Cases by Issue - Veteran

Brown, Secretary Of Veterans Affairs v. Gardner - Oral Argument

Fri, 09 Jan 2009 14:50:00 +0000

Case:

Brown, Secretary Of Veterans Affairs v. Gardner

Media File:

93-1128_19941031-argument.mp3

Related Transcript:

transcript.xml

Transcript:

Argument of Edward C. DuMont

Chief Justice Rehnquist: We'll hear argument now in Number 93-1128, Jesse Brown, Secretary of Veterans Affairs v. Fred P. Gardner.

Mr. DuMont.

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

This case involves 38 U.S. Code section 1151, which provides so-called service-connected disability benefits to veterans who have suffered an injury not, in fact, as a result of their military service but as the result of hospitalization or medical care provided by the Veterans Administration.

During the statute's 70-year history of enactment, implementation, repeal, reenactment, recodification, and periodic amendment, the VA has consistently held that section 1151 does not authorize the extension of benefits for disabilities arising as a reasonably foreseeable consequence of properly rendered medical care.

Rather--

Unknown Speaker: During most of that period there was no opportunity for judicial review of that judgment, is that right?

Mr. DuMont: --That's correct, Justice Scalia.

However, we would point out that in addition to that fact, or precisely because of that fact, it's well-known that the Veterans Committees of Congress have always taken a very active interest in the administration of Veterans Affairs.

Unknown Speaker: Well, that would presumably mean that what was being done pleased the then-current committees of Congress.

It would have very little to do with what the statute when originally enacted, by perhaps quite different people, meant.

Mr. DuMont: Well, although we think there is quite a remarkable record of consistency in that regard, since there was a good deal of administration in the twenties, shortly after the enactment, there was a good deal of administration in the thirties, after the reenactment, and there has been a great deal of ongoing administration during the subsequent period... so we believe really that the evidence that Congress has over all of those years expressed no dissatisfaction, in fact no one in Congress, no one else, to our knowledge, has expressed any great dissatisfaction with the core interpretation of section 1151 not to provide benefits for the ordinary, foreseeable results of proper medical care--

Unknown Speaker: Mr. DuMont--

--Would you expect--

--I'm sorry.

I'm sorry.

Go ahead.

Would you expect the Veterans Committee of Congress to object to the VA giving away too many benefits?

Mr. DuMont: --We would expect the veterans and the committee to object if they thought that the Veterans Administration was applying too narrow a construction of the statute, which is the claim that the respondent makes in this case.

Unknown Speaker: Well, we would expect them to object, maybe, if there was a good reason for them to do so.

One thing I don't know, maybe it's in the briefs but I just couldn't get a sense of it, is, what was the percentage of these claims in which the Government's policy would make a difference, because as I understand it, if there were treatment for, later treatment for a service-connected disability, there was no fault requirement at all, so that the only cases in which the Government's policy, if I understand it correctly, would make a difference, are those in which there was no prior service-connected disability, and the veteran simply went in because he was sick or he was hurt or what-not.

Was the percentage of these cases sufficiently high so that anyone would have paid much attention to them?

Did... in other words, I'm saying what practical difference did the policy make?

Mr. DuMont: I think it makes quite a significant practical difference, actually.

I'm not aware of the figures from the very early period.

However, now I can tell you that a very substantial proportion of the care rendered by the VA, both hospitalization and out-patient medical care, is rendered to veterans whose disability is nonservice-connected, or whose condition is a nonservice-connected condition, and therefore--

Unknown Speaker: But in the early years we just don't know.

Prior, for example, to the, what was it, the '34 amendment, we don't know what the substantiality of this effect would have been in that period.

Mr. DuMont: --That's correct.

I'm not aware of... well, of course, until 1924, by and large veterans with nonservice-connected disabilities were not entitled to care at all, which is one of the reasons that we think it's implausible to accept respondent's contention that section 1151 in its original incarnation was intended to somehow put nonservice-connected veterans on a par with service-connected veterans, because really they were quite separate questions.

Unknown Speaker: Mr. DuMont, do we know on the question of numbers, of the unrepresented claimants, and most, if not all, of these were, what percentage prevailed in showing fault or accident?

How many of these claimants did this policy screen out?

This case was screened out, obviously.

What struck me is, I don't know of another compensation system where an unrepresented party is required to prove fault.

If you know of another compensation scheme decided, in the first instance, by an administrator where there is no representation for the claimant and yet the claimant has the burden of showing fault... that seems to be unique.

Mr. DuMont: I'm not aware of another system that has this structure, but I think the entire system of veterans' benefits is unique, but part of what's unique about it is that it is meant to be nonadversarial at the initial stages, and I think there is really no evidence... despite the allegations from respondent, there's no evidence that the claims adjudicators at the VA don't do a proper job of trying to develop the facts of these cases when they're presented and try to figure out whether there was fault on the part of the VA, or some fault that comes within the meaning of the statute.

Unknown Speaker: But the burden is supposed to be on the claimant, the unrepresented claimant, to prove the fault.

Mr. DuMont: Well, that's not... not really true.

At the administrative stage, by statute all factual questions are to be resolved in favor of the claimant, and it's not really a question of who has the burden.

The claimant is supposed to come to the Veterans Administration, and the Veterans Administration has an obligation to help the claimant develop the facts of that claim, so it's really an objective investigation process which the VA people are perfectly capable of implementing, and there's no evidence they're not implementing it correctly.

Unknown Speaker: But the claimant loses unless fault is shown.

Mr. DuMont: The plaintiff cannot... the claimant cannot require... recover benefits unless there is some showing of fault or an accident within the meaning of the regulations, that's correct.

Unknown Speaker: Who must make that showing?

Mr. DuMont: It must be... it must be made on behalf of the claimant, that's correct, but--

Unknown Speaker: Mr. DuMont, may I ask you, if we agree with the court below that the statute just doesn't require the proof of negligence, you point to examples such as, well, what about the removal of a lung, and that results in shortness of breath, should that be covered by the statute.

Does the statute still contain an injury requirement, and is it conceivable that some of the examples you gave would just not be injuries within the meaning of the statute?

Mr. DuMont: --I certainly think that that's--

Unknown Speaker: Quite apart from any negligence requirement.

Mr. DuMont: --I certainly think that that is conceivable.

We think that, as we've said in our brief, that the term "injury" as used in this particular statute has room for interpretation, and that what Congress was thinking about when they passed this statute was not the ordinary, foreseeable result of proper medical care, which is all we are talking about here.

Remember, the respondent came to the VA with a herniated disk that had nothing to do with his military service.

He received a perfectly proper operation.

There's no contention that the care was improper, and he experienced, apparently, a common and foreseeable result of that surgery, which is some weakness of dorsiflexion in the left foot.

Now, the question is, when Congress passed this whole scheme, as they've watched it be administered over the years, did they really intend to extend not only the benefit of free care to an indigent veteran, which is what happened here, for a nonservice-connected disability, but also a lifetime of disability compensation benefits for a perfectly foreseeable result of the proper care he received?

Unknown Speaker: Well, that's why I'm asking the question, because it seems to me that quite apart from any requirement of finding negligence on the part of the hospital, there may be other requirements in the statute to be met for coverage.

Mr. DuMont: Well, we think that's quite right.

The veteran has to suffer an injury, and we don't think... we think it's perfectly acceptable for the Veterans Administration to say that within the context of this statute you do not suffer an injury when you get the care that you were entitled to, it was proper care, and all that happens is that you have some common, foreseeable side effect of that care.

Unknown Speaker: But that's a separate issue.

I mean, you can come to that conclusion and still say that when recovery is required, it is a nonfault-based system.

Mr. DuMont: Yes.

Unknown Speaker: You're saying, if... the Government's case, if I understand it, is there is no recovery even if it is not a common, foreseeable consequence of the operation, but if there is some flukish consequence of the operation you would say there's no recovery unless it's a result of negligence, right, whereas the question that Justice O'Connor puts is a question where it is the foreseeable and normal consequence of the operation.

Mr. DuMont: And that, of course, is the normal case and the case we have here, but--

Unknown Speaker: Well, but that's not the argument you're making.

You are not making the argument that this plaintiff cannot recover because this was the normal consequence and, therefore, when the operation was decided upon you expected to have this and, therefore, you suffered no injury.

You're making the argument that even if you didn't expect this, even if it was unforeseeable, it's not an injury because there was no negligence.

That's a quite different argument, isn't it?

Mr. DuMont: --The argument we're making, Justice Scalia, is this: the statute was intended to cover... let me back up, if I may for a minute, to 1924, and what was the situation in 1924.

Since 1917, the VA had provided hospitalization and medical care benefits for veterans with service-connected disabilities, and that left a gap, a perceived gap in the coverage of the statute.

The VA felt that its authority to compensate for the foreseeable result of the injury would cover the normal results of medical care, but it did not feel that it would cover something where an intervening cause had come along in the form of malpractice by a VA physician or some particularly unforeseeable thing that happened while the veteran was under VA care, and it was for that reason that it proposed the statute in 1924.

That's... if you look at the legislative materials, what they are talking about is, Congress, we have to fix this statute because there are a limited number of cases where we have a veteran who comes in and there's no current statutory authority to compensate for cases of malpractice or error in judgment and so on.

Now, they therefore passed section 213, which is now section 1151.

Now, we know that that was not intended to address the question of nonservice-connected veterans because there was no treatment for nonservice-connected veterans, with limited exceptions, before that, and we know that it could not have been intended exclusively to address the cases of examinations, where somebody might be examined, be injured, and then be found not to have a service-connected condition.

That was a set of cases.

But Congress didn't focus exclusively on that, because in fact they had to amend the statute in 1925 to cover those cases.

So what we're left with, as a matter of detection, is saying, what was Congress getting at?

What they were getting at is these cases of service-connected veterans who were injured under care of the VA in some way that was not considered to be a proximate cause of their service-connected injury, and that was either for one... it was for one of two reasons, either because there was intervening negligence on the part of some VA agent, or because something simply freakish happened, something that was completely unforeseeable.

What it was never intended to cover is the ordinary results of care.

Unknown Speaker: Isn't it possible to interpret that legislative history that you describe as reflecting an intent to have the period when the service-connected disability of a veteran is being treated in hospital as though it were treatment while he was in service, and therefore whatever happened as a result of that would be sort of the equivalent to a service-connected disability itself?

Mr. DuMont: Well, we don't think so, and we don't think so because the question is, what would Congress have intended when it was extending these benefits, and it's perfectly plausible that they intended to cover a veteran for anything that happened as a result of Government fault.

Unknown Speaker: But to give a specific example of the doctor does the best he can and without neglect, a General Hines... that's quoted in the court of appeals opinion.

Mr. DuMont: That's correct.

That statement from the legislative history is inconsistent with our view, and I think we have to say that, reading the legislative history as a--

Unknown Speaker: It is consistent with the view that they wanted to more or less treat the period when the former serviceman is in the hospital as though that was military service, so that any consequences of that would be just as though he had been wounded on the battlefield or something like that.

Mr. DuMont: --One could take that view, but I suggest that by reading the entire legislative history and thinking about what Congress would have had in mind, that would be an unlikely conclusion to reach, because it is simply not plausible that Congress, when they were extending benefits in 1924, thought that what they were doing was saying, not only are we going to... well, remember that they were thinking about service-connected veterans in the first place.

There was a separate issue about nonservice-connected veterans.

But in 1924 they thought, we will liberalize the system.

We will extend care to nonservice-connected veterans on a relatively general basis, but it's not very plausible to me that they thought what they were doing when they extended that limited hospitalization benefit was to say we will pick up the tab for the original care for your nonservice-connected condition plus a lifetime disability bill for anything that happens that really is a result not of your care but of that condition.

Unknown Speaker: Mr. DuMont, why do you divide it into two categories?

You say that there are two things that they had in mind, one is negligence and the other is unanticipated consequences.

Wouldn't unanticipated consequences alone cover negligence as well?

I mean, couldn't it simply be a regime in which the normal consequences of this operation are expected to be borne?

They are not an injury, but if they are unanticipated, whether because the doctor was negligent, and surely that's not anticipated, or for any other reason, they are covered.

Doesn't that come to the same thing?

I have a lot of trouble reading in a negligence requirement.

There's just no language in this statute that smells of negligence.

Mr. DuMont: Well, let me focus on that.

We think the language that's key here as to that point is the language, as a result of, and that language... respondent would have the Court interpret that language as plain on its face, to mean nothing more than factual causation, but I think that's not only inconsistent with some of this Court's precedents in the antitrust area, which we cited in our reply brief, Halmers v. SIPC being the obvious example.

But it's inconsistent with common sense.

I mean, when you have a statute where you--

Unknown Speaker: There's a further textual element that you're leaving out, and that is, there's a provision in there specifically referring to the fault of the claimant, so that there is on the face of the text an expression of consciousness of fault, but it was expressed only with respect to the claimant.

Mr. DuMont: --That's true, but I think it, with respect... that it is of limited significance, because that exclusion for fault of the claimant is one that runs throughout the entire gamut of veterans' benefits statutes.

Unknown Speaker: What does that screen out?

Is that for people who are alcoholics or, what is wilful misconduct on the part of the veteran?

Mr. DuMont: It could be a variety of things.

It could be self-injury, it could be... in many cases in the early days, it was sexually transmitted diseases which were considered misconduct diseases and were not covered.

It might be a veteran who got in a fight while in the VA hospital and injured himself, or didn't take--

Unknown Speaker: Well, suppose the veteran slips when he's... during, in the recovery convalescent period, because he has a cast on, and he slips and falls through no fault of his own and reinjures himself, is he covered?

Mr. DuMont: --Well, I think that would depend on, if it's through no fault of his own and there is no suggestion there is any fault on the part of the Veterans Administration in the conditions that gave rise to the accident, then it would really be a question of whether that was an accident, something simply unforeseeable that might have happened, and in that case he would recover.

Unknown Speaker: If wilful misconduct--

Mr. DuMont: Now, if he was at fault, or if VA was at fault--

Unknown Speaker: --If wilful misconduct does not allow recovery, it seems to me that all other injuries are covered, and all other aggravating conditions.

Mr. DuMont: --Well, I really don't think so, and I think one can interpret the language--

Unknown Speaker: That's the dichotomy the statute sets up.

Mr. DuMont: --Well, one could interpret the statute very broadly to be any factual cause except for wilful misconduct, or one can interpret those same words, I think quite plausibly, to draw a line that says, look, what is this as a result of?

You have some further disability.

Is that as a result of your medical care, or is it as a result of the original condition you walked in the hospital with?

And our position is that any kind of foreseeable, common side effect of treatment is a result of the condition you walked in the hospital with, and not a result of the treatment you received from the Veterans Administration.

Unknown Speaker: I... but that brings you back to Justice Scalia's question.

What's the difference between foreseeable and unforeseeable?

Suppose there's an unexpected and very rare reaction to the medication, and he has a rash that creates some permanent disability, is that recoverable?

Mr. DuMont: That's exactly the kind of case that would normally be covered under the accident definition of the regulations.

It's something that's simply unforeseeable.

It's not the veteran's fault, it's not a normal result of the condition or the treatment, it's not really the fault of the VA, but it's something that happened while you were under VA care, and the Government has chosen to accept responsibility for that.

And I... with respect, I think that's the key point here.

What we're looking for is what has Congress chosen to accept responsibility for in the case of these veterans, and again, I would suggest that it's not plausible that they have chosen to accept responsibility for the ordinary consequences of properly rendered medical care.

Unknown Speaker: I can understand that.

Why do you make your case hard by trying to drag in a negligence requirement?

You're not arguing for a negligence requirement at all.

You're simply arguing for foreseeability versus nonforeseeability.

That's really a different thing.

What is added to the things that are excluded by your arguing about negligence?

Isn't it the case that any injury produced by negligence would have been an unforeseeable injury, not the normally expected consequence of the procedure?

Mr. DuMont: We certainly think that's... that's essentially what we're arguing, and we'd be perfectly happy to express it that way as opposed to, through negligence.

In fact, focusing on negligence is, we think, erroneous, because the standard has never really required the same kind of proof that you would have in a tort case in the civil context.

Unknown Speaker: --question that you're on when you were responding to Justice Kennedy.

You do cover what you call unforeseen, untoward events, right?

Mr. DuMont: That's correct.

Unknown Speaker: And you don't cover contemplated, foreseeable events unless they're negligent.

Mr. DuMont: That's correct.

Unknown Speaker: Well, there are a whole lot of complications that may occur 10 percent of the time, 20 percent of the time, but say, normally, less than half the time.

That's an awful lot of injury, actually, and I take it the issue is whether you cover those, and what... would it work to have a test which said, if it's something bad that occurs more than half the time, okay, that's part of the treatment, but if it occurs sporadically, or less than half the time, approximately, then that's something different, then you'll cover it?

That seems to be what the case is about, that big lump of things there that occur not always, but fairly often.

Mr. DuMont: I think that might be a possible line that the VA could have drawn in interpreting the statute, because we think that the words, "as a result of", give plenty of leeway for deciding what it was that Congress was getting at.

The fact is, the VA has drawn a somewhat different line, a somewhat more conservative line, which is to say, at the 5 or 10 percent level, if this is something that if you open the textbook of medicine and said, you're going to have this operation and here are the possible side effects.

Or to look at it in another way, if this is something you would be considered to have consented to as a matter of informed consent when you underwent the treatment in the first place, then that is not the kind of thing that Congress meant to cover as a disability matter under the statute.

So that's the line that VA has drawn.

We think it's a reasonable line, and we think it's entitled to deference from the courts.

Unknown Speaker: Well, I thought the line that they had drawn was one based on requirement of negligence on the part of the VA.

I mean, that was how I understood your argument to be.

Mr. DuMont: The case most often comes up in a posture of somebody... of the question being, was there fault or not fault, and that's most often thought of in terms of negligence of care versus nonnegligence of care.

But it's in fact a little bit broader than that.

It's any kind of demonstrated fault or error in judgment on the part of the people at the VA, or any kind of simply freakish, unforeseeable accident that might occur, that the Government is willing to accept responsibility for, because after all you were under VA care when it happened, and that seems to be a reasonable line, giving the benefit of the doubt to the veteran.

Unknown Speaker: Can I be clear, though, it has to be sufficiently freakish that it would not have normally been covered in the textbooks and that sort of thing?

I mean, the fact that it's just 1 out of 100 cases would not be enough to make it freakish.

Mr. DuMont: That's correct, and I think, you know, one good example of that is the recent reconsideration of the accident definition in the case of blood transfusions in the early 1980's that might have transmitted the HIV virus.

In those cases, it was determined that up to a certain point it was really just not foreseeable to anybody that was a way you could get HIV, and those, therefore, were covered, those cases.

But when it became foreseeable, then there was merely a question of negligence or consent.

If there are no further questions at this time, I'd like to save the remainder of my time for rebuttal.

Unknown Speaker: Very well, Mr. DuMont.

Mr. Hannon, we'll hear from you.

Argument of Joseph M. Hannon, Jr.

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

Good morning.

I would like first to address a number of points that were made by Mr. DuMont in his argument before I proceed to my presentation.

First, there was a suggestion that because the VA adjudicates compensation claims in a proper fashion and there's no evidence that they do so in an improper fashion, this scheme of fault or accident is permissible.

In Mr. Gardner's own case, the VA did not adjudicate his compensation claim according to their own standards.

He applied to the regional office in Waco, Texas, with the assistance of VA personnel who actually gave him the form to fill out initially, and the hearing officer, who was a lay person, not trained in the law or medicine, but someone whose job it is to attempt to apply the statutes of Congress to compensation claims, denied Mr. Gardner's claim based upon an outdated regulation.

The regulation that was utilized by the hearing officer was one that was amended by the Veterans Administration in 1978.

It had existed from 1936 to 1978.

It was the most stringent regulation that the VA has ever applied.

Unknown Speaker: Mr. Hannon, how does this bear on the question that's presented in the petition for certiorari?

Mr. Hannon: It bears on the question that's presented because of the argument of the Veterans Administration that the Court should defer to a so-called longstanding method of interpreting the statute, and their longstanding method of interpreting the statute wasn't even applied accurately in Mr. Gardner's case.

There was a question of Justice Souter, I believe, about the percentages of cases that we're really talking about here, and that question was asked by Judge Archer at the Federal circuit, and this Court doesn't know, because the VA hasn't presented to the Court any evidence, or to any court any evidence of what kinds of cases we're talking about here, and the numbers of cases we're talking about, other than the Harvard study, which is completely speculative, as amicus Paralyzed Veterans indicates.

The Veterans--

Unknown Speaker: Mr. Hannon, could you tell me whether... what is the difference between you and the Government, if the Government's position is taken to be not a requirement of negligence but simply a requirement that the injury not be one of the normal or possible... known to be possible consequences of the medical procedure?

Would you still quarrel with that test?

Mr. Hannon: --I would, Your Honor.

Mr. Gardner read the statute and wrote a letter to the VA that said, I have an injury as a result of surgical treatment that has resulted in additional disability.

Unknown Speaker: What about shortness of breath after removal of a diseased lung?

Mr. Hannon: There--

Unknown Speaker: Is that covered?

Mr. Hannon: --It is not, and the Department says it's not covered--

Unknown Speaker: Why not?

Mr. Hannon: --and we say it's not covered for different reasons.

Unknown Speaker: What is the reason?

Mr. Hannon: The reason of the Department is that it's an absurd result of a literal reading of the statute.

If the Court wishes to accept that explanation, that doesn't mean that the statute is ambiguous and requires a fault-based or accident-based regulation--

Unknown Speaker: You mean, there's no language in the statute that would exclude that, but just, it's so absurd you will ignore the language of the statute?

Mr. Hannon: --That's the Department's view.

Unknown Speaker: No, is that your view?

Mr. Hannon: It is not.

My view is--

Unknown Speaker: What language in the statute excludes the veteran suing for shortness of breath after he has voluntarily agreed to have a lung removed?

Mr. Hannon: --The language in the statute is that language which requires that there be an additional disability as a result of an injury which itself is the result of hospital treatment.

The VA--

Unknown Speaker: Well, this is an additional injury.

I mean, he didn't have shortness of breath before.

Now, he does.

Mr. Hannon: --Under the VA compensation system, an additional disability is a disability which causes a diminishment in the veteran's ability to earn a living.

That is the gist of the compensation scheme that runs throughout the Veteran's Administration law.

Unknown Speaker: I'm looking for the language in the statute.

What language in the statute excludes this?

Mr. Hannon: That's the language that we rely on.

Unknown Speaker: What language?

Mr. Hannon: It must result in an "additional disability".

If the veteran goes to the VA... I would like to use the gangrene example.

I'll use the lung example if the Court wishes--

Unknown Speaker: Gangrene's okay.

Mr. Hannon: --and says, I have diabetes, and as a result of diabetes I've developed an infection in my leg.

What should be done here?

And the physicians at the VA Medical Hospital, in conjunction, in consultation with the veteran, make a decision, an informed decision, that they're going to amputate that leg, and they do so.

There would be no claim for benefits available to the veteran because his earning capacity, his additional disability, would be determined by comparing his condition after the amputation of the leg with his condition before the treatment in the hospital.

Unknown Speaker: Oh, I see, and the leg was not usable before anyway, is that the point?

Mr. Hannon: The question would be whether he has an additional disability.

If it is decided to remove the leg because in the absence of that surgery he's going to die from poison, he doesn't have an additional disability as contemplated by Congress in the compensation scheme.

I would also suggest to the Court that the words

"as a result of the surgical treatment. "

also make it clear that that is not a compensable condition.

It's because the amputation of a leg did not occur as a result of surgery or treatment in a direct causal sense, as the Department would like the Court to apply, but as a matter of an informed choice by the veteran with his physician to contemplate the intended outcome of medical treatment.

That is, the amputation of the leg.

We all agree that this statute does not apply to the intended outcomes of medical care and treatment.

Unknown Speaker: Even if that intent is based on negligent advice?

In other words, might there be a case in which you want to depend on negligence to get out of this particular analytical framework.

Mr. Hannon: I think our no-fault reading of the statute necessarily includes that type of--

Unknown Speaker: Just an--

Mr. Hannon: --negligent conduct.

Unknown Speaker: --argument.

So, yeah.

Mr. Hannon: It would necessarily include that.

Unknown Speaker: But you would still have to prove the negligence in order to prove, I suppose, that this was something other than the usual informed consent case.

You say the reason it's not an informed consent case is that we got negligent advice.

Mr. Hannon: Justice Souter, we reject even the informed consent analysis that is proposed by the Department here, because that is not what the language of Congress intends.

Informed consent... in this case, in fact, before the hearing officer in Texas, after Mr. Gardner made his appeal, the hearing officer trotted out the informed consent form that had been signed by Mr. Gardner.

Now, the terms of that informed consent form were as broad as the attorneys of the Department and the physicians could possibly make it.

The position of the Department seems to be that anything that is contained within an informed consent form executed by a patient in a hospital with VA medical personnel is not covered under the statute.

Unknown Speaker: And what is your position?

Your position is, I gather, that if the consequence is 100 percent sure, if you have a gangrenous leg removed, you will not have a leg, that's 100 percent sure.

Therefore, that is intended.

But if the VA tells you, what if the VA tells you there's a 50-50 chance that if you have this procedure you'll have this other side effect, is that intended?

Mr. Hannon: Your Honor, I--

Unknown Speaker: Is that an intended consequence?

Mr. Hannon: --I think that the difficult and close questions are not to be resolved by way of a regulation.

The difficult and closed questions--

Unknown Speaker: I don't care how they're... I want to know what your answer to it is.

I didn't ask how it should be resolved.

What is your answer to it?

Mr. Hannon: --If it is a--

Unknown Speaker: A 50 percent chance.

Is that intended?

Mr. Hannon: --If it's an injury that results from surgery that creates an increased disability, that is the test, and in our view--

Unknown Speaker: How does that translate into an answer to my question?

Mr. Hannon: --It would have to... it would have to be framed in the context of specific facts of a particular veteran.

Unknown Speaker: Why do you need to know anything more than what I've told you?

He is told that if you have this operation, there's a 50-percent chance that you will have this accompanying disability.

Do you want the operation?

He says, yes.

Mr. Hannon: We would consider--

Unknown Speaker: Is that an intended consequence?

Mr. Hannon: --And the consequence is an adverse--

Unknown Speaker: Yes.

Mr. Hannon: --medical outcome?

Unknown Speaker: Yes.

Yes.

It's an additional disability.

Mr. Hannon: Congress intended to cover the adverse medical outcome of the surgery under the statute.

Unknown Speaker: So it's only 100... what about 75 percent?

There's a 75-percent... is that intended?

Mr. Hannon: Your Honor, our view is it's not a foreseeability standard, it is a simple causal relationship between the surgery and additional disability.

Unknown Speaker: It's caused in all of these cases.

It says it's caused.

Mr. Hannon: If it is an intended outcome that doesn't create an additional disability, which is what we've hypothesized here--

Unknown Speaker: I am trying to find out what you mean by intended.

Is the only thing you mean by intended that you are 100 percent sure that this will happen?

If you remove a lung, you'll be short of breath.

If you remove the leg, you will not have a leg.

Is that the only thing you are willing to acknowledge is an intended consequence of the operation on the part of the patient?

Mr. Hannon: --That's essentially correct.

Unknown Speaker: 100 percent.

75 percent won't do.

Mr. Hannon: Your Honor, again, I will not accept the notion that foreseeability is a proper test of the clear language of the statute.

Unknown Speaker: You start throwing around words like "intended", it seems to me you've gotten yourself into foreseeability, at least where... where the consequences are told to the--

Mr. Hannon: The classic example that was set forth by General Hines himself at the origin of this statute in 1924 was a circumstance where a veteran goes into a VA hospital to submit himself to a spinal tap for the purposes of conducting a diagnostic test.

Both today and in 1924, there is a risk, a hazard, in the very words of General Hines, that that veteran may be paralyzed as a result of that spinal tap, through absolutely no fault of medical personnel.

That was an example that was not only cited by General Hines, but it was also cited by other Senators during the 1924 consideration of this statute.

That says that the words of Congress mean that the adverse outcomes of surgical treatment... Your Honor, I do not care how predictable they are, the adverse outcomes of medical treatment under the statute are contemplated as being covered and compensable, and in the case of Mr. Gardner--

Unknown Speaker: --You care how foreseeable they are.

I thought we've established, if it's 100 percent, you will not allow them to be... shortness of breath.

You will not allow that to be compensated.

Mr. Hannon: --Your Honor, I do not consider "intended" to have a foreseeability concept to it.

Mr. Gardner went into this surgery with the expectation that his neurological pain would go away.

It was the intended consequence of the surgery that that would occur.

Instead of that occurring, Mr. Gardner suffered a spinal cord injury which is permanent.

No amount of surgery is going to bring back to Mr. Gardner the use of his legs, in this case.

That was not an intended outcome of the surgery.

It was undeniably an outcome of the surgery.

The Department has admitted it in its supplemental memorandum before the Court of Veterans Affairs.

Mr. DuMont is incorrect when he suggests to the Court that this is a foreseeable outcome in the case of Mr. Gardner.

It is not.

It is an adverse outcome, and for them to suggest to Mr. Gardner that his spinal cord injury constitutes a usual and foreseeable outcome of this type of surgery is simply inappropriate.

Unknown Speaker: Mr. Hannon, would it be easier for you, and perhaps for us, if we drew this distinction, the distinction between the consequences, simply as a straight matter of factual causation, of appropriate medical procedures and, on the other hand, the imposition of inappropriate medical procedures?

In your case, you're not claiming that it was inappropriate to have disk surgery.

What you're claiming is that there was a consequence of the disk surgery, and you should not be required to prove fault in order to establish how that consequence occurred in the course of what, in the abstract at least, was a perfectly appropriate procedure, some disk surgery.

Whereas, some of the questions that are being presented to you, and some of the hypotheticals that are being raised, are hypotheticals about procedures which are not warranted at all.

If I've got a scratch in my leg, it is not an appropriate procedure simply to amputate my leg.

If I have gangrene which cannot be controlled, it is.

Wouldn't you be on easier ground if you said, look, the only case that I'm worried about here, and the only case which perhaps the regs were intended to address, is the case in which the procedure is appropriate, but something goes wrong in the course of it, there is a consequence, whether it be unexpected, merely, or negligent in fact, and we don't have to prove fault in order to get compensation for that consequence?

Would that be a satisfactory position for you, and would it be a possible reading of the reg?

Mr. Hannon: Justice Souter, I think that Your Honor's articulation of the outcome is exactly what the words of Congress said, that if there is an injury as a result of the surgery and it meets the standard for compensation as an additional disability, it matters not what was intended or foreseeable.

The point of the matter is that it is a hazard, and I must say that--

Unknown Speaker: Well, let me ask you, then, do you think the regulation addresses the case of the procedure which is totally inappropriate, the procedure which is totally the result of negligence?

I scratch my leg, and the VA says we'll have to take it off.

Does the reg address that... I'm sorry, the statute address that?

Mr. Hannon: --Yes, because it refers to treatment.

I would suggest that--

Unknown Speaker: We've got to... the statute is all or nothing.

Is the distinction that I'm making a legitimate distinction?

Mr. Hannon: --I think the statute on its plain language would cover the circumstance that Your Honor posits here, because we're talking about hospitalization, medical or surgical treatment, and if the question is whether the misdiagnosis constitutes one of those predicates, the Veterans Administration, the Department, is obligated under the statutory requirement that they broadly construe the acts of Congress to apply that analysis to the benefit of the veteran.

In fact, under their own regulations they're required to.

So in the situation that Your Honor has hypothesized, there would undoubtedly be compensation under 1151.

Unknown Speaker: Does it help you to say that your reliance in some instances on foreseeability and intent are relevant to determining whether or not there's an additional disability?

That is to say, in the hypothetical of removal of a lung with shortness of breath, we know, as a matter of foreseeability, that the person is always going to be disabled because of the bad lung, and it is intended, and it is foreseeable, that there would be shortness of breath, but we compare that with what's intended and foreseeable if he had the poor lung, so, to that extent, intent and foreseeability do bear on whether or not there's an additional disability.

Mr. Hannon: Your Honor, I really think it's much simpler and ought to be much simpler, and the reason why I think it ought to be much simpler is the entire compensation scheme for veterans presupposes that the veteran is entitled to benefits by virtue of his or her status--

Unknown Speaker: Yes.

Mr. Hannon: --as a veteran, and a nexus in the case of service-connected benefits, a nexus between service and a disability.

In this case, Congress concluded that when a veteran, service-connected or otherwise, walks into a Veterans Administration hospital, Congress is essentially saying, you're in the Army now, and as Justice Stevens indicated earlier on, that means that any hazards that the veteran, by virtue of his status of being in the hospital, gets exposed to in that hospital that result in an additional disability, are going to be covered.

Therefore--

Unknown Speaker: But what do the words "additional disability" mean, additional to what?

Mr. Hannon: --There are... there are interpretive regulations that the Department has enacted that are not at issue in this case that Mr. DuMont and I agree do apply.

One of those regulations indicates that in comparing the condition of the veteran after the surgery... excuse me.

In determining the answer to Your Honor's question, the condition of the veteran after the surgery as compared to the condition of the veteran before the surgery.

That's common sense--

Unknown Speaker: And that imports some notions of foreseeability, I take it.

I'm simply trying to say that your answers to Justice Scalia earlier with reference to intent and what we foresee really does have a bearing on whether or not there is an additional disability, but it has nothing to do with whether or not there's an injury.

Mr. Hannon: --I would very much like to adopt some type of a regulation that provides foreseeability to solve some of these unexpected medical problems that we're talking about here, but it's... I don't see it being in the statute, Your Honor.

I think--

Unknown Speaker: Did you say that there were regulations defining additional disability and that you had no disagreement with the Veterans Administration about those?

Mr. Hannon: --In 358, my recollection is, Your Honor, that there is a regulation that directs the hearing officer, in determining whether there is an additional disability, to make a simple comparison between the condition of the veteran after the exposure to the predicate event, in this case surgery, and the condition of the veteran before the predicate event.

That is, when he went in, the condition the veteran was in when he went in.

In the case of our diabetic, the hypothetical is that the diabetic goes into the hospital with poison in the system and requires the amputation of a leg.

The situation involving the removal of a lung is obviously, again, a situation where the condition of the veteran before hospitalization is obviously a more diminished condition in terms of earning capacity as opposed to the intended outcome of the surgery, and that is the removal of a lung.

Unknown Speaker: Well, Mr. Hannon, how about a back problem caused by a disk, and before surgery the person is so disabled because of the pain that he's not able to carry on his normal work, and as a result of the surgery, he still has pain, and a difficulty with the left foot, and can't do the normal work.

No recovery.

I mean, it's the same disability, right?

You'd accept that?

Mr. Hannon: I don't believe there's any additional disability in Your Honor's hypothesis.

Unknown Speaker: Right.

Mr. Hannon: I can contemplate a situation which would require the analysis of not just the additional disability language but also require an analysis of the as-a-result-of language.

Is the condition after surgery indeed as a result of the surgery?

Unknown Speaker: Didn't the Veterans Board here decide in this case that the causation requirement was not met with respect to the left calf and the ankle?

Mr. Hannon: Your Honor, in their brief to the Court--

Unknown Speaker: Didn't the board decide that?

Mr. Hannon: --The board... the board in its decision concluded in the alternative, that the--

Unknown Speaker: Could you say yes or no?

Mr. Hannon: --post operative condition--

Unknown Speaker: I mean, this is getting kind of tangled up.

Mr. Hannon: --Yes.

Unknown Speaker: I thought the board made a decision on causation and said, no causation as to left calf and ankle.

Yes or no.

Mr. Hannon: They did.

Unknown Speaker: Okay, and what's left is the left foot problem, and as to that, the board said there was causation there, but it was a common, foreseeable result.

Mr. Hannon: It was... that's correct, essentially, a usual after-result.

Without proof of negligence, he can't recover for that.

But subsequently, Your Honor, when I argued on behalf of Mr. Gardner as an amicus before the Court of Veterans' Appeals, that very finding raised the question as to whether this issue was factually ripe for a decision by that court, and it was argued by me that there was plenty of evidence in the record that indicated that Mr. Gardner's condition was as a result of the surgery.

There indeed had been a medical examination by the surgeon that concluded that his condition, both conditions that Your Honor referred to, were as a result of the surgery, and counsel on behalf of the Department before the Court of Veterans' Appeals acknowledged the case is ripe for a decision, it turns only on the regulation, and that Mr. Gardner is, indeed, 100 percent disabled as a result of the surgery, and that is the record of the case.

We have mentioned this in our brief, and Mr. DuMont is not familiar with those oral presentations at that level of the case.

Unknown Speaker: You talk about some sort of oral presentations to the Court of Veterans' Appeals.

Mr. Hannon: Yes, Your Honor.

Unknown Speaker: And did they deal with the question of causation?

Mr. Hannon: In their opinion in this case, they did not.

They dealt exclusively with the fault issue as to the Federal circuit.

Unknown Speaker: From what I gather your description of the representations were, it doesn't sound as though they dealt with the question of causation, either.

Mr. Hannon: They did not.

Unknown Speaker: Okay.

Mr. Hannon: In fact, one of the issues that the Court of Veterans' Appeals asked the VA to address was the significance of the surgeon's examination in which the surgeon's opinion was that the condition was as a result of surgery, and while that issue was addressed, it did not inform the decision of the Court of Veterans' Appeals, and I take it, quite frankly, that the Department would not have asked this Court to hear the case if there were a factual obstacle to reaching this particular decision.

In our view, there is no question that Mr. Gardner is permanently disabled as a result of this surgery, and therefore ultimately his entitlement to the compensation will depend upon this Court's decision about the regulation.

Unknown Speaker: His case is easier in one respect if you take... than the one I'm going to put.

If you take the instance of the leg that comes off, if the veteran could walk into the hospital to have the operation and he then loses the leg, obviously there's an additional disability there.

And yet, if the testimony, if the conclusion were that he would have died without the removal of the leg, you would not claim that he should be compensated for disability, whereas if the conclusion were that he would have been perfectly fine if the leg had been left on, you would claim for disability.

So you're claiming something more than the mere factual foreseeability of the consequence of the operation.

You're assuming something about the appropriateness of what was done to him, aren't you?

Mr. Hannon: I'm assuming, Your Honor, that there's evidence that the additional disability was incurred "as a result of" surgery.

Unknown Speaker: Well, it's as a result of it factually.

He couldn't walk because he lost his leg.

There's clear factual causation, but if, in fact, it were accepted as a conclusion that he would have died without the loss of... without the amputation, you would not claim that that was a compensable injury.

Mr. Hannon: Your Honor, I think the language as--

Unknown Speaker: Would you?

Would you?

You wouldn't be claiming that that was a compensable consequence, would you?

Mr. Hannon: --I would not, and it's because it's not as a result of the surgery.

Unknown Speaker: And it's also not an additional disability, if he's going to die anyway--

Mr. Hannon: But it's--

Unknown Speaker: --whereas in the case where the amputation is improperly performed, he's worse off than he would have been if there had been no operation.

Mr. Hannon: --I really--

Unknown Speaker: One it's an additional disability, the other it's not.

Mr. Hannon: --I really do think that all of the potential cases that can be hypothesized are amenable to a decision under the plain language of the statute.

The hard case, the truly hard case is taken care of by another mechanism that is available here, and that is, the Board of Veterans' Appeals would have to simply make a factual determination, as we're discussing here, as to whether the veteran's condition meets these predicates for compensation.

If the Board of Veterans' Appeals in the hard case makes a determination that there is no injury entitled to compensation for factual reasons as opposed to a regulation such as this, which across the board cuts out a whole group of cases, then that factual determination is subject to overturn by the Court of Veterans' Appeals only on a clearly erroneous standard, so there is deference to the Board of Veterans' Appeals in the tough case on a factual basis.

Unknown Speaker: Well, I mean, you can't talk about factual bases without talking about the law.

I mean, what we're arguing about here is, what facts are relevant?

Is the fact that it's 25 percent chance of this occurring, is that a relevant fact.

Mr. Hannon: Justice Scalia--

Unknown Speaker: don't think it's any answer to say, you know, in the hard case we can... you know, you can handle it by the factual determinations.

Mr. Hannon: --Well, here's my answer.

What Your Honor is inviting is, Your Honor is inviting a regulation like the current regulation, which was not in place, by the way, at the time of Mr. Gardner's surgery, and the current regulation says that the foreseeable consequences of medical care and treatment, properly administered, would not entitle the veteran to compensation without a showing of fault.

Now, to my mind, we're talking about foreseeability in a medical context, and that determination is an unreasonable one, makes no sense to me, and cannot possibly inform the decision of the Veterans' Administration how to handle a case on an individual basis.

The Office of General Counsel opinion which led to that regulation dealt with exposure to HIV virus by virtue of receiving a blood transfusion.

The conclusion of the Office of General Counsel was that if the veteran received a blood transfusion before it was known that you could contract HIV, that was considered unforeseeable and an accident, and you get compensation.

On the other hand, the veterans who were exposed to HIV, contracted it, and died during the time period when the VA knew that that was a possibility, aren't entitled to compensation under 1151, and unless the literal language of the statute isn't followed by the VA on a case-by-case basis, regulations such as this, and their changing nature over the 70 years that we've seen them, are going to essentially deny veterans the benefits that Congress said they should have.

Different veterans with the same condition at different points in time in the history of the administration of this statute would be granted benefits or denied benefits, depending upon the particular interpretation that the VA had of the statute at that particular point in time.

Congress has not authorized the Veterans Administration to make such policy choices.

Rather, Congress has said that they must make rules and regulations consistent with the laws, and the Court of Veterans' Appeals has a mandate to strike down those regulations which are inconsistent with the laws, and this regulation is inconsistent with the laws, and the hard cases are taken care of by the factual deference that the Court owes to the Board of Veterans' Appeals.

Unknown Speaker: Mr. Hannon, do you agree with the Government that at the time the statute was passed there were very few cases of nonservice-connected disability, whereas today there are a great many in the veterans' hospitals?

Mr. Hannon: There's no evidence one way or the other.

Unknown Speaker: Thank you, Mr. Hannon.

Mr. DuMont, you have 7 minutes remaining.

Rebuttal of Edward C. DuMont

Mr. DuMont: Thank you, Your Honor.

To return just briefly, Justice Ginsburg, to your question about... and perhaps this is also your question, Justice Stevens, about numbers, what I can tell you is, on page 35 of our brief at note 20 we point out that in 1933, when the statute, after all, had just been repealed, there were 66,000 admissions to VA hospitals for nonservice-connected conditions, whereas in 1934, when Senator Steiwer was arguing for reenactment of this provision, what he said was, there might be 65 or 67 people who were affected by reenacting section 213.

That has two significances.

One is, there were quite a few people out there who presumably had some bad consequence of care who were not getting benefits, and one might have thought that they would bring this to the attention of Congress if that was wrong, and the second is that there were simply not very many people who were being granted benefits under this statute when Congress reenacted it in 1934, and that gives us some idea of what scope they had in mind when they reenacted it.

Justice Stevens, you had asked about why one shouldn't interpret the statute--

Unknown Speaker: Mr. DuMont, before you get off the veterans who didn't complain to Congress that this statute should have been cured, once this problem surfaced at two judicial levels, was there any attempt on the part of the Veterans Administration to get a clarifying amendment to the statute?

Mr. DuMont: --I believe there was an attempt to get the statute amended.

I don't believe it eventuated in anything.

Unknown Speaker: In response to the Federal circuit decision.

Mr. DuMont: I believe that the VA made a legislative proposal, but certainly nothing was enacted.

Justice Stevens, you asked about the sort of you're-in-the-Army-now hypothetical, as Mr. Hannon put it.

We think the case of somebody who's in the Army is really quite different from somebody who's in the hospital.

Congress has made the choice explicitly in a statute to say that anyone... in the line of duty has been interpreted very broadly to mean anything that happens to you while you are physically in the service.

In the hospital, we don't think Congress would have had any reason to adopt the same kind of view and, in fact, that's pointed up by the anomaly that respondent's position creates.

If you have a veteran with exactly the same condition who goes to a private hospital and receives exactly the same care, has exactly the same result, he will not be entitled to any benefits under 1151 because it wasn't VA care, and it's odd that Congress would have had in mind having very different benefits regimes for veterans who are really in very much the same position, unless you think they had in mind something--

Unknown Speaker: The veteran in a private hospital wouldn't fit into the hypothetical of being similar to being someone in the service.

Mr. DuMont: --But again, the question is--

Unknown Speaker: I'm not quite sure I understand the thrust of your argument.

Mr. DuMont: --Well, again, the question is, what is it that Congress would reasonably be thought to have taken responsibility for, and I think they would have taken responsibility for a range of circumstances that are much the same as those that would have given rise to recovery in the private hospital setting.

Again, you can make that... you can see that even more clearly by the fact that many of these people, especially in the early days, were entitled to care only on a space-available basis, so you might very well have had a veteran with a nonservice-connected disability who was turned away from a VA hospital only because there was no space, went to a private hospital, he not only has to pay for his care now, he doesn't get these disability benefits, when in fact the care he received was identical and was perfectly proper in both cases.

We think that's quite anomalous.

Unknown Speaker: Mr. DuMont, I was asking you earlier about just the law in general, and I guess we sort of came to the conclusion that you really don't have to establish a separate negligence rule, that it would be enough if you had a rule that any reasonably anticipable consequence, if that is a word, would not be triggered, this compensation.

How does that... how would such a rule apply to this case?

How was this case decided by the courts below?

Was it decided only on the basis that there was no negligence and therefore no compensation, or was there a finding of both no negligence and also that the consequences were an anticipable result of the operation?

Mr. DuMont: As Justice O'Connor pointed out, there were really three sort of claimed additional disabilities, two of them the board quite clearly found bore no factual relationship to the surgery.

The third one, which was the left foot, they simply said that there was no negligence.

That's the way they disposed of the case, and they didn't ever reach the question of--

Unknown Speaker: So to win the case up here we have to agree with you that there is simply a no-negligence test.

Mr. DuMont: --Well, I don't think so.

I think you could articulate the rule exactly the way you did, and it might have to be remanded back to the Board of Veterans' Appeals for further factual findings to see how that test would be applied here, although I think the natural assumption would be that if there was no negligence then what they said was, look, this was a common, foreseeable result of this surgery, and if that's true, then we win under both bases.

Unknown Speaker: Mr. Hannon, I... Mr. DuMont, I thought the Board of Veterans Appeals said that the foot problems were a common, foreseeable result of the surgery.

Mr. DuMont: That's correct.

They said they were a common, foreseeable result of the surgery, and there was no indication of any kind of fault on the part of VA.

They're really two sides of the same coin, I think.

So one could either read their opinion to have made a definitive finding on that issue and we win hands-down, or one could read it to leave open some room for foreseeability analysis that hasn't taken place and remand it back, but I'm quite confident what the result would be based on their opinion.

Just, in quick closing, we think that the discussion with Mr. Hannon has clearly demonstrated our fundamental point here, which is that the language of the statute does not, on its face, resolve this question.

The as-a-result-of language, the injury language, leave plenty of room for interpretation.

And when we get down to questions like, is it 100 percent, or 75 percent, or 50 percent, or 5 percent where one draws a foreseeability line, that is classically the kind of decision that ought to be left in the hands of the administrative agency that has been committed by Congress with the task of interpreting the statute and administering it, and I think that the VA has done a perfectly reasonable job here, the courts below failed to defer, and this Court should correct that error.

Thank you.

Chief Justice Rehnquist: Thank you, Mr. DuMont.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Traynor v. Turnage - Oral Argument

Wed, 13 Apr 2011 20:11:25 +0000

Case:

Traynor v. Turnage

Media File:

86-622_19871207-argument.mp3

Related Transcript:

86-622_19871207-argument.xml

Transcript:

ORAL ARGUMENT OF KEITH A. TEEL, ESQ. ON BEHALF OF PETITIONERS

Chief Justice William H. Rehnquist: Mr. Teel, you may proceed whenever you're ready.

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

These cases today raise two issues for your consideration.

The primary issue is not, as the Government suggests in its brief, the medical question of whether alcoholism is a disease.

That issue has been decided by the Congress, which has determined that alcoholism is a handicap and that it is an illness, a finding that is conclusively supported by the American Medical Association, the American Psychiatric Association, and the National Council on Alcoholism, all of whom have filed briefs in support of petitioners in this case.

Instead, the question here is whether the Veterans' Administration can ignore Congress' determination and enforce a regulation that defines alcoholism to be willful misconduct, which regulation is applied to bar alcoholic veterans from obtaining extensions of the time in which to use their VA educational benefits.

We contend that the VA cannot use such a regulation because it is impermissibly discriminatory under Section 504 of the Rehabilitation Act of 1973.

Before reaching that issue, however, there is a threshold question of the jurisdiction of the Federal courts even to consider the legality of the willful misconduct regulation.

Section 211(a) of the Veterans Benefits Statutes precludes review of certain VA decisions.

The Government argues for a sweeping interpretation of section 211(a), one that would bar review of all VA action except constitutional challenges to VA statutes, and challenges by persons not themselves in a position to receive Veterans' Administration benefits by who are affected by VA action.

Petitioners argue that Section 211(a) should be read slightly more narrowly and that at a minimum review of VA regulations to determine whether they comply with non-VA statutes is permitted.

Unidentified Justice: Is that because of the text, Mr. Teel, that you say that review of Regs to see if they comply with non-VA statutes?

Mr. Teel: It is because of the text and because of the legislative history and the statutory scheme for review that we believe Congress created here, which I will explain in just a moment.

The petitioners here are both honorably discharged veterans.

They each have a family history of alcoholism, and each of them began drinking while they were children; Mr. Traynor at age 8, Mr. McKelvey at age 13.

After they left the Service, they were both disabled by alcoholism for a period of six to eight years.

Before 1977, veterans were required to use their educational benefits within a period of ten years following their separation from the Service.

In 1977, the Educational Benefits statute was amended by the Congress to allow extensions of the limiting date, the ten-year period, to veterans who had been unable to use those benefits within the ten year period because of a disability that was not the result of their own willful misconduct.

Both petitioners here applied for an extension of the time in which to use their benefits.

Both were denied that extension in decisions of the Board of Veterans Appeals, in which the Board of Veterans Appeals stated explicitly the extension were being denied on the basis of the Willful Misconduct Regulation at issue here.

Thereafter, both petitioners brought suit; both prevailed on summary judgment in the district courts.

In the Courts of Appeals, Mr. Traynor lost on the jurisdictional issue in the Second Circuit; Mr. McKelvey lost on the merits question in the District of Columbia Circuit.

We believe that both Courts were in error on the issues in which they ruled against petitioners.

I'd like to begin with the jurisdictional issue.

It is difficult to imagine a less attractive circumstance for a Federal Agency to argue that review is precluded.

In this case, the Veterans Administration refused to decide the issue here; whether this regulation violated the Rehabilitation Act.

Even though it would not decide the question, it contends that the Courts cannot decide the question either.

Finally, at the same time it is making these arguments to the Courts, it has repeatedly during this decade told the Congress in response to questions, and in testimony, that review of VA regulations is in fact permitted under Section 211(a).

As with any case involving the question of bars to judicial review, we begin here with a strong presumption that there is judicial review which can be overcome by a clear and convincing showing that Congress did not intend such review.

In Block v. Community Nutrition Institute, in 1984, this Court enunciated a number of factors that should be considered in deciding whether review is precluded.

The first of these is the language of the Statute; others are the structure of the statutory scheme and the legislative history.

Let me address those three elements.

First, with respect to the language of Section 211(a), is not as sweeping as the Government suggests.

The specific language at issue here is whether decisions of the Administrator on any question of law or fact, under any law administered by the VA providing benefits to veterans is barred from review.

Now, certainly the Congress could have drafted a statute far more clearly had they intended to entirely preclude review of everything affecting the VA.

They simply could have said, nothing the VA does can be challenged in Court.

That's not what we have here.

We have a statute here with a number of specific clauses that must be interpreted.

First, there's a requirement in the Statute that a decision be on a question of law or fact arising under any statute administered by the Veterans' Administration.

Judge Kearse noted in her dissent in Traynor in the Second Circuit that not only was the Rehabilitation Act not administered by the VA, there's a distinction there between administering and complying with a statute.

Presumably all Federal agencies comply with Federal statutes of broad scope that affect it.

Administering a statute, we believe, indicates some expertise.

Here, the President, by Executive Order, has delegated the administration of Section 504 to the Justice Department.

This Court recognized in its decision in 1986 in Bowen v. American Hospital Association that a number of agencies have issued regulations under Section 504 and that those agencies do not have any particular expertise so there is no reason to give deference to those agencies' views with respect to Section 504.

The reason we believe that is relevant is that is some indication that those agencies do not administer the statute; they merely comply with a statute.

Secondly, there is a requirement that the Statute provide benefits to veterans.

Again, the Rehabilitation Act does not do that.

What we have with the Rehabilitation Act is a limitation on the power of Federal agencies to discriminate against handicapped persons on the basis of their handicap.

Now, the structure and the legislative history are essential to understanding the scope of Section 211(a).

It is our position that the Congress crafted a rational scheme for review of VA actions.

Certain actions are subject to review in the Board of Veterans' Appeals.

Section 4004(a) of the Veterans Statutes establishes the jurisdiction of the Board of Veterans' Appeals.

It makes clear in Section 4004(c) that the Board of Veterans Appeals does not have authority to review regulations of the Veterans' Administration.

It is bound by those regulations.

That, as petitioners discovered here in their administrative hearings in this case, is a restriction taken quite seriously by the Board of Veterans' Appeals.

The Board of Veterans' Appeals in both cases here stated that it was powerless to review regulations of the Veterans' Administration.

It was bound by those regulations.

With this view, this Court basically is left with two alternatives; one is to make a decision that nevertheless despite the view of the Board of Veterans' Appeals, there is no review available here.

The effect of that is that the Veterans' Administration could pick and choose among those Federal Statutes that it wanted to pay attention to.

It could decide not to bother with the Rehabilitation Act.

It could decide not to bother with the Civil Rights Act.

And presumably under the Government's interpretation of Section 211(a), the Veterans' Administration could do so with impunity.

We believe that that is not supported by the language of the Statute, and that the more rational interpretation of Section 211(a) is that while decisions of the Veterans' Administration within the specific facts of a veteran's case under Veterans' laws as to whether a particular veteran is entitled to benefits is consigned to the Board of Veterans' Appeals, but that challenges to regulations under non-Veterans' Administration statutes may be reviewed in the Federal Courts.

Unidentified Justice: How about challenges to regulations under VA Statutes?

Mr. Teel: Our position is that regulations generally are reviewable because of the distinction between decisions and regulations that we believe is in Section 4004.

I would note that we believe this is not that case.

Unidentified Justice: The Government says there are just thousands and thousands of regulations if you say any decision based on a regulation is reviewable that there are just going to be all sorts of cases coming into the courts.

Mr. Teel: Well, I know they say that, and I think the experience--

Unidentified Justice: Do you have reason to doubt it if we were to say that VA statute regulations as well as non-VA statute regulations were reviewable?

Mr. Teel: --I think there is quite a lot of reason to doubt it.

Within the last decade, four Federal Courts have allowed review of regulations, challenges to regulations that they were in excess of statutory authority, that kind of challenge.

There simply has not been that flood of litigation which you would expect if the Government's position were correct here.

Unidentified Justice: And these were allowing review of regulations based on VA statutes?

Mr. Teel: Yes.

The other point to note here is that we believe our interpretation here is supported by the Veterans' Administration.

It's only in this case they seem to be arguing something differently.

They have repeatedly expressed the view to the Congress that review in these circumstances is permitted.

In 1952, they explained to the Congress that they believed that Section 211(a) barred review of determinations arising in the facts of particular veterans' cases under particular Veterans' law, and they gave as an example, rating decisions, degrees of disability, that kind of thing.

No mention of regulations.

More recently, the Veterans' Administration has been questioned repeatedly since 1980 on this issue by the Congress and has stated that in their view, regulations of the Veterans' Administration are subject to review.

Indeed, what is particularly striking is they most recently said that in response to a letter from Senator Ganston in 1986, which was after the decisions of these courts on the Courts of Appeals.

Unidentified Justice: But Mr. Teel, here we have the Veterans' Administration appearing formally before us by the Solicitor General, and he's saying this is what the Veterans' Administration, this is their position.

Now, we ordinarily accept that.

You may argue that it has not been consistently applied in the past, but we ordinarily take the Solicitor General's word for what the VA's position is.

Mr. Teel: I'm disputing that, Your Honor.

Unidentified Justice: But you say the Veterans' Administration itself believes the way you do.

If it did, obviously, there wouldn't be any lawsuit.

Mr. Teel: Well, I would think so myself, but that doesn't seem to be what we have here.

The statutes, the legislative support we have cited in our brief, quite clearly, they have taken a different view for Congress.

Now, they are no doubt here arguing a different position, but that shouldn't control.

Unidentified Justice: Well, you say legislative support, and you've cited states made, or you think were made... and probably were... by VA people to the Congress, but that isn't legislative support.

That may be an inconsistent position by the Agency.

Mr. Teel: I agree with you it is not legislative history in the sense that this Court often refers to it.

Unidentified Justice: In any orthodox sense.

Mr. Teel: Pardon me?

Unidentified Justice: Or in any orthodox sense.

Mr. Teel: That's correct.

But this Court has noted repeatedly, and we cite cases to support this view that the view of an agency with respect to statutes that govern it is entitled to some deference.

That's the reason we think that the statements made by the Veterans' Administration to the Congress are significant.

Unidentified Justice: Yes, but this statutory provision really doesn't have much to do with what the Agency does; it describes what courts may do.

Mr. Teel: Nevertheless, I think that the Agency lives day to day with this statute.

They presumably know what they do is not subject to review, and they better get it right.

Here their view seems to be... other than in this case... that they think 211(a) does not reach regulations.

We think that view is entitled to some deference, certainly consideration by this Court in resolving these issues.

We think that it's an indication that the Veterans' Administration recognizes that the statutory scheme for review that I suggested was created by 211(a) is in fact the proper one.

I'd like to now turn, if I could, to the Rehabilitation Act issue before the Court.

Our argument is a simple one.

We contend that because alcoholism has been defined as a handicap under the Rehabilitation Act, and because Section 504 of the Rehabilitation Act applies to the VA Educational Benefits Program, the regulation here at issue is impermissibly discriminatory and cannot stand.

Unidentified Justice: I guess under your view, disability payments would have to be made as well, wouldn't they?

Mr. Teel: Well, it is a troubling aspect of this case, as the Government points out, that the VA uses the same term, willful misconduct, in its disability statutes as it does in these educational benefits statutes.

The fact is, however, we believe that the choice for the Court is to write these petitioners out of the Rehabilitation Act by saying that you don't get your benefits, or to worry about the question of disability benefits which, if that resulted in a problem, the Congress could correct that problem.

There's ample room for--

Unidentified Justice: Well, it would be pretty hard to distinguish legally, wouldn't it, if you're right?

Mr. Teel: --Well, under the current statutes, it is.

But I note, for instance, under the Rehabilitation Act under the definitions of what's a handicapped person with respect to employment benefits, the Congress has made just that kind of distinction that persons who are currently alcoholics or currently are drug abusers are not covered with respect to employment opportunities if their problems would prevent them from being able to do their job.

There is that kind of precedent that the Congress has made those small corrections when necessary.

Presumably it could do the same thing here.

Last term in Arline, this Court noted that discrimination against the handicapped often results from insensitivity.

We believe this is not such a case.

The Regulation here is discriminatory by intent.

The VA knows about the problems of alcoholism.

Its hospitals may be the Federal Government's largest provider of treatment and services to alcoholics.

And it significantly does not make any distinction on the basis of wilful misconduct in treating those patients.

Despite that, it continues to enforce a regulation that we believe is based on nothing more than the history of the Regulation.

The regulation comes from the era of prohibition.

It has never been reconsidered in light of current medical knowledge, despite the united opposition of the leading medical groups in this country including the AMA and the American Psychiatric Association.

It truly is reflective, to use the phrase used in Arline of archaic attitudes and laws.

And we believe cannot be allowed to stand.

Previous judicial decisions under Section 504 have created a four-part analysis for determining whether the Section 504 has been violated.

The first question is, are the petitioners handicapped.

The answer here obviously is, yes.

This Court recognized in Arline that alcoholics are covered by the language of the Rehabilitation Act.

Are they otherwise qualified.

Again, the facts in this case indicate that the answer must be, yes.

Both petitioners here received education after they recovered from their alcoholism.

The Government has not disputed that point.

Third point, are these programs covered by Section 504.

Again, the answer is, yes.

The Government concedes that.

The fourth point, have these petitioners been excluded solely on the basis of handicap.

Here, the Board of Veterans' Appeals said, we've got this regulation here that says if you are an alcoholic, we can't give you an extension.

Therefore, that's the end of the case.

Unidentified Justice: You feel that's an irrebuttable presumption.

Mr. Teel: Yes.

Now, I want to address a point that the Court of Appeals in McKelvey made because they had some problem with the notion that this was exclusion on the basis of handicap.

The majority there said this was not discrimination on the basis of handicap but rather on the basis of conduct.

We believe that that is a distinction that does not make sense.

The key feature of alcoholism is the compulsion to drink.

There may be other points about it but what characterizes the illness in its active phase is drinking behavior.

We believe the two must be taken part and parcel, at least with respect to this kind of regulation.

Here the Regulation was not regulating behavior, it was simply saying, if you are an alcoholic, you don't get your benefits.

That is a decision made not on the basis of any conduct but on the basis of the petitioners' status as alcoholics.

In Arline, this Court noted that the contagious effects of tuberculosis cannot meaningfully be distinguished from the disease itself.

We believe here you have essentially the same kind of problem.

You can't separate the drinking behavior from alcoholism.

To do so would write alcoholics entirely out of the protection of the Rehabilitation Act.

We believe that any Federal Agency could say well, we understand you're an alcoholic and we're not saying anything about that.

We're just regulating on the basis of your conduct.

Unidentified Justice: Mr. Teel, I would like to go back because your argument I think raises the point to the question Justice O'Connor asked you earlier.

Does your argument also require the same treatment of claims for disability benefits by a veteran?

And I particularly am concerned about the legislative history in 1977 in which the Senate suggested that in determining whether the disability was a result of willful misconduct, they wanted to apply the same standard that was being applied by the VA under this Regulation.

Mr. Teel: I think the answer to the question is, yes.

The VA applies the same willful misconduct standard in the context of disability benefits as well as these educational benefits.

Unidentified Justice: Your arguments against doing so in the tolling context seem to me to apply equally to the disability benefit claim context.

Mr. Teel: I'm sorry, I don't understand the question.

Unidentified Justice: You're explaining why they should not do it in the context of tolling the ten-year prohibition, but doesn't your argument also apply equally to a claim by a veteran for disability benefits based on his alcoholism?

Mr. Teel: I think it well might, yes, sir.

Unidentified Justice: So you don't really buy Judge Ginsburg's distinction of the two.

You say then whatever we decide today will decide the issue on disability benefits?

Mr. Teel: Well, I think, as Justice O'Connor notes, it's a tough distinction to make.

There are suggestions that the VA might be able, for instance, to determine that if somebody knows they have the problem of alcoholism and they're not receiving treatment, that perhaps that alone is a sufficient basis to call willful misconduct in the disability benefit context.

That is a bit far afield from this case.

We don't have that problem because here we've got petitioners who are recovered from the problem of alcoholism.

It's conceivable the VA might try to make those distinctions.

But nevertheless, we recognize that there is the same language in the Statutes and that if the Congress perceives that to be a problem as a result of the decision for petitioners in this case, they may have to modify it.

Unidentified Justice: Not only the same language in the Statute and the Regulation, but also legislative history suggesting at least in 1977 Congress intended the two rules to be the same.

Mr. Teel: Well, that's right.

And in fact, I'd like to mention that legislative history.

In our view, the Government makes much of the point that that reference in '77 to these regulations.

We think that the most that can be made out of that is that Congress felt the same standards should be applied across the board.

That's a rational thing for an agency to do.

If you've got the same language, apply the same meaning to it.

Unidentified Justice: Isn't this tough enough for us to take it one step at a time?

Mr. Teel: Well, in fact, I think it is, it's very difficult.

And I think this Court's decision for instance in Choate where you decided some things... we reached some disparate impact under Section 504; we may not reach it all... has shown a willingness to take things one at a time.

You could have a narrow decision such as that in this case.

Unidentified Justice: If there had been no Rehabilitation Act, the Veterans' Administration would withstand challenge of its interpretation and application to alcoholics of this tolling provision, without the Rehabilitation Act Section 504, you would not have a case, I take it?

Mr. Teel: Well, I think we would have a much more difficult case.

Unidentified Justice: But that's your principal reliance?

Mr. Teel: Yes, we are principally relying on Section 504.

Unidentified Justice: So here's an Act that was being administered as it was supposed to be administered, and then came the Rehabilitation Act and you say there's a fundamental inconsistency between the two statutes?

Mr. Teel: No, actually that's what the Government argues.

The Government argues there is a fundamental inconsistency.

We don't argue that for a minute.

Unidentified Justice: What are you arguing?

Mr. Teel: Well, our point is that the inconsistency here--

Unidentified Justice: Yes, but you say that the Rehabilitation Act requires the Veterans' Administration to change its views.

Mr. Teel: --It's views as expressed in a regulation.

We do not contend that they could not then take petitioners' cases and direct them back for the sort of--

Unidentified Justice: I know, but I thought that you answered that the Veterans' Administration position in its regulation would be perfectly acceptable absent the Rehabilitation Act.

Mr. Teel: --No.

What I said was, I think it would be a tougher case.

You said, did we principally rely on Section 504 and we do.

Unidentified Justice: Assume for the moment that the Regulation was quite valid, absent the Rehabilitation Act, and hence the Regulation is a valid regulation under the applicable statutes.

And that expresses the meaning of the statute or a permissible meaning of the statute.

Mr. Teel: I concede it would be more difficult to challenge that.

Unidentified Justice: Well, let's assume that it was a permissible interpretation of the statute.

Now, you in effect say that the Rehabilitation Act made it an impermissible construction of the statute.

Mr. Teel: That's right, but that does not have the affect, as the Government suggests, of repealing the '77 Statute.

What it does is mean they can't enforce this particular regulation.

There's no inconsistency.

Unidentified Justice: Well, the reason they can't is because it is no longer a permissible interpretation of the Veterans' Statute.

Mr. Teel: Well, it is no longer permissible with these statutes with the Rehabilitation Act to define a condition, a handicapping condition under the Rehab Act.

But to define that as--

Unidentified Justice: Yes, but you're arguing that the Rehabilitation Act means that the Veterans' laws governing the Veterans' Administration can no longer be construed the way the Veterans' Administration has been construing them.

Mr. Teel: --If you assume, as is correct, the regulations implement that statute, I will concede that point, but there is no inherent contradiction between the two statutes, we believe.

You can still have a determination on theses petitioners of whether there was something in particular in their behavior--

Unidentified Justice: But you say that the Rehabilitation Act means that there is no longer any room to construe the laws of the Veterans' Administration is administering in the way that they have been construed.

Mr. Teel: --Make a blanket determination that alcoholics have engaged in misconduct we believe that's inconsistent with the Rehabilitation Act.

Unidentified Justice: Even though absent it, it was quite consistent with the Veterans' Administration laws?

Mr. Teel: Well, actually, I'm not so sure it is inconsistent with the Veterans' Administration laws.

The Veterans' Administration laws, as this Court has noted in previous opinions, the Radiation case back in '85, are typically slanted in favor of the veteran.

This is something that while maybe as a legal matter absent the Rehabilitation Act, would be consistent with Veterans' laws, I'm not sure that somebody couldn't challenge it on that basis.

Unidentified Justice: In light of the Senate history in 1977?

Mr. Teel: Well, again, the Government, I believe, places too much reliance on that history.

I think the most that history stands for is that the same concept should be applied in the same circumstances, pardon me, applied in the same way.

Willful misconduct means the same thing in all contexts.

There was no discussion in that legislative history of what the regulation meant, and there was certainly no consideration of it in light of the Rehabilitation Act, which did not apply in '78 to this program.

I'd like to reserve my remaining time.

Chief Justice William H. Rehnquist: Thank you, Mr. Teel.

We'll hear now from you, Mr. Ganzfried.

ORAL ARGUMENT OF JERROLD J. GANZFRIED, ESQ. ON BEHALF OF RESPONDENTS

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

Congress has spoken plainly and directly on the two questions that are at issue in these cases.

One jurisdictional, the other substantive.

First, did Congress intend to preclude judicial review in these cases.

The answer is, yes.

And second, did Congress intend for the GI bill to be administered just as the VA has administered it here.

And the answer, again, is yes.

The common theme in both issues is ultimately the principle that Congressional intent must govern.

The Statute barring judicial review, Section 211(a) precludes review of decisions of the Administrator on any question of fact or law under any law administered by the VA providing benefits.

The intent of this language couldn't be clearer.

Unidentified Justice: You're going to explain how the Rehab Act is administered by the Veterans' Administration?

Mr. Ganzfried: I'm going to explain how what's being challenged in this case is a decision by the Administrator under a law administered by the VA, namely the decision was to deny the particular extension on the educational benefits program to the petitioners.

