ensured by the very nature of the spreading of the deficit reduction across the budget.

This is not an Act that singles out individual groups for special treatment.

It's an Act that requires that reduction be across the budget and affecting a wide variety of groups.

The parties to this lawsuit, whether they be members of Congress, the executive branch, the amici representing very articulate and powerful interests, are all participants in that process.

So what we have here is an opportunity through the political process to decide whether the Congress should in some other way achieve objectives which the Congress and the President have legislated into law.

If I could pick up a theme on the fallback, this administrative mechanism is a standby mechanism and, as I indicated, it may never be utilized again after this first year.

But it is a fundamental part of the statute, because it was perceived by the sponsors of the Act and endorsed by the Congress that a mechanism, reliable and predictable in nature, was necessary to discipline the budget process.

If this Court is to strike the administrative mechanism, then it removes from the statute what was perceived to be the statute's unique contribution to deficit reduction.

Now, there may be some circumstances in which the fallback is the perfectly appropriate alternative.

If, for example, as I indicated, this Court would decide that this power may not be delegated to an administrative officer, then annual deficit reductions through legislation is the only alternative.

And if this Court were to conclude, agreeing with the Solicitor General, that this function could only be performed by an officer who serves at the President's pleasure, then it is difficult to say that the Congress would have passed this statute.

And the reason why it is difficult to say that is that it is indispensable to the statute that there be a neutral mechanism, not committed to the policy objectives of the Congress or the President, to play the role of scorekeeper.

Unidentified Justice: Would you say that that objection was founded on the same objection to the line item vetoes?

There's some resemblance there?

Mr. Davidson: It is a very similar type of concern.

Policy decisions are made by the Congress in enacting appropriations.

This Act requires that, if there is to be deficit reduction under the Act, no program or project will be singled out with any different treatment except as provided in the statute through an exemption.

Unidentified Justice: Well, what if we took the suggestion that Mr. Cutler suggests, that if the problem with the statute is the removal Power by Congress, which the district court emphasized, do you think that Congress would have passed this statute if it didn't have removal power?

Mr. Davidson: I think the evidence is that it probably would have.

The reason for that is that in enacting this statute the Congress was only searching for an officer who would be neutral and impartial in those judgments.

There is not one shred of evidence in the legislative history that the Congress was seeking an officer over whom it had any control.

If the removal provision was stricken and if either the result was that the Comptroller General was removable only by impeachment, as the only other alternative under the 1921 Act, or that there is an implied reservation of presidential authority, constitutional presidential authority to remove for cause, the Comptroller General would remain an independent officer.

The reasons for removal do not include disagreement with his policies, but only malfeasance in office or gross inefficiency in office, the failure of the office to operate, but not the determinations of the office.

Unidentified Justice: Don't you run the risk, if the removal provision of the 1921 Act is struck down, that you would leave the office simply removable by the President at will?

Mr. Davidson: We agree with the Comptroller General that under this Court's decision in Weiner the Court would look to the functions of the Comptroller General in determining whether it is the kind of function which requires presidential removal at will.

And we think that it would find in those circumstances, starting from the 1921 Act, that it was the intention of the Congress that the Comptroller General not be subject to the policy pleasure of any official of the United States, whether it be the Congress or the President.

The Congress thought in 1921 that, looking at the cases that it then knew, prior to Myers, that it could be the agent to determine whether the Comptroller General had reached such a degree of inefficiency or malfeasance that removal was required.

But it specifically eschewed the power to remove for no cause at all.

If the Court retains that basic idea, which we think is required by the legislative history of that office, the Comptroller General would remain under the '85 Act an independent officer performing exactly the function which the Congress has asked him to perform under that Act.

In those circumstances, it would be unnecessary to radically change the statute from one which contains an administrative mechanism to one which requires an annual deficit reduction legislation, because the objectives of the Congress would still be preserved.

Let me add one further thought on the question of the 1921 Act.

We have made the further argument, as the Third Circuit decided only last month, that the removal issue is not ripe for adjudication.

The Third Circuit emphasized the fact that it had never been used, and I would like to add just one further point to that.

The 1921 Act provides for a future enactment of the Congress.

That's an enactment which would have to be approved bicamerally and presented to the President.

This Court has never anticipated a future enactment of the Congress.

And prior to the Congress ever adopting a joint resolution of removal, it would be faced with the serious constitutional questions that this Court's decisions from Myers on have presented.

We think that the level of respect from one coordinate branch to another... that the Congress be given that first opportunity, if ever the removal issue were presented to it.

Unidentified Justice: Earlier, Mr. Davidson, you had made... at least I got an intimation that judges could make some kind of an appraisal of whether Congress would or would not have passed the '21 Act without the removal privilege.

Where do we get our authority to try to make judgments of that kind?

Mr. Davidson: I think it is the judgment that this Court made in Chadha, the legislative veto case, when the contention was placed before the Court that the Congress would not have delegated the authority to the Attorney General to suspend and then cancel deportation without reserving the opportunity to review that decision.

Unidentified Justice: Do you think that was a key factor in the Chadha holding?

Mr. Davidson: Not in its constitutional holding, but in the Court's prior, preliminary ruling that that statute was severable.

The same severability analysis applied to the Comptroller General would indicate that Congress has intended to assign to him the administrative functions which he has had since 1921, and that if there is a defect in a potential method of Congressional control over that assignment of powers to an officer of the United States, the defect is cured by striking it and retaining the authority of the officer.

Thank you.

Chief Justice Burger: Very well.

Mr. Solicitor General?

ORAL ARGUMENT OF CHARLES FRIED, ESQ., ON BEHALF OF APPELLEE THE UNITED STATES

Mr. Fried: Thank you, Mr. Chief Justice, and may it please the Court.

Section 251 of the 1985 Act gives the Comptroller General critical responsibility for the execution of the Act by assigning to him the determination of reductions in outlays throughout the Government.

This grant of authority violates the Constitution, first and principally because the grant is to an official removable only on the initiative of the Congress, an official who is for this and because of Congress' intent expressed in many other ways an agent of Congress.

And second, because executive functions importantly affecting the whole of the executive branch and directing the President himself may only be performed by an officer who serves at the pleasure of the President.

I would like to say at the outset that this second argument does not in our view in any way cast any doubt on the validity of agencies such as the Federal Reserve Board, the Federal Trade Commission, or any such agencies, and that the notion that the second argument in some sense endangers those agencies or would embark this Court on some constitutional adventure is simply a scare which we don't intend to throw into the Court and I don't think need be thrown there.

