Warren E. Burger: -- hear arguments next in 70-5344, Willis against Prudential. Mr. Leverett.
E. Freeman Leverett: Mr. Chief Justice and may it please the Court. The Court granted certiorari in this case to review a decision of the Supreme Court of Georgia holding that the Beneficiary Clause of the Servicemen's Life Insurance Act of 1965 should be construed according to Georgia law. And on that basis, the words “child or children” is used in the federal Act, were held to include legitimate children only and to exclude the illegitimate children of a deceased serviceman. This case commenced with the filing of a suit in the Superior Court of Elbert County, Georgia in July, 1969 against the Prudential Insurance Company of America, the respondent, seeking recovery of the $10,000 proceeds of a policy written under the Act. At the time of filing suit, the petitioner, Lorenzo Willis, was a two-year-old, illegitimate, Negro son of a 15-year-old mother, Janice Willis and a 20-year-old serviceman, Johnny Cleveland Simpson who was killed in Vietnam on September 1968. The deceased was not married but prior to his death, had orally acknowledged the child as his own. He had also signed a statement agreeing to pay the lying-in expenses and he had, prior to his death, contributed to the care and support of the child. In addition, the paternity of the child had been recognized by the Social Security and Veterans Administrations for the purpose of paying social security and for pension benefits. At the time of entering the service, the serviceman, the deceased, did not designate a beneficiary by name but simply checked a block on the form which specified that payment is to be made “in the order of precedence set forth in the law.” The Act in this instance provides that the proceeds shall be paid in this order of precedence, first, to the designated beneficiary, secondly, to the widow or widower, third, the child or children, fourth, parents, fifth, the executor-administrator, sixth, next of kin under the laws of the serviceman's -- of domicile. Following the death of the deceased in action, his father, offered to assist in securing the benefits for the petitioner. And papers were turned over to him for this purpose but instead of securing the benefits for his grandson, the grandfather obtained them for himself, although his application noted that there was an illegitimate son. This action was then filed on the part and on behalf of the minor. Following depositions, requests for admissions, motions for summary judgment were made. The Superior Court of Elbert County granted summary judgment on behalf of the petitioner and denied it to the respondent. That Court relied upon lower federal court decisions interpreting the Federal Employees' Group Life Insurance Act which it held that illegitimate children could take. At that time the four or five cases interpreting the Servicemen's Life Insurance Act had not been decided or had not been reported. The Court of Appeals of Georgia, the intermediate appellate court, affirmed using the same approach to statutory construction. But on certiorari, the Supreme Court of Georgia relying upon three prior decisions, two involving the FEGLI and one, decided four months earlier, involving the SGLI, held that the words “child or children” should be construed according to Georgia law as found with respect to wills, contracts, inheritance and deeds. And under these decisions, child or children would include legitimate children only. Two Justices dissented. I'd like to address some remarks preliminarily to the motion to dismiss in this case on the ground that the writ was improvidently granted. This Court granted certiorari on November the 9th, of last year. In early December, Congress passed and on December 15th, the President signed an amendment to the Servicemen's Group Life Insurance Act, H.R. 907 Public Law 92185 which undertakes to define the terms in question here among others. With respect to the instant problem, child is defined to include an illegitimate child as to the father only if about six situations are met, first, that the father must have acknowledged to the child in a writing signed by him. Secondly, the father must have been judicially ordered to contribute to the child's support or the father must have been prior to death, judicially declared to be the father. Fourth, proof of paternity be established by a certified copy of a public record of birth or baptism showing that the father was the informant and that he listed himself as father. Lastly, proof -- proof of paternity can be established from the service department of a public record showing that the father with his own knowledge was named as father of the child.
Potter Stewart: Could your -- could your client come under any of these?
E. Freeman Leverett: No, sir. I do not think so. He did -- the father did not acknowledge him as such in writing. In the record, there is an -- a statement that he signed at the doctor's office stating that he would be responsible for the lying-in expenses, but he did not acknowledge the child as his, only by and only inferentially as it may arise from that statement.