I would also point out that to the extent that the petitioners are suggesting that the Rehabilitation Act has required some modification of the Veterans' Benefits law, they're arguing that the Rehabilitation Act has been integrated into that Statute, and of course, it's the head of the Agency who has been given the responsibility by Congress of implementing the Rehabilitation Act within his Agency's programs.

There's a reference to the Department of Justice.

The Department of Justice has coordinating responsibilities, but to the extent that the Administrator has to make a decision in a benefits case, that subsumes questions raised under other statutes, he's still deciding a question under the VA Benefits Laws.

Unidentified Justice: Mr. Ganzfried, I want to be sure... as long as the ten years has not expired, the veteran is entitled to this assistance, isn't he?

Mr. Ganzfried: That's correct.

Unidentified Justice: Even though he's an alcoholic?

Mr. Ganzfried: That's correct.

Unidentified Justice: And all you're doing is denying him the necessary time to get the full benefit?

Mr. Ganzfried: He is not in a position from anyone else who is not handicapped.

He had reasonable access to the package of benefits, the educational benefits program.

He had the ten years.

All that has been denied is the extension that Congress provided in 1977 for certain handicapped people, and they defined handicapped people to whom that extension would be available and defined it in a way that did not include the petitioners within that category.

I should make clear that the VA Regulation does not disqualify alcoholics from benefits.

And as I think your question implied, had they applied during the ten-year period, and in fact both of them did, and did receive educational benefits during their applicable ten year delimiting periods, and they got them.

There was no disqualification on account of alcoholism.

It just becomes a relevant consideration in connection with this limited extension of the ten-year period that Congress has provided for certain handicapped people.

Unidentified Justice: Well, I take it you imply that their delay in completing their education was due to the continuing disability due to alcoholism?

Mr. Ganzfried: What I mean to say is that as the Board of Veterans' Appeals determined in this case, they did not meet any of the statutory or VA regulatory criteria for qualifying for the extension.

Unidentified Justice: Isn't it somewhat unrealistic.

You say they could have had the benefits, but aren't we assuming that during the period of alcoholism, they really were not fit to be students in higher education institute.

Mr. Ganzfried: Well, we're not assuming that because had they suffered consequential physical disabilities, consequential physical effects of the alcoholism that themselves would have qualified as a disability, they would have gotten the benefits.

Unidentified Justice: Yes, but still, doesn't the alcoholism itself, assuming it's serious enough, would not that prevent a person from passing college grade courses?

Mr. Ganzfried: It could but it would be the derivative physical effects of the alcoholism and the determination in these cases by the Board was that the physical effects on which the petitioners relied did not satisfy to meet other regulatory requirements as to how severe a disability you have to show to get your benefits.

Unidentified Justice: I really don't understand your argument.

Mr. Ganzfried: Okay.

The regulation--

Unidentified Justice: I mean, the physical effect is just that the person is consuming so much alcohol that he or she is unable to live a normal life.

Are you saying--

Mr. Ganzfried: --I take issue with one statement there.

The physical effect is consuming too much alcohol, our position that consuming too much alcohol is conduct, not a physical effect.

If the veteran has derivative physical effects that are so disabling--

Unidentified Justice: --Yes, but that conduct itself is sufficient to prevent the person from acquiring an education, isn't it?

Mr. Ganzfried: --Only if he has the consequential physical disabilities.

Unidentified Justice: Maybe in the Government's interpretation of the regulation, it doesn't count, but just as a practical matter whether it was otherwise qualified or not, if he is consuming large quantities of alcohol 24 hours a day, six days a week, and there's nothing else... he doesn't break his leg in an accident or anything like the no other conduct... but isn't that itself something that as a practical matter makes it rather unrealistic to suggest he should be taking advantage of this education benefit.

Mr. Ganzfried: Well, what I have to understand in the question is are there any physical consequences of his consuming--

Unidentified Justice: He's drunk all the time.

Mr. Ganzfried: --Well, in that case, if he's consuming alcohol 24 hours a day, if he's not eating, then he's going to have nutritional deficiencies, he's going to have vitamin deficiencies which is specified in the VA regulation as... he may have all kinds of other physical maladies and consequences of it, and if he has those and if he proves them, he gets the benefits.

And the fact that alcoholism may have been the cause is not a disqualification.

Unidentified Justice: But is being dead drunk so to speak a physical consequence that would entitle him to some sort of benefits?

Mr. Ganzfried: Being unconscious?

Unidentified Justice: Yes.

Mr. Ganzfried: The question is whether it's a disability that would have prevented someone from pursuing an education.

Being dead drunk on occasions does not disable someone from pursuing an educational program.

The problem that the petitioners ran into before the Board here was that... and there are various periods of hospitalization in Mr. Traynor's case.

He was hospitalized five times over the course of four years, but none of his periods of hospitalization were sufficiently long to satisfy a separate regulatory requirement that only hospitalization periods of 30 days would permit someone to get an extension of benefits.

Unidentified Justice: If he had been hospitalized for 30 days because of alcoholism, then he would have gotten credit for that 30 days in the tolling?

Mr. Ganzfried: He may have, depending on how the Board looked at what evidence he presented.

But ordinarily, the hospital records are not going to say often simply, hospitalized 30 days alcoholism.

They're going to indicate alcoholism and because, as the brief suggests as a very important part of alcoholism, and that is denial, the fact that this person is not likely to be in the hospital in the first place unless there is some physical manifestation.

Unidentified Justice: But this rule doesn't say anything about physical manifestations or anything else about being drunk or anything.

It says, if you're an alcoholic; that's all.

Mr. Ganzfried: No, it does not say that.

Unidentified Justice: What does it say?

Mr. Ganzfried: The VA rule is that alcoholism is divided into two categories: primary alcoholism and secondary.

Unidentified Justice: Right.

Mr. Ganzfried: Secondary alcoholism, which is the result of any underlying psychiatric disorder, is not a disqualification.

You get the extension of benefits.

Unidentified Justice: That has nothing to do with how much liquor he drinks or anything else.

Mr. Ganzfried: Well, whether someone's an alcoholic doesn't always depend on how much liquor he drinks.

Unidentified Justice: That's what I'm talking about; that's exactly what I'm complaining about.

Mr. Ganzfried: There are people who may drink as much as someone who is an alcoholic, and yet those people are not alcoholics.

There are alcoholics who may be functioning alcoholics.

There are alcoholics who may have binges or weekend drinking and yet are able to function at school and at work five days a week.

Unidentified Justice: I guess he couldn't teach either, could he, if he's an alcoholic?

He couldn't teach, could he?

Mr. Ganzfried: An active alcoholic, 24 hours a day, seven days a week?

Unidentified Justice: Yes.

Mr. Ganzfried: And showing the physical manifestations of that?

Unidentified Justice: Yes.

Mr. Ganzfried: I suppose not.

Unidentified Justice: That's right, but you pick on this one group.

Mr. Ganzfried: No, it's only a group of people who can prove neither--

Unidentified Justice: Who are sick.

Have you admitted that this is an illness?

Mr. Ganzfried: --That alcoholism is an illness?

Unidentified Justice: That alcoholism is an illness?

Mr. Ganzfried: We submit that it's basically an irrelevant question in this context for reasons very similar to--

Unidentified Justice: Well, do you mind answering an irrelevant question?

Do you agree that it is an illness?

Mr. Ganzfried: --It can be.

It can be.

Unidentified Justice: Do you agree that the "average alcoholism" in quotes, is an illness?

Mr. Ganzfried: Well, we don't know what the average alcoholism is.

Unidentified Justice: Well, the one that you're talking about in your statute?

Mr. Ganzfried: Primary alcoholism?

Unidentified Justice: Yes, sir.

Mr. Ganzfried: Okay, what is defined in the regulations--

Unidentified Justice: Is that an illness?

Mr. Ganzfried: --It can be.

Unidentified Justice: Is it?

Is it?

Mr. Ganzfried: It is not always.

Unidentified Justice: It's in your Statute, you put it in there.

Mr. Ganzfried: Well, it's in the Regulation and the term primary alcoholism is essentially what the VA has determined to be willful alcoholism.

Unidentified Justice: Is it an illness?

Mr. Ganzfried: It can be.

Is it in every case?

I don't know.

Unidentified Justice: Mr. Ganzfried, if it's not an illness, what is it?

Mr. Ganzfried: It can be conduct, it can be a compulsion short of an illness, it can be an inclination short of a compulsion, it can be a predisposition.

Unidentified Justice: Is that what they're talking about?

Mr. Ganzfried: Well, we don't know.

Unidentified Justice: Oh, you mean the statute's indefinite?

Mr. Ganzfried: The statute simply says disability not the result of willful misconduct.

Unidentified Justice: And the regulations are indefinite.

They're not too indefinite to take away a man's livelihood.

Mr. Ganzfried: It's not talking about any questions of taking away anyone's livelihood.

Unidentified Justice: Well, I'm asking you, is it an illness, or not?

Mr. Ganzfried: You raise it in terms of someone's livelihood.

The Congress has said in the Rehabilitation Act that an alcoholic who is not able to perform employment duties is not a handicapped person.

That's in the Statute in the Rehabilitation Act.

Unidentified Justice: I'm talking about this Statute which says, alcoholism.

Mr. Ganzfried: Well, this statute doesn't say, alcoholism.

Unidentified Justice: It says primary?

Mr. Ganzfried: No, it's a regulation and the VA policy, it says primary regulation.

Unidentified Justice: Well, is that regulation an illness when it says alcoholism in the regulation?

Mr. Ganzfried: It doesn't address the question whether it's an illness.

Unidentified Justice: Well, does it say alcoholism?

Primary alcoholism?

Mr. Ganzfried: Primary alcoholism.

Unidentified Justice: Well, is that or not... I'm going to try this one more time, and then I'm through: Is it or is it not an illness.

Mr. Ganzfried: The regulation doesn't say.

Unidentified Justice: Well, is it or is it not.

Is it administered as, or is it not?

Mr. Ganzfried: In terms of providing rehabilitation and treatment, the answer to that, in terms of the Veterans' Administration is, yes.

And it provides $100 million in in-patient rehabilitation alcoholism services each year, and for rehabilitation, it regards it as an illness.

It will help people overcome the condition.

Unidentified Justice: You agree, it is an illness.

Mr. Ganzfried: In some contexts.

Unidentified Justice: It took quite awhile, but I made it.

Mr. Ganzfried, let me try to bring this down to earth.

I take it that the issue much proclaimed by the media as to whether alcoholism is or is not a disease is not really very relevant in this case, is it?

Mr. Ganzfried: No.

Because illness is not necessarily a disability.

I guess I've gotten a bit afield from the section 211(a), but I think the colloquy points out that we are dealing here with very complex questions that touch on a very intricate ganglion of nerves in society that cuts across questions of medicine and law and philosophy and religion.

The case doesn't have to be decided on that level, but the issues do implicate all of those concerns.

The basis for deciding the case is really determining Congress' intent in two statutes.

211(a) in which it said, no review because it didn't want the Courts to get involved in day to day determinations of VA policy and VA benefits.

And it's clear that that's exactly what is really involved in these cases.

It's clear from the prayers for relief in the District Courts.

Unidentified Justice: Yes, but Mr. Ganzfried, that's because these cases arise in that particular way.

But supposing they brought declaratory judgment actions asking for a ruling on the consistency of this regulation with the Rehabilitation Act.

Then your language of the Statute argument really wouldn't fit.

It's just that it happens to arise in that particular way.

Mr. Ganzfried: Without ever first doing something like petitioning the administrator of the VA to reconsider?

I mean, what's the agency action that's being challenged here?

It's either the benefits determination in their cases--

Unidentified Justice: It's the regulation, I suppose.

Mr. Ganzfried: --or it's a regulation that was promulgated in 1972 before the Rehabilitation Act was passed, six years before it became applicable to Federal programs, and it's simply not an appropriate basis for Federal jurisdiction to come into Court--

Unidentified Justice: Well, maybe it's a challenge of the failure of the VA to--

Mr. Ganzfried: --without having gone to the head of the Agency petitioning him to reconsider his regulation as--

Unidentified Justice: --No, but all I'm suggesting is that if you brought that kind of a lawsuit, the language of 211(a) would not read upon it.

Mr. Ganzfried: --It might.

It might, because what might happen is that the Administrator could say that this was a question of whether I should interpret--

Unidentified Justice: The Administrator could say, as he did here--

Mr. Ganzfried: --the benefits law to have the following consequences on the benefits law as a result of the Rehabilitation Act.

Unidentified Justice: --Or the VA could say, as it did here, we're just not interested in deciding that question.

They did not decide it here, as I understand.

Mr. Ganzfried: The Board of Veterans' Appeals didn't decide it here.

The Board of Veterans' Appeals was deciding the particular eligibility--

Unidentified Justice: And your position is that nobody should decide it, nobody should decide it, because the agency refused to and the Court says we can't.

Mr. Ganzfried: --No, we've got to forums here, neither one of which was addressed by the petitioners.

The first is a petition to the Administrator.

The Administrator has by issuing this as a regulation and not maintaining it as a decision which it had been in earlier years in 1931 and 1964, they were decisions by the Administrator, individual determinations, not subject to judicial review.

In 1972, the Administrator put that into a regulation.

And the Administrator--

Unidentified Justice: Yes, but the question is whether that regulation, as interpreted by the Administrator, continues to comport with the law that was passed in 1978.

Mr. Ganzfried: --Yes, and the answer is you go back to the Administrator, the person who promulgated the regulation, 553(e) of the Administrative Procedure Act, which has been incorporated here by the VA, says you go back and you petition to the head of the Agency, or you go to Congress.

Unidentified Justice: No.

But do you concede that there would be review under the Administrative Procedure Act in such a proceeding, notwithstanding the language of the--

Mr. Ganzfried: Well, it's altogether different from this case and it's not a concession that--

Unidentified Justice: --Yes, but are you contending that the Statute would bar such a proceeding?

If you are, why are you suggesting that's the way they should have done it?

Mr. Ganzfried: --Because they could have gotten relief.

There might not have been a need for a proceeding.

Or having gotten that decision from the Administrator to go in, to present the medical evidence, to present whatever you'd like to present from the recent medical literature and say, look, times have changed, the statute has changed.

We think that a rethinking is in order here.

The Administrator has, independent of the fact that there had been no such petition for that, has looked at this question.

Unidentified Justice: Yes, but I don't understand that as a jurisdictional argument unless you're saying that there would have been review under the Administrative Procedure Act.

If you're not saying that, they could have written him a letter, too, and said, please reexamine this.

They could have done a lot of things.

Mr. Ganzfried: That's right, but they did none of them.

Unidentified Justice: The question is whether the Statute requires them to do those.

And I still don't know what your answer is on whether there would have been review in an appropriately framed proceeding under the Administrative Procedure Act.

Mr. Ganzfried: If ultimately what it was was a decision by the Administrator under a law administered by the VA, the answer to that has got to be that there would not be judicial review.

Let me address the question briefly as to whether review extends only to regulations or turn that around, whether the preclusion of review extends only to adjudications in individual cases, or it applies to regulations as well.

The petitioners have argued that there has been very little litigation on this subject, very few cases brought, even though a number of circuits have permitted judicial review of VA decisions in particular instances.

The question really isn't whether we can predict whether flood gates will open and the waters will rush in.

It's more important to look at what Congress was saying when it was writing the statute and whether it was concerned about flood gates, and the answer to that is, yes.

In 1970, when 211 was amended to its present form as this Court discussed in its decision in Johnson v. Robison, it was done as a reaction to decisions by the D.C. Circuit that had permitted review in certain circumstances.

And the legislative history which is discussed in Johnson v. Robison, and is also discussed in then Judge Scalia's opinion in the case of Gott v. Walters, indicates that there was concern that there were 353 cases pending in the D.C. Circuit alone, and that there was concern that future cases would be brought based on individual benefits determinations and regulations.

And that was part of Congress' concern and that is part of the basis upon which Congress amended the Statute to read the way it does today.

Unidentified Justice: How did it read before the amendment?

Mr. Ganzfried: It used the term, claims, and what the D.C. Circuit had said, well, that would preclude judicial review if you're coming in and applying for benefits, but in instances where benefits were discontinued or benefits were forfeited for some reason, the Court had held that you can come into court because that's not a claim for benefits, that's something that happens after you're already getting benefits.

And Congress came in and said, no, we want no review; we don't want to involve the courts in the day to day workings of the VA.

Now, would a decision that you could challenge regulations, even the validity of regulations under other statutes interfere with the day to day workings of the VA?

And the answer to that is, yes.

Just one example is that the VA has a regulation on the ratings for disability of malaria.

It's got four categories that rate the disability from 100 percent to 50 percent to 30 percent to 10 percent.

The gradations depend on such things as whether there have been three relapses in a six month period or two relapses in a six month period.

I suppose that someone could claim that current medical evidence makes that distinction inappropriate, that two serious relapses is more important than three not so serious relapses, and that he shouldn't be discriminated against because he happened to have two rather than three relapses of malaria.

Well, under petitioners' theory, he would get into Court.

That's just one example.

Asthma is another condition with four categories.

High blood pressure has four categories.

Ulcers have five.

Epilepsy has six.

And blindness has more than 100 different ratings categories in the regulations that depend upon the degree of impairment division.

A suggestion that reviewing regulations would not inject the courts into the day to day workings of the VA has no basis in fact.

Now, if the Court concludes despite the arguments I've made and those in our brief, that there is jurisdiction for these cases to proceed--

Unidentified Justice: May I ask one question on that point, Mr. Ganzfried?

Mr. Ganzfried: --Sure.

Unidentified Justice: Do you agree with the view taken by then-Judge Scalia in the McKelvey case that the Administrator necessarily decided in the benefit claims case that the regulation was consistent with the Rehab Act?

Mr. Ganzfried: I didn't hear the middle part--

Unidentified Justice: Judge Scalia's view in the McKelvey case, do you agree with it?

Mr. Ganzfried: --I think that view as amplified in his opinion in the Gott case, Gott v. Walters, an earlier case that was the opinion was vacated upon granting of rehearing en banc and then the case was settled but the opinion is cited in some of the briefs mentioned briefly in a quotation in our brief.

That explanation is an appropriate one.

There's also a procedural wrangle in this case as to whether the Administrator or the VA had decided the issue or hadn't decided the issue.

Unidentified Justice: Would that view have implications for us in terms of our jurisdiction in other cases do you think?

Mr. Ganzfried: The question of whether a decision--

Unidentified Justice: Whether necessarily encompasses others?

Mr. Ganzfried: --It would have enormous implications.

Let me say something about a case, considering the subject matter of this case it is quite astonishing that the case has not been mentioned before.

This is not the first time that this Court has been asked to consider the legal ramifications of alcoholism.

In Powell v. Texas, the Court refused to accept the blanket rule that alcoholics may not be asked to bear some degree of responsibility for their conduct, criminal responsibility in that case.

And the Court recognized that alcoholism is not merely status, it involves conduct, drinking, for which there may be an element of volition, at least at some point in the progression leading toward chronic alcoholism.

Now, the Powell case is discussed in our brief in several places, but it's not mentioned in Petitioners brief or reply brief, or in any of the amicus submissions and hasn't been mentioned today.

I've tried to explain that the VA policy is not a blanket disqualification of alcoholics from benefits.

They get rehabilitation and treatment and medical services.

They also get educational benefits if they apply within the ten years.

So there's some reasonable access to the package of benefits that we're talking about in this case.

With respect to the language of willful misconduct, that is language that petitioners try to paint as deriving from prohibition.

What's more important about that language is that it derives from the statutes that deal with veterans benefits for disability compensation and pensions.

And no one can seriously claim that a disability compensation which amounts to $1355 a month for a total disability and that's not an income-sensitive amount, that that should be paid to someone whose sole disability is alcohol abuse or drug abuse.

And I should mention that the VA has a regulation that treats drug abuse, for the purposes of these programs, in a similar way to the way it treats alcoholism.

Because to take that position would be tantamount to paying that person for life to continue drinking or taking drugs, and would discourage treatment or rehabilitation.

And it is certainly an appropriate response for Congress to take to say that funds would be better spent on rehabilitation and treatment than on simply providing pensions and disability compensations.

And I should add also that a claim along those lines has already been made, a claim for alcoholism disability has been made in the pension area and is pending in the Third Circuit and is mentioned in our briefs.

Now, in 1977, Congress incorporated the willful misconduct language into the educational benefit program to assess who was entitled to this extension.

And it took a term of art.

It didn't make up some language.

It took a term of art that had a particular meaning that had evolved in VA pension determinations over the course of years, a position that was first addressed in 1931, was reviewed again in 1964, and was reviewed again in 1972 when the present regulation was promulgated and sent out for notice and comment, and there was only one comment on this regulation when it was proposed in 1972.

So the VA's position is not as it's been suggested woodenly fixed in the early days of the century.

It has evolved in response to changing conditions as to the facts as they were presented.

Unidentified Justice: Mr. Ganzfried, may I ask you this question.

Supposing in 1978, the VA had said, we want to take another look at this regulation and allow an extension in this kind of situation.

Do you think the 1977 history would have prevented them from doing it?

Mr. Ganzfried: It would have made it awfully difficult and the VA came to that conclusion, because there's legislative history in 1979 and 1981 when members of the Senate Committee that oversees the VA said we really don't want you to apply this alcoholism standard in the educational benefits extension context.

And the VA went up there and said, well, you may say that now, but in your Committee Report in 1977 you said that by using the term, willful misconduct, we intend for the VA to apply that term as it's applied it in the other contexts, and specifically referenced this regulation--

Unidentified Justice: I understand that.

Do you think--

Mr. Ganzfried: --and the provision from the manual.

And the VA went back to Congress and said, you may have something different in mind, but we've concluded that we're bound by what you told us in '77.

You told us, you must do this.

Unidentified Justice: --Do you think they would have been bound by that 1977 history even if they read the 1978 legislation the way your opponent does?

Mr. Ganzfried: I think the answer to that is still yes, but it's a question for the Administrator to take up in the first instance because the 1978 legislation is more general and it doesn't repeal something that's more specific.

If it requires a different result, then you do have to address whether it effected an appeal by implication.

Chief Justice William H. Rehnquist: Thank you, Mr. Ganzfried.

Mr. Teel, you have three minutes remaining.

ORAL ARGUMENT OF KEITH A. TEEL, ESQ. ON BEHALF OF PETITIONERS -- REBUTTAL

Mr. Teel: Thank you, Your Honor.

I would just like to address a couple points.

First, with respect to Mr. Ganzfried's astonishment at our failure to discuss Powell v. Texas, I also note this Court has the precedent in 1962 of Robinson v. California, which explicitly held that it was improper to punish people for the status of being, in that case, drug abusers.

Unidentified Justice: Didn't Powell say it wouldn't apply the Robinson principle in the case of alcoholics?

Mr. Teel: No.

What it said was, the Court there I think was concerned about extending the principle of you can't do something to somebody just because of their status to regulating conduct that went along with it.

The express concern in that case I think was along the lines of criminal statutes in the states, for instance, regulating drunk driving.

The Court wanted to make clear it did not reach those kinds of things.

But with respect to regulation based solely on somebody's status as an alcoholic, which is what we think this regulation does, we think Robinson is still controlling here.

Well, that was in a criminal context, constitutional context, to the extent that it has any relevance at all or that Powell does, we contend we're Robinson and we're not Powell.

The Rehabilitation Act, as this Court noted in Arline, requires an individualized determination of each handicapped person's situation.

That is at essence the problem with a regulation like this.

This Regulation is discriminatory.

We believe it cannot stand.

However, we contend that a decision our way here, the probable result of that decision would be to send these cases back to the Veteran's Administration with a directive that you've got the law wrong.

The law is, alcoholism is a handicap.

You can't discriminate solely on that basis.

Now, you have a Statute in 1977 that says the VA does have a right to decide whether a particular petitioner, particular veteran engaged in willful misconduct.

The effective of a decision for petitioners here is to send these cases back to the Veterans' Administration for that willful misconduct determination.

The delimiting date extension statute would still have force.

The VA just would be unable on the basis of these petitioners' condition as alcoholics to say that alone means you don't get your benefits.

That is in essence what our case is here.

The VA is ignoring the requirements of the Rehabilitation Act.

They will continue to do so as long as this regulation stands, and therefore, we believe this regulation should be invalidated by the Court.

If there are no further questions.

Chief Justice William H. Rehnquist: Thank you, Mr. Teel.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Monroe v. Standard Oil Co. - Oral Argument

Wed, 18 Feb 2009 06:13:07 +0000

Case:

Monroe v. Standard Oil Co.

Media File:

80-298_19810304-argument.mp3

Related Transcript:

80-298_19810304-argument_transcript.xml

Transcript:

ORAL ARGUMENT OF ALAN I. HOROWITZ, ESQ., ON BEHALF OF THE PETITIONER

Chief Justice Burger: We'll hear arguments next in Monroe v. Standard Oil.

Mr. Horowitz, I think you may proceed when you are ready.

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

This case is here on a writ of certiorari to the United States Court of Appeals for the 6th Circuit.

The issue involves the construction of Section 38 U.S.C. 2021(b)(3), a section of what are commonly known as the veterans's reemployment rights provisions.

This section, enacted in 1968, provides that reservists

"shall not be denied retention in employment, or any promotion or other incident or advantage of employment because of any obligation as a member of a reserve component of the armed forces. "

The facts of this case are as follows.

Petitioner is employed at respondent's refinery in Lima, Ohio.

This refinery operates around the clock, seven days a week, three eight-hour shifts per day.

Each employee works five days per week for a total of 40 hours, according to a rotating shift schedule that is established by the respondent.

During 1975 and 1976 petitioner was a member of a reserve component of the armed forces, which entailed certain training obligations.

As a general rule he was required to train with his unit on one weekend per month.

In establishing the shift schedule, respondent took no cognizance of petitioner's training obligations and therefore petitioner was frequently scheduled to work on weekend days that conflicted with his training obligations.

Thus, unless he was able to arrange a voluntary exchange of shifts with a fellow employee, petitioner was unable to work 40 hours during those weeks, and respondent made other arrangements for other employees to substitute for him.

As a result, petitioner lost 192 hours of work and salary over a 15-month period.

Now, the parties entered into a stipulation in the district court and stipulated that respondent took no steps to provide petitioner with any work hours during these weeks to substitute for those lost as a result of his military obligations.

Petitioner brought this suit in the United States District Court for the Northern District of Ohio, alleging that Respondent's failure to attempt to accommodate his reserve obligations violated his statutory rights guaranteed by Section 2021(b)(3).

Based upon a stipulated set of facts the district court granted petitioner's motion for summary judgment.

The court held that respondent had denied the petitioner the right to a 40-hour week, an incident or advantage of employment under the Act by refusing to take account of his reserve obligations in its scheduling.

On appeal the Court of Appeals reversed.

The Court of Appeals agreed that the right to be scheduled for a 40-hour work week at respondent's refinery was an incident or advantage of employment within the meaning of the statute.

However, the Court of Appeals disagreed with the district court and with other courts of appeals as to the scope of the protection that the statute provides such a benefit.

The Court of Appeals held that Section 2021(b)(3) protects reservists only against intentional unequal treatment or on-the-job bias by their employers.

However, if a reservist is denied an employment benefit because of the operation of "a facially neutral rule" that is applied uniformly to all employees, in that case, the court held that the statute is not violated.

Applying these principles to this case, the court held that respondent had not violated the Act.

Petitioner's work schedule was established without regard to his training obligations and his training-related absences were treated just as other nonmilitary absences of another employee would have been treated.

Thus, in the view of the Court of Appeals, neutral treatment, not bias, was shown.

It is our contention that the principles on which the court based its decision stem from an erroneous interpretation of the statute.

Congress did not intend that employers would be permitted blindly to follow rules that, although neutral on their face, have an inevitable adverse effect on reservists not in situations where that adverse impact can be completely eliminated if the employer seeks to accommodate rather than simply ignore the fact of petitioner's reserve obligations.

Unidentified Justice: Do you have suggestions, Mr. Horowitz, how do you think the employer should accommodate to satisfy his obligation under the statute?

Mr. Horowitz: You mean, on these specific facts?

It depends, on a case by case basis.

Unidentified Justice: All right, let's start with these.

Mr. Horowitz: Okay, well, first of all, we don't think the actual means of accommodation is really an issue in this case because the record reveals that the employer made no effort to make any arrangements.

Often it can be arranged simply by exchanging shifts.

For example, in this case, other employees had to take respondent's shift, employees that work on a so-called extra board, and there's nothing in the record that indicates why petitioner couldn't then have taken shifts caused by the extra board employees.

Unidentified Justice: Suppose that's tried and that doesn't work, then what?

What should the employer do?

Mr. Horowitz: In other words, it's impossible for the employer to accommodate in that sense?

Unidentified Justice: At least by that method he can't accommodate him.

Mr. Horowitz: Well, we would also suggest that he should have taken account of these obligations in the schedule itself.

In other words, first, have a schedule for petitioner's off weekends, on those weekends when he had military obligations, and then fill in his schedule around that.

Unidentified Justice: So that he works five days other than the weekend?

Mr. Horowitz: Only in the week that he has the reserve obligations.

He would still work the same number of weekends over the course of the year, as everyone else.

Unidentified Justice: But under your theory, every time that a worker is dissatisfied with the employer's effort to accommodate, it would be a question that would have to be resolved in court, whether there had been good faith effort to accommodate him.

Mr. Horowitz: Well, it's not a question of whether he's dissatisfied with the accommodation.

It's a question of whether the benefit is denied to him.

Now, if the employer didn't give him a 40-hour work week, for example.

Unidentified Justice: But you say that it's a very flexible type of thing, that the employer does not have to--

Mr. Horowitz: I don't mean to suggest that the courts... the courts are not going to be overrun by cases now deciding what's reasonable accommodation.

There's been a lot of litigation in this area already, and it's always been a dispute over what the meaning of the statute is.

There's never been any question in these other cases that the employer couldn't accommodate.

In most situations it's no trouble at all.

For example, in the 5th Circuit case, in the West case, which we've asserted as directly in conflict with this one, the employer conceded that it was no trouble to arrange the schedule that way.

Now, the facts of this case may raise a slightly more difficult question because you have a small plant and it's making--

Justice Rehnquist: --And you've also got seven days a week, 24 hours a day, scheduling.

Mr. Horowitz: --Yes, but the reservist is going to be there for five days, so it's not clear that there's any difficulty in scheduling him for those five days.

Unidentified Justice: Well, did the employer treat this reservist like he treated other employees who wanted to be away?

Mr. Horowitz: That's right.

He treated his reserve absences just as if they were personal leaves of absence for whatever reason--

Justice White: So your submission is that he's not entitled to do that, that he... that the statute puts a--

Mr. Horowitz: --That's right.

Congress has enacted a special statute that provides for special treatment of reservists--

Justice White: --It requires him to treat the reservists more favorably than others, including more favorably with respect to absences?

Mr. Horowitz: --I don't think it's a question of treating the reservist more favorably.

The end result--

Justice White: That's what I just asked you.

Mr. Horowitz: --What we contend is that the employer has to give special treatment to the absences.

The statute's not satisfied simply by--

Justice White: All right.

He is to give more favorable treatment to these absences than to other?

Mr. Horowitz: --It's not permitted to treat an absence for reserve duty as if it was any other sort of absence.

Now, the bottom line is not more favorable treatment for the reservist.

He ends up with the same benefits that all the other employees have.

It's just the recognition by Congress that these are absences that the reservists have no control over.

Chief Justice Burger: Are you saying that this statute is comparable to what some states have, with special provisions made for people called for jury service?

Is military service in the same ball park as jury service?

Mr. Horowitz: I think it's in the same ball park.

Congress has specifically put it in a special category.

They've asked employers to take certain steps so that people are not, do not automatically lose benefits in their civilian employment because they have to enter into this military service.

This is a recognition that military service is important for this country and they want to encourage people to do it, not be discouraged.

Unidentified Justice: Are the problems of accommodation, Mr. Horowitz, any different under this statute than under those statutes that the Congress has enacted requiring accommodation of religious preferences?

Mr. Horowitz: Well, I think it's quite different than under Title VII, because the situation under Title VII, it's a complete anti-discrimination statute that intends to prohibit discrimination against all groups of employees, religious being one.

But here there is a specific statute directed at military absences.

So I think that there may be some more accommodation required here than there is in the Title VII problem.

Unidentified Justice: More required here?

Even though that's rather constitutionally based, isn't it, under Title VII?

Mr. Horowitz: Well, I think the accommodation is just statutorily based.

Justice Marshall: Is that why you don't see TWA v. Hardison as being in your way?

Mr. Horowitz: Well, we think that TWA v. Hardison really has very little to do with this case.

First of all--

Justice Marshall: Is that the reason?

Mr. Horowitz: --Well, for several reasons.

One, the statute is completely different.

The purposes of the statute are quite different.

I mean, here you have a specific statute aimed at a particular group of employees.

There you have complete anti-discrimination.

Now, you have to recognize, in Hardison the employee himself was asking for preferential treatment.

He didn't want to work on any Saturdays at all, so he was asking for a schedule that was better than what the other employees were entitled to, even though those employees had greater seniority.

Now, here, the respondent's just asking for an opportunity to work.

And the schedule is going to end up being the same, in the final analysis.

Unidentified Justice: The statute doesn't say anything about rescheduling, does it?

Mr. Horowitz: No.

Unidentified Justice: It does give him, certainly, something other employees don't have.

He can be away for reserve duty and still maintain his seniority and other things, so certainly there is a statute here directed to reservists, but... It specifically says what the employer may not deprive him of, but it doesn't say anything about his having to change his shifts or anything.

Mr. Horowitz: Well, there are two different sections that apply to reservists.

One is Section 2024(d), first enacted in 1960, that says that a reservist has a right to a leave of absence when he has reserve duty and when he returns from that leave of absence he's entitled to be restored to his employment with the same seniority, vacation, et cetera.

Justice Rehnquist: No question about that being violated?

Mr. Horowitz: No question about that being violated here.

But Congress had enacted an additional section, several years later, to increase the protection for reservists, and in that section the statutory language is that

"the reservist may not be denied retention of employment. "

et cetera

"or other incident or advantages of employment because of his reserve obligations. "

Now, in its literal terms, that statute has been violated here.

Both courts found that the right to a 40-hour work week at the refinery was an incident or advantage of employment within the meaning of the statute.

Unidentified Justice: The right to work 40 hours?

Mr. Horowitz: Yes.

Right to work.

Unidentified Justice: Where is the right, where's that in, the source of any right to work 40 hours a week?

Mr. Horowitz: The right to work 40 hours a week is based on the employer's practice at this particular refinery.

Unidentified Justice: Well, that's what he was employed for.

The employer would have been glad to have him, if he had worked the 40 hours he wanted him to work.

Mr. Horowitz: This is a right that is granted to employees.

Employees want to be able to depend upon a certain amount of guaranteed income.

I mean, the right to a 40-hour work week is not a benefit for employers, it's a benefit for employees.

Unidentified Justice: Yes, but who guaranteed him the right to work 40 hours a week?

Mr. Horowitz: The right is guaranteed by the employer.

It was not a guarantee of--

Unidentified Justice: Where was that guaranteed him?

Mr. Horowitz: --By custom and practice at the refinery.

That's a factual finding by both courts below.

Unidentified Justice: Well, is it a question of a guarantee, counsel?

Or is it simply that, were it not for his reservist status, he would work 40 hours a week, and it's because of his reservist status that he's put in what you regard as a position of discrimination.

Mr. Horowitz: He's denied meaningful right to work 40 hours a week because of his reserve status.

Now, it's true that they scheduled him, on schedule, for 40 hours, but they scheduled him at times that they knew he could not work.

I'm not probably responsive to the questions but that's not a meaningful--

Justice Stevens: May I ask you a question about your distinction of the Hardison case now?

Supposing here... and I don't think the record tells us whether this is true or not, but suppose it was here, in order to accommodate his desire to be off on the days where he had reserve obligations, one out of every four weekends, the schedule would require some other employee to work more weekends than he wanted.

Now, let's assume it's undesirable to work weekends.

Does your position apply even if the rescheduling would impose, may give him a preference at times of desirable work?

Or does it only relate to the cases where, given the requirement of meeting his demands, everybody still has the same employment obligation?

Mr. Horowitz: --Okay, we're not asking for the reservist to be given a preference.

It's hard to answer completely in the abstract as to what is reasonable or not.

I mean, if the fact that other employees would have to work more weekends, or if it might interfere with some seniority system, there is certainly strong evidence that it's an unreasonable accommodation.

Because, I'm just reluctant to admit that there might be some--

Justice Stevens: Well, he's getting more than equal treatment, if other employees have to take some undesirable work.

That seems to be rather clear in that case.

I don't know whether this fellow's in that category or not.

Mr. Horowitz: --No, we absolutely concede that he's not entitled to work fewer weekends than the other employees, although it has to be recognized that he is--

Justice Stevens: So your point is that if the company could rearrange the schedules in a way that didn't put any other employee in any worse position than they're in under the normal scheduling, that then he has the right to reschedule?

Mr. Horowitz: --Yes, that's clear, as far as it goes; I'm not sure.

Unidentified Justice: What if there are two employees; this man goes off to reserve duty and the employer says, fine, I'll reschedule, I'll try to work it out, and he does, and then a man comes to him and says, I understand so and so is getting off for reserve duty and gets rescheduled.

Every time he goes to reserve duty I want to go fishing, for the same amount of time and please reschedule me, just the same schedule.

And the employer says, you must be out of your mind.

You can't; or, I will not do it.

Now, you say that the employer certainly could say that in the latter case, but he couldn't say that to the reservist?

Mr. Horowitz: Well, I think you've put your finger on it.

Unidentified Justice: He certainly is being favored, isn't he?

Chief Justice Burger: Well, has Congress made any provision for going fishing?

Mr. Horowitz: Well, he's not being favored, because he doesn't have the right to go fishing either.

I mean, this is just a special treatment of this particular category of absences that Congress has mandated.

Justice White: Well, all right, so you do say that it is a special treatment, that the Act does give him special treatment.

Mr. Horowitz: It requires the employer to treat his absences differently.

Justice White: The statute is not satisfied by treating the reservist like everyone else?

Mr. Horowitz: Not satisfied by treating his absences like other absences.

I still maintain that the bottom line as to what the reservist gets is the same.

He works the same number of weekends, the same number of hours.

Chief Justice Burger: Is it fundamentally different from the situation of a man who's gone to Korea or Vietnam or wherever?

He comes back and is given "special treatment" by getting seniority for service he did not perform for the employer?

Mr. Horowitz: No, that's the precise analogy.

And this Court has said many times that under the seniority provisions of the reemployment rights statutes the employer is not entitled to treat a veteran's absences the same as he treats absences of--

Justice White: There's no argument about that.

The only question is whether the Congress intended to give him preference for his being away.

Justice Rehnquist: What if this statute had been in effect at the time of the Korean War when, let's say, someone like Ted Williams was called back into the service?

Do you think after a two-year tour of duty in Korea the veteran could come back and say, I want to be paid for all the time I was away?

Mr. Horowitz: --Clearly not.

Our contention here is that he has a right to work 40 hours during the week when he's present at work.

Now, on these weekends that he misses, he's there at work, during the week, for five days of the week, and we're just asking that he be entitled to work on those five days.

Now, if he's gone for two years, he's not at the plant.

He can't work 40 hours for any of those weeks.

So he's not been denied that right.

Unidentified Justice: Mr. Horowitz, is there any--

Mr. Horowitz: Excuse me, Justice Blackmun.

There's no way they can accommodate him.

I'm sorry; go ahead.

Unidentified Justice: --Is there any union presence in this case, in the background?

Mr. Horowitz: Well, there's no official union presence.

I mean, I think union employers are often reluctant to give these benefits, or to give this treatment to reservists unless they're required to do so by the courts, because they're a little concerned that the unions will complain.

I mean, I think that perhaps explains why even though it may not have been very difficult for them to accommodate the reservists, they chose not to and chose to litigate it.

Justice Blackmun: Maybe I should ask my question of your opposition.

Justice Marshall: Wouldn't... can I assume that Standard Oil has a union?

Mr. Horowitz: That Standard Oil is unionized?

Justice Marshall: Yes.

Mr. Horowitz: I think we can assume that; yes.

There is a collective bargaining agreement involved.

Now, this case is basically one of statutory construction.

Apart from the plain language of the statute that I've already alluded to, there are several principles of statutory construction this Court has established under the veterans provisions, and each of these points towards petitioner's construction of the statute.

First, it's always been recognized that the provisions ought to be given liberal construction in favor of the veteran or, as in this case, the reservist.

Now, despite this command, the Court of Appeals adopted a very narrow view of the protection here because there was no clear and unambiguous legislative mandate to the contrary.

This rejection of what the Court of Appeals recognized to be a plausible interpretation is completely contrary to what this Court has established as the rule for construing the statute.

Secondly, this Court has repeatedly recognized the underlying purpose of these provisions, and that is that servicemen not be disadvantaged by serving their country, to the extent possible.

In Alabama Power this Court stated this principle thusly:

"The provisions evidence Congress's desire to minimize the destruction in individuals' lives resulting from military needs. "

Justice Rehnquist: Mr. Horowitz, supposing that this man had a two-week summer duty and when he came back from it he gets paid so much for being in the reserves, he couldn't claim the complete wages that he would have received, but he made a claim against the employer for the difference between what he got paid by the Government for his reserve duty and what he would have made had he stayed at the plant and worked?

Mr. Horowitz: We said in our brief, there is no basis for such a claim, unless there is some other employment benefit I'm not aware of.

But on this benefit we're talking about in this case, the right to a 40-hour work week, he was not denied that right, if he's gone for two weeks.

If he's gone for a whole week, there's no way the employer can schedule him for 40 hours of work that week, so he's not entitled to anything.

We're not... he's just asking for the right to work, he's not asking to be paid for hours that he does not work.

Justice Rehnquist: And if it's seasonal employment and his reserve duty occurs during the season, he has no claim?

A cannery-type thing?

Mr. Horowitz: I'm not sure exactly what situation you're talking about.

If there's a way that they can work it out, that he can work the hours, then he has a claim.

If there isn't, there isn't.

Now, Congress enacted this statute against the background of these principles of construction that I've discussed.

They deliberately enacted the statute using broad language.

They used the words,

"any incident or advantage of employment. "

and they used the words,

"that the reservist shall not be denied these benefits. "

Congress did not intend that the statute be interpreted as narrowly as it has been.

Now, I think the waters in this case have been muddied a little bit by the facts, which as I pointed out to Mr. Justice Stevens, are not really at issue in this case.

Perhaps I could focus the issue a little better by giving you different examples.

Let's suppose the reservist worked at a store where each employee was entitled to two weekends of work in a given month at double pay, and the employer has historically divided the weekends on an alphabetical basis.

Those employees in the first half of the alphabet work on the first and third weekends of each month, those in the second half of the alphabet worked on the second and fourth weekends of each month.

Now, Mr. Andrews, who works at the store, joins the reserves and now has an obligation to attend reserve duty on the third weekend of those months.

Now, our position is that the employer has a duty, since it is no trouble for him at all, to schedule Andrews on the second and the fourth weekend of those months and schedule someone else on the first and the third weekends, even though that violates his long-established rule of how he allocates the weekends.

The Court of Appeals position is that the employer is entitled to rely on his rule.

The rule is facially neutral, does not discriminate against reservists, and therefore they don't have to do anything for him.

Justice Rehnquist: What if the rule were that there's a one-month vacation for all employees, and the vacation for A-to-M employees is July and the vacation for N-to-Z employees is August, and some have scheduled, say, refresher teaching courses, some have scheduled vacations with their families, some have scheduled any number of things.

Would you say that the reservist has a right to insist that he get the vacation time contrary to policy because of his one-month reserve duty?

Mr. Horowitz: You're suggesting this one month reserve duty falls in July, for example, and that's when he's scheduled for vacation?

Justice Rehnquist: Yes.

Mr. Horowitz: I'm not sure what employment benefit he's being denied if his reserve duty comes out on his vacation.

I mean, that's the optimum situation, that's the idea that Congress had in mind.

Justice Rehnquist: Well, supposing his reserve duty comes in August, and he wants a vacation, but he's also a member of the reserves?

Mr. Horowitz: Well, he can't... well, let me backtrack.

I think he--

Justice Rehnquist: You wouldn't regard the reserve duty as vacation?

Mr. Horowitz: --That doesn't even really raise the issue, I think, that's presented here, because Section 2024(d) guarantees him a leave of absence and guarantees that he can come back with his vacation intact.

Justice Rehnquist: But it doesn't guarantee that he will be paid during that time?

Mr. Horowitz: No, that's right; it doesn't guarantee that he'll be paid.

But if he comes back at the end of July he will still be entitled to vacation.

Justice Stevens: Well, your question would be comparable if he wanted to work during August when they scheduled him for vacation, and he had to go to the reserves in July.

Then it would be like your first and third, and second and fourth.

I understand you to be arguing, yes, he has a right to have his vacation in the month in which the reserve obligation falls.

Mr. Horowitz: All right, assuming that it can be accommodated, now--

Justice Stevens: And how do you tell whether it can be accommodated?

There's always a little extra work if they stop using the A-M schedule.

What is the test?

Mr. Horowitz: --Well, I think that's right.

It's just a reasonableness test.

It's hard to identify in the abstract.

I mean, certainly the fact that they had to do a little extra work, change from A-to-M to N-to-Z.

Justice Stevens: But isn't it true, as Justice White suggests, that the statute is therefore giving him something no other employee has?

Mr. Horowitz: Right.

Justice Stevens: He's got a right to some kind of special consideration at the time the work schedule is prepared?

Mr. Horowitz: He just has a right to the same benefit--

Justice Stevens: I'm saying that he's the only one in the store who can say, I want to take my vacation in July, or I'm the only one in the store who says, even though my name begins with A, I want to have my first and third with the N?

Mr. Horowitz: --He can't say that I want to have my first and third... the same as any other employee.

If he has any reason that he wants his vacation in July, it's too bad.

But if it conflicts, if it's because it conflicts with his reserve obligation, then he does have a right not to have the benefit denied to him.

Unidentified Justice: He says it's not that he wants to have, he's entitled to have; that's your argument.

Mr. Horowitz: Congress has guaranteed him these employment benefits to the extent that if they can be accommodated.

I'd like to reserve the remainder of my time.

Chief Justice Burger: Very well.

Mr. McAuliffe, you may proceed.

ORAL ARGUMENT OF PAUL S. McAULIFFE, ESQ., ON BEHALF OF THE RESPONDENT

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

During the course of an average year each hourly employee at Sohio's petroleum refinery in Lima, Ohio, will have seven weekends scheduled off from work, during that year.

For the other 45 weekends of the calendar year, that employee will be scheduled to work: on 30 of those weekends working both Saturday and Sunday; on the other 15 working one or the other.

There is a reason why life appears to be so draconian at the refinery, and that is because, like most petroleum refineries and like many other workplaces in this country, the refinery operates seven days a week, 24 hours a day, 365 days a year.

That means that on every weekend a full operating work force is required to run that refinery.

If weekends were staffed on a voluntary basis, in most cases there would be serious practical problems getting a full on a weekend.

For that reason Sohio has developed at this refinery, subject to the collective bargaining agreement that exists with the Oil, Chemical, and Atomic Workers, a system of routine rotating scheduling of weekend work on an involuntary basis.

Under this system, which is set forth in the record, every employee will have on the average seven weekends off per year, that I have mentioned.

In this case we're dealing with one of these employee's who was a member at the time in question of the Ohio National Guard.

Justice Stevens: Mr. McAuliffe, could I interrupt with a question, because it affects the argument right here?

I didn't know from the record that there were seven weekends off and 45 on, but I'm sure that's correct if you tell us that.

Are you also telling us that you could not schedule this man so he'd have 12 weekends off but still work the same number of Saturdays and Sundays?

In other words, he'd have to work both days on more weekends, to work the same number of total weekend days?

Are you saying you couldn't do that, because of the schedule?

There's my question to you.

Mr. McAuliffe: Well, first, in response to the first part of your question, this schedule itself is set forth in the joint appendix and was part of the stipulation, and you can--

Justice Stevens: Is this the one at page 29?

Mr. McAuliffe: --Pages 29 through 39.

If you go--

Justice Stevens: Oh, I see.

Mr. McAuliffe: --If you go through the rotation scheme in there, you will find it works out on the average to seven weekends off per year.

But the difficulty in rescheduling is the fact that even to just shift one day at a time on a weekend, you are requiring another employee who would otherwise have had, say, the Saturday off, to work on that Saturday.

And then--

Unidentified Justice: But against his will?

Mr. McAuliffe: --That's correct.

And we--

Justice White: All voluntary trades have been exhausted in this case, haven't they?

Mr. McAuliffe: --That's correct, Mr. Justice White.

There is a provision in the collective bargaining agreement that provides, whenever the regular work schedule, whenever an employee has a conflict, he can change voluntarily.

Justice Stevens: He can change... I still don't think you've answered my question.

My question is whether he could be scheduled with the number of days off he needs, the number of Saturdays and Sundays off to accommodate his reserve obligation, without requiring any other other employee in the plant to work any more Saturdays or Sundays than they now have to work under the regular routine?

Mr. McAuliffe: Given the facts we have in this case, that could be done, Mr. Justice Stevens.

The number of days, if we're talking about, 12 months, 24 days, the total number of weekend days off he would normally have would be 29, so we're talking about a redistribution of his weekend days as well as the days of the other employees.

As a practical matter, in most cases, we'll be talking about more than the 24 days, because the reservist will also be gone for two weeks for the summer training camp obligation.

Justice Stevens: Right, and you may have more than one service too.

Mr. McAuliffe: So you might be able to accomplish it by juggling the days around.

You're still--

Justice White: Which would mean other employees would have to work fewer weekend days?

Mr. McAuliffe: --No, no, I wasn't suggesting that at all.

Justice White: Well, if he works more weekend days than would be normal and the company only needs a total of X weekend days, I'm not saying that other employees wouldn't welcome the opportunity to work fewer weekend days?

Mr. McAuliffe: Mr. Justice White, I do not mean to say he'd be working more days.

Their distribution would be different.

Justice White: There might be two in January and none in February, instead of one in each month?

Mr. McAuliffe: The total number during the course of the year could be set up so that the number of days, enough days, would be the same.

That's correct.

Justice Marshall: But in your admissions you say that the defendant took no steps to provide plaintiff with substituted work hours.

No effort, no steps, rather; no... none.

Not even one.

Mr. McAuliffe: That's correct, Mr. Justice Marshall.

Justice Marshall: Do you think that's in keeping with the statute, to, make no effort?

Mr. McAuliffe: I think it's in keeping with the statute when you look at the provisions of the statute and at the workplaces of this facility.

First of all, we're talking about Sohio having taken the specific steps that were required by the statute to grant a--

Justice Marshall: This is the admission,

"They had made no steps to provide plaintiff with sixteen substituted working hours to make up for his lost work. "

That's all that it says.

Mr. McAuliffe: --That's correct, Mr. Justice Marshall.

Justice Marshall: And no means no.

Mr. McAuliffe: And we contend that that--

Justice Marshall: Did you even ask if somebody wanted to take this man's place?

Mr. McAuliffe: --The steps that were taken were the steps taken under the collective bargaining agreement calling for voluntary exchanges.

Other than that, no steps were taken to rearrange the schedule.

Justice Marshall: Well, under the collective agreement the man has to take the steps, the worker has to make the steps.

Mr. McAuliffe: Yes, that's correct.

Justice Marshall: So it still means that the defendant did nothing.

Mr. McAuliffe: That's true, Mr. Justice Marshall, and we contend that there was no obligation.

Justice Marshall: And I would assume, I could assume there were ten million people waiting there to do it, if they'd just ask.

Mr. McAuliffe: I missed... I'm sorry.

Unidentified Justice: Well, you can't dispute it.

Justice Marshall: I mean, that word "no" is awfully--

Mr. McAuliffe: What we see at issue in this case is the problem of reconciling the problems of somebody who is in effect holding two different jobs.

The petitioner in this case is a full-time employee at Sohio's Lima, Ohio, refinery, and has certain rights and obligations that go with that status of being an employee.

Chief Justice Burger: Are you suggesting that a reservist in this setting is just like some fellow who is moonlighting, working for a Seven-Eleven store or?

Mr. McAuliffe: Not at all, Mr. Chief Justice.

Chief Justice Burger: Congress singled out this one category of people, didn't it?

Mr. McAuliffe: Congress has and Congress has enacted very specific accommodation requirements that--

Chief Justice Burger: They did that to encourage people to go into the military reserve, did they not?

Do you doubt this then?

Mr. McAuliffe: --I assume that they did, Mr. Chief Justice.

Chief Justice Burger: You assume it.

Is there any doubt about it in the legislative history?

Mr. McAuliffe: No, I don't think so.

But what Congress has done with regard to the reserves is to create very specific special rights to accommodation that do not exist for other employees.

Justice White: And you suggest that this isn't one of them?

Mr. McAuliffe: That's correct, Mr. Justice White.

The right that Congress has created is, first, the right when there is a conflict to relieve this employee of his obligation to work his regular schedule and to grant that employee a leave of absence, to reinstate that employee at the termination of that, and to protect his seniority, his status, just as you would have to do for someone who was in the regular military.

Justice White: Well, Mr. McAuliffe, when you grant him a leave of absence, which you agree you have to do without firing him... he can be away from work, and he won't be paid under your submission, but he can't be fired for being away?

Mr. McAuliffe: That's correct, Mr. Justice White.

Justice White: Well, what do you do when he's away?

Mr. McAuliffe: When he is away?

Justice White: Under your position.

You certainly need to fill the job while he's away.

So what do you do?

Require other employees to work?

Mr. McAuliffe: While he's away, you fill the job on a temporary basis and that can be done--

Justice White: How do you do it?

Do you assign people who should be off on the weekend to?

Mr. McAuliffe: --There are two methods that were used at this workplace.

One would be to assign an employee if one is available from a floating crew called "the extra board" at the facility who would not have a regular schedule and who would be available to fill temporary vacancies.

That person would then work that day or two days, as the--

Justice White: And you're paying him but not the fellow who's away?

Mr. McAuliffe: --That's correct.

If no one were available from that crew, then you would fill it as an overtime job.

Under this agreement it has to be voluntary.

Justice White: And that would cost you money?

Mr. McAuliffe: That would cost premium pay; time and a half.

The rearrangement of schedules That the Government is suggesting in this case would require us to take an employee in the same classification as petitioner, require him to work that particular weekend instead, still at his regular pay, no premium pay, because everybody is still just working a 40-hour week under this theory.

But the fact is that the vacancy is filled now under the provisions of... collective bargaining agreement.

Justice White: So, you have a way of it not costing you any money to accommodate yourself to the leave of absence?

You could let him be away and not fire him, and still get the work done by your extra crew?

Mr. McAuliffe: That's correct.

In some cases there may be some premium pay involved but that wasn't done in this case.

Justice Brennan: But in any event, Mr. McAuliffe, as I understand your submission, it is that all that Congress required you to do was (a) let him have a leave of absence, and (b) on his return give him what the statute expressly identifies, namely, restore seniority, status, pay, and vacation.

And that's all you have to do because Congress didn't say you had to do any more?

Mr. McAuliffe: Well, that's correct, Mr. Justice Brennan, because the right to seniority that is protected is a very broad right.

Unidentified Justice: Yes, I know, you have to... but that isn't involved here?

Mr. McAuliffe: There's no contention here.

Unidentified Justice: He comes back with the same seniority as if he'd not taken a leave of absence, under the statute, doesn't he?

Mr. McAuliffe: Yes, that's correct, and--

Unidentified Justice: Incidentally, that's the same wording that's appeared in some of these veterans return statutes.

Mr. McAuliffe: --The wording is precisely the same with one difference, and that is that provisions relating to reservists also use the word "vacation", because there's a specific protection for the reservist that he cannot be charged any vacation time--

Unidentified Justice: Well, my question was going to be, haven't we had some of our cases under the veterans return statutes that have interpreted this wording a little more broadly than you submit?

You don't think so?

Mr. McAuliffe: --I don't believe so.

The cases under the Veterans Reemployment Act apply to veterans; have said that the seniority that's protected can and should be interpreted when you're talking about seniority to protect the veteran, or in this case the reservist, protect that absence, give them protections that may not exist elsewhere.

The difference between our position and the Government's position in this case is that we freely concede that the leave of absence is to be treated better, and, in fact, it is, because of the leave of absence, because of the seniority protection.

The Government's argument is that there is an obligation of reasonable accommodation out there that requires even more.

What it requires is that the work schedule be changed so that there is no absence at all.

What we're talking about is not better treatment, should there be an absence.

We freely concede that that is required by this Court's decisions and we have in fact done that in this case; there is no dispute that we have done that.

Justice Marshall: And the Court of Appeals said that all that was required was that he be treated exactly like everybody else.

Mr. McAuliffe: That's correct.

Justice Marshall: That's what they said over and over again.

Justice White: Well, for this purpose; for this particular purpose.

They didn't say you had to treat him the same for seniority.

Mr. McAuliffe: No, the Court of Appeals, the passage which Mr. Justice Marshall was reciting refers to the version of the statute upon which the Government relies, and the Court of Appeals reads that as requiring neutral treatment.

Justice Rehnquist: Why did Congress pass the most recent amendment to the Veterans Reemployment Act?

Mr. McAuliffe: Congress passed this because when they first enacted the reinstatement protection for reservist in 1960 they left a gap in protection, when you compare that to the protection they had already provided for the regular military.

The statutes that apply to the regular military create two kinds of statutory protection.

The first is a reinstatement right with protection of seniority and status.

Congress enacted that for reservists in 24(d) in 1960.

There is a second provision of the statute that relates to the regular military that protects them against discharge without cause for a fixed period after their return to work.

The reasons for that being to prevent the case where a veteran would be reinstated, given full seniority protection, and then once that had been done, a few weeks down the road that person would be released from employment.

In 1960, when Congress specifically extended the statute to the reservists, they provided no comparable protection, and if you look at the legislative history that led to the passage of 21(b)(3), the specific concern of the Department of Labor in proposing the legislation, or the Department of Defense in supporting it, was that there were instances of employees being reinstated after having exercised their reservist rights and then being discharged from employment or denied promotions or suffering other adverse treatment.

Justice Rehnquist: Dumped, in effect, after a pro forma compliance with the statute?

Mr. McAuliffe: That's correct.

Absent 21(b)(3), there would be no protection under the statute in that case, and that's the reason Congress enacted it.

And that is... it's clear from the legislative history that that was their purpose and this comes clear as well if you look at the interpretations that have been issued under the statute by the Department of Labor from that time to this date, which has specifically described 21(b)(3) as a section designed to protect against discharges, protect against denials of promotion or other discrimination.

Justice White: If you must do what the Government says, I take it you'll be doing more than the collective bargaining agreement calls for?

Mr. McAuliffe: That's correct, Mr. Justice White.

Justice White: But would it violate the collective bargaining agreement for you to do what the Government says?

Mr. McAuliffe: I think the best answer I can give you to that question is that it probably would and I answer--

Unidentified Justice: At least the union will probably say so.

Mr. McAuliffe: --The facts are that the scheduling practice that has been followed under the agreement is the one that's set forth in the record.

There never has been any attempt to follow a different practice.

The agreement, while it may be silent on this specific work schedules, the agreement does have a specific mechanism for resolving schedule conflicts--

Unidentified Justice: And is the union in here?

Mr. McAuliffe: --Yes, sir.

There is a union at this facility.

It is Local--

Unidentified Justice: No, but is the union in the litigation?

Have they taken a position at all?

Mr. McAuliffe: --No, they are not.

The union has--

Unidentified Justice: They're not very concerned about it then?

Justice Marshall: It's in all the findings.

Mr. McAuliffe: --Well, there is... the union is not a party to this litigation.

Justice Marshall: Not a party, but it's in the findings.

Mr. McAuliffe: I suspect that--

Justice Marshall: Well, if you paid a union worker a single salary for a double salary job, wouldn't it be a violation of the union contract?

Mr. McAuliffe: --It certainly would be.

Justice Marshall: I should think so.

I wouldn't advise trying it.

Unidentified Justice: Well, couldn't the company have at least undertaken on its own to have solicited other employees to see if they wanted to take this man's place while he was at camp, rather than leaving it totally up to him?

Mr. McAuliffe: It could have been done.

I am sure it would not be impossible to do that, but we're facing facts where we know that solicitation was already done by the employee affected and there was no one willing to exchange on a voluntary basis.

We could... as we read the collective bargaining agreement in place here, we would not have the right to force somebody to make the shift.

Unidentified Justice: Mr. McAuliffe, does the record show how many persons are employed at the Lima plant?

Mr. McAuliffe: At the time in question, approximately, I think it's 561 employees at this time.

Unidentified Justice: Does it show how many reservists are employed?

Mr. McAuliffe: The record is silent on that question other than to note this one petitioner involved is a member of the reserves.

Chief Justice Burger: If it had been 100, for example, wouldn't it be reasonable to assume that someone would put that in evidence as distinguished from five or ten?

Mr. McAuliffe: Yes, it certainly would be.

Unidentified Justice: To try to accommodate 100 reservists would be perhaps a bit of a problem, wouldn't it?

Mr. McAuliffe: Well, you run into the answer I gave to Mr. Justice Stevens before, what will work in the case of one employee won't work as you get, get more and more, perhaps, more and more employees involved.

We don't have any specific knowledge in the record of this case, how many employees are affected.

I think in terms of reading--

Chief Justice Burger: Excuse me.

I think Mr. Justice Stevens had a question for you.

Mr. McAuliffe: --Yes, sir.

Justice Stevens: I was just going to ask you this one question.

Maybe you were going to address it.

In your brief you say,

"This case presents a radically different issue from that presented in the Safeway case in the 5th Circuit. "

Do you think the 5th Circuit case was correctly decided?

Mr. McAuliffe: No, I do not, Mr. Justice Stevens.

Justice Stevens: Seems to me your position really is inconsistent with the 5th Circuit's holding.

Mr. McAuliffe: I think the 5th Circuit holding was incorrect and also that the logic that it followed in getting to that holding was incorrect.

That's what I'll--

Unidentified Justice: It's different.

Mr. McAuliffe: --I think this case reflects in a way that the West case in the 5th Circuit does not, some of the difficulties with trying to develop an accommodation scheme, because you do have a fixed schedule, you do have a collective bargaining agreement that limits flexibility in changing that schedule, which was not, at least not in the record, as far as we know in the--

Justice Stevens: Another way to put the question, I suppose, would you think this case would be different if instead, if the agreement, instead of giving the employees a right to be scheduled for 40 hours, had said they have a right to work 40 hours?

It seems to me your argument would still be that that wouldn't make any difference.

Mr. McAuliffe: --It would not.

It would... the answer to that question would depend somewhat upon how the collective bargaining agreement was construed and whether that was actually construed as a guarantee of 40 hours per week, a guarantee that the employer would assure on a regular basis for the right--

Justice Stevens: Seems to me you'd still argue they've got to show up for work to get... if you offer them the job for 40 hours, that satisfies your requirement under the agreement and it also would meet the statute.

Mr. McAuliffe: --That's precisely our argument, Mr. Justice Stevens.

The principal difference in reading, in our reading of the statute and the reading that the petitioner urges, does come down to the question of whether or not there is a reasonable accommodation requirement that applies.

It's our position that there is not, and that, first, if you look at the statute, there's nothing in the language of Section 21(b)(3) which even hints at there being a reasonable accommodation requirement.

You also have the fact that in another section of the same statute Congress spoke very specifically to what types of accommodation should be provided when you have a conflict between a reservist schedule and a regular work schedule.

I'm referring to Section 24(d).

You also have a very clear legislative history of Section 21(b)(3) which shows that its purpose was to protect against discriminatory treatment.

We submit that there's no basis in the statute or the legislative history to support the interpretation that the Government has urged upon you in this case.

We believe that the reading that we think is the proper reading of 21(b)(3) is the only reading that is consistent with the structure of the statute, with the legislative history, with the administrative guidance that employers have gotten for ten years from the Department of Labor on what their obligations are, as well as the best reading consistent with the use of judicial resources to reconcile claims of what may or may not, within a particular set of facts, be reasonable accommodation.

In our view the Congress in 24(d) specifically addressed this question, and gave very detailed, specific, and workable rules for employers to follow.

And our contention is that the facts in this case show that Sohio has met all of its obligations with regard to the reserve absence, with regard to the need to provide reinstatement rights, and with regard to 21(b)(3) and its protection against discriminatory treatment.

I thank the Court.

Chief Justice Burger: Very well.

Do you have anything further, Mr. Horowitz?

Mr. Horowitz: I have a couple of points.

ORAL ARGUMENT OF ALAN I. HOROWITZ, ESQ., ON BEHALF OF THE PETITIONER -- REBUTTAL

Justice Powell: Mr. Horowitz, the Government's position is that only reasonable efforts to accommodate the needs of a reservist are required under the statute.

The statute itself is rather positive, isn't it?

2021(b)(3) provides in effect that any person who holds a position described in the statute shall not be denied other incident or advantage.

Do you interpret that to require only reasonable effort?

Mr. Horowitz: That's correct.

The plain language of the statute is that reservists cannot be denied these benefits.

Now, we are willing to admit that Congress did not intend that employers need to take unreasonable measures in order to assure employees these benefits--

Unidentified Justice: Well, it seems to me your argument as suggested by my brother Powell is a little bit inconsistent with the statute.

The statute doesn't impose a duty upon an employer to make reasonable efforts, but it says--

Mr. Horowitz: --No, the statute imposed a duty on the employer.

Unidentified Justice: --It seems to give absolute entitlements.

Mr. Horowitz: An absolute duty; that's right.

Unidentified Justice: And therefore the requirement is an absolute duty.

Mr. Horowitz: There's an absolute duty.

Unidentified Justice: If the statute means what you say it means.

Mr. Horowitz: Well, in another portion of the statute the Congress made clear in 2021(a) that it did not require the employer to take unreasonable measures.

That's in connection with reinstating veterans.

Unidentified Justice: Well, no, it doesn't--

--Where is that found in 2021(a)?

Mr. Horowitz: This is at the end.

Well, it's not reprinted, because it's not germane to this case, but in fact, there's a specific statement in the statute that employers are not required to reinstate veterans where it will be unreasonable or unduly burdensome to do so, and we--

Unidentified Justice: But here, if the petitioner is entitled to 40 hours a week, he's entitled to 40 hours a week, and not entitled simply to his employer's making reasonable efforts to see to it that he has 40 hours.

Mr. Horowitz: --He's entitled to 40 hours a week, to work 40 hours a week.

But if it's impossible for him to work 40 hours that week, it's recognized that Congress wouldn't haven't intended it.

Justice Marshall: Is there anybody else in that plant entitled to 40 hours a week?

Mr. Horowitz: Everybody's entitled to 40 hours a week.

Unidentified Justice: Well, it isn't impossible, it isn't impossible to give him his 40 hours.

Mr. Horowitz: Not in this case, it's not impossible.

Unidentified Justice: Well, I know, but it wouldn't be in any case, would it?

Mr. Horowitz: Sure, it's impossible--

Unidentified Justice: All the employer would have to do is to pay overtime.

Mr. Horowitz: --No, if he's gone for the whole week, it's impossible to schedule him to work 40 hours during that week.

Unidentified Justice: I know, but if he's gone on weekends, you can assign somebody else to work for him.

Or pay him even though he's not there.

Mr. Horowitz: But that's not giving him... the employment benefit is the right to work, not the right to be paid for not working.

We're just saying that he's entitled to be given the employment benefit at issue, which is working for 40 hours.

Unidentified Justice: So, he has the right to work 40 hours and not just the right to a leave?

Mr. Horowitz: That's right.

And I think a lot of discussion here has completely ignored the fact that Congress passed this statute, 2021(b)(3).

In response to Mr. Justice Brennan's question, the respondent indicated that the reservist has only certain limited rights, and those are the rights that are guaranteed by 2024(d).

There is another statute here and respondent will either have us ignore this statute or restrict it to discharges, which is plain from the face of the statute that it's not restricted to discharge or, as the court of Appeals so narrowly construed the statute as to make it almost meaningless.

And they did that by--

Justice Rehnquist: Aren't you yourself, as my brother Stewart suggested, construing it more narrowly than it's literally written?

Mr. Horowitz: --The statute has to be construed in line with what we think Congress's intent would be.

Now, this Court has said many times that this entire statute is to be read together as one piece.

Now, there is this unreasonability requirement in another part of the statute.

They didn't specifically repeat it in this particular amendment, but it's reasonable to assume the Congress would have thought the same thing; the same policies applied.

The policy, as to reservists... inequality in employment be minimized.

Justice Marshall: Mr. Horowitz, may I ask you one question?

I'm not entirely clear as to what the duty is with respect to the two weeks' summer training for reservists.

Does the reservist have a right not only to be absent for those two weeks but in addition to have his two weeks vacation with pay, so he's away four weeks in the summer?

Mr. Horowitz: In other words, if he has a two-week vacation with pay, generally, and then he takes these two weeks off on reserve duty.