Justice O'Connor: Well, Mr. Fried, I'll confess you scared me with it.

Unidentified Justice: [Laughter]

Justice O'Connor: So why don't you explain.

Mr. Fried: Well, the principal point, Justice O'Connor, is that the powers which are given to the Comptroller General here are so sweeping they affect every nook and cranny of the executive department.

They give orders to the President himself.

They affect every one of the executive agencies.

And there is no single agency of those that we are perfectly familiar with which has any such sweeping powers.

And the argument we make is simply that an officer who can have that pervasive effect on the executive branch must be removable by the President at will.

Justice O'Connor: Well, that strikes me as kind of a novel doctrine you're espousing, and I can't quite put a finger on that approach in any of this Court's previous decisions.

And I mean, can't it be said that the Federal Reserve Board, for example, through its powers basically affects the financial structure of every agency of the Government?

Mr. Fried: The Federal Reserve Board is a good example, because in fact what the Federal Reserve Board does is to determine, as the bank which it is established to be, the interest rate it will charge to its clients.

Now, that determination has implications.

It has implications which do indeed have an effect.

It's quite interesting that the statute setting up the Federal Reserve Board specifically said that nothing in it shall in any sense impinge on the powers of the Secretary of the Treasury.

Here we have an official who gives orders to the President.

I don't think we have that in respect to the Federal Reserve Board or any other of the agencies which we're familiar with.

So I think it's really quite a different thing.

The reason that the argument that I'm making sounds novel is that these powers are entirely novel.

Unidentified Justice: Mr. Fried, you don't challenge the fallback position, do you?

Mr. Fried: Not at all.

Unidentified Justice: That if this order, instead of being given by the Comptroller General, were based on the recommendation of the Comptroller General and then enacted in a joint resolution of Congress, that then the President would have to obey it.

Mr. Fried: Well, the President of course, as this Court has said on numerous occasions, exists to execute the laws.

Unidentified Justice: Right.

Mr. Fried: And this would be a law, and it would be a law which he would to execute.

There's no question of that.

Unidentified Justice: And you don't challenge the delegation, do you?

Mr. Fried: No, Justice Rehnquist.

It would seem to us that between one far pole, where the actions of an officer are merely ministerial... in our view, the Comptroller General's actions here are very far from being merely ministerial... and the other far pole, where the officer acts entirely at large, there is a very large terrain.

It is the usual terrain of executive action and administration, and it is in that terrain that the Comptroller General is asked to act.

Unidentified Justice: So if these functions had been assigned to the Secretary of the Treasury, you would say it was a perfectly good delegation--

Mr. Fried: That would have been--

Unidentified Justice: --just like you say it is here?

Mr. Fried: --perfectly proper, if it had been assigned to the Secretary of the Treasury.

Chief Justice Burger: Or the OBM?

Mr. Fried: Or the Director of the OBM, yes, Chief Justice Burger.

In our view, the principal purpose of the Office of the Comptroller General established in the 1921 Budget and Accounting Act was to serve as the auditor for Congress.

To the extent that the Comptroller General has interpreted the 1921 Act as going beyond that conception, the executive has always resisted such accretions to the central function.

In 1933, the Solicitor General said to the Court in Miguel against McCall... and I'll quote it in extenso because it's exactly our position today.

"It was the purpose of Congress that the Comptroller General should. "

--now quoting from the Act...

--exercise in general a control over all of the accounting procedures of the government.

but, said the Solicitor General--

"the accounting procedures relate to accounting, and power over accounting is not power to decide how the laws shall be administered. "

That is precisely our contention today, that power over accounting is not power to decide how the laws shall be administered.

And that has been the consistent position of the executive branch.

Unidentified Justice: What about the management audits that the Comptroller General conducts?

Do you think that's an improper use of that function?

Mr. Fried: Those are very useful, but the position of the executive branch has consistently been that those are not final and determinatively binding on the executive.

That indeed was the issue is Miguel against McCall, and this Court supported the executive, ordered that a particular pension be paid to a Philippine scout which the Comptroller General general had finally determined should not be so paid.

So the position really of the executive has been that way consistently.

In 1969, when the Administration instituted the so-called Philadelphia Plan, the Comptroller General purported to say that this was an unauthorized use of appropriations.

The executive resisted that determination.

In Stotts v. Lynn, then the Comptroller General, under the impoundment... in the Impoundment Control Act, sought to bring suit against the executive, the executive resisted that exercise of power by the Comptroller General.

Unidentified Justice: Are you suggesting, Mr. Solicitor General, that when the Comptroller General exercises that kind of a function he is calling attention as an overseer, calling the attention of Congress so that Congress the next time around on the budgets can deal with the problem that the Comptroller General has pointed out?

Mr. Fried: That is our view of his principal function, as the auditor for the Congress, on behalf of the Congress, as one of the Congressmen in the debates on the 1921 Act said, a watchdog and a critic on behalf of Congress.

And that is the central function which the Comptroller General so admirably has performed throughout the life of that office.

Justice O'Connor: Well, if you're correct is he still an officer of the United States who must be appointed by the President?

Mr. Fried: We make no point of whether he is an officer of the United States.

Because he has been appointed by the President, he is an officer of the United States.

We're not at all sure that these very same functions could not as conveniently and as easily have been performed by someone appointed by the Congress itself.

But having been appointed by the President, we make no point of the fact that he is or is not an officer of the United States.

The constitutional temptation here, as in Miguel against McCall, as in Stotz v. Lynn, and throughout this history, has been on the part of Congress to try to have it both ways.

Our constitutional scheme is one in which Congress makes general laws and the executive administers those laws.

Congress cuts the pie, the executive chooses.

In this case, Congress has sought both to cut the pie and to choose.

Congress chooses to legislate in a general way because circumstances make detailed regulation inconvenient.

Yet here it has been unwilling to let go of the actual administration of its general will, and so it has cast about for an agent who is at once respected for its competence and integrity, but nonetheless has a close and special relationship to itself.

And that is, and from the outset has been, the conception of the Comptroller General.

If this assignment of executive power by Congress to its agent the Comptroller General is good, what may Congress not assign to him?

The idea has great potential.

Indeed, in a provision of the very section before us which has not been brought into action, 251(d)(3)(C)(2), it is stated that the President may cancel certain defense contracts, but only if the Comptroller General determines that saving money in this way is reasonable.

We wonder, could Congress circumvent the Chadha decision by conditioning the promulgation or repromulgation of agency regulations on some such determination by the Comptroller General of reasonableness or consonance with the public interest?