Potter Stewart: The problem I have is this. Now, your -- your brother on the other side says -- he tells us that because of the enactment of this -- the legislation of this case is nowhere -- no longer worthy of consideration by this Court on certiorari because congressional statute has now cleared the matter up. But putting that point to one side, you tell us that federal law be applicable and hasn't Congress, and by that statute declared what the federal law is.
E. Freeman Leverett: They have declared it. This does not, of course, affect this case because the language of the statute expressly so declares the amendment. Secondly, this does not eliminate the constitutional question that's involved in this case as to equal protection, if that would still be applicable because you still have imposed a burden upon an illegitimate child that is not imposed upon a legitimate child and none of the rationale of Oyama versus California conceding that the parents can be penalized for illegitimate -- or illicit relationships. Can Congress itself impose the burden, the onerous procedural burden upon the child where he is not responsible for this situation?
William H. Rehnquist: Well, are you contending then that conceivably, the application of the new act of Congress could be unconstitutional in some circumstances?
E. Freeman Leverett: My contention is, Mr. Justice Rehnquist that the new statute does not cover the facts of this case except it would exclude the child in this instance. But we also expect to show, I think it is apparent, that the act of Congress really would not cover the great majority of situations arising and likely to arise under the Servicemen's Group Life Insurance Act because of the fact that it's so seldom that there is a formal acknowledgement or that there has been a judicial determination. Now, admittedly, the statute purports to say unless it has, illegitimates are excluded. It -- it applies to it in that sense but we say that still does not avoid the constitutional question. That resolves the statutory interpretation question but it does not resolve the constitutional question.
Potter Stewart: Well, it does follow as Mr. -- my brother Rehnquist -- the question suggest then that your ultimate claim is that that statute is unconstitutional or if the -- if the statute had been in existence at the time that your claim arose, you would still be making your constitutional claim and the -- and it would be --
E. Freeman Leverett: There is a direct --
Potter Stewart: -- an absolute claim if the statute wasn't constitutionally inadequate.
E. Freeman Leverett: That is correct.
Potter Stewart: Wouldn't that be true?
Byron R. White: Don't you -- don't you -- I thought that (Inaudible) statute required was some definitive proof of parenthood?
E. Freeman Leverett: It -- it requires definitive proof of --
Byron R. White: (Voice Overlap) making in the -- in this very litigation.
E. Freeman Leverett: No, sir. We could not need it here.
Byron R. White: Why?
E. Freeman Leverett: Because of the fact that this necessitated something on the -- some action on the part of the father which the father in case had not done. He didn't -- had not taken any action that would have brought him under --
Byron R. White: I mean under --
E. Freeman Leverett: -- anyone.
Byron R. White: -- the new federal statute, it is not enough just to have -- have proof of parenthood?
E. Freeman Leverett: No, sir. It is not like the Veterans Benefit Act in 38 U.S.C. 101 which simply says, “Or other proofs satisfactory.” It is of a particular and specific type of proceeding that the father must have done prior to his death. He must have formally acknowledged him in writing. That was not done here. He must have -- there must have been a judicial determination or he must have quite filled out a --
Byron R. White: Well, what about the mother?
E. Freeman Leverett: The mother's -- the federal statute does not reach the situation of the mother. It deals only with the acts necessary --
Byron R. White: Well, for the --
E. Freeman Leverett: -- to be done by the father.
Byron R. White: What about the testimony of the mother? I mean the -- the --
E. Freeman Leverett: That would not suffice at all under the new federal statute, the 1971 Act. It will necessitate some specific action by the father in order to be brought within the coverage of the 1971 amendment.
William H. Rehnquist: So that once the father is dead, all chances of coverage --
E. Freeman Leverett: That's correct.
William H. Rehnquist: -- under that amendment disappear.
E. Freeman Leverett: That is correct. So unless he has done something before his death, to bring him within one of the six -- the five or six categories of the federal statute which had not been done in this case. In other words, if this federal statute had been in effect at the time of the death of the deceased, we could not come within it because the deceased had not done any of the things to bring him under.
Byron R. White: So you could in effect then -- Congress has said that it's not a denial of due process of law to -- for the federal government or for the federal law to distinguish between unacknowledged and acknowledged illegitimates.
E. Freeman Leverett: Well, they have not said so expressly but --
Byron R. White: Well, it's not her fault.