He's not required to count those two weeks as his two weeks' vacation.

He takes the two weeks off, he's not paid for these two weeks.

And then later he could take his vacation.

Justice Powell: Let me see if I understand you.

He's entitled, I suppose, under this union bargaining contract, as in most, to a period off with pay?

Mr. Horowitz: Yes; assuming that.

Justice Powell: Is a reservist entitled, in addition to that, to take off two additional weeks to fulfill his reserve requirements--

Mr. Horowitz: Yes.

Without pay.

Justice Powell: --Without pay.

Unidentified Justice: Well, he gets paid as a reservist.

Mr. Horowitz: Some pay.

Unidentified Justice: He gets pay on his weekends as a reservist, but not from this--

Mr. Horowitz: He doesn't get... it doesn't go; it's not the same pay.

Justice Powell: --The result is he may be away a month?

Mr. Horowitz: He may be away a total of a month, yes.

He's entitled to take the--

Justice Rehnquist: Mr. Horiwitz, when Congress enacted this statute and its amendments, did it confide its administration to the Department of Defense or Department of Labor, or did it not confide it to any of the administrative departments?

Mr. Horowitz: --Well, I mean, the veterans reemployment or the statutes in general are administered by the Department of Labor.

Chief Justice Burger: Thank you, gentlemen.

The case is submitted.

Unidentified Justice: The honorable court is now adjourned until Monday next at 10:00.

Attribution:

The OYEZ Project

Featured:

Coffy v. Republic Steel Corp. - Oral Argument

Thu, 13 Sep 2012 22:04:10 +0000

Case:

Coffy v. Republic Steel Corp.

Media File:

79-81_19800227-argument

Related Transcript:

79-81_19800227-argument

Transcript:

Argument of Alan I. Horowitz

Chief Justice Warren E. Burger: We'll hear arguments next in Coffy against Republic Steel Corporation.

Mr. Horowitz, I think you may proceed when you're ready.

Mr. Alan I. Horowitz: Mr. Chief Justice and may it please the Court.

This case is here on a writ of certiorari to the United States Court of Appeals for the Sixth Circuit.

It concerns the proper interpretation of the statutory provisions that guarantee certain reemployment rights to veterans upon their return to employment.

These provisions are now codified in 38 U.S.C., 2021. The question here is how those provisions apply to the supplemental unemployment benefits or SUB's that are provided under the collective-bargaining agreement between respondent and the United Steel-workers.

Specifically, the question is whether the guarantee against loss of seniority under the Act requires that the time spent by a veteran in the service be included in the time used to compute SUB's.

SUB's are payments that are made by the employer to employees who have been laid off.

These payments are over and above the unemployment compensation that the employee otherwise receives from the State.

Under the SUB plan involved in this case, which is set out beginning at page 17 of the appendix, SUB payments are made on a weekly basis for a period of up to 52 weeks.

That period depends upon the number of SUB credits that the employee has accrued.

The amount of each weekly payment is determined according to a formula set out in Section 1 of the plan.

That formula depends on several factors, including the employee's present salary and his number of dependents and the amount of compensation that he receives from the State.

The formula does not depend on the amount of time that the employee has been employed.

Therefore, there is no dispute in this case about the amount of each weekly benefit that was received by petitioner.

What the dispute in this case does concern, is the length of the time period over which this weekly SUB payments continue.

This period is determined by the number of SUB credits.

And these credits are earned through the passage of time as described in Section 2 of the SUB plan on page 19.

One-half credit is earned per week.

An eligible week for which 1/2 credit maybe on, is one and which the employee has any of the following hours; hours worked for the company, hours that are not worked but for which the employee is paid.

For example, vacation time or time spend on jury duty and also, certain categories of hours not worked and for which the employee is not paid, where the employee is performing certain duties for the local union or as on a certain specified disability leave.

When an employee is laid off and receives weekly payments, he uses up the SUB credits.

Finally, under the plan an employee is not eligible to receive SUB payments at all, no matter how many credits he has accrued until he has two years of continuous service with the employer.

As an example of how the system works, if an employee begin work for the company and worked or engaged in time of these other eligible activities for continuous period the year and a half and was then laid off he would have accrued 39 SUB credits by that time.

That would be at the rate of 1/2 credit per week.

However, because he had not reached the 2-year eligibility threshold, he would not receive any SUB payments when he was laid off.

In this case the petitioner began working for respondent in 1968.

And work for respondent for a period of four-and-half months during that time.

He was then laid off and he then left respondent's employment.

He had accrued 9 SUB credits during the time that he was employed in 1968.

However, because he elected to leave respondent's employment those credits were canceled.

He then begun to work for respondent again in late January 1969 and continued to work for respondent until he entered military service in September of 1969.

He thus earned approximately 16 SUB periods, excuse me SUB credits during the slight of period.

He served in the military unit August 1971 when he was honorably discharged.

He was the reinstated to this previous position with respondent.

However, because of respondent's economic situation, he was immediately placed in layoff status.

He remained layoff for period of 9 1/2 months until July 1972.

During the layoff period, petitioner received SUB payments for approximately 16 weeks, corresponding to the 16 SUB credits that he had earned before he entered the service.

However, he did not receive any payments for the remaining 5 1/2 months that the layoff continued.

Had petitioner not entered military service and continued in respondent's employment, the parties have stipulated that he would have 52 SUB credits at the time of his layoff.

Thus, he would have received SUB credits for the, excuse me, SUB payments for the entire duration of his layoff.

The question presented in this case then, is simply whether petitioner should have had his military service counted in determining his total SUB credits when he was reinstated following his military service.

Petitioner originally brought suit in the District Court for the Northern District of Ohio, alleging that the failure to consider his service time in computing his SUB credits violated his statutory rights.

The District Court rejected petitioner's contention, holding that the SUB plan established a bona fide work requirement for the earning of SUB credits.

Petitioner appealed and while the case was pending on appeal, this Court handed down its decision in Alabama Power Company v. Davis, holding that pension benefits or perquisite of seniority under the act.

The Court of Appeals then vacated the District Court's decision and remanded for reconsideration in light of Alabama Power.

The District Court again held for respondent, stating that, “entitlement to SUB benefits requires more than continued status, such as a work requirement to any actual performance on the job”.

The Court of Appeals then affirmed for the reason stated by the District Court.

The relevant provision of the statute involved here is that portion of 38 U.S.C 2021 (b) (1) that requires veterans to be reinstated without loss of seniority.

If this Court finds that SUB payments are perquisite of seniority within the meaning of that section then petitioner must be given credit for his army service time in computing his SUB credits.

That is a consequence of two main principles that were established in this Court's decision in Fishgold.

First, the escalator principle was established, that is that a veteran who returns to his employment is to be reinstated at the same place, he would have been had he remained in the employment, that is, at the place he would have been on the escalator, that he remained in employment not at the place he got off the escalator when he entered the service.

Secondly, Fishgold also established that the provisions of the act ought to be liberally construed for the benefit of the veteran.

In this Court's decision in Alabama Power, it established the appropriate analysis for determining whether a particular benefit is indeed a perquisite of seniority.

The real nature of the benefit is to be examined.

And it is to be determined whether other one hand the benefit is primarily in the nature of a reward for length of service in which case it is a perquisite of seniority or on the other hand whether the benefit is primarily short-term compensation for work performed.

Applying this test, severance pay and pension benefits have been held by this Court to be perquisites of seniority.

Vacation pay has been held to be primarily in the nature of compensation for work performed.

Before I turn to discussion of those factors that we believe indicate that SUB should be treated as a perquisite of seniority, I would like briefly to discuss the notion of a work requirement upon which the District Court and respondent have focused some of their attention.

There is no dispute here that SUB credits are primarily earn by employees who are workers.

This is naturally true of most benefits that this Court has dealt with whether they are determined by language in the collective-bargaining agreement that refers to work or whether that it is determined by language that refers use of service.

Now, in Alabama Power, a contention was made to this Court that any benefit that is determined by work requirement, that is where the collective-bargaining agreement specifies that most of the employees who earn the benefit will be working, should automatically dispose of any contention that the benefit maybe treated as a perquisite of seniority.

The Court expressly rejected that contention in Alabama Power and it noted that almost any benefit could be tied to a work requirement such as existed in that case.

That would permit the employer himself to decide whether a benefit was a perquisite of seniority and the employer himself to decide whether the veteran was entitled to have his service time credited.

However, Congress has not left that decision up to the employer.

This is a decision that Congress has made.

Now, as far as the work requirement in this case, it is significantly less in the work requirement that this Court rejected in Alabama Power.

There, the question was whether the employee was entitled to accredited service time for the time that he spent in the military.

Accredited service was defined in terms of full time service at 40 hours per week.

Moreover, the limited exceptions in Alabama Power, applied only to employees who are on paid leave not employees who are in certain categories of unpaid leave as in this case.

We believe that SUB benefits should be treated as a perquisite of seniority.

They serve a purpose that is akin to the most traditional seniority benefit.

And this analysis incidentally was made by the Third Circuit in the Foster decision which was later affirmed by this Court.

The -- the primary purpose of SUB benefits is to protect employees against economic loss during periods of the diminished employment.

It acts as an adjunct to the normal layoff protection that employees get when they accrue seniority benefits.

Thus when, there's an economic downturn and the employer is forced to layoff a number of employees, what happens, is those employees that have accrued the most amount of seniority are protected from layoff because of the seniority that they have accrued.

Employees who have not accrued enough seniority to be protected from layoff get this more limited protection of the SUB benefits.

That is they receive some money to tie them over the period for which they are unemployed and employees who have the least seniority at all will either not be eligible at all for SUB payments or they will receive less because they have accrued fewer credits.

Justice William H. Rehnquist: All -- all employees laid off I take it will receive unemployment benefits from the State?

Mr. Alan I. Horowitz: That's correct.

The SUBs are only intended to be a supplement to the unemployment benefits provided by the State and the formula for figuring out how much SUB is to be paid inclusive deduction for the amount of State on employment benefits.

And in fact if an employee, for some reason, does not get State unemployment benefits for reason that was within his control if he doesn't apply for them for example, then he will not be eligible to receive SUBs.

We think the best analogy to the SUBs is a quite similar benefit of severance pay that this Court held to be a perquisite of seniority in the Accardi case.

Severance pay also provides income that ties an employee over a period of unemployment as to SUB's.

The difference essentially is that with SUB's layoff is only temporary and severance pay deals with the issue of permanent layoff.

As in the Accardi the intent of SUB's, is to provide compensation for the lost of the rights and expectations that the employee has accrued over his period of service.

It is not to provide compensation for the work that the employee did in the past.

The amount the SUB benefits as the amount of severance pay benefits are not at all tied to the amount of work that was done in the past.

Moreover, the provisions of the plan are completely inconsistent with any notion that SUB's are to be treated as compensation for work performed.

First of all, SUB credits are forfeitable at anytime if the employee incurs a break in continuous service.

Therefore, an employee could work for 20 years and then if he incurred to break in service, he would loss all the SUB credit that he had accrued and if he hadn't been laid off in the time, he never would have received any benefit at all.

Justice Potter Stewart: Well he -- but all that he would have accrued in 20 years is the same as he would have accrued in two years, doesn't it?

Mr. Alan I. Horowitz: That's correct.

Unknown Speaker: Because there's a maximum of 52.

Mr. Alan I. Horowitz: There's a maximum 52.

Justice Potter Stewart: (Inaudible) after weeks?

Mr. Alan I. Horowitz: At -- at the time that in this collective-bargaining agreement I said existed at time the petitioner was laid off, yes.

Chief Justice Warren E. Burger: And this -- for this particular employee was laid off, well -- was he not?

Mr. Alan I. Horowitz: He was laid off --

Justice William H. Rehnquist: -- and so he'd started all over again when he went back to work in the process of accruing issue of the benefit?

Mr. Alan I. Horowitz: No.

Justice Potter Stewart: He was --

Mr. Alan I. Horowitz: He was --

Justice Potter Stewart: -- he was laid off immediately upon his reinstatement

Mr. Alan I. Horowitz: That's right.

He was laid off as soon as he came back to work --

Justice Potter Stewart: He was reinstated then laid off?

Mr. Alan I. Horowitz: Right, because, according to his seniority status, they've already passed the -- the time when he was then laid off had he been back before.

He still have --

Justice William H. Rehnquist: I thought he -- I thought he quitted.

Mr. Alan I. Horowitz: Well, he -- he first works for period in 1968, then was laid off and then quit.

And at that time he forfeit of all the credits they had.

He then came back to work and worked for a period of time which enabled him to accrue 16 more credits and he then entered the service.

And he -- when he came back he was given those 16 credits that he accrued before he entered the service.

Justice William H. Rehnquist: Was he given -- was he also given the part that he had accrued before he quit?

Mr. Alan I. Horowitz: Well, when you quit you forfeit the benefits.

Now, what -- what happen here is that, the employer actually made a mistake and did give him credit for the benefits that he had accrued even before he quit and made payments upon to that but later on the mistake was realized and petitioner had to repay that money.

So in effect, he did not get the credit and we don't contend that he should have gotten credit for that time.

Most significantly there is a vesting requirement here before the employee is eligible to receive SUB payments.

As in Alabama Power, there was a vesting requirement.

Here -- no.

if the employee works for any period less than 2 years, he does not receive any SUB payments.

Even after, the two-year period comes the payments are still contention upon his being laid off.

Now, this is completely inconsistent with any notion of compensation, that the idea of SUB payments was compensation and the employee -- if an employee did a certain amount of work he would be entitled to a certain amount of payment for that work whether or not he was laid off and whether or not he manages to hang around for 2 years.

Justice John Paul Stevens: Mr. Horowitz, can I interrupt you there?

Mr. Alan I. Horowitz: Yes.

Justice John Paul Stevens: I -- I'm just was little puzzled.

The -- the 2 years is the necessary nor to be eligible for any payments.

How -- if -- if you -- your opponent were correct in this case, how would he have met the 2-year requirement?

Mr. Alan I. Horowitz: Well, respondent was willing to count his military service time for the purposes of the 2-year requirement but it was not.

Justice John Paul Stevens: For the eligibility but not for the amount of (Voice Overlap) --

Mr. Alan I. Horowitz: That's right.

It was treated inconsistently for the two different purposes under the SUB plan.

The reason I believe that the respondent felt compelled to give credit for the military time is that, that 2-year requirement is -- is the same requirement that is generally occurs throughout the seniority provisions of the collective-bargaining agreement and it's defined through the same definitional section.

And it's clear that for -- the more traditional seniority benefits he would have to have been given credit for his time in the army.

So, if respondent had not given him credit for time in army it would – he would have been using same definition in giving him credit under that definition for some purposes and not for other purposes.

Justice John Paul Stevens: So they in fact agree that the 2 year -- the eligibility is this an aspect to seniority?

Mr. Alan I. Horowitz: That's correct.

Justice John Paul Stevens: I see.

Mr. Alan I. Horowitz: Moreover, there is absolutely no correlation between the amount of work that is performed by the employee and the amount of benefits that he accrues.

He accrues 1/2 credit per week, no matter how much work he does during that week.

Justice Harry A. Blackmun: Yes, but do you – do you --

Mr. Alan I. Horowitz: Now --

Justice Harry A. Blackmun: -- not conceded that 32 hours is the rule rather than one hour of the exception?

Mr. Alan I. Horowitz: One hour is certainly the exception.

There are probably no instances of one hour.

Respondent put on testimony in the District Court and we accept the District Court's finding that as a general rule most employees work 32 hours in any given week or work none at all.

That is only for general rule.

It's clear that in some cases and place did not manage to work 32 hours.

There is an entire section of the SUB plans, Section 4 that is devoted to the question of what benefits are paid when employee does not work 32 hours.

Even a -- even if all employees have worked 32 hours, it should be pointed out that that is not the normal amount of work.

The normal amount work is 40 hours per week.

Employees who work 32 and employees who work 40 accrue the same amount of SUB benefits.

Moreover employees who work overtime also accrue the same amount of SUB benefits.

Apart from -- apart from the amount of SUB credit they've accrued, the weekly -- the amount of the weekly benefit, the actual money which is paid to the employee has absolutely no correlation to the work that is performed.

It depends upon the number of dependents that he has, it depends upon his salary at the time of layoff, not at the time that the credits are earned and it depends on the amount of money in the fund.

Now, in fact the -- the fact that it depends to some extent upon his salary at the time of layoff is an aspect of seniority, if anything in determining the amount for this payment – or these payments.

That was discussed by this Court in Alabama Power where as well it was noted at the pension benefits that were paid depended upon the employees compensation at the time that he was -- began to receive pension benefits not at the time that he earned the credits for them.

Finally, the specific points that this Court mentioned in Foster as indicating some sort of correlation between the amount of work and the amount of earning a credit are absent in this case. There are two factors that this Court mentioned in Foster.

First, that vacation benefit -- more vacation benefits were earned by employees who worked overtime, than employees who did not and there was a special provision that was made for overtime.

Here there is no such provision.

Secondly, in Foster, employees who did not meet the minimum threshold, there you had to work 25 weeks per year in order to get a vacation.

Employee -- certain employees who did not work 25 weeks per year were entitled to pro rata vacation.

And here there is no such pro rata requirement.

An employee who works all the way up to the 2 years is not entitled to any SUB payments at all.

Now, we submit that --

Justice William H. Rehnquist: The employees who work less than 32 hours per week under Section 4 of the collective-bargaining agreement are entitled to some short of pro rata SUB's?

Mr. Alan I. Horowitz: An employee who works less than 32 hours is entitled to the full one half credit – one-half SUB credit.

Now, what Section 4 of the agreement does is that it defines what's called the “short week benefit”.

That is if an employee works 24 hours in a week, he is entitled to a benefit that he'll be paid as if he had worked 32.

But, and -- and the idea I think of that provision is probably -- it was probably put in mostly the instigation of the union is to encourage the employer to make sure that -- I should say to penalize the employer for not allowing employees to work 32 hours per week.

It acts as disincentive to the employer, to schedule employees for less than 32 hours per week.

Now, as far as how it fits into the SUB plan, an employee who works less than 32 hours per week does get half in SUB credit no matter how many hours he works he maybe eligible for a benefit under Section 4 of the plan.

Again he is not eligible for that benefit unless he's already got 2 years of service under his belt.

If he receives a benefit under Section 4, he would still accrue 1/2 SUB credit for that time but -- but because he's receiving a benefit he would also have to give up one SUB -- excuse me 1/2 SUB credit for that time.

So, he would end up in not accruing additional credits if he was actually receiving a benefit.

Petitioner in this case left his employment and went to serve in the military.

When he return from his employment he was disadvantage as compared to those other employees who began employment on the same day that he did.

Had he remained in a civilian employment, he would have had 52 SUB credits and would have received payments for an additional 22 weeks.

Having served in the military he was denied these payments.

We believe that this is precisely the result that Congress was intending to avoid when it passed the Veterans' Re-employment Rights Act statute and we submit that this Court should -- should hold that SUB benefits are perquisite of seniority and the petitioner was entitled to his credits.

If there are no further questions I'd like to reserve the remainder of my time.

Chief Justice Warren E. Burger: Mr. Nims.

Argument of Michael A. Nims

Mr. Michael A. Nims: Mr. Chief and may it pleases the Court.

I think that when one understands the supplemental unemployment benefit plan that the Court is considering, one will realize that if anything it has exactly a reverse relationship to seniority rather than being a perquisite of seniority.

In the first place, the principle benefit of seniority obviously in a layoff situation is layoff preference and the more seniority the employee accumulates the less likely it is, that he will in fact be laid off, that the layoff will reach his seniority date.

The employees --

Justice Harry A. Blackmun: (Inaudible) seniority plan?

Mr. Michael A. Nims: Pardon Your Honor.

Justice Harry A. Blackmun: Isn't that always true of a seniority plan?

Mr. Michael A. Nims: Yes.

Justice Harry A. Blackmun: But this one is so significant --

Mr. Michael A. Nims: That's always true of the seniority plan.

That's the point I'm making Your Honor that the supplemental unemployment benefit which is the benefit we're talking about here is actually a benefit which is most often used by people with lesser seniority than people with greater seniority.

It's more important to people with lesser seniority than people with greater seniority and the point I'm making is rather than being a perquisite of seniority, it indeed operates in a reverse relationship with seniority.

Justice John Paul Stevens: But Mr. Nims, aren't there really three classes of -- of seniority that people who are senior enough not to be laid off, people who were in kind of a middle category who gets these benefits, and then the very, very junior people who don't even get this benefit and then the very, very junior people who don't even get these benefits.

Mr. Michael A. Nims: That's true Your Honor, but that's true with almost any benefit.

Indeed I believe it was true with the vacation benefit before the Court in Foster that there, there was a one-year requirement before you became eligible for vacation, you got entitlement to the vacation in the second year by virtue of having worked 25 weeks in the first year.

And I -- I don't think that that analysis would make this benefit or the vacation benefit in Foster a perquisite of seniority or it would make every benefit of perquisite of seniority --

Justice John Paul Stevens: No, all I was suggesting was the fact that people who have even greater seniority gets some greater benefit doesn't necessarily take this benefit out of the category of benefits that are affected by the length of service.

Mr. Michael A. Nims: No, I agree that it doesn't necessarily do that.

But the point being that greater seniority once you pass the eligibility threshold so that you're entitled to the benefit, greater seniority does not have any effect on the benefit at all in a positive way.

The 2-year man who is eligible to receive a payment will get a benefit as well the 15-year man if the layoff happens to reach his level of seniority and the 5th year – 15-year man will not have any greater benefit, any advantage over being a 15-year man.

Justice John Paul Stevens: Well, are you saying that every person who meets the 2 year requirement always gets 52 units?

Mr. Michael A. Nims: No.

It depends upon from the work requirement.

Justice John Paul Stevens: Well then, even with among those who were eligible, seniority has an effect on the amount of the number of units and therefore the number of (Voice Overlap) --

Mr. Michael A. Nims: No, not seniority Your Honor, working day up to accumulating the maximum of 52 credit units if you haven't worked in 2 years and accumulated the 52 maximum credit units, yes the fact that you haven't done that work may result when you're having a lesser number of benefits.

But once you have work in 2 years and accumulated 52 credit units not only increased seniority will not give a greater benefit, increase work won't give you a greater benefit.

Further, the amount of the benefit represented by each credit unit also bears a reverse relationship to seniority if it bears any relationship to seniority.

The plan provides that the amount of benefit that you'll receive in the event that you ever receive supplemental unemployment benefits is affected by four factors.

Number one, the wage rate of your job classification, that wage rate is established by the collective-bargaining agreement for each job classification and has nothing to do with seniority other than in the sense that in some jobs preference is a factor of seniority, and your ability to hold a particular job maybe depended upon seniority.

But the actual wage rate for that job classification will be the same whether the individual holding that is a 2 year man or a 5-year man or a 10-year man or a 20-year man.

The second factor in the amount to the benefit is the number of dependents that the employee has, obviously that has no relationship to seniority with the company.

The third factor in determining the amount of the benefit for each credit unit was the amount of state unemployment compensation which the employee receives from what ever state programs exists in that particular State.

That has no involvement with sen -- with seniority and finally, the fourth factor that influences the amount of benefit is the amount of money remaining in the plan as whole.

The obligation if the industry is to fund the plan with a finite number of dollars agreed to in the collective-bargaining process then as the plan is exhausted through the layoffs once it reaches a sufficient diminution to key in that part of the formula, the amount of benefit represented by each credit unit drops.

So that you actually have the anomalous situation if you're focusing on seniority that the 3-year man is much more likely to have his benefit be 100% of the possible benefit than the 20-year man because if a layoff in fact gets severe enough to reach the 20-year man, you'll likely to have the fund substantially depleted by the previous payments made to persons of lesser seniorities so that the 20 year man in fact finds he's getting a lesser benefit if his seniority number is in fact reached during the layoff.

But we don't believe that that kind of a benefit should be classified to be a perquisite of seniority and indeed the -- the testimony in the record below is clear that it's -- it's not thought certainly by the industry and the by the people who negotiated it to be in any sense of perquisite of seniority.

Rather it is based upon the formula which is governed by the actual practical realities of the steel industry which found that prior to 1960 they actual had a SUB plan which had a very precise relationship, between how many hours you worked and the accumulation of credit units, and they determined that that wasn't necessary.

It created an administrative headache that they didn't need because in point of fact people who are working at least 32 hours, if they worked at all because of the existence of the short-week benefit.

And the short-week benefit provides that if you call an employee in during a week and have him worked less than 32 hours, essentially you're going to have to pay him for 32 hours anyway and so naturally your try not to call an employee at all unless you actually have 32 hours of week for him.

So the SUB plan and the formula for the earning of credit units in the SUB plan is tied to a formula which in the industry and the practical reality is based upon at least 32 hours of work achieving the earning of the entire -- of entitlement to 1/2 credit unit.

Now, whether or not that ever translates into a benefit, of course, depends upon whether the employee has to get laid off and that admittedly is a factor of his seniority, but the benefit as suppose to the layoff is not a factor of seniority.

Indeed it -- if it has any relationship with seniority it's a reverse relationship.

One of the arguments that the Government has made in this case is that in trying to analogize to other benefits which have been before the Court, the closest benefit according to the Government is the severance pay that was before the Court in Accardi.

Respondent believes that that analogy is faulty.

Severance pay is normally and was in Accardi very much a factor of seniority.

Somebody who had worked for that particular railroad 19 years and the 20-year people were not subject to the discharge but it was people with less than 20-year seniority, somebody who had worked for the railroad for 19 years was entitled to a larger amount of severance pay than somebody who had worked for 18 years and 17 years, and 16 years and back down the line.

And that we submit was key to this Court's analysis of severance pay being a long-term benefit which really the notion of compensated service before the Court in the Accardi case really measuring only time on the role as an employee, but the SUB benefit is very different.

The 15-year man has no advantage whatsoever over the 2-year man so long as each have accumulated the maximum number credit units available are 52 and indeed as we've shown it might happen to work out that the 15-year man is at a disadvantage because of the diminution in the money in the fund should layoff reach his level of seniority.

So we don't feel that the SUB benefit can possibly be analogy -- analogized properly or fairly to a severance benefit.

The Government has -- has argued this morning that in a sense the steel industry is acting in an inconsistent fashion in treating the 2-year continuous service requirement as seniority and crediting the veteran for that, but not crediting him with the time in the military for purposes of accruing credit units.

We don't feel that's inconsistent at all.

In the first place, the applicable bargaining agreements and plans expressly provide for both of those situations.

They expressly provide that service in the military will not break continuous service in the company and they expressly provide that there will be no accrual of credit units for the individual during the period of time he's in the military, so they're certainly consistent with the underlying contractual documents, but more important, they're consistent with what the industry regards as the law being as interpreted by this Court and other courts throughout the last several years.

Continuous service as that is defined in the pension program has indeed notions of seniority, notion of simply being on the rules as an employee and the industry recognizes that and does not break continuous service for pension purposes, for SUB purposes, for any benefit purposes when the veteran leaves the civilian employee and then comes back within the permitted statutory period.

But that's no different than the situation that was in front of this Court in the Foster v. Dravo case in which this Court considered vacation entitlement and this Court pointed out in a footnote that while you have to work in the required number of weeks in order to earn vacation eligibility for any particular year, if in fact a 5-year man has two weeks vacation and a 10-year man has 3 weeks vacation, and a 20-year man has 4 weeks vacation, in that sense under the plan in front of the Court in Dravo, the -- the defendant there, the company there did credit time and service for purposes of determining the maximum amount of vacation eligibility which an individual employee would have, and the Court noted that in its footnote.

But that doesn't mean that earning that four weeks vacation that you may have the potential entitlement to is also a factor of seniority, the Court found that it was not.

It found that it was conditioned upon a bona fide work requirement that a traditional notion of a vacation is a short-term reward for work actually rendered.

And that wasn't changed by the fact that also it's traditional that the amount of vacation you can earn a reward for is a factor of your total service over a large number of -- of years, and therefore a 20-year man may get four weeks vacation while a 15-year man get three.

That didn't change the actual earning of vacation in any particular year as being key to a bona fide work requirement, as being reasonably key to such a requirement, that didn't change the traditional notion of vacation in this work site.

We think that the same is true with the SUB plan.

There is a minimum vesting period of 2 years, but it also should be understood that that period relates only to the actual entitlement to payment of a benefit.

It does not relate to the earning of the credit unit, so that the first week in which the individual employee works, he accumulates 1/2 credit unit.

He merely has a 2-year eligibility requirement before he can receive a benefit in the event of layoff, but that's -- that's no different than with lots of other benefits which don't kick in until an employee has had some minimum period of time with the company.

That's true in many companies of hospitalization benefits or sick pay of many other kinds of benefits which I think the Court would readily agree that if the focus is on the real nature of the benefit, those benefits are thought to be short-term compensation benefits rather perquisite of seniority, but they still may have an eligibility requirement that you be with the company 1 or 2 years before the company starts to fund those benefits for you and we don't think that that changes every benefit that may exist into a perquisite of seniority.

We don't think the Court found that in the Foster v. Dravo decision.

So in summing up, unless the Court has other questions, we think that the District Court in this case wrote two very detailed opinions.

He wrote the first opinion before he had the benefit of this Court's guidance in Alabama Power in which he analyzed why the industry had the work requirement it had, why it had the formula it had, how the benefit was applied and as he interpreted the Court's decisions up to that point in time, he wrote a -- we believe very detailed opinion as to why the SUB benefit was not a perquisite of seniority and why the plan should be administered according to its terms.

Following this Court's decision in Alabama Power, he wrote another detailed opinion focusing precisely on the real nature of the benefit and concluding based upon the record made in front of him, that the real nature of the benefit with short-term compensation was substitute for wages in areas where wages had traditionally been paid.

We believe those two decisions correctly interpret the plan and the law.

We believe the affirmance by the Sixth Circuit Court of Appeals was proper.

Would -- we would say one thing, there is of course a conflict between the Courts in this case and the United States Court of Appeals for the Third Circuit which also had the steel industry plan in front it and it's decision in Hoffman v. Bethlehem Steel, but that decision and Your Honors I'm sure we'll read it carefully, was rendered in 1973 prior to either the opinion of this Court in Foster v. Dravo or the opinion of this Court -- of this Court in Alabama Power v. Davis.

And the focus of the Third Circuit Court of Appeals in Hoffman was that since it was theoretically possible to earn a 1/2 credit unit with as little as one hour work in a week, the Third Circuit felt that the same bizarre result which this Court had mention in Accardi was possible.

But this Court has indicated in its decision in Foster v. Dravo and its decision in Alabama Power v. Davis that that bizarre result theoretical though it maybe is not the appropriate analysis.

Justice Harry A. Blackmun: That is theoretical --

Mr. Michael A. Nims: It's very theoretical particular in this -- particularly in this case in which there's been testimony as to these industry's that need under its own agreements to bring an individual in for 32 hours if it brings him in for one hour during the week.

Thank you.

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

Rebuttal of Alan I. Horowitz

Mr. Alan I. Horowitz: I do have a couple points I would like to make Mr. Chief Justice.

First, in regard of the comment about the bizarre results, as Mr. Justice Blackmun pointed out, that is merely a theoretical analysis and I'm sure it was theoretical in Accardi as well.

The Court there was just using the bizarre results to indicate that the plan in no way attempted to compensate for the amount of work performed.

The same is true here.

There was absolutely nothing in this plan that indicates that SUB benefits are intended to be compensation.

Respondent has noted the four factors that go into determining the amount of the weekly payment that is made, not one of those factors has anything to do with compensation for work.

The only work requirement that is involved in this case is the fact that most of the employees who earn this benefits work.

There is not a requirement that all employees work.

As I discussed in setting out the plan, there are several categories of employees who are not working who can also receive benefits.

And essentially the only difference between the work requirement here and the work requirement in any case were there is just a period of service that is required to accrue a benefit, for example, in the most standard seniority situation, is that respondent has seen fit to exclude certain categories of employees on leaves of -- who are on leaves of absence from receiving these SUB benefits.

Now, our contention is that, these rights are guaranteed by Congress and the fact that respondent chooses to exclude certain employees who are leaves of absence does not mean that veterans can be excluded from these benefits.

I'd also like to discuss the point about whether this is a seniority benefit simply because employees who have 20 years of service and employees who have 15 years of service will receive the same benefit.

That's clear that at the lower levels of the seniority ladder there is a seniority distinction made based on length of service.

Employees who have more service are eligible for the benefits, employees who have less than 2 years or not, employees who have more service may get up to the 52 credit maximum --

Justice Byron R. White: But how long does it take to accumulate the 52, 2 years?

Mr. Alan I. Horowitz: It takes 2 years, yes.

Justice Byron R. White: So that once you've worked 2 years and accumulated your 52 credits from then on length of service doesn't count, or how much you worked doesn't count?

Mr. Alan I. Horowitz: That's correct.

That's correct Your Honor.

Justice Byron R. White: Any (Voice Overlap) --

Mr. Alan I. Horowitz: Unless -- unless --

Justice Byron R. White: (Voice Overlap) anytime from 2 years on just no -- just no difference, but up to that time --

Mr. Alan I. Horowitz: Up till that time there is a difference.

And we submit that that --

Justice Byron R. White: And that's the – then that's the advantage that's being claimed here.

Mr. Alan I. Horowitz: That's right.

There's – it's as of no significance of petitioner that everyone -- whether everyone above him had 52 units or whether some of them had 52 and some of them had 200 and some then had 300.

Justice Potter Stewart: But no -- no --

Mr. Alan I. Horowitz: That wouldn't have –-

Justice Potter Stewart: -- nobody can have more than 52?

Mr. Alan I. Horowitz: That's right.

Nobody can have more that 52.

Justice Potter Stewart: So nobody can have 200 or 300?

Mr. Alan I. Horowitz: No, but -- it wouldn't make any difference in this case if someone could have 200 or 300.

Justice Byron R. White: But you can have less?

Mr. Alan I. Horowitz: Yes, you can have less and petitioner had less.

Justice Byron R. White: -- and then -- (Voice Overlap) says he was given less and he was entitle to the 52.

Mr. Alan I. Horowitz: That's correct.

Justice Potter Stewart: An employee for the first 2 years is totally ineligible therefore he doesn't acquire any SUB's --

Mr. Alan I. Horowitz: He -- he acquires credits.

Justice Potter Stewart: -- but -- but then (Voice Overlap) –

Mr. Alan I. Horowitz: That they're not good for his --

Justice Potter Stewart: -- on the first day of the -- of his third year if he's worked at least 32 hours every week in the first 2 years?

Mr. Alan I. Horowitz: He would have --

Justice Potter Stewart: Does he immediately get 52?

Mr. Alan I. Horowitz: Well, -- no, he gets -- he gets 1/2 per week so after a year he has 26.

Justice Potter Stewart: Yes.

Mr. Alan I. Horowitz: He has -- he has some writ and allege of 26 but they're not good for anything.

If he's laid off, he can't collect any payments.

Justice Potter Stewart: But my question was --

Mr. Alan I. Horowitz: So --

Justice Potter Stewart: -- after on the first day of the third year --

Mr. Alan I. Horowitz: Right.

He would then have 52 --

Justice Potter Stewart: -- if he's worked at least 32 hours --

Mr. Alan I. Horowitz: That's correct.

Justice Potter Stewart: -- a week for each of two -- of the previous 2-year, does he immediately have 52 SUBs?

Mr. Alan I. Horowitz: That's -- that's right.

He would have -- he would --

Justice Potter Stewart: (Inaudible)

Mr. Alan I. Horowitz: 52 by that, yes.

Justice Potter Stewart: Yes, right.

Justice John Paul Stevens: Mr. Horowitz, other than the interrupted service because of military duty, could a man get -- satisfy the 2-year requirement without also accumulating the 52 units?

Mr. Alan I. Horowitz: Yes, if he was on some leave of absence during the 2 years that --

Justice John Paul Stevens: Any other leave of absence --

Mr. Alan I. Horowitz: -- was not eligible --

Justice John Paul Stevens: -- he could still be accumulating his 2 years with earning any credits?

Mr. Alan I. Horowitz: That's correct and if he was on layoff status as well he would be accumulating his 2 years.

And I just like to briefly allude to the Foster decision which respondent has cited.

In Foster as this Court explained in Alabama Power, the Court relied on the fact that vacation benefits are understood to be directly related to work, that there are (Inaudible) for worked performed.

And that there the Court did not find that there was any reason to diverge from that understanding but here where there's clearly a seniority aspect to this benefit as we've just discussed.

The question then is whether the benefit is to be characterized a short-term compensation for worked performed and we submit that there is no --

Justice Byron R. White: This is a -- this is a factor to seniority and one just pointing the 2 year eligibility --

Mr. Alan I. Horowitz: And for the number credits.

Justice Byron R. White: And the -- and also the work credit.

Mr. Alan I. Horowitz: The number of credits aren't, correct --

Justice Byron R. White: Well --

Mr. Alan I. Horowitz: -- whether by work or by some other --

Justice Byron R. White: -- you say that he – if he hadn't been away, he had been working and would -- would -- would not only have been satisfying his 2 year eligibility requirement but also accumulating credit.

Mr. Alan I. Horowitz: That's correct.

It stipulated that had he remained in employment he would have had 52 credits at the time.

If there is no further question, thank you.

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

Featured:

Oliphant v. Suquamish Indian Tribe - Oral Argument

Sun, 08 Aug 2010 19:14:33 +0000

Case:

Oliphant v. Suquamish Indian Tribe

Media File:

76-5729_19780109-argument.mp3

Related Transcript:

76-5729_19780109-argument.xml

Transcript:

Argument of Philip P. Malone

Chief Justice Warren E. Burger: We will hear arguments first this morning in 76-5729, Oliphant against the Suquamish Indian Tribe.

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

Mr. Philip P. Malone: Mr. Chief Justice and may it please the Court.

On behalf of the petitioners Mark Oliphant and Daniel Belgarde, Attorney General Gorton and myself will divide arguments of first impression before this Court in the history of United States, that is as Indian tribe inherent governmental criminal police powers over non-Indian persons, citizens of the United States for their actions occurring within the boundaries of an Indian reservation.

I will first discuss the facts and then argue the issues involved under the Fifth and the Fifteenth Amendment of the United States Constitution and the Indian Civil Rights Act of 1968 which protects the privileges, rights and freedom of the petitioners as non-Indians, non-members of the tribe from the exercise of such powers claimed by the respondents in this case.

Justice William H. Rehnquist: Counsel what basis do you rely on for Federal Jurisdiction in this case?

Mr. Philip P. Malone: The federal jurisdictions in this case, in federal district court constitution, habeas corpus.

Justice William H. Rehnquist: Of what particular statutory grants of jurisdiction for the federal district courts do you rely on?

Mr. Philip P. Malone: Indian Civil Rights Act, excuse me,Your Honor Indian Civil Rights Act.

Justice William H. Rehnquist: I do not mean neither statute so it is the Indian Civil Rights Act?

Mr. Philip P. Malone: Indian Civil Rights Act, primarily.

Justice William H. Rehnquist: When you say primarily, is there something else that is secondary?

Mr. Philip P. Malone: Well also, that main, not secondarily, but there is a right from the United States constitution for petition of writ of habeas corpus which --

Justice William H. Rehnquist: And to whom may that be. Do you not have to be in custody either in a federal or state commitment in order to rely on that?

Mr. Philip P. Malone: Yes, that is correct.

Justice William H. Rehnquist: You contend that your client was in custody under either federal or state commitment in this situation?

Mr. Philip P. Malone: He was for a period of time, then he was released on his personal recognizance.

Justice William H. Rehnquist: When he was detained by the Indians is it your contention that it was the same as if he had been detained by the Federal Government?

Mr. Philip P. Malone: Yes, Your Honor.

The Port Madison Reservation is located entirely within Kitsap County, Washington, approximately 10 miles across the waters of Puget Sound from downtown Seattle.

Among the public services provide by the county and the state for the reservation as in any other area, not within the Indian Reservation are schools, roads, public utilities, fire protection, social and health services and law enforcement.

The Suquamish Tribe provides no service as such to non-Indians except the police protection and law enforcement of tribal laws that are claimed in this case.

The reservation is similar to the Pearl River Indian Reservation (Ph) with which this Court I am sure is familiar.

The land area of the reservation is approximately 7,300 acres.

Two-thirds of that land is owned by non-Indians and some Indians in fee and that is subject to local taxes for payment of public services.

One-third of the land approximately is individually owned, a lot of land with title held in trust by the United States for the protection of those individual Indian allottees and it is exempt from taxation and I may note to make a distinguishing factor of these allotments arose here primarily under the Treaty of Point Elliott.

Justice Byron R. White: These days, is there any termination date on the trust property?

Mr. Philip P. Malone: No, there is not.

Justice Byron R. White: There used to be.

Mr. Philip P. Malone: There used to be.

There was contemplated a termination date and as I understand Congress extended that period.

Justice Byron R. White: Indefinitely.

Mr. Philip P. Malone: Indefinitely.

In 1973, the time of the Oliphant incident, the tribe had leased to a non-Indian corporation with approval of the United States, the last remaining unoccupied, unallotted trust lands on the reservation and all that there was a portion known as the Ball Park and that is where the Oliphant incident took place.

As of 1973, only 50 adult and minor tribal members lived on the reservation or inter-dispersed in residential areas among in approximately non-Indian residential population of 3,000 people.

No distinct community occupying any certain area existed anywhere on the reservation in 1973.

In 1965, a total enrolled membership of 112 tribal members entitled to vote in tribal elections, fifty-six members elected and adapted a constitution for the tribe as authorized by the Indian Reorganization Act of 1934 and approved by the Secretary of Interior.

It provides for a limited powers of government by a General Council and in a Tribal Council.

Franchise to vote is in the General Council and through an election by the members they also elect pastors in the tribal counsel.

The limitation on voting and membership is that they must be 1/8th Indian Blood and generally 18 years or over.

The Tribal Council as such is the executive branch of the General Council.

Because of the limited executive powers of the tribal ordinances that is governing the Indians in the constitution which restricts in effect the executive body to regulate in hunting and fishing and shell fishing, ordinances may be promulgated through via Tribal Council provided the Secretary of Interior approves.

Therefore, the most recent ordinances relevant to this case have been passed by a General Council of all of the eligible voters and members of the tribe.

In July 1973, members of the General Councils for the first time in the history the tribe adapted a law and order code asserting tribal territorial jurisdiction as an Act, Code of self determination overall Indians and non-Indians in their lands within the reservation.

The code was not approved by the Secretary of Interior.

Tribal crimes are defined in the code that includes not only major offenses and not only minor offenses, but also major offenses.

Amongst all major offenses are assaults, burglary, theft, and rape.

At the same time, the code provides the tribal courts established in the code do not have jurisdiction over offenses within the Major Crimes Act of the United States.

Since the Major Crimes Act applies only to offenses by Indian offenders, the tribal court therefore, has jurisdiction under the code only over non-Indians, but not Indians for those major tribal offenses as defined in the law and order code.

The code established a judicial system for the first time in the history of the tribe providing for a tribal court and appellate court, where judges are the same.

They must be tribal members and have no further education qualifications than having graduated from high school.

Their salaries are paid from funds in the United States.

At the same time we note that the members of the jury by a recent enactment of the tribe must also be members of the tribe and by being members of the tribe that means they must have 1/8th Indian Blood or more.

In August of 1973, Mr. Oliphant, a non-Indian residing on the reservation when the alleged violation took place by him on the reservation.

For years prior to 1973, a local American legion had sponsored this event.

It was known as Chief Seattle Days and they also took place generally in this Ball Park area.

This was where the incident took place in the Oliphant case.

At that time, Mr. Oliphant became involved in altercation with campers on the Ball Park that were attending that event.

The record does not indicate that the campers involved in altercation with him were tribal members.

He was arrested and charged by newly appointed tribal police officers, not for the altercation with the campers, but for assaulting one of the police officers in resisting arrest.

Due to lack of jail facilities, he was then imprisoned in the City of Bremerton Jail off the Reservation for five days.

Pursuant to contract that have been made by the Federal Government with the City of Bremerton for the benefit of the tribe and the jailed prisoners of the tribe.

Justice William H. Rehnquist: So the offense really, he was charged with an altercation between himself and the Indian tribal policeman?

Mr. Philip P. Malone: He was charged with resisting an arrest and assaulting one of those police officers.

Justice William H. Rehnquist: Who was an Indian tribal policeman?

Mr. Philip P. Malone: Yes.

Unknown Speaker: Mr. Malone, what is the size and composition of the total judicial grants of the tribe.

I understood you to say only 53 members reside within the reservation.

How many of the members of the judicial branch and what are their positions.

How many judges for example?

Mr. Philip P. Malone: There are two judges.

Unknown Speaker: How many police officers?

Mr. Philip P. Malone: At the time, there were a number of appointed deputies and at the present time I think there are three or four police officers.

Unknown Speaker: Do they have a courthouse and a clerk and what establishment?

Mr. Philip P. Malone: They have appointed a clerk.

The courthouse was in a Belgarde case was a barbershop.

Unknown Speaker: And they have a jail?

Mr. Philip P. Malone: No jail facility.

Unknown Speaker: Where do they incarcerate?

Mr. Philip P. Malone: They held Mr. -- during the period of time after the arrest they held Mr. Oliphant in the local office, a tribal office in a back room.

Unknown Speaker: Who pays for all of this?

Mr. Philip P. Malone: The United States.

Part of the funds, as I understand, part of the funds, tribal funds are raised, one from the lease in the land and also from the operation of cigarette store and --

Unknown Speaker: And how are the judges chosen, are they elected or --?

Mr. Philip P. Malone: As far as law and order court it says by appointment.

So I assume that the executive branch of the tribe, the Tribal Council appoint judges and as I understand the executive branch is a chairman, four people, vice chairman and so on.

The point of through that, I know of no restrictions otherwise.

Mr. Belgarde also, a non-Indian, residing on the Reservation in 1974 when he was arrested by the tribal police.

He was driving his automobile on the public highway at the time tribal police cars took pursuit of him.

A roadblock was set up by those police on a public highway, on non-Indian land, within the reservation to apprehend him.

Belgarde’s case, his car collided with one of the police cars and he was arrested and charged with recklessly endangering a police officer and damaging the police car.

He again was jailed some 50 miles --

Unknown Speaker: That police car was again owned by the tribe I take it?

Mr. Philip P. Malone: I can answer for certain because the exact words of the charge is a public car and that I believe there was a contract with United States Government for supplying of police vehicles and whether the title of that police vehicle was in the United States Government or in the tribe, I am uncertain.

Justice Thurgood Marshall: Was it not fairly marked as a police vehicle?

Mr. Philip P. Malone: Yes, it was.

Justice Thurgood Marshall: And this man was running away from a police vehicle?

Mr. Philip P. Malone: That would be a matter of interpretation.

Justice Thurgood Marshall: Well, he run into then, did he not?

Mr. Philip P. Malone: He would not run away from them, he ran into them.

Justice Thurgood Marshall: He ran into them, that was worse?

He was not trying to escape when he ran into them or did I misunderstand what you said?

You said they were chasing him?

Mr. Philip P. Malone: Yes, pursuit is taking place.

Justice Thurgood Marshall: And in doing the pursuit, that is a good word, he run into them?

Mr. Philip P. Malone: A roadblock then had taken place. He perused to take --

Justice Thurgood Marshall: Did he run into a police car or not?

Mr. Philip P. Malone: Yes.

Justice Thurgood Marshall: He did?

Mr. Philip P. Malone: Yes.

Justice Thurgood Marshall: And it was clearly marked?

Mr. Philip P. Malone: Yes.

Well in short, looking at the constitutional situations here we have a tribal government that may be characterized as governing all the non-Indians on the reservation, by some Indians and four some Indians with that system subsidized by the federal government.

This then leads to the constitution problems involved in this case.

I would first bring these problems in perspective.

My clients and a number of non-Indians have no immediate interest in voting in Suquamish General Council.

Their immediate interest is to be free from the tribal laws and their enforcement promulgated without their consent.

They do not want to be subject to independent tribal powers over which they have no control except with resort to the judiciary, but if they maybe not left alone, if they are to be subject to tribal criminal code, then the best choice would be that they would have the right to vote which I believe and argue that they have under the constitution.

This would mean in effect if non-Indians were entitled to vote, the very purpose of the claimed powers here or self determinations of tribes would end on such reservations as a Port Madison Indian Reservation.

But if the choice has to be made for their freedom, they would desire the choice and power and ability to vote.

Justice William H. Rehnquist: The effect would be quite different in the Port Madison Reservation on the one hand which your client came into contact with than the reservation like the Navajo Reservation which is 20,000 square miles, largely populated with Indians, would it not?

Mr. Philip P. Malone: It would be startlingly different.

Unknown Speaker: And that prompts me to ask Mr. Malone, whether whatever principles are forthcoming in this case that you feel should apply to all Indian reservations?

Mr. Philip P. Malone: I believe that qualifying my statement is that first to have powers, you should have a community that you should represent, that is not in this case.

Unknown Speaker: But it is not the case later in the week involving another host, are you familiar with that case?

Mr. Philip P. Malone: Yes, I am to a certain extent.

I would say that as part of the constitution, the constitution principles apply here.

They apply to the Navajo Indian Reservation, if they are surely similar claims over non-Indians.

Unknown Speaker: Well then, some of the facts are not particularly important though?

Mr. Philip P. Malone: That is true.

Justice Byron R. White: Unless that it were possible that there would be a difference between a crime committed on a trust property and off trust property, but still on the reservation or difference between a crime committed against the tribe itself and not against the tribe itself.

For instance, trespass on tribal property.

Do you think the tribe could prosecute somebody for that even though they might not be able to prosecute for assault and for a misdemeanor in some bar somewhere?

Mr. Philip P. Malone: I believe that the powers of the tribe should come from right, should come from the treaty or acts of Congress and not by implication or desire.

That would be the first limitation, so if the treaty -- in certain treaties they do provide powers to exclude, they powers to exclude people from their lands.

Justice Byron R. White: Well, suppose somebody does not exclude, supposing comes on anyway and there is a tribal -- there is a tribal regulation that says anybody who trespasses on our property has to pay $500.00, then what are you going to say?

Mr. Philip P. Malone: I think that becomes difficult.

Justice Thurgood Marshall: It is a little late, is it not, they should have put a restrictive cognizant back in 1600 and --

Mr. Philip P. Malone: I would guess.

Justice Thurgood Marshall: Mr. Malone, I get that you are arguing what should be argued to Congress and not to a Court, now show me that I am wrong?

Mr. Philip P. Malone: Well --

Justice Thurgood Marshall: You said that tribal civil rights, the Indian Civil Rights law, did you not?

Mr. Philip P. Malone: Yes.

Justice Thurgood Marshall: Are you going to get to that point?

Mr. Philip P. Malone: Yes.

Chief Justice Warren E. Burger: Before you address that, what other law enforcement authority was available at the time and place of this incident, what other police officers, laying aside the judges for a moment?

Mr. Philip P. Malone: Well, there has been complete county protection.

Chief Justice Warren E. Burger: (Inaudible).

Mr. Philip P. Malone: Local County Law Enforcement --

Chief Justice Warren E. Burger: Were they there at the scene, at that time?

Mr. Philip P. Malone: They were at the scene at the Belgarde case yes and there were tribal police cars (Inaudible) the Oliphant case that took place.

Well in short, as for the constitution issues involved here, I think they are quiet clear Your Honor.

One is the Fifteenth Amendment of the right to vote.

The Fifth Amendment also protects my clients because of federal action.

Cases have been cited in the briefs.

There is a direct connection between Federal Government and the tribe here.

Justice William H. Rehnquist: Well, is it your contention that the provision for the right of Habeas Corpus in the Indian Civil Rights Act permits one to raise in that writ, rights other than those that are conferred by the Indians Civil Rights Act?

Mr. Philip P. Malone: It reads the right of determine the tribal orders as to the constitutionality of tribal orders, but does that – my --

Justice William H. Rehnquist: Well, I was curios to know whether you thought that the express provision in the Indian Civil Rights Acts granting the right of federal jurisdiction to hear a writ of Habeas Corpus on behalf of someone detained by an Indian tribe permitted that person to raise claims other than those granted by the Indians Civil Rights Act?

Mr. Philip P. Malone: Yes, I believe that the purpose of the Indian Civil Rights Act was to give protection to any person by tribal order of the court and it was not just restricted to those rights in the civil rights act, but Section 8 of the Civil Rights Act in effect is the same in word language as the Fifth Amendment protections.

Justice Thurgood Marshall: But there is nothing in legislation history on that point?

Mr. Philip P. Malone: I have no answer to that as to legislative history.

Justice Potter Stewart: Mr. Malone, you have submitted to us here constitutional plan.

We do not reach those however at all, do we, unless we resolve the statutory issues against you and actually we do not first proceed to canvas these statutory issues and determine whether not statutory issues towards the briefs are largely addressed to determine whether or not the law provides that non-Indian shall be prosecutable on this reservation by the tribe and other Indian law?

Mr. Philip P. Malone: I agree.

Justice Potter Stewart: Here we got, in other words, a cart before the horse a little bit.

I assume your colleague here is going to talk about the statutory issues.

Mr. Philip P. Malone: Attorney General will take that up in statutory issues because there is no inherent sovereignty and the Court holds that.

Obviously we do not have this constitution issues before the Court.

With that if there are no further questions --

Justice Potter Stewart: Mr. Attorney General.

Argument of Slade Gorton

Mr. Slade Gorton: Mr. Chief Justice and may it please the Court.

One remark Mr. Justice Powell on your factual question.

In each case, these petitioners were jailed in state facility, City jails in Bremerton and Port Angeles pursuant to contracts between those cities and the federal government.

Justice Thurgood Marshall: And would be the same if they had been arrested by FBI agent?

Mr. Slade Gorton: Yes sir.

At the outset, it is well the note, the extensive scope of respondents' claim that the tribe has jurisdiction to try non-citizens, in this instance under its laws even though they may not participate in making those laws, derived principally from the tribes retained inherent powers of government which is unlimited except as expressly qualified by treaty or a statute.

Chief Justice Warren E. Burger: There is nothing really unique about that is there Mr. Attorney General?

Mr. Slade Gorton: I believe --

Chief Justice Warren E. Burger: If he crossed the line into the next state, he will be subject to some laws that he has no part in making?

Mr. Slade Gorton: Yes, on a residential basis Mr. Chief Justice.

If he went to Idaho he could become a citizen of Idaho on that day under your decision and then Dun v. Romanson.

For example there is no duration --

Chief Justice Warren E. Burger: I am speaking of a man who just going over to a fair or a football game in the next state?

Mr. Slade Gorton: That is true, but these two persons are both residents of the reservation over which the tribal jurisdiction was asserted.

As a matter of fact, the respondents’ brief offers no source for the power asserted here other than retained inherent sovereignty.

The Solicitor General presents the same broad claim.

The tribal jurisdiction here asserted is an aspect of residual tribal autonomy which can only be last by the terms of the treaty of statute.

Justice Lewis F. Powell: What do we, Mr. Attorney General, I suppose you are going to tell us, but where do we turn to answer that question?

Mr. Slade Gorton: That is exactly where I propose --

Justice Lewis F. Powell: Is it some statute or just some case law?

Mr. Slade Gorton: It is a statute or a treaty.

This Court has rejected the analysis which respondents of the United States present here.

It has never authorized any exercise of Indian Jurisdiction over the personal property of a non-Indian based on the platonic notion of severity, to quote Mr. Justice Marshall on McClanahan.

This Court has upheld Indian claims to tribal jurisdiction over non-Indians only when the authority for the assertion can be found under the specific treaty provision or statute and of course that is exactly the positions which we are taking here.

Justice Byron R. White: Well, has it ever held that it could not be found some place else?

Mr. Slade Gorton: It has always been very careful to avoid basing the finding on sovereignty.

Justice Byron R. White: Then I guess your answer is no.

Mr. Slade Gorton: Yes, my answer is no.

To our knowledge, there have been only three cases in which this Court countenance even a modest claim of Indian jurisdiction over non-Indian activities.

And in each of these cases, the Court used the McClanahan approach, finding the source in either a treaty provision or statute.

In Morris v. Hitchcock in 1904, this court found to be valid legislation of the Chickasaw Nation levying a permit tax on horses and cattle owned by non-Indians, but grazing on Chickasaw land.

The Court found the authority for the tax lay both in the Curtis Act and the treaty under which the Chickasaws has held their lands.

But note, even so, even under those circumstances where they are highly organized the Indian government, the sanction for failure to pay the tax was an expulsion from the reservation by federal officials, not a criminal prosecution in the Chickasaw tribal court.

In Williams v. Lee --

Justice William H. Rehnquist: The Chickasaws are who won the five civilized choice?

Mr. Slade Gorton: Yes, this was Oklahoma while it was Indian Territory.

In Williams v. Lee, this Court prohibited a licensed Indian trader on the Navajo Reservation from suing his Indians debtor in a state court leaving him to pursue his claim if he chose to do so in the Navajo Tribal Court.

The exclusive jurisdiction of that court was found to rest on the 1868 Treaty between the United States and the Navajos and finally in the United States v. Mazurie you validated an explicit statutory delegation by Congress of its power to control on reservation tavern licensing to the resident Indian tribe, but the Mazuries were convicted of the violation of a federal statute in a Federal District Court.

They were not before a tribal court charged with a violation of a tribal ordinance.

Moreover, this consistent view of this Court, the claims of residual sovereignties standing alone are not sufficient grounds to support a claim of tribal jurisdiction over non-Indians has been matched step for step by the Congress and the executive.

In 1834, immediately after the passage of the Trade and Intercourse Act of that year, the Attorney General of the United States expressed his view, the Congress passed that law “on the assumption that under the treaties Indian laws would be applicable only to Indians themselves."

The same opinion takes the position that for such authority to exist in an Indian tribe it must be given by the United States.

No article legislative history of the 1834 Act proceed from any other assumption.

Its clear implication is that either the United States or the tribe might have jurisdiction, but not both.

The Congress elected federal jurisdiction over non-Indians.

In 1854, the Congress reinstated the treaty exception in its present form.

Justice Byron R. White: So are submitting that -- is your submission that Congress has in effect past the statute or several of them that says there is no such thing as retain power?

Mr. Slade Gorton: It is our position that the law of the United States is that the Indian tribes must show their right to try non-Indians either in a treaty (Voice Overlaps).

Justice Byron R. White: I understand your position.

I am just trying to find out where you found the law on that.

You just picked that out of the air somewhere or are you saying that Congress in affect has a statute which says, no retain power and that the tribe may exercise only such powers over non-Indians as you can find in a statute or treaty?

Mr. Slade Gorton: I am stating that the Congress has stated that there is no Indian power to try the non-Indians in these cases. (Voice Overlap).

Justice Byron R. White: You are not just suggesting that Congress has said that there is a law some place that some constitutional principle or what?

Mr. Slade Gorton: I am stating two separate propositions that this Court consistently has held that the Indian powers over non-Indians must be found in treaty or statute.

In addition to that, I am saying that the Trade and Intercourse Acts rather explicitly denied that right and put exclusive jurisdiction over this kind of activity in the United States at the time of those Acts, but the Attorney General of United States at the time of Trade and Intercourse Acts took exactly that position on two different occasions and that the courts of the United States said (Voice Overlap)

Justice Byron R. White: Do you say the same thing about that tribal sovereignty over Indians?

Mr. Slade Gorton: That Mr. Justice White is a very interesting question which of course is not directly involved in this case.

Justice Byron R. White: But can you just answer yes or no, do the cases or the Congress recognized some sort of retained inherent power of the tribe over Indians?

Mr. Slade Gorton: There is only one case in which this Court has even remotely based its decision on the retained tribal jurisdiction even over tribe or members in Talton v. Mayes.

Even there, the power to try the Indians in the first place seems to stem from a treaty.

Whether or not this Court would continue that view even as the Indians I think is a moot question.

Mr. Justice Harlan, the 19th century Mr. Justice Harlan decided.

He might have been as prophetic on that as he was in Plessy v. Ferguson.

In any event, the jurisdiction of the Indians to try Indians maybe found in the Trade and Intercourse Act which explicitly states that the United States in effect recognizes the right of the Indian tribes to try the non-Indians.

Justice William H. Rehnquist: Well, your responses to Mr. Justice White’s question all depend on implication, do they not, that Congress saw fit to confer particular jurisdiction on Federal Courts in certain situations, then on Indian tribes in other situations and if that had existed independently of Congressional action, Congress would have not gone ahead and done it?

Mr. Slade Gorton: Exactly and in addition there is another statutory scheme in connection with these reservations in the State of Washington which I suspect, but do not know, is paralleled in most other western states.

The Sovereignty of the United States over the area which is now the State of Washington under the concepts of sovereignty which have always been accepted in western country, in western civilization in the United States came from explorations beginning with those of Robert Gray and from a series of treaties, the Louisiana Purchase Treaties with Spain and Great Britain culminating in the treaty with Great Britain of 1846 under which we settled the northwest frontier of the United States.

At that point, the United States' claim to the sovereignty over the Washington area was total, absolute and complete.

Moreover, two years later, the United States organized that area into the Oregon territory and the Oregon territory statute says on this subject “Nothing in this Act shall be construed to impair the rights of persons or property now pertaining to the Indians and said territory so long as such rights shall remain unextinguished by treat, rights of person or property.

Now, does this mean that the United States recognized, this is before and even the Indian Treaties were signed, criminal jurisdiction by the Indian tribes over non- Indians unlimited and subject matter in geography except by the borders of the Washington territory, I think that state that questions answers it.

It means exactly the opposite.

That the United States recognized in the Indians no powers except rights of person or property which themselves depended on that Oregon territory statute.

All else was subsumed into the sovereignty of the United States.

In 1854, when the Trade and Intercourse Act was passed in its present form, at least for the purposes of this argument here today, the United States withdrew from Federal Jurisdictions a certain authority to prosecute both Indians and none Indians where a tribe held exclusive jurisdiction and I am quoting now “by treaty stipulations.”

Later in that same year, 1854, in full knowledge of this provision, the United States presented the treaty of Point Elliott to this Suquamish Indians.

That treaty contained no treaty stipulations conferring exclusive jurisdiction over non-Indians to the tribe.

And the next year, in 1855, the Attorney General of the United States re-stated his early opinion that Indian tribes may receive jurisdiction over non-Indians only from Congress.

In 1878, a Circuit Court at Ex-party Canyon held that the Federal Statue limited tribal court jurisdiction to offenses by Indians against Indians.

Now, from that point on, 1878, at the latest, the judiciary, the Congress and the executive were in complete agreement.

As late as 1970, the Solicitor of the Department of the Interior adhered to the same conclusion.

Indian tribes do not have criminal jurisdiction over non-Indians.

True that opinion was withdrawn in 1974, but not until the Solicitor General’s brief in this case has the federal government ever expressed a contrary review.

Now, what has happened as a result of that view, in reliance on these consistent longstanding views, literally tens of thousands of United States citizens had purchased land and settled on Indians Reservations in full confidence that they have not waived their rights to self-government and to participation in the administration of their criminal justice systems.

It seems to us far too late on the day now at least in the absence of a clear declaration of congressional intent to the United States to tell these citizens that it was wrong and that they are in the situation of any one living in a foreign country “precisely the extraordinary submission of the Solicitor General in this case.”

Not only a foreign country, but a foreign country in which they can never become naturalized citizens.

These citizens have not chosen to live in a foreign country and they do not do so now.

They live in the United States and they are subject to its laws.

Justice Potter Stewart: How about the -- most of your argument as I have understood it would lead to the conclusion that the government does have jurisdiction over these people.

It is not your state, the State of Washington, but rather the United States of America under 18 U.S.C. 1151 and the rest of your argument.

I suppose the issue here is whether or not the Indian Tribe has jurisdiction and we do not necessarily need to decide if it does not, who does?

Mr. Slade Gorton: Precisely Mr. Justice Stewart.

I am not --

Justice Potter Stewart: The amicus brief as you know, suggests that we even defer argument in this case until we decide whether or not we are going to take the Yakama case?

Mr. Slade Gorton: But I do not believe that you need to do that.

I am not here as the Attorney General of the state arguing for state jurisdiction.

I am here arguing against this assertion of jurisdiction under the McBratney exception if the crime does not involve Indians, the original crimes of this case is the altercation of the Ball Park, are clearly under state jurisdiction without regard to Public Law 280, but if they are under state jurisdiction then they are under federal jurisdiction.

Justice Thurgood Marshall: Mr. Attorney General (Voice Overlap)

Justice Potter Stewart: Then your submission is --

Mr. Slade Gorton: Absent Public Law 280 --

Justice Potter Stewart: We do not need to decide in order to decide in your favor who does have jurisdiction?

Mr. Slade Gorton: No, you do not.

Justice Thurgood Marshall: I think I misunderstood you.

Did you say that Congress could give Indians this right?

Mr. Slade Gorton: The Congress at least has to try before they can validly assert it.

Whether Congress can constitutionally give the Indians this jurisdiction is another point which was at least (Voice Overlap)

Justice Thurgood Marshall: And you would concede that?

Mr. Slade Gorton: I do not concede that.

In our view whether by statute or by constitution, tribal self government ends where the common self government of all citizens begins.

May I reserve the balance of my argument.

Justice William H. Rehnquist: Let me ask you one question General Gorton.

Your argument would apply equally I supposed to the 20,000 square miles of the Navajo Reservation as some person driving from Phoenix to Denver and spending about 120 miles on the roads going through that reservation?

Mr. Slade Gorton: It would have a very substantial impact on that situation.

I cannot tell you that it would govern in because there are at least two differences between this and that situation Mr. Justice Rehnquist.

The first is that the individual whom you posited is not a resident and therefore it does not have any right to self government and secondly the Navajo Treaties may be different from the treaties with which we are dealing here, that jurisdiction may have been given to the Navajos by their treaties.

I just do not know the answer to that question.

Chief Justice Warren E. Burger: Mr. Ernstoff.

Argument of Barry D. Ernstoff

Mr. Barry D. Ernstoff: Mr. Chief Justice and if it please the Court.

The case before you I consider to be basically a fairly routine except of course for the novel legal questions behind that law and order case.

The only question really is and I think the last series of questions pointed this out who is going to have what we call misdemeanor jurisdiction over all persons of an Indian Reservation.

The alternatives at this point as far as the law stated is the tribe or the federal government and I would pose that any federal judge sitting in any of the federal courts around this country who was told that he was going to have to have in his courtroom all the belittling offenses, failure to stop for a stop sign, failure to signal for turn that he would have to be prosecuting those on the (Inaudible) Crimes Act which is what the US Attorney would have to do would tend to agree with the position.

Justice William H. Rehnquist: Well, the ones in the Sixth Circuit are not crazy about prosecuting a black lung cases either I take it?[Laughter]

Mr. Barry D. Ernstoff: I would presume so Your Honor, but the question, I think is a serious question in the matter of federal judicial policy aside from the legal issues that are involved.

Justice Thurgood Marshall: And what do you do about all the army camps?

Mr. Barry D. Ernstoff: With the army camps sir, my understanding is there is a system of military justice as well as the federal courts.

Justice Thurgood Marshall: Some Federal Magistrate is there?

Mr. Barry D. Ernstoff: A Federal Magistrates is used.

Justice Thurgood Marshall: For the Federal Magistrate here?

Mr. Barry D. Ernstoff: Well, perhaps but thus far I can tell you at least in Seattle.

I am sure that the Chief Justice has heard everyone complaining about not enough Federal Judges and Federal Magistrates that does not seem to be a great deal of con available.

Justice Thurgood Marshall: But none of this would settle this case, will they?

Mr. Barry D. Ernstoff: That is correct Your Honor.

I think the more important is to understand really what the case is about in terms of the treaties and the agreements between Indian Tribes and United States.

And perhaps I am trying to attempt to make this too larger case for what seems to be a relatively minor issue in terms of the offense.

But that is one of the treaties do and I think it is important for the Court to understand this.

The treaties established what ought to be the final homeland for Indians in this country.

Anyone who is knowledgeable about Western history, certainly in our state knows, that Indians basically roam throughout the state and agreed there were no wars in the State of Washington.

They agreed basically to cede land to the United States Government in exchange for being given their reservations as a homeland.

Now, I acknowledge that because of the United States Government, the federal government, there is an anomaly today and that is that these Reservations, non-Indians were allowed to settle on whether to the General Allotment Act or through treaty provisions which in this case is what prevails.

The allotments, the assignments of land were made to the treaty, not the General Allotment Act or whether through the opening up a reservation to settlement.

The question remains now is how is this anomaly going to be dealt with.

I am the first to acknowledge that I think an important question the fact that people living within the reservation cannot participate in tribal government, but the question remains then which way does one go?

And it seems to me that the danger to American Indian Policy and to the promises of this government in telling Indian Tribes that in choosing between these, because of this anomaly, these two alternatives that we have chosen basically to eliminate any control you might have on your reservation over non-Indian trespassers or other committers of minor offenses is the wrong way to go and is really going to harm.

Indian interest and the interest of this Court has upheld in previous cases, in recent cases much more than the harm that might be done to the non-Indian who I admit is in an unfortunate situation.

I think that the question that was asker earlier by the Court about should you not be arguing to Congress about this is the proper question.