In short, what we have here is a temptation, a potentiality for what the Federalist Papers called aggrandizement by the legislative branch.

And like Chadha, we view this potential as particularly menacing.

Our first and principal contention is that the Comptroller General is an agent of Congress and so may not perform the significant and pervasive executive functions assigned to him by this Act.

It seems quite clear that the functions assigned to the Comptroller General are indeed full of judgment, full of discretion.

He must make predictions based on very controversial criteria: What will interest rates be?

What will be the level of unemployment?

Justice White: Well, Mr. Solicitor General, would you be satisfied with a judgment that in performing these functions the Comptroller General is a purely executive officer, subject to the removal by the President at will?

Mr. Fried: I don't see how this Court, Justice White, could arrive at that conclusion.

Justice White: Well, you're arguing that performing these functions do make him a purely executive officer.

Mr. Fried: Justice--

Justice White: Aren't you?

Isn't that your argument?

Mr. Fried: --It is, Justice White.

We argue that... no, actually there's a trap there, I think.

[Laughter]

It's a trap.

It's a trap into which we believe the Amerine court fell, because that is to argue in a rather tight circle, and I'd rather not do that, because that is to ask, is the Comptroller General doing something executive?

Yes, he is.

Then therefore he's a member of the executive branch, and then therefore it's all right for him to do something executive.

Unidentified Justice: I take it you--

--Then... excuse me.

Then he would be removable by the President at will?

Mr. Fried: That would go Mr. Cutler's route as to severability, and we have great doubts about that because severability is a matter of divining the intent of Congress in the event that something Congress has done--

Unidentified Justice: So you say that we... you would be satisfied with that judgment, I suppose, but you think that would be an imperfect judgment because that isn't what Congress would have intended?

Mr. Fried: --We would not be satisfied with that judgment, with respect, because we think it would he an incorrect Judgment.

Unidentified Justice: All right, all right.

But let me just ask, if I may at this point, if you're right that the assignment of these functions makes him pro tanto an executive officer, it seems to me then one would conclude that the Congress has in effect amended the 1921 Act and said, this is an executive removable by the President; the President could remove him and appoint the Secretary of the Treasury Comptroller General and go about his way.

I don't know why that couldn't follow.

Mr. Fried: The 1985 Act was passed under the shadow, under the clear shadow, of the doubts which the executive had always raised about giving executive functions to the Comptroller General.

Indeed, as the Act was being debated the executive branch had filed objections exactly the same tenor as my argument today in the Amerine case.

And in the face of that fact, the Congress said: If the CBO-OMB-General Accounting Officer trigger fails, then what we want is the fallback provision.

And if that is what Congress determined, then surely that is what this Court should do.

It's the question whether... well, it's quite striking, because we have here a central conception of who this officer is.

He is, as we say, the auditor for Congress.

Now, Congress has come in and given him another inconsistent role.

Surely the appropriate thing to do is to remove that later, inappropriate role, rather than to reconstitute a whole office which was very deliberately constituted in that way in 1921.

Justice Marshall: Mr. Solicitor General, if I back up a minute, you paraded quite a few horrible things that could happen if Congress took over the job.

Why is it not possible for the President to do the same?

I mean, is Congress the only body in Government that does wrong?

Mr. Fried: Oh, no.

The President in the many years of his history I'm sure has committed as many wrongs as the Congress.

But he commits his wrongs in the execution of the law and Congress commits its wrongs in making general laws.

It world be a pity if they started committing each other's wrongs.

[Laughter]

Justice Marshall: Does that help me at all?

Mr. Fried: I think so, I think so.

I think it's very important that the division of powers in the Constitution be kept rather distinct.

The Constitution, after all, says that the legislative power, Section 1 of Article I, this legislative power is in the Congress.

Justice Marshall: I learned that in my first year of high school.

Now can we get to something else?

Mr. Fried: And it is... well, I think that is what we rely on, that the legislative power is in the Congress, while the executive power is in the President.

And for that reason, it is a dangerous confusion to start giving executive powers to Congress or, I suppose, legislative powers to the President.

Justice O'Connor: Mr. Fried, do you say that none of the other powers of the Comptroller General prior to this particular Act were executive powers in essence?

Mr. Fried: Justice O'Connor, it was the position of the executive in Stotz v. Lynn that the power under the Impoundment Act to bring suit was not valid, and for very similar reasons to those that I'm making here.

It was our position in 1969, when the Comptroller General purported to make a definitive, binding ruling that the Philadelphia Plan was unauthorized, that the executive department must look to the Attorney General for binding opinions as to law.

And indeed, that was the issue in 1933 in Miguel v. McCall.

So there are these expressions on the central role of the Comptroller General, and wherever they have appeared the executive department has been vigilant to make an issue of them, that is correct.

But that is an issue, that is a vigilance, we have exercised for over half a century, and in precisely the terms we urge on you today.

That the Comptroller General is an agent of Congress is we think shown most dramatically by the mode of his removal.

The Congress was very aware of what it was doing when in created this mode of removal.

It chose to do that knowing how to make an agent removable for cause by the President, and yet did not do so.

Subsequently to that legislation, the Congress on a number of occasions has described the Comptroller General as being within the legislative branch.

And indeed, the Comptroller General by his own profession is a member of the legislative branch.

At the beginning of the red book, the Comptroller General's bible, the principles of federal appropriations law, he states that the GAO is a nonpartisan, independent agency in the legislative branch.

And this Court itself has adopted that designation in the very recent case of Bossier and Marc, adding the phrase that

"The Comptroller General exists in large part to serve the needs of Congress. "

Now, this seems to us to indicate the kind of subservience which is inappropriate in one executing the law.

This subservience, of which the district court spoke, is of course not a personal reflection on the Comptroller General.

His office has been characterized by integrity and competence.

I hope the same thing would be said of the Office of the Solicitor General.

Yet there is no question but that that officer is subservient in the constitutional sense to the President, as the provisions for his removal in the statutes clearly show.

The point we make about subservience is a structural, not a personal, point.

Now, I'd like to return for a moment to our second argument, which is that these powers, whatever other powers may be given to an officer who is not removable at will by the President, these powers are so far-reaching that they constitute indeed a constitutional novelty, and a novelty of quite remarkable proportions, and that the holding in Humphrey's Executor, the practice of the legislature, the whole existence of administrative agencies, in no way provides a precedence for this kind of sweeping power, a power which extends to giving orders to the President himself.

Now, as to the severability, I think that a number of the questions--

Justice White: If we agreed with your argument, we would be foreclosed from saying the district court erred in not striking the removal provision of the 1921 Act?