E. Freeman Leverett: -- the necessary effect -- the necessary effect.
Byron R. White: In fact, this language didn't make that contention.
E. Freeman Leverett: That's right. That's right, sir. In that respect they have.
William H. Rehnquist: And it is true, Mr. Leverett, isn't it, that once the father had died without having gone through some acknowledgement procedure that your problems of proof do become exacerbated?
E. Freeman Leverett: That is certainly true, but by the same token where there has been an acknowledgement in orally or where there has been as in this case, a written statement agreeing to be responsible for lying-in expenses. We submit that that satisfies all the reasonable requirements of proof and to require these other burdensome and onerous requirement that the statute, the federal statute sets forth, is -- is to impose upon an illegitimate an onerous burden that is not imposed with respect to a legitimate and that comes within the rationale of the Oyama case.
Byron R. White: But if you say that the federal law controls this case, where -- and as my brother Stewart says that, where do you find the federal law?
E. Freeman Leverett: No, sir. The federal law does not control this case because -- or rather the federal -- the 1971 statute does not control.
Byron R. White: It might be so, I -- I just put the federal law does.
E. Freeman Leverett: Alright, sir. Our position then is that it becomes a question as to --
Byron R. White: How do you construe the word “children” in this insurance policy?
E. Freeman Leverett: You construe in the light of the context in which the statutory term appears. The word gathers meaning from the context in which it is used and since we expect to show that the --
Byron R. White: (Voice Overlap)
E. Freeman Leverett: -- purpose of Congress here.
Byron R. White: But the statute says the word “children” would not include and acknowledge illegitimates.
E. Freeman Leverett: No. I'm not sure that, Mr. Justice White, whether you're referring to the 1971 amendment or the original 1965 Act. Now, under the 1971 amendment, if this identically same factual situation that we have here was to arise today, the 1971 amendment would cover it and would preclude the child from recovering unless the 1971 amendment is declared to be unconstitutional.
William H. Rehnquist: Well really, it -- it's your position then that the 1971 amendment far from broadening the construction that you contend governed before actually narrowed it.
E. Freeman Leverett: Well, the 1971 amendment is relevant to my case only to the extent that the contention is made that certiorari should be dismissed as improvidently granted because of the fact that since Congress has now solved the problem as to the future, the problem has become one of an isolated character, not meeting the requirements of the Court for certiorari adjudication. That is the only in which the 1971 amendment is relevant here.
William H. Rehnquist: But on -- on the merits of your argument you're arguing that the federal law prior to the 1971 amendment supports recovery by your client.
E. Freeman Leverett: Correct.
William H. Rehnquist: And then we look at the 1971 amendment and we see that under it, your client could not recover. So we must assume if you're right as to what the federal law meant before that the 1971 amendment narrowed the definition of children, rather than extend it.
E. Freeman Leverett: Correct. Correct, sir. We submit that the case relied upon for dismissal, the Rice versus the Sioux City Cemetery is not applicable. In that case, after argument and affirmance by an equally divided court, the -- our legislature passed a statute which prohibited the very act of discrimination complained of. The Court reasoned that this statute had rendered the pending case on such isolated significance that the question was not likely rise again -- to arise again and then hence, it would not warrant adjudication. We submit instead that this Court's more recent decisions in Jones versus Alfred H. 4Mayer Company, 392 U.S. In Sullivan versus Little Hunting Park, in 396 U.S. support the retention of jurisdiction here, in both of these cases.
Harry A. Blackmun: Would you say that --
E. Freeman Leverett: Several act --
Harry A. Blackmun: -- would you say that Reed against Reed of last term would also support your position?
E. Freeman Leverett: That one, I have not read, sir.
Harry A. Blackmun: I suggest you look at it.