This Court has always held that Congress is the place to determine how jurisdiction should be allocated among states, federal government and in Indian Tribes and in fact Congress has taken this challenge since this case began in the District Court.

Congress established an 11-man commission, the American-Indian Policy Review Commission to investigate over a period of two years over extensive congressional commission investigation, matters of jurisdiction on Indian reservations and to come up with legislative solutions and that report was issued, this is in the brief Was issued in May of 1977.

There were six members of Congress on the Commission and five Indians on the Commission, Indian leaders and that commission said that they find that not only as a matter of law do they consider that Indian tribes have jurisdiction over non-Indians, but because of the heinous situation in most Western States about local law enforcement from counties and states that it is necessary and is a cataloging of all the problems.

Justice William H. Rehnquist: You do not think this is an Act of Congress, do you?

Mr. Barry D. Ernstoff: No.

What I am suggesting though is that the answer to the question should not Congress be dealing with this is correct.

That is where this ought to be happening not in this Court.

Justice William H. Rehnquist: But the fundamental difference between you and your opponent is who has the burden of proof with Congress as I understand it.

Your opponents say unless Congress has conferred jurisdiction on the Indian Tribe, they do not have it and you say unless Congress has taken it away, they do have it and I do not see how this report really moves the ball one way or the other?

Mr. Barry D. Ernstoff: It does not.

One hopes that legislation will come to this and it was just my position that a legislative framework, a legislative solution which takes great deal time, a lot of discussion and much testimony to decide how to deal with these problems as a much better solution than this Court having to deal with the problem in terms of exacting definitions.

Justice William H. Rehnquist: But this case is here now, not five years from now?

Justice Thurgood Marshall: That all could have been handled by not arresting these men?[Laughter]

Mr. Barry D. Ernstoff: That brings up the problem of the facts Mr. Justice Marshall.

Justice Potter Stewart: Well, before we move on, this is not just a matter of legislative solution, if there is anything in the constitutional claims made by your opponent because even though your position were clear as a matter of legislation or treaty, we still then would have the constitutional claims to deal with would we not?

Mr. Barry D. Ernstoff: That is correct.

Justice Potter Stewart: With Fifth Amendment claims and for example a jury trial?

Mr. Barry D. Ernstoff: There is a right to a jury trial under the Indian Civil Rights Act.

Justice Potter Stewart: And for these offenses?

Mr. Barry D. Ernstoff: For these offenses.

Justice Potter Stewart: And how many eligible jurors are there?

Mr. Barry D. Ernstoff: At this point, the numbers of eligible jurors are the members of the tribe.

Justice Potter Stewart: Well, not even all members of the tribe.

I assume some of them are children, are they not?

Mr. Barry D. Ernstoff: That is correct.

Justice Potter Stewart: So how many, a couple of dozen eligible jurors?

Mr. Barry D. Ernstoff: I think Your Honor these points out a very important point and that is --

Justice Potter Stewart: Well, in which sense would you answer the question?

Mr. Barry D. Ernstoff: When these problems come up, the answer to the question is it is very possible for instance that the lack of non-Indians under the near to be selected for the jury is in fact impermissible under the Indian Civil Rights Act.

Justice Potter Stewart: You would have about the same jury in every case, would you not?

Mr. Barry D. Ernstoff: The point I am making is that that is exactly (Voice Overlap).

Justice Potter Stewart: Would you answer my question?

Mr. Barry D. Ernstoff: The answer is yes.

At this point, the near is very small.

Justice Potter Stewart: And none of the jurors would be of the same ethnic background as any of this defense?

Mr. Barry D. Ernstoff: That is correct and it may be impermissible under the Indian Civil Rights Act.

It is up to the federal court to determine that and has not yet been determined.

What I am saying and this is what Court said, in the United States v. Mazurie.

There is a protection for non-Indian residents of Indian Reservations.

Since 1968, there has been the Indian Civil Rights Act and these petitioners had no problem invoking that act in attempting to get review on what they consider to be the violation of their statutory right.

Justice Potter Stewart: Yes, those are statutory rights, but American Citizens have constitutional rights, do they not?

Mr. Barry D. Ernstoff: American Citizens have constitutional rights, but most constitutional rights of the first 10 amendments are rights against the state government and against the federal government.

This Court in 1897 of Talton v. Mayes held that those constitutional rights, the bill of rights does not apply to the actions of Indian Tribes.

Justice Potter Stewart: Exactly, and therefore, these defendants are deprived of their constitutional rights that are accorded to most American Citizens, if not all others?

Mr. Barry D. Ernstoff: It is a matter of definition.

If one does not have a constitutional right, and this Court has determined that, one is not being deprived of it.

Justice William H. Rehnquist: Well, if you remember of moose latch and a grand master latch up in a men’s room overnight you are not being deprive of any constitutional right, are you?

Mr. Barry D. Ernstoff: No.

The question being presented here, I think it is important that this be understood too is not one of exclusive jurisdiction by the respondents.

We are talking about here about that gap in law enforcement that occurs when the only jurisdiction to be able to deal with misdemeanors on the reservation is the federal government and the Federal Government I can tell you and there is a history of this in the American Union Policy Review Commission Report, the federal government has not been able to deal with minor offenses on Indian Reservations for a very good reason.

Indian Reservations are generally far from Urban Centers.

I can tell you as attorney for the tribe how difficult it is to get the FBI to come out to an Indian Reservation to investigate something other than a major crime.

So the question is not one of, does this tribe have jurisdiction and no one else.

Question is one of misdemeanor concurrent jurisdiction.

I think it is important to realize in the history of the cases since 1973 when this case started that there are almost no if any cases in any other Indian Reservations dealing with jurisdiction over non-Indians and I think it is important question.

Many tribes in the amicus brief show this or exercise in such jurisdiction.

Several tribes have had thousands of non-Indians before their courts and not one of them has filed a habeas corpus action.

I think that there is an alarmist attitude on the part of the Attorney General about what harm are going to be done.

For the most part, the system has worked out quite well.

Justice Thurgood Marshall: Are not those constitutional rights were individual and did not depend on how many people exercised it?

Mr. Barry D. Ernstoff: Not at all, I am merely pointing out as matter of policy.

Justice Thurgood Marshall: Do you agree with that?

Mr. Barry D. Ernstoff: I do agree with that.

It is a matter of policy.

Justice Thurgood Marshall: What do we have to do with policy?

Mr. Barry D. Ernstoff: Well, the attorney general has raised the questions of what I consider to be policy on what way the misdemeanor jurisdiction should be decided and what is going to happen to the citizens, the residents of these reservations and I am really countering that to show that in fact nothing serious has really happened to cause any federal court anywhere to come down on Indian Tribe that is exercising that jurisdiction.

Justice Potter Stewart: Do you think that somewhere in the federal law system you will find some authority for the Indian Tribe to exercise the jurisdiction that you claim they have?

Mr. Barry D. Ernstoff: Yes, I do Your Honor.

Justice Potter Stewart: And where do you find it?

Mr. Barry D. Ernstoff: Mr. Gorton attempted to say that this Court has never decided this decision before and the answer is yes, if you had, we would not be here today, but this Court has decided other cases that come close to the issue or deal with analytical matters that would come under that issue.

Let us take United States v. Mazurie decided two years ago.

Clearly, it was a delegation case.

Can the United States Government delegate the power of liquor to an Indian Tribe?

Well, Mr. Justice Rehnquist in writing the opinion does not really rely on the question of delegation because he notes that in order to delegate a power, the body gets receiving it has to have some sort of independent power over the matters at hand.

And in United States v. Mazurie decided two years ago, this Court held that Indian Tribes are unique aggregations, possessing attributes of sovereignty over both their members and their territory and use that analysis to determine that in fact the tribe could decide whether or not the Mazurie is non-Indians on fee pattern land could sell liquor.

I acknowledge it was a delegation case.

It is a matter federal prosecution, but the analysis is really the same.

Do Indian tribes posses these attributes of sovereignty over their members and their territory?

Justice William H. Rehnquist: But to say that a tribe possesses an attribute of sovereignty, does not necessarily possesses all attributes itself?

Mr. Barry D. Ernstoff: That is correct.

Most attributes what we call real sovereignty having given up by Indians tribes.

There is no question about it.

Indian tribes cannot mint money.

They cannot enter into treaties with other nations, but this Court is consistently held that there powers that have not been taken away.

Let me give you an example.

If Mr. Gorton is right and you got to look to some kind of federal statute to determine what powers the tribe got.

Indian tribes would not be able to point to one single treaty or statutory enactment which would justify the exercise of most their powers including powers which this Court has upheld.

Morris v. Hitchcock is a pure case of this Court saying that even though the prosecution was federal because of the federal regulations involved.

Justice Thurgood Marshall: I think, what the attorney general said you either look to a statute or treaty or a decision of this Court?

Mr. Barry D. Ernstoff: That is correct.

Justice Thurgood Marshall: And you are now about decision of the Court?

Mr. Barry D. Ernstoff: I am saying that in Morris v. Hitchcock in 1905 there was no previous decision of this Court.

Justice Potter Stewart: What is it, is it just sort of federal common law?

If this Court holds that a tribe has some residual sovereignty, what authority we got to say that?

Is it a sort of federal common law?

Mr. Barry D. Ernstoff: It is the law of the cases of this Court.

This court has never -- let me give another example.

Justice Potter Stewart: Not based on the constitution or a statute or --?

Mr. Barry D. Ernstoff: It is based under the constitution because the constitution gave the United States, the Congress the power to enter into treaties with the Indian tribes.

So, to the extent that those treaties recognize Indian tribes has having been sovereign nations at one time, it is based certainly on both constitutional provisions and on treaties.

Justice Potter Stewart: So, do you think that the Indian tribes in exercising this power are exercising part of the sovereignty of the United States as well as that of the Indian Tribe?

Mr. Barry D. Ernstoff: I do not think so.

I think Indian Tribes are exercising a sovereignty which is recognized and reaffirmed by the United States.

Last year you had a case here called Fischer v. District Court dealing with adoption involved Indians in Montana and this court held that the tribe in fact had jurisdiction over that adoption.

Now, nowhere could anyone point to any statute, treaty or enactment which gave the Northern Cheyenne Tribe jurisdiction over adoption?

What this Court said was that the Indian Reorganization Act of 1934 which by the way does not at all give any powers to Indian Tribes, it merely recognizes powers was sufficient, a sort of peg upon which that hang your hat and this Court did not point any statutory enactment which actually gave that power to the tribe.

Justice Thurgood Marshall: So your piggyback argument is that where we want to something without power, we are therefore authorized to continue to act without power?

Mr. Barry D. Ernstoff: When you say “we are” you mean the tribe or --?

Justice Thurgood Marshall: The Supreme Court of the United States?

Mr. Barry D. Ernstoff: I am not saying that.

Justice Thurgood Marshall: Is that what you are arguing?

Mr. Barry D. Ernstoff: I am arguing that the Court’s analysis under those cases that Indian Tribes must retain whatever it was they were except that which expressly been taken away by Congress, by treaty or in analysis of this Court has to be viable because if it is not, then Indian Tribes really posses almost no power.

Justice Thurgood Marshall: And you also admit that there is no decision of this Court that says that an Indian Tribe has authority to punish a misdemeanor who is not an Indian?

Mr. Barry D. Ernstoff: There is no question in this.

No decision of this --

Justice Thurgood Marshall: But you do want us to extend, do you not?

Mr. Barry D. Ernstoff: I do Your Honor if there had been a decision of the Court we would not be here today.

Justice Thurgood Marshall: Well we would keep on arguing that we did not have power to do what we did, how can you argue we have power to do more?

Mr. Barry D. Ernstoff: What I am saying is that your analysis which was correct that one does not have to look for an express treaty or statutory enactment in order to find that in Indian Tribe has a power, that that is the correct analysis that this Court has used over the years --

Justice Thurgood Marshall: Now what do you point to?

Mr. Barry D. Ernstoff: I point to Mazurie which talks about tribes having independent authority to some extent over these matters.

Justice Thurgood Marshall: What do you point to other than an opinion of this Court?

Mr. Barry D. Ernstoff: It is impossible to point --

Justice Thurgood Marshall: Then the answer is you do not have anything?

Mr. Barry D. Ernstoff: Yes, the answer is that Congress has never --

Justice Thurgood Marshall: Your answer is you do not have anything?

Mr. Barry D. Ernstoff: That is correct because Your Honor it is very difficult to prove a negative.

If Congress has never enacted a statute giving a tribe power and this Court has recognized the power how can I point to a statute which gave the tribe that power.

All I can point to is this Court’s analysis of the fact that one does not need a statute or a treaty in order to determine if there is a power. Take a look at Williams v. Lee.

Williams v. Lee in 1959, this Court said that a non-Indian must go to tribal court for a civil matter in order to have a judgment entered for him to be able to benefit from a debt that was owed to him.

And the court said in Williams v. Lee, it is immaterial that respondent is not an Indian.

He was under reservation and the transaction with an Indian took place there and that was the reason of this Court’s decision.

Now, nowhere can anyone point to any statutory enactment which says that tribal courts have --

Justice Thurgood Marshall: I think what you point to a constitution provision is that there is difference between civil and criminal?

Mr. Barry D. Ernstoff: I agree Your Honor. Again, if case had been decided in Williams v. Lee we would not be here.

All I can do is rely on this Court’s analysis previously and it does not just --

Justice John Paul Stevens: Can I ask you a question about your basic theory about where the jurisdiction all comes from?

Supposing we had the case arising in 1850 after the Treaty with Great Britain and before the Treaty of Point Elliott, would you say that at that time if an American Scout wandered on to the tribal lands, that the tribe would have jurisdiction in the sense we are talking about it to try that person and the American Courts would recognize that jurisdiction, at that time?

Mr. Barry D. Ernstoff: I believe so, Your Honor.

Justice John Paul Stevens: That is critical to your cases, is it not?

Mr. Barry D. Ernstoff: Yes it is.

As a matter of fact, I think it is important to point out the time and period of the treaty negotiation with Point Elliott tribes of which Suquamish is one.

It is very important.

A draft treaty was prepared in 1854 by the local commissioner of Indian affairs, the Governor of the Washington Territory, Isaac Stevens.

In that treaty, was a specific provision which said the tribe will give up jurisdiction, criminal jurisdiction over non-Indians and will have criminal jurisdiction only over its own members, a specific provision, this is in the brief.

That language was written by the attorney who was the Secretary of the Treaty Commission on December 10, 1854.

Six weeks later, on January 22, 1855, the Point Elliott Treaty was signed.

The only provisions of a 15-section draft treaty which had been written for the purpose of negotiation, the only provision that does not find its way into the Point Elliott Treaty are those expressed words that a tribe will give up non-Indians -- will not have a jurisdiction over non-Indians and will turn them over to the United States for prosecution.

Every other provision of the draft treaty is in there.

There are even provisions which are part of the article in which this language appears which find their way into the treaty.

It is the only provision that is not in the treaty.

Certainly, I cannot tell you, I was not there, we do not have notes.

I cannot tell you that the Indians were clever enough in the 1855 to negotiate a way back because they knew what trouble would bring them.

But some conclusion must be drawn from the fact that the commissioners at that time and this is 20 years after the passage of the 1834 Trade and Intercourse Act felt it necessary to negotiate and to put in to a treaty a provision terminating jurisdiction which Mr. Gorton says had been terminated 20 years before in 1834.

Justice Potter Stewart: Well what we have here is not the 1834 Act, but the amendment of 1854 which pre-dated the conclusion of this treaty?

Mr. Barry D. Ernstoff: That is correct.

Justice Potter Stewart: And that 1854 statute said that the United States should have federal criminal jurisdiction within any Indian Reservation with three exceptions and the third exception which is the only one applicable here is any case where by treaty stipulations the exclusive jurisdiction over such offenses is or may be secured by the Indian Tribes respectively?

Mr. Barry D. Ernstoff: Yes, Your Honor.

Justice Potter Stewart: And certainly, the negotiators for the United States of America knew of the enactment of that statute in 1854 when they concluded this treaty in 1855 and they realized that in the absence of stipulations to the contrary, the tribe under the 1854 Act simply would not have criminal jurisdiction over non-Indians.

Is that not the reason that that original provision was deleted because it was necessary from the point of view of the United States?

Mr. Barry D. Ernstoff: I do not believe so Your Honor because one has to remember, again, we are examining pre-dated time of which we have a little record, but it was well after the 1854 enactment that the Secretary to the Commission, before they actually went out on this trip to negotiate treaties put a provision in not give the tribe exclusive jurisdiction, but they took it away. After the 1854 Act it was not necessary to take away tribal jurisdiction over non-Indians had the 1854 enactment actually done that.

Justice Potter Stewart: There had to be treaty stipulation to the contrary, otherwise the statute took it away?

Mr. Barry D. Ernstoff: That is exactly correct and there are no treaties -- I do not take position by the way that we are talking about the third exception.

It is our position, the government may have a different position, but it is our position that the Federal Government in fact would have had jurisdiction over these offenses over both Oliphant and Belgarde.

The only question is concurrently, can the tribe claim jurisdiction and as it occurred in the facts of this situation, employ that jurisdiction when there is no one else around to do it.

You are dealing with the situation where both offenses occurred in the middle of the night.

You are dealing with the situation in which the County and the Federal Government were asked to provide law enforcement assistance during the tribal celebration in the Oliphant case and the county gave one deputy for an eight-hour period and the Federal Government provided no one.

Had the tribal police not affected this arrest and the tribe not persecuted it, both Oliphant and Belgarde would have gone unpunished.

In the Belgarde case it is even worst because the tribal police basically under my instructions at the time attempted not to act in a matter which might bring about as it did, a court case and the tribal police called the state patrol and the county sheriff and asked them to come that they have now made an arrest of a person who is intoxicated and was speeding through town.

They came, they said well this is a misdemeanor we did not observe it and so therefore we will not be prosecute.

This is on the record and so you have a situation, it is the perfect situation.

The facts really show the law in this case.

Had that tribe not been able to make that arrest and make that prosecution who knows what destruction would have been occurred on that night.

Particularly in the Belgarde case, we are talking about an individual and a truck speeding and probably highly intoxicated.

So, the answer to the question is, no, we are not claiming exclusive jurisdiction.

I can tell you that the US Attorney, the Federal Courts had really not much desire to get involved in neither the Oliphant nor the Belgarde cases in terms of a prosecution.

They are relevantly minor offenses.

They are two young kids and they are making some trouble.

If the tribe can not do that, particularly when the other side of the offense is tribal police, tribal property, tribal dignity, a breach of the peace not just for Indians, but for non-Indians, if the tribe can not do that, what is left to them, but this homeland that has been created for them?

Justice Potter Stewart: How about the state?

Mr. Barry D. Ernstoff: The state on the Oliphant case was on (Voice Overlap)

Justice Potter Stewart: (Voice Overlap)

Mr. Barry D. Ernstoff: Under our strange partial jurisdiction statute there would be no jurisdiction over Oliphant.

In the Belgarde case, but for the Yakama case which the court has already acknowledged the state might also have jurisdiction, but in this case they refused to do anything about it, even though at the time the Yakama case had not been decided.

What you find is --

Justice Thurgood Marshall: What happens after the state refuses to prosecute a felony?

What can the tribe do?

Nothing.

Mr. Barry D. Ernstoff: That is correct.

Justice Thurgood Marshall: Well, then why do you say that it is so difficult with a misdemeanor?

If they file as to act in a felony it would be much more demonstrated, he may able to run while shooting people?

Mr. Barry D. Ernstoff: That is correct Your Honor, but we have never had the problem.

The state I think is certain responsible and the county certainly will not let a felony go unpunished.

When you are talking about minor offenses, mostly which affect the tribe not the county and which the land involved for the most part is non-taxable land, the county is getting no income from it -

Justice Thurgood Marshall: Was this man driving down the road aiming at Indians only?

Mr. Barry D. Ernstoff: He was aiming at everyone.[Laughter]

Justice Thurgood Marshall: Sir?

Mr. Barry D. Ernstoff: He was aiming at everyone.

Justice Thurgood Marshall: Oh! I thought so.

Mr. Barry D. Ernstoff: He was aiming at everyone.

I think if he happened to pick the Indian and he would hit the Indian, but he was aiming at everyone and that is the very question, why was not the county interested enough to get involve and to prosecute?

As I said, on my advise, the tribe was not going to prosecute until it became a matter of assault on the dignity of the tribe, that everyone in the community would look and know that you can violate the law in the reservation and there would be no retribution whatsoever, no kind of punishment.

Justice William H. Rehnquist: Mr. Ernstoff, is there any way of distinguishing your case from a civil jurisdiction of the tribe, so that the Court could enter principal way will say there was criminal jurisdiction here, but not civil jurisdiction?

Mr. Barry D. Ernstoff: That is an interesting question Your Honor.

I really do not know that they can to be honest with you.

I had been trying to do that because I thought it would be a benefit to me to come in with a most narrow case that I can possibly come in with, but to be intellectually honest, I do not think you really can and I do not think that you should.

Let me give an example if I may.

Take the Northern Cheyenne tribe in Montana which have much more trust land, 3000 Indians, almost no non-Indians, coal is about to be developed on that reservation.

It is going to bring an influx of 25,000 non-Indians, probably to develop that coal.

The county seat is at least 60 to 70, perhaps over a hundred miles away, Billings is about 150 miles away.

Now, you picture what is going to that reservation, the 25,000 non-Indian workers to come on to a reservation of three Indians, a half-million hectares and get involved in the kinds of things that people get involved in, and the tribe is powerless to act.

So, while the Port Madison case, we admit that the tribe is still there, it has always been recognized, it has never been terminated, there is a statute, no agreement or statute doing that, the principle of law though, whether it would be civil regulation or criminal regulation can be better seen a situation like that.

Tribes have not done this before.

There is no question about this.

The dissent in the Ninth Circuit in Oliphant makes it very clear that its position is if this all true, why did it not happen earlier and there are several answers.

One is until 1968 you had no remedy, I think the Court is already pointed that out, Talton v. Mayes said you had no constitutional rights and the second reason and perhaps the more important reason, is that until the 1960s, Indian tribes depended on the Federal Government.

This Court said in Mancory v. Morton, just two years ago, talked about materialistic attitude of the Federal Government and the fact that Indian interest basically suffered because the Federal Government said to Indians we will take care of you.

Well, the American Indian Policy Review Commission Report and other things that this Court can take note of shows how the Federal Government took care of the Indians.

The concept to self-determination basically is a concept that the tribes have been upgrading on over the last 10 years, and that is the Federal Government is not going to do it force, but going to have do it ourselves and Congress has recognized this.

You know that Suquamish Tribe is the recipient of all revenue sharing funds for the entire reservation, so any programs that they have had to be for all the members of the reservation.

The Suquamish Tribe is the recipient.

Justice Potter Stewart: What do you mean with the members of the reservation?

Are they the members of the tribe or they are residents on the reservation?

Mr. Barry D. Ernstoff: That is right Your Honor, all the residents of the reservation.

In other words, the formula that is used for determining how much money the tribe will get by the Federal Government, by Congress is the number of residents in the reservation, not the number of Indians.

Justice Potter Stewart: And then where does that money go?

Mr. Barry D. Ernstoff: That money then goes to the tribe which then has to account for them in terms of the programs that revenue sharing money is used for.

Justice Potter Stewart: And what are the programs?

Mr. Barry D. Ernstoff: Kinds of programs that are involved are, first of all, a good deal of the money is used for law enforcement because that is the major problem there.

There is money used for social services for social workers.

Justice Potter Stewart: By the tribe?

Mr. Barry D. Ernstoff: By the tribe because that is considered from the Federal Government as the Local Government of the Reservation.

Justice Potter Stewart: Well, they get money based upon the number of people on the reservation?

Mr. Barry D. Ernstoff: That is correct.

Justice Potter Stewart: The money goes to the tribe for the tribal users and that is just a --

Mr. Barry D. Ernstoff: For the tribal use for all residents of the reservation, law enforcement on the reservation, the Tribal Police Officers and there are 10 not three.

Tribal Police Officers and the three tribal police cars go through the entire reservation.

They do not stop and this Court pointed out for instance In Moe and in Seamore v. Superintendent (Ph) the problems of trying to use a track book in going through an Indian Reservation to determine whether or not you are on trust land or field land.

Think of how much worst would be if they got to get out genealogical chart at the same time and before they made an arrest they had to look and see first of all is it free or trust land, secondly, is it a member the tribe or not.

They cannot even rely on the fact that he is an Indian, because an Indian on the reservation --

Justice Thurgood Marshall: May I ask again, does that apply to felonies too?

Mr. Barry D. Ernstoff: The situation would apply to felonies too, but the tribe --

Justice Thurgood Marshall: I can see that, you make these arguments, when you realize that?

Mr. Barry D. Ernstoff: The situation would apply to felonies also, but as to felonies, the tribe basically has not been involved in any kind of prosecution.

The tribe has allowed and hope that the Federal Government and state will take that over.

The point I am making is that a law would apply and that is why very quickly to deal with the Fifteenth Amendment question, that is why it is an irrelevant question.

Indian is not a racial classification.

This Court is already decided that in Mancory v. Morton, Indian is a political status.

A man can be barely an Indian in terms of his blood and be a member of the tribe, and therefore, come under the definition of Indian and at the same time another man can be a full blood Indian but a member of the different tribe, and he would be in the same status as the non-Indian resident of the reservation, let us make that very clear.

We are talking about a political status not a racial classification.

I believe, that if this Court were to examine the authorities that are in our brief and is a very complicated issue, I acknowledge that, it is one that is never been decided by the Court before, we would not be here and the Court would take its own analysis in related areas and more important, the Court would have take a look at something like the American-Indian Policy Review Commission Report, the Court would see that without this kind of jurisdiction, Indian reservations already a very difficult place to live for an Indian, Indian reservations are going to be even more difficult for an Indian to live in and for an Indian tribe would be able to --

Justice Potter Stewart: It would be more difficult for a place to live for a non-Indian, if you are right?

Mr. Barry D. Ernstoff: That you Honor would depend on the supposition that non-Indians will not receive justice in Indian tribal courts, and I would venture to say that the justice that is given out in Indian tribal courts is equal to or surpasses the justice given out in the most JP Courts, Justice of the Peace Courts through out this country, talking about most part of minor offenses and misdemeanors.

I would venture to say that any non-Indian who felt he was not getting --

Justice Thurgood Marshall: You are citing what to back that up other than you are here?

Mr. Barry D. Ernstoff: That is correct Your Honor.

I can not find anything.

Rebuttal of Slade Gorton

Mr. Slade Gorton: I cannot use that.

Rebuttal of Barry D. Ernstoff

Mr. Barry D. Ernstoff: I cannot -- but -- I can cite the American-Indian Policy Review Commission Report which I think the Court should address itself to because that is what it says what the situation is.

I think that the non-Indians have available to them the Indians Civil Rights Act and I think that that law will develop.

We had suggested for instance in our brief, the concept of a tribal subject matter interest test for this Court to establish which is really what you have been using where the tribe has an interest and it can show, where it is not totally unrelated to the tribe, then the tribe will have jurisdiction and we have used for instance the long arm jurisdiction kinds of cases of this Court.

We had used the taxing of foreign corporation cases.

We had used the cases that talk about when the state can get involved in the interstate commerce.

Cases that show that this Court is concerned about a local government having sufficient authority to be able to maintain peace, dignity and law within their area.

Thank you Your Honor.

Unknown Speaker: Mr. Ernstoff, before you sit down, am I correct, did your firm in addition to the respondent’s brief also filed a brief amicus?

Mr. Barry D. Ernstoff: We represent a number of tribes and two tribes, clients of ours requested that we file an amicus brief on the issue only a Public Law 280 jurisdiction.

Unknown Speaker: So you got a one, two punch?

Mr. Barry D. Ernstoff: Well, we could have put it in our original brief Your Honor, but the United States had informed us that they were going to request that matter not be heard as part of this case since it was an ancillary issue.

It was never decide about the Ninth Circuit in this case and we felt rather than burden the Court with a very long brief, that it made more sense to incorporate by reference and amicus brief would set up the arguments, should the Court want to hear them.

Unknown Speaker: Do you often file amicus briefs in cases in which you are a Counsel for one of the primary parties?

Mr. Barry D. Ernstoff: We have done that once before in this Court, Your Honor.

Justice Thurgood Marshall: Which case is that?

Mr. Barry D. Ernstoff: Tunascot (Ph) v. State of Washington, a number of tribes filed amicus briefs on issues which were ancillary to the basic issue.

We feel that our clients certainly have a right to be represented, and even though we happen to be Counsel for both sides and I did not write the amicus brief, Your Honor.

Justice Thurgood Marshall: Yes, but your firm is in it and you are a partner in the firm?

Mr. Barry D. Ernstoff: That is correct Your Honor.

I did not know that it was improper and if it is we certain would not do it again.

We really were trying to relieve the Court of the burden of a very long brief on what were really two separate issues, one of which has been briefed very thoroughly in another case.

Justice Byron R. White: Well, Mr. Ernstoff there is no conflict between the position of your client and the position of the amicus.

Mr. Barry D. Ernstoff: No, it is exact the same position.

We incorporate it by reference in our brief.

Again, it is a long drawn out explanation of something that we felt the Court might want to refer it to, but not have it in front of it at all times.

Thank you Your Honors.

Chief Justice Warren E. Burger: Mr. Farr.

Argument of Chestnut H. Bartow Farr Iii

Mr. Chestnut H. Bartow Farr Iii: Mr. Chief Justice and may it please the Court.

Because the issues in this case are numerous and difficult and because of the extensive briefing on all sides, I would like at the outset to make clear what the position of the United States is and is not.

First, at the heart of our submission and directly opposed to the position taken by a petitioners in the State of Washington is the principle that the Indian Tribes do not depend upon the United States for the creation of their powers of Government.

These powers instead are derived from an inherent sovereignty that antedates the European settlement of the United States and indeed the formation of the United States itself.

Now, in the questioning earlier in this case, it has been asked whether, in fact, we depend on particular federal statutes or treaties to establish that or the power or the constitution of the United States itself.

We do not depend on those.

We believe that the sovereignty antedates all of that and in fact the reason that Congress did not pass statutes for example, creating inherent sovereignty of the tribe --

Unknown Speaker: And we should just assume to recognize that?

Mr. Chestnut H. Bartow Farr Iii: I believe that the Court has recognized it before and should again.

Justice Potter Stewart: Well, even if we buy that position 100%, the question would still remain whether or not that historic sovereignty included the power to try and convict non-tribal members of criminal offenses and violation of tribal law, that is certainly historically before the white man got here, it did not?

Mr. Chestnut H. Bartow Farr Iii: Before the Indians had had to cover on the Indians itself.

However, we believe that even when the white settlers did get here that the sovereignty of the Indian Tribes who at the time of course were dealing by treaty with the settlement nations, were occasionally at war with them, did extend far enough at least to protect themselves against intrusions by whites, crimes against the tribe itself or against its members and that that sovereignty continues now.

Justice William H. Rehnquist: Do you think that was changed at all by the first sentence of the First Amendment -- of all the Fourteenth Amendment that reads “all persons born or naturalized in the United States and subject to the jurisdiction thereof are citizens of the United States and of the state wherein they reside?”

Mr. Chestnut H. Bartow Farr Iii: No, I do not.

Justice William H. Rehnquist: You think that there is no negative implication of ruling out other sovereignties than the United States or the State in that?

Mr. Chestnut H. Bartow Farr Iii: I think in terms of sure sovereignty which is the point I am going to discuss in just a moment that this Court has recognized and the Fourteenth Amendment recognizes that there are principally the Federal Government and the States.

There are two sovereignties.

However, the fact that the sovereignty of the Indians is not a full sovereignty to the extent that the Federal Government possess a sovereignty or the states possess sovereignty, does not seem to me to settle the question of whether the sovereignty that they have is so thin that it does not cover this one.

Justice Potter Stewart: But it leaves it open, does it not?

I mean, you concede that it is not a full sovereignty as indeed you must?

Mr. Chestnut H. Bartow Farr Iii: We do concede it is not a full sovereignty.

Justice Potter Stewart: And the question is then does it include as I say the power to try and convict and punish either non-members of the tribe or non-Indians?

Mr. Chestnut H. Bartow Farr Iii: That is right and I think that that is the question which the Court has to decide in this case at outset --

Justice Potter Stewart: And you begin by conceding it is not full, so the --

Mr. Chestnut H. Bartow Farr Iii: We concede that it is not full.

We recognize as Chief Justice Marshall said way back in Worcester v. Georgia that the Indian tribes are to the extent that their sovereignties, dependent sovereignties and that they are dependent upon the Federal Government at least if not to create their powers not to take them away.

History in nearly two centuries of legal authority demonstrate that the tribe sovereignty is subject to the greater sovereignty of the United States and in the exercise of its own sovereignty, the United States has established a special relationship towards a unique responsibility for the Indians in the United States.

Thus we do agree with petitioners Mr. Justice Stewart that the tribal sovereignty can be in and in many respects has been circumscribed by the United States, so to that extent that it is not a full sovereignty.

Justice Potter Stewart: Well and also it did not begin as full sovereignty, did it?

Mr. Chestnut H. Bartow Farr Iii: Well, I think it did.

Justice Potter Stewart: Not a territorial sovereignty, did it?

Mr. Chestnut H. Bartow Farr Iii: Well, it did not begin --

Justice Potter Stewart: Was that not a concept wholly alien to Indian tribes, the concept of territorial sovereignty they were by -- even those that were not nomadic it did not stay right within the meets and bounds of what is now a reservation because there were no such things.

Mr. Chestnut H. Bartow Farr Iii: That is right Mr. Justice Stewart.

At the time before there was an Indian settlement --

Justice Potter Stewart: It was a tribal self-government, but it was not territorial sovereignty, was it ever?

Mr. Chestnut H. Bartow Farr Iii: Well, in the beginning it was certainly tribal self-government because as you posit they did not have a sophisticated concept of land ownership and there was not anybody else to govern that, it is just now.

Unknown Speaker: Well, it is a territorial sovereignty itself?

Mr. Chestnut H. Bartow Farr Iii: That is because they did not view territory as belonging to particular individual tribes.

That is a concept to which the European settlers quickly educated and it is not clear to me that that means that once they developed that understanding that their sovereignty because it did not depend on it at the outset was not sufficient to cover it when it was developed.

Unknown Speaker: Mr. Farr, you said that they did not have a sophisticated concept of land ownership, did the United States recognize any land ownership rights in the Indians other than those granted by treaty?

Mr. Chestnut H. Bartow Farr Iii: Well, no they did not.

I think one of the first sovereign rights that they lost to the extent that they would have inclined to assert it at all was the right to own land as against sovereignty of the United States --

Unknown Speaker: And how did they lose that right?

Mr. Chestnut H. Bartow Farr Iii: I think that that is an in a central part of living within the jurisdiction of a sovereign in which you are dependent. [Voice Overlap]

Unknown Speaker: Was it not simply by virtue of the United States exercising total jurisdiction over the territory that there would ordinarily be a sovereign right, simply was assumed not to exist?

Mr. Chestnut H. Bartow Farr Iii: I think necessarily it must.

I mean clearly it did.

Unknown Speaker: And why does not the same argument apply to the criminal jurisdiction over non-Indians?

Mr. Chestnut H. Bartow Farr Iii: Because I do not think, by necessary implication that it is inconsistent with the right of the United States to assert their own criminal jurisdiction to assert that the tribes can also have criminal jurisdiction whereas I do think it is inconsistent necessarily with the position of the United States as sovereign over its land to say that the Indians could contract and make treaties with foreign countries, could lease out their lands for a naval base for a foreign country.

So I do not think that is necessary inconsistency in this case.

As a result of these positions, we do believe it is necessary in order to resolve these cases to examine as the Court usually has to do in Indian cases, the relevant statutes and treaties in accordance with the principles of sovereignties just discussed.

At the same time we ask that the Court keep in mind establish rules of statutory construction that again are repeated in all Indian cases that were the statutes and treaties are ambiguous, that they should not be construed to the Indians’ detriment.

Now, with regard to the present cases, the particular treaty provision at issue is the Treaty of Point Elliott and the particular statutes in our opinion as 18 U.S.C. 1152 which comes at the end of a long line of similar statutes.

Now, we find in that treaty, in that statute, no clear expression of congressional intent to cut off tribal jurisdiction entirely in every instance where non-Indians have committed a crime.

At best we can find some provisions that seem ambiguous, that are suspect and can be interpreted as petitioners in the State of Washington have done to support one conclusion or the other, but we find no clear statement such as we think is required by the principles of statutory construction that this Court has laid down.

Justice Potter Stewart: Well, when you say there is no intension to cut it off, you have to first of all, have convinced your self and us that it is existed?

Mr. Chestnut H. Bartow Farr Iii: That is correct.

Justice Potter Stewart: And nothing you have said so far has indicated that to me?

Mr. Chestnut H. Bartow Farr Iii: I have as I suppose given my best shot.

I mean, I think that the cases [Laughter], the authorities we cited in our brief and the position we take is apparent there and I believe that that sovereignty exists and it does cover it.

Justice Potter Stewart: Well, if there was limited sovereignty, but there is no case in this Court where that sovereignty included the power to try and punish for criminal offense of a non-Indian?

Mr. Chestnut H. Bartow Farr Iii: The Court has not said that.

That is true, but if that sovereignty does not exist to some extent, it is difficult to explain, to begin with where the Indians get the sovereignty over their own members, that has been conferred by anything in particular.

Justice Potter Stewart: But that is tribal, it is tribal?

Justice Thurgood Marshall: They could all get together and vote it?

Mr. Chestnut H. Bartow Farr Iii: Well, they have in fact done that in many cases.

Justice Thurgood Marshall: Well, that is their answer, but the petitioners in this case, they were not allowed to vote on?

Mr. Chestnut H. Bartow Farr Iii: But the Court had said that they are not in the situation of a private club.

The opinion for the Court in Mazurie said that, that they are something far more than that and that they have a unique position which is not that a group of people who (Voice Overlap)

Justice Thurgood Marshall: But my own point is, you said there was no way for the tribe to do it and I said, the tribe can pass its own laws, that is what the United States --

Mr. Chestnut H. Bartow Farr Iii: I assume that they could form a voluntary association (Voice Overlap)

Justice Potter Stewart: Like McBratney?

Justice Thurgood Marshall: No, no, I am saying that the tribe at its private council vote its own laws, do they not?

Mr. Chestnut H. Bartow Farr Iii: They do now and I believe they do so in the exercise of their sovereignty.

I believe they probably could do so, at least to govern themselves by voluntary organization.

Fourth in just completing our submission on this general point, we do not believe that Public Law 280 constitutes a bar to assertion of tribal jurisdiction in this case and we have discussed this briefly in our brief here and we have also alluded to it in our amicus memorandum in the Yakama Nation case which we filed late last week.

Although, we recognize that Congress in Public Law 280 has extended the rights, the opportunity to assert jurisdiction over the Indian tribes, we do not believe that the assertion by the State of Washington is valid, and therefore, it would not reach to this case.

Now, in the few moments remaining, I just like to say brief words about the practical effects of Indian jurisdiction.

Although, we do not underestimate the possible difficulties, we do not believe that the result will be catastrophe that the petitioners in the State of Washington seem to predict.

We do not believe it is an extraordinary notion that Indians would have a right to protect themselves against crimes committed by other person.

Unknown Speaker: Mr. Farr, can I ask you?

Why does not the Indian sovereignty, the tribal sovereignty extend to the prosecution of felonies?

Mr. Chestnut H. Bartow Farr Iii: It does not extend to the prosecution of felonies at this time because the Indian Civil Rights Act has limited the punishment which the Indian tribes can meet out.

Unknown Speaker: So you are saying because it is a federal statute which cuts back to sovereignty?

Mr. Chestnut H. Bartow Farr Iii: There is a federal statute that cuts back.

Unknown Speaker: Without a federal statute that leads on prosecutions for felony or the limits of a punishment, the tribe would have the --?

Mr. Chestnut H. Bartow Farr Iii: I think encompass within the notion of tribal sovereignty is the fact that if a non-Indian came on the reservation and killed an Indian that they could have tried him if the federal government has not taken that away?

Justice Potter Stewart: Or kill a non-Indian on the reservation?

Mr. Chestnut H. Bartow Farr Iii: To could kill a non-Indian, then McBratney and those cases put exclusive jurisdiction on the state under terms of enabling act and that doctrine.

So it would be necessarily their interest would be implicated by the killing of an Indian.

Justice John Paul Stevens: So that in the killing of a non-Indian, what the tribal sovereignty that existed has been taken away?

Mr. Chestnut H. Bartow Farr Iii: In the killing of a non-Indian, the tribal sovereignty to the extent that it is existed, there is an open question in that is to whether an Indian interest is sufficiently connected to that.

Justice Potter Stewart: Under McBratney?

Mr. Chestnut H. Bartow Farr Iii: Right, to justify and assert sovereignty and to the extent that there was any sovereignty it has been taken away, that is correct.

Justice Lewis F. Powell: But your position is confined to situation where there is a tribal interest?

Mr. Chestnut H. Bartow Farr Iii: Right, we do believe that there is must be a tribal interest.

Justice Lewis F. Powell: If there were two charges against Belgarde as I recall, one was called for speeding or reckless drive and then the other was called damaging Indian property?

Mr. Chestnut H. Bartow Farr Iii: That is correct.

Justice Lewis F. Powell: If it only has been the first charge, would the Indian Courts have had jurisdiction?

Mr. Chestnut H. Bartow Farr Iii: I believe as I read facts in this case, they would have, speeding through an Indian reservation.

Justice Lewis F. Powell: Suppose Belgarde, instead of being driving had just mugged another non-Indian back on the reservation?

Mr. Chestnut H. Bartow Farr Iii: I believe that would be covered by McBratney Mr. Justices Powell and the state would have jurisdiction of that crime.

Justice Lewis F. Powell: Unless he was about to precipitate a riot?

Mr. Chestnut H. Bartow Farr Iii: It is possible.

This is questionable ground that I am getting into, but it is possible that if a crime by a non-Indian against a non-Indian sufficiently endangered tribal interest that there might be some way for a tribe to assert jurisdiction, but I think in the normal case McBratney leaves that to the states.

Justice John Paul Stevens: Mr. Farr, if I may ask just one other question, putting to one side all the statutes for a moment, going back to what the tribes retained as its original concept to sovereignty, if I understand your position correctly, you do not contend that they originally retain the power to try for major crimes?

Mr. Chestnut H. Bartow Farr Iii: No, I believe that our submission is not that.

I believe originally that they did have the power to try for major crimes.

If they had the sovereign power to protect themselves and their members (Voice Overlap).

Justice John Paul Stevens: How did they lose the power to try non-Indians from major crimes?

Mr. Chestnut H. Bartow Farr Iii: They have lost that in Indian Civil Rights Act.

Justice John Paul Stevens: Until 1968, they possessed that power?

Mr. Chestnut H. Bartow Farr Iii: That is right.

Now, there is no question that that power (Voice Overlap).

Justice John Paul Stevens: They never exercised it though?

Mr. Chestnut H. Bartow Farr Iii: That is right.

Justice William H. Rehnquist: Subject to the Major Crimes Act?

Mr. Chestnut H. Bartow Farr Iii: The Major Crimes Act covering Indians.

Justice William H. Rehnquist: And the Indians Civil Rights Act did not take away from them the power to punish for major crimes, it just said you cannot sentence a person convicted of first-degree murder for more than six months.

Mr. Chestnut H. Bartow Farr Iii: That is correct.

It defines in terms of punishment and not the actual crime, but I think both as a practical matter that that was more or less disabled.

Thank you Mr. Chief Justice.

Chief Justice Warren E. Burger: Mr. Attorney General you have about six minutes.

Rebuttal of Slade Gorton

Mr. Slade Gorton: Mr. Chief Justice and may it please the Court.

I trust that you have noted how extraordinary that presentation of the United States is, but until 1968, this Indian tribe could have hung a non-Indian for burglary without offering him any constitutional rights whatsoever.

I think I do want to speak very briefly on the technically not quite relevant to facts --

Justice William H. Rehnquist: Well, Mr. Gorton before 1868, the State of Washington could have hanged an Indian or a white man without offering him any constitutional rights at all, could they not, because there was no Fourteenth Amendment?

Mr. Slade Gorton: Before 1868 sir, that may be correct.

There was at least a constitution on under those circumstances for the state and during these years pre-1868 this tribe had no constitution either.

There were not even Indian Constitution Rights, but they are claiming, the United States submission is that Indian jurisdiction or rather at least that the Indian tribal jurisdiction on this reservation over non-Indians except under the McBratney exception was plenary and was not derived from the constitution and was not subject to constitutional guarantees.

Here, the respondents have constantly made the point of what a terrible situation will exist as far as the enforcement of the law on this reservation is concerned unless they are allowed to try these cases.

They failed to tell you that they have objected vociferously and consistently to any exercise of state jurisdiction under Public Law 280.

At this point, unless you hear an appeal on it, they have successfully objected to that jurisdiction.

So on the one hand, they are saying the state will not come and enforce its laws on the reservation and on the other when we try to do so they are saying that you cannot come and enforce your law on the reservation.

The cure to that situation is extraordinary simple.

Even if they are correct in their position on Public Law 280, the Indians Civil Rights Act gives them the power to ask the state to take jurisdiction, total or limited on that reservation.

Our state has already deputized other tribal police officers on the reservation such as the Yakama who have the authority to make arrest for the violation of the state laws.

Therefore, they do not need a genealogical chart in order to --

Justice John Paul Stevens: Does the 280 question -- that question relate to non-Indians and Indians.

I take it?

Mr. Slade Gorton: No, the question relates primarily to jurisdiction over Indians.

Justice John Paul Stevens: Now, I take it you do not object, you do not say now that the Indian tribe does not have power to try Indians?

Mr. Slade Gorton: I do not.

Justice John Paul Stevens: Do you say the state does?

Mr. Slade Gorton: I am sorry?

Justice John Paul Stevens: Do you say the state has concurrent power to try Indians?

Mr. Slade Gorton: Whether the state power has concurrent power to try Indians depends on the validity of public law 280 and that is a separate case which we have--

Justice Potter Stewart: And that is in the Yakama case?

As of now, in the Ninth Circuit position.

Mr. Slade Gorton: We do not.

Justice Potter Stewart: You do not?

Mr. Slade Gorton: That is quite correct.

Finally, to state the proposition that the state and local authorities have no interest in providing law enforcement authority for 3,000 of their own voting citizens on this reservation or perhaps, for 25,000 potential voting citizens on a reservation some place in Montana, is something nonsense.

Of course, the county has exactly the same interest in the enforcement of the law in this area as it does not any other area in that county.

Mr. Justice Stevens asked the question of counsel as to the situation of the Indians got in 1850, after the Oregon Territory Act, but before any Indian Treaties were signed.

Mr. Justice Stevens, I believe could have asked a much broader question and received the same answer.

Under the submission of the tribes, the Indians would have had the right to seek out that scout at any place in the Oregon territory and try him for any asserted violation of its code whatsoever because of these Doctrine of Retained Sovereignty.

We say there are at least two grounds under which the answer is no to that question.

The Indians simply did not retain that sovereignty under the way in which sovereignty is considered by the United States.

As of 1846, by the time of the completion of the treaty with Great Britain, the sovereignty of the United States over that territory, of the United States was total.

When the United States in the Oregon Treaty statute sought to preserve rights of Indians, it did not talk about some kind of retained sovereignty.

It said that we will not take away their rights to persons, their personal or property rights, except by treaty.

Again, I say it is absurd to think that the United States blively (ph) left all of the settlers who were moving into that territory to the plenary jurisdiction of the Indians.

Under those circumstances until they could reduce them, reduce them geographically only to a set of reservations.

That is simply is not consistent with the history of the United States.

Thank you very much.

Justice John Paul Stevens: Can I ask you Mr. Attorney General is the Suquamish Reservation part of the historic area in which the tribe lived or is it different?

Mr. Slade Gorton: The answer to that question is clearly no because the Suquamish Tribe did not exist until Governor Stevens came out there and organized it as a political unit in order to sign a treaty with it.

Justice John Paul Stevens: So that the reservation area is one is --

Mr. Slade Gorton: Arbitrarily selected by the Governor Stevens.

Justice John Paul Stevens: And it is not one as to which the tribe had any Indian Title originally?

Mr. Slade Gorton: Well, there was no tribe before Stevens created it in order to sign this treaty.

Some of the particular Indians who were later (Inaudible) Suquamish may very well have lived in this area.

Justice John Paul Stevens: That is what I want to know.

Did they live in this area?

Mr. Slade Gorton: They may have.

It is very difficult to tell at this point.

Justice John Paul Stevens: Thanks.

Chief Justice Warren E. Burger: Thank you gentlemen.

The case is submitted.

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Transcript:

Argument of Harry R. Sachse

Chief Justice Warren E. Burger: We'll hear arguments next in 73-1773, Foster against Dravo Corporation.

Mr. Sachse.

Mr. Harry R. Sachse: Mr. Chief Justice and may it please the Court.

This case is here on writ of certiorari to the Court of Appeals for the Third Circuit.

The question presented by the case is whether a requirement of a collective bargaining agreement that an employee work not less than 25 weeks in the prior year to receive a vacation can be used to prevent a returning veteran from receiving a vacation in the year of his return and in the year after his return.

The Court of Appeals held that the company could deny vacations to the veteran for failure to meet this 25-work week requirement, it's our position that this interpretation keeps a veteran from returning to his employment without loss of seniority status or pay and it's in contravention of 50 U.S.C. 459, the Selective Service Act.

I've had a chart passed around which I've also supplied to opposing counsel which I'll turn to in a minute and I think will help clarify the -- what really happened in this case.

Justice William H. Rehnquist: I take it that's illustrative only, isn't it?

Mr. Harry R. Sachse: It's only illustrative.

That's correct.

I've decided to use instead of a big display that seemed unwieldy.

Justice Potter Stewart: Is it continuing escalator here?

Mr. Harry R. Sachse: That's right.

Justice Potter Stewart: The true continuing escalator.

Mr. Harry R. Sachse: Well, we argue that a continuing escalator principle should apply in this case.

The contract in question has a 25-work week requirement but as to veterans, this is all that the contract says, this is on -- in the appendix page 48.

It says, “An employee inducted into the Armed Forces of the United States shall be given the minimum re-employment rights granted him under the Selective Service Act as amended.

So the question then is --

Justice Lewis F. Powell: I'm just curious Mr. Sachse.

I gather this being Selective Service Act is only for a conscripted army.

Mr. Harry R. Sachse: No, that's not so.

It applies to -- to reserve units and it applies to --

Justice Lewis F. Powell: Well, how about to new volunteers?

Mr. Harry R. Sachse: -- to volunteers in the army.

Justice Lewis F. Powell: It does?

To new volunteer army?

Mr. Harry R. Sachse: Yes, it does.

Yes it does.

Chief Justice Warren E. Burger: A volunteer, I suppose, is inducted in the same sense that a draftee is inducted, isn't he?

Mr. Harry R. Sachse: Well, there are different sections of the act but they apply the exact same rule.

Justice Byron R. White: You mean, anybody can say to his work time he's been a volunteer for the army it would be years but they never are coming back?

Mr. Harry R. Sachse: That's right.

And the Act was passed in 1941 with the idea that a lot of people would be volunteering and not just that and to encourage people to --

Justice Potter Stewart: Volunteering for a career in the army?

Like what if he say --

Mr. Harry R. Sachse: No.

No.

Justice Potter Stewart: -- as a volunteer for 30 years.

Mr. Harry R. Sachse: No, their limits on how many years if applies drafted I think its two years volunteer to something, I don't recall the details --

Justice Potter Stewart: But they are short.

Mr. Harry R. Sachse: There are limits there and there are also limits on how quickly you have to re-apply within 90 days of being released after you apply to the same.

Justice Lewis F. Powell: I might say Military Selective Service Act is a little misleading, isn't it?

Mr. Harry R. Sachse: Well that cites at 10 on the appendix --

Justice Lewis F. Powell: To that Act?

Mr. Harry R. Sachse: Well, its part of that Act but it -- but it covers more than that.

Justice Byron R. White: Right now, right now if you volunteer for a full hitch in the army, it -- it doesn't have to do with you involved here, this Act upon us.

Mr. Harry R. Sachse: I don't want to make a definite statement on that.

The Act applies -- the Act applies to more than just draft.

I know it applies to reserve units.

Justice Lewis F. Powell: If it didn't apply to the volunteer army, this would be rather just this case, wouldn't it?

It's a statute if the decision here is to apply that.

Mr. Harry R. Sachse: But it's really, it's just.

It's useless for me to speculate about whether it applies in a pure volunteer situation.

There's no question in this case that it does apply to this employee.

Now, if you turn to the chart, I'll show you what happens with this employee and it's a fairly typical situation.

He went to work on August 5th, extreme left of the chart.

During the first 22 weeks, he received no vacation.

During the next year, he received a vacation of approximately three days based on the amount of work in the prior year under provision that is only there for initial employees.

During the next year, he had served enough, so that he was a full-fledged employee getting regular vacation pay which would -- which is seven days.

So, they get even in the third year but during that third year, he went into the army, into the navy actually.

He begins almost two years of military service.

He's paid when he goes into the navy.

His vacation benefits are earned up to that point.

So, we have no quarrel about old -- about benefits prior to that date.

Justice Potter Stewart: I'm not sure I follow you.

Mr. Harry R. Sachse: On March 6, 1967 --

Justice Potter Stewart: Yes.

Mr. Harry R. Sachse: -- he begins his military service and he's paid 56 hours of vacation benefit.

Now, let me just proceed and I think you will follow me.

He then is in navy for about a year and a half or almost two years.

When he returns, he gets no vacation benefit, no vacation at all during that first 13-week period and he gets no vacation during the entire next year under this contract.

It's full work year and the result for that first of all, to put it in some simplified way but I think this is what the Act is really about from his standpoint because he went into the service.

His having to go through the whole business of being a rookie again of having a year and a half before he works up to getting a vacation again.

Justice Potter Stewart: No, he doesn't even get the benefit of a rookie because --

Mr. Harry R. Sachse: That's right.

Less --

Justice Potter Stewart: -- the rookie got to pro rata of 20.

Mr. Harry R. Sachse: That's correct.

Justice Potter Stewart: 20 hours.

Mr. Harry R. Sachse: He doesn't even get the pro rata that a rookie would get.

Justice Potter Stewart: Right.

Mr. Harry R. Sachse: Now, the company says that this is just a straight application of the contract because in these 13 weeks, when he came back, he hadn't serve 25 weeks in the prior year, then in the full year, when he comes back, he hadn't serve 25 weeks at the plant in that year and so this is the way the contract works.

Now, our position to really just get to the heart of it right at the beginning, our position is that where a company bases its vacation benefits on a work requirement such as 25 weeks in a year which is just half of the year's work, but what they're really doing the way the employee see it and the real effect of what they're doing is saying that a person who's a steady employee of the company, who's there working every year, gets a vacation every year, after he's gone through his initial period and that under this Court's decision on the Selective Service Act and under the language of the Act.

This is part of seniority and status, of longevity in the company and when he comes back, he shouldn't be required to sit there and re-earn his right to a vacation.

He should start getting vacations the year he comes back to work for the company and certainly, I can see problems in the first year where he can play around, that he worked just three weeks that year, that he worked almost the whole year but here, even in the second year, he received no vacation.

Justice Potter Stewart: Is the maximum vacation 56 hours?

Mr. Harry R. Sachse: No, it goes up depending on how many years he's been in employment.

Justice Potter Stewart: I see.

Mr. Harry R. Sachse: And the company is not dispute that the way of figuring the maximum vacation is continuous and he would get credit for his years in the service for that (Voice Overlap) just arguing that qualification for it, 25-week qualification.

Chief Justice Warren E. Burger: Is your argument -- does your argument one of essentially of linking vacation rights to seniority?

Mr. Harry R. Sachse: That's correct.

Chief Justice Warren E. Burger: On his return.

Mr. Harry R. Sachse: Our argument makes a distinction in vacations and I think it has an advantage to it and that it I think can get the lower courts out of the kind of mess that they've been in, in trying to work out every detail of every contract.

Our argument is this and we think it's what the Act calls for and what the decision that this Court calls for.

That where a company makes a close correlation between hours worked and vacation pay, so that for every 24 hours work, you get three hours towards a vacation, something like that.

Then all the employees know it.

They know they're not getting rewarded for being a continual employee but just each hour they got this little amount of extra pay.

Justice Potter Stewart: And that's compensation really.

Mr. Harry R. Sachse: And in that, we say, it's compensation.

It's not seniority, it's compensation but when there's not that kind of one-to-one ration, when the real question is whether a man has been a steady employee and if he is, he could then say 25 weeks where the average person probably put in 50.

Here, he gets same vacation with his 25 weeks, 30 weeks, 35 weeks, so forth and in that situation, what you're really looking at is seniority in the plan and a man should not lose his vacation because he's been in military service in that situation.

Justice William H. Rehnquist: Does the record show Mr. Sachse what the typical number of weeks put in per year was by a worker would say five years seniority?

Was it the kind that he were even expect to work 49 or 50 weeks a year was 25 or 30 more likely?

Mr. Harry R. Sachse: I think there is data in the record on worksheets of particular employees junior to him, 47 weeks, the week -- the year that he was there beforehand, I believe is typical.

It was stipulated that he would have worked more than 25 weeks in each of the years that he was in the military service and that people junior to him had worked more than 25 weeks in each of those years but there's sufficient data in the record to show, it's also stipulated that he was not a temporary or part-time employee.

And there's sufficient data in the record to show that this was a steady job and he still works there.

Justice William H. Rehnquist: I would suppose --

Justice William J. Brennan: What do you believe did petitioner receive while he was in the service?

Mr. Harry R. Sachse: I don't know.

It's not in the record.

I think we can all assume he received whatever it is that the military gives during that time.

It's our position that it would be a can of worms to get into that because you then have to start dealing with employees who've been in combat and what do you -- how do you count the leave that a person gets when he's in Vietnam or something like that.

Justice Potter Stewart: Well, there is such a thing as a terminal leave in the military which they used to be and I think that they will have two-and-a-half days a month, is that still true?

Mr. Harry R. Sachse: I just don't know.

I assume he did get some leave in the military.

We certainly don't argue that he received no leave in the military and we don't ask that he be paid --

Justice William H. Rehnquist: Let me interrupt you just a minute Mr. Sachse.

Mr. Harry R. Sachse: Yes.

Justice William H. Rehnquist: I would assume that by the Government's own theory, it might make a difference whether the typical number of weeks worked was say 30 and/or 50 that if the most a man could expect to work during the year were 30-32 weeks and the company required 25, then it might be more analogous to a kind of an earned credit type of thing.

Mr. Harry R. Sachse: Well, then I understand the point you're making.

That is not the Government's theory for this reason and in the Accardi case.

This Court pointed that in a -- in a scheme for a severance pay that was based on years of service in the year of service and the year of service for so many months of service and the month of service was a month in which so many days of service that it could work out where a person that only had 10 or 12 days of service and it would still be counted as a year of service.

Now, the Court rejected arguments in that case that that was very untypical sort of thing that a man would be fired if he was working that little and the Court concentrated on the proposition that that the scheme itself shows that that's not a one-to-one or not a close ratio at all between the amount of vacation and the hours worked.

Now, I think the facts of this case and as their worksheets in the appendix that will show this would show that the 25 weeks was nowhere near a typical work year that the 47 weeks or 50 weeks was much closer to it but we don't suggest that the Court should get into that in every case.

One of the problems in this kind of case that the total amount of money that you're talking about is usually small in any individual case and that the companies need some fairly certain way of determining whether a vacation benefit is old or not and so do the employees and it's better to seek a solution that can be easily applied.

Chief Justice Warren E. Burger: Mr. Sachse, while you're pausing for a moment, let me see perhaps this is oversimplification. Are you trying to attack the 82 weeks of military service on to the bar -- the gray marked bar that preceded it or you just kind of attack your two gray marked bars together for purposes of vacation?

Mr. Harry R. Sachse: Let me put it a different way.

This way, I understand it.

What I'm trying to do is say that when the man returns that in that year, he can count his military service for vacation entitlement, so that --

Chief Justice Warren E. Burger: Even though he got a vacation from the army?

Mr. Harry R. Sachse: Even though he got a vacation from the army that the military service is a separate thing that the purpose of the Act is to: number one, encourage people to go into the military.

Number two, to prevent people who go into the military from being hurt when they come back and --

Chief Justice Warren E. Burger: Well then, if that's the theory then you ought to be able to get the differential and pay too.

That's your basic theory.

Mr. Harry R. Sachse: No, what we -- no, our theory is that you can ignore what happened in the military, that the question is when this man came back when you start figuring his first vacation after he's back, you have the right to count his time in the military just as if it had been --

Justice Thurgood Marshall: Well, then but you're entitled to the first month off?

Mr. Harry R. Sachse: Sir?

Justice Thurgood Marshall: Will be entitled to the first month off a vacation?

Mr. Harry R. Sachse: Well, --

Justice Thurgood Marshall: You'll see that's -- you got to get out of that.

Mr. Harry R. Sachse: That's a problem in this that bothers me and that is when a man comes back with only a week or two towards the end of the year and we've debated a bit about how this should be solved.

Should you do a pro rata in that year and then let it be the first full year.

The thing that shouldn't be allowed to happen is he's been in the military, he's come back, he started the year January 1st as everybody else, he shouldn't have to work through that whole year and not get a vacation, okay.

Chief Justice Warren E. Burger: Well then going back to my question, your answer to my question I should think or simply would be, yes you are trying to attack the number of days of military service onto the number of days of employment that preceded this number of days.

Mr. Harry R. Sachse: I think that's correct.

I think fair answer to that question is yes.

Justice William J. Brennan: Will he get vacation for both 1967 and 1968?

Mr. Harry R. Sachse: He would get -- I prefer that speaking of the year in which he gets it because there's some confusion that he would get a vacation benefit in the year 1968.

Justice William J. Brennan: That's right.

Of how much -- what -- if he had been in continuous employment, he would have had in 1967 a vacation of how long, a week, two weeks?

Mr. Harry R. Sachse: Seven days, I believe it is.

Justice William J. Brennan: Seven days?

And in 1968, he would have get a --

Mr. Harry R. Sachse: He would get a seven-day vacation.

Justice William J. Brennan: Alright.

So, are you suggesting that he gets 14 days vacation in the remaining 13 weeks of 1968?

Mr. Harry R. Sachse: No, no, no.

I'm only saying that in the year he comes back --

Justice William J. Brennan: Well, is it not the year he came back?

Mr. Harry R. Sachse: He came back in 1968, October 7, 1968.

He came back October 7, 1968.

Justice William J. Brennan: Alright, now, what -- how much vacation does he get?

The vacation he didn't have in 1967 as well as the vacation he didn't have in 1968?

Mr. Harry R. Sachse: No, we'd only given the same vacation that he would've gotten in 1968 if he'd been working steady.

Justice William J. Brennan: And we forget 1967.

Mr. Harry R. Sachse: Forget 1967.

In 1967 he got taken --

Justice William H. Rehnquist: He got plenty time to leave.

Mr. Harry R. Sachse: That's right.

It was taken care of when he went in.

Justice William J. Brennan: Oh, I see.

Mr. Harry R. Sachse: Now, we have an alternative position which is that this --

Justice William H. Rehnquist: I take it's drawn by Congress, aren't you that --

Mr. Harry R. Sachse: Well, when, I say we, what I mean is I really have to mean to two things.

One is that the Department of Justice represents the individual Earl Foster, out there right now and we argue the case for him.

When I say we, we also we also mean the Department of Labor and the Justice Department support the position that we have taken in this -- in this brief.

I haven't gotten to talk much about the cases but there are two cases it seem to me you are in control of this language to the statute and two cases.

Language to the statute is that a veteran should be restored in such manner as to give him such status in his employment as he would he have enjoyed if he had continued in such employment continuously from the time of his entering the armed forces until the time of his restoration to such employment.

That was an Act in 1948 that really codifying this Court's decision, perhaps codifying and expanding this Court's decision in the case called Fishgold but the Court has had two cases on questions similar to this.

The big issue for a while prior to the Accardi case among people who dealt with this problem was whether vacation benefits severance pay pensions counted as questions of seniority and status of whether they on the other hand counted as insurance or other benefits which would be governed by the contract provisions for people on leaves of absence.

In Accardi, the Court for -- the Court defined the insurance or other benefits clause and it said that that was something in addition to the seniority clause that it didn't keep severance pay from being seniority and that it applied to benefits the serviceman might get while he's in the service.

In other words, that if an employee on leave of absence could still go to the railroad hospital or his wife could still go to the railroad hospital, the insurance and other benefits clause would assure that his wife could still go there even if he was in the service and the Court very specifically ruled on or discussed that the insurance and other benefit clause.

Then prior to the Accardi decision, in the Magma Copper case that this situation, employees under -- who had been denied both vacation pay and holiday pay.

In the vacation pay, they were denied it because -- although they had satisfied their work requirement of 75% of the available shifts, they were not present at the plant on the last day of the year because they were in the military.

As to holiday pays, when they come back from the military, just think about this when they'd come back from the military, this were then the Vietnam War.

They were denied holiday pay for Fourth of July and for Independence Day though everyone else got it because they hadn't satisfied a three-month requirement.

They had not been on the payroll three months when they came back.

Now, the Ninth Circuit upheld that and said the company could do that.

It could apply its contract.

Then the Accardi case was decided and the Ninth Circuit had the case back again on rehearing.

They reaffirmed their prior decision with one judge dissenting, saying, “We can't do this.

This is not what other benefits means.

This is part of seniority see the Accardi case.”

The veterans petitioned this Court and the Court granted writ of certiorari and the Court summarily reversed the Ninth Circuit with an opinion that just said reversed, see Accardi with the citation.

There was a dissent in that case.

Justice Stewart -- Justice Douglas wrote the dissent.

Justice Stewart and Justice Harlan joined in the dissent and in the dissent, they would have made a distinction between the amount of vacation or holiday pay that a person could get and the entitlement to it and would have said that the question of the entitlement to it is not a question of seniority and is something that would have to be governed by the contract but that's the position that the Court did not take and that's the subversive opinion said in an earlier case and as a result of that case too, we think it's even clearer that in this situation that -- that the entitlement should not be governed by the contract but should be a question of seniority that the serviceman has a right to.

Now, I want to answer one question raised by the respondents in their brief.

They say that as a matter of sort of legal principle that a vacation -- that vacation pay is a part of wages paid, of salary and that therefore it has to be something other than seniority, that you can't give a man a salary for the time that he didn't worked and they cite a number of cases and arbitration decisions but those cases make a different point as we read and that is in the 1930's, the Court sometime said that vacation is just a gratuity and that the management can do it at once with it and in a number of cases, arbitrators in courts held that vacations are not just questions of gratuity that there are things bargained for and in that sense, they say, that there are function of wages but there certainly was no attempt in those cases to answer the kinds of questions that are set forth here.

And --

Chief Justice Warren E. Burger: The form -- those holdings held that that's the form of deferred compensation, isn't it?

Mr. Harry R. Sachse: That's correct.

Chief Justice Warren E. Burger: So, it's related directly to the wages he received at the time.

Mr. Harry R. Sachse: It's related to the wages, it's related to his seniority in the plant.

It clearly is not just for --

Chief Justice Warren E. Burger: It's the length -- the length of service, the length of service plus the wages.

Mr. Harry R. Sachse: That's right.

It really -- the reason that people have had trouble with the vacation thing is analytically, it's somewhere in between a payment and a seniority right because it's not just wages, it's not tied that closely to it.

It's for reasons other than wages too.

It keeps employee happy and able to work.

It's an in between sort of thing and the Court has ruled on it in the -- in Magma Copper to say that it is a function of seniority or I take that decision as ruling that way, that it's protected by the Act.

There are -- I want to give you another citation which is United States versus Embassy Restaurant, 359 U.S. 29 which holds that payments into a union fund though analytically part of wages are not considered part of wages in Bankruptcy Act.

It simply illustrates the point that you have to look at the particular act in particular context and there's no flat rule one way or the other, other than what the statute says in the cases this Court has decided ruling on.

Justice William H. Rehnquist: What the Government's position, Mr. Sachse, in the case of the contract that calls for a one day vacation for each month worked the preceding year?

Mr. Harry R. Sachse: The -- our position is that if it's clear in the contract -- one day vacation for each month worked.

Justice William H. Rehnquist: Each month, each two weeks, whatever you want to call it.

Mr. Harry R. Sachse: Well, if it's tied close enough to a precise amount of work done, we then say that it's a pure function of wages and if the contract is clear that the returning veteran does not have a right to it and the broadest example of that is a pooled vacation benefit where money is actually set aside in a pool for vacation.

We don't claim with that kind of program that a person would have this right.

But what we're talking about is veteran's legitimate expectation when he returns to work.

I don't think he would expect it in that kind of program but he would here.

Chief Justice Warren E. Burger: But isn't -- isn't his legitimate expectation that he will not lose the benefit of that period from the time he began to work there until the time he went into the service?

If he gets his place in line, as of the date when he left, why isn't he restored fully than under both the act and the contract?