Mr. Fried: --I believe so, Justice White, yes.

Justice White: And you didn't cross-petition here or cross-appeal?

Mr. Fried: We did not, we did not.

If one turns to that removal, the severability problem, it is a question, what exactly is this Court to do if they agree with Mr. Cutler's suggestion?

Is it to be a simple excision of the offending removal provision, leaving the Comptroller General irremovable?

Or does Mr. Cutler propose reconstructive surgery, with some new removal, some new and apt removal provision being substituted?

The very question indicates how inappropriate it would be to reach back and refashion an office carefully fashioned in 1921 in order to solve a problem created in 1985, particularly when in 1985 the Congress quite explicitly stated what it wanted done in the event there was a problem.

Thank you.

Chief Justice Burger: Mr. Morrison.

ORAL ARGUMENT OF ALAN B. MORRISON, ESQ., ON BEHALF OF APPELLEES SYNAR ET AL.

Mr. Morrison: Mr. Chief Justice and may it please the Court:

As I was listening to the argument this morning, I tried to put myself in the place of someone in the audience who had not read all the briefs and been through the statutes, and to ask myself, why did Congress create this Gramm-Rudman mechanism?

What were they trying to do by putting a new form of governance into place in which we had one part Office of Management and Budget, one part Congressional Budget Office, and added the Comptroller General on top of it?

This surely was not, as Mr. Davidson suggested, a standby mechanism, because we have all the standby mechanisms we need.

This is operative unless Congress passes a new law to change it or unless Congress meets the budget targets of the statute.

No, what Congress was trying to do here... and this is wholly undisputed... was trying to create an elaborate mechanism under which it could obtain a reduction in the budget deficit without having either to increase taxes or to cut any of the spending programs, because it was unable to muster the votes needed to do that under our law-making provisions of the Constitution.

And so it set up a new mechanism to do this.

It didn't do it, as it has so often done it in delegating authority to administrative agencies, because it had too many decisions to make, because the questions were too technical, because we needed fairness and adjudicative proceedings.

It didn't do that for any of these reasons.

It did it so it could accomplish through the backdoor that which it could not accomplish through the front door.

And indeed, it is not even going to relieve itself of any responsibilities, for under this statute, each year, as it did each year beginning in 1789, including 1985 and already in 1986, it is now passing on the very same appropriations laws that it has always passed on, and it will have to pass on through 1991 but with only one difference, and that is that those laws really won't count because if these three unelected officials under the statute determine that Congress hasn't done its job properly, or they and the President have not been able to reach agreement on a proper target deficit, then the Gramm-Rudman override comes in as a permanent rider affecting future laws by changing what is actually going to be appropriated.

That, I suggest to you, is a kind of function never before found in the history of our Republic, where administrative officials are overriding whatever Congress may do in the future insofar as this particular area of the law is concerned.

And it is not a minor matter.

It is quite properly, as the Solicitor General observed, a sweeping power extending the entire breadth of the federal government.

In this year alone, the budget reduction was $11.7 billion, and it would have been far higher but for the cap put on it in the statute.

We simply don't know how much the budget, the deficit reductions are going to be in the future.

And all of this is not based on what you would hear today as some kind of a precise formula.

The key ingredients in this deficit reduction program are estimates.

They are estimates made as to inflation rate, unemployment, the gross national product.

They are estimates made on the basis of what someone thinks is going to happen to the economy.

Justice Rehnquist: But they are at least factual, Mr.... or essentially in the realm of fact, Mr. Morrison, rather than policy that agencies have been given authority to enforce.

Mr. Morrison: Well, I want to turn to that, and I suppose this is as good a time as any, Mr. Justice Rehnquist.

I think the best evidence that these judgments being made are political is what happened when Congress reviewed the possibility that these determinations would be made by OMB.

The House said we simply cannot accept that because OMB is political, as Justice Stevens remarked earlier.

These standards are subject to such manipulation, they could come out with anything.

Indeed, Senator Gramm was asked on the floor of the House... on the floor of the Senate, what is the range of budget deficit cuts we are talking about?

He said I couldn't give a worst case scenario.

In 1985 alone, from August when Congress reached its predictions as to what the budget deficit was going to be, until October when Gramm-Rudman reached the floor of the Senate, the prediction in that narrow timeframe changed $30 billion, and in 1981 there was a swing of $60 billion in predicted deficits in a matter of 60 days.

And it seems to me that the key ingredient in taking this away from--

Unidentified Justice: $30 billion or $60 billion as percentage of what?

Mr. Morrison: --Well, as a percentage of the entire federal budget, it is close to a trillion dollars, and so far as the portion which is not exempt, it is about $500 billion or $600 billion.

Unidentified Justice: So you are talking about 10 percent, 5 percent, something like that?

Mr. Morrison: The cuts this year were 4.3 percent and 4.9 percent for non-defense and defense, but this is only on a prorated basis.

And that was... those cuts were that small because we had a cap built into the statute.

Next year there is no cap.

If the revenue projections in the statute, in the... that were used to form these deficit reduction targets, turn out to be wrong because we have much less income, then we have no limit at all on how much the deficit reductions are going to be.

And what happened here in this statute was that the House of Representatives and the Senate said we cannot give these judgments to the Office of Management and Budget because these are subject to such political manipulation, and if you look at the statute, you will understand why.

There are lots of provisions in the act dealing with how to allocate the cuts between one branch and... between one part of the government and another, what to do if Congress doesn't pass appropriation laws, what to do about cost of living increases.

But there is not a word in the statute or the legislative history about how one is to go about predicting what the interest rate is going to be, what the gross national product is going to be.

No one knows what these figures are going to be because they are raw, discretionary determinations, entirely proper to be made provided that they are made by the lawmakers in this country, that is, the President in conjunction with the Senate and the House of Representatives as envisioned by Article 1 of the Constitution.

That is how the laws are being made.

We have here a situation in which the hard policy choices have not been made, and I suggest to you that the very reason that Gramm-Rudman was enacted was because the Congress found that it was not making the hard choices.

It wanted to have defense, it wanted to have social programs, it wanted to have clean air, it wanted to have transportation, and it couldn't pick and choose among them.

So it hoped that by creating this mechanism you would have three unelected officials do the job that Congress was supposed to do.

And I suggest to you that that kind of abdication goes to the very heart of our system of government, and it changes all of the dynamics around in our legislative process.

These are not the kind of facts that administrators normally find.

These are sweeping predictions as to the future, trying to say what is going to happen to the economy.