E. Freeman Leverett: Alright, sir. In both of these cases, civil actions had been instituted under Section 1982 complaining of racial discrimination in the leasing and in the sale of real estate. These suits were based upon transactions that accord prior to the passage of the 1968 Fair Housing Act. In the Mayer case, certiorari was granted prior to the passage of the Act in the case it was decided after passage. But in the Sullivan case, certiorari was granted and the decision was rendered after the passage. In both cases, this Court rejected the contention that certiorari should be dismissed as improvidently granted. In the Sullivan case, this was set. But petitioners' suits were commenced on March 16th, 1966, two years before that Act was passed. It would be irresponsible judicial administration to dismiss a suit because of an intervening Act which has no possible application to events long preceding its enactment. Another case is U.S. versus Yazell in 382 U.S. 341 which involved a Texas statute which said that a wife could not bind her separate property by contract, a married woman. The Texas statute was subsequently repealed but not until after they had done a Small Business Administration loan made in which the wife cosigned with her husband. This Court made it certiorari and despite the fact that the state statute in question had been repealed for quite a number of years, no question was even raised as to the propriety of certiorari. The 1971 Act covers only situations where there has been either, generally speaking, a formal acknowledgement in writing or judicial determination of some similar type of proof. In here, none of those requirements would be met so very clearly, the constitutional question that looms underneath this case is still present even with respect to the 1971 amendment to the Act. There're approximately 3.4 million members of the armed services covered by this Act according to the V.A. It's been pointed out by the Commandant of the Marine Corps in the Warner case from Virginia, that the great majority of the servicemen do not designate a beneficiary by name. I think it's also reasonable to assume that the majority of cases probably have already arisen. As we diminish our participation in Vietnam, the number of cases of course would certainly slacken off. There have been 10 or 12 cases reported under this Act in the last 10 -- two or three years. In the petition for certiorari filed in the Supreme Court of Georgia by the respondent in this case, reference was made to the fact that there were numerous cases coming up under this section which -- which this question was involved. This brings me to the merits of the case with respect to the question of the merits. I think the case can be most easily disposed of, is one of statutory construction. The statute here says child or children, it doesn't say legitimate children. And there's no occasion for interpolating into it as one federal court has pointed out something that is not there. The statutory terms should be construed, we submit, in accordance with the context in which they appear. When this is done, the inclusion of illegitimates is compelled. This is so, we say because the statute was designed as a substitute source of income for dependents. And this purpose is served just as much with respect to illegitimates as it is with regard to legitimates. Contrary to what we said in our brief, I think the legislative history of the 1965 Act does bear this out. Certainly, the committee reports too, are silent on the subject. But the statements on the floor do have for -- the floors of the two Houses of Congress do support this. There are repeated references to the fact that this dependents, to survivors, a Senate version which would have limited the benefits to illegitimate children only if designated as a beneficiary, was expressly rejected in favor of the House version which contains no such limitation. The cases also have recognized that this is the purpose of the SGLI as well as the FEGLI. And in a committee report --
Warren E. Burger: We'll suspend until after lunch counsel. You may continue now.
E. Freeman Leverett: Mr. Chief Justice and may it please the Court. At the noon recess, I was making reference to a House Committee Report which accompanied a 1970 amendment to the Servicemen's Group Life Insurance Act which raised the coverage from $10,000 to $15,000. And this report made -- express reference was made to the fact that the insurance was designed to provide support for dependents. Respondent relies upon certain statements made in the House and the Senate Committee Reports accompanying the 1971 amendment which we have previously discussed to this effect. The existing law does not define the terms widow, widower, child or parent for SGLI purposes. That's presumably leaving such definitions to local state law. This is relied upon in a showing solve a retroactive legislative intent. Now, this statement, we submit, has no particular advocacy in this case because it was not a statement made contemporaneously with passage of the 1965 Act but rather made six years later in connection with an amendment which was aimed at solving the very problem at which this statement was directed. The United Mine Workers case in 330 U.S., the United versus Wise in 370 U.S., this Court held that statements made not contemporaneously with passage of legislation but rather in subsequent years by legislators who were endeavoring to amend that legislature have little or no weight or value as far as interpreting the statute. Moreover, the statements here made were not independent determinations or statements made by Congress but rather this was simply parroting the language of the letter from the Administrator of Veterans Affairs, who sponsored this legislation. And in his letter of transmittal, he used the same language which was quoted verbatim in the two committee reports as well as in the -- the statement referred to on the floor of the House of Representatives. Lastly, this statement which says presumably the question would be referred to state law not only is contrary to the majority of cases. There are three lower federal court cases, two of them decided since my brief was filed or at least they were not in the -- they were not annotated at the time our brief was filed, the -- all contrary to the statement made by the administrator. And moreover, on its face the statement reflects uncertainty. And in then the DeSylva v. Ballentine case, this Court held that statements are made by an administrative agency which are adopted more from a doubt as to the meaning of the statute rather than from a comfort interpretation of the statute that this would be given little effect because of the fact that the administrative agency itself is an obvious doubt as to the question.