Mr. Harry R. Sachse: Well, he's being made a new man again, a rookie again.

He's having to go through a year-and-a-half again before he gets his vacation.

Chief Justice Warren E. Burger: Well that --

Mr. Harry R. Sachse: And the company's has written at that way but we don't think that squares with seniority and status provisions of the Act and particularly with this Court's prior cases on it.

This Court, in times perhaps when veterans were given a little more deference than they have been from Vietnam War has interpreted this Act, so as to really protect veterans and we're trying to support those interpretations.

Chief Justice Warren E. Burger: With no credit to the employer for whatever number of days vacation were given in the military service?

Mr. Harry R. Sachse: No.

No, Your Honor.

Chief Justice Warren E. Burger: On what theory do you just disregard that theory?

Mr. Harry R. Sachse: That vacation was part of his military service.

He may not have wanted to be in Vietnam or he may not have been able to go anywhere but God knows where on that vacation.

Now, it could have been wonderful.

It might have been two weeks in Paris, you know, but we just --

Chief Justice Warren E. Burger: Well then, it might have been a terminal leave pay as Mr. Justice Stewart suggested that the last -- and that's common with military personnel, is it not, that they are discharged as of March 30th that they leave active duty on --

Mr. Harry R. Sachse: There are a lot of vagaries in the military about how these things worked, we're trying to keep out that you know you can be discharged and have to go across the country and think that's wonderful or you can be discharged and be in a terrible situation.

It can be from delight to horror and --

Chief Justice Warren E. Burger: But you want to treat them all the same?

Mr. Harry R. Sachse: We want to apply the principle at that time in the military counts as time in the plant and figuring their entitlement to vacation when they come back but just when they come back.

Thank you.

Chief Justice Warren E. Burger: Mr. Shoop.

Argument of Robert H. Shoop, Jr.

Mr. Robert H. Shoop, Jr.: Mr. Chief Justice, may it please the Court.

Initially, let me set forth to the Court the position of the Government at least when they tried the case in the District Court where I was there.

The Government is seeking vacation for the year 1967 and 1968 under this chart that they have set forth.

They are seeking 64 hours of vacation in 1967 and 72 hours of vacation in 1968 for Mr. Foster and as I have set forth in my brief, --

Justice William H. Rehnquist: They're not still seeking that much, are they?

Mr. Robert H. Shoop, Jr.: The complaint in the initial case sought that much.

I think they misunderstand vacation benefits as I pointed out on page 4 of my brief, Mr. Justice.

A person earns their vacation in one year and they take it in their next year.

Mr. Foster earned his vacation in 1966.

He received it in March of 1967 when he went into the military service.

He earns his vacation in 1969 and on January 1st of 1970, he's entitled to every cent of vacation that he would have earned in that last year.

That is 69 (Voice Overlap) vacation.

You take in 60.

Chief Justice Warren E. Burger: Last year, you mean precisely what, what period?

You just used the phrase last year.

Mr. Robert H. Shoop, Jr.: Okay, between the year of 1966, between January 1st of 1966 and December 31st of 1966, Mr. Foster earned one weeks vacation, 56 hours.

On January 1st of 1968, he was entitled to leave the employer Dravo and do whatever was necessary and he would have gotten that vacation.

He could have gone on vacation that week as a lot of people do in the first of week of January or he could've waited later on in the year.

Now, in the year of 1969, when he returned form the military service, he works that year and he earns his vacation which he is entitled to in full on January 1,1970.

He again can take the pay and leave the employment of Dravo or he can take his vacation or he can take it some time later on.

The -- and provided during that year of 1969 and provided during that year of 1966, he works 26 work weeks, I mean 25 work weeks, excuse me.

He has to earn, have an earnings in those years before he can get the vacation the next year.

You earn it in 1967, take it in 1968, earn it in '199 and take it in 1970.

Justice William H. Rehnquist: Of course, one thing the Government contends as I understand it is that this is less like an earned vacation than it might be since the man who works 25 weeks and the man who works 50 weeks gets exactly the same amount of vacation.

Mr. Robert H. Shoop, Jr.: No.

Justice William H. Rehnquist: That's not right?

Mr. Robert H. Shoop, Jr.: That is not correct.

The man who works 25 weeks and the man who work 50 weeks are both entitled to a vacation.

That's the difference.

The man who works -- has worked for Dravo for 20 years is entitled to five weeks vacation under this contract in issue.

The man who has worked for Dravo for five years is entitled to a different length of vacation.

Justice William H. Rehnquist: Okay, but how about two guys of each work for Dravo five years.

One who works 25 weeks and one who works 50 weeks, the preceding?

Mr. Robert H. Shoop, Jr.: They both would get the same vacation the next year.

Now, Dravo however expects every employee to week regularly during the course of the year.

We expect everybody to normally attend work whose on the payroll 50, 49 weeks.

This provision is negotiated into a collective bargaining agreement by a union to protect people who for some reason may be ill during the course of the year.

They say, “Gee!

Look, here's a guy who's been ill for a month, why shouldn't he get a vacation?

Here's a man who may have left for a couple of months for a leave of absence because his wife is ill, why shouldn't he get a vacation in the next year?”

So therefore, the union comes to the company and says, “Let's make a man earn his vacation if he works 25 weeks.”

The company expects anybody who is regularly on the payroll except for leaves of absence, except for illness to work 50 weeks, 49 weeks, what we all work during the course of the year and not examples like they try and bring out in these cases if the man could only work 25 hours or something like that.

He'd be fired.

Justice Potter Stewart: Well, is that true Mr. Shoop in your plants of business, it's not seasonal, is it?

Mr. Robert H. Shoop, Jr.: No sir.

Justice Potter Stewart: No.

Mr. Robert H. Shoop, Jr.: Dravo is a shipbuilding corporation in Pittsburgh, Pennsylvania and business is pretty good, right.

Justice Potter Stewart: And it's not a seasonal business.

Mr. Robert H. Shoop, Jr.: No, sir.

Justice Potter Stewart: Could have been.

Mr. Robert H. Shoop, Jr.: Now, to answer some other questions that were raised in part of my argument, the question here is more than the $377.92 involved which are the vacation entitlements in 1967 and the vacation entitlements in 1968 which by the way Your Honors, in 1967, he became entitled to another days vacation.

He would -- his vacation entitlement in 1967 is 64 hours.

His vacation entitlement in 1968 is 72 hours.

We recognized that when he got his vacation in 1970 and we gave him credit for his military service as far as the length of his vacation goes.

That is not at issue here and we did recognize that.

We're talking about the entitlement to a vacation.

Now, let me point out the economic significance of finding the benefit as the Government would argue here.

We are dealing with a statute that has no statute limitation.

We're dealing with a statute that is only detriment to filing suit is the doctrine of laches.

At least in Pennsylvania and as recognized by the Third Circuit, laches doesn't come into effect into a man who has unknown right.

This statute has not been significantly amended since its enactment in 1940.

So theoretically, you'll find for the Government every employee at Dravo who has been in the military service can file a suit to recover back vacation pay.

Chief Justice Warren E. Burger: Whether he returned or not return?

Mr. Robert H. Shoop, Jr.: Well, if he returned.

Right.

He would have to return.

Moreover, the --

Justice Potter Stewart: And that return within in a certain --

Mr. Robert H. Shoop, Jr.: 90 days, he has to return --

Justice Potter Stewart: Within 90 days.

Mr. Robert H. Shoop, Jr.: -- within 90 days after his discharge from the selective service to be entitled to any reemployment benefit.

Justice Potter Stewart: And if there's a -- if he's been in the military longer than a certain number of years, it's not applicable at all, is it?

Mr. Robert H. Shoop, Jr.: Yes, let me point that out.

That was my next question and the Act does because a public policy to encourage enlistments in the military service also protect people who are enlisted, therefore, your question as to whether this is moot, although I would contend it isn't anyway of the laches argument.

If people who do enlist are protected, they are protected, Mr. Justice Stewart for a period of four years.

Justice Potter Stewart: That is if they've --

Mr. Robert H. Shoop, Jr.: If they enlist in the military service, they can stay in the military service for four years.

Justice Potter Stewart: For up to four years.

Mr. Robert H. Shoop, Jr.: A fifth year, if they are requested by the Government to stay an extra year and this came up during the Cuban Missile Crisis is when they asked some people to stay in the service and they amended that statute of that time to increase up to five years upon request of the service.

Now, let me give you an example of under the Government's theory what can happen.

An employee from Dravo can enlist in the military service on January 1st of 1975.

He can continue in the military service.

Justice William J. Brennan: Well what's the enlistment hitch now under the volunteer argument, three years or?

Mr. Robert H. Shoop, Jr.: I think it's still three years.

It was the last time I heard but he can continue in the military service until December, in the middle of December of 1979.

He can then, in 90 days, sometime in March of 1975, come back to work for Dravo.

According to the Government, we could owe him anywhere between eight and 20 weeks vacation pay, the day he came back to work for us because he has met the requirements of the re-employment statute.

I submit, Your Honors, the next day, he could quit and go to work for somebody else and there's nothing we could do about it.

Moreover, you take their argument one other point, the lower courts accepting the decision like this could say hospitalization benefits, life insurance, how about vacation bonuses.

Many companies pay a bonus for a vacation and taken at various times of the year.

Is he entitled to this?

According to the Government's theory, I think you can go as far as holding that it would include wages that for some reason maybe argued to appear a prerequisite of seniority.

Chief Justice Warren E. Burger: Now, when you speak of the vacation bonus, you mean that the practice of giving one day and a half for each day if you take it between January 1st and March 1st or something.

Mr. Robert H. Shoop, Jr.: My familiarity is we give him $30.00.

Many companies give $50.00 to take a vacation between January 15th and March 1st.

$40.00 to take a vacation in the next two months and nothing to take it during the summer and then going back up in the fall.

Steel and Aluminum all have these type of bonus arrangements.

Chief Justice Warren E. Burger: Going back to your hypothetical case, is it your position under that the Government's theory would require you to take a man who work for 30 days for Dravo and then went into the service for four years and then came back.

He might have built up this by attacking the military under the 30 days initial period.

(Voice Overlap) He might have a month vacation?

Mr. Robert H. Shoop, Jr.: If the position he'd held in the 30 days was other than temporary and it's no holding that he was a -- that a probationary employee as other than temporary that was decided by the Fourth Circuit in Allen versus Weirton Steel, I believe in quite a number of years ago.

So, probationary employee and other than temporary are not synonymous.

However, if he was a summer employee who came to work for Dravo for the summer and wasn't going to come back in the fall, he entered the military.

He would be what is known as a temporary employee under the term for the Act.

Justice Lewis F. Powell: Mr. Shoop, are you suggesting when you mentioned insurance benefits that if a veteran would die in service, he'd be entitled to participate in the company's group insurance program?

Mr. Robert H. Shoop, Jr.: He certainly wouldn't under any of the plants that I am familiar with but a logical extension of the Government's argue -- argument in this case would appear to me to hold that that's a possibility.

You know, there's no earned, you know.

My understanding of vacation benefits and my understanding of all these other benefits are they are earned benefits.

They are benefits that you earn by working for Dravo.

I think this Court has aptly pointed out that the vacation benefits between the time he left Dravo and between the time he came back were paid for by the Government.

At this time, remark of counsel significantly higher, higher rate of two-and-a-half days per every months of service, he gets 30 days vacation the year, he only gets eight, seven at Dravo.

Justice William H. Rehnquist: Of course, he gets not vacation from anyone in 19 -- between 19 -- in the year 1969.

Mr. Robert H. Shoop, Jr.: In the year 1969, he got no vacation time off but he earned vacation that was taken effective January 1st of 1970, or could've been taken at that time.

Justice William H. Rehnquist: Which is like saying, he earned a vacation sometime in 1970 but he didn't get anything since 1969?

Mr. Robert H. Shoop, Jr.: He did not get any time off or he did not get any pay but he earned a vacation that he takes in 1970 and I think you will find that that's the way vacations are.

You work for a period of time and then you get a vacation.

Justice William H. Rehnquist: Well, sure.

You always figure you're going to put in some rookie time or whatever you want to call it before you qualify but the Government's argument is I'm sure is that he shouldn't have to put it in when he comes to work and then when he first comes back from the service too.

Mr. Robert H. Shoop, Jr.: No sir, Your Honor.

I submit that you have to put in time every year to get a vacation.

On a year sir, you could take a year off and you wouldn't -- you would get vacation.

That isn't true.

Justice William H. Rehnquist: Well, he put in a year -- from January 1, 1968 to January 1, 1969, he put in presumably 39 weeks with the military and 13 weeks with Dravo but he got no vacation the following year.

Mr. Robert H. Shoop, Jr.: That's right.

Also I stated before, this Act was enacted in 1940 and except to codify what was the escalator principle in Fishgold versus Sullivan Drydock, the Act has not significantly been amended.

Chief Justice Warren E. Burger: Let me back up to your statement about the 13 weeks at the end of 1969.

Do I understand you to say that in the first week -- on the first day of January, he was then entitled to a vacation benefits deriving from the 13 weeks plus his prior service?

Mr. Robert H. Shoop, Jr.: No, sir.

To qualify for a vacation in any one year, a regular employee must perform work for Dravo Corporation a period of 25 weeks.

Chief Justice Warren E. Burger: Well then, when -- at what point in 1970 would he get the benefit of the 13 weeks which he worked in 1969?

Mr. Robert H. Shoop, Jr.: He would never get the benefit of working those 13 weeks except for the fact that in length of vacation, it will be recognized that the entire year of 1968 would be -- I believe those 13 weeks were worked in 1968, Your Honor.

That's between 1968 and 1969.

Justice William H. Rehnquist: Didn't the Third Circuit say that that should be remanded to the District Court.

Mr. Robert H. Shoop, Jr.: Yes, sir.

Justice William H. Rehnquist: That particular issue that the Chief Justice inquired about?

Mr. Robert H. Shoop, Jr.: The Government has at this time in their brief that wasn't reached an argument made an argument for a pro rata benefits.

They say, “Well, at least, he's entitled the 13 25ths of a vacation.

That issue was never raised at the trial level.

As I submit in my brief.

If Your Honor would look on page 24 of my brief in the appendix on page 10, what happened was the judge at the trial level, tried to effect the settlement between Dravo and the Government and he suggested this as being an issue maybe we could pro rate the vacation for 1968.

I specifically stated to him on the record at that time that that was not the issue before this Court and he recognized it.

That was not the issue before the District Court at that time, and the judge said, “Yes, I recognize it” but being a non-jury trial he was trying to settle it may have said a number of things in the record.

I don't think he's one of us who believe, we are going to be here or I was going to be here today when we tried this case.

But --

Justice William H. Rehnquist: Well, if we affirm the judgment of the Third Circuit, the case would go back to the District Court and the employee would have a right to litigate at least as matter of contract law, whether he's entitled of pro rata vacation.

Mr. Robert H. Shoop, Jr.: The issue before the District Court would be one, was the matter raised and litigated there?

And two, what is the outcome, or what decision would this Court make based on the law in the contract in issue?

If you affirm the third -- that's exactly what the Third Circuit did, they sent it back to the District Court.

Justice Byron R. White: But if you say, that although the Act doesn't require you to recognize that he's entitled to a vacation, you say that he works all of 1969, then in 1970, he's entitled to a vacation and you say you will -- the length of the vacation pay that he's entitled to, you say, will include the time he was in the military.

Mr. Robert H. Shoop, Jr.: Yes, sir.

Justice Byron R. White: Well, the -- now, do you say the Act requires that?

Mr. Robert H. Shoop, Jr.: I would think so, sir.

Justice Byron R. White: Because you must treat him as having been on the payroll.

Mr. Robert H. Shoop, Jr.: Because no.

Because you treat him as seniority.

He is in his relationship to other employees has five-year seniority.

You look at your contract and you find that people with five-year seniority are entitled to “X” number of weeks vacation.

Justice Byron R. White: Well that's only -- that's only if you work those -- that's only if you've been entitled to vacation during those periods.

Mr. Robert H. Shoop, Jr.: Not necessarily.

I would -- that issue wasn't raised and I wholeheartedly agree with the company's actions in this case of giving the man his benefit in the military service towards the length of his vacation.

Justice Lewis F. Powell: Well, Mr. Shoop, what happens with an employee who does not go into the military service but who in 1967, whatever reason worked only 20 weeks, in 1968, worked only 15 weeks but then he comes to 1969, he works 52 weeks, how do you compute his vacation earned for 1970?

Mr. Robert H. Shoop, Jr.: Okay.

He would receive no vacation benefits for the year 1967, that which he worked less than 25 work week.

He would receive no vacation benefits for the year 1968, that which he worked less than 25 work weeks.

He would receive vacation benefits in 1969 when he worked more than 25 work weeks which would be taken in 1970 and the length of his vacation I think is the question you're getting to would be treated just as if he had been an employee and on the role of the (Voice Overlap)

Justice William J. Brennan: Whether or not he earned any vacation.

Mr. Robert H. Shoop, Jr.: Whether or not he took it in the previous years, I think --

Justice William J. Brennan: Whether or not he earned it.

Mr. Robert H. Shoop, Jr.: Whether or not he earned it, right I think in those cases --

Justice Potter Stewart: So that's pure seniority.

Mr. Robert H. Shoop, Jr.: That's pure seniority.

The length of the vacation is pure seniority.

The entitlement to a vacation of any given year is earned.

You earn your vacation this year to take it next year.

Let me just --

Justice Harry A. Blackmun: Mr. Shoop, on remand, if you prevailed here, on remand, will you also have under consideration a pro rata for 1965?

Mr. Robert H. Shoop, Jr.: Well --

Justice Harry A. Blackmun: Or is that --

Rebuttal of Harry R. Sachse

Mr. Harry R. Sachse: No, 1965 there's no problem.

We have under remand the argument of the nine weeks in 1967.

Justice Harry A. Blackmun: Why not 1965 also?

Rebuttal of Robert H. Shoop, Jr.

Mr. Robert H. Shoop, Jr.: Because 1965, see that's where they missed the -- the Government isn't getting the -- he got his 1965 vacation in 1966.

See, he worked 22 weeks in 1965 and he received 20 hours vacation in 1966.

Justice Harry A. Blackmun: But why was he entitled to it, it was not 25 weeks, or is it just because he began work in that year?

Mr. Robert H. Shoop, Jr.: As Justice Stewart pointed out, the rookies -- and this is -- this is something that's negotiated in a contract to protect an employee who is coming on the payroll new.

Justice Harry A. Blackmun: Okay.

Mr. Robert H. Shoop, Jr.: And he is entitled to some benefits at that period of time as a new employee but he's only entitled to one day.

In this period of time, Mr. Foster in this case is entitled to over two weeks vacation when he returns that's why you wouldn't return as a rookie, you'd want to return as a -- as a veteran, so you can get that length of vacation better than you had before.

Chief Justice Warren E. Burger: In other words, the total length of his service from his first employment date down to 19 -- the beginning of 1970 is used to measure the amount of vacation but not to give him any dollars for the period he was in the military service?

Mr. Robert H. Shoop, Jr.: No sir, you earn your vacation each and every year.

Chief Justice Warren E. Burger: But your answer to my question is yes then, is it?

Mr. Robert H. Shoop, Jr.: Yes.

Justice William J. Brennan: I wonder Mr. Shoop, you said this was within the statute, this is related to seniority yet Section 2 says should be so restored in such manner as to give him such status in his employment as he would have enjoyed if it continued in such employment continuously from the time he was entering the armed forces to a time his restoration of such employment.

Now, the hypothetical I gave you before of the chap who had not gone into service going to be 20 weeks or 15 weeks.

I gather you're giving him the same status in his employment as that probable?

Mr. Robert H. Shoop, Jr.: As that probably do, yes sir.

Justice William J. Brennan: Because at least for purposes of a length of vacation he gets in 1970 that he earns in 1969, he's given credit for his time in service.

Mr. Robert H. Shoop, Jr.: Yes sir, right.

The length of vacation, no problem.

We're giving him all the credit and to point out further that a vacation is an earned benefit under the Dravo contract, I would point out that in Article IV, Section 3 as cited at my brief, a person at Dravo who works considerably more overtime as to say regularly six days a week receives more vacation than the person who doesn't work those hours.

So, there is a relationship between the amount of time worked and the amount of vacation you get and that you get more vacation if you worked longer hours and more overtime.

The two cases that were cited by the Government and relied on, I think, ought to be examined in some detail and the first was Accardi.

What happened in the Accardi decision was the Pennsylvania Railroad attempted to abolish the position of firemen on new diesel tugs back in 1959.

A strike ensued, the firemen went on strike.

The intra-strike was finally settled in 1960 with an agreement that the position of firemen was abolished.

However, they would remain on the payroll, those firemen who had 20 years or more seniority and they remained on the work force.

The other part of the agreement paid severance pay to those employees who had less than 20 years seniority.

The severance pay was paid on a theory of the number of years of compensated service you had with the Pennsylvania Railroad.

The Pennsylvania Railroad being wrong again argued that this was an earned benefit.

This Court correctly saw it wasn't.

It couldn't be an earned benefit because the people who works severed would never ever get the benefit and everybody who was discharged got some benefit.

The only thing they were arguing about was the amount of the benefit and that's exactly like our vacation policy.

The amount is not in question.

It is a prerequisite of seniority and the entire agreement was the severance pay.

There was no full collective bargaining agreement and the Third Circuit in this case reviewed the entire contract and came to the conclusion that vacations at Dravo are an earned benefit.

Eagar versus Magma Copper has also been referred to.

It was a pre curiam decision.

There was a dissent in that case written by Justice Douglas on behalf of you, Justice Stewart and the late Justice Harlan.

In that case though, Eagar had worked the amount of time that was necessary to receive the benefit.

He had worked 75% of the hours in the week before he entered the military service and the year before he entered the military service.

The only thing was he wasn't on the payroll at the end of his first anniversary year and wasn't on the payroll on December 31st of the vacation of earning year.

That's the only difference.

He earned his, here, it has not been earned.

Justice Potter Stewart: Well, but he didn't -- he didn't meet the conditions of the collective bargaining agreement.

Mr. Robert H. Shoop, Jr.: But he met --

Justice Potter Stewart: No question to that.

Mr. Robert H. Shoop, Jr.: -- all the earnings requirements of the collective bargaining agreement.

You take my position that vacations are an earned benefit that they are a payment or earnings deferred to compensation for working at the company.

Eagar is entitled to it and anybody else that Dravo is entitled to it provided they have earned their vacation.

Justice Potter Stewart: Well, you don't have the same agreement that was involved in the Eagar case, in the -- yes, Eagar case.

Mr. Robert H. Shoop, Jr.: No but I got this similar agreement.

In my case, you have to work 25 work weeks, in his, you have to work 75% percent of the work week.

Justice Potter Stewart: Plus be on the payroll at the end of the year.

Mr. Robert H. Shoop, Jr.: I would say, my position on those if we have those in these collective bargaining agreements that those are seniority provisions.

Justice Potter Stewart: Well, it's easy position for you to take now.

Mr. Robert H. Shoop, Jr.: Yes, sir.

Justice Potter Stewart: Since you don't have that in your agreement.

Mr. Robert H. Shoop, Jr.: Yes, sir.

My law school professor, however, told me that a dissent of three justices in the Supreme Court is better than nothing at all and so therefore, I would ask for your consideration to -- [Laughter Attempt] of your dissent in that opinion which goes further by the way than I intend to ask this Court -- than I have asked this Court to go today.

As I stated before, Dravo expects every employer, every employee to perform a work of 50 weeks.

The judges and justices who in their judicial opinions have thoroughly considered the issue of vacation entitlement have all determined that vacation entitlement does not automatically accrue as a result of seniority but are earned benefits as found by this Court, as far back as 1948, Judge Learned Hand in Dwyer v. Crosby cited in my brief held this.

Judge Hufstedler in Austin versus Sears and Roebuck in 1974 held this.

Judge Hill in Kasmeier in the Tenth Circuit held this.

Judge Adams in the Third Circuit held this.

Judge Batten dissenting in Locaynia in the Ninth Circuit held this.

These gentlemen had all reviewed thoroughly the collective bargaining agreements in issue.

The facts of both Accardi and Eagar and found as well as Justice Douglas, Justice Stewart and Justice Harlan that vacation benefits are an earned benefit that you must meet that earnings requirement, in this case of 25 weeks to be entitled in that year or the next year to a vacation.

Thank you.

Chief Justice Warren E. Burger: Thank you gentlemen.

The case is submitted.

Featured:

Hernandez v. Veterans' Administration - Oral Argument

Thu, 23 Aug 2012 18:25:01 +0000

Case:

Hernandez v. Veterans' Administration

Media File:

72-700_19731211-argument.mp3

Related Transcript:

72-700_19731211-argument

Transcript:

Argument of Lawrence L. Curtice

Chief Justice Warren E. Burger: We’ll hear arguments next in Hernandez against Veterans’ Administration, 72-700.

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

Mr. Lawrence L. Curtice: Mr. Chief Justice and may it please the Court.

The issue involved in this case is a jurisdictional one, namely, whether 38 U.S.C. Section 211 (a) bars judicial review of a lawsuit challenging the constitutionality of an Act of Congress concerning veterans’ educational benefits.

In the companion case of Robison versus Johnson, the merits of the claim will be discussed.

The issue here is only whether 38 U.S.C. 211 (a) bars judicial review.

During my 15 minutes, I will discuss the question of the proper statutory construction of 211 (a) and the due process limitations, which we feel are inherent in a contrary construction of 211 (a).

My colleague, Mr. Petranker will discuss the question of whether Congress has a power to sole limit judicial review and the question of the extent to which sovereign immunity is involved in this lawsuit.

The facts are simple and undisputed.

Petitioners here and our conscientious objectors who have performed two years of alternative services as required under Section 456 of 50 U.S.C.

Thereafter, they applied for veterans’ educational benefits with the Veterans’ Administration.

Their claim for benefits was denied under the statute since they did not fall within the definition of those individuals who have served more than 180 days in active duty.

Thereafter, petitioners filed a lawsuit in Federal District Court in California challenging the constitutionality of the Veterans’ Readjustment Benefits Act on the grounds that it was in validation of the First and Fifth Amendments of the Constitution.

Justice Potter Stewart: What’s the jurisdictional basis of the lawsuit?

Mr. Lawrence L. Curtice: Well, there were two main jurisdictional bases, the mandamus 38 U.S.C. Section 1651 and excuse me -- and the $10,000 requirement under 1331, 28 U.S.C. 1361 and 1331.

Justice Potter Stewart: And those are both were cited on the line on the complaint?

Mr. Lawrence L. Curtice: Yes, in both cases.

The District Court --

Justice Potter Stewart: And the relief requested was what?

Mr. Lawrence L. Curtice: The relief requested was declaratory relief, injunctive relief, and affirmative relief, namely, that they received the benefits.

Justice Potter Stewart: A mandamus?

Was a mandamus request?

Mr. Lawrence L. Curtice: Yes.

Yes.

Justice Potter Stewart: Where does the complaint appear here in these papers, can you tell?

Mr. Lawrence L. Curtice: The complaint appears as appendix -- it’s in the record but I am not exactly sure where it is.

Justice Potter Stewart: You don’t know where it is in the papers we have.

Mr. Lawrence L. Curtice: No, I do not.

The District Court dismissed the lawsuit and the Ninth Circuit affirmed on the grounds that 38 U.S.C. Section 211 (a) is a bar to our claim that petitioners are entitled to veterans’ educational benefits.

The first issue that I’d like to address myself to is the proper statutory construction of 211 (a).

We submit that under a proper interpretation of 211 (a), the more difficult constitutional questions involved in a contrary construction of 211 (a) need not be faced.

We submit under the plain meaning of the statute that this case should not be barred by 211 (a).

The statute provides that the decisions of the Administrator, on any question of law or fact, under any law administered by the Veterans’ Administration, shall be final and the courts shall have no power to review any such decision.

By the terms of the language of that statute, this lawsuit is not barred for we are not seeking review of a decision of the Veterans’ Administration.

The Veterans’ Administration has refused to consider petitioner’s constitutional claims, and we contend rightfully so that they don’t have the power to consider our challenge to the constitutionality of the Act which they administer.

Furthermore, under the language of the statute, we are not seeking review of any question of the law administered by the Veterans’ Administration.

We are instead contending that the statute itself is unconstitutional.

So we’re not seeking review on any question of law by the Veterans’ Administration.

The statutory history of Section 211 (a) and particularly the 1970 Amendment support our conclusion.

The Government suggest that 211 (a), the 1970 Amendment of 211 (a) was meant to cut out judicial review even in this type of case where we’re challenging the constitutionality of an Act of Congress.

It’s apparent from the legislative history that the purpose of the 1970 Amendment was merely to overrule certain decisions of the District -- the Circuit Court in the District of Columbia.

Concerning questions involving the termination of benefits, the DC Circuit had held that 211 (a) was not a bar to cases involving determination of benefits in contrast to those cases involving the application for benefits, and we submit that the 1970 Amendment was only meant to overrule this type of case.

There is nothing at all in the legislative history of the 1970 Amendment or the earlier enactments of the predecessors of 211 (a) that indicate that Congress wish to cutoff judicial review in this type of case, namely, where we’re seeking judicial review of the constitutionality of a statute, and --

Justice Thurgood Marshall: The statute is that you claim as unconstitutional?

Mr. Lawrence L. Curtice: The Veterans’ Readjustment Benefits Act.

Justice Thurgood Marshall: Which says what?

Mr. Lawrence L. Curtice: Which says, that veterans who served more than 180 days on active duty are entitled to veterans’ educational benefits.

Justice Thurgood Marshall: And you say that’s unconstitutional?

Mr. Lawrence L. Curtice: Yes?

Justice Thurgood Marshall: Why?

Mr. Lawrence L. Curtice: Well, I would like to defer that to the Robison case.

We’re going to strictly limit ourselves to the jurisdictional question.

Justice William H. Rehnquist: Mr. Curtice, so suppose that your client had sought a benefit and the Veterans’ Administration was denied by the Administrator and then sought to challenge it in the District Court not on the grounds of unconstitutionality of the statute, but on the grounds that the Administrator had unconstitutionally discriminated against him as compared with other similarly situated applicants.

Do you think this 211 would permit that sort of review or not?

Mr. Lawrence L. Curtice: Well, previous cases have held that it would not permit such a review and we do not have that question before us at this time.

Ours is a much narrower issue where there has been absolutely no review by any court or no decision by the Administrator at all on the questions presented.

Ours is a case in which the Administrator has refused to consider the constitutional challenges to the statute.

We’re not seeking review of a factual legal question which the Veterans’ Administration has already resolved.

This construction of the statute would also be in line with this Court’s theory that judicial review of statutes should not be cutoff unless it’s within the plain meaning of the statute and the legislative history supports that interpretation, and we submit there isn’t such here.

Also, this interpretation of the statute would save this Court the necessity of facing the constitutional issues involved in the case which we submit are gray.

Now, I would like to get into the due process limitations which are inherent in the contrary construction.

If 211 (a) were construed not to apply to case like this, we submit that petitioners’ due process rights have been violated.

Namely, they have been denied an opportunity for a meaningful hearing appropriate to the nature of their claim.

They have had absolutely no hearing whatsoever on their constitutional claim which is the one that’s appropriate to the nature of their claim in this case.

And we submit that the protections of the Due Process Clause come within in the meaning of the Board of Regents v. Roth, because there has been a legitimate -- petitioners do have a legitimate claim of entitlement to benefits.

Chief Justice Warren E. Burger: You mean they had a reasonable expectation? Is that the point you’re drawing on the Roth case?

Mr. Lawrence L. Curtice: Well -- I am not, no not the reasonable expectation because under the statute, it’s clear that they didn’t have a reasonable expectation.

But we submit that the statute provides the basis for the claim and the constitution provides a legitimate claim of entitlement to the benefits.

For example, if the statute had said that no blacks were to receive benefits under the statute, we submit that Roth would cover the situation even though that it’s quite clear that they have no reasonable expectation of receiving it.

In other words, the constitution provides a source of legitimate claim of entitlement to these benefits.

Justice William H. Rehnquist: But that’s a substantive constitutional right you’re talking about there, isn’t it?

Mr. Lawrence L. Curtice: Yes.

Justice William H. Rehnquist: The right to be free from denial of equal protection.

I think the Government argues here and to me with some persuasiveness that Mr. Justice Stewart’s opinions in Perry and Sindermann are basically procedural due process types of situations, where you don’t have any substantive claim.

But there, you have to show some sort of property that’s created by a statute but you’re not attacking really.

Mr. Lawrence L. Curtice: I think that the Roth decision should be extended to the extent that covers claims for property interest which but for the constitutional, -- beyond constitutional statute, they would be entitled to receive those benefits.

I would say that if again, if the statute have provided that no -- all veterans are entitled to receive benefits except for black veterans they would have a right -- a due process right, a property right that they should have a meaningful opportunity to present their claim of entitlement to these benefits.

Justice Potter Stewart: But where, in your submission is there a right to a hearing, in the agency?

Mr. Lawrence L. Curtice: No, in this type of case, the only place where there’d be such a right when you’re challenging the constitutionality would be in federal courts.

Justice Potter Stewart: That’s a -- in other words, your argument would cover this situation.

I could go into federal court and attack the constitutionality -- I could go into a federal court and attack the constitutionality of the program for aid to mothers with dependent children saying that while I’m not a mother, and that I don’t have dependent children, I am a father whose children are independent and nonetheless the statute is unconstitutional as to me and there’s some ground of independent jurisdiction based on this kind of a claim that I am entitled to a hearing on that claim?

Mr. Lawrence L. Curtice: We still have standing to sue because we’re seeking the benefits in question.

Justice Potter Stewart: Well, I’d be seeking the benefits that are given to mothers with dependent children on the proposition that the statute is unconstitutional because it doesn’t give it to me who is a father with independent children?

Mr. Lawrence L. Curtice: Well that would get into the question of a legitimate claim of entitlement.

Justice Potter Stewart: Well, that’s -- I would have a good faith claim.

It might be quite wrong but I would be believed in it by hypothesis.

Mr. Lawrence L. Curtice: I would submit that that is distinguishable.

Justice Potter Stewart: How and why?

Mr. Lawrence L. Curtice: In our case, we have a legitimate claim of entitlement.

That’s our contention and --

Justice Potter Stewart: Well, it should be contention too in my lawsuit.

Mr. Lawrence L. Curtice: Well, I would say then that it would come within that.

But it’s a case that would be --

Justice Potter Stewart: That the constitution itself confers jurisdiction upon a District Court and compels the District Court to give me a hearing on that question, is that it?

Mr. Lawrence L. Curtice: No, not the constitution.

Justice Potter Stewart: Well, Roth was a constitutional decision, wasn’t it and you are relying on Roth.

Mr. Lawrence L. Curtice: I’m relying upon Roth but --

Justice Potter Stewart: Not Roth against the United States, but Roth against the --

Mr. Lawrence L. Curtice: I’m relying upon the statute itself.

I’m relying upon the Veterans’ Readjustment Benefits Act.

Justice Potter Stewart: Well, I’d be relying on the legislation that gives aid to mothers with dependent children.

Mr. Lawrence L. Curtice: Then under the writ of mandamus statute, we’re submitting that we are entitled to make the claim for benefits on the grounds that the statute is unconstitutional.

Justice Potter Stewart: Of course anybody is entitled to make a claim for anything but the question is whether or not there is a duty of the federal court to grant you a hearing on this claim, as against legislation of the Congress that seems on its face at least to say that the decisions of the Veterans’ Administration are unreviewable in these cases.

Mr. Lawrence L. Curtice: Well, we submit in the case, for example, where again the example of the statute, which says that no black was to receive benefits that that would come under the Roth rational.

In other words, you’d be entitled to a hearing to challenge the statute that it was unconstitutional.

Chief Justice Warren E. Burger: Suppose counsel, that a young man had been in the Peace Corps and he made the same claim for educational benefits that your client is making here, and the Veterans’ Administration presumably would deny that claim administratively, wouldn’t they?

Mr. Lawrence L. Curtice: Yes.

Chief Justice Warren E. Burger: Because he’s not a veteran.

Mr. Lawrence L. Curtice: Yes.

Chief Justice Warren E. Burger: Now, isn’t the Veterans’ Administration administratively saying that they have denied this claim for substantially the same reason, that he is not a veteran?

Mr. Lawrence L. Curtice: They have said that but we submit --

Chief Justice Warren E. Burger: Well but in that sense, procedurally, and set aside the substantive claim, procedurally, he is in the same posture as a Peace Corps -- a former Peace Corps man who wanted veterans’ benefit, isn’t he?

Mr. Lawrence L. Curtice: Yes.

I will yield to Mr. Petranker.

Chief Justice Warren E. Burger: Fine.

Justice Thurgood Marshall: Well maybe, one question here, in your record, I find the complaint from some Peter Miller and Gary Lehn.

Mr. Lawrence L. Curtice: Yes.

Justice Thurgood Marshall: What’s that done in this record?

Mr. Lawrence L. Curtice: There are two cases that were consolidated.

I brought one action and Mr. Petranker brought another and they were consolidated for purposes of appeal to the Ninth Circuit.

Justice William H. Rehnquist: Well, isn’t -- Mr. Curtice, isn’t your argument basically a kind of independent of your Roth contention that --

Mr. Lawrence L. Curtice: Yes.

Justice William H. Rehnquist: -- 1331 confers federal-question jurisdiction, you alleged $10,000 in controversy, you alleged a substantive constitutional claim and that the statute in question deprived your client’s of the equal protection component of their Fifth Amendment due process?

Mr. Lawrence L. Curtice: That’s correct.

Justice William H. Rehnquist: And therefore, the federal court has jurisdiction of the 1331 to at least hear your claim, quite apart from any Roth?

Mr. Lawrence L. Curtice: That’s right.

We’re saying -- we’re also saying that the statute as construed does not apply to a case like this, 211 (a); on its face, it does not apply.

Chief Justice Warren E. Burger: That would be the same claim again going back to the Peace Corps case.

Mr. Lawrence L. Curtice: Yes, it would.

Chief Justice Warren E. Burger: The Peace Corps, former Peace Corps man said this is denial of equal protection or otherwise raise a constitutional question.

You say, he has a right to have a Federal Court decide that constitutional question narrowly.

Mr. Lawrence L. Curtice: Yes.

Justice Potter Stewart: And you claim -- excuse me, that this is the way I understand it.

You say the statute, as properly construed, doesn’t apply this kind of a case.

Mr. Lawrence L. Curtice: That’s right.

It does not --

Justice Potter Stewart: But that if you did construe the statute this way, it would deny you some sort of a constitutional right to a hearing?

Mr. Lawrence L. Curtice: Right and Mr. Petranker will go into other constitutional problems.

Chief Justice Warren E. Burger: Mr. Petranker, we have detained your colleague a little longer and we will enlarge your time by three minutes to compensate for that.

Argument of Jack R. Petranker

Mr. Jack R. Petranker: Thank you, Your Honor. Mr. Chief Justice, and may it please the Court.

At the outset, I would like to turn to a question which Mr. Justice Stewart raised.

I think that Mr. Curtice correctly answered that question but I sense that there may be some confusion left in the minds of the Court.

Mr. Justice Stewart raised the question whether an individual could come into Court and claim a right to a hearing on his claim that he was entitled to benefits under the aid to dependent Children’s Act, even though he was not a mother and does not have dependent children.

I think the distinction between that case and this one is that there would be an independent basis there for denying jurisdiction and that is simply that his claim would be frivolous, whether or not it was brought in good faith.

I think that once the terms of the statute were taken into account and the purposes of the statute, that there simply would be no valid constitutional claim.

In this case, our position is that once the statute is properly considered in light of its purposes, there is a substantial constitutional claim that conscientious objectors who perform alternative service like persons who are in the Armed Forces are entitled to those benefits.

Chief Justice Warren E. Burger: And you say that any time you allege a constitutional claim, the court -- the Federal Court must hear it unless it’s determined that’s insubstantial.

The Court might decide that it’s an insubstantial frivolous claim, not this particular one, but a claim and then not here but otherwise if the constitutional issue is raised, you say it, must be heard.

Mr. Jack R. Petranker: That’s correct Your Honor.

We think that’s fundamental.

Justice Potter Stewart: And was your complaint also grounded on 28 United States Code Section 1331?

Mr. Jack R. Petranker: Yes, 1331.

Also, Section 1361 and in addition in my complaint we raised an additional jurisdictional ground 5 U.S.C. Section 701 and the following sections, which will make the --

Justice Potter Stewart: What Section, declaratory judgment?

Mr. Jack R. Petranker: No, the Administrative Procedure Act, Your Honor, which specifies that a person aggrieved by agency action has the right to go into Federal Court to seek relief.

Justice Potter Stewart: To review again?

Mr. Jack R. Petranker: Yes.

Justice William H. Rehnquist: But doesn’t the Administrative Procedure Act exclude the case where review is precluded by statute?

Justice Potter Stewart: By its term.

Mr. Jack R. Petranker: That’s correct.

Our contention is that since Section 211 (a) doesn’t apply here, the Administrative Procedure Act does.

Justice Potter Stewart: And on what basis did you under 1331 allege an amount of controversy of more than $10,000 excluding interest and cost?

Mr. Jack R. Petranker: Essentially, the value of an education to the individual plaintiffs involved, the benefits that they are seeking would enable them to obtain a college education or higher education, and without those benefits, they might very well not be able to commence or complete a college education and over the course of their lifetimes that certainly would result in an economic deprivation to them in excess of $10,000.

That was the basis of our allegation.

Justice Potter Stewart: You were in the Hernandez case?

Mr. Jack R. Petranker: Yes, that’s right.

Justice Potter Stewart: Representing Mr. Hernandez, and purportedly all those similarly situated?

Mr. Jack R. Petranker: Mr. Hernandez and Thomas Wolf were the two named plaintiffs, and in addition, it was a class action, yes.

Mr. Curtice had already addressed himself to the due process issues involved in this case.

In addition, I’d simply like to point out as the Court already has I believe what the other constitutional problems are in the Government’s position that even though petitioners have raised purely a constitutional claim, a substantive constitutional claim, that nonetheless, they can be denied relief or review of the constitutionality of an Act of Congress in the federal courts, or for that matter in any court.

Essentially, that proposition, of course, runs afoul of the rule recognized in countless decisions of this Court as fundamental to this form of government and that is that the courts must always be open to hear claims that the constitution has been violated by Congress.

Justice Byron R. White: You say, do you think that’s true if the claim was less than $10,000?

Mr. Jack R. Petranker: If there were no other forum, judicial forum, in which that claim could be heard, then I think essentially the same problem would be raised here, yes.

Justice Byron R. White: But you wouldn’t say that it will have to be raisable in the federal court?

Mr. Jack R. Petranker: No, Your Honor.

But under the terms of Section 211 --

Justice Byron R. White: Well, we have got here the Federal Court.

Mr. Jack R. Petranker: But under the terms of Section 211 (a), Congress has apparently sought the cutoff review in every Court, Your Honor.

The statute provides that the decisions of the Administrator shall be final and that would appear to cover state courts as well.

And in addition, --

Justice William J. Brennan: I know, but a region or any court of the United States.

Mr. Jack R. Petranker: Well, that term is ambiguous.

Our position is that there’s really no basis for Congress to decide that the federal courts cannot review decisions by the Veterans’ Administration but state courts can.

That would run contrary to the normal presumption that review of federal agencies should be in the federal courts.

Justice William H. Rehnquist: I suppose that the Administrator were sued in state court he could remove to federal court, couldn’t he, under the removal statute?

Mr. Jack R. Petranker: There might be a problem there, Your Honor, and that the removal statute would seem to conflict with what the Government says Section 211 (a) is since they contend.

Justice Byron R. White: It wouldn’t be removal if federal court didn’t have jurisdiction in the first place?

Mr. Jack R. Petranker: That’s correct Your Honor.

So that there might be a problem there and that’s another reason that it wouldn’t seem to make sense to construe Section 211 (a) to allow suit in the state courts.

There’d be still a further problem in that the ultimate reviewer of state court decisions, the Supreme Court, this Court would seem to be barred from consideration of claims coming from the state courts under that interpretation.

Justice Byron R. White: I take it your position is that if 211 said that the United States Courts shall not have jurisdiction of any action challenging the constitutionality of any provision of this statute that you would be arguing that statute is unconstitutional; that provision is unconstitutional itself, barring -- barring those sort of suits in the federal court.

Mr. Jack R. Petranker: If the state courts were left open, I don’t think there’d be a constitutional problem.

Justice Byron R. White: Well, then let’s assume that this present section is construable that way?

Mr. Jack R. Petranker: Then I don’t think -- I suppose I misspoke myself to some extent.

I think there would be a constitutional issue raised.

I don’t think it would be as difficult as the issue posed here, and I think it would certainly go much further towards protecting the rights of petitioners here since they would at least concede.

Justice Byron R. White: Well, one of the issues in the case is, how do you construe this section?

Mr. Jack R. Petranker: Yes.

Justice Byron R. White: What did Congress intend to preclude litigation about in the federal court?

Now, if let’s assume for the moment that we decided that Congress intended to preclude constitutional challenges to this statute, then your case is much different, is it what you say?

Mr. Jack R. Petranker: On the assumption that, that exclusion was intended to apply in federal courts but not in state courts?

Justice Byron R. White: Well, it’s not -- it's hard to say about the state courts, but at least, let’s assume we’re clear about Congress’ intention with respect to the federal courts.

Because after all, that’s what it does say, Courts of the United States.

Mr. Jack R. Petranker: Well, the term, Courts of the United States has been construed in other statutes to include courts of the states, so that that in itself, I don’t think is a sufficient indicator.

But if that construction were possible, I think we would take the position that unless at the same time appeared that there was a definite right to go into state court, that the constitutional requirements of a hearing on the questions of constitutionality would not have been satisfied.

There will also be an additional problem under Article III which we have addressed ourselves to in the briefs as to whether those questions could be entrusted completely to the state courts without the possibility of review in this Court.

But as I say, that’s a much more narrow question and it’s one that would not pose as serious constitutional problems as are involved here.

Now, the Government has relied on two basic arguments for their view that the courts can indeed be deprived of jurisdiction to hear constitutional claims.

First, they point to the fact that Congress can, of course, control the jurisdiction of the federal courts, and I suppose, at least within limits the state courts as well.

But they failed the point to any case which is held that Congress can remove the jurisdiction of the courts to consider constitutional claims where the result would be that no court could consider a constitutional claim.

And that’s what’s involved here and that is the rule that we believe the decisions of this Court and in fact the entire theory of this government requires that some court must be able to hear constitutional claim.

In addition, the Government relies on an application of the sovereign immunity doctrine.

They contend that since in the normal case, Congress must give its consent before the United States can be sued.

But then in this case, since Congress appears to under the Government’s construction have withdrawn its consent to be sued that sovereign immunity doctrine does bar consideration of petitioners’ claims.

But, of course, again, there is a clear exception in the sovereign immunity doctrine when it is alleged that an officer of the United States is acting pursuant to an unconstitutional statute, and that is the situation that we have here, so that again, the position that the Government has taken is unsupported by the decisions of this Court and by the --

Justice Byron R. White: Plaintiff -- do you think there’s any difference between asking for a declaratory judgment and an order to an officer to payoff funds of the United States?

Mr. Jack R. Petranker: Well, in asking for declaratory judgment, the Court does not impose an affirmative duty on Congress or an officer of the United States and it does give Congress the option in this particular Act, for example, if the Court declared that the Veterans’ Readjustment Benefits Act was unconstitutional, Congress would have the option of enacting a new law terminating the law or proceeding to include conscientious objectors within the terms of the Act, so that there is not as direct an interference.

Justice Byron R. White: So again, I ask you, do you think that in terms of sovereign immunity that there is a difference between asking for an order for benefits as distinguished from the declaration that the statute is unconstitutional?

Mr. Jack R. Petranker: I think there is that difference to which I just tried to address myself.

Justice Byron R. White: Well, so do you think if you do ask for an order that actually for an order to pay money that you are barred by sovereign immunity?

Mr. Jack R. Petranker: If that were the only kind of relief that could satisfy the claims of petitioner --

Justice Byron R. White: But the veterans are asking in terms of the complaint in this case, to enter an injunction required to seize refusing to grant plaintiff’s benefits?

Mr. Jack R. Petranker: Well, I believe that the second paragraph of the prayer for relief does also request declaratory relief.

Justice Byron R. White: Is that?

Mr. Jack R. Petranker: But focusing on the first, there was a suggestion in Larson versus Domestic & Foreign Finance Corporation that even in the case involving an allegation of unconstitutionality where affirmative relief would be required in order to effectuate an order of the Court, that sovereign immunity might operate as a bar.

I think the correct interpretation of that suggestion is that in a case where affirmative relief would cause a substantial interference with the function of the Government.

In other words, a variant of the compelling interest test, if you will.

If the Government could come in and show with compelling interest which would lead to the conclusion that it should not be required to enter a -- or to make affirmative relief, then it might be that despite the allegation of unconstitutionality, the Court would not have jurisdiction because of the Sovereign Immunity Doctrine.

But in the case where affirmative relief could be granted without any substantial interference and that was the question -- that is a question, I submit, before the Court, then the Government would not or the Court rather would not be barred by sovereign immunity doctrine.

Chief Justice Warren E. Burger: Thank you Mr. Petranker.

Mr. Norton.

Argument of Gerald P. Norton

Mr. Gerald P. Norton: Mr. Chief Justice, and may it please the Court.

I have lost my voice to a cold over the weekend.

And if I don’t come across loudly often times, let me know, I’ll try to speak out.

There are two consolidated cases before the Court in Hernandez presenting the same issues on the merits and on jurisdiction as would be considered also in the Robison case next on the calendar.

We don’t have an extensive factual record below because the case went off in a motion to dismiss.

And the allegations of the complaint do not provide substantial background about the plaintiffs here.

We do know that they did, as alleged, serve two years of alternative service and were denied benefits when they applied to the VA for educational benefits provided by the 1966 Veterans Readjustments Benefits Act.

I think I will start by turning directly to the question of whether Section 211 applies here.

By its terms it says that a decision of the Administrator of the VA under any of the laws administered by the VA with certain exceptions for contractual benefits, not involved here, shall be final and conclusive and no other official or any Court of the United States shall have jurisdiction or power to review such a decision.

Now, we think this statute clearly covers this case by its terms.

If plaintiffs are seeking here to review a decision of the Administrator namely that they are not entitled to benefits, their effort to get out of the terms of the statute really involves an assertion that there are reasons why he should -- the Administrator should have come to a contrary decision.

They say, he should have decided that they were entitled to benefits for reasons that he did not consider namely the constitutionality of the statute.

But you cannot avoid the fact that these cases seek to review a decision of the Administrator to the fact that they were not entitled the benefits, and therefore the cases are squarely within the terms of 211.

Now to appreciate the scope of preclusion of review that Congress intended, I think it is important to trace the background of the statute.

A forerunner of 211 was enacted in 1921 which provided that the Director of the Veterans’ Bureau, then administering the Veterans’ Benefits Laws, adopted after World War I, shall decide all questions arising under the Act.

Now in the Silver Shine case and a series of decisions in the 1920s, this Court decided that while any questions of fact were not subject to judicial review under that statute that a question of law, or the question whether the Administrator’s decision was arbitrary or whether there was any evidence whatever to support the decision might not be subject to the preclusion.

Then in 1933 Congress enacted the Economy Act.

It’s part of the effort to reduce Government expenditures, and made various changes in the Veterans’ Benefits Program, and in that statute there was another preclusion provision which provided that all decisions of the Administrator under the provisions of law for non-contractual benefits shall be conclusive on all questions of law and fact and no official or Court of the United States shall have jurisdiction to review those decisions by mandamus or otherwise.

In Lynch against United States in the unanimous opinion by Mr. Justice Brandeis, this Court observed that the 1933 provision was obviously intended by Congress to eliminate even the scope of review that the Court have previously said was available under the 1921 Act.

And there was no intimation that any constitutional program was presented by that action.

Indeed, in Lynch, the Court discussed at some length the enormous power that Congress has to grant or withdraw benefits fortuitous or non-contractual benefits and the enormous power that Congress has to grant or withdraw a forum in which to press for relief under a statute granting such benefits.

In 1957, the 1933 provision and a similar provision adopted in 1940 were combined into the immediate predecessor of 211.

At that statute, included the language to the effect that the Administrator’s decision on any question of law or fact concerning a claim for benefits under these non-contractual provision was conclusive and not subject to judicial review.

A series of decisions in the District of Columbia Circuit construed 211 as not precluding review of a decision concerning termination or reduction of benefits distinguishing between claim and termination.

Now, this led Congress in 1970 to amend the statute retroactive to 1940 to make it perfectly clear that Congress intended that all decisions of the Administrator under the provisions of the statutes providing for non-contractual benefits were not subject to judicial review.

I think it’s --

Justice Byron R. White: What about -- go ahead.

Justice Thurgood Marshall: Is there anything in the legislative history that gave to the Veterans’ Administration the right to determine constitutional questions, finally?

Mr. Gerald P. Norton: There is not.

There is some indication --

Justice Thurgood Marshall: Well, isn’t that this case?

Mr. Gerald P. Norton: I would not say that is this case because the -- well before we contend that the VA has decided the constitutional question --

Justice Thurgood Marshall: Well, suppose the VA decided that nobody who didn’t go overseas shouldn’t feel to like -- how would you touch that?

Mr. Gerald P. Norton: I am sorry.

I couldn’t hear.

Justice Thurgood Marshall: The VA says, you can’t get veterans’ benefits because you didn’t go overseas, you stayed and can’t meet.

What would be done with that?

Mr. Gerald P. Norton: Well, under the statute that makes that distinction or on --

Justice Thurgood Marshall: No, no under this present statute.

Mr. Gerald P. Norton: Well, the --

Justice Thurgood Marshall: How would you get to that?

Mr. Gerald P. Norton: The cases construing the present statute in Roth against United States in the Ninth Circuit is an example, say that 211 precludes review of any decision even where it is claimed that the Administrator committed an error of law or if constitutional dimension in applying the statute.

Justice Thurgood Marshall: Roth said constitutional dimension?

Mr. Gerald P. Norton: It was claimed in the Roth case that the decision of the Administrator was based on either a lack of evidence or in which the claim was treated resulted in a denial of due process to the claimant.

Justice Thurgood Marshall: And because of the treatment of the evidence, the factual evidence?

Mr. Gerald P. Norton: Well, that is the nature of that case.

Justice Thurgood Marshall: Well, that’s not a constitutional point.

Mr. Gerald P. Norton: Well, that was the allegation and the Court said even without allegation of the denial of the --

Justice Thurgood Marshall: So in this case, if the Administrator just deliberately violates the Constitution of the United States, he is the only man in the Government who goes cut free?

Mr. Gerald P. Norton: There’s nothing in the terms of 211 that makes any exception for that situation and the observation of the Court in the Lynch case where they said that the similar statute eliminated review of an arbitrary decision by the Administrator would lead in that direction.

Justice Thurgood Marshall: Lynch said it ain’t constitutional; it’s an arbitrary.

Mr. Gerald P. Norton: Well, I think you can enlarge measure or acquaint that to because of the way that the question of due process has developed to the often interchangeable with arbitrary action.

There is another indication of the Congress’ intent in the 1933 Economy Act and that under a separate provision of that statute involving a not contractual benefits but reduction of pay to certain people.

Congress had another provision precluding judicial review but except in cases where a constitutional issue was presented.

So Congress knew how to make the distinction when it wanted to and in none of the statutes leading up to 211 has it as it done so.

Justice William H. Rehnquist: Mr. Norton, what if the petitioners here instead of having presented a claim to the Administrator, had simply gone into the District Court under 1331 and 1361 and challenged the constitutionality of the statute, could the Government have asserted the provision of 211 (a) as a defense to that action?

Mr. Gerald P. Norton: Well, 211 (a) would not seem to apply on its face because it would not be -- if the Administrator have taken no action whatever on this issue, it would not seem that there would be a decision of the Administrator under review.

There would be other questions raised in such a suit as to whether it was premature, whether there have been exhaustion of administrative remedies, and of course sovereign immunity or another basis for jurisdiction would be additional issue that would have to be confronted. That of course is not this case.

The desire of Congress to preclude judicial review in this area seems amply justified by the potentially enormous burden that review of VA decisions would place on the Court it’s in that.

VA takes about 15 million adjudicative actions annually and the Board of Veterans Appeals alone disposes of some 30,000 cases, the vast majority of these involve claims under the various non-contractual benefit programs that are the subject of Section 211 (a).

Now, the plaintiffs claim that if the suit is barred that they are denied their due process rights, but the critical provision of the Fifth Amendment that they never really face up to is that the Fifth Amendment protects against a denial of life, liberty, or property without due process of law.

And it’s this Court’s decision in the Roth case indicates every person who seeks some benefit or is disappointed by the action taken by Government concerning him does not have the basis for a claim under the Fifth Amendment.

There must be a property interest of some sort created either by statute, contract, practice, or common law.

The plaintiffs concede that under the statute on its face, they have no property interest in these benefits.

They try to construe or contend that the statute has to be read as unconstitutional if it does not extend benefits to them, and therefore, by combining the constitution and the statute, they have a property interest but the Court indicated in Roth that the Constitution does not create property interest.

And that approach does not have any merit, we believe.

In addition, there is a problem that if the claim is made is that a statute unconstitutionally distinguishes between the groups by giving something to one and taking away or not giving to someone else, all the plaintiffs can really claim is that that distinction is invalid.

It doesn’t necessarily follow that they are entitled to get what someone else got.

It maybe that the answer is that the Court or the benefit should not have been extended to either group either it was to everyone or to none, so that the Constitution itself, even in conjunction for the statute does not give them a right to benefits.

The plaintiffs have contended that they have a right to a court hearing because of Article III of the Constitution, which they say, basically requires that a federal court be available to hear any and all constitutional questions that may be raised.

Now, just in last term in the Palmore case, this Court rejected the proposition that Congress was obliged under Article III to vest in the federal courts all of the judicial power authorized by Article III, and it is still the law and has been throughout our history that to have jurisdiction in a Court, there has to be a statute extending that jurisdiction, and Congress has the power to grant jurisdiction and has power to limit jurisdiction.

And as the Court said in Lynch, the power knows virtually no limits.

We would -- on the question whether 211 applies to state court proceeding if that has not previously been raised in this case as this case arose in a federal court, the question of state court jurisdiction over a case like this is one that, I think, would require additional consideration.

It is certainly not the position of the Veterans’ Administration that all these cases should be litigated in the state courts and if a case were filed in the state court, there would be a question of sovereign immunity just as there is a question of sovereign immunity in the federal courts.

To determine whether there would be state court jurisdiction you would have to know the nature of the proceeding, the nature of the state law, and the relief sought and other matters that I do not think can be decided in the abstract.

But on the question of sovereign immunity, this is a suit against the Veterans’ Administration by name, its administrator and the regional administrator concerning the actions of these officials in the course of their duties.

The relief sought would require the affirmative action of these officials in turning over to the plaintiffs’ funds, property, money that is unquestionably belonging to the United States.

Now we feel that this brings -- it makes the case squarely one against the United States in substance even if in form against its officials and under the --

Justice Byron R. White: But what if there was no request for an injunction of any kind?

Mr. Gerald P. Norton: Well, in the Larson case, I assume you made just a declaratory judgment request?

Justice Byron R. White: Yes, against only the officials.

Mr. Gerald P. Norton: In the Larson case, the Court indicated that even if only declaratory relief had been sought, there would still be a sovereign immunity problem.

Indeed, it suggested that there might be a greater one because there would be a -- could be a binding declaration of rights.

It is always been said in these sovereign immunity cases is that the action can precede against the officer but it is not binding against the Government, it’s not --

Justice Byron R. White: This would be an interesting decision in the light of some of the welfare cases, wouldn’t it?

Mr. Gerald P. Norton: Well, I would not attempt here to try to square those cases with all of the sovereign immunity doctrine which the Court has recognized as not an area of perfect logical symmetry.

But in the cases where the courts have entertained suits against officials where they -- where officials of the United States, they have tended to involve property either land or coal or something tangible which there was a claim that the property really belong to the plaintiff and that this officer was retaining it against the rights of the plaintiff and the question of possession could be determined as between the two with the question to ultimate title vis-a-vis the United States left to another forum.

Justice Thurgood Marshall: Well, that if we go with you on the sovereign immunity, we don’t need to bother with 211 then, do we?

And let me just waste it, definitely.

Mr. Gerald P. Norton: If the Court will hold the sovereign immunity --

Justice Thurgood Marshall: If sovereign immunity is a good defense, you don’t need 211. So Congress has wasted its time.

Mr. Gerald P. Norton: Well, I wouldn’t say the Congress has wasted its time because there maybe suits that would be subject to 211 that would not necessary be subject to the sovereign immunity doctrine.

But in this case, given the nature of the relief sought and the nature of the parties, we say that it is barred both by sovereign immunity and 211.

The Court could, if it so chose, resolve this case on the basis of whether the statute that is constitutional without necessarily reaching the merits.

This was the approach taken in Brooks against Doe where a difficult question was raised concerning a jurisdiction of a state court to grant relief against the federal official in the performance of his duties. The Court said that where the plaintiffs’ claim was lacking in substance, it wasn’t essential to reach that difficult jurisdictional issue, because they could affirm on the merits.

That is the position we would take here and that the Court can affirm in this case on either ground.

Of course if the Court is going to reject our position in the Robison case on the merits, it’s essential that it resolve both jurisdiction and the question on the merits.

Now --

Justice William H. Rehnquist: Well, the ultimate question in this Ninth Circuit case, if we come to the merits at all, is not the constitutionality fell on the Act, but whether the question that’s constitutional is sufficiently substantial to warrant the convening of the three-judge court, isn’t it?

Mr. Gerald P. Norton: Well, yes, that’s exactly my next point that the alternative or the second point decided by the District Court in Hernandez was that after holding that 211 barred jurisdiction, the Court also denied the request for a three-judge court holding that no substantial constitutional question had been raised.

Now, if that was a correct determination then the Court can affirm the action of the District Court on the jurisdictional rule and because it was properly made by a single judge as we contend.

Now the District Court’s determination that there was no substantial question, constitutional question was made in view of what the Court thought of the manifest differences between alternative service and military service and the reasonableness of providing this fringe benefit to veterans of military service in the absence of any cognizable burden on the free exercise of religion and also the lack of any establishment or religion in the statutory scheme.

The substance of that ruling really requires a consideration of the merits which is presented in the Robison case and has not been touched on in the arguments here, so that I think it would be appropriate for me to defer that for further discussion until that case, and if I were to begin it here, I would be unfair to the other side, although I would not want to give up my time here and not be able to continue.

So I think I would rest at this time but defer the constitutional question to Robison.

Chief Justice Warren E. Burger: I take it you agree with Mr. Curtice’s response to the hypothetical question I gave about the Peace Corps Veteran who came in and made the same claim that’s being made here.

Do you agree that the District Court could say that claim is so insubstantial for constitutional claim and that I will not convene a three-judge district court?

Mr. Gerald P. Norton: Yes, I think that is precisely what happened in this case.

Chief Justice Warren E. Burger: Well, and you think that’s true here too, but that’s because you think both cases attend to equate to each other that is the Peace Corps Veteran and the petitioners here?

Mr. Gerald P. Norton: That’s true, we would say that there is no greater constitutional question presented there than here, and in either case, the District Court could properly dismiss both for lack of jurisdiction and the lack of a need to convene a three-judge court because of the insubstantiality of the question presented.

If there are no further questions --

Justice Potter Stewart: Well, that would, of course, the dismissal was squarely, as I understand it upon the basis of Section 211 (a), wasn’t it?

Mr. Gerald P. Norton: That’s correct.

Justice Potter Stewart: We have a footnote in the Court of Appeals’ Per Curiam affirmance that there might be something so egregiously unconstitutional that the constitutionality of 211 (a) itself might have to be reconsidered but this dismissal wasn’t on the basis that it was an insubstantial question, was it?

Mr. Gerald P. Norton: Well, the District Judge denied a request for a three-judge court, but then --

Justice Potter Stewart: Right.

Well, because of 211 (a), didn’t he?

Mr. Gerald P. Norton: No, because you said there were no substantial constitutional questions presented.

He may have felt that he had to do that in order to be authorized to as a single judge grant the motion to dismiss.

Justice Potter Stewart: I have, as you know, there’s no appendix in this case and I have before me, except for the Page 16 of the petition for writ of certiorari the Court of Appeals characterization of what the District Court did saying the District Court dismissed the plaintiff’s complaint for lack of jurisdiction under 211 (a).

Mr. Gerald P. Norton: Well, that is true, but the Court also denied the request for a three-judge Court.

On the ground that --

Justice Potter Stewart: This can be any court that 211 (a) is valid, couldn’t it, could there?

Three-judge court, one-judge court, or 10-man judge Court, 211 (a) says, there should be no judicial review.

Mr. Gerald P. Norton: Well, that is true, and we’re not saying that he had to convene a three-judge court to determine whether he could dismiss under 211, he may have felt that it was appropriate to consider both of those issues in order to make his dismissal proper as a single judge.

Justice William H. Rehnquist: I take it, what you’re referring to is the 339 Fed. Supp. Xerox in the very back of the petition, which has Judge Carter’s opinion.

Mr. Gerald P. Norton: That’s right.

Chief Justice Warren E. Burger: Well, conceivably to -- Excuse me.

Justice Potter Stewart: Excuse me.

Chief Justice Warren E. Burger: Justice Marshall put a question to you or perhaps to one of your friends awhile ago, saying that if the Veterans’ Administration can find educational benefits to those veterans who had served overseas that that might conceivably raise a constitutional question and the three-judge court or a single district judge might conceivably, I take it, decided to call or convene a three-judge court for that purpose, you would not agree with it perhaps?

But I am trying to distinguish that kind of the case, raising what would appear to be a significant constitutional question from the one which you considered insubstantial here.

In short, you wouldn’t say it was an insubstantial claim if the Veterans’ Administration was denying benefits to all veterans except those who went overseas when the statute obviously gives no such authority.

Mr. Gerald P. Norton: Well, we say that 211 bars any review of a decision of the Administrator and on 211 alone, the District Court properly dismissed the case.

We don’t think it was necessary for him to address the three-judge court question, a motion was before him, he may have felt an appropriate thing to do to not to leave it unresolved in order to make it clear that his action on the motion to dismiss was properly taken as a single judge.

Chief Justice Warren E. Burger: Let’s take an extreme case then, that the Veterans’ Administration Administrator decides that because of the shortage of funds, rate inflation, and a lot of factors, he is not going to pay any education benefits to anyone.

He is just going to nullify that section of the Act of Congress, would say that that would not be open to mandamus under 211?

Mr. Gerald P. Norton: Well, we believe that 211 supersedes whatever jurisdiction is otherwise available under one of the general jurisdictional statutes whether it be 1361 the mandamus statute or 1331 the General Federal Question Statute.

Chief Justice Warren E. Burger: I suppose you might also answer that the same for the Veterans’ Administration did that, he would be fired by the President throughout --

Mr. Gerald P. Norton: Well, exactly there are --

Chief Justice Warren E. Burger: -- a follow up to Congress and the problem would solve itself politically.

Mr. Gerald P. Norton: There are other remedies and restrains on --

Chief Justice Warren E. Burger: But you’re saying that there is only a political remedy on that situation.

Mr. Gerald P. Norton: Under 211.

Chief Justice Warren E. Burger: Thank you gentlemen.

The case is submitted.

Featured:

Johnson v. Robison - Oral Argument

Thu, 23 Aug 2012 18:23:54 +0000

Case:

Johnson v. Robison

Media File:

72-1297_19731211-argument.mp3

Related Transcript:

72-1297_19731211-argument

Transcript:

Argument of Gerald P. Norton

Chief Justice Warren E. Burger: We’ll hear arguments next in 72-1297, Donald Johnson against Robison.

Mr. Norton you may proceed.

Mr. Gerald P. Norton: The ultimate question on the merits as I indicated before is the same here and the same jurisdictional questions arise.

After being classified I-O which means that a conscientious objector opposed to any participation in war in any form, even in noncombatant duty.

Robison took a job in May 1968 at a hospital in Boston where he resided, he was going to school.

Under procedures, I’ll describe later, he asked the local board to sign him to that hospital for his alternative service required under the Selective Service Laws which he was entitled to in lieu of induction having claimed his exemption from service as a conscientious objector.

In August 1968, the local board ordered him to work at the hospital he had selected, effective the preceding may and he would have, at that time been classified I-W which is a classification of people who were I-O and have been ordered to do alternative service and I may use those terms for convenience.

Two years later in May 1970, he finished his alternative service and quit his hospital job and having continued at school at night he graduated from college in 1970 as well.

In 1971, he applied, he got to law school and he applied to the VA for educational benefits under chapter 34 of Title 38 (b) 1966 Veterans’ Readjustment Benefits Act.

The VA decided that he was ineligible because he did not come within the statutory definition of eligible veterans to whom such benefits are made available because he had not been on active duty as those terms are defined in Title 38.