They are the kinds of determinations which need to be made and which Congress will continue to make every year.

But that should be done in the legislative process.

Justice Stevens: But Mr. Morrison, it is a fact, is it not, that in this particular... the experience we have so far, the congressional estimate, the executive estimate, and the Comptroller's estimate are all pretty close to one another?

Mr. Morrison: I think in fairness, Justice Stevens, there are two points to make.

One is that they were made in the middle of the fiscal year as opposed to three or four months before the year.

But much more important, it didn't make any difference because of the $11.7 billion cap.

Indeed, we heard this morning that the budget deficit would actually have been $220 billion.

And so while the estimates turned out to be the same, nobody had to spend much time worrying about them because there was no consequences.

Indeed, the Comptroller General himself said he did that for that reason.

Justice Stevens: Yes, but the fact that they didn't have any consequences, it seems to me, would be more reason to anticipate wider variation rather than coming close to the target.

I don't see how that cuts any ice on the way they went about doing their job.

I assume they did it conscientiously, and they did in fact come out pretty much the same.

Mr. Morrison: That is correct.

I don't think anybody believes that these figures are not subject to wide fluctuation and variation.

Indeed, that was the whole premise on which the House of Representatives insisted that the House... that the Office of Management and Budget be taken out of them, simply because they didn't trust them, and the reason they didn't trust them is because there's nothing in the statute to get your hands on.

If you look in the statute, there's not a word about how anybody is to figure out any of these very amorphous figures.

Equally important, of course, is the fact that in this statute there is a specific preclusion of judicial review for the very determinations which are at the heart of the deficit cutting mechanism.

All of these economic assumptions which underly the how much or in fact the whether of deficit reduction, all of those are specifically made non-reviewable.

So the Congress undoubtedly would have been concerned because, for whatever reasons, because of your views about the policy initiatives of the administration, because you were optimistic or pessimistic about the economy, you thought that this year would be a good year and there would be a little bit of a deficit, or because for other reasons you wanted to cut certain programs, and the only way you could cut those programs was to have a large target, a large miss in the target, so you estimated there to be a broad deficit reduction needed.

Whatever your reasons, there's nothing in the statute that would prevent any of the judgments being made here with any number that you could think of.

Next year we could have an estimate of 20 percent inflation or 2 percent inflation, and nothing could be done about it except Congress could pass a new statute, or Congress could fire the Comptroller General.

Neither of those, we suggest to you, are appropriate.

Unidentified Justice: Mr. Morrison, you may have noticed as a member of the bar that over the last 15 years on perhaps four or five occasions Congress has created special judicial panels and authorized the designation to those panels of judges already in office.

Is your argument with respect to allocation of these duties to the Comptroller General... put it this way.

Would your argument be that what the Congress has undertaken to do here is just as though they had asked that we assign these functions to some presently sitting judges--

Mr. Morrison: No, I--

Unidentified Justice: --who have no executive authority and no legislative authority, and who are not removable by the President?

Mr. Morrison: --Well, I would certainly say that under this Court's decisions that prohibit nonjudicial functions being performed by judges, I would say that a member of this Court or any other court could not perform the functions being performed by the Comptroller General here.

If in my primary submission... my primary submission is that these are basically legislative type functions of the kind that only Congress can be performed because there's no standards and there's no checks or balances, but if they are administrative type functions, then they must be performed by someone at the very least who may not be removed by the legislative branch, that Congress cannot have the power to retain a hand on the execution of a law once it has decided what the law shall be.

Unidentified Justice: Well, you say, you say these are legislative functions, so do you disagree with the Solicitor General that they are purely executive functions?

Mr. Morrison: No.

I believe that the--

Unidentified Justice: Well, they can't be both.

Mr. Morrison: --That is correct, they cannot be both.

I believe principally that the functions being performed here are legislative type functions.

If the Court disagrees with me and says that the delegation is proper, then I say the delegation must be performed by a person who may not be removed by the Congress.

Unidentified Justice: You mean the functions may be--

Mr. Morrison: Must be performed by a person who may not be removed by the Congress.

Unidentified Justice: --I see.

That's why I suggested the question, the hypothetical of some of these judges who couldn't be removed if the--

Mr. Morrison: They couldn't be removed by the Congress.

That objection would be correct, Your Honor.

I would also say, though, that I believe that this Court has ruled that judges may perform only judging type functions.

They may not perform executive functions under principles of separation of powers, much as the Court ruled that the Congress could not perform executive functions in the Chadha case.

Unidentified Justice: --But your conclusion would be that if they had made that assignment to these judges selected in that way, it would be just as improper as the one you are now challenging.

Mr. Morrison: Precisely, precisely.

Unidentified Justice: And for the same reasons.

Mr. Morrison: Well--

Unidentified Justice: Or similar.

Mr. Morrison: --Very similar reasons, yes, Your Honor.

Unidentified Justice: Similar reasons.

Mr. Morrison: Yes, Your Honor.

Let me turn to the second argument I made, which is made only in our brief, and that is that... and this involves the aspect of the statute under which the Office of Congressional Budget is an intimate part of the decisionmaking process here.

That is, when the House... when the Senate passed this bill, there was a joint determination to be made by OMB and CBO that would have become the operative determination.

Everybody recognized that that would be plainly unconstitutional under Chadha and other, and Buckley because the control... the Congressional Budget Office is a pure arm of Congress, no pretense of being appointed by the President.

In order to attempt to cure that, what the Congress did was to put an overlay on top of the same report that was going to be issued by OMB and CBO of the Comptroller General, and the question before the Court in our view on point number two is whether the addition of the Comptroller General serves sufficiently to cure the constitutional defect caused by the Congressional Budget Office being an intimate part of the process.

The defenders of the statute say that the CBO is purely an advisory official; it does nothing but render advice to the Comptroller General.

That, in our view, is an incorrect view of the statute, and indeed, of what has happened under it by the Comptroller General's own affidavit.

And I say that principally because when one normally thinks of an advisor, the key element of an advisor is that you can either take their advice or reject it at will.

That is not the case with the statute here.

The Comptroller General's discretion vis-a-vis the two other officials, including OMB and CBO, is that first... and this is in the statute itself... he must give due regard to their findings; second, he must explain fully any deviations that he makes from them; third, the legislative history and the conference report says that the Comptroller General must use his "utmost discretion" before altering any of the findings which they made.

In the memorandum to the House and the Senate before the final debate on passage, the report of CBO and OMB was referred to as a "draft order", and as Senator Gramm said in supporting this piece of legislation and the Comptroller General's role, the Comptroller General would be the "final arbiter".