Byron R. White: What do you do with DeSylva?
E. Freeman Leverett: I'm coming to that now. The DeSylva we say is distinguishable because of the fact that that dealt with a subject matter that is entirely different than the subject matter here. And the DeSylva case of course dealt with the Copyright Act. And the question there had to do only with the -- the creation of a right, not the devolution of the right it dealt. Here, the subject matter is serviceman and that is a category which this Court has held --
Byron R. White: Well, it's not a matter -- wasn't that a question of whether the right to renew a copyright descended to illegitimates as well as legitimate children?
E. Freeman Leverett: That is correct, sir. And the Court resolved by referring to state law, but on the basis of a determination that this was really a question of inheritance that Congress really intended in the Copyright Act to establish rights of inheritance. And consequently if you would refer to state law and of course on the California law, the illegititmate could take. But here, the question relates to a relationship that is peculiarly federal. And that is the relationship between a serviceman and the Government. In every case in which this Court has ever decided a question dealing with a serviceman, it has resolved it solely as a matter of federal law. We have referred to those cases in our brief. There are three of them that involved the NSLI Act of 1940 which the National Servicemen's Life Insurance Act of 1940. Two of those cases or what would in the Wissner case dealt with the designation of beneficiaries. In every one of those cases, this Court resolved the question as a matter of federal law without referring or even mentioning state law. Now, a person does not become a federal instrumentality or agent by writing a book or poem or music. But he does become an instrumentality of the federal Government when he joins the armed services or is drafted.
Byron R. White: Well, would -- would you -- if this case came up today, if the serviceman died today, would your beneficiary be covered?
E. Freeman Leverett: No, sir, because there was no formal acknowledgement. This 1971 amendment constitutes an act of Congress that specifies who is -- who is a child, who is considered a child and absent a successful attack upon the constitutionality of the 1971 amendment. The petitioner here would be excluded because of the fact that his father did not formally acknowledge him or there had been -- there had been no judicial determination.
Byron R. White: Well, what could a -- what could an appellate court do when it's -- the question before it is what does the statute mean? What does the word “children” include and pending appeal, there's a statute that says what it means?
E. Freeman Leverett: Well, I don't think --
Byron R. White: And should the appellate court take the law as it is when the case is decided or -- or what?
E. Freeman Leverett: I don't think you could say that because Congress decided in 1971 that illegitimate children will be included only in four or five different specific categories that it must have meant the same thing in 1965 when it just used the words “child or children.”
Byron R. White: Well, what if it didn't know. What if the law was changed then you say it may not be applied retroactively, is that it?
E. Freeman Leverett: Yes. We -- we can see that because the 1971 amendment expressly says that it shall not apply.
Byron R. White: Alright.
E. Freeman Leverett: And the last section --
Byron R. White: It's the fact that --
E. Freeman Leverett: That's right, sir. I would like to --
Harry A. Blackmun: Mr. Leverett, let me interrupt you in one respect. The sanction under which you are operating doesn't hesitate to go to state law in at least two of the categories, does it?
E. Freeman Leverett: In one category.
Harry A. Blackmun: Is it --
E. Freeman Leverett: One category where it deals with next of kin according the laws of the domicile of the serviceman's or rather according to the laws of the serviceman's domicile. And I suppose you might say that you have to go to state law to determine who is the executor or administrator. But in California's --
Harry A. Blackmun: Well, if --
E. Freeman Leverett: -- expressio unius argument that what Congress intended to refer to state law in the SGLI. It expressly so said in this instance. It did not in 1965.
Harry A. Blackmun: In the fifth category, it goes to the executor or administrator of the estate which means it would then descend according to state intestacy law.
E. Freeman Leverett: That's right, sir.
Harry A. Blackmun: Or under his will.