In February 1972, a complaint was filed against the VA and the administrator as a class action for all persons who had served the alternative service and completed their service, and seeking a declaratory judgment that the statute was unconstitutional in extending benefits to veterans of military service, but not to persons who had rendered alternative service.

They also sought a declaratory judgment that plaintiff and members of the class were entitled to receive these benefits.

No injunctions or other specific relief was sought.

Now, the ultimate question here as in Hernandez on the merits is whether it is unconstitutional for Congress to extend certain fringe benefits to a specified category of federal employee, namely certain members of the uniform services and not to extend them to anyone else, who might share some of the circumstances for a background in common with some of those receiving benefits.

I think it might help to provide some background about the statutory scheme involved here.

Congress has of course in number of specifically enumerated powers pertaining to the Armed Forces and under the Constitution and for at least as long as this country has required the services of Armed Forces and its employee, it has exercised these powers to provide benefits to veterans of various types of veterans of military service.

The first Veterans’ Pension Law was passed in 1789 for example for veterans of the revolutionary war and the history of veterans’ benefits maybe traced ever since.

At present, Congress has established a number of programs for veterans of military service.

Some are contractual in nature.

Some are non-contractual, involving essentially fortuitous benefits.

They have a variety of eligibility restrictions and each one has to be taken separately.

We deal here only with the program concerning educational benefits under Chapter 34.

Now, the educational benefits program reflects a number of policy decisions by Congress in 1966.

One of course was the level of benefits which is not as generous as the benefits provided to veterans of Korean War or World War II.

The benefits available to anyone of these plaintiffs is under the law -- under most circumstance is not to be likely to exceed $10,000 because of adjustment for the number of dependents and you would need a great number of dependents to be entitled to $10,000 over the course of the program.

The program is not intended to subsidize education, but merely provide partial assistance.

It’s available, however, without regard to the needs for the benefits and it’s also available without regard to whether your education has in fact been disrupted or hindered.

One limitation in the statute is that you be a veteran as defined in Title 38 which means a person who has served active duty aligned in Military Forces, the Air Force, and who has not been dishonorably discharged.

The 1966 Act further limits the category of eligible veteran for the purpose of Chapter 34, the educational benefits to a person who has more than 180 days of active duty, again, a person who was discharged under the conditions other than dishonorable or of discharged for a service-connected disability.

Justice Potter Stewart: Doesn’t it also include some other people, public health people?

Mr. Gerald P. Norton: It does.

The statute itself does not in terms extend benefits to the public health service or the [Voice Overlap].

Justice Potter Stewart: But another, by another law by reference.

Mr. Gerald P. Norton: Under the 1957 version of Title 38, active duty was defined in a way as to include active duty by commissioned officers of those two organizations within the terms active duty for veterans’ benefits purposes.

So that unless Congress took affirmative action to exclude them, they would be covered.

Now, this reflects a historic equation of service in these two organizations to military service that goes back to World War I days.

These organizations have historically been at from time to time under the direct control of the military.

They have reserved course, they have military structures, they are at times subject to military duty and for purposes of pay and allowances they are included with the military in Title 37 covering compensation of the uniform services.

We -- the statutory background is rather detailed and we haven’t developed it in our brief and if the Court would like, we’d be happy to submit a supplemental memorandum on that point, but there was no affirmative provision of the 1966 Act which dealt with those categories.

There were several other decisions made in 1966 by Congress.

It was a question whether to extend these benefits only to people who had active duty in the military zone or hostilities, but the purpose was broader than rewarding such service so that the Act is broader.

There was a question whether to limit benefits to draftees or the men who had enlisted and again the statute had various purposes which ended up being served by including both.

As I understand, the claims in these cases if the statute had been narrower and had not extended benefits as far as it does, we might not have a case here.

The position is that Congress should have indeed was constitutionally obliged to go even further than it did.

Justice Potter Stewart: The -- it was always intended to extend these benefits to draftees, wasn’t it?

The only question before Congress was whether as you understood what you say whether not to also include volunteers?

Mr. Gerald P. Norton: That’s right.

It was a -- but one purpose [Voice Overlap]

Justice Potter Stewart: And they are arguably by your brothers on the other side would still be made if the benefits have been limited to draftees as they say that there’s nothing in the -- no purpose of Congress to provide an incentive for enlistment or volunteering can be served when you just give these benefits to draftees?

Mr. Gerald P. Norton: Well, that’s true.

If you look one purpose and try to measure all of the benefits in terms of that one purpose that it might be a problem, but there are multiple purposes here and each recipient of the benefits need not be justified by each of the purposes.

I think there’s been a tendency to crisscross the lines.

Essentially, the plaintiff's case comes down to the contention that looking only at people who were drafted into military service and conscientious objectors who performed alternative service, there are absolutely no factual distinctions between the nature of the service rendered that would permit the Congress rationally to conclude that it was an inappropriate action to extend benefits to veterans of military service and not to anyone else.

Now, we think it claimed that Congress took a different view that Congress realized that there were a number of unique and distinctive features of military service which could have supported this distinction so that the distinction cannot be said to be illusory or utterly lacking in substance or any of the other terms that this Court has said must be supported in order to say that the classification is unconstitutional.

Let me turn now to some of the distinctions that Congress had in mind either explicitly or in the nature of things, it could recently have -- had in mind.

For one thing, someone who was drafted into the military service has an obligation of six years, four of which after active duty are in the reserves.

The person who serves alternative service as a conscientious objector has a maximum obligation of two years.

Now, that reserve obligation is not merely a theoretical possibility as it can involve the burdens of training in weekend or summer time duty or other duty and Congress had in mind particularly in 1965 and 1966 when this Act was being considered, the fact that in only a few years before it had been necessary to call up the reserves in connection with the Berlin crisis.

So this was something that was explicitly discussed and it’s a very significant distinction between the two kinds of service because as Congress indicated having this additional liability hanging over his head, a person in the military has a kind of disruption and continuing disruption of his plans and his educational plans.

Now, there is the additional fact that service in the military involves the possibility of being sent anywhere in the world to face a variety of dangerous or hostile conditions.

In the District Court, Robison agreed that it was unquestionable that military service was a hazardous and vigorous demanding than alternative service.

There is been some suggestion in the briefs that conscientious objectors at times do serve abroad, but in fact that it’s the policy of the selective service and was the policy not to order anyone to report for work overseas.

Persons who ended up doing alternative duty overseas were ones who had indicated a willingness to work for one of the -- or established organizations who did overseas service and knew that that was what they’re going to do and what they’re getting into and even then they would not be assigned overseas, but would be assigned to work for a group base in this country who then might use their services overseas.

There is also a very substantial difference in the way in which these two groups select or influence the work they do.

I think the influence that a draftee has over where he works and what he does is notoriously limited, if there is any at all.

He does what he is told and goes where he is told.

However, under the regulations that were in existence in 1965 and 1966 and continued until 1971, a person doing alternative service had considerable opportunity to influence those decisions.

It could as Robison did submit up to three types of employment that he was qualified and willing to do.

If the local board found anyone of them appropriate, it would then order him to do one of those things.

If they did not find anyone appropriate, then they would come up with three and submit them to the registrant and if he didn’t find anyone of those satisfactory, then they would have a conference with the state director.

And if they still couldn’t work out something and finally the local board did have the authority to order the registrant to do work, but only with the approval of the national director.

This is a far cry from the situation presented to a military draftee.

That man understandably that a selective -- that a conscientious objector who was going to alternative service had much greater opportunity to fit his service inconsistent with other obligations he might have such as pursuing his education as Mr. Robison was able to do.

Of course the pay, but I think it is important to note one does apprehension of the District Court.

The District Court quotes a what is cited as a regulation of the selective service which permitted local boards to assign and abruptly reassign persons who were doing alternative service anywhere at anytime even in combat zones.

Now, selective service in knows of no such regulation.

It is not contained in the regulation that is cited in a District Court’s opinion and there was none such that was into factoring the period that Congress was considering this Act or since.

We simply don’t know where it came from and I think there’s a reference on it to one of the briefs which is based on the District Court’s use of it in the opinion, but again, there’s no way we can track it down.

Justice William H. Rehnquist: Mr. Norton, I take it that Judge Geraghty rejected the disposition of the government's that there is a rational distinction between those who were subject to being assigned to hazardous combat duty and those who were not on the grounds that Congress had intended to rely on that distinction, that it probably could have, but I gather he said that wasn’t what Congress had in mind.

What’s the government’s position with respect to that?

Mr. Gerald P. Norton: We’re not saying it’s only a distinction between those subject to hazardous combat duty.

We’re saying that even if you look at all military draftees, the nature of the disruption of their lives was quantitatively and qualitatively different from that of anyone else who was affected by the selective service laws and that Congress could rationally conclude that given these various distinctions that it was appropriate to extend benefits to the military draftees.

Even if you were to accept that the contention that alternative service veterans, if you will, had some disruption of their educations and hence had some need of the same kind of benefit, I think it is permissible certainly under this Court’s decisions in Jefferson against Hackney for Congress to distinguish between different categories of people who might share in some general way a characteristic and extend benefits in a differential fashion as long as the distinction, the classification is not altogether illusory or utterly lacking in any rational meaning.

Justice William H. Rehnquist: You say it’s a question of what Congress might have reasonably considered not what the legislative history shows they did in fact consider?

Mr. Gerald P. Norton: Well, we say that the test that has been announced in this Court’s decisions is the former that could it rationally have been conceived -- is there a state of facts that might have been conceived to justify this distinction?

But we say in addition that there were distinctions that were directly addressed by Congress which support this distinction.

And another one that Congress specifically mentioned was the fact that military veterans have been subjected to deprivations of liberty and loss of freedom, inherent in military discipline and military life, is subject to the universal uniform code of military justice.

And this kind of existence for two or more years creates additional transition problems in returning to civilian life.

There is also the related to a fact that in the military someone may after serving be discharged on grounds other than the honorable indeed in dishonorable grounds because of things done in the military.

Whereas someone who was doing alternative service does not face that possibility if they complete their two years even though they may have done something which would’ve warranted a dishonorable discharged in the military.

They have no such adverse consequence attaching to their service and this has a direct bearing in this case because a veteran of military service served is otherwise within the definition of an eligible veteran but for some reason was dishonorably discharged would not be entitled to these benefits and if under the District Court’s decision here if someone who did alternative service committed the same offense, they would be entitled to it, so that the result of the decision below is to place alternative service people in a somewhat more favored position.

Justice Thurgood Marshall: When you complete your alternative service you don’t get any kind of piece of paper, don't you --?

Mr. Gerald P. Norton: You get a piece of paper saying you have satisfied your, in your --

Justice Thurgood Marshall: It’s not like a discharge?

Mr. Gerald P. Norton: No, it can only be either a completion or an incomplete if you haven’t completed it; they can order you to continue until you do.

Justice Thurgood Marshall: What I mean, are you given something like a card or anything?

Mr. Gerald P. Norton: I think for some --

Justice Thurgood Marshall: I think it’s important in this case is just the matter.

Mr. Gerald P. Norton: Selective service, I think sends you a piece of paper that certifies that you have completed your alternative service.

There is a another point along this line that -- another misapprehension of the District Court is argued and was stated by the Court that a person in alternative service could be subject to prosecution for failure to comply with the reasonable order of his employer.

Now, this was not a part of the scheme, the regulatory scheme when Congress was considering the Veterans’ Benefits Act.

This is under a regulation and it was not adopted until 1971 and it can have no bearing of course on the rationality of the judgment made by Congress in 1966.

Similarly, there are repeated references to guidelines issued by the Director of the Selective Service to the effect that the disruption of alternative service person’s life should be comparable to that of someone in the military.

Again, these were not part of the regulatory scheme when Congress was considering the 1966 Act.

They were introduced at a later time, they were not of binding a legal effect and indeed, one court has held that they were questionable legal significance in any event.

Of course, another distinction is to pay.

A draftee during let’s say the period that Mr. Robison started work was paid I think, at the rate of about $100 a month.

Mr. Robison says that he started work at $80 a week.

There’s no indication in the record as to any increases he may have had after that time, any fringe benefits, or allowances or other compensation.

So that a draftee is in especially difficult position to try to save money and/or to finance education even if he had the time to do it while he was in the service.

Chief Justice Warren E. Burger: Are there any limits on how much a person may receive under alternative service employment?

Mr. Gerald P. Norton: There were not in 1965 and 1966 when Congress was considering this Act.

At a later time, another, one of these guidelines of the Selective Service Director suggested that the pay should be comparable to that or someone in the military, but it is a very general statement and it’s not clear to what effects if at all, it was applied.

Chief Justice Warren E. Burger: It’s not statutory?

Mr. Gerald P. Norton: It’s not statutory.

The statute contains none of these limitations.

Justice William H. Rehnquist: Of course a draftee gets free room and board?

Mr. Gerald P. Norton: Well, that’s true, but it’s free room and board where the military wants them to live which maybe at military base in the far reaches of the world and a place where he is unable to shape his life, so as to pursue his education.

Justice William H. Rehnquist: Well because you made that argument already that this is one of the things that a draftee is subject to, if you treat that as a point, I don’t really see how can you separately treat the fact that all -- that it’s some kind of a detraction from the room and board that the same thing happens or if you are talking strictly in terms of compensation?

Mr. Gerald P. Norton: Well, we don’t know whether on this record whether any of these alternative service people end up getting room and board.

And it can’t be assumed that they were getting -- generally getting it or generally not.

The Congress might have reasonably concluded that the draftee's situation was sufficiently distinct if they justified these benefits.

Of course, as this Court has indicated the question is not whether Congress has assumptions in these regards were actually warranted by the facts, it was whether it was a reasonable determination for Congress to make.

Chief Justice Warren E. Burger: Well, McGowan against Maryland went a great a deal beyond that so that if on any conceivable, on any conceivable basis it could be supported that would be enough?

Mr. Gerald P. Norton: Well, that’s right and that was what I was adverting to earlier.

Chief Justice Warren E. Burger: [Voice Overlap] the last term or the most recent term, I think.

Mr. Gerald P. Norton: I’d like to reserve the balance of my time, if any, for rebuttal.

Chief Justice Warren E. Burger: There’s only one minute remaining counsel, I don’t think we’ll ask you to talk to one minute.

We’ll let you begin fresh at 1 o’clock.

[Luncheon Recess]

Mr. Rosenberg, you may proceed whenever you’re ready.

Argument of Michael David Rosenberg

Mr. Michael David Rosenberg: Thank you sir.

Mr. Chief Justice and may it please the Court.

This is a class action on behalf of conscientious objectors whose religious beliefs prevent them from serving under military authority.

In every other respect, these men are treated precisely like every other registrant drafted under the Selective Service Act.

They are drafted in accordance with the normal order of call.

They are drafted no matter where they are and under what circumstances their civilian life places them except as to the normal kind of exemptions and deferments.

Justice Potter Stewart: How many of them were killed or wounded in the line of duty during the period of 1965 to 1973?

Mr. Michael David Rosenberg: Your Honor, as far as we can tell, only one, but the statistics are not kept.

The fact is that numerous of them have been injured and your question is quite direct.

They have not served in the military capacity --

Justice Potter Stewart: So there is that difference?

Mr. Michael David Rosenberg: But they are treated in every other respect.

Justice Potter Stewart: Well, you said in all respects but one, I am suggesting that there maybe at least two.

Mr. Michael David Rosenberg: Well, Your Honor the -- it goes directly to the question of whether or not there is any potential for hazardous duty.

For these men, there is just as much potential as any other member of the service.

These men can be deployed at the will of the President, at the will of Selective Service that the President and the Selective Service have not deployed these men to Vietnam on the whole during that period, really only reflects in my mind that their service was more -- it was needed more that they were doing better service here.

There’s no inherent limitation.

Justice Byron R. White: They can -- they couldn’t be deployed to combat duty?

Mr. Michael David Rosenberg: They couldn’t be deployed to combat duty but --

Justice Byron R. White: Well, that makes -- it makes quite a bit, but this doesn’t make a great deal difference to say they can be sent to Vietnam or out of the country.

The question is whether they can be put in the combat duty?

Mr. Michael David Rosenberg: That’s -- well, that’s true Your Honor, but there are I-A-O’s in the service, conscientious objectors.

Justice Byron R. White: Alright, alright.

Let’s just start with the proposition they may not be sent into combat?

Mr. Michael David Rosenberg: They may not be sent into combat [Voice Overlap], Your Honor I haven’t forgotten it, it is obviously critical to this case.

Chief Justice Warren E. Burger: How about the Code of Military Justice, are they subject to the jurisdiction [Voice overlap]?

Mr. Michael David Rosenberg: No, Your Honor, they are not, but as the Senate Report clearly indicates the facts that these men are under discipline doesn’t at all disturb their ability to become students.

As a matter of fact, it enhances their ability to become students.

Chief Justice Warren E. Burger: I don’t see of a connection between -- I’m speaking of the difference at the time they’re engaged in discharging their two-year period of service.

Are they during that period of service subject to courts martial and the military discipline?

Mr. Michael David Rosenberg: No, Your Honor, they are subject to felony -- federal felony criminal prosecutions for their violations.

They are not subject to courts martial prosecution, but at the heart of this case is the question of whether any of these differences and I can see there are differences, whether any of these difference are relevant to the purpose that the Act seeks to achieve.

This Act has stated unlike all the others, I think ever before considered by this Court, the explicit purposes for what has turned out to be one of the major educational programs in the history of this country.

The explicit purpose that Congress established this program form was to compensate for the lost time that a man entails when he does service for his country.

The fact that he is under military discipline, the fact that he might be sent into combat duty does not raise or a lower or in anyway affect the disruption that Congress had in mind when it granted these benefits.

As a matter of fact, Your Honors, it would be a strange or maybe even a cruel irony if the rigors of service were taken into account when and by this Court in assessing this legislation when Congress refused to even parse out in the scale of benefits more benefits for those men who actually went into combat.

More benefits for the people who actually face death on the front lines.

Justice Thurgood Marshall: It could be because all of them were subject to it?

Mr. Michael David Rosenberg: Yes, Your Honor, there is that potential.

Justice Thurgood Marshall: The only difference is that they were all subject to it.

Mr. Michael David Rosenberg: Yes Your Honor, the potential --

Justice Thurgood Marshall: They’re all subject to be thrown into the front line wherever the government is and these men were not subject to that?

Mr. Michael David Rosenberg: No.

Your Honor, there are two questions there that it is true that they were all subject.

For some, the potential wasn’t real and in fact it never materialized and Congress well knew that.

Justice Thurgood Marshall: There are people right now that are crossing the street, they’ve been crossing all their life, but this time they got hit?

Mr. Michael David Rosenberg: Your Honor, it is absolutely true that the potential is there.

That potential vote --

Justice Thurgood Marshall: Don’t you think that some difference to be reckoned with?

Mr. Michael David Rosenberg: I think it’s a difference to be reckon with Your Honor only if the purpose of the Act took that kind of difference into a account but the --

Justice Thurgood Marshall: And they didn’t?

Mr. Michael David Rosenberg: No, Your Honor, specifically in the legislative history throughout the legislative history is the indication that these benefits are not a bonus.

They are not a reward for hazardous duty or the risk of the hazardous duty.

This is given to men for the normal disruption they entail based on their time and service.

Justice Thurgood Marshall: And the men -- and these men, that your man was disrupted how?

He went school, didn’t he, different school?

Mr. Michael David Rosenberg: That’s right.

He went to school part time at night over a period --

Justice Thurgood Marshall: [Voice overlap] for men in the military to go on school?

Mr. Michael David Rosenberg: Unquestionably, Your Honor.

As a matter of fact, thousands have and many of those thousands have gone with Government, have been financed in their educational pursuits by the Government during their time in service.

Justice Thurgood Marshall: With the Government permission?

Mr. Michael David Rosenberg: No.

Justice Thurgood Marshall: He will need the Government.

Mr. Michael David Rosenberg: No, Your Honor, it’s not all with the Government’s permission.

Justice Thurgood Marshall: Well, I don’t believe that that man in Vietnam is going to a Boston College.

Mr. Michael David Rosenberg: No, that’s right but the man stationed at a Boston Base is going to a Boston College at night has the same --

Justice Thurgood Marshall: Do you have anything in the congressional history that said that there was any question that this applied to people who were not in the active military service?

Mr. Michael David Rosenberg: That this did not apply to anyone in the active military service?

Yes, Your Honor.

Yes the National Health Service specifically included and those men received benefits --

Justice Thurgood Marshall: I am talking about this, --

Mr. Michael David Rosenberg: About?

Justice Thurgood Marshall: About that you want.

If you say so we’re through of everything.

Mr. Michael David Rosenberg: Your Honor, not in this legislation.

Not in this legislative history but --

Justice Thurgood Marshall: Well, is that man a veteran?

Mr. Michael David Rosenberg: Your Honor, he is a veteran of alternative service.

He has done two years in the service of his nation.

Justice Thurgood Marshall: He’s a veteran?

Mr. Michael David Rosenberg: In those terms.

Your Honor, it is true that the legislative history --

Justice Thurgood Marshall: In order to be a veteran, don’t you have to have him honorable discharge?

Mr. Michael David Rosenberg: He has a release from his service.

I understand what you’re saying.

He is not a veteran of military service.

He is a veteran of alternative service.

The legislative history does not speak about this man or at least the legislative history directed towards this Act, but the prior legislative history that surrounds these kinds of benefits, in fact, even the predecessors to this Act does speak and it speaks very loudly.

Justice Thurgood Marshall: Is this action from mandamus?

Mr. Michael David Rosenberg: Your Honor, it was an action under the mandamus statute and under Section 1331 general.

Justice Thurgood Marshall: Are you saying that [Inaudible]

Mr. Michael David Rosenberg: Your Honor, I believe --

Justice Thurgood Marshall: [Inaudible]

Mr. Michael David Rosenberg: I am not -- that has not been settled and of course the statute says --

Justice Thurgood Marshall: It doesn’t settle under mandamus?

Mr. Michael David Rosenberg: No, Your Honor because the statute says in the nature of mandamus it doesn’t say mandamus.

Justice Thurgood Marshall: So in the nature between that right?

Mr. Michael David Rosenberg: Well, Your Honor I think if the Constitution --

Justice Thurgood Marshall: You have mentioned don’t have [Inaudible]?

Mr. Michael David Rosenberg: Your Honor, if there is affirmance I think we do have a clear right.

I think the Constitution does give us a clear right to these benefits.

We have been excluded both arbitrarily and I believe this excluded discriminatorily, invidiously.

The history that we have to look at is the history that surrounds the veterans’ benefits program when they emerged during World War II.

Conscientious objectors who did alternative service were specifically excluded by Congress during that period of time.

The question came before Congress; it wasn’t as if Congress overlooked the problem.

Congress faced it a several important times and yet Congress refused to give these men the pittance that they need to compensate for the disabilities that they suffered just as much as anybody in the military.

They received no disability benefits for physical injuries.

They received no dependency allowances and in World War II, they weren’t even compensated for any of the service that they performed.

This is a history that gives birth to the present legislation since the present legislation is modeled almost directly after the Korean War G.I. Bill and after the World War II G.I. Bill.

Justice Potter Stewart: The federal government isn’t inevitably their employers during this period of service?

Sometimes, I guess it is, but often it’s for state or municipal or county hospital or institution and I suppose sometimes for private one, isn’t it?

Mr. Michael David Rosenberg: That’s exactly correct, Your Honor.

But the fact is that there are no guarantees that these men will even get the kind of workmen’s compensation that might cover some of their disabilities.

In fact, one of the petitioners in the Hernandez case working in a hospital contracted hepatitis and as it turns out, he had no compensation whatsoever to cover that disability.

Justice Potter Stewart: He might have Blue Cross?

Mr. Michael David Rosenberg: Well, if he could afford it, the fact is Your Honor, these men are paid on a ratio that gives them the standard of living that a GI has.

But a GI --

Justice Thurgood Marshall: Is that true as to your case?

Mr. Michael David Rosenberg: Yes Your Honor, he received $80 a month.

Justice Thurgood Marshall: When was it?

Mr. Michael David Rosenberg: I mean $80 a week.

Justice Thurgood Marshall: When?

Mr. Michael David Rosenberg: I’m sorry.

Justice Thurgood Marshall: When?

Mr. Michael David Rosenberg: In 1970 or 1969 or 1970.

Justice Thurgood Marshall: Was that the same -- was this guideline out then?

Mr. Michael David Rosenberg: Yes, Your Honor, it was.

It was always outstanding.

Justice Thurgood Marshall: Does it apply?

Mr. Michael David Rosenberg: Yes Your Honor, it did apply.

Justice Thurgood Marshall: [Inaudible]?

Mr. Michael David Rosenberg: Yes, Your Honor, $80 a week to cover obviously room and board and whatever, and food to the extent that person in the military is covered.

But beyond that he received no coverage.

In fact, as I say in World War II, these men did that service and they received no compensation whatsoever.

When the question was brought before Congress whether the money they earned which was in a frozen account should be turned over to their dependents who in many cases were in very bad scrapes -- straits, Congress refused and the colloquy that we reprinted in our brief indicates that Congress refused because it was afraid of public reaction.

It was afraid that the public would react that these men were getting away with something when they definitely were not.

It was an irrational public resentment that has spurred Congress on to the deprivations that they force these I-O conscientious objectors to bear.

Your Honor, these men are subject to a policy of disruption of their lives that is by presidential mandate suppose to be equal to the disruption generally that men in the military suffer.

The Government has indicated that this policy was not written form in 1966.

I fail to see the relevance of that -- the relevance of that.

The fact is that that policy was stated throughout by the selective service directors since the inception of the I-O conscientious objector program.

Justice Thurgood Marshall: How did it applied to this man?

Mr. Michael David Rosenberg: It applies to this man in the sense --

Justice Thurgood Marshall: It stick to the record on basically.

Mr. Michael David Rosenberg: Well, Your Honor this is a class action.

It is a class action because in fact they are men that --

Justice Thurgood Marshall: Well, I want what’s in the record about one of the named plaintiffs to show to what extent his life was disrupted, that’s in this record?

Mr. Michael David Rosenberg: Your Honor, his life was disrupted to the extent that he was forced to go night school to complete one year of college on his own on whatever money he could scrape together.

When he left the service, he did not have enough money to go to school.

He had to work a whole year to put together enough money to undertake his first year of law school.

He had no savings when he left the service, he was as disadvantaged as any member of the military in that respect.

Justice Thurgood Marshall: Is that in the record?

Mr. Michael David Rosenberg: Yes, Your Honor as a matter of fact we stated --

Justice Thurgood Marshall: If the last statement is not in the record, that he was a disadvantage as anybody else in the service.

Mr. Michael David Rosenberg: Well, I can see that, Your Honor.

I didn’t say that way.

Justice Thurgood Marshall: Thank you, so the only disruption was he had to go to night school?

Mr. Michael David Rosenberg: The only Your Honor, that was a substantial disruption.

He was not --

Justice Thurgood Marshall: What other disruption was there, in this record?

Mr. Michael David Rosenberg: As I say, when he left the service he had no money.

It is stated in the complaint in and in affidavit on his behalf.

Justice Thurgood Marshall: Was that because of his disruption?

Mr. Michael David Rosenberg: Yes, Your Honor, that was because --

Justice Thurgood Marshall: Well, how was he disrupted other than the fact that he worked in the day and went to school at night?

Mr. Michael David Rosenberg: He was disrupted because he received an $80 a week compensation for his work and wasn’t able to save a cent.

Justice Thurgood Marshall: Well, how much was he making before that?

Mr. Michael David Rosenberg: I believe --

Justice Thurgood Marshall: Was that in the record?

Mr. Michael David Rosenberg: I believe he was in school.

I’m not sure; I’m not [Voice Overlap]

Justice Thurgood Marshall: So, he’s making nothing before?

Mr. Michael David Rosenberg: I don’t know what he was doing precisely before he entered the service.

Justice Thurgood Marshall: So, that’s the only disruption

Mr. Michael David Rosenberg: Your Honor, as we state in the complaint, this man when he entered law school faced the problem that he would not be able to continue his law school education because he had no savings that’s why he brought the suit, that’s why he applied for a veterans’ benefits.

He had no money, he was poor and he was left poor by the service he did.

Now, nobody is -- nobody say that he shouldn’t have done his service.

This man doesn’t say that.

All he is saying is, that when a man who does military service is left in that condition and Congress gives him compensation for it, this man deserves the same compensation.

Congress hasn’t said that this man is disrupted less than the other.

I will give him less compensation.

It has decided that he should receive no compensation and this is --

Chief Justice Warren E. Burger: At the time he went under this program Mr. Rosenberg, did he then have the option to go into non-combat military service?

Mr. Michael David Rosenberg: He had that option Your Honor and of course our claim here is that under Sherbert, the differential that the Government has established places a burden on the man and we don’t say that this man would’ve bowed under to that burden, but places a burden on that man to give up his religious scruples and serve in the military in a capacity that would gain him benefits.

He didn’t do that.

Chief Justice Warren E. Burger: Do you say that it was irrational, that it is irrational to reach a conclusion that a man in this category suffers less hardship, less disruption than those who go into the regular military service?

Mr. Michael David Rosenberg: I would say Your Honor that in both services there are men who suffer great or lesser disruptions.

On the whole I would say that the men in alternative service suffer the same general scope of disruption as the general run of those who do military service and those who do 1-O -- I-A-O conscientious objector service in the military.

The fact is that there are thousands of people in the military who go to school at night and part-time.

Draftees who go to school at night and during the part-time period that they’re not in service or they’re not serving or employed.

Those men received benefits just as our men I think should even though he did go to school part-time.

This Act doesn’t parse out when benefit should be given.

It is given during war time and peace time.

It doesn’t relate at all to where the men serves or under what conditions he serves.

All it requires the sole criteria for receiving these benefits is 180 days service.

Justice William H. Rehnquist: Mr. Rosenberg, were these benefits available to people in the service between roughly the time that the Korean War ended and the time that Vietnam War started?

Mr. Michael David Rosenberg: Absolutely, Your Honor because the Act applies retroactively.

It took up three to four million people who serve between 1955 and 1966 and gave them benefits.

All of them were made eligible by the Act of 1966.

Justice Byron R. White: [Inaudible]

Mr. Michael David Rosenberg: That expired on the very day that the retroactive affect attached.

In other words there has always been a GI build by virtue of the 1966 Act.

Justice William H. Rehnquist: Well, but I don’t think that quite answers my question because I take it from what you say that although looking back, post 1966, we can say that everybody has been covered.

I take it if one looked at the period of the late 50’s and early 60’s, the veterans then serving were not by any law enforce while they were serving in that --

Mr. Michael David Rosenberg: That exactly correct Your Honor, but it is a fact that in 1966 the Act applied retroactively to everyone who served between 1955 that is the termination date of the Korean GI Bill in 1966.

No matter where they served or under what conditions and it -- the scope is three to four million people were brought under the coverage.

As a matter of fact this is an enormous education program which the date has expended over $8.8 billion.

Justice William J. Brennan: Mr. Rosenberg, may I ask you, do I actually read Judge Geraghty opinion is finally entering in effect with an interpretation of the statute that it is at least covering your clients?

Mr. Michael David Rosenberg: No, it is not an interpretation of the statute, Your Honor.

It is declaration --

Justice William J. Brennan: Is it because Justice Harlan’s technique in Welsh, didn’t he?

Mr. Michael David Rosenberg: Yes, Your Honor and of course I think the format set down in the Frontiero case where the Court affirms that in a situation like this where a program can be nullified or extended, the extension will be granted if it would probably -- if it was likely that Congress would want to maintain the program even with this additional coverage and I can’t see Your Honor how Congress would refuse and deny millions of people benefits just because of few others would get benefits.

Justice William J. Brennan: But I gather from what your argument earlier you think the statute on its face reflects a deliberate congressional purpose to exclude.

Mr. Michael David Rosenberg: Yes, Your Honor, I do believe that.

I do believe that based on the legislative history, we found since the District Court opinion.

I will say we did not present it to the District Court.

It was very hard to come by but from the material we have been able to gather, I do believe now that it was a congressional intention, a deliberate intention to exclude these men.

Justice William J. Brennan: Well, now the extension that Justice Harlan suggested in Welsh rested on his feeling that the statute, we then had before as contravened the establishment cause.

Mr. Michael David Rosenberg: Yes, Your Honor, I believe that’s true.

Justice William J. Brennan: And what do you --

Mr. Michael David Rosenberg: I --

Justice William J. Brennan: -- suggests that Judge Geraghty hinges his extension to you?

Mr. Michael David Rosenberg: On the Fifth Amendment that it violates the equal protection component of the Fifth Amendment, that these men have been arbitrarily excluded.

Now, I will say Your Honor before this Court, we reassert our position under Sherbert and Verner and under the heightened scrutiny need demanded by the equal protection guarantee.

We are entitled to that scrutiny and we are entitled to a constitutional ruling at that level.

In other words, we believe --

Justice William J. Brennan: Constitutional ruling to what affect?

Mr. Michael David Rosenberg: A ruling that without a compelling state interest, without any compelling interest in this exclusion, this exclusion both denies that the free exercise of religion under the First Amendment and denies equal protection under the Fifth Amendment.

Justice William J. Brennan: With what consequence for the statute is written?

Mr. Michael David Rosenberg: The consequence would be Your Honor that the clause that excludes would be extended to cover or were not or read not to exclude these people who have done alternative service for 180 days.

Your Honor, I do want to assert that while the District Court -- the District Court’s ruling did cover the First Amendment claim we are making here and I believe we are properly making it again, the Government has not responded to it.

We assert that under Sherbert and Verner just like in Sherbert and Verner variable government benefits, compensatory benefits are being denied to one who asserts because of religious belief, a view that here she cannot undertake some conduct which brings them within the scope of eligibility.

In other words, this is a conditioning of veterans’ benefits on this man’s relinquishing his religious beliefs.

Your Honor, if there is a compelling interest in excluding these men as harshly as Congress has done, I’d like to hear it and the Government has offered none, none whatsoever and we come down to that position.

Is the Government able to supply any compelling or real reason why these men are excluded?

The Government may say that it’s an attempt to save money.

Your Honor, I submit with the program of this size covering these many people, would it be possible that Congress wanted to save the pittance that would be saved if a few thousand were excluded.

I don’t believe that’s true and in addition, I also don’t believe that the mere objective of saving money is a compelling interest.

On the whole Your Honor, there has been no interest, affirmative interest deserted by the Government whatsoever.

The only interest that the Government asserts is that there are some find line distinctions in many cases between the kind of service one man does and the kind of service that another does.

Those distinctions done obtain in every case and they don’t warrant an absolute exclusion from these valuable benefits.

If Congress wanted to draw that fine line it has the language to do it.

It could have said, we want to give benefits to those who have done military service they faced the rigors and we want to give less money to those who have not faced those rigors of military service, but who nonetheless have been disrupted.

Congress could’ve chosen that group because as the Government concedes both classes of people have suffered educational disruption.

Congress invoked an absolute exclusion.

Justice William H. Rehnquist: Well, if you say they could’ve given less money to the conscientious objectors.

It's hard for me to figure out how they could constitutionally do that if you’re right and still not be able to give no money?

Mr. Michael David Rosenberg: Your Honor, I was positing that on the Government’s positions that there was a difference.

If there was such a difference it was likely Congress would’ve reflected it in its legislation.

I don’t believe there is a difference.

I am positing my statement on a Government assertion that there is a difference in the nature of service.

What we have here an absolute exclusion, one that reflects no differences and one that shuts out one man in the harshest type of situation and it shuts him out from needed compensation in the same way that he is always been shut out from all the other kinds of needed compensation provided to veterans.

Your Honors, if we have to come down to drawing parallels, I submit there is no distinction between the service that a 1-O man performs and the service that I-A-O man performs, that is the conscientious objective in the military.

Both men are subjected to the authority of the Government, both man have been drafted.

Both are likely to serve in areas where combat is on going although both are prohibited by their religious beliefs from engaging in combat.

As I said, the I-O conscientious objector maybe deployed at any time, anywhere by the President.

That control means that his potential in any given situation is as great as any other man who serves in this Government, in a national interest and in the national defense.

Justice Lewis F. Powell: Mr. Rosenberg.

Mr. Michael David Rosenberg: Yes, Your Honor.

Justice Lewis F. Powell: Personnel in the alternative service in organized units of any kind?

Mr. Michael David Rosenberg: The I-O conscientious objector?

Justice Lewis F. Powell: Yes.

Mr. Michael David Rosenberg: In some cases, Your Honor.

In some cases they serve in camps and are in units not in terms of military units.

Justice Lewis F. Powell: But what about the appellee in this case?

Mr. Michael David Rosenberg: The appellee, no.

Now, he served in a hospital.

Justice Lewis F. Powell: I know, to whom did he report?

Mr. Michael David Rosenberg: He reported first to the director of the hospital I imagine and then to the State Director of Selective Service and finally to the President.

Justice Lewis F. Powell: How often did he report to the State director of this [Voice Overlap]

Mr. Michael David Rosenberg: Your Honor, I am not aware.

I am not aware and obviously if you done a service properly there are probably would be no contact unless of course, unless of course the decision was made on the part of the President that these men were needed some place out and then there would be a whole rearranging of their circumstances and they would be shipped off to whatever assignment the President deemed necessary.

Justice Lewis F. Powell: Does the record show how many times that President made any such decision during the period in question?

Mr. Michael David Rosenberg: No, Your Honor.

The fact is that I-O conscientious objector service has changed latitudes since its inception.

At first, these men served in the camps, in federal government camps and now they are not serving in federal government camps and serving in mixed responsibilities, but as the exigencies of any crisis period, they could be deployed wherever the President needs them the most and the only assumption I think the Court can reach is that these men have been deployed where the President has deemed their services the most necessary and the most valuable.

I want to reiterate one further point.

This Act states purposes that are explicit.

This Court has never before, I believe, had the opportunity to review an Act with the explicit stated purposes.

If new purposes are to be added, new substantive purposes are to be added I believe it cannot be done in this context.

Congress has stated its purposes and by virtue of that statement, I believe has excluded alternative purposes.

Justice William H. Rehnquist: Well, take the example of the National Labor Relations Act when it was first passed.

As I recall the recital of the legislative purpose there was that interstate commerce was being disrupted because of strikes and so forth.

Now, do you think it have been open to somebody to come in on that legislative history and say, well in fact there was no disruption of interstate commerce here and so this doesn’t lead the purpose that Congress said when it was enacted so we can’t apply the -- even though by its terms it might apply?

Mr. Michael David Rosenberg: Your Honor as I understand the question it would seem to me that if Congress’ decisions were based on no facts whatsoever and purely arbitrary, then I believe a Court could enter that area, otherwise, I think not.

That the Court is bound by the stated purposes and those purposes are binding on the Court to the fullest degree as they are here.

Justice William H. Rehnquist: It’s certainly different than some of our cases you have said about Equal Protection of any conceivable set of facts?

Mr. Michael David Rosenberg: There is no question, Your Honor and I concede that, but none of those cases involved legislation that stated on the face of the legislation, they are for direct purposes to this education program we have just created and that’s what this legislation does.

Justice William H. Rehnquist: Well, can you be there at sure that in a legislation we were dealing in the other case is they weren’t stated purposes, but that the Court just didn’t think they were important?

Mr. Michael David Rosenberg: Your Honor, I have canvassed many.

I can’t say that I have canvassed them all and from what I can tell there has never been a case like this.

I see that my time is almost up, are there any further questions because I do believe that at this point I would just simply reiterate that we do assert that Sherbert versus Verner governs this case and a compelling interest is required and none has been offered by the Government that under Equal Protection we are entitled to the strict scrutiny review because in this case First Amendment protected activity that is religious liberty is affected by the regulations that we’re challenging and in an addition, I submit Your Honors, based on the history that we have disclosed in our brief that the I-O conscientious objector during war time is a suspect class that has no access to the political forums that is at the mercy of public resentment as the history discloses and there has been ill-treated consistently throughout their history and deserves the protections of the suspect classification.

Thank you.

Chief Justice Warren E. Burger: Thank you Mr. Rosenberg.

Mr. Norton, do you have any further?

Rebuttal of Gerald P. Norton

Mr. Gerald P. Norton: Just a few comments.

With respect to the last remark about the public attitude toward conscientious objectors and suggestion that Congress had a purpose of somehow penalizing people who were conscientiously opposed to participation in war.

There is not a shred of evidence of any such intention under laying the classification embodied in the 1966 statute, that is conceded in the plaintiff’s brief.

What they have done is gone back to a various things said in World War II, very different circumstances, different public attitude towards war, towards conscientious objection.

The attitudes and views expressed then by the congressmen have no bearing on what happen in 1966.

Indeed, I think the Court has acknowledged that the Congress has demonstrated an increasing degree of accommodation to the views of conscientious objectors in the statutes that have been enacted as time has gone on.

I think it’s wholly unsupported contention to make.

The comment concerning the statement of purposes and the Act underlines one of the deficiencies of the District Court's approach in this case we believe and he took a very strict and narrow reading of the purposes.

Now, this Court has never said that the Court is confined to an explicit statement of purposes in considering the validity of a statute.

Indeed in the Moreno case, the Food Stamp case last year, the Court first considered the explicit purposes that were stated and then went on to consider whether they were other possible purposes that might have justified the statute.

It's a perfectly proper and established approach.

Now, there is one continuing misapprehension that pervades the argument on the other side and that is that there is in the statute an exclusion.

The statute is not in terms to exclude anyone, all it does, is extend benefits to a defined category of persons who rendered military service.

People who rendered alternative service are not the only people who denied benefits; everyone else who is not within that category is denied benefits.

Someone who has conscientious objection to participation in war and who does not happen to fall within the statutory exemption, and therefore, he goes to prison instead as Mr. Gillette chose to do.

His life was disrupted by the Selective Service laws but he is finally not entitled to benefits.

So it is wrong to --

Justice Potter Stewart: But the claim is, as I understand that at least that it’s under inclusive and that was a basic claim wasn’t it, in Wells?

Mr. Gerald P. Norton: Well, that is the claim, but I think it is wrong to characterize the statute as carving out an exclusion of any definable --

Justice Potter Stewart: Under inclusive?

Mr. Gerald P. Norton: Definable group.

Justice Potter Stewart: Would you think that’s an unfair way to characterize the argument?

Mr. Gerald P. Norton: Well, they say they should be cover is as well, that’s true.

Justice Byron R. White: Well, let’s say -- they say it’s unconstitutionally under --

Mr. Gerald P. Norton: Yes, that’s correct.

Justice Byron R. White: [Inaudible]

Chief Justice Warren E. Burger: Suppose it’s under inclusive in the sense that doesn’t include Peace Corps Veterans in the broad sense but the question in this case is whether it is constitutionally under inclusive as Justice White suggests?

Mr. Gerald P. Norton: Well, that true and I have that in mind and I think we come back in that case to the -- your question that was raised whether it would be sufficient if there could be any distinction between these two categories and whether then it would be permissible to grant a different level of benefits to military veterans than to alternative service selection.

Justice Harry A. Blackmun: Mr. Norton, could the man who served in military service for a 179 days make the same argument?

His life has been just as much disrupted, but he is excluded by the statute?

Mr. Gerald P. Norton: He would have the same and he could argue that it is irrational to cut it off at 179 or 180 days.

Any statute that extends benefits or imposes restrains, that draws line is bound to create people on the other side of that line.

These are legislative decisions, these are policy judgments which we feel are within Congress' power to make.

If the claim being asserted is as persuasive and as meritorious as the plaintiffs argue, there is no reason to think that if it were addressed to Congress so that Congress will focus specifically on it, it would be turned down.

They’re asking this Court to do something that Congress has not explicitly ever done itself.

Justice Byron R. White: Mr. Norton, assume that, for the moment, that Section 211 so barred the judicial consideration of the questions in this case, does the Government has any other objection to the jurisdiction of the Court, of the District Court?

Mr. Gerald P. Norton: Well, --

Justice Byron R. White: I suppose sovereign immunity --

Mr. Gerald P. Norton: As I indicated in the Hernandez that Larson --

Justice Byron R. White: Well, how about -- do you question the jurisdictional amount for example?

Mr. Gerald P. Norton: Well, we have raised the question whether under the law he would ever be entitled to as much as $10,000.

Justice Byron R. White: Well, how long do you raise a question?

Do you object -- do you make a jurisdictional objection?

Mr. Gerald P. Norton: That was yes, that was asserted below.

Justice William J. Brennan: But what other benefits?

Justice Byron R. White: Do you --

Chief Justice Warren E. Burger: Assert here?

Justice Byron R. White: Do you assert here?

Mr. Gerald P. Norton: It’s yes, it’s contended in our briefs and we say the date --

Justice Byron R. White: And no other contended, no other basis or jurisdiction other than 1331?

Mr. Gerald P. Norton: Well, they have relied on the mandamus statute, but they're seeking of declaratory judgment --

Justice Byron R. White: Is the judgment inappropriate?

Mr. Gerald P. Norton: We say yes that is inappropriate, for that offers relief in the nature of mandamus but this is not a case that is within the terms of that statute as --

Justice Potter Stewart: In this case, I don’t believe that complainant didn’t ask for writ of mandamus, do you?

Mr. Gerald P. Norton: No, it asked only for declaratory relief.

Justice Potter Stewart: By contrast to the previous case?

Mr. Gerald P. Norton: That’s right, and of course that declaratory judgment statute, this Court has said does not grant jurisdiction but really provides a remedy.

Justice Potter Stewart: And it would be --

Justice Thurgood Marshall: [Voice Overlap] $10000 in that year.

Suppose this man cannot get any education without this help, and there the difference, would the difference be whether a man whose educated make his life come or not?

Mr. Gerald P. Norton: Well, that would be going -- I think beyond the bounds of prior decisions, it’s really in jurisdictional amount.

What they are seeking in this case is a claim to a certain amount of money help.

Justice Potter Stewart: And it’s less than $10,000?

Mr. Gerald P. Norton: It’s less than $10,000.

Justice Thurgood Marshall: But they -- as I understand they are claiming an education which they can’t get without that money, I’m just giving you what there side is.

Mr. Gerald P. Norton: Well, I understand and they are trying to boost up the monitory value by relying upon consequential events that may or may not happen --

Justice William J. Brennan: [Voice Overlap] $100.

Mr. Gerald P. Norton: They vary depending upon the size of the family.

Originally, in 1966 the basic allotment for an individual who is full time student was a $130.

Justice William J. Brennan: For how long?

Mr. Gerald P. Norton: For up to 36 months of education and that is since twice have been increased in the current base figure I believe is $220.

Justice William J. Brennan: For how long?

Mr. Gerald P. Norton: Again, 36 months of period.

Now, if you have dependents -- a married, I don’t know if particularly goes by numbers or spouse but there is a scale that increases the benefits depending on the number of dependents.

Justice William H. Rehnquist: Is tuition over and above that or is that the total?

Mr. Gerald P. Norton: That is the total.

Justice Potter Stewart: So we are talking about $8,000 here --

Mr. Gerald P. Norton: Something in that order --

Justice Potter Stewart: -- not 10, not and but you don’t -- in your brief at least you relegate this to the footnote?

Mr. Gerald P. Norton: Well, I think that is because our principle reliance is on 211.

Justice Potter Stewart: What do you have to say about the asserted jurisdiction under 1361?

Mr. Gerald P. Norton: Well, we say that does not apply here either because we’re not seeking relief --

Justice Potter Stewart: Now, in the preview case they would’ve seek mandamus?

Mr. Gerald P. Norton: They did there but --

Justice Potter Stewart: If in this case say, it’s simply added that in the prayer of their complaint, you find no difficulties under 1361?

Mr. Gerald P. Norton: Well, the relief they’re seeking is not relief in the nature of mandamus, we don’t believe.

As Mr. Justice Marshall indicated that it’s traditionally involved in ministerial duty involving a clear legal right in that --

Justice Potter Stewart: Of course, if you know there’s good deal in the legal leadership about a writ on nature but on a writ of mandamus, whether or not that means what mandamus we all learned in law school not just the ministerial act.

Mr. Gerald P. Norton: But on the face of the statute if they have clearly no legal right, they have to go beyond the statute to make their claim.

Justice William H. Rehnquist: Mr. Norton as I understand the law that's established by decision of this Court that the Declaratory Judgment Act does not confer on independent basis of jurisdiction on this Court if it’s not a present by some other jurisdictional grant.

Have there been any decisions one way or the other as to whether to 1361, the mandamus section confers an independent grant of jurisdiction?

Mr. Gerald P. Norton: I am not entirely sure, I think there may be some lower Court decisions about ways, but I think it is in construed by some courts as granting jurisdiction within its rather narrow limits if it is a case appropriate for that kind of relief.

Justice William J. Brennan: And this is not within those limits, you say?

Mr. Gerald P. Norton: That is our position.

I would just conclude with one comment about the First Amendment argument.

We did address the First Amendment issues in our brief in Hernandez.

We did not explicitly address them in a reply brief in our brief in Robison, but they are covered there and I would say briefly that unlike the situation in Sherbert against Verner, where the denial of employment compensation constituted a continuing pressure upon the claimant to forgo or religious scruples and to work on Saturday.

Here there is no such continuing pressure.

A decision was made by Mr. Robison back in 1968 to take advantage of an exemption from military service that Congress had made available and that is the source of his present situation and there is no continuing pressure on him.

He claims -- does not claim that the possibility of receiving benefits exerted any pressure on him.

In fact, if it did exert pressure it wasn’t very effective pressure because he went ahead anyway.

Thank you.

Chief Justice Warren E. Burger: Thank you Mr. Norton.

Thank you Mr. Rosenberg.

The case is submitted.

Featured:

Accardi v. Pennsylvania R. Co. - Oral Argument

Wed, 22 Aug 2012 16:55:46 +0000

Case:

Accardi v. Pennsylvania R. Co.

Media File:

280_19660120-argument.mp3

Related Transcript:

280_19660120-argument

Transcript:

Argument of Richard A. Posner

Justice Hugo L. Black: Number 280, Pasquale J. Accardi and others against the Pennsylvania Railroad Company.

Mr. Posner.

Unknown Speaker: May it please the Court.

I should like to move the admission of Richard A. Posner of the New York Bar for purposes of arguing this case on the petitioner's behalf.

Justice Hugo L. Black: Motion is granted.

Mr. Richard A. Posner: Mr. Justice Black, may it please the Court.

This is an action by six veterans of World War II against their former employer, the Pennsylvania Railroad to enforce claims based on the Section 8, the Selective Training and Service Act of 1940.

The Act provides for the representation of such claimants by the Department of Justice.

Petitioners prevailed in the District Court.

But the Court of Appeals for the Second Circuit reversed cases here on certiorari.

The facts were stipulated and may be briefly summarized.

Petitioners were hired in 1941 and 1942 as firemen on tugboats operated by the Railroad in New York Harbor.

Shortly after being hired, they left to enter military service in World War II and after serving for about three years, were honorably discharged.

The railroad as required in Section 8 (b) of the Act, restored petitioners to their old jobs as firemen.

In 1959, the job of firemen or as sometimes called oilier on all for the railroads diesel tugboats in New York Harbor was abolished on the ground that diesel tugboats don't need a fireman.

And this action of the railroad precipitated a major strike.

The strike was settled by an agreement between the railroad and the union representing its employees which provided among other things for separation allowances.

That is severance pay to be given those employees like petitioners whose jobs were abolished.

Now, the amount of these separation allowances was measured by the number of months of the employees compensated service for the railroad.

Compensated service, being a term defined in this fashion, a month of compensated service was any month in which the employee had worked at least one day for the railroad.

And a year of compensated service was 12 such months or a major portion thereof, seven months.

These petitioners, these veterans, of course, had not been able to work one day of month during their three years in military service in World War II.

And the railroad decided that their period of military service should not be counted as compensated service for purpose of computing the amount of the separation allowances to which they were entitled.

And the result was that each of these petitioners received some $1200 less in separation allowances than he would have received had his military service been counted or in other words had his civilian employment with the railroad never been interrupted by military service.

Justice John M. Harlan: Wasn't there another option that the court could put bargaining agreement gave these people?

Mr. Richard A. Posner: Well, employees –-

Justice John M. Harlan: Stay on and they have 20 years to stay on that the job?

Mr. Richard A. Posner: Employees who had 20 years seniority, seniority being measured from first being hired by the railroad were given an election.

Petitioner Accardi was the only one of the six veterans who qualified who have the 20 years.

He is the only one could elect and he elected instead to take these -- to take his separation allowance.

Now, Section 8 (c) of the Selective Training and Service Act requires that any veteran who is restored to his former civilian employment, as Section 8 (b) requires and as was done here, shall be restored without loss of seniority.

And the only issue in this case is whether these petitioners were denied seniority in being refused separation allowances in an amount equal to what they would have received had their military service, had their civilian employment not been interrupted.

This issue in turn ends on how two questions were answered.

The first is whether the measure of the separation allowances, what the contract between the union and the railroad calls length of compensated service was seniority in the statuary sense.

And the second question is, if so, are these allowances accorded on the basis of seniority the kind of benefits which the Act means to protect for the veteran?

And the first of these questions requires us to examine the concept of seniority as it's used in the Act.

And I think we can usefully approach this by asking why Congress should have selected seniority as a standard of the veterans' reemployment rights.

It's clear I think what the basic impulse behind these veterans legislation is.

It's the feeling that veterans should not be penalized in their civilian employment careers, by reason of having been called into the armed services in an hour of the country's great need.

On the other hand, if this thought, this desire for equality were carried to its logical extreme, the results would be rather disruptive and impractical.

Because if one really wants to fully equalize the employments status of a veteran and of a nonveteran, that would mean, for example, compiling the employer to make up the difference in pay scales between the armed forces and the civilian employment.

Or it might require compelling an employer to attribute to a veteran a skill or qualification that he might have received had he not been inducted into the armed forces but that he didn't receive.

In other words, there are difficult questions in social policy involved in -- if one is to go so far as to require an employer to pay a veteran for work he didn't do or for a skill he didn't attain, although he would have.

On the other hand, as Congress well knew, at least in those industries where collective bargaining with independent unions is the prevailing mode of regulating industrial relations, many of the perquisites of employment, promotions of various sorts, wage increases, vacation rights, retirement rights, order of lay-off and recall, are made to flow automatically from the length of the employee's service with the employer.

And these benefits or perquisites are not intended to compensate an employee for the work he's done or as an incentive better work in the future.

And if you require just these benefits, benefits which are accorded mechanically, automatically on a basis of time served to a veteran as if he had never been inducted, you don't have any of these disruptive effects on the employer's managerial discretion.

And we submit that in making seniority the statutory test to these veterans' employment rights, Congress meant to protect for the veteran this entire range of benefits which are conferred on the basis of how long you've been on the job.

And don't have any implication of the reward for the value the employee's contribution or for the skill of his work.

And if this is the proper test, then clearly, the veterans in this case were improperly denied separate -- the full separation allowances to which they were entitled because the measure used in this agreement defined the amount of separation allowances.

What the parties called length of compensated service was in all practical respects a measure based on time of the employee in the railroads employ and it had nothing to do with attempting to compensate employees for their particular contributions to the railroad's business or for the skills they had attained or anything of that sort.

Justice John M. Harlan: If the collective bargaining agreement was giving them a lump sum which is less and what they would've earned have they been working during -- that they would have received a period of service, you wouldn't quarrel with that?

Mr. Richard A. Posner: No.

There is no requirement that -- if I understand your question correctly that the employer pay any amount in lieu of wages for the period when the veteran was in the service.

He didn't work for the employer he is not entitled to any wages.

Now, these separation allowances are not a -- they're not an end of employment bonus or additional wage compensation, they're a method of a tiding over the employee in readjusting to another job to his lost of this job.

Justice Hugo L. Black: They're to compensate the lost wages, aren't they?

Mr. Richard A. Posner: They are to compensate for lost future wages.

Justice Hugo L. Black: Is that's for the future?

Mr. Richard A. Posner: Yes, they are in essence an exchange for giving up your job rights for what you're going to do in the future.

And they were provided here on a basis simply, in all practical sense, simply on how long you happen to have been around the job.

An employee who started work the same day as these veterans in 1941 or 1942 and who worked, he may have worked very sporadically over 20 years but nevertheless managed to put in at least one day a month, he would be entitled to a far larger separation allowance than a veteran who worked steadily.

All of the 17 years he was on the job but of course during the three years of his military service couldn't render this nominal service of one day a month.

And this kind of inequity, this arbitrary, a distinction and treatment between veterans and nonveterans, we think, is just the kind of inequity that the statute was meant to prevent.

Because from the employer standpoint, he can treat the veteran and the nonveteran alike in terms of these separation allowances without being involved in problems of paying compensation for work that that wasn't done.

I might say that on this first point, the court below was in agreement with the Government's position, although the respondent has taken vigorous issue with it.

The court agreed that these separation allowances were measured by seniority by length of service within the meaning of the statutory term.

What troubled the court was, some additional language in Section 8 (c) which in the court's view carve out a set of benefits as to which the veteran and doesn't have the right to be treated the same as his co-workers who were not inducted.

This language which is set out on page 3 our brief is the first and third clauses of 8 (c), where it says that any person who is restored to a position as required by the Act shall be considered as having been on furlough or leave of absence during his period of training and service and shall be entitled to participate in insurance or other benefits offered by the employer pursuant to the established rules and practices relating to employees on furlough or leave of absence in effect with the employer at the time such a person was inducted into the armed forces.

Now, what the court below felt was that there is a -- there is this category of insurance or other benefits which the court felt included these separation allowances as to which you treat the restored veteran, as if he had been on a leave of absence rather than as if he had been working during his period in service.

Now, we read this language in 8 (c), these leave of absence benefits created in the statute, rather differently.

This language on which the court relied was added, as we explain more fully in our brief, as an amendment to the basic bill which had created these veteran reemployment rights based on seniority.

And the purpose of this additional language was not to curtail or qualify those rights, carve out an exception for some seniority rights, but to create additional rights, and specifically as the legislative history indicates, the intent was to protect the continued participation by inducted employees in group insurance plans which employers set up with their employees.

Now, under these group insurance plans, the plan would continue in effect, continue to protect an employee even if happen to be laid off or take a leave of absence.

And what Congress desired was that when a man was called into the armed forces he should be treated no worse in terms to these insurance programs than his co-workers who might be on leave of absence.

Justice William J. Brennan: Well, does that mean Mr. Posner that other benefits takes a connotation of insurance, things like insurance?

Mr. Richard A. Posner: Well, I think Congress had in mind, group insurance plans.

I think the language is broad enough to embrace any benefit which employers extend to their furloughed employees.

It seems to me, if -- another example doesn't come to mind but whatever benefits at the time these people were called into the service, the railroad had in effect four furloughed employees, would continue to accrue in favor of these inducted men.

They wouldn't lose the benefit of this merely by being inducted, and if -- so that what we're talking about here is benefits of the pre-restoration stage in the employee's career.

While he's in the service, he's entitled to these 8 (c) leave of absence benefits.

When he's restored to his civilian employment, he then becomes entitled to all benefits perquisites of seniority which may accrue.

Here, these separation allowances were first created in 1960 long after these veterans returned from the service and were available to employees in the service of the company.

Justice William J. Brennan: Well, I suppose for example a furloughed employee you suggest were entitled vacation pay, were there some such arrangement as that while they were in service, they'd get vacation pay?

Mr. Richard A. Posner: I can't imagine that -- I suppose it's possible, it seems to me, very unlikely that employers would provide vacation pay for workers who were laid off --

Justice William J. Brennan: My difficulty is knowing what other benefits, insurance you suggest.

This means keeping alive their participation on a group insurance program.

Mr. Richard A. Posner: Yes.

Justice Abe Fortas: Suppose --

Justice William J. Brennan: I think that's easier, but don't quite see what other benefits --

Justice Abe Fortas: Suppose it was profit sharing and the company's plan provided that an employee even though he's on a leave for the whole year of part of the year is entitled to share pro rata and the distribution of profits according to the whenever a formulas provided.

I suppose Mr. Justice Brennan's question would present the issue of whether a returning veteran would then claim that distribution of his few share of the profits?

Mr. Richard A. Posner: Well, I think he would, again the example -- it strikes me as unlikely that the employer would make this kind of provision for employees who weren't actually rendering service.

But if the employer decides that furloughed employees are entitled to a continuing share in the profits, it seems entirely fair and inconsonance with the benevolent purposes of this legislation that a person involuntarily furlough because he was called into armed forces should be entitled to the same profit sharing or other benefits as a man, an employee, who likewise is not actually rendering service because he's on furlough.

And even if there is some plausibility to the instruction placed on this insurance or other benefits clause by the Court of Appeals, it seems to us -- the result, it seems to us, anomalous and wholly inconsistent with the objectives of this legislation.

If what was at stake here was not severance pay at all but a one set now or wage increase, there's no question but that veterans assuming the wage increase was key to seniority, veterans would be entitled to be treated as if they'd never been inducted.

What is in fact at stake here is something far greater than a once in an hour wage increase.

These separation allowances, in some cases, are the equivalent of a full year's wages.

And not only are they substantial in character, but realistically what these wages are, are a quid pro quo for the surrender of seniority rights and benefits.

The clearest case is petitioner Accardi's.

Because of his 20 years seniority he had a right, a right based on seniority to continue in the employ of the railroads.

And he surrendered this right to seniority in exchange for this lump sum payment.

And if the seniority -- the 20 years seniority which he gave up was a right protected by the Act, so also we think should be the lump sum which took the place of that seniority right.

Justice William J. Brennan: Well, may I ask Mr. Posner let's see in -- actually what happened here?

Accardi did get some severance pay, did he?

Mr. Richard A. Posner: Yes, he got 17 years.

Justice William J. Brennan: 17 years --

Mr. Richard A. Posner: Worth of --

Justice William J. Brennan: -- and that's not giving him any credit for his time at service, is that it?

Mr. Richard A. Posner: That's correct.

Justice William J. Brennan: And if that by credit he would get 20 years on the basis of 20 years.

Mr. Richard A. Posner: Yes.

Justice William J. Brennan: How much difference would it make in dollars?

Mr. Richard A. Posner: $1200.

Justice William J. Brennan: $1200?

Mr. Richard A. Posner: And on the basis of 20 years of compensated service, the employee was entitled to 50 weeks pay which is almost to full year's wages.

Justice Byron R. White: Well, Mr. Posner could the employer in -- have said I'm going to give this separation pay based only to those people who have worked 3/4 of the days during the month?

Mr. Richard A. Posner: No.

I don't think that would change the case at all although our case underlines the arbitrariness of the result but --

Justice Byron R. White: And the employer would just disentitle to limit separation pay to those who had worked, actually worked?

Mr. Richard A. Posner: If the separation pay is designed not to reward an employee for particular services or contribution to the company, but it is designed to follow automatically from length of service, then he must treat the --

Justice Byron R. White: You say disentitled to make it follow the length of work?

Mr. Richard A. Posner: That's correct.

That is the Tilton case which this Court decided unanimously in the veteran's favor just two terms ago.

The facts there were that in order to be entitled to promotion from apprenticeship to journeyman status that you had to spend 1000 days as an apprentice and you actually had to be on the job as an apprentice for those thousand days.

The veteran had served several hundred of these days before World War II and had been called into service and had returned and finished the balance of the thousand days.

And the Court said, that his seniority as a journeyman in his new position had to be backdated so that -- so as to treat him just as if he had completed this apprenticeship during his military service, and although actual service on the job was the requirement for the promotion, the veteran had to be treated as if he had rendered such service during the period of military service.

Argument of Edward F. Butler

Mr. Edward F. Butler: Mr. Justice Black, may it please the Court.

I think I should underline that the real issue here is whether or not there is anything in the provisions of the Selective Service Act, specifically provisions in the Section 8 (c) which should be read to override the plain provisions of a collective bargaining agreement that was freely negotiated and freely arrived at by the employer and the union representing the employees.

And I think, to see this issue in its proper setting it would be helpful if I make a somewhat in large statement of the facts gave a somewhat greater interpretation of the agreement than has thus far been placed before the Court.

As the Court has been informed, when these petitioners went in the military service back in 1943, there were no provisions in the collective bargaining agreement for separation pay.

Separation pay was a thing unheard of so far as the railroad was concerned in any of its collective bargaining agreements.

And that was so for many years after these veterans were restored, and when they were restored after their completion of their military service, they were restored with seniority date which in every way complied with the provisions of the Selective Training and Service Act of Section 8 (c).

That is included -- stipulated in the stipulation which is in the record before the Court.

Now, these petitioners had no antecedent rights to separation allowances.

We come now down to 15 years later, in the year 1959, and at that time a labor dispute arose between not only the Pennsylvania Railroad, but seven other railroads who operate railroad tugs in New York Harbor.

Between them and the employees who perform the duties of the job classification known as oilers on those tugs.

And this dispute precipitated a strike.

It was a strike that tied up the movement of the rail freight and the harbor of the City of New York for some time.

It eventually resulted in litigation which finally reached this Court.

And ultimately, after these many months of turmoil, the parties got together and they solved their differences.

This agreement that they made was a two-pronged agreement.

First, it provided that all employees in the oilers classification who had seniority of 20 years or more could stay on the job.

And in computing seniority, full credit was given to the time of the veterans in military service.

When it came to measuring the quantum of the separation allowance, here the parties bargained for a separation allowance based on a measuring run of length of compensated service and this length of compensated service by its definition excluded the period of time that these petitioners spent in military service.

And also, another very vital point, excluded the time of any other employees who were on furlough during the course of their employment for any other nonmilitary reason and there were many of those.

Justice Abe Fortas: You mean that there was an explicit exclusion of people in the category of these petitioners?

Mr. Edward F. Butler: I do not mean there was an explicit exclusion, sir.

I mean that the definition of the term length of compensated service and the mechanics which the agreement called forth to spell it out made it perfectly evident that people who had not been on the job and earning pay were not qualified for the period of time that that was so.

Justice William J. Brennan: Mr. Butler, does that definition appear on the record?

I see the agreement here --

Mr. Edward F. Butler: The agreement is in the record in full --

Justice William J. Brennan: Yes --

Mr. Edward F. Butler: Mr. Justice Brennan.

Justice William J. Brennan: -- I just wondered whether the -- you could refer me to the definition itself of compensated service.

Mr. Edward F. Butler: I don't believe there is any specific definition of compensated service as such.

Justice William J. Brennan: Oh I see.

Mr. Edward F. Butler: Except that in the note on page 10 underneath the column or tabulation, the agreement states, a month of compensated service is any month and which the employee worked one or more days.

So in that sense, there is an explicit definition that in order to qualify under the term 'compensated service' you have to work on the job.

Justice Byron R. White: Of course the Government's position, as I understood Mr. Posner, is that you can argue this case even though there was a specific and expressed attempt to exclude this category of the person.

The Government says that the employer just absolutely disentitled to exclude the kind of person that it involved here, one that was off in service.

Mr. Edward F. Butler: I think that is the Government's position Mr. Justice White and we think it's an entirely unjustified position and that there is nothing in Section 8 (c) or the Selective Service Act that requires this.

Justice Byron R. White: You think Tilton controls that question?

Mr. Edward F. Butler: Sir?

Justice Byron R. White: You think Tilton controls that question?

Mr. Edward F. Butler: No.

No.

Justice Byron R. White: In Tilton, at least, the petitioners came back there and completed the work.

Mr. Edward F. Butler: That is right, sir.

Justice Byron R. White: They came back to have completed their service as in the credit and then their seniority was dated back.

Mr. Edward F. Butler: I don't think Tilton controls it, because Tilton involved the question of seniority and what privileges were to pertain to seniority.

Justice Byron R. White: But there was the question of an advancing from an apprentice to a permanent position and you had to do those for a certain period of apprenticeship before you became permanent.

Mr. Edward F. Butler: That is right, sir.

Justice Byron R. White: And then when they came back to service, they should leave the apprenticeship.

Mr. Edward F. Butler: That is right, sir.

Justice Byron R. White: From what date did their permanent status --

Mr. Edward F. Butler: This Court held that it had to be dated back.

But that case, as I say, involved --

Justice Byron R. White: But that case didn't hold that if they hadn't have done the work, they were entitled to a permanent --

Mr. Edward F. Butler: By no means.

By no means and I think that the McKinney case by pointing out that where job benefits are not automatically tied to seniority, then a veteran does not become entitle to them under the previsions of Section 8 (c) is also of considerable relevance to this case.

But more than any other previous precedent in this Court which is, we respectfully submit important, are the precedents of the Aeronautical Lodge against Campbell and Trailmobile against Whirls.

Because those were cases decided a number of years ago in which this Court held that under situations where veterans had already vested rates after being restored to employment, that those rights could be divested by the terms of a collective bargaining agreement which was fairly arrived at without any taint of hostility toward veterans.

And we respectfully submit that no such taint can be levied at the agreement here.

Justice Hugo L. Black: I presume you're saying that he had been on the furlough for six months or gone six months leave of absence that they couldn't have their pay?

Mr. Edward F. Butler: That is right sir, and that is the --

Justice Hugo L. Black: (Inaudible)

Mr. Edward F. Butler: That is right, sir.

So that -- both veterans and nonveterans were treated equally so far as time off the job was concerned.

Justice William J. Brennan: That's your 8 (c) argument, isn't it, Mr. Butler?