Now, that to me does not sound like a pure advisor, and in fact, Congress did one other thing which confirmed the major role they thought that CBO would have, and that is under the fallback mechanism, it doesn't even care what the Comptroller General says about these deficits; it relies solely on the report of OMB and CBO.

Now, of course, the Comptroller General has the final say.

He is ultimately responsible.

That is not our bone of contention.

What we dispute is whether anyone can fairly characterize this process as purely advisory, particularly since the Comptroller General has put in an affidavit which is in the Joint Appendix saying that throughout this process he consulted consistently with OMB and CBO in order to make the process work, since indeed he has only five days from the time he gets their report in which he is going to issue his final order, and two of those days in each of the first two cycles come on weekends.

So I respectfully suggest to you that what Congress tried to do here was to keep its hand in the process, to have its budget person continue to be part of the process so that it would not get skewed away from it, and it tried to do that in order to assure that these open-ended standards would be met, and it did it this way and through the Comptroller General who, as Ms. Williams will now explain, remains an important arm of Congress in the process.

Chief Justice Burger: Very well.

Ms. Williams?

ORAL ARGUMENT OF MS. LOIS G. WILLIAMS, ESQ., ON BEHALF OF APPELLEES NATIONAL TREASURY EMPLOYEES AND VAN RIDDELL

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

The role of the Comptroller General is obviously the central question in this case.

We have argued in agreement with Mr. Morrison that he is required under this act to make legislative decisions, but I would like to spend most of my time today saying that if these aren't legislative decisions under the act that he is making, then at the very least, they are executive decisions.

They can't be nothing.

They--

Unidentified Justice: Well, why does it... why does that follow?

Are you arguing the delegation point?

Is that it?

Mr. Williams: --No, I would like to spend my time on the separation of powers, Comptroller General role, Your Honor, but, but I say--

Unidentified Justice: But they could be... they still could be at least quasi-legislative functions and be delegated.

Mr. Williams: --Yes, indeed.

Unidentified Justice: And they wouldn't necessarily follow that they are executive functions.

Mr. Williams: Yes, indeed.

It is... it seems to me that no one disputes that there are significant decisions made here--

Unidentified Justice: So just because they are delegated doesn't mean that they cease being legislative.

Mr. Williams: --That's true.

If it were performed strictly in aid of the legislative function.

Unidentified Justice: Then why do you say that they have to be either.

Mr. Williams: Well, I don't understand... I beg your pardon.

I don't understand the Appellants to be making the argument that these are strictly in aid of the legislative function, but rather, that they are functions that may be performed by an independent officer, and that they rely on that notion.

But I would say that they are... pardon me, Mr. Chief Justice.

I would say that they are executive in nature for the same reason that the Solicitor General does, because what is left to the Comptroller General, if he is not legislating when he is doing this, is the full implementation of this law.

That's what's left to him.

That you wouldn't do with a congressional committee.

That you couldn't do with an arm of the Congress.

He is taking over the role of the executive in the function.

Unidentified Justice: --Well, that's what I was going to get at.

Are you saying that he's impinging, he is not performing an executive function in the sense that the true executive does, but he is impinging upon the executive role?

Mr. Williams: He is indeed, Your Honor, but he is doing it in large measure by, as I say, fully implementing the law himself.

The President has virtually no role but to sign the order once his work is done.

So every significant decision, every decision that is made after the legislature finishes its work is made by this officer, and the only thing that's at issue here in this case is whether Congress' power to remove that officer disables him from administering this law.

That's the only question.

And there is no decision of this Court that suggests that Congress may assume for itself the right to remove an officer who administers the law.

Unidentified Justice: Well, then, absent the removal power by Congress, you would say this 1985 act is all right?

Mr. Williams: Yes, if this were... if we're talking strictly about the separation of powers question, forgetting the delegation argument, I would say there is no violation of the separation of powers if this power is deemed executive and it were given to the executive branch, that's correct.

Unidentified Justice: Well, I know, but absent, absent... if there was no provision for congressional removal of the Solicitor General... of the Comptroller General, then this act would be all right?

Mr. Williams: I would like to see what the Office of Comptroller General would be like without removal, but if he were indeed functioning like a truly independent officer, although that's not at issue here, I certainly am not prepared to argue that that would be unconstitutional, Your Honor.

Unidentified Justice: Well, the Solicitor General is, as you know.

Mr. Williams: Yes, and let me just say about that that I think the question of what kind of an officer could perform these duties is really not at all before this Court, and the reason is that to decide that the President must remove this officer in some way is by definition to decide that he may not be removed by Congress, which is now the fact, and if that is true, then the fallback mechanism that the statute provides should take place because the congressional removal would render the Comptroller General unable to perform these functions.

It would simply be advised to the Congress, should it decide to pass another law, what kind of an officer it might then choose to delegate this responsibility to.

That is not, not necessarily, not at all at issue here.

The question here is really quite narrow because of the uniqueness of the Comptroller General's role and his position, his status.

He is the, as Mr. Davidson points out, not the only one but virtually the only officer who is so removable.

I would like to discuss--

Unidentified Justice: Let me just ask one question about the removal power which you regard as critical, as I understand it.

Must we not presume that if Congress were to exercise its removable power, removal power, it would only do so for a reason specified in the statute, which would mean that it could not remove the Comptroller General because they didn't like the way he performed his functions under this statute?

Mr. Williams: --Yes, Your Honor, I do assume, but the causes here are very broad: inefficiency and neglect of duty.

It's true that those are among the specified causes.

They are virtually open-ended, and I am not at all sure how a Solicitor--

Unidentified Justice: But surely they could not remove him for, because they disagreed with his policy judgments on estimating rates of inflation or unemployment.

Mr. Williams: --I take it they would never characterize it in that fashion, Your Honor.

And I think--

Unidentified Justice: Are you suggesting they might regard that as inefficiency or neglect of duty?

Mr. Williams: --I think the causes are broad enough to include practically anything.

But I don't... I don't say that because the removal power exists... and it is narrower, certainly, than removal at will.

I don't say that that is something that the Comptroller General has any reason to live in fear of, as no good employee does, I think.

The power of removal is the symbol of the ultimate power over this office.

It is one of many symbols--

Unidentified Justice: Would you make the same argument if he could only be removed for committing a felony, say?

Mr. Williams: --Well, it would depend a little bit on how reviewable that decision would be, Your Honor.

Unidentified Justice: Well, is this decision reviewable?

Nobody's told us that.

