Source: https://supreme.justia.com/cases/federal/us/367/389/
Timestamp: 2019-04-22 20:09:37+00:00

Document:
"are not entitled to any of the rights, privileges, and immunities attendant upon legal bodies created under the jurisdiction of the laws of the United States or any political subdivision thereof."
This termination of state registration had the indirect effect of increasing petitioners' tax rate under the Federal Unemployment Tax Act from about 1% to 3%. The Internal Revenue Service continued to treat petitioners as covered by the latter Act, and to collect taxes from them thereunder.
Held: the Communist Control Act of 1954 does not require exclusion of petitioners from New York's unemployment compensation system; the judgment is reversed, and the case is remanded for further proceedings. Pp. 367 U. S. 389-395.
8 N.Y.2d 77, 168 N.E.2d 242, reversed and case remanded.
"Section 2. The Congress [hereby] finds and declares that the Communist Party of the United States, although purportedly a political party, is in fact an instrumentality of a conspiracy to overthrow the Government of the United States . . . . Therefore the Communist Party should be outlawed."
"Section 3. The Communist Party of the United States, or any successors of such party regardless of the assumed name, whose object or purpose is to overthrow the Government of the United States, or the government of any State, Territory, District, or possession thereof, or the government of any political subdivision therein by force and violence, are not entitled to any of the rights, privileges, and immunities attendant upon legal bodies created under the jurisdiction of the laws of the United States or any political subdivision thereof; and whatever rights, privileges, and immunities which have heretofore been granted to said party or any subsidiary organization by reason of the laws of the United States or any political subdivision thereof, are hereby terminated: Provided, however, That nothing in this section shall be construed as amending the Internal Security Act of 1950, as amended."
"rights, privileges, and immunities attendant upon legal bodies created under the jurisdiction of the United States or any political subdivision thereof."
Respondent would have us construe this language to mean that, wherever a situation advantageous to the petitioners occurs by reference to the statutory or common law of a State or any other government in the United States, this is to be considered a "right," "privilege," or "immunity," and must be deemed to be withheld by the Act. On this basis, New York has reasoned that liability to taxation as an employer, though not a privilege in the ordinary sense of the term, is nonetheless a recognition of the common law contractual capacity to employ, and, as such, is advantageous to petitioners; and further, that an employer whose employees are unable to benefit from state and federal unemployment insurance programs will be disadvantaged in finding and keeping employees. Therefore it was thought that the Communist Control Act required termination of the registration of petitioners as employers.
and Congress, in 1956, has dealt in terms with a like matter, excluding from federal old-age, survivors and disability benefits, 42 U.S.C., c. 7, subchapter II, employment with any organization required to register by the Subversive Activities Control Board and removing from the coverage of the Federal Insurance Contributions Act, 26 U.S.C., c. 21, any such organization, [Footnote 8] thus tying the exclusion to the administrative factfindings and determinations required by the Internal Security Act of 1950, 64 Stat. 987; see Communist Party v. Subversive Activities Control Board, 367 U. S. 1.
In face of these considerations, we should hesitate long before attributing to Congress a purpose to effectuate the similar exclusion in this instance by legislative fiat. Our reluctance to accept a state interpretation which would have that effect is fortified both by the difficult constitutional questions that would result and by the undesirability of having conflicting state and federal administrative interpretations of a federal statute establishing this "coordinated and . . . dual system" (Buckstaff Bath House Co. v. McKinley, 308 U. S. 358, 308 U. S. 364) of employment insurance.
We hold that the Communist Control Act of 1954 does not require exclusion of the petitioners from New York's unemployment compensation system. Since the New York Court of Appeals' decision unmistakably rested on the contrary premise, its judgment must be reversed, and the case remanded for further proceedings not inconsistent with this opinion.
The basic federal rate was increased to 3.1% by Public Law 86-778, § 523(c), 74 Stat. 924, 982, effective 1961. 26 U.S.C. § 3301.
Petitioners argue that the Act, on its face and as applied, violates the Due Process Clause of the Fifth Amendment and Art. I, § 9, cl. 3 of the Federal Constitution, which provides that "no Bill of Attainder or ex post facto Law shall be passed." Petitioners also contingently assert a Fourteenth Amendment claim, see note 6 infra.
"the Commissioner's representatives . . . urge that Congress has effectively outlawed the Communist Party, and thus, by force of law, the Referee is bound to find that . . . there could not have been any valid employment . . . ."
See 8 N.Y.2d 77 at 83, 202 N.Y.S.2d 5 at 8, 168 N.E.2d 242 at 243, for the opinion of Chief Judge Desmond, with whom Judge Dye concurred, and 8 N.Y.2d at 90-91, 202 N.Y.S.2d at 14-15, 168 N.E.2d at 248-249, for the opinion of Judge Van Voorhis, with whom Judge Burke concurred. Two judges of the court dissented, and one judge did not participate.
Petitioners also argue that if the administrative action rested upon some state procedural ground, as respondent contends, then that action violated the Due Process Clause of the Fourteenth Amendment. We do not reach this contention.
"[t]here is no need to file a brief describing the practice of federal agencies in interpreting the statute [The Communist Control Act of 1954], for this information is already set forth in the opinion of Judge Fuld in the New York Court of Appeals."
"the federal authorities, admittedly aware of the Industrial Commissioner's position, have taken one diametrically opposed, and continue to recognize the Communist Party as an employer subject to the Federal act."
42 U.S.C. § 410(a)(17) and 26 U.S.C. § 3121(b)(17), Act of August 1, 1956, § 121(c) and (d), 70 Stat. 839. No similar exclusion, however, has been made from the coverage of the Federal Unemployment Tax Act, 26 U.S.C., c. 23, which imposes the federal tax against which the state taxes involved in this case are credited. See p. 367 U. S. 391, supra.
Communist Party, U. S. A.

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 § 523
 § 3301
 § 9
 § 410
 § 3121
 § 121