Mr. Edward F. Butler: Well, this is -- my argument is that 8 (c) doesn't control this case.

Section 8 (c) simply requires that a veteran be restored without loss of seniority.

Now, what benefits are to be perquisites of seniority is left entirely by 8 (c) to the collective bargaining agreements between the parties.

Section 8 (c) doesn't undertake to impose a seniority system.

Section 8 (c) assumes and accepts the seniority systems that have been negotiated by the parties and are in effect in any employment situation to which Section 8 (c) is applied.

Now here, the plain fact is that the employer and the union negotiated a settlement of this strike by awarding separation allowances based not on seniority.

And it was perfectly confident for them, we respectfully submit, to make that choice.

Section 8 (c) does not mandate that in computing separation allowance or anything else that seniority must necessarily be the measuring rod.

Indeed, this Court in the Ford Motor Company against Huffman case pointed out the wide range of discretion that must be given the employer and the collective bargaining agent to work out arrangements which are fair to the entire bargaining unit and we respectfully submit that that duty was fully met and fully discharged here.

It would --

Justice William J. Brennan: I suppose then, Mr. Butler, if you had a vacation pay program under a collective bargaining agreement that said, four weeks vacation pay after 20 years of compensated service, three with vacation pay after 17 years of compensated service, and they have this provision you pointed to at page 10, you'd say the party got only three weeks and not four, isn't it?

Mr. Edward F. Butler: I would, yes.

I would, and the agreement that we have here, the agreement that these parties worked out and I wish to emphasize that it would work out really under most difficult conditions and Ford's dried out of the better heat of industrial conflict.

The agreement that these parties hammered out, was an agreement which has -- is not unusual in many of its features.

The Department of Labor has recently published a very comprehensive follow-up in this area, entitled Severance Pay and Lay-Off Benefit Plans.

It reviews the various types of separation pay and lay-off benefit plans that are found throughout the country.

And it's immediately apparent that a wide variety of measuring rods has been used, seniority has been used.

Perhaps the most common measuring rod which has been used for separation pay is a -- the employee's total earnings during the cause of his employment.

Now, of course --

Justice William J. Brennan: I wonder -- suppose here is any basis for the assumption -- presumption call it if you will that but-for the three years he spent in service Accardi would have worked at least one day a month?

Mr. Edward F. Butler: I think --

Justice William J. Brennan: In the years 1940 to 1943?

Mr. Edward F. Butler: I think the Court can well assume that he would have, but I don't think that's dispositive of this case.

Because what he is entitled to so long as the agreement that has been made on his behalf by the union with the employer was concerned is not hostile to veterans and doesn't discriminate against them so long is that so, then I think we have to abide by the agreement.

Justice Byron R. White: Well, what if the agreement based vacation or the severance pay on the length of seniority --

Mr. Edward F. Butler: Then we would've computed seniority by giving him credit for the military service.

Justice Byron R. White: And that would -- anything -- anything that is computable just by reference to the passage of time or that's automatic in the passage of time he would've got credit for it, wouldn't it?

Mr. Edward F. Butler: He would have because the agreement would have given it to him.

Justice Byron R. White: And you think the one day a month really takes it out to that category?

Mr. Edward F. Butler: I don't think the one day a month affects it one way the other, Mr. Justice White.

This was a compromise reached after hard bargaining between the parties.

Presumably, the --

Justice Byron R. White: Why if could -- do think the parties could have agreed for example that there well be severance pay based on length of seniority but excluding credit for a military veterans?

Mr. Edward F. Butler: No, I do not, because that would be discriminating against veterans.

Justice Byron R. White: If the duty is to dispositive of the case doesn't say the parties agreed on it or that it was in the heat of a labor conflict?

Mr. Edward F. Butler: I will modify that by saying, it's dispositive of the case if the agreement is without taint of hostility toward veterans, if it doesn't discriminate against veterans.

Justice Byron R. White: Well, I'm just asking you again then that you think the one day a month thing is so significantly different from just basing it on seniority which is automatic in the passage of time?

Mr. Edward F. Butler: No, I do not.

No.

Justice Byron R. White: You think it's not significantly different?

Mr. Edward F. Butler: I don't it's -- well, I think it is significantly different because it's still compensated service.

It's a way of measuring length of compensated service.

And I would like to --

Justice Byron R. White: Yes.

Mr. Edward F. Butler: -- I would like to make this point that here, of course, at the time this settlement was made, the railroads involved were able to estimate, at least they thought they were able to estimate the total cost of this package.

Justice William J. Brennan: And this application to fellow veterans during last war, I take it, never got into the negotiation?

Mr. Edward F. Butler: Never got into the negotiations.

And the record -- the stipulation in the record affirmatively shows or stipulates that this agreement was made in good faith and there was an affidavit before the Court, which was not contradicted.

An affidavit submitted on behalf of the railroad which stated by a person who was involved in the negotiations that there was no intention on the part anybody to discriminate against veterans.

Now, let me point out what might have happened if the parties had attempted to accommodate this point.

Our basic position is that they were not required by Section 8 (c) to accommodate it.

But let's suppose that it had been raised and they have attempted to accommodate.

I think the only thing that can realistically be hypothesized here is that they would have tried to rearrange the formula to still fit within the total cost of the package.

And they probably would have then, if they gave the veterans credit for their time in military service, would have given the other furloughed employees credit for their time while they were laid-off or on leave of absence.

And in the end, these veterans might have gotten a less individual benefit than they've already received, because this would necessarily have deluded the benefit that went to each individual.

Now, I think that it's a matter of fact the agreement itself --

Justice William J. Brennan: Well, it did provide for the furlough, or didn't it, expressly?

Mr. Edward F. Butler: I beg your pardon sir.

Justice William J. Brennan: As I noticed at page 10, the furloughed oiler as such was taken care of provided herein at least $26,000 as an oiler engineer from 1958 to 1959.

Mr. Edward F. Butler: I think there is another significant provision that is directly relevant to the point that I was just making, Your Honor, contained on page 12 of this agreement.

You will note down there under paragraph 9.

The parties addressed themselves to the question of the New York Central Railroad Company which at that time didn't have any diesel tugs.

They had steam tugs but they were planning a diesel operation and they were looking forward when they planned the diesel operation to laying-off these oilers.

And the agreements specifically says as dieselization proceeds the parties will endeavor to accommodate the principles adopted herein to the success of steps of dieselization.

The carrier shall not be required to provide any benefits more extensive or relatively more expensive than those provided herein.

Obviously, what the railroads were interested in was in achieving their objective within their own financial limitations.

Presumably, each one had put a limit on the amount to the package, the amount he was willing to pay to achieve this objective.

And if substantial additional cost is now to be imposed upon them, we think that certainly it's not required by Section 8 (c) and would be obviously inequitable.

Now, I would like to close by saying a word about the last clause of Section 8 (c) which -- Section 8 (c) contains four different provisions with respect to veterans.

It says, first, that after they're restored, they shall be considered as having been on furlough or leave of absence.

Now, that's just exactly the way we treated them as though they've been on furlough or leave of absence.

So we have certainly complied with that part of Section 8 (c).

But the last clause is the one to which I would like to direct the Court's attention.

And that is the clause which provides that he after being restored and given these rights, he shall not be discharged from such position without cause within one year after such restoration.

Now, this Court has held in the Oakley case that that one year period is not a statute of limitations.

Nevertheless, in Whirl Mobiles, this Court held that that did apply not only to discharges but to the cutting back of any other kind of employment benefits which a veteran had.

So that while in the Oakley case, it was held to be not a statute of limitations.

It stands here in the statute as testimony of Congress' intent that these benefits not be frozen into the employment relationship per omnia saecula saeculorum.

And here, we have a collective bargaining agreement and into 15 years after these people completed their period of military service and we thing that the agreement was nondiscriminatory at its terms excluded there time in military service and if the judgment below should be affirmed.

Thank you.

Justice William J. Brennan: What's your answer, Mr. Posner, to that argument in this respect that there's nothing about the Selective Service and Training Act which limits the authority of the parties to make this claim of a standard as the measurement, agree upon this kind of a standard even though its consequences to set out the veterans three years credit that otherwise he'd have were just length of service.

Rebuttal of Richard A. Posner

Mr. Richard A. Posner: Well, I think there are two answers.

The first is that in the Fishgold case, the leading case in by Mr. Justice Douglas in this area.

The Court stated explicitly that the parties in their contract could not cut down the rights of veterans.

But I think beyond that, this case illustrates how if you permit the parties to have carte blanche in dealing with these rights of seniority the results are anomalous because Mr. Butler concedes that if pure length of service were the criteria these veterans would be entitled to equal treatment with nonveterans.

The contract between the --

Justice Byron R. White: But on the other hand do you concede that the parties that the employer here and they could agree now to make earnings the basis for seniority and therefore not include any times spent in the military?

Mr. Richard A. Posner: Well, I think if the -- and test of earnings might or might not be this.

If the period the separation allowance was as a kind of bonus for past work as revealed by earnings.

Justice Byron R. White: Well, all you've got unfortunately is the provision in the contract, were going to make the separation by total earnings.

Mr. Richard A. Posner: Well, I think that would be a difficult case, but I think if the basic point, and again, it would -- something would have to known in that case about the circumstances of the provision.

But if the intension is to make given a benefit based on length of service, however that's measured, it seems to us --

Justice William J. Brennan: Your point is that the man -- if an employer is going out of business and he's going to make a separation pay provision, well then -- and it's going to be based on anything that is related to employment which the veteran could not perform because he was in the service.

Nevertheless, he's got to be given credit for that time, is that it?

Mr. Richard A. Posner: Yes, with the qualification that if the nature of the benefit is one designed as actual compensation wages.

The veteran is not entitled to wages for time that he was in the service.

But whereas here you have a separation allowance based on nominal service.

The basic standard being length of employment and the intension merely to grant an automatic benefit to those who have been on the job for a long time, veterans are entitled to be treated as if they have been employed.

Featured:

Brooks v. Missouri P. R. Co. - Oral Argument, Part 2

Wed, 16 Jan 2013 22:48:50 +0000

Case:

Brooks v. Missouri P. R. Co.

Media File:

53_19640108-argument-2

Related Transcript:

53_19640108-argument-2

Transcript:

Argument of Philip B. Heymann

Chief Justice Earl Warren: Robert C. Brooks, Petitioner, versus Missouri Pacific Railroad.

Mr. Heymann, you may continue your argument.

Mr. Philip B. Heymann: Thank you Mr. Chief Justice, and may it please the Court.

I'd like to begin my argument by making clear one point that is crucial to our case and then I'm afraid I left very obscure yesterday.

We are not claiming that the veteran has any rights in a higher position until after he has fully completed any work requirement that the employer imposes.

He must actually work the number of days the employer requires before he has any rights in a higher position.

Now, to take an example that will make that absolutely clear.

If the employer -- if the employee has worked 100 days before he goes into military service and then misses, let's say 600 days of a 1040-day period, because of his military service.

When he returns, he must work 940 more days.

He must get in 1040 days of actual work.

This -- this case, the Brooks case, and the Tilton case which was the last one, only arise after he's actually completed 1040 days of actual work.

At that point, he says, “I'd like my seniority date to be placed so I haven't lost my relative seniority position.”

And that's where these cases begin after 1040 days of actual work.

Justice William J. Brennan: (Inaudible)

Mr. Philip B. Heymann: That's it Justice Brennan.

He has to work 1040 actual days of work -- military service not counted towards those.

Justice William J. Brennan: He has no -- he has no right to work those 1040 days that's involved, doesn't he?

Mr. Philip B. Heymann: He has no right -- he has actually under the contract on his return, certain rights to work ahead of other people.

In the Brooks case, an apprentice has a right to continue his apprenticeship.

In the cases before this, a upgraded helper has a right to work ahead of those who were junior to him in upgrading but does it on -- he has certain contract rights but --

Justice William J. Brennan: But that's all --

Mr. Philip B. Heymann: That's all --

Justice William J. Brennan: -- is it layoff or a shutdown?

Mr. Philip B. Heymann: In -- if there is a layoff, if there's a shutdown, anything that happens after his military service is at the employee's peril.

Justice William J. Brennan: He is subject to all those perils --

Mr. Philip B. Heymann: He's subject to all those perils.

Now, we -- I had argued yesterday that the function of the statute, or the most important function is to grant the veteran as a matter of statutory right, what would've been his as a matter of contract right, had he been “continuously employed.”

Those words have been used all the way back to fiscal decision at the very beginning.

I then argued that the quotes were taken from around the words “continuously employed” in a Diehl for the first time.

The issue what “continuously employed” meant was squarely faced and decided and it was held that it means continuously at work when -- when the veteran would've had a right to work.

That was the only case that has taken the quotes away from the words “continuously employed.”

And I finally said that in the McKinney case, the McKinney case was a case that again could be decided with the quotes around continuously employed.

It said the veteran can only claim what would be his as a matter of right, had he been continuously employed when he was in military service.

He cannot claim what would've been his only in the employer's discretion, had he not been in military service.

But only one case has passed on exactly what “continuously employed” means and that's the Diehl case and that's never been overruled.

I had begun to discuss Brooks yesterday, Brooks was an apprentice in contrast to Diehl who was an upgraded helper.

And I'd said that the requirement of finishing 1040 days of apprenticeship was, we believed, identical to the requirement of working 1040 days as an upgraded helper in Diehl, I'd also talked about the requirement of a correspondence course.

There are two other things I should mention in Brook -- Brooks, two other points that I do not think are difficulties but they are points.

The first is, the respondent suggests that the fact that Brooks transferred a number of times after returning to Monroe, Louisiana, maybe relevant to this case.

One of those transfers was apparently a discretionary transfer with the employer.

My answer to that is very much what I answered Justice Stewart before.

“We're only reconstructing his time of military service.

He left Monroe, Louisiana and he returned to Monroe, Louisiana.

He claims the right to be treated during that gap in his employment career as if he had been continuously employed.”

There are no transfers as to the rest of his career after his return, he takes that as it falls, that's his actual history of -- he gets lot of days of work, that's fine if doesn't, that's fine too.

When Brooks returned to Monroe, Louisiana after his military service, he had certain statutory rights because there would've been contract rights had he been continuously employed.

One of those was a right to be treated as if he had worked whenever he would've had the right to work, had he not been in service.

He -- he carried this with him wherever he went later.

And later when he actually completed 1040 days of actual work, he could count these days in setting his seniority date.

Later transfers just aren't relevant in the case.

The final variation in the case is --

Justice John M. Harlan: (Inaudible)

Mr. Philip B. Heymann: I'm -- I'm not sure I understand Mr. Justice --

Justice John M. Harlan: (Inaudible) the same kind of work (Inaudible) in the location.

Mr. Philip B. Heymann: He -- he was doing the same kind of work.

Justice John M. Harlan: (Inaudible)

Mr. Philip B. Heymann: It would -- it -- yes, they're certainly relevant in the sense that he has to actually work and that the days of actual work are counted up and had he -- had he failed to get work after he returned from Monroe, Louisiana, could he -- and had he not been able to find work as an apprentice, that would've slowed him down very much.

The last -- their variation is the one the Eighth Circuit decided on.

The Eighth Circuit said in its decision in this case that Brooks had no right to be employed as a journeyman in North Little Rock on November 3rd, 1955, the date everyone has agreed for purposes of this case or for purposes of dating that he would've finished his apprenticeship.

They say moreover, it was certainly unforeseeable that there would've been a shortage of a -- of journeymen machinist at that time.

I'm -- I'm sorry, I have to take the Court back.

I had said yesterday that seniority as a journeyman begins on the first date that an apprentice works as a journeyman after completing his apprenticeship period.

It doesn't begin on the last date of completing the apprenticeship period but on the first day of work as a journeyman.

Well, to the Eighth Circuit's decision, we say that Brooks had the very sort of right to work as a journeyman on November 3rd, 1955 but the statute gives him a statute that the statute protects.

He had a right to be employed ahead of all those who were actually doing journeyman work on that date.

Not all of those, all those upgraded apprentices.

The record is clear that there were number of vacancies for a journeyman's work on November 3rd, in November, 1955, that these were being filled by upgraded apprentices and that any journeyman would've had a right to bump all -- what of -- well, the first or anyone of the upgraded apprentices and take that work.

All the statute requires in the way of a right to a promotion or a right to a seniority date or a right to work, is a right to fill a vacancy ahead of all the other claimants.

That's -- that's the holding of the Mckin -- of McKinney on remand, I don't know.

The Court remanded McKinney to determine whether McKinney would've had a right ahead of all other claimants to a -- a vacancy in group 1, he had been in group 2.

And the -- the only right that the Court required was a right ahead of all other claimants to fill a vacancy that in fact, existed.

Brooks had a right ahead of a number of claimants to fill a vacancy that actually existed at the time he would've completed his apprenticeship, he had a right to work as a journeyman at that time.

It's -- as a practical matter, it's hardly necessary to add that he -- as a practical matter, he had a right against his employer too.

His employer could only have failed to hire him as a journeyman by discharging a number of upgraded apprentices and seen a great deal of -- of machinist work left undone.

The other fork of the Eighth Circuit's decision was that even if this maybe so, the fact that vacancies would exist on November 3rd was certainly unforeseeable when he left.

This is the heart of the Brooks decision and the foreseeability is very much part of the decision in Tilton.

We believe that foreseeability is plainly not required under the statute.

This again was decided in the McKinney remand.

When McKinney left for service, he couldn't have known that there would be a vacancy in group 1 during his absence.

The Court held that if he had a right to be the one to fill that vacancy, he was entitled to, on his return, to be given that vacancy.

Now, that was unforeseeable but the Court squarely held that he had that right.

Foreseeability simply doesn't -- isn't simply -- isn't a requirement for the veteran to assert his rights.

Now, in conclusion, I'd like to say just about three or four sentences.

I've argued this case very largely in terms of it having been decided in Diehl that a veteran should be treated as if he were continuously at work, and this decision not having been later reversed by the Court in McKinney, McKinney involving a quite different problem.

I'd like to say in conclusion that even if Diehl were not there, the Diehl result seems to me, to be almost dictated by the statute.

The statute directs the employer in the courts to return the veteran without loss of seniority.

The veterans in a case like this where they haven't been able to complete a number of days work requirement, 1040 days in both this cases and in Tilton, have sustained a very substantial loss of seniority.

There is no question but the best approximation of maintaining their seniority position is to treat them as if they had been at work whenever they had a right to work and not to treat them as if they had been on a leave of absence, which is one thing they wouldn't have been on.

Against that best approximation, the only fact -- there are no factors as there were in McKinney that weigh against adopting that best approximation.

There is no interference with the employer's discretion which were in the Court in McKinney.

There's no invitation for the Court to plunge into a -- an attempt to litigate imponderables, would the employer have promoted this man.

It's simply a question of treating this if he had worked when he had a right to work.

I think the Diehl result would be reached if it were fresh and it was certainly reached in Diehl.

Thank you Your Honor.

Chief Justice Earl Warren: Mr. Light.

Argument of Robert V. Light

Mr. Robert V. Light: Mr. Chief Justice and may it please the Court.

This case was tried in the Eastern District of Arkansas like Tilton that came here through the Eighth Circuit.

There are a number of factual distinctions between this case and Tilton.

In the first instance, Mr. Brooks was engaged in a traditional type of apprenticeship, a formalized traditional arrangement requiring coincidentally, 1040 days as did the -- which was the day requirement in Tilton.

However, it's quite clear in this case that this was a training period, not simply a work period.

This is made clear by the correspondence course that Mr. Justice White referred to yesterday.

Justice Byron R. White: (Inaudible)

Mr. Robert V. Light: A journeyman machinist --

Justice Byron R. White: (Inaudible)

Mr. Robert V. Light: Your Honor.

Justice Byron R. White: (Inaudible)

Mr. Robert V. Light: He works under the journey -- you mean when he's on the job working as a machinist apprentice?

Justice Byron R. White: Yes.

Mr. Robert V. Light: During the training period, he works under the supervision of the journeyman machinist performing machinist type of work in order to qualify to ultimately become a journeyman machinist.

But it all --

Justice Byron R. White: (Inaudible)

Mr. Robert V. Light: The record is unclear on that, I'm -- I'm certain they have apprentices --

Justice Byron R. White: If the -- in the announcements, they have to know (Inaudible)?

Mr. Robert V. Light: Your Honor, frankly that is not in the record -- that was not developed, unlike --

Justice Byron R. White: (Inaudible)

Mr. Robert V. Light: The -- the point that this is a training period?

Justice Byron R. White: Yes.

Mr. Robert V. Light: Well --

Justice Byron R. White: (Inaudible)

Mr. Robert V. Light: Well really, the only thing in the record on that, Your Honor is that the correspondence course which is a two --

Justice Byron R. White: (Inaudible)

Mr. Robert V. Light: The Railroad Company through its apprentice instructor who testified in this case --

Justice Byron R. White: (Inaudible)

Mr. Robert V. Light: That again was not developed in the trial court, Your Honor but he does testify and as I say, the only thing in the record on that point, that if the apprentice machinist gets as much as three months behind and his correspondence course is either two lessons per month by correspondence, that he's in a subject to dismissal from the apprenticeship.

Justice Byron R. White: (Inaudible)

Mr. Robert V. Light: Well, I think we must infer that there are some -- some skill and some learning involved in -- in -- either that's implied from the course itself, the course -- correspondence course of study.

Justice Byron R. White: (Inaudible)

Mr. Robert V. Light: Well, the standard of sufficient proficiency be retained in the apprenticeship.

Justice Byron R. White: (Inaudible)

Mr. Robert V. Light: Well, perhaps we -- we find the -- the criteria that Your Honor is searching for in the written collective bargaining agreement as it pertains to apprentices.

There's a provision in there that during the first period which happen to be 130 days in apprenticeships, divided into eight periods, that if he does not show proficiency to become an apprentice or to become a -- a journeyman that he would be dismissed, that he will not be retained.

That's what the labor organization and the Railroad Company have agreed that he will not be retained if during the first period, he doesn't demonstrate proficiency, a positive standard.

Chief Justice Earl Warren: Then when he has finished this training period, is the employer at liberty either to employ as a machinist or to -- or to -- not to?

Mr. Robert V. Light: Yes, Mr. Chief Justice and that is another significant factor in this case that -- that distinguishes it from Tilton, argued yesterday.

The apprentice machinist under the collective bargaining agreement in this case, on completing his 1040 days, does not thereby acquire, on the 1040th day or the 1041st day, seniority as a journeyman.

In Tilton, the upgraded carmen helpers did acquire or make it on finishing their 1040th day and on making the election to forfeit their helper seniority, they did then acquire seniority on the carman -- journeymen carmen's seniority roster.

He does not, as an apprentice.

He has no right to an employment by the Railroad Company.

The practical affect to that is that if there were four carmen -- upgraded carmen helpers who had finished their 1040 days and one vacancy for a carman, then the one that would get it would be the one that first finished his 1040 days.

And contemporaneously, elected the forfeiters helper seniority and at that time, he went on the carmen's roster.

However, in this case, if there were four apprentices who had competed and one vacancy for an -- for a journeyman machinist, the one that would get it is the one that the Railroad Company would select from among the four regardless of whether he had finished the day before or year before because he has no seniority whatever on the journeymen's seniority roster until he's employed by the Railroad Company.

Selected and employed and works his first day and that's the day that he establishes on that roster.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert V. Light: Your Honor, I believe that rule is at page 62 of the record, Rule 37 (e) which states, “If an apprentice is retained -- if an apprentice is retained --

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert V. Light: -- in service.”

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert V. Light: I --

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert V. Light: I believe Mr. Justice Goldberg, subject to Mr. Heymann's correcting me when he makes his rebuttal that perhaps that is a -- a misprint and it should read Rule 37.

Now --

Unknown Speaker: 37?

Mr. Robert V. Light: Yes sir, it's Rule 37 (e).

Unknown Speaker: (Inaudible)

Mr. Robert V. Light: Yes, Your Honor.

Unknown Speaker: (Inaudible)

Mr. Robert V. Light: The trial court's findings of fact which of course were accepted by the Court of Appeals as it must accept them.

They were based on substantial evidence, were to the effect that there was a shortage of journeymen mechanics at the North Little Rock shops during this November period that we -- were talking about and I'll talk about a little bit more in a moment.

And that --

Unknown Speaker: (Inaudible)

Mr. Robert V. Light: Apprentices that presented --

Unknown Speaker: (Inaudible)

Mr. Robert V. Light: That -- that their -- that whatever discretion management had would've been readily -- readily exercised.

Unknown Speaker: (Inaudible)

Mr. Robert V. Light: That was the situation it found as the fact existed in North Little Rock at that time.

Now, I'll -- I do not say that the trial -- in fact, I contest that trial court's conclusion of law --

Unknown Speaker: (Inaudible)

Mr. Robert V. Light: -- that this would make it automatic within McKinney is -- is correct, that I think that it's not.

Chief Justice Earl Warren: Mr. Light, would it disturb your argument if I ask you to state briefly how the Missouri Pacific Railroad would be injured if this case was reversed?

Mr. Robert V. Light: Your Honor, wouldn't -- it would not disturb my argument at all.

There is no immediate prospect of injuring -- a monetary injury at Railroad Company.

It doesn't cost the Railroad Company anymore to employ Mr. Brooks than it -- than it would to employ whoever is now ahead of him on the seniority roster that he would jump if he's successful in this case.

There is a possibility that I haven't researched and reached the point of the finding -- searched and researched it that we would have claims from persons like Mr. Brooks if -- if this case is reversed, saying, “You had me in the wrong place on your seniority roster all these years, as the consequence, I was laid off when I should not have been and you owe me a back pay for that.”

The other disadvantages that a man could sustain as a result of being on the wrong place in the seniority roster, it'd be hard to measure the monetary damage but he could've been in a better job that might've had either more convenient hours as a result of his seniority or might've produced more overtime pay than -- than the job he was able to hold because of his relative position on the seniority roster.

Really, I'm here and the Railroad Company is here and in more or less, a representative capacity for the Railroad Brotherhood, that's an unusual position to be in but the labor organization of which the petitioner is a member, the AF -- AFL Railway Employees Department has filed an amicus brief here in support of the position that -- that I present.

Justice Byron R. White: (Inaudible)

Mr. Robert V. Light: No, I don't quite follow you that --

Justice Byron R. White: (Inaudible)

Mr. Robert V. Light: And I don't recall that is in either case, nor I don't think there's been any -- any suggestion to that effect here.

If -- if I'm following you on what sort of mistake --

Justice Byron R. White: (Inaudible)

Mr. Robert V. Light: The Government emphasizes in its brief that Brooks had a contract right to complete his apprenticeship once he had gotten into it and once he got over the first 130 days which was more or less a probationary or trial period.

I'd like to point out that that is not what it -- it might imply, his contract right to complete the apprenticeship.

He was not employed for a term of days or months adding up to 1040 year -- 1040 days.

He was employed to complete his apprenticeship specifically provided in the agreement that he could be discharged for cause during the entirety of the 1040 days and certainly, he was subject to layoffs, which an employee contracted to work for a -- a period of time would not be.

This is best evidence by what happened to Mr. Brooks in this case.

He came back from the middle of his service to Monroe and resumed his apprenticeship.

And thereafter, the -- there was a change and the work done at Monroe and he was laid off.

The machinist work was no longer available to him as an apprentice there.

So he had no right to continue his employment as such.

Now, he was able to some several months later, to find a vacancy in the St. Louis shops of the Railroad Company and transferred there in response to a system call.

But his so-called right to complete the employmentship -- to -- the employment to the extent that it is relevant isn't really what it implies.

That is, that he was employed subject to the layoff if -- if the work diminished and subject to a discharge for cause.

There is a stipulation in this case that I want to discuss to a certain extent.

November 3, 1955 was the date that Mr. Heymann has referred to that all parties agreed that -- and to use his expression “that he would have completed his apprenticeship but for the military interruption.”

What that was, that was not intended as a stipulation to make this ideal type of case that is an agreement that the 1040 days were simply a work period and was not a training period.

It was not intended to -- to take it out of the -- or to resolve the uncertainties, a non-automatic type of -- of criteria that was laid down in McKinney.

In 1945, the Railroad Company and the Railroad Brotherhood entered into an agreement which is referred to in this record as the Memorandum of Understanding of 1945, which provided the apprentices more.

The apprentices, who had been employed by the Railroad Company and then went to service during the course of their apprenticeship, went to the military service.

It provided them more than the Act provided.

It provided that upon return and completion of their apprenticeship with the Railroad Company after the military service, their seniority as journeymen would be fixed as of the date they would have completed their apprenticeship but for the military interruption.

Now, having made that provision and having apprentices now returning in the 1940s from the military service and completing their apprenticeship, it was necessary for these contracting parties, the Railroad Company and the Brotherhood to device a method of computation under that contract by which they would assign those seniority dates to these apprentices.

And it is that method of computation by which the November 3, 1955 date is reached.

That is we -- we do not agree by saying that he would have finished on November 3, 1955.

That all of these uncertainties that may have kept him from finishing are resolved, are no longer in the case.

All we say and it's quite clear in the parts of the record that I've quoted in the brief that operating under the Memorandum of Understanding on 1945 and computing the time as all such computations have been made, the date of November 3, 1955 is developed.

In fact, the Railroad Company contends and concedes that in this case, he's entitled to that date retroactive seniority at Monroe, Louisiana under the agreement, without reference to any right he acquires under the Act.

He doesn't want the seniority at Monroe and has rejected it because it's of little practical value to have seniority there where the work is not done or there's insufficient work done for him to be employed.

The -- the Court of Appeals made reference to that stipulation and -- and concurred in what I've just said that it was clearly made with the reservation that it was a method of computation, not a stipulation that he would have in fact, finished on that date had he not had to go to the military service.

I find no difficulty with either McKinney or Diehl.

In this case, the McKinney rule is that the Act reserves for the returning veteran what he automatically, as a matter of right and that Mr. Heymann says that it certainly must be contact right.

I don't know where else he would acquire such right.

It preserves those things he automatically, as a matter of right would've acquired had he remained out of the military service and in the employment.

Diehl involved in an allegation in the complaint by the veteran that he would have in fact finished the apprenticeship on such and such a date.

And the case being decided on motion in the lower court, that must be taken as admitted which we don't have here.

The Government argues, I think, that this Court should overrule McKinney.

At page 36 of the Government's brief, it argues that what it is advocating for a veteran, is that he'd be able to have under the Act, all of those benefits proved with that degree of certainty, normally requisite to the established legal rights.

That he probably would've gotten had he remained in the employment instead to go in the military service.

I do not know what the reference or the phrase with that degree of certainty -- showed with that degree certainty, normally requisite to establish legal rights.

I don't know what that could mean other than preponderance of the evidence which is the usual standard by which legal rights are established on a civil case.

Now in McKinney, this Court rejected the proposition that a veteran was entitled under the Act to those things that it's highly probable that he would have acquired had he stayed in the employment.

It specifically rejected that and adopted the automatic -- as a matter of contact right standard.

If the Court concurred in the Government's approach in this case, it would not only go back to approving the highly probable standard but it would be down to a point of a preponderance of the probabilities because that's all the preponderance of the evidence is.

The Government is really asking the Court to go much further back than even the McKinney case.

I think that the position taken by the Railroad Brotherhood in their amicus brief is deserving of consideration.

They point out that this law has been a fertile breeding ground for litigation from the time of its original enactment.

And that the Diehl case didn't resolve that but perhaps prompted additional litigation, has been a great deal since Diehl, since this Court did dispose of Diehl without an opinion.

But with the standards laid down in McKinney and they're clear standards, they're standards that the Courts of Appeals have had no difficulty with.

I think that Courts of Appeal are not in conflict as to the application of the McKinney standards.

That will resolve the litigation that we've had so long for 20 years which is expensive as pointed out by the Brotherhood and which engenders unhappiness in the entire industry and all the industries affected by this, by constant litigation among fellow workers seeking to obtain relative benefits to the relative detriment of their fellow workers.

The transfer feature which is novel in this case, arises from the fact that the veteran employee seeks assignment of a seniority day, a retroactive seniority day, had a place other than that at which the collective bargaining agreement would assign it.

The railroad industry has traditionally had a system of point seniority that is an apprentice or a journeyman at Monroe, Louisiana shops, has no seniority at North Little Rock shops for the same Railroad Company or the St. Louis shops.

And if he transfers from Monroe as a journeyman, to North Little Rock, he goes to the bottom of the journeyman seniority roster.

That permits -- it obvious purposes to permit, the men on a seniority roster to be able to look at it and know where they stand down, where they will continue to stand with reference to the people ahead of them on the seniority roster.

And doesn't permit men from other shops or other points on the Railroad Company to come in and get ahead of them on a seniority roster to the point that they maybe affected by a layoff where they otherwise would not.

That's the traditional, basic concept in -- with these threats and seniority with railroad companies.

Now, in this case, Mr. Brooks was entitled under the collective bargaining agreement to retroactive seniority at Monroe but in fact, he seeks it in North Little Rock.

Now, there's only one Court of Appeals case that has come to grips with the problem of where the rights arising out of transfer, benefits accruing from transfer are subject to the McKinney standard in the same sense that benefits arising out of promotion are.

That is whether it must be automatic and as a matter of contract right, that's the Horton case from the Fifth Circuit and they clearly said that there's no distinction that -- that transfer and promotion, benefits arising from those things are subject to the McKinney standard and certainly, I can find no logical reason why that shouldn't be a applied.

The District Court concluded that the significant factor was not -- that he had no contract right to be at North Little Rock -- to transfer at North Little Rock and thereby seek his retroactive seniority there.

He had none and no contract right, the District Court said the significant thing was that he did do it, he did do it in fact.

It's clear he -- he was in St. Louis, he requested the transfer of his master mechanic in St. Louis who gave his approval and then he requested the transfer of the master mechanic at North Little Rock where he was seeking to go, who gave his approval.

There's no doubt that that was a result of exercise managerial discretion.

In the District Court's conclusion that the significant factor was that he did transfer.

And not where they had a right to do it, is contrary to this Court's holding in McKinney which was specifically that a gratuitous benefit conferred by management.

The one required does not thereby enlarge the veteran's rights.

In McKinney, the man had been assigned to the group 1 position on return, it appeared that he did not -- that -- that he -- that the company wasn't required to put him in it.

The company contended they put him in it through a mistake of law.

And this Court says, they're making a difference whether the mistake of law or not, it was a gratuitous benefit to which he wouldn't entitle as a matter of right and didn't enlarge his rights.

I think to have the case in the proper perspective, appropriate to again, referred to the remarks I've made in response to the Chief Justice's question about the Railroad Company's direct interest and it's liability to direct injuries that result to this.

I think that the Railroad Company's probable injury would not be great and then certainly, it somewhat remote at this stage.

They're probably doing here is dealing with -- of course they're not seeking some absolute benefit against the Railroad Company such as it seems on an hour increase in pay.

We're dealing with employees, co-employees seeking benefits relative to their fellow employees and which they can have and enjoy only at the detriment of their fellow employees.

Now, these fellow employees who aren't veterans have earned seniority.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert V. Light: I think that's the underlying purpose of the Act sir.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert V. Light: Yes, sir.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert V. Light: Alright I'm -- I'm --I've been unclear on that and I'm glad you asked the question Mr. Justice Goldberg.

He had his basic rights granted under this Act when he returned at Monroe and was reemployed as an apprentice with the same place on the apprentice seniority roster, the same relative position and was retained there for the year required by the Act and was returned at the same rate of pay.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert V. Light: Yes, sir.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert V. Light: Yes, sir but I believe the answer to the overall general question you asked is in McKinney and that is that there's much that he was called to the colors cannot lay claim to that might've come by chance or effort or training.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert V. Light: And I think, the very basic thing that they intended to protect by this Act.

Justice Hugo L. Black: Now, I see you referred toward the brief on this date by the Government, on the amicus brief existing.

In other words on this, I have such a brief.

Mr. Robert V. Light: The -- the amicus brief I referred to Mr. Justice Black was filed in both this case in Tilton, number 49 and 50 (Voice Overlap) --

Justice Hugo L. Black: Amicus brief.

Mr. Robert V. Light: Yes sir.

Unknown Speaker: As to the same brief?

Mr. Robert V. Light: Yes, sir.

Unknown Speaker: (Inaudible)

Mr. Robert V. Light: That's -- that's correct sir.

Justice Hugo L. Black: (Inaudible)

Mr. Robert V. Light: I beg --

Justice Hugo L. Black: (Inaudible) in the other case and they don't have a separate brief for this case.

Mr. Robert V. Light: Oh, I see.

No -- no sir -- no sir, they filed consolidated --

Justice Hugo L. Black: (Inaudible)

Mr. Robert V. Light: -- brief.

Rebuttal of Philip B. Heymann

Mr. Philip B. Heymann: Mr. Chief Justice.

Chief Justice Earl Warren: Mr. Heymann.

Mr. Philip B. Heymann: I'd only like to make clear that we of course, do not claim what was cut -- what we did claim in McKinney and that is that the veteran is entitled to everything that would've come to him as a matter of probability had he been continuously employed, we claim that he's entitled to what he could have had as a matter of contract right --

Justice Byron R. White: (Inaudible)

Mr. Philip B. Heymann: There --

Justice Byron R. White: (Inaudible)

Mr. Philip B. Heymann: There are many cases on that Justice White.

They generally go on whether the employer has sufficiently indicated that he's paying for work service -- for actual work.

If he will not count time of -- on leave of absence towards five years' pay, a special pay increase for five years then we don't claim it for the veteran.

If there's an -- if he calls it a work training but he counts time on leave of absence and sick leave and anything else, then we claim it for the veteran.

Justice Byron R. White: (Inaudible)

Mr. Philip B. Heymann: I don't think that is either of these cases because I think, the odds are very much in favor of them.

But in that situation, if -- if I maybe permitted to say, that -- that -- to change your example just a little, I don't think I'll be changing its content.

And they -- let's say the inquirer gave a test to the employees in a certain group during his absence and was a very hard test and it's in a -- subjective test and if you get, “Oh, I could make it.”

And I say if they have perfect eyesight, and any employee with perfect eyesight is entitled to be promoted from fireman to engineer.

We would say, in a -- any employee of a particular seniority or any employee in a particular group, we would say that even though 50% failed that test, as an average.

When the employee returns and takes the test and finds that he has absolutely perfect eyesight, he's entitled to be given the position of engineer with the seniority that he would've had, had he gotten it --

Justice Byron R. White: (Inaudible)

Mr. Philip B. Heymann: Right.

Justice Byron R. White: (Inaudible)

Mr. Philip B. Heymann: We would say that.

The only -- the only issue on this case is dating.

What date should the man be given and for dating purposes, we would say if all that's required is that he's -- have completed it, that he performed satisfactorily in the training requirement and worked --

Justice Byron R. White: (Inaudible)

Mr. Philip B. Heymann: Well, I think -- I read McKinney is simply saying that the employee cannot claim what was -- what could've been withheld from him as a matter of discretion of the employer.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Philip B. Heymann: I -- I believe it is Justice Goldberg, I'm certain.

I should say that the rule that we rely on very strongly which gives the -- which gives the journeyman a right to claim work away from upgraded apprentices is an unwritten rule that appears -- now, conclusively in the record, we've set out the evidence for it -- never great, but it's an unwritten rule.

I -- I think that's all I had to say.

Thank you very much.

Featured:

Tilton v. Missouri P. R. Co. - Oral Argument

Wed, 16 Jan 2013 22:48:46 +0000

Case:

Tilton v. Missouri P. R. Co.

Media File:

49_19640107-argument

Related Transcript:

49_19640107-argument

Transcript:

Argument of Philip B. Heymann

Chief Justice Earl Warren: Number 49, Donald I. Tilton et al., Petitioners, versus Missouri Pacific Railroad Company.

(Inaudible)

Mr. Heymann

Mr. Philip B. Heymann: Mr. Chief Justice and may it please the Court.

This case arises under Section 9 of the Universal Military Training and Service Act of 1948.

That Section and its predecessor provisions which go back constant -- continually to 1940 draft act give veterans certain reemployment rights on their return from military service.

Stating the facts of the case requires making clear the relationship between three of the many categories of employees in the railroads, maintenance and repair shops.

The first category is that of carman.

Carman does the most skilled work of the three.

Gets paid the highest pay and has its own seniority roster.

The second category is that of carman helper that does less skilled work, gets paid on a lower scale and has -- the carman helpers have their own seniority roster.

The third category is something of a hybrid between the two.

Because of shortages among carmen, sometimes helpers are upgraded to do carman's work.

An upgraded carman helper does carman's work, gets paid a carman's wage but doesn't obtain carman's seniority until he's worked 1040 days, “a 1040-day training period as an upgraded carman helper.”

In the meantime, he retains his seniority as a helper and he also obtains something very much like seniority as an upgraded helper.

He gets a date when he's upgraded and that date determines his right to demand work as a carman, work towards 1040 days.

In terms of these three categories, the facts of the case can be simply stated.

Tilton, Beck and McClearn were already upgraded helpers when they went into the military service.

The only discretion that management has had been exercised at that point in their -- where there is apparently discretion in upgrading but they'd already been upgraded.

During the time they were in military service, they were passed in the number of days work towards 1040-day requirement by a number of junior upgraded helpers who would've had a subordinate right to work had these veterans been present.

Justice Potter Stewart: Going back just a moment, I just don't quite --

Mr. Philip B. Heymann: Yes, Justice Stewart --

Justice Potter Stewart: -- understand what determines whether a helper is to become an upgraded helper.

Mr. Philip B. Heymann: The -- the record indicates – there was a lot of argument, Justice Stewart in the record about whether upgrading is automatic.

I have no idea why there was that argument.

There is --

Justice Potter Stewart: Was it not really an issue here?

Mr. Philip B. Heymann: I don't think it's an issue at all.

Justice Potter Stewart: These people all were upgraded.

Mr. Philip B. Heymann: They were all upgraded when they went and this is also true in the next -- well, in the next case as an apprentice.

Justice Potter Stewart: But you're --

Mr. Philip B. Heymann: I don't think it's an issue at all.

Justice Potter Stewart: But you're assuming that there maybe or was some discretion, management discretion in determining whether or not a helper, these helpers should become upgraded helper but in any --

Mr. Philip B. Heymann: From --

Justice Potter Stewart: -- event that was water over the bridge.

Is that it?

Mr. Philip B. Heymann: Exactly, exactly.

The purpose of this case we can concede there was discretion at that stage.

Justice Potter Stewart: Under the bridge or over the dam.

Mr. Philip B. Heymann: But -- when -- because they were passed by when they return and completed their 1040 days of work, they found that formerly junior upgraded helpers already had carman status and seniority.

They asked to have their seniority dates set back so that they would maintain the same relative seniority position with regard to these people that they had had when they were -- when they had gone into the military service, at the time when they were all upgraded helpers.

The employer refused.

The suit resulted.

The District Court held for the employer and the Court of Appeals affirmed saying in substance that the veteran can only claim on his return what would've been his absolutely, certainly and forseeably at the time he left.

As it were the employees to be -- the veterans to be treated as if he had been on leave of absence and accrued only those rights which are near functions of lapse of time.

I'd like to begin my argument by stating what we conceived to be the issue of the case.

One of the central functions of Section 9, perhaps the central function is to grant to veterans, as a matter of statutory right, those benefits of seniority in position that would've come to them as a matter of contract right had they not been away in military service.

In the words of this Court, in the words of Section 9 (c) (2), had they been continuously employed and I -- I now use those words in quote so I don't mean to say anything by them, had they not been away.

Perhaps the most important of these benefits of seniority in position is the relative seniority position of the veteran.

The importance of this benefit of course flows from a large number of other rights that are a function of relative seniority position.

Security on the jobs, security against layoffs, preferences in work, vacation times, each of these is a function of seniority.

The issue in this case is whether the veteran is entitled to be protected in his relative seniority position not only in the position he left but also in the position to which he and his fellow employees have advanced and been able to claim as a matter of right on completion of a 1040-day work period.

Our contention is very simply that the seniority these veterans claim would've been theirs a matter of contract right had they have been continuously employed in a sense of continuously present and on the job whenever they would've had a right to work.

The Eighth Circuit agreed that they would've had a right to a seniority position they claim had they have been continuously present and on the job whenever they had a right to work.

But the Eighth Circuit said that when this Court has said, “continuously employed” or when we're trying to figure out where the veteran would've been -- had he not been absent in military service, he's not entitled to be treated as if he had been at work whenever he had a right to work.

He should be treated as if he had been on leave of absence.

Now, that that frame is the issue as we see it, does continuously employed means continuously on leave of absence, or continuously at work when the veteran had a right to work.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Philip B. Heymann: Yes, Justice Goldberg.

Justice Arthur J. Goldberg: Assuming the -- that was referred to (Inaudible)

Mr. Philip B. Heymann: The record indicates that this has never happened without the employee's -- without the employee's agreement in the history -- in the -- in the memory of anyone that was present.

But I -- I would again be prepared to concede that if his performance were inadequate, he could've been relieved from his job of upgraded helper.

They're seen -- this is a right but you don't easily imply away.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Philip B. Heymann: Adequate -- adequate performance Justice Goldberg, we would insist, is always a condition of a -- of continuing seniority in the simplest case.

In the case where the veteran has gone and returned at the same position, he wouldn't have had -- he wouldn't have increased seniority in that position unless he had adequately performed there.

Now, on the issue of whether the --

Chief Justice Earl Warren: (Inaudible)

Mr. Philip B. Heymann: In the Brooks -- the Brooks case which is the next case Mr. Chief Justice is an apprenticeship and I will argue in that case with the exact same rule applies that there's no difference between the cases.

Unknown Speaker: (Inaudible)

Justice Potter Stewart: Well, the statute does there say and maybe I've missed a part of your argument that he shall be considered as having been on leave of absence.

Mr. Philip B. Heymann: No.

Justice Potter Stewart: And it also says somewhere else that he should be considered as having been employed continuously, doesn't it?

Justice Potter Stewart: It says in 9 (c) (1) that he should be treated as if he had been on leave of absences or furlough.

Justice Potter Stewart: Right.

Mr. Philip B. Heymann: Says in 9 (c) -- that was at -- that was in 1940 in 9 (c) (2), provision was added that was -- which at -- in 1948, a provision was added as 9 (c) (2) which says, “Give him the status he would have had had he been continuously employed."

Justice Potter Stewart: And they're both in the statute?

Mr. Philip B. Heymann: Well, 9 (c) (2) is declared to be the sense of Congress.

I think Justice Burton once said, “How Congress believes 9 (c) (1) should be interpreted.” 9 (c) (1) is a statutory provision in itself.

Justice Potter Stewart: But if -- if -- if these people had been on leave of absence, the company would be correct in its position.

Mr. Philip B. Heymann: That's -- there's no doubt about that but I don't --

Justice Potter Stewart: And if they have been continuously employed --

Mr. Philip B. Heymann: We would be --

Justice Potter Stewart: -- I think this whole one side, any question of management discretion, you'd be right in your position.

Mr. Philip B. Heymann: We would be right.

I don't think --

Justice Potter Stewart: The statute says both.

Mr. Philip B. Heymann: I don't think there is -- that -- that's right, Your Honor.

There's no question in this case -- I don't believe, of management discretion.

There's no place at all where management discretion comes into this case.

The question is whether the infirmities of what -- of being a human being which can interfere with work when a man has a right to work, prevent him from maintaining his relative position.

But I'd like to go to furlough and leave of absence, if -- if I may.

I was going to go on to say that the heart of our case is that the Tilton case is almost a mirror copy of a case decided by this -- by this Court in favor of the veteran after full briefing and oral argument in 1955, Diehl versus Lehigh Valley Railroad.

Now, that's a square precedent as -- as one can have.

In Diehl, like as here -- oh, let me take -- let me use the name Diehl.Diehl like Tilton was an upgraded carman helper when he went into military service.

Diehl like Tilton apparently had rights -- had prior rights to work when work -- when carman's work was available over those who had been upgraded after him.

He was passed because of his service time.

On his return, the employer and the union entered into a collective bargaining agreement saying that upgraded helpers should be given carman's status and seniority after 1160 days of work instead of 1040 days.

Diehl claimed that his date should be set back to preserve his relative position.

He should be given the position he would've -- he had when he left.

The Third Circuit -- the employer refused, the District Court agreed with the employer in grounds very much like those in the Eighth Circuit opinion here.

The Third Circuit affirmed saying, in a way that reflects Justice Stewart's question, the Third Circuit said, “If this man is entitled to be treated as if he were continuously employed” and the Third Circuit said, “That's the language the Supreme Court has used in Oakley,” that was one of the leading preceding cases.

If he's entitled to be treated as continuously employed in the language that Congress used in 9 (c) (2) then Diehl was entitled to be given credit, given the seniority position he claims because he would have had it if he was continuously employed.

However, we believe the leave of absence in furlough language controls.

There was full argument and full briefing in this Court of Appeals -- this Court reversed per curiam citing Oakley where the Court had said that the veteran should be treated as if he'd been continuously employed.

Now, we know of no distinction between the Diehl case and this case.

The respondents have suggested that maybe this Court thought in Diehl that the 1160-day period wasn't actually a work period but that's simply impossible in the facts.

The Court of Appeals had called it an experience period repeatedly.

In there briefs in this Court, the parties made absolutely clear that the 1160-day period was a required work period.

The Eighth Circuit suggest that Diehl maybe different because there was a stipulation upon what date Diehl would've completed his work.

One answer to this is I think, the Eighth Circuit was misled in thinking there was -- unintentionally misled in thinking there was a stipulation, there wasn't stipulation.

The facts were that Diehl had alleged that he would complete his work on a certain date and his complaint was dismissed and for purposes of the complaint it was taken as true.

But this was by no means equivalent to taking as true what was palpably and always will be untrue and that is that there are -- that there were no contingencies that could interfere with Diehl's completion of his work period.

Obviously, sickness and even number of things could.

Now, since we believe that the Diehl case is this case, the only question is whether the -- this Court's only case since Diehl, the McKinney case overruled Diehl.

I -- I would be inclined to think that that was at the heart of the Eighth Circuit's opinion.

The Eighth Circuit wasn't really trying to say that Diehl was different.

It ended up saying if -- how Diehl and McKinney are irreconcilable, it's up to the Supreme Court to say so and not us.

But McKinney didn't have anything to do with what is continuous employment.

McKinney was concerned with the very different issue, whether the veteran is entitled to claim as a matter of statutory right.

Everything that he would -- the he probably would've obtained had he been “continuously employed.”

And here I can just put those words continuously employed in quotes.

McKinney doesn't talk about what continuously employed means even though some of these benefits that he probably would've obtained would've been in the discretion of the employer.

Or, was the veteran only entitled to what he could have claimed as a matter of right under the collective bargaining agreement or customs of the parties, had he been continuously employed.

This was the position of the parties.

The McKinney facts indicated that the employer's discretion was required for a promotion that McKinney was asking that McKinney was asking for.

The Government argued in behalf of McKinney that he probably would've gotten the promotion in the employer's discretion.

The railroad responded, “He can only claim it if it could've had it as a matter of right had he been continuously employed.”

It distinguish Diehl saying that the Diehl was entirely consistent with their -- with their position in McKinney.

Diehl, the railroad said was entitled to the seniority he claimed as a matter of right had he been continuously employed.

McKinney wouldn't have had any right to the promotion he claimed even if he had been continuously employed.

This Court adopted the railroad's position in McKinney.

Oh, that's right, the railroad's position in McKinney.

It said that the veteran can only claim what have -- what have been his as a matter of right, had he been continuously employed.

It continued to use the very language of continuous employment that this Court had used in Oakley which had been interpreted in Diehl to mean continuous -- continuous presence on the job whenever the veteran would've had a right to work and it stated and which was now incorporated in 9 (c) (2).

There is absolutely no indication that intended to overrule Diehl.

Diehl, I should point out was not even mentioned in McKinney.

It's not even cited.

I should -- I'd only like to add that I think that the result we contend for in this case is almost dictated by the McKinney decision itself.

McKinney had an alternative claim that he would've been entitled to his promotion as a matter of right had he been continuously present on the job.

This, he said was the actual way that collective bargaining agreement had been interpreted by the parties.

The Court agreed that if he was entitled to his promotion as a matter of right and not discretion, he should get it and remand it to allow him to try to prove that's what the collective bargaining agreement meant.

Well, what our veterans are claiming in this case is the improvement in status that would've cont -- that they had a right to claim had they been continuously employed.

Their status as upgraded helpers improves everyday they work.

They move towards carman everyday they work.

They had contract rights to work ahead of those junior to them exactly the same as McKinney's claim, contract right to be promoted ahead of those junior to him.

And we're just claiming that they should be given the benefits of those rights.

I would like to reserve whatever the time I have Mr. Chief Justice.

Chief Justice Earl Warren: Mr. Yost.

Argument of Robert W. Yost

Mr. Robert W. Yost: Mr. Chief Justice and may it please the Court.

I want to compliment Mr. Heymann on a very fair presentation of the facts and the issues in this case.

And I'll try to avoid repeating too much but I think it is essential to have a clear understanding of the facts in the case and what the court below found.

In the first place, there were these two entirely distinct classifications of work under the collective bargain agreement.

One was the carman helper and the other was the carman.

Now these veterans were classified before they went into military service, after they went in the -- after they came back from military service as carman helpers.

They were not classified as carmen.

These two classes of work had different job descriptions which were provided in the collective bargaining agreement.

The carman helper was confined to doing the unskilled tasks involving repair of cars and the carman was a skilled craftsman who had all the responsibilities such as the master carpenter has in building a house.

The carman helper never had the right to do the carman's work and the carman never had the right to do the carman helper's work.

These were entirely different categories.

There were separate seniority as providers.

The carman helper was on one list and the carmen journeymen were on entirely separate list.

These veterans then had no seniority whatever as carmen when they went into military service.

They had no way, there was no possible way under the contract for them to do carmen's work or to transfer to a carman's seniority escalator except under the provisions of the specific agreement that was adopted in December 1953 between the collective bargaining agent and the railroad.

And that is what I want to get into primarily.

I'd like to mention before that that this -- this Court has recognized that seniority is not inherent in the job.

It is a matter of contract.

Seniority grows out of contract and contract alone.

I might quote this one statement in the case of Aeronautical Lodge against Campbell.

"Barring legislation not here involved, seniority rights derive their scope and their significance from union contracts, confined as they are almost exclusively to unionized industry."

Now, what was the contract of 1953?

First of all, it said when the qualified carmen were not available, then, the railroad could utilize the services of the helper to do the carmen's work.

It was only when these qualified carmen were not available that these helpers could work as carmen.

And that vary with conditions, jobs maybe cut off and there would be ample carmen available or jobs might be added to the situation at a particular point and there would be fewer carmen and therefore more helpers would be able to do the carmen's work.

It provided also that if they were selected to do the carmen's work, and incidentally, an answer to your question Mr. Justice Goldberg, they were selected on a basis that they have the aptitude and were willing to take over the job, they were not considered qualified at all as carmen when they started out.

They were just like beginning apprentices who were beginning their apprenticeship.

It provided that if they were selected to do this carman's work, they would retain their helper's seniority.

They did not go over on the carmen help -- on the carmen's seniority list and they were not considered qualified carmen at that time.

Having retained their helper's seniority, they could exercise it at anytime they chose to exercise it.

In other words, they didn't have to take this carman's work that became available to them.

They could go back to working as a helper and many times they did that very thing because they might have a better hour, you see they were higher up on the carman helpers list.

They were at the very bottom of the -- of the working group of carman.

They could only take the worst positions as carmen and so they might have better hours, they might even work more overtime so that they would earn more pay as helpers and sometimes they did exercise their helper seniority in preference to doing the carman's work.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: That's correct.

The term “upgraded” meant that he was selected to do the carman's work when qualified carmen were not available to do it.

Justice Arthur J. Goldberg: And there's no argument (Inaudible)

Mr. Robert W. Yost: They were upgraded --

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: -- before they went into military service.

However, it -- it -- this is not significant but it been only short time.

I mean, one of them had been working for 21 days for example before he went into military service.

Justice Byron R. White: (Inaudible)

Mr. Robert W. Yost: In a sense, the contract that -- that's what I want to get into immediately.

The -- the contract specified that before a man could be considered a qualified carman and acquire carman seniority, he had to have this actual work experience of 1040 days.

So in a sense it was a training period such as an apprenticeship.

However, there was --

Justice Byron R. White: (Inaudible)the contract with the employer not to call a particular man during his training period if there was work available, and they have to call him.

Mr. Robert W. Yost: During this training period --

Justice Byron R. White: What could be upgraded --

Mr. Robert W. Yost: During --

Justice Byron R. White: -- to any -- any way of determining the up -- upgrading?

Mr. Robert W. Yost: If the man proved inept at the work, he could be demoted and -- and put back to working as a carman helper, certainly.

That's -- that's true in any employment contract I think.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: Work in a carman's position, yes sir.

Justice Arthur J. Goldberg: (Inaudible)-- as a carman helper.

Mr. Robert W. Yost: That's right.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: And -- and -- and I want you to bear in mind also that the 1040 days is not a four-year calendar period of any kind.

A record was kept by the railroad of every single working day that the man worked in a carman's position and when it -- it accumulated to 1040 days whether that be done in four years or whether it be done in 10 years or -- or whenever.

Then he was notified that he had accumulated the 1040 days.

Until then, he was not considered a qualified carman and had no contractual right to a carman's seniority.

Unknown Speaker: (Inaudible)

Mr. Robert W. Yost: At the end of the 1040 days, he had the right to choose between the helper's seniority and the carman's seniority.

Unknown Speaker: (Inaudible)

Mr. Robert W. Yost: If he wanted to, he could be a carman at that point provided he gave up this helpers -- he -- he had no right to keep both the helper seniority and acquire the carman seniority.

Unknown Speaker: (Inaudible)

Mr. Robert W. Yost: Of work experience in carman's positions.

Justice Byron R. White: Satisfactory work (Inaudible)

Mr. Robert W. Yost: It didn't specify satisfactory.

That was certainly implied.

Justice Byron R. White: Well, in other words, he can be discharged --

Mr. Robert W. Yost: He could've been discharged or demoted, sure --

Justice Byron R. White: Is that a negotiated (Inaudible)

Mr. Robert W. Yost: The 1040 days was negotiated, yes sir.

Justice Byron R. White: (Inaudible)

Mr. Robert W. Yost: In 1942, the first agreement right at during World War II specified three years.

Justice Byron R. White: Is there any other part of the -- any other aspects of the upgrading period except working underground?

Mr. Robert W. Yost: No, there were not.

There were no courses a man had to take.

There were no special requirements to pass any tests or anything and that's -- it was simply work experience that was required in order to acquire the necessary skills that -- that qualify the man to become a journeyman.

Justice Byron R. White: And if -- if -- if there were -- let's presume that four or five helpers had finished their 1000 and some-day training or work and then a -- then a carman (Inaudible) the employer had no discretion as to whom to choose, did he?

Mr. Robert W. Yost: At the end of the 1040 days, you -- did you say?

Justice Byron R. White: Say that -- say that four or five helpers had finished their -- their training period --

Mr. Robert W. Yost: Yes sir.

Justice Byron R. White: And that -- that there were any carmen's positions open?

Mr. Robert W. Yost: They had the right to get on the carman's seniority list at that time.

Justice Byron R. White: Yes.

They were on this carman seniority list.

Mr. Robert W. Yost: That's right.

Justice Byron R. White: But they went on by -- automatically by seniority, the employer had no right to choose among the four or five.

And they went on (Voice Overlap) --

Mr. Robert W. Yost: They -- they went on the carmen seniority list as of the date they completed the 1040 days if -- if they so chose.

Justice Byron R. White: Well, that part -- that part was automatic?

Mr. Robert W. Yost: The -- once they completed the 1040 days, it was -- and -- and relinquish their helper seniority, it was automatic.

That we concede.

It was automatic at that point but we don't concede it was automatic up to that point.

Now, this -- this should be kept in mind, the contract provided that the only seniority which these people could choose once they completed this 1040 days of experience was the ending date of the 1040 days of service as carman.

They didn't have any other choice and we say, if they -- if they relinquish their helper seniority and chose that date, then they can't say, “Well, we're entitled to another date” because that was the only date that was offered to them under this contract.

And I want to point out that the Court specifically found that -- that the whole purpose of this agreement was to serve as an -- an on-the-job training program so that they could increase their skill and proficiency and become a qualified carman.

And the -- and -- and the only way they could become a qualified carman was to get this experience just as any apprentice has to take several years of training in order to become a qualified journeyman.

And because of the -- the way this was determined, that is their qualification and eligibility to become carmen because of the way this was determined, this was not depended on their seniority as -- as helpers at all.

In other words, seniority is a matter that accumulates automatically day by day.

This thing depended on the day they completed the 1040 days of -- of service as carmen and that depended in turn on their opportunities that the opportunities available to them to work as Carmen.

It depended on their willingness at all times to work as carmen when the opportunity came.

It depended on the fact that they were always present and that they weren't -- taken a vacation or they weren't ill for any length of time.

It depended on the fact that they continued to do the satisfactory work as a carman.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: No sir.

The -- the opportunity to work as a carman, if the man was present and willing to so work depended upon his date of upgrading could -- not -- not his seniority as a helper.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: Yes, sir.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: Except that the contract specifically said that wasn't -- not a seniority.

Justice Arthur J. Goldberg: I understand that.

Mr. Robert W. Yost: Yes.

Justice Arthur J. Goldberg: (Voice Overlap)

Mr. Robert W. Yost: But it -- essentially, that's what it amounted to.

Now, these veterans are trying to get this Court to construe Section 9 (c) (2) which uses the words continuously employed as if that meant continuously at work in acquiring the skills which a company -- that working experience.

Now we say Section 9 (c) (1) of the Act is completely inconsistent with this interpretation because Section 9 (c) (1), they took mandatory that the Court treat -- that the employer treat these veterans as though they had been on leave of absence.

Not at work, no man cannot be on leave of absence and -- and be at work at the same time, that's just impossible.

So, you've got to find another construction for the words “continuously employed” if it's going to be consistent with this leave of absence test.

And we say the Court has already furnished that explanation, that -- that interpretation in the McKinney case.

McKinney case said that only the rights which flowed from seniority alone which came about -- which accrued to the veteran while he was on leave of absence because of his seniority position which accumulated during that leave of absence could be claimed on the veteran's return.

But those rights which flowed only and depended upon his experience, his skill, his qualifications, those -- those rights could not be claimed as a matter, automatic right.

They -- they had to be earned and we say these veterans' rights as carmen had to be earned under this contract.

Justice John M. Harlan: Do you think the McKinney case overruled Diehl?

Mr. Robert W. Yost: It's hard to say because the facts were so unclear in -- in the -- in the Diehl -- in the Diehl case and of course, the Court wrote no opinion in the Diehl case.

What the Court had in mind, I can't -- for the life of me determine the absence of an opinion, I can only guess.

Now -- now, I think the -- the McKinney case did add this qualification to the Diehl case.

McKinney did take out of -- of the interpretation of this “continuously employed.”

The -- the rights which flowed from the work experience.

In other words, that the -- Justice Frankfurter distinguished between seniority and -- and actual work experience in the McKinney case.

And whether the Court had that distinction in mind in the Diehl case, I just don't know.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: The McKinney decision?

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: Well, what I made out of that is that -- if as a matter of actual practice and construction of the contract, the -- the parties made a -- a new contract or in other words, modified a written contract in such a way that there was no discretion on the part of the employer that in -- in actual practice under the contract, the veteran had the right to be promoted to take this group one position.

That could be shown to be the case by the veteran and he's entitled to that.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: In this -- in this case?

Justice Arthur J. Goldberg: Yes.

Mr. Robert W. Yost: Yes.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: And then there weren't any --

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: If -- if they were depending on whether there were a carmen available of course.

Justice Arthur J. Goldberg: Yes.

(Inaudible)

Mr. Robert W. Yost: Yes.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: That's right.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: I'd --

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: Just -- Justice Frankfurter said that rights which flow from experience, skill, effort and chance cannot be claimed by the veteran.

That those -- those things are not just -- just discretionary with the employer.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: That was certainly the -- the significant decision of that case.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: Yes, yes.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: Well, if we conclude that the -- the matter of management discretion is the only way that that the court decision below can be upheld, then that's right.

But I -- I think we have to find out what is meant by continuously employed in the statute because that -- that's the whole basis for their -- their claim in this case.

What is meant by continuously employed?

Does it mean continuously at work, getting the skills that can only be gotten by being continuously at work? Or does it meant -- does it mean that a man can be on leave of absences as -- as contemplated in Section 9 (c) (1) and still be continuously an employee.

A man might be an employee even though he isn't at work.

He can be an employee when he's on weekends, when he's not at the office on weekends, when he's on a vacation, when he's home in the evenings.

He's not working, he's not getting experience and skill but he is an employee.

And that's what we think that this isn't -- Congress meant by the -- by the use of those words.

At any rate, we think that whether they intended it or not, it has to be so construed in order to be consistent with the prior Section of the very same statute and I -- I want to --

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: Because -- well, I think I can explain that by going to the history of this -- this statute, I think that's important in order to understand it.

The House bill, when this thing came up from (Inaudible) in 1948, the House bill had provided that the veteran shall be treated as though he had been continuously at work while he was on military -- while in service.

The conference committee rejected that language and he used the words of the Senate bill which said “continuously employed.”

Now, in explaining this language, the Senate Committee said, first of all that this was merely a statement of the escalator principle which had been recognized by the Court in a Fishgold case.

And -- and secondly, they said specifically that they did not intend by this amendment to confer any additional rights on veterans under the 1948 Act then had been granted the veterans under the 1940 Act so they did not intend to change the law in any way, you see?

And furthermore, the language which they used here said, it -- it shall be this -- it should -- it -- it is a sense of Congress that the veterans should be so treated as if you've been continuously employed.

And then, they go on and amend Section (d) which is the enforcement section of the Act so as not to provide any enforcement of this very section that the veterans rely on.

The -- Section (d) says that -- that the Court has jurisdiction to enforce Section 9 (b) and 9 (c) (1) but it expressly omits 9 (c) (2) from the enforcement section.

Now, the McKinney case said that this 9 (c) (2) was nothing more than a clarification of the escalator principle.

In the escalator principle, there's nothing more than a recognition by this Court of the facts of seniority.

In other words, seniority accumulates while a man is on leave of absence and that he is entitled to whatever benefits may accrue to his seniority position while he is on leave of absence.That's all the Fishgold case held.

And that's all the escalator principle says and that's all this 9 (c) (2) means in my opinion.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: That's right.

If --

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: I don't see anything in the statute that says a man has a right to have retroactive qualification for a promotion or -- can be considered as having qualified prior to the time he actually qualified.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: The -- the statute requires that he be restored to his previous position and the -- with the previous seniority rights and such rights as have accrued to him during his period of military absence.

That was done, there's no argument about that part.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: Accumulating during this period of absence.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: Well, I mean --

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: Remember that he didn't have any seniority as a carman or as an upgrader helper for that matter.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: He had the right to -- to work as a carman when such work --

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: -- was of --

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: Yes.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Robert W. Yost: But, remember this that the -- the date of completion of this 1040-day period didn't -- didn't depend on his seniority as a helper.

In other words a man might take 10 years.

A -- a senior man might take 10 years and that's actually the fact.

They might take 10 years to accomplish these 1040 days of service.

And the junior man might be right there joining on the spot and accomplish it in four years or less.

Now, in -- in -- in conclusion, I want to merely state that we think that the qualification for a carman's seniority was not an automatic thing.

It didn't -- it didn't depend on seniority, it didn't accompany seniority.

It was something that had to be learned and something that they had to earn by this actual work experience and we think that since Congress rejected the position in which veterans here are taken that they be considered as having been actually on the job during their period of military service that -- that this Court should take the same position.

Thank you.

Rebuttal of Philip B. Heymann

Mr. Philip B. Heymann: Mr. Chief Justice, may it please the Court.

I'd like to address myself to three things I hope without to a great length and rebuttal.

First, I hope it's clear that we of course are not claiming that the veteran could use his military service as time that would actually satisfy the employer's requirement of a training period.

He had to complete that when he got back, I think Justice Goldberg stated the position as -- that we are espousing and that is that for -- only for seniority purposes, he's entitled to have this.

In line with this, I'd like to say something about 1948 House bill that was rejected.

There are lots of reasons why Congress can choose one bill rather than another.

I think it's almost not worth speculating when they both are -- when they both grant a similar protection as here.

But I would like to point out that the House bill would've given the veteran the right to be promoted.

Not just have seniority date reflect the promotion but to be promoted, although the employer only wanted trained men on the job.

Now that's a good enough reason for me to explain why the House bill was rejected.

And another reason that is mentioned in the Senate Report is that Congress didn't want to grant veterans after 1948 rights that might take precedents over what they've granted before 1948.

A neat way of avoiding doing that was to declare it sense and its -- and declare its sense in terms that this Court had used those with continuous employment.

That's my first point.

My second point is I think that the -- the heart of the case can be stated more adequately now than before when I was standing up.

McKinney definitely holds that the employee can't claim what is in the discretion of the employer to withhold from him.

What would've been in the discretion of the employer to withhold them had he not been -- had he -- even had he been present on the job, that's certainly the heart of McKinney.