Mr. Williams: That's right, and I'm sorry, I don't know the answer to that.

I think certainly the constitutionality would be reviewable.

Unidentified Justice: Of the statute would be, but the... but I'm concerned about the exercise of it.

Say they said we now determine he is inefficient or something.

Mr. Williams: I have no reason to think that it would be reviewable, Your Honor, and given the fact that it is extremely broad, that is obviously a danger.

But as I say, I think that the notion that removal is somewhat remote, that possibility, doesn't mean that it's not relevant, and I think to hear the Appellants' arguments suggests that it simply doesn't matter that that removal provision is on the books, and indeed, they are willing to abandon it altogether, even knowing that there is a risk, as Mr. Cutler has conceded, that that might make removal by the President possible.

They... the assumption must be on their part that it has no impact on this office, and I think that that assumption defies both history and common sense.

And this is an officer whom the President does appoint.

But then, all influence ends.

And as members of the Court have indicated this morning, the Comptroller General certainly does do his work for the Congress.

The office exists to serve the needs of the Congress, as this Court has said, to help it legislate.

And even in those functions which have been spoken of as aid to the executive, it has been quite properly pointed out that those are helpful probably at least as much in aid of the congressional interest.

They are designed to assist the Congress in watching over the President's stewardship.

That is why the office exists, and everything he does really exists in that position between the legislative and the executive branch, and in that position, he is the Congress' partisan; he must be in order to perform his functions properly.

No doubt he does function in a largely nonpolitical, apolitical I should say, nonpartisan way, in a thoroughly professional way, but he cannot remain neutral as to the fact that Congress... it's Congress' interests he exists to serve.

The Comptroller General therefore is only as independent as Congress allows him to be, and it might suit Congress' interests that he be quite so most of the time.

Justice Marshall: This is true although Congress has never made an effort to exert the authority?

Mr. Williams: I believe so, Justice Marshall.

Justice Marshall: It's still true?

Mr. Williams: Yes, and I would say that whether... the fact that no removal has been attempted is at least as strong an argument that this... that this person knows to whom he is accountable as it is that he not really accountable to Congress.

It doesn't really prove anything, that no one has ever tried to remove a Comptroller General, but it may very well demonstrate that everyone understands the relationship that exists.

Unidentified Justice: We have been told in briefs and in the oral argument that the Comptroller General has described himself in effect as an arm, an agent of the Congress.

Has that been true with all the Comptrollers General since 1921, if you know?

Mr. Williams: So far as I know, Your Honor, and no one has pointed to the contrary, although his functions have been variously described, certainly.

In 1921 it was very, very clear that that was the... I invite the Court's attention to that legislative history.

That was the intent of the Congress, to remove it from the executive branch, to make him independent, yes, but to make him answerable to Congress, and it is very clear that Congress thought about this matter carefully and considered all types of removal.

It passed the statute that exists... existed in spite of a presidential veto, and they didn't override the veto, but the new version provides for... the one that now exists provides for joint resolution removal.

President Wilson certainly could not have tolerated that, according to his veto message on the first bill.

The one that became law is, has, must be the view of the Congress, and it was very clear that their primary goal was independence from the President.

It is also very clear that independence from the President was achieved by retaining the removal power, and that that was the critical way in which the Congress could guarantee this independence.

It made, it made this officer answerable to itself, and of course, it existed in order to serve those interests.

Unidentified Justice: Do you think in that analysis, do you think it's a more important element of the Comptroller General's independence from Congress' point of view that the President cannot remove him than that Congress can remove him?

Mr. Williams: I absolutely do, Your Honor, and I think they are opposite sides of the same coin, that independence, total independence from the President, in fact, on the spectrum, would be total dependence on Congress, and that the truest independence, as we have argued in our brief, is somewhere between those branches, where each branch has some influence.

In this situation, the Congress has all the influence, and the president, once appointment is over, remembering he cannot even reappoint this officer, his influence over that officer ends.

And therefore, he cannot... removal is part of the context in which he lives, and the fact that the President has then no control makes it quite a credible statement that the Comptroller General works for the Congress.

Unidentified Justice: It sounds to me like you're adopting the Solicitor General's argument that the officer must be removable by the President in order to perform this function.

Mr. Williams: I beg your pardon, Your Honor.

I didn't--

Unidentified Justice: It sounds to me as though you have adopted the Solicitor General's position that this officer must be removable by the President in order for the powers to be delegated to him.

Do you adopt that?

Mr. Williams: --Indeed yes, Your Honor.

Indeed yes.

I would dispute... I mean, there may be a large dispute about whether he should be removed at will, but that certainly is not at issue in this case.

Unidentified Justice: But in any event, he must not be removable by the Congress alone, is that your point?

Mr. Williams: Absolutely, Your Honor, absolutely.

I think that the congressional intent throughout, both the original Congress, the '85 Congress, and, although I haven't researched this thoroughly... remember, there are a number of intervening Congresses who have given power to this Comptroller General as well, and in order to simply drop the removal provision, we would have to assume that each of those Congresses, in giving power to this officer, regarded the removal as incidental and that the critical question for each Congress was the power given no matter who could remove.

Now, in the few moments I have left, I would like to turn to the delegation argument, just to... before I do that, let me say one other thing about the 1985 act.

In this act, Congress quite naturally turned again to the Comptroller General, again thinking it needed independence, but most emphatically again, what they wanted in this act was independence from the President, as a number of counsel this morning have shown.

Congress said, Mr. President, you get no voice in this matter.

It would not tolerate giving the functions to an executive branch officer, it made that quite clear.

So we do know what the intent of this Congress is.

The intent was to keep it out of the hands of the executive.

So it made clear that OMB could not do this job.

It also carefully excised the only discretion that the President had in the earlier versions of the bill so that now he has no discretion in the implementation of this law.

He makes virtually no choices.

But this is political distrust, this is political distrust, not the institutional concern that we saw in the original act.

The Comptroller General isn't performing his watchdog function here.

He's taking over the executive branch function.

He's doing the President's job.

He's administering the law.

Because Congress didn't trust the President to administer the law, it gave it to the officer it could trust, and we submit that that decision was fatal to the act.

Now, just a few points about the delegation arguments, Your Honor.

It is important to see precisely which infirmity in this law we complain of when we talk about undue delegation.

The delegate decides whether to cut spending at all.

This is the effect of the decision, whether to cut spending at all across the board, and how much.

This is the heart of the act.

The act further makes those decisions automatic, and it's the automatic effect, without any approval by elected officials, that make... that creates the problem here.