It also -- it also holds that the veteran can claim on his return a promotion that he could've had on the basis of seniority alone had he been present on the job.

He can claim what he would've had as a matter of right.

Now, what this case is about -- in -- in this case, the veterans are claiming the -- the increase in status which comes with exercising the rights they had in their absence to work as carmen.

Justice McKinney exercised -- McKinney claimed that he was deprived of his right.

This Court found it was probably discretionary about his right to a promotion.

These veterans are claiming the benefits of the rights they had to work during their absence.

What the case is about is whether -- it's agreed that the veteran -- it's agreed that veterans can claim what would've been theirs as a matter of right had they been present.

It's agreed they can't claim what would have been theirs only as a matter of discretion had they been present.

This case is about what happens to the acts of nature that fall in the middle.

These veterans had a right to claim work on everyday but they had no right not to be sick nor it was not -- sickness was not a matter of discretion and not a matter of right.

What happens to those -- what happens to the things that could've interfered with what the -- the veteran claims but is not interference as a matter of employee or his discretion.

To that, we answer that the Diehl case has said that if the only thing as long as what the veteran is claiming depends only upon as being treated as if he had worked when he had a right to work, he's entitled to that.

This we say is the holding of Diehl.

Justice Byron R. White: (Inaudible) they must -- what was at the Diehl principle, the thought that -- that he would have acquired the proper level of skill simply by being on the job.

Automatically, he had exercised his right, he had been there.

He would've -- let's call the worst and he automatically would've acquired the necessary degree of skills to be a carman.

Mr. Philip B. Heymann: Mr. Justice White, I don't think we -- no, I don't think this Court should say that he would've obtained any degree of skill.

All he had to do was be --

Justice Byron R. White: But you don't think there's any element of that at that stage?

Mr. Philip B. Heymann: No, I --

Justice Byron R. White: (Inaudible)

Mr. Philip B. Heymann: Actually, all that is required for their two -- the two things I have to respond to, all that's required to do a day's work as a carman for an upgraded helper is to perform adequately.

In the memory of men in the record, no one had ever been set down without his permission.

No one had ever been taken -- his up -- had his upgraded work taken away from him.

Justice Byron R. White: Well, what was the -- can you tell me what the purpose is in (Inaudible), wasn't it in 1040 days and what is the purpose of these three, isn't this an apprenticeship to learn something or is it just a fact that you've got a lot of people that --

Mr. Philip B. Heymann: We've --

Justice Byron R. White: -- that are -- want the same job.

Mr. Philip B. Heymann: Well, we've taken this case on the assumption that it's a training period, though -- though all that is required to become a carman after 1040 days is the 1040th day of work.

Justice Byron R. White: (Inaudible)

Mr. Philip B. Heymann: Right, we've taken it as a training period.

I suspect that's --

Justice Byron R. White: But the fact is -- but -- but the -- that one of the -- one of the realities is that the situation, if it is a training period, it must be and this is (Inaudible) training, you don't get any more work.

Mr. Philip B. Heymann: I think it -- you have to satisfactorily perform as the carman.

I -- I assume that the only training is doing carman's work.

Its on-the-job training doing that --

Justice Byron R. White: Did that involved -- it does involve --

Mr. Philip B. Heymann: That's right.

Justice Byron R. White: -- the 1040 days worth of experience as (Voice Overlap) --

Mr. Philip B. Heymann: That's --

Justice Byron R. White: -- what do you think that --

Mr. Philip B. Heymann: That's correct.

Justice Byron R. White: Do you think that's an automatic thing that anybody would acquire simply by being there based on the work?

Mr. Philip B. Heymann: Your Honor, on the -- it -- it of course isn't absolutely automatic.

Someone could've failed.

Justice Byron R. White: Do I understand (Voice Overlap) --

Mr. Philip B. Heymann: Someone could've been sick.

Justice Byron R. White: (Inaudible) the same category of sickness or (Voice Overlap) --

Mr. Philip B. Heymann: That's all.

I think it's -- I think that failure to respond satisfactorily is far less likely than any of the other alternatives as far as I can tell from the record.

It -- the fact -- the --

Justice Byron R. White: Suppose this really --

Mr. Philip B. Heymann: -- the possibility of getting --

Justice Byron R. White: This really isn't much of a (Inaudible)

Mr. Philip B. Heymann: No, I think it's --

Justice Byron R. White: The work period.

Mr. Philip B. Heymann: It's a work period.

That's right.

And the ultimate question for this case is whether this -- whether an --

Justice Byron R. White: (Inaudible)

Mr. Philip B. Heymann: Yes.

Yes.

I'm beginning to worry about that right now Justice White.

The ultimate question is whether -- whether the fairness of treating the -- obviously the best approximation of where this veteran would've been had he not gone into service is to treat them as if he had been work -- at work when he had a right to work.

That's the best approximation.

McKinney tells us that there are certain things that are ultimate imponderables and that courts don't speculate on.

One of those things is the employers' discretion.

Now, if you wanted -- if you pass the Diehl case which we say has decided this, the question is whether -- whether that this Court should come down on the side of avoiding, speculating about the imponderables of discretion, of sickness and all those things or whether it should put the employee where he would most likely have been.

When all that's involved is the right to -- the assumption that the veteran would have been at work, we say should've come down on the side where he would've been.

Chief Justice Earl Warren: (Inaudible)

Mr. Philip B. Heymann: If he had -- he -- Mr. Chief Justice, we would of course say that he would have to complete a training period at the -- before he could work in the status that -- in any advanced status because the employer would have a right to require that he be trained before giving him the job.

The employer could also require him to make up any lost grounds, any ground that he had lost by being away from a highly specialized field.

But, if the only statutory -- the only requirement under the collective bargaining agreement for advancement between two positions was a certain number of days of work.

We would say the employee should be treated as if he had worked whenever he had a right to work.

Unknown Speaker: (Inaudible)

Mr. Philip B. Heymann: This -- this --

Unknown Speaker: (Inaudible)

Mr. Philip B. Heymann: Yes, Your Honor.

I've -- the last point I wanted to make and I'll have to make very quickly, and that is furlough and leave of absence.

We believe that the Court was entirely correct in Diehl in overruling the Third Circuit which had relied on furlough and leave of absence for their decision.

Furlough and leave of absence was added in this way in 1940.

The bill had been written without furlough and leave of absence giving in exactly the way it is now at protected seniority position and insurance and other benefits.

Senator Danaher of Connecticut and a number of Congressmen in the House were worried about the protection of insurance and other benefits.

They said, is the employer going to be paying while the employee is away in service?

Now this was a concern to them.

Senator Sheppard of Texas responded, “No, the only insurance and other benefits that are protected are those that the veteran had when he left.”

Not -- he doesn't get any increment in pay-type benefits while he is away.

This is the way it was left for two weeks and then Senator Davis of Pennsylvania came in with the -- he said, “Let's amend the statute and put in this furlough and leave of absence clauses.”

The statute -- this was endorsed by Senator Sheppard, head of the Armed Services Committee who said, “This is wonderful.

Now, veterans are also going to have the protection and the benefits that are given absent, employees who were off from leave of absence.”

To that extent, it was treated -- it was considered fair to impose an extra burden on employers.

Now, this just took -- it seems to me this is a very different question, it doesn't as a matter of grammar, it doesn't modify the seniority provisions or the position -- provisions.

As a matter of history, it's a very different matter than seniority which doesn't burden the employer in any way.

This isn't a question of requiring him to pay for services he hasn't received in any way.

Justice Byron R. White: Mr. Heymann, is there any record at all of the (Inaudible)

Mr. Philip B. Heymann: I wouldn't -- I wouldn't think so Your Honor.

This Court -- if there's one thing that's basic under the statute, it is that a man who leaves position A with seniority of -- of two years and returns after three years of service -- after three years of service gets seniority of five years in position A.

There's no dispute about that at all.

Justice Byron R. White: (Inaudible)

Mr. Philip B. Heymann: Well, that -- that assumes that he was -- that he performed his work --

Justice Byron R. White: What (Inaudible)

Mr. Philip B. Heymann: -- satisfactorily.

Justice Byron R. White: Assume there was some record (Inaudible) in the company history that every now and then a -- a -- an upgraded helper (Inaudible) out during the -- during the 1040 days, he just doesn't -- but really, some people could do the work but some people can't.

And (Inaudible) -- enough examples of upgrading carman to be -- to be voted.

Would -- would that -- wouldn't that (Inaudible) could not bother you at all if you are to --

Mr. Philip B. Heymann: I -- I would say that the statute should be implied on the assumption that people continue doing satisfactory work that the veteran would've continued doing satisfactory work even if a sizable proportion did not do satisfactory work --

Justice Byron R. White: (Inaudible)

Mr. Philip B. Heymann: -- 10%, 15%.

Justice Byron R. White: (Inaudible) well it seems to me that there is as a matter of (Inaudible) that you have to put it in the discretion example of (Inaudible) because somebody wants you to know.

Mr. Philip B. Heymann: Oh, I don't -- that I don't think would be a matter of discretion.

That would be a matter of grievance arbitration, wouldn't be on -- certainly wouldn't be in the employer's discretion --

Justice Byron R. White: Well, he is (Voice Overlap) --

Mr. Philip B. Heymann: -- Mr. Justice White.

Justice Byron R. White: (Inaudible) so definitely they'll put (Inaudible)

Mr. Philip B. Heymann: Correct.

Justice Byron R. White: (Inaudible)

Mr. Philip B. Heymann: Correct, but it would have to be in a--

Justice Byron R. White: Somebody challenge it -- let's assume the union did challenge it.

Mr. Philip B. Heymann: Would have to be for cause.

Justice Byron R. White: If the degree -- if -- you're doing it, well what this means is that, is that just working everyday for 1040 days that -- let's not imagine gets to be a carman, you have to demonstrate the -- the ability to be a carman and satisfactory as with his skills.

Mr. Philip B. Heymann: You have to work satisfactorily as a carman during this 1040 days.

Justice Byron R. White: (Inaudible)

Mr. Philip B. Heymann: Just the -- just the way every carman who continues to accu -- let's say a carman went into service and came back and -- and claimed accumulated seniority, his claim would --

Justice Byron R. White: (Inaudible) you said it earlier, not -- from the history of men, as an upgraded helper ever -- ever --

Mr. Philip B. Heymann: Been demoted.

Justice Byron R. White: -- demoted.

Mr. Philip B. Heymann: Well then -- the only man -- I did say that but I wouldn't think it was different if they had been -- if some had failed to do their job adequately.

Featured:

Brooks v. Missouri P. R. Co. - Oral Argument, Part 1

Wed, 16 Jan 2013 22:48:50 +0000

Case:

Brooks v. Missouri P. R. Co.

Media File:

53_19640107-argument-1

Related Transcript:

53_19640107-argument-1

Transcript:

Argument of Philip B. Heymann

Chief Justice Earl Warren: Number 53, Robert C. Brooks versus Missouri Pacific Railroad Company.

Mr. Philip B. Heymann: Now, this -- this case is in most respect similar to Tilton or at least that's how I intended to begin the argument though I can see that -- that will require some arguing.

Brooks was an apprentice when he went off to the service.

He was an apprentice machinist not a carman.

The apprenticeship program consists of 1040 days of work plus successful completion of a correspondence course.

After 1040 days of work, the apprentice automatically obtains the status of a journeyman machinist but he doesn't obtain machinist seniority until -- unless he's in the language of the contract continued in the employment in the language of common sense employed for one day as a journeyman machinist.

He has to be employed for one day after completion of 1040-day apprenticeship period.

He does -- the journeyman machinist does, however, have a right to do work of a journeyman ahead of anyone who has less status than a journeyman, less than upgraded apprentices.

I'd -- I'll remind you of that when we get later on in the case.

Brooks was called away as an apprentice from Monroe, Louisiana.

He returned to Monroe, Louisiana and worked there in his -- after his military service and worked there on his apprenticeship until the -- there was a layoff at Monroe.

The Monroe was actually disappearing as a shop where work was being done.

He transferred to St. Louis where the railroad was calling for apprentices and a year later in the summer of 1955, he trans -- I think it was 1955, he transferred with the Railroad's permission to North Little Rock.

He completed his 1040 days at North Little Rock and was thereupon assigned -- he immediately went to work but he claimed his seniority date which would have been his, had he been continuously employed in his apprenticeship program during the period he was away in military service.

The railroad rejected this.

The District Court this time found in favor of the veteran saying that his process would have been -- now, every step was a matter of right.

The Court of Appeals again for the Eight Circuit reversed this time merely citing its Tilton opinion.

It relied on the fact that obtaining work as a journeyman for a day was not absolutely certain and foreseeable as the ground for reversal.

I've said that in most respect, this case is in our view similar to Tilton.

As in Tilton, we rely and deal for the proposition that the veteran can claim as a matter of right what would have been his had he merely been continuously on the job and at work.

We say that Brooks' job was the job of being an apprentice and had he been continuously on the job, he would have had the seniority date he claims here.

It's true, as my discussion would -- in line of my discussion with Justice White that he had to complete a correspondence course.

However, we do not see any reason for treating this part of his job, a required correspondence course, as different from any other part.

We think that continuous employment includes the right to be treated as continually measuring up to accept its standards for the job, and we think that accepted standards for the job of apprentice is accepted progress is -- is expected progress in learning during your apprenticeship and is satisfactory completion of whatever correspondence course is required.

I'd like to make an alternative argument to that though on this point on the correspondence course.

We would argue that a veteran has a right to be treated as -- at a later date as if he had passed a qualifying test at an earlier date, once he's passed it.

Now, let me step back on that.

There's no question between any parties, I don't think that -- that a veteran who says and makes out a claim that by seniority alone would have been -- he would have been entitled to fill a vacancy during his absence, is entitled to have that position on his return.

I think everybody agrees on that.

Now, the --

Justice Arthur J. Goldberg: (Inaudible)

Mr. Philip B. Heymann: Yes, Your Honor.

Justice Arthur J. Goldberg: -- the whole period.

Mr. Philip B. Heymann: Yes, Your Honor.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Philip B. Heymann: You --

Justice Arthur J. Goldberg: (Inaudible)

Mr. Philip B. Heymann: You also assume that he was present and wasn't ill and --

Justice Arthur J. Goldberg: (Inaudible)

Mr. Philip B. Heymann: You -- you -- you assume that he elected to give up seniority.

I'd -- I'd like to bring this out, all the factors that are supposed to be troublesome in this case are conceded in that case.

You assume that he elected to give up seniority in the lower job in order to get the higher position but anyway, that is conceded.

Now the question is what happens if the employer says the senior man in category one is entitled to a promotion to group two if he has vision of 20/50 or no better or no worst.

We would say, when that employee returns and takes an eye test and is shown he has 20/20 vision, he can still claim the vacancy that was filled during his absence and that he would have been entitled to even though he had to pass a qualification test, and he couldn't pass it because he was away in military service.

Now, we would say the same thing of any objective tests, it doesn't make a difference to us whether it says he has to have an IQ of 100 or whether it says he has to satisfactory -- satisfactorily pass any objective test, any test that doesn't involve management -- the -- the marking of which did not involve management discretion and we would treat the correspondence course that way even if we weren't -- if even if we didn't simply sweep it in with --

Justice Byron R. White: What really (Inaudible) after he got back and then proves he could've done it but the (Inaudible) during the war?

Mr. Philip B. Heymann: Yes.

Justice Byron R. White: Could have done it also.

Mr. Philip B. Heymann: We -- we have to do that because the largest extent advancements could be denied to veterans --

Justice Byron R. White: Are those -- were discretionary (Inaudible)

Mr. Philip B. Heymann: Not for discretion --

Justice Byron R. White: Suppose that (Inaudible)

Mr. Philip B. Heymann: No it doesn't apply to discretion.

I don't think Your Honor.

Featured:

Porter v. Aetna Casualty Co. - Oral Argument

Tue, 25 Sep 2012 22:36:34 +0000

Case:

Porter v. Aetna Casualty Co.

Media File:

604_19620425-argument

Related Transcript:

604_19620425-argument

Transcript:

Argument of John G. Laughlin, Jr.

Justice Hugo L. Black: Number -- United States, Harry Clifford Porter, 604, Harry Clifford Porter, Against Aetna Casualty & Surety Company.

Mr. John G. Laughlin, Jr.: Mr. Justice Black, may it please the Court.

I speak for the United States which is here as an amicus curiae in support of the petition and the petitioner and to the courtesy of counsel for the petitioner and he has allotted me 25 minutes of his time and has agreed that I might open the case on the part of the petitioner.

The case brings before the Court a question of statutory interpretation and application and the statute itself provides an exemption from taxation and suits by creditors of benefits payable and administered by Veterans' Administration under the various benefit laws.

Perhaps that the outset should indicate the Government's interest in this case.

The statute which is now before the Court is a derivation of similar statutes that have been on the books for the better part of the year.

Under current laws administered by the Veterans' Administration in some 12 million individuals were on the roles as recipients of various veterans -- or various benefits.

These are payable not only to the veterans but in giving instances to the widows, parents and children of veterans.

A very substantial sum of money is involved running into billions of dollars annually and the Government's interest as we come here today is to what we hope is to keep faith with the congressional purpose not only in providing for these benefits but in providing that the benefits shall be immune from creditor suits as well as from taxation.

Coming to the facts of the immediate case, they date to 1952 when the petitioner was indicted for murder here in the District of Columbia.

A trial on that indictment resulted in his acquittal by reason of insanity.

He was thereupon committed to St. Elizabeth's where he presently resides.

The murder with which he was charged took place while he was an employee of a certain realty company within the District of Columbia and engaged in that employment, painting certain apartment dwellings within the district.

The administratrix of the decedent's estate brought a wrongful debt action against the petitioner's employer and another party not relevant here.

And as that suit ultimately turned out, a settlement was agreed upon and some $16,000 was paid over to the estate of the deceased.

The suit was defended and the settlement was arranged by the respondent here who then under a subrogation clause of its policy; liability policy, obtained an indem -- indemnity judgment over against the petitioner.

To obtain satisfaction of that judgment, writs of attachment were sued out against two savings and loan accounts within the district and a checking account in a local bank.

It is agreed at this point that the funds on deposit in both the savings and loan association and the bank are derived solely from disability compensation benefits paid by the Veterans' Administration pursuant to veterans benefit legislation.

Writs -- motions to quash the several writs were made and sustained by the District Court.

The judgment of the District Court was reversed by the Court of Appeals and then the Court of Appeals; the only issue was asked to the immunity of the savings deposits on file or with -- with these two savings and loan associations.

The issue as to the immunity of the bank account was eliminated from the case.

There are three prior decisions of this Court under previous statutes preceding the one now in effect, 38 U.S.C. 3101 (a) which are immediately relevant to the issue now before the Court.

These three cases were decided in a span of a 3-year -- a 6-year span between 1933 and 1939 and in brief, they hold, first of all the -- that the immunity provided by the statute did not extend to permanent investments which in the Trotter case to which I am referring consisted of real estate and buildings thereon.

The second case to which I -- in the order in which they were decided is Lawrence v. Shaw, where the Court held that bank deposits subject to the draft by the veterans' guardian were not subject to taxation.

In other words, the immunity right about the statute from taxation carried over unto -- until so long as these banks for these -- the funds were on deposit with the bank.

The third and final case to which I refer is Carrier v. Bryant where government bonds and negotiable notes purchased with benefit moneys were held not to be immune from a creditor's suit.

It was on the basis of these three decisions that the two courts below reached opposite conclusions and that there was a division within the -- the Court of Appeals.

It is the Government's position that consistent with the purpose not only of the benefit payments themselves but of the immunity which attends these benefits that the funds here in issue, savings account deposits with federal savings and loan association should be held immune from the suit by Aetna Casualty Company.

We would rely primarily upon the bank account decision of Lawrence v. Shaw where the Court made it plain that the congressional purpose could not have been to require that the recipients of these benefits carry them on their person or maintain them under the roof in order to prot -- protect and continue the immunity that the statute otherwise plainly accorded.

Rather, the Court made it plain that the conventional modes of receipt and retention of moneys should be recognized and that the immunity did attach.

We cannot, of course, equate a savings account deposit in a savings and loan association with a checking account in a commercial bank.

Nonetheless, in our judgment, the similarities between the two are such that the same result should obtain in this case as obtained in the bank case.

There are, of course, legal and very importantly legal distinction between an ordinary deposit or checking account deposit in a commercial bank and the savings deposits that are here involved.

There is, of course, a debtor-creditor relationship in a commercial checking account whereas in here, the depositor acquires a share and interest in the capital of the savings and loan association.

This, as I say, is a very important difference but it is in the difference that becomes important only in the event of an economic emergency.

And, over recent -- over the -- over in recent years, dating back since the financial crisis of the late 1920's and the early 1930's and with the advent of federal insurance not only of commercial savings accounts but federal insurance which extends to the very accounts that are here involved, the public has become more and more to regard these institutions as, if I may so -- say so, the -- a conventional mode of retention of the dollars that millions of Americans are able to put aside for some emergent use.

We think it does no great violence to either the principles of the Trotter case or Carrier v. Bryant if the character of these deposits are recognized even though they may technically be a -- an investment in the technical and legal sense.

Unlike a bank deposit, these accounts -- through dividends, they're compounded usually on a quarterly basis by the savings and loan association.

A bank account on the other hand since 1933 has born no interest.

For what it may be worth, the Internal Revenue Service regards these dividends paid by savings and loan associations as interest and requires them to be so treated on the internal revenue returns.

And I should also point out insofar as interest itself is concerned, that in the Lawrence case, well, there was no interest accruing on the bank deposit that were there involved.

The Court went out of its way to indicate that it did not suggest that the mere allowance of interest would destroy or terminate the immunity that would otherwise attach to the benefit moneys.

There are of course other differences that need be recognized insofar as in distinguishing a savings account from a checking account, that is of course that since the accountable requires a share interest in the capital, he has at least a technical right to vote for the management of the association.

This I would question is -- is a -- a right that is often exercised due to the magnitude of the -- and prevalence of the existing associations and the millions and millions of depositors that do have an interest in these accounts.

Further difference between the checking account and the savings account is that the checking account is always subject to the depositor's draft whereas under the governing regulations of federal savings and loan associations, the depositor may be required to wait 30 days for his money for -- for a redemption of his shares.

This, we submit, is like the interest distinction between savings accounts and bank accounts and in substantial one and should not defeat the immunity that otherwise would attach to these funds.

Justice John M. Harlan: What would be the indication of these -- of these shared stocks?

Mr. John G. Laughlin, Jr.: In the share -- in a share of -- of ordinary corporate stock, Justice Harlan I think it will be controlled probably by your decision in Carrier v. Bryant which involved a government bond and negotiable securities and negotiable notes purchased out of these benefit moneys.

Justice Potter Stewart: It would not lose the --

Mr. John G. Laughlin, Jr.: It would not be -- it would lose -- the exemption would terminate with the purchase of the bond.

This to our mind comports more consistently with the investment concept as it was first announced in the Trotter case and subsequently, articulated in Lawrence v. Shaw and coming to this, the negotiable securities so held in Carrier v. Bryant.

And it is the -- it is the investment aspect that we do not deny exist in this case but we suggest that a rigid or mechanical approach to the solution to the question here involved by a determination of whether this is a dictionary, or in a legal sense, an investment that we would have to concede it is but this should not so bind the Court that it would defeat the otherwise manifest intent of -- of Congress.

This was the approach taken by the District Court and I suggest the approach that the majority of the Court of Appeals took.

At the same time, the Court did recognize that the purpose of these benefits and of the immunity statute was to assure the availability of these funds for the maintenance and support of the -- of veterans on the case of a deceased veteran, his widow or his children.

The distinction that the Court of Appeals found was that by reason of the fact that the Veterans Committee here first deposited these funds in a checking account which was of course immune and then at subsequent periods as the funds accumulated, he transferred them into the two savings and loan association substantial amounts.

Our view of -- of this aspect of the holding below is that it is an -- an unduly narrow and restrictive approach to the concept of maintenance and support as it presently has come to be in this day.

To be sure the sums paid out in many instances are very modest and would permit of no substantial setting aside of amounts in either a bank account or a savings account.

But we think that the prudent recipient of these invest -- or these benefits should not be required to keep them on this person if he's able to set aside a little bit every month or under his roof or in a checking account that should be entitled or should have available to him the modesty income that these savings association accounts provide.

They are in every sense as -- as liquid and asset as in a practical sense as the deposit in a bank because of the record here and has been pointed out by the Court of Appeals, the -- shows the funds while subject to a 30-day withdrawal period or nonetheless, in a practical sense available on demand must -- the same as a deposit in a bank.

So these purposes that I have -- that the Court recognized but be limited because it felt that the maintenance of a checking account and the conversion of some of the funds into the savings account, indicated that these were surplus funds over and above the needs and necessities of the petitioner here.

We suggest in our brief that this is an unduly narrow and restrictive view of present day needs and point out that school, schooling for children, taxes, debt, an automobile or a home are probably -- properly in the present day and the age considered as a maintenance and support or as of the -- as a necessity of present day life and that to deprive these funds once they are deposited in the savings association of this immunity to that extent tends to defeat the purpose of that Congress had in mind in extending the immunity to these provisions.

Justice John M. Harlan: What's the amount of these deposits?

Mr. John G. Laughlin, Jr.: Of the deposits, something less than $9000.

There's $5759 in one account and $3078 in -- in the second account.

But that Mr. Justice Harlan includes two dividends to the to the time of judgment and of course as the District Court held and that no one questioned the dividends as the crew are not within the ambit of -- of the statutory immunity.

I think one brief word on the part of the Government is an order as with respect to the Wisconsin Bankers case since respondent suggest that the position that the Government take here and that it took in that case is someone inconsistent.

The Wisconsin Bankers case was an attack upon the Home Loan Bank Board and the charge being that it was by its regulations permitting these savings accounts and savings deposits.

Well as authorizing saving and loan associations to engage unlawfully in the business of banking.

We took the position in that case that by reason of the technical legal distinction between a -- a savings depositor in a savings and loan association and a depositor in a savings account in the bank that the -- and the fact that the depositors and the associations acquire an interest in the capital of the association, took it beyond the proscription in the statute against savings and loan associations accepting demand deposits.

And we do not say that the deposits here are demand of others in a sense that they are in a commercial bank and subject to draft in any sense but that the -- even though they are, as a practical matter, subject to withdraw on demand, they are nonetheless subject to a possible waiting period and as I've earlier indicated that the distinction is really a practical significance only in the event of some economic emergency, it should befall the savings and loan association.

One other point that I would like to suggest here, and that is that these savings and loan associations in the present day number on an excess of 6300; they have 6300 throughout the United States.

They have deposits that run an excess of 62 billion dollars.

The public, I suggest distinguishes between these and a commercial bank only in terms of the rate of interest they are able to receive from the savings and loan association but cannot receive through a bank either checking account or a savings account in a commercial bank.

They come to regard them as a convenient and a secure institution whereby they can take dollars saved and on a systematic or whatever basis they can; set their money aside, assured in the belief that with federal insurance up to $10,000 they run no risk and that as a practical matter in the present day and as it has been for years and years, these funds are immediately available for whatever emergency or whatever need may arise.

We think that consistent with the public understanding of these institutions and the insubstantiality of the distinctions between these accounts and those that the Court or the account that the Court was concerned with in Lawrence v. Shaw that the ruling of Shaw case should carry over unto this area.

Justice Hugo L. Black: Mr. Laskey.

Argument of John L. Laskey

Mr. John L. Laskey: Justice Black, Mr. Justices.

We differ -- the Government's position as to what is the distinguishing criteria which terminates the exemption.

We say that it is the only thing which is exempted is the payment of benefit and when the moneys, be it still in the form of money or whether it be transferred into some other form, bank account shares or any other forms.

When it ceases to have the character of a payment, it has lost its exemption because that exemption was only extended by the statute to the payment.

But the Government would read that that benefits acquired from the payment of veterans' disability checks shall be examined.

I do not read the statute in that like.

I would think we should approach this case on the basis of the record made in the lower court.

In that record, we were dealing only with two building -- one building and loan account and one savings and loan account for the purposes of our considerations that there is no distinction in the building and loan and the savings and loan account, they're governed by the same author; same regulations.

We are not dealing here with a systematic deposit of the veterans' benefit checks in a certain account or in the accounts which were attached.

The record will show from the Committee's account which appears at page 15 of the record and on some of the following pages that the regular monthly disability checks in the amount of $225 were systematically deposited in the national bank checking account.

An account not here before the Court which was attached but as to which we are raising no question.

The Committee's account further shows that at various times but on no fixed pattern, funds were transferred from that account in a lump sum $3000 in one case, $2000 in other and $1000 figures in others, incidentally, figures which are not consistent with an accumulation only of the payments or rather a payment deficit divisible into that sum which it did not.

But those funds were transferred.

When they reached the hands of the garnishee where they were attached, they were not payments of veterans' benefits.

They were a payment from the veterans' checking account and were an investment by the veterans who bought the accrual of interest.

Indeed, one item with $2000 had been withdrawn from the building and loan account, placed back in the checking account in anticipation of the -- of its use for payments of expert witnesses at the trial and then when that was -- this necessity was dispensed with, it was again transferred to the building and loan account.

Could it be said that that transfer of that $2000 back again to the building and loan account and not -- it then still retained as a character as the payment which had been an exempted and we submit that it could not.

The distinction between the relationships between depositors in building and loan accounts and the relationship between depositors and checking accounts and bank -- and bank accounts of the checking account nature is a substantial and real one.

And in order to accomplish the results sought by the Government and by the petitioner in this case, it is necessary to rewrite the contract which was entered into between of the person who deposited -- the veteran who deposited -- deposited the funds in a building and loan or savings and loan account and -- and that institution.

To carry that argument; the Government's argument and the petitioner's argument to its logical extension would not only rewrite the account for the benefit of the veteran and at the prejudice of the building and loan or savings and loan association but would also provide the means of a shop an unfair and an equitable discrimination between those depositors in the building and loan organizations who were veterans and those who were not because if you are to exempt those funds from attachment by a judgment creditors, you would necessarily have to exempt them from any other form of execution described in the statute either equitable or legal.

So, I think we all know that all building and loan associations are not federally insured or are not properly managed.

Some have come into difficulties and some in this immediate area are even now in the hands of receivers.

The Government's position would require that depositors in that account in those associ -- associations would be treated differently.

Veterans' accounts would be exempt but the other depositors would have to bear the full burden of any loss because if the veterans accounted the exempt from attachment by a judgment creditor, it would be exempt from seizure by the receiver or the -- the referee in bankruptcy or any other person seeking to enforce and carry out the liquidation or the salvation of that company.

Mr. John L. Laskey: I would like to deal for a moment with the Government's argument for the widows and children as I understood it.

At page 17 of their brief that Mr. Laughlin has argued, urges that a woman receiving widow's benefit on the veterans legislation must keep those moneys perhaps intended as a source of maintenance and independence in later life either on her person or under her rule.

The same type of an argument was made with respect to a child.

I submit that that is vicious argument that you do not find in the statute, any intention to exempt anything except the payment that the statute -- it has a limited duration.

I find nothing in the statute which says that a veteran or a veteran's widow or a veterans' child could live on credit putting the veteran's payments in a building and loan account and the judgment proof for necessities bought on credit that would follow.

The Government states that its position here is consistent with that taken in the Wisconsin Bankers case.

I do not concede that that is the fact.

I say in their brief in his case, that the only real difference between a savings account depositor and here we do not have a savings account depositor but I -- I -- our position would be the same in any event and the checking account depositor are that the former draw the little interest or dividend on his account and has to present his passbook.

These minimal differences are not, we submit, sufficient to deprive benefits proceeds of their identity when placed in a savings account.

Again at page 25, they say the differences between these two types of accounts, however, are technical and legal and are far outweighed by their similarities when the issue is viewed in the perspec -- perspective of the benign legislative purpose of this Act.

However, in arguing the Congress with the position which they take here in their brief on -- an -- an objection to the application for certiorari in the Wisconsin Bankers case, they say, at page 7 of their brief in that case, “From these regulatory provisions, it is clear that whatever their similarities in name and practice and practical operations of the savings accounts authorized by the regulations are not the legal counterpart of a deposit in a bank and the relationship of holders to those savings accounts to the association is significantly different from the debtor-creditor relationship that exist between a depositor and a bank.”

They go on to say at the footer that same page, “Unlike petitioners, depositors however, are members of an association holding savings account paid for a share of capital that Section 5 (b) require and though they may withdraw their interest, they are subject to a waiting period as well as a proration of funds in the event of an emergency.

They are share owners not depositors.”

In concluding, they say our position is that the challenge regulations create procedures and legal interest significantly different in legal contemplation from the type of deposits proscribed by Section 5 of the Home Owners' Loan Act.

Justice John M. Harlan: What year was that?

Mr. John L. Laskey: I beg Your Honor's pardon?

Justice John M. Harlan: What year was that?

Mr. John L. Laskey: That was filed at the -- the Wisconsin Bankers case was filed on November 15th, 1961.

It was decided by the United States Court of Appeals for the District of Columbia Circuit on the same day to this case.

This Court denied certiorari in the Wisconsin Bankers case, after the opposition by the Government had granted its appeal.

The Home Owners' Regulations had clearly set forth the legal effects of the relationships between the depositors; be they veteran or non-veteran and be they veteran incompetent or veterans who are competent.

They set them forth clearly and they specified that they are owners of share; benefit share, share interest; a capital interest in the organization.

They have voting interests, they have other interest too incidentally, as they aid in acquiring traditional capital accounts.

The institutions involved here and many others of like-nature, have made a practice of honoring withdrawals at the same time they are made but that does not change the legal effect or the legal relationship between the parties.

Those regulations are set forth at page 18 and 19 of our brief.

Justice William O. Douglas: 18 and 19?

Mr. John L. Laskey: Yes sir.

We started at little prior to that on page -- page 17, they began by saying, "In order to provide local mutual thrift institutions in which people may invest their funds," and they go on, "they know deposits shall be accepted.

"That's what the Wisconsin Bankers Association is complaining about that they were in fact deposits, the Government there said, "No, they were not deposits, they were share interest."

And they defined as the savings account, under the building and loan and -- and savings and loan organization.They defined ad -- admitting the monetary interest of the hol -- holder thereof in the capital of a federal association.

And again, on page 19, was the -- "The requirements with regard to withdrawals that the association shall then pay all withdrawals requested in accordance with such methods and procedures as to amounts and allotment of funds as to such purposes that shall be provided in the regulations of the -- by the Federal Home Loan Bank Board in effect to date the request for with -- withdrawal.

Holders of savings account for which application for withdrawal has been made shall remain holders of savings accounts until paid and shall not become creditors.

The situation which the Government would rewrite and recast that it would permit necessarily freedom of withdrawal of veterans' funds since it's quid pro quo."

If the exception is extended, it must be extended with prescription against seizure of any kind, legal or equitable.

Set forth in the record, the particular exemplifications of those provisions in this case.

We ran into a little printing difficulty not through the Court's regular printer but to our own and possibly to our method of submitting our material to him.

We had intended to set out the charter and bylaws of the Columbia Federal Savings and Loan Association in order as paginated in their pamphlet.

The pagination is set forth in the transcript of records beginning at page 37 and -- and 44 -- through 44 is not consistent and we accordingly had prepared and asked the Court to distribute to the Justices a proper reproduction of the same record material but with the proper pagination.

If there sets forth the specific matters which we have referred to and these are the specific regulations which are applicable as to this account in this case and which are in the record in this proceeding and are now before you.

I am unable to find a definition that was -- what would meant at any time by the use of the term "permanent investment."

There had been references to land and buildings, there had been references to shares of stock, there had been references to government bonds and savings accounts.

I can see no application of the term "permanent" to any type of -- of investment such as they referred to which renders one distinguishable from the other in that event.

Permanent would be a matter of intent.

You will find in throughout the Federal Savings and Loan System a -- a preference for long term deposits and they refer to a long term deposit as one in extending beyond two years.

Certainly, a -- an -- an investment which had continued for that period of time is just as much as a perm -- of a permanent investment as is a purchase of a government bond which again maybe judicially noticed as readily cashable providing a ready source of funds in the event of need.

We've met that on the basis of this record which is not that of a savings account but is that of a building and loan account that there was no exemption but the only thing exempted by the Congress and the Congress have had ample opportunity to change it if that was its intent.

The only thing exempted was a payment and that when the particular property attached has lost the characteristic of a payment, its exemption is ceased.

Argument of Ethelbert B. Frey

Mr. Ethelbert B. Frey: If the Court please.

Justice Hugo L. Black: Mr. Frey.

Mr. Ethelbert B. Frey: I happen to be the committee attorney of the petitioner.

I've been a member of the District Bar since 1912 and this Bar since 1933.

Now, the question before this Court is not on about a building and a loan association rules.

If my -- where defendant cited this Bankers case.

The Bankers case was purely simply to the stop the building association from taking money like they've been taking it.

Now, this case goes right to the point whether or not this veteran who is injured in Korea is entitled to his benefits, his disability and whether or not Article 38 of the United States Code which absolutely be provides that no attachment of judgement either before or afterwards in equity otherwise shall file a lien against that money.

Now, the money that I received from Mr. Porter as his committee was deposited in bank and when my report went to the order to the court below, I was told under rules to put it in a saving account so that argument itself for the little interest to that idea.

That idea, the only expressed understanding with the Columbia Federal Building Association, if you look at my brief and -- or my exhibits, I went in there and told them what I was going to do and I wouldn't buy in any shares.

They said, "You don't have to Mr. Frey.

You'll withdraw that money out tomorrow if you put it in today."

Those rules -- those rules we have in emergency matters.

And I'll say to the Court here that the banks in Maryland and at once -- that have failed if they used that in an emergency matter, they wouldn't have been caught swapping accounts or -- or transferring money.

Now, this money that I put in bank for Mr. Porter was for his necessities and for his keep and for his rehabilitation purposes.

It was close to $6000.

From time to time it's true I drew on that account or one occasion rightfully, I drew $2000 when Mr. Porter was going to be tried, they said he was forbad ready for trial on that graft.

I drew the money out of the bank with any hope of having Dr. Teplin, United States Psychiatrist.

Mr. Freddie and Dr. Gilbert, who is now dead, testified to come here from California in Wisconsin.

And then when I made an agreement with the District Attorney, the money was put back.

Now, this money that I have deposited in these associations, if the Court pleases, has never lost its identity.

It is still money, they had not even purchased of it -- with it.

We haven't bought stocks or bonds and if Your Honor will read the Lawrence case thoroughly and the Trotter case, the Court will find that in those cases, the criterion was where they bought real estate and stocks and bond, they're examined but never a word about stock or shares in the Building Loan Association.

I think it's common knowledge to this Court and as everybody else that the Building Loan Association today is the same as the bank.

You don't need to wait any time to get your money out.

You can go in the there today and put $1000 in and tomorrow you'll go in and get your thousand back.

Not the same thousand but of the same kind.

Now, Mr. Porter received this money; a disability fund where it is a deposit under an order of court below.

And then when he had accumulated with no dependence, assume equal to $1500, the Government under the law of 1958 or 1959 cut his disability of pension off completely.

Now, Mr. Porter hasn't had a nickel since 1959 and that money was attached.

That money was attached in 1961.

And in December 1959, after the trial of Mr. Porter and he was -- he was found out guilty, the hospital over there started to run a bill for his services over there which I think had prior or they already jdugment and secured after that against his estate.

It's not only that, there's other bills that are due; bills for bond are running on and bills for different things that he requires at the hospitals.

He has had no money or whatever in order to buy the actual necessities because his money had been tied up.

Justice John M. Harlan: Do you think that that illegal consequence follows --

Mr. Ethelbert B. Frey: Sir?

Justice John M. Harlan: Do you think that illegal consequence follows with the fact that his problem was investment that he used to --

Mr. Ethelbert B. Frey: Your Honor that --

Justice John M. Harlan: -- (Voice Overlap) -- against the question turned on to the argument that was made by this Committee or rather made my by the veteran's son.

Mr. Ethelbert B. Frey: Well if the Court pleases, I'm going to show you this and answer that question and had I put that money in the safe deposit box or some other way out or invested in something, they would have never known anything about it but under the Court rules and the court order, I had to comply with their request and if I did not probably been disbond.

Justice John M. Harlan: That's exactly my point.

Mr. Ethelbert B. Frey: Where is your point again Judge, pardon me Judge Harlan?

Justice John M. Harlan: Go ahead sir.

Mr. Ethelbert B. Frey: Go ahead judge.

Justice John M. Harlan: I was going to say that you did this as a matter not of his request but because your duty is committed in fiduciary, is that it?

Mr. Ethelbert B. Frey: That's right.

Justice John M. Harlan: That is -- your -- your reward is a --

Mr. Ethelbert B. Frey: Sir?

Justice John M. Harlan: Your award and the man you represent is in the -- St. -- St. Elizabeth.

Mr. Ethelbert B. Frey: Yes.

Now, I say this if the Court pleases that -- that in my -- in my brief, if you will read it, I said that I thought that it wouldn't be long before Mr. Porter would be released or Mr. Porter was released being homeless on the 6th day of April and they couldn't turn him lose because he hasn't a nickel in world for a rehabilitation purposes or go to school or do anything.

And he only has rights to go out in the daytime and report back that hospital at night.

And I respectfully submit, if the Court pleases, that that Article 38 of the United States Code certainly protects him and his money.

I claim and I'll always claim that the money that I received is still moneys whether it was in the building association, it is moneys and it's still moneys.

And as such, the Article 38 of the United States Code certainly protects him in that respect.

And I ask this Court that our final request that the Court reverse the flagrant decision of the Court of Appeals below in this manner and sustain Judge Youngdahl's opinion and ruling on the motion to quash.

If the Court pleases, that motion was filed to attachment and then a motion was filed to quash the memorandum and we argued that case in court and the Court had it under opinion for a long time before it decided and able.

Now here, we have a man that has lost his constitutional rights.

He has no nickel in the world, he can't find a job and all of the money that I had saved for him under an order of court, not through me.

The Court ordered me to do that is being attached and held up and he can't use it.

I thank you, Your Honor.

Featured:

United States v. Shimer - Oral Argument

Tue, 25 Sep 2012 22:35:07 +0000

Case:

United States v. Shimer

Media File:

392_19610427-argument

Related Transcript:

392_19610427-argument

Transcript:

Argument of Wayne G. Barnett

Chief Justice Earl Warren: Number 392, United States, Petitioner, versus George E. Shimer.

Mr. Barnett.

Mr. Wayne G. Barnett: Mr. Chief Justice, may it please the Court.

Under the Pennsylvania Deficiency Judgment Act, if a mortgagee forecloses on property and purchased the property himself at the foreclosure sale, then the debtor and his guarantors are released from any further liability to the mortgagee.

Unless within six months, he petitions to the Court to have the fair market value of the property he determined and credits that against the indictment.

In effect, a purchasing mortgagee is required to give credit against the indebtedness for the fair market value of the property he acquires which is deemed to be equal to the full indebtedness unless he proves it to be otherwise within six months.

The basic question in this case is whether that statute relieves the United States of its liability as guarantor on loans to veterans guaranteed by the Veterans' Administration under the Servicemen's Readjustment Act of 1944, that's commonly known -- known as the GI Bill.

The -- on January -- in January, 1948, the respondent, a World War II veteran borrowed $13,000 from the Pennsylvania Bank for the purchase of a home in Pennsylvania.

On his application, the Veterans' Administration guaranteed $4000 of that loan.

Because of the guarantee, he was not required to make a down payment and the loan was given for the full purchase price of the property.

After the first three monthly payments, the respondent defaulted in his payments on the loan.

And a year later, on May 12, 1949, the bank entered judgment in the state court to foreclose the abandoned mortgage.

Execution was had on the judgment at a share of sale on June 29th, that's six weeks later, at which the bank bought in the property on a bid of $250.

That's the nominal amount covering cost.

A few weeks later on July 8th, the bank submitted its claim for payment of the guarantee under the Servicemen's Readjustment Act.

The VA in due course paid the bank $4000 on the guarantee.

Now, at no time did the bank follow the procedure under the Pennsylvania Deficiency Judgment Act to have the fair market value of the property determined.

Justice William O. Douglas: Did the Government at any time ask the bank --

Mr. Wayne G. Barnett: No, we do not.

Justice William O. Douglas: (Voice Overlap)

Mr. Wayne G. Barnett: We do not.

This action is an action brought by the United States against the respondent, the veteran to recover indemnity from him for the $4000 payment that we have paid the bank.

The District Court granted summary judgment for respondent and the Court of Appeals for the Third Circuit affirmed.

It agreed that the respondent was liable to the United States for indemnity for any amounts that we were required to pay the bank.

But it held that the VA was relieved of liability to the bank by virtue of the Pennsylvania Deficiency Judgment Act.

Therefore, we should not have paid the bank the $4000 and accordingly, we're not entitled to recover it from the veteran.

Justice William J. Brennan: Do I understand (Inaudible) that you were, therefore, looking for volunteer?

Mr. Wayne G. Barnett: Yes.

Oh, we -- we have -- we agreed that if we were not liable to the bank, we can't recover from the veteran.

What it held was we weren't liable to the bank and our position is that we were liable to the bank.

We are here then in the position of asserting our own liability.

Our position is that United States does not relieve of liability on the GI loan guarantee by the Pennsylvania --

Justice Potter Stewart: Mr. Barnett, your pack -- our position is -- is not here and I -- I --

Mr. Wayne G. Barnett: Yes.

Justice Potter Stewart: I -- do you understand that they agree that if you were liable to the bank then you have a claim against the respondent or I -- I --

Mr. Wayne G. Barnett: No, no, (Voice Overlap) but they contest that.

Justice Potter Stewart: They make an argument that even at those --

Mr. Wayne G. Barnett: They contest that.

Justice Potter Stewart: -- even if you were liable to that.

Mr. Wayne G. Barnett: Yes, that's right.

That's right.

Justice Potter Stewart: They're not liable to you.

Mr. Wayne G. Barnett: The Court of Appeals' decision was based solely on the lack of our liability --

Justice Potter Stewart: Yes.

Mr. Wayne G. Barnett: -- to the bank.

The Court of Appeals agreed that the veteran would be liable to us if we were liable to the bank.

Justice Potter Stewart: But the respondent --

Mr. Wayne G. Barnett: Now, the respondent -- respondent does not agree with that.

Yes, sir.

Chief Justice Earl Warren: You asked us to hold that you are liable to the bank.

Mr. Wayne G. Barnett: That is right.

The reason we do that, although it involves a very large liability on the Government, the reason we -- we assert that, is that in our view, it's essential to the contingent -- continued functioning of the GI loan program that the liability under the guarantee not be impaired.

We think it's -- without our liability in these circumstances, the guarantee as I hope to show would not be worth anything and wouldn't do the veterans any good.

The veterans couldn't get loans under the GI loan program.

Justice Charles E. Whittaker: But maybe good for the policy, though it wouldn't be enough the question (Inaudible)

Mr. Wayne G. Barnett: Yes, yes.

Justice Charles E. Whittaker: -- to authorize (Inaudible)

Mr. Wayne G. Barnett: Yes.

We were -- I'm not sure that whole figures involved.

The total loans, I think that have added up to about $30 billion and -- and we would not assert a -- the result and guaranteed liability on that amount unless we were satisfied at least that that that was required by -- by the statute.

Now, I think the question in the case turns entirely upon a construction of the -- the question of our liability -- our liability to the bank, I will deal with first, turns entirely upon the construction of the Federal Act and the VA regulations issued under it.

The Court of Appeals turn to state law, as we understand its opinion, not because it thought state law was controlling of its own force, but only because it thought that the federal regulations did not provide for the matter and were intended to leave its state law.

So the question really is only what the federal regulations do provide.

And what I hope to do primarily is simply to show how the Federal Act and the regulations fit together in how the guarantee does operate.

Justice John M. Harlan: Was there any claim by your opponents that the regulation has construed to say that should be authorized?

Mr. Wayne G. Barnett: There is such a claim on the indemnity regulation, his liability over to us which is the second question.

On the first question, our liability to think -- I would like to state what the respondent's argument is but I don't think I can do a justice.

We are -- we really are speaking in an entirely different terms and I'm not sure that I understand really what he is arguing about our liability to the bank.

So I prefer just to state or might argue what the regulations provide.

As they say -- said, the VA originally guarantee at the respondent's request, $4000 of the $13,000 loan.

Now, in fact, the -- the guarantee does not remain at a fixed amount during the life of the loan.

Section 500 (b) of the Act which is set forth in our brief at pages -- at page 62, the appendix to our brief.

Provides that the -- that the guarantee show a decrease or increase pro rata with any decrease or increase in the amount of the outstanding indebtedness.

Now, the effect of that is to convert the guarantee from a guarantee of a fixed amount to a guarantee of a percentage of the indebtedness that's outstanding.

Now, in this case, the -- the percentage works out to be 30.76%.

So what the guarantee really was, was a guarantee of 30.76% of the indebtedness outstanding from time to time not to exceed the original amount of $4000.

Justice Potter Stewart: That's the ratio of $4000 to $13,000?

Mr. Wayne G. Barnett: Yes, yes.

It's 30.76%.

Justice Potter Stewart: Yes.

It was 30.76% with the maximum of $4000.

Is that right?

Mr. Wayne G. Barnett: That's right.

That's right.

Now, the -- that variable nature of the amount of the guarantee, the fact that it's a percentage introduces one complication, because you have to then provide at what time the amount becomes fixed when you -- it is liquidated to a fixed amount of guarantee.

That is performed by Section 506 of the Act and the regulations under that Section.

Section 506 is at page 64 of our brief.

Well, that -- that provides that in the event of default, the holder shall notify the administrator who shall thereupon pay to such holder the guarantee.

Now, without more -- let's take that that part of -- of 506.

That would mean that the guarantee becomes fixed at the date of default as the specified percentage of the indebtedness outstanding on that date and is then absolutely payable.

However, the second proviso of the 506 goes on to say that the administrator may permit forbearance on the part of the lender and for that purpose, may authorize interest in other charges to continue to accrue on the indebtedness for purposes of computing the guarantee beyond the date of default.

Though, he cannot -- he -- he has to provide a cut-off date for that percentage computation no later than the date of judgment and decree of foreclosure.

The regulations under that -- now, I'm just taking about the time at which one computes the amount of the guarantee, the percentage computation.

The regulations under that authority are at page 73 of our brief, Section 4321 (a), subsection (a) of that Section.

Now, those provide that the guarantee shall be computed as the specified percentage applied to the indebtedness computed as of the date of claim but not later than the date of judgment or of decree of foreclosure.

Now then, if the claim is filed as it maybe any time after default and if it's in fact filed before foreclosure then the date on which the claim is filed controls the computation for this indebtedness outstanding on that date.

However, if the claim is not field until after foreclosure, then the guarantee is computed not when the claim is filed but rather back at the date of judgment of foreclosure.

So, the -- the guarantee originally variable becomes fixed on the date of judgment of foreclosure.

In this case, that date was May 12, 1948 when the judgment was entered.

On that date, there were no proceeds of foreclosure because the corp -- the sale, the execution, -- the sheriff's sale didn't take place until six weeks later.

So the proceeds of foreclosure do not affect the computation of the principal or face amount of the guarantee.

As of May 13th -- May 12, 1948, the indebtedness outstanding in fact with all the accrued interest in other charges exceeded $13,000.

The 30 -- 30.76% of that which was the guarantee, exceeded $4000.

So the guarantee became fixed at $4000 and it -- it is now a liquidated amount of $4000 as the face amount of the guarantee.

Now, all of that --

Justice Potter Stewart: Mr. Barnett, this is seemed quite complicated at least to me --

Mr. Wayne G. Barnett: Yes.

Justice Potter Stewart: -- it might be at the end of the day, but it's a -- as I understand it, the bank subsequently sold this property for $10,500.

Does that -- that fact (Voice Overlap) --

Mr. Wayne G. Barnett: That -- that is correct.

Justice Potter Stewart: -- play -- doesn't play any part in -- in --

Mr. Wayne G. Barnett: Well --

Justice Potter Stewart: -- computing the amount of the guarantee.

Mr. Wayne G. Barnett: I --

Justice Potter Stewart: And if it doesn't, doesn't this give --

Mr. Wayne G. Barnett: Yes.

Justice Potter Stewart: -- the bank a windfall?

Mr. Wayne G. Barnett: Well, the answer -- first of all, I haven't gotten to the point at which the proceeds of foreclosure are taken into account.

The proceeds for foreclosure do have to be taken into account.

They -- they do -- don't affect the -- the face amount of the guarantee, i.e. the $4000 penalty amount -- that that's our maximum liability is $4000.

The -- the foreclosure proceeds don't affect that and the reason they don't is --

Justice Felix Frankfurter: I don't know what you mean by business, they don't affect that.

Mr. Wayne G. Barnett: The -- they copied --

Justice Felix Frankfurter: Protect the liability for --

Mr. Wayne G. Barnett: They --

Justice Felix Frankfurter: -- for the amount.

Mr. Wayne G. Barnett: Yes.

The --

Justice Charles E. Whittaker: You read Section subparagraph B on this regulation, that coverage is not a suit.

Mr. Wayne G. Barnett: Yes, that does.

That does.

That is the final accounting.

Now, is it -- even if we started out with a guarantee liability fixed at $4000, we guarantee $4000 of the debt.

That's the usual -- that's --

Justice Felix Frankfurter: Up to guarantee, up to (Voice Overlap)

Mr. Wayne G. Barnett: Up to, yes.

Justice Felix Frankfurter: That's a very different thing.

Mr. Wayne G. Barnett: Well, you would normally state the guarantee is $4000.

What you would have to pay -- what would you have to pay would be limited to the loss.

I -- I think if I go ahead and show where you do take into account the foreclosure proceeds, it will clear -- it will clear this up.

The reason you don't take the foreclosure proceeds into account in this first percentage computation is that the result would be to make this not a guarantee but a share -- share -- sharing of the loss agreement, because if you take the foreclosure proceeds into account first and then take a percentage, really owe into paying is a percentage of the ultimate loss.

And what the guarantee is designed to do is for us to bear with the entire loss up to amount of guarantee.

And that's --

Justice Felix Frankfurter: But does it --

Mr. Wayne G. Barnett: -- that's why it's important to compute the -- the amount of the guarantee before you take into account the foreclosure proceeds.

Now, the --

Justice Felix Frankfurter: But this isn't the gain -- this is the gain -- you may state the question your way, but why don't you state it Justice Stewart's way --

Mr. Wayne G. Barnett: Well --

Justice Felix Frankfurter: -- that the guaran -- guarantee --

Mr. Wayne G. Barnett: Yes.

Justice Felix Frankfurter: -- the beneficiary of the guarantee did not entirely have a windfall suppose you start that way --

Mr. Wayne G. Barnett: The -- the --

Justice Felix Frankfurter: -- then you might end up (Voice Overlap) --

Mr. Wayne G. Barnett: Yes.

Let --

Justice Felix Frankfurter: You finish your way --

Mr. Wayne G. Barnett: Alright.

Justice Felix Frankfurter: -- I just want to suggest this isn't the gain.

Mr. Wayne G. Barnett: The -- as I say that the -- the fact that we haven't considered the proceeds of foreclosure in determining the principal amount of the guarantee does not mean that we don't take them into account.

We do take them in -- into account.

The Section 506 provides that if he does demand, aim into the guarantee immediately upon the default and we pay it.

We are then subrogated to his rights, to the lender's rights.

That means that if the lender then forecloses and then sells the property that he has to repay to us any proceeds that he realizes an excess of the unguaranteed part of the debt.

So, he doesn't get a windfall on the judicial sale of the property.

Justice Felix Frankfurter: Let me ask you this question of that side.

I don't mean to break into the architecture of your argument but suppose the guarantor would not be United States or the Veterans' Administration or a private -- a private financing company of Philadelphia, would you make it -- be making the same argument?

Mr. Wayne G. Barnett: No, I would not, sir.

Justice Felix Frankfurter: Alright.

Mr. Wayne G. Barnett: As I understand it, we don't question the interpretation of the Pennsylvania law as relieving a private guarantor.

Now, the -- going back to --

Chief Justice Earl Warren: Can the bank -- can the bank get a windfall here?

Mr. Wayne G. Barnett: The bank cannot get a windfall depending upon how one makes evaluation of what the bank gets.

The -- the -- Mr. Justice Stewart spoke of the proceeds on the bank's ultimate resale.

I think everyone would agree and I think anyone makes an argument to the contrary that the profit or loss on the resale isn't -- is never relevant.

We never take into account what happens in subsequent sale.

The problem is --

Justice William J. Brennan: You mean they paid $250 and they brought it in.

Mr. Wayne G. Barnett: Yes.

Justice William J. Brennan: Therefore, this $4000 do -- do -- (Inaudible) guarantee.

Now, they hold it and sell it for $25,000, in a couple of years, it's not wasted.

Mr. Wayne G. Barnett: That -- that is right.

That is basically right.

If a third party buys the property at the sheriff's sale, we can't go after him for the profit loss when he resells it a year later.

The problem is how you account for it --

Justice Felix Frankfurter: You can guarantee --

Mr. Wayne G. Barnett: -- at the date of the sheriff's sale?

That's the time of which we have to make our final accounting.

Justice Felix Frankfurter: You can guarantee anything to the third party, is it guaranteed to with the -- with the mortgages?

Mr. Wayne G. Barnett: Yes, yes.

Let me say, the way this is done -- section -- turning to -- back to the regulations, I think if I follow up through the regulations, I -- I will show you exactly where our procedure differs from the state procedure.

Section 4321, subsection (b) is the section which directly governs this case.

This applies to the situation where the -- the guarantee is not claimed until after the foreclosure sale, after the -- the realization on the proceeds of the security.

It provides that credits accruing from the proceeds of a sale or other disposition of the security subsequent to the date of computation, that's this case, we've already fixed the principal amount of $4000.

And prior to the submission of the claim, here the claim wasn't submitted until after the sheriff's sale, shall be reported to the administrator and the amount payable on the claim -- on the claim shall at no event exceed the remaining balance of the indebtedness.

That is, we agreed, we were liable to pay the bank only an amount equal to the indebtedness less the credits for the proceeds of foreclosure --

Justice William J. Brennan: We're talking in figures.

Mr. Wayne G. Barnett: -- i.e. the loss -- the loss.

Now, well I can't --

Justice William J. Brennan: But we have figures here.

We had -- wasn't the -- the indebtedness was $13,000?

Mr. Wayne G. Barnett: $13,000 it was over that actually at this time.

Justice William J. Brennan: And now, the proceeds to the sale were $250.

Mr. Wayne G. Barnett: Well, that's the question.

The question is what are the credits we have to give for the -- for the sale?

That's where -- we agreed with the Court of Appeals that you have to first allow a credit for the sale of the security.

The point at which we depart from the Court of Appeals is, "How do you determine what that credit shall be?"

The Court of Appeals said that, "The regulations don't provide for it, we have to turn to state law."

Under the Pennsylvania Deficiency Judgment Act, the dollars bid at the sale if the mortgagee buys, are -- are irrelevant.

The mortgagee, the purchasing mortgagee, has to give credit for the full balance of the indebtedness unless he filed the petition in the state court to -- to appraise the property, then he has to give a credit for the fair market value of the property.

Since the bank didn't file a petition, under the Pennsylvania law, he would have to give credit for the full indebtedness.

There'll be nothing remaining due and we would have to pay nothing under the guarantee.

That is what the Court of Appeals held.

Justice Potter Stewart: How is the-- in -- under Pennsylvania law, how is this fair market of value determined?

Is it a -- is it a long retracted litigation or is it a --

Mr. Wayne G. Barnett: I don't really know of how likely in practice that is to be contested.

If it's contested, you have a full hearing with expert witnesses on value.

Now, whether in practice, these things can be put through without a great contest, I -- I am really not informed.

Now, the point which we think the Court of Appeals went wrong was in thinking that the -- the federal regulations do not themselves provide for the credits.

It is our position that the regulations do specifically provide what credit shall be made upon the disposition of the security.

That regulation is Section 4320 which appears at page 68 through 72 of our brief.

Justice Felix Frankfurter: (Voice Overlap) what statutory provision, what regulations was made?

Mr. Wayne G. Barnett: I think -- I think Mr. --

Justice Felix Frankfurter: (Voice Overlap)

Mr. Wayne G. Barnett: If I may -- if I may -- if I can tell you first what they do then I -- I can -- I can tell you how I justify it in terms of the statute.

Well, I think it will help -- I -- if I first state what they do.

This provision, 70 -- 4320 and in fact provides that upon the administrators receiving notice of a proposed sale of the security, the administrator may specify an upset price.

If he specifies an upset price, the mortgagee, the bank, the lender, must give credit for that upset price unless in fact it's sold for more in which case he has to credit the actual proceeds but he must give credit for the upset price.

In return for that, he has an option to resell the property to the VA at that price.

And if we do not set an upset price, the regulation specifically provide that he need credit against the indebtedness for purposes of the guarantee only the actual proceeds.

Now, I -- I -- I'd like to explain what the function is of the upset price and how it works.

The reason we have that authority is to minimize our liability on the guarantee.

Well, the only thing that will reduce our liability on the guarantee is a credit that exceeds the unguaranteed balance of indebtedness, in this case, $9000.

The indebtedness was $13,000, guarantee of $4000.

We still have to pay $4000 unless the credit on the sale of the security is more than $9000.

Therefore, we have no interest in establishing an upset price unless we're willing to establish one higher than $9000.

It doesn't make any difference to us how much less than that is realized so long as it's less than that.

So, we establish an upset price only when it's on our appraisal -- we -- we make a -- have appraisal reports made of the property and determined in our view what the realizable value of the property is.

If the realizable value exceeds the unguaranteed part of the debt, so we'll reduced our liability in the guarantee, we establish an upset price.

Justice William J. Brennan: Let me see if I get this clearly Mr. Barnett, having instead about $250.

It's a usual mortgagee who's trying to bid.

Mr. Wayne G. Barnett: Yes, yes.

Justice William J. Brennan: Then the -- that that had not been the proceeds, but there had in fact when the sheriff's sale in a price of, say $11,000 had been realized.

Mr. Wayne G. Barnett: Yes.

Justice William J. Brennan: And the mortgagee would have to credit that $11,000 because --

Mr. Wayne G. Barnett: Yes.

Justice William J. Brennan: -- the indebtedness of $13,000.

Mr. Wayne G. Barnett: Yes.

Justice William J. Brennan: And then the Government's obligation would have been reduced at two.

Mr. Wayne G. Barnett: That's right.

Justice William J. Brennan: Is that right?

Mr. Wayne G. Barnett: That's right.

Justice William J. Brennan: But since in this instance, the Government couldn't fix an upset, that didn't happen --

Mr. Wayne G. Barnett: That's right.

Justice William J. Brennan: -- $250.

If the Government had fixed an upset price of $11,000, --

Mr. Wayne G. Barnett: Yes.

Justice William J. Brennan: -- it would've been the same result.

Mr. Wayne G. Barnett: That's right.

That's right.

Justice William J. Brennan: But since it couldn't fix one, an excess of $9000 will fix none.

Mr. Wayne G. Barnett: This -- since we were unwilling to, we could have.

Justice William J. Brennan: Unwilling about --

Mr. Wayne G. Barnett: Yes, yes.

Justice William J. Brennan: Unwilling to.

Mr. Wayne G. Barnett: Yes, that -- that is correct.

Justice William J. Brennan: Is that?

That's the obligation that became forth though.

Mr. Wayne G. Barnett: That -- that is right.

Justice William J. Brennan: And independently, the fact that the bank later in fact sold the property for $10,500.

Mr. Wayne G. Barnett: Oh no, think -- we get the benefit of the actual proceeds.

Justice William J. Brennan: Now, didn't the bank actually sell --

Mr. Wayne G. Barnett: Oh, I'm sorry.

The -- this all goes to the sheriff's sale --

Justice William J. Brennan: That's what I thought.

Mr. Wayne G. Barnett: -- the sheriff's sale.

Justice William J. Brennan: So that --

Mr. Wayne G. Barnett: Yes.

Justice William J. Brennan: -- the $10,500 ultimate sale has nothing to do with it.

Mr. Wayne G. Barnett: That is correct.

That is correct.

And -- and an unknown theory couldn't have anything to do with it.

Everyone agrees that it is solely the sheriff's sale that we're concerned with.

Now, the upset price provisions of the regulations are we think the -- the heart of the protection provided by the guarantee.

They are essential to the perform -- to the function of the guarantee and encouraging lenders to make loans to veterans.

The purpose of the GI loan programs is to -- is to provide a substitute to the down payment for veterans who can't afford a down payment.

The guarantee, under the regulations with the upset price provisions, do just that.

The worst that can happen to a lender under the guarantee as we construe the regulations is that you'll be paid the guarantee in full and we'll have to accept the house for the rest of the indebtedness.

That's what happens to him when he has a down payment.

If you have a 30% down payment, the lender advances only 70%.

The house stands are only 70% and if he buys it in under the Pennsylvania law and has to accept it in full payment, it still stands for only 70% so he has a 30% cushion.

Our guarantee works exactly the same way.

He gets the guarantee unless he's, otherwise, made whole by either the actual cash proceeds or the offer of the VA in the form of the upset price.

He always had -- he established an upset price, he has the option selling it to us and can be made whole.

But unless he is otherwise made whole, we are liable on the guarantee and it's that function of the guarantee that makes it the equivalent of a down payment.

Now, under the Pennsylvania law, under decisions below I think that it is demonstrable that the guarantee is virtually no protection to lenders.

Now, we're not issuing protecting lenders for their own sake.

We want to protect the lenders in order to get them to lend money.

And veterans -- the -- the VA guaranteed loans are not particularly attractive investments or generally a low interest rate.

And to induce 100% financing to the veterans, we have to provide security and protection to lenders.

Now, on --

Justice Felix Frankfurter: Are you saying -- are you saying that in Pennsylvania, down payment of your 30% make your figures --

Mr. Wayne G. Barnett: Yes.

Justice Felix Frankfurter: -- for the guarantee by private guarantors --

Mr. Wayne G. Barnett: We -- you -- you probably wouldn't have both the down payment and the guarantor.

We might --

Justice Felix Frankfurter: Well, if you have --

Mr. Wayne G. Barnett: Yes.

Justice Felix Frankfurter: -- exactly the same situation --

Mr. Wayne G. Barnett: Well here, we have no down payment.

There's no down payment.

Justice Felix Frankfurter: No, but the guarantee --

The guarantee is --

Justice Felix Frankfurter: -- would be operates --

Mr. Wayne G. Barnett: Yes.

Justice Felix Frankfurter: -- operate in place.

Mr. Wayne G. Barnett: Yes.

Justice Felix Frankfurter: And are you saying that therefore therein that -- well, if you have a guarantee situation or get down payment, after all, there's a good deal of -- I assume, I don't know, correct if I'm wrong with the flight offenses.

That in Pennsylvania, properties acquired by people -- by this kind of arrangements without down payment who guarantors it, isn't it?

Mr. Wayne G. Barnett: I would --

Justice Felix Frankfurter: Is that unknown?

Mr. Wayne G. Barnett: I would think that's fairly unlikely in Pennsylvania.

I think the effect of this kind of --

Justice Felix Frankfurter: Why, why is it unlikely?

Mr. Wayne G. Barnett: The effect of this kind statute in cutting off the liability of the guarantor.

This cuts off the liability of the guarantor.

Justice Felix Frankfurter: Only if -- if the -- only if the mortgagee is -- is made whole by -- by the property.

Mr. Wayne G. Barnett: Well, I --

Justice Felix Frankfurter: He -- he is (Voice Overlap) --

Mr. Wayne G. Barnett: I -- I think I was specific, yes --

Justice Felix Frankfurter: He's made -- he's made whole by the guarantee under Pennsylvania laws, it satisfied its laws.

Mr. Wayne G. Barnett: Yes, but I don't think you'll find many lending institutions willing to rely, make out 100% loan and willing to rely upon a --

Justice Felix Frankfurter: Because your arguments --

Mr. Wayne G. Barnett: -- court's evaluation of the property in payment of that loan.

Justice Felix Frankfurter: (Voice Overlap) --

Mr. Wayne G. Barnett: They rely upon the down payment cushion.

Justice Felix Frankfurter: Do you think the guarantee of the genitive Girard Trust Company in Philadelphia isn't put as (Inaudible) VA guarantee?

Mr. Wayne G. Barnett: Oh, it is except that ours is not cut off by Pennsylvania law.

Justice William J. Brennan: That doesn't mean (Voice Overlap) doing those guarantees, I take it out, the Girard Trust Company?

Mr. Wayne G. Barnett: They are not giving the guarantees?

Justice William J. Brennan: No, no, I mean making arrangements such as Uncle Sam has made that will enable people to buy a property --

Mr. Wayne G. Barnett: Well that's right, that's right.

Justice William J. Brennan: -- without paying anything, none at all?

Mr. Wayne G. Barnett: I -- I doubt that they are.

Justice William J. Brennan: I might not.

Mr. Wayne G. Barnett: But -- and on the -- the question of -- of indemnity, I -- I will rely on our brief's treatment of that.

Thank you.

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