The forecasting itself is not alone a problem.

And as we have argued, there are differences in kind and degree, but degree is really the central question here, whether Congress has done enough before handing this job off to others.

Did they succeed--

Unidentified Justice: Done enough with its legislative task.

Mr. Williams: --Yes.

They succeed in avoiding the hard choices--

Unidentified Justice: So you are arguing that there's an undue--

Mr. Williams: --Absolutely, absolutely, Your Honor.

That's our... that was our first argument in our brief--

Unidentified Justice: --Yes.

Mr. Williams: --This is an alternative ground for upholding the lower court.

Unidentified Justice: And so it is either... again, it is either... if it isn't legislative, it's executive.

If it isn't executive, it's legislative.

Mr. Williams: Yes, that's my argument, Your Honor.

Now, I would like to just spend a moment saying that the Comptroller General's decisions are obviously--

Unidentified Justice: I take it there, Ms. Williams, I take it there you are relying on the fact that historically, for 199 years, these functions have been performed by the Congress.

Mr. Williams: --To the... yes, absolutely, yes.

Unidentified Justice: With the cooperation of the President.

Mr. Williams: Yes, by statute.

The spending policies and the budget levels of this nation have always been... that has always been accomplished by Congress, and the question is here did they do enough of that to allow them to give the rest to someone else.

And the decisions, though they are not couched as policy decisions, they are certainly not... I don't suggest that the Comptroller General is deliberately choosing among programs that he would like, but makes a great many decisions.

A policy vacuum is created by this law, and the decisions made by the Comptroller General which are not guided in the slightest by Congress... these decisions are not guided at all... jump into that vacuum.

They fill that policy vacuum.

They become the law.

And what policy does the law establish?

The law says we'll reduce the deficit.

Does it tell the Comptroller General when he has these many choices to make whether be should estimate the deficit in a conservative way, in an extravagant way?

Does he decide on the low side or the high side when he's predicting interest rates?

We know that it isn't just cynical manipulation that can take place.

It's honest difference of opinion.

And Mr. Justice Stevens, if they all agree, they can all be wrong, and they could be quite consistently wrong.

And it might be for the reasons that something nobody thought of will happen in the intervening months.

And that happens all the time.

And the difficulty is that there is no policymaker here who is overtly making policy and examining these deficit forecasts.

Thank you, Your Honor.

Chief Justice Burger: Very well.

Mr. Cutler?

ORAL ARGUMENT OF LLOYD N. CUTLER, ESQ. ON BEHALF OF APPELLANT COMPTROLLER GENERAL -- Rebuttal

Mr. Cutler: With respect to what the Solicitor General has said about the Comptroller General being an officer of Congress, I do not believe that has been the consistent position of the executive or Congress.

If the Comptroller were a mere officer or agent of Congress, Congress could have appointed him himself... itself.

Congress decided that it had to be an appointment by the President with the advice and consent of the Senate because the Comptroller was to perform some executive or administrative functions.

There would have been no point to President Wilson's veto, what could he have vetoed, in the Congress reserving to itself the power to remove an officer or agent of the Congress.

Solicitor General Beck argued in the Myers case that the... this very removal provision was unconstitutional because the Solicitor General was an officer of the executive branch.

Unidentified Justice: The Solicitor General?

Mr. Cutler: The Comptroller General.

We are all making, that mistake, sir.

The present Solicitor General is arguing to you that this removal provision is constitutionally objectionable in its own right.

How could that be so if the Comptroller General were a mere officer or agent of Congress?

In the mid-seventies, Congress considered reserving the appointment of the Comptroller General to itself, and the representative of the Office of Legal Counsel went to Congress and testified you can't do that.

Congress is... the Comptroller General is performing executive functions, and he must be appointed by the President.

And in 1979, the Office of Legal Counsel published an opinion to the effect that the conflict of interest laws apply to the Comptroller General and the GAO as an independent agency.

In the Buckley case, this Court in a footnote noted that the Comptroller General, despite his appellations, could, as an arm of Congress that occasionally happened, he could perform administrative functions which he was allowed to perform under an earlier version of the Campaign Act, Campaign Financing Act.

And if you will remember, in Springer, which is twice quoted by this Court in Buckley, even if the Comptroller, let us say, were an independent agency within the legislative branch, as you once characterized him in passing, Justice O'Connor, Springer says that an officer appointed by the legislature cannot perform an executive function, but the case might be different if that officer were appointed by the President, by the executive, the President of the United States.

The Solicitor General has made much of the fact that the order, the report the Comptroller issues under the '85 act is to be binding on the President.

You will recall that in Nixon v. Fitzgerald, the Civil Service Commission had ordered the reinstatement of Mr. Fitzgerald, even though the President himself was involved in removing him from office, and Mr. Fitzgerald brought a lawsuit to enforce his right to reinstatement, and that lawsuit was finally settled by the executive branch, and he was given back his old job.

Moreover, I would submit that if the President has a constitutional objection to issuing the order after the Comptroller General issues his report, he has recourse under the judicial review provisions set forth in Section 274(d)(2) of the act which speaks of the President issuing a different report, order, than the one that is supposedly required by the Comptroller General's report on the claim or defense that it infringes on his constitutional prerogatives.

And that issue is then resolved by the courts.

Severance of the removal provision seems to have become a critical issue in the case, and I would submit that Myers is the square precedent.

Myers severed the removal part of a statute relating to the appointment and removal of postmasters.

The President was allowed to go right on appointing the postmasters, and their functions were not changed in any respect.

Justice Rehnquist: But there's no doubt that Congress wanted postmasters and that it had no choice but to allow the President to appoint them.

I don't see that it is quite the square precedent that you say.

Mr. Cutler: Well, we would submit, Justice Rehnquist, that Congress considered in the debates about the override in 1920 whether if they overrode and then the removal provisions were later held invalid by this Court, would the rest of the statute fall, and the floor leader in the House said he thought not.

He said that it would fall only to the extent that the statute might be held invalid.

In Senator Howard Baker's brief, he suggested to the Court that this may be the last chance for a statutory solution of this terrible budget deficit problem which is a growing cancer and may soon become inoperable.

It's an example of how Congress, dealing with a problem that arguably belonged to both branches, chose this, to repeat again this experiment of using the independent officer of the United States.

It is very important in the history of this country and its development of being able to deal with the complexities of modern government that this Court has not struck down the notion of the independent officer duly appointed by the President.

Chief Justice Burger: Thank you, Counsel.

The case is submitted.

Attribution:

The Oyez Project

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