E. Freeman Leverett: That's right, sir.
Harry A. Blackmun: So there are two --
E. Freeman Leverett: In that sense, yes.
Harry A. Blackmun: -- category in which it clearly goes under state law.
E. Freeman Leverett: But by expressed reference to state law. With respect to the constitutional question on the matter of a classification generally, we say that the Labine case is distinguishable because of the subject matter. A classification might well be constitutional in the context of intestate cessation and not constitutional when applied to a federal statute having well fair type connotations. But I think the easiest resolution is as far as the constitutional issue is concerned, is the additional challenge to classification on the ground that this classification is really a racial classification because of the peculiarities of the history of slavery in this country. In the Griggs case, this Court held that informant procedures and practices and tests that were neutral on their face but were found to be discriminatory in operation would -- were prohibited by the Civil Rights Act of 1964 where this heavier burden placed upon the ethnic minority, was found to be a consequence of past discrimination in education. Now we submit that the same principle applied to the Equal Protection Clause in the Constitution invalidates the discrimination here, at least in a State having a history of Negro slavery and racial discrimination. That the classification falls more heavily on Blacks can hardly be subject to dispute. The statistics in this record indicate that in 1957, the ratio of illegitimates between Blacks and Whites for the country as a whole was about 2-to-1. But in Georgia it was 8-to-1, in Mississippi, 26-to-1. In Louisiana and Alabama, about 7 1/2-to-8-to 1.
Harry A. Blackmun: Suppose it were 51-to-49 percent would you make the same argument?
E. Freeman Leverett: Well, they would be certainly be weakened somewhat. But the --
Harry A. Blackmun: It is bound to be as differential, isn't it?
E. Freeman Leverett: To some extent. But when it is so great as to suggest a very particular reason for it, we submit that that of course then changes this -- the character of the difference. In 1880, two-thirds of all Negros born in United States were illegitimate and in some communities today, nearly half or more of all Negros are illegitimate. In 1963, 24% of all non-White births in United States were illegitimate.
William H. Rehnquist: In this particular case, Mr. Leverett the -- the proceeds of the policy were paid out, were they not?
E. Freeman Leverett: To the father of the deceased sense.
William H. Rehnquist: Was he Black or White?
E. Freeman Leverett: He was Black. We have attempted to show in our brief how the institution of slavery was partially responsible, and large part responsible for this greater incidents of illegitimacy. And we submit that where we -- we have here is in this case. Number one, the undisputed fact that the incidents is greater. Number two, that it is the effect, the continuing effect of this past discrimination that the classification must fall.
Warren E. Burger: Thank you, Mr. Leverett. Mr. Jenkins.
A. Felton Jenkins, Jr.: Mr. Chief Justice, and may it please the Court. I'm Felton Jenkins from Atlanta, Georgia and I represent the respondent, the Prudential Insurance Company of America in this case. Mr. Leverett I think has fairly stated the facts that are involved here. There are however, two points that I would like to make just so I'm certain that the Court understands. It's not clear from the record before this Court that the petitioner here is in fact the illegitimate son of the deceased serviceman. As was pointed out, there's no written or public acknowledgement. There's no father listed on birth certificate and the records of the Social Security Administration and the Veterans Administration do not show that petitioner has been recognized as the son of this deceased serviceman at least so far as this record is concerned. And we do not contend that he's not the illegitimate son. We just want to point out if there is some question of fact on that point.
William H. Rehnquist: Well the Georgia trial court found that he was.
A. Felton Jenkins, Jr.: The Georgia trial court found that he was and the Georgia --
William H. Rehnquist: That was upheld by the Georgia Court of Appeals.
A. Felton Jenkins, Jr.: Yes, sir, it -- it was. The second point that I wanted to make is -- concerns the question which is before this Court. It's been stated in the briefs I think that the question is the meaning of the word “child or children” in the Servicemen's Group Life Insurance Act. And that is in fact the ultimate question that has to be decided but the specific question before the Court so Prudential contends is whether or not reference should be made to state law to determine the meaning of that term. That Prudential does not contend that -- I want to make this clear to the Court that we do not contend that in every situation the word “child” does not include illegitimates. All we are saying is that reference should be made to state law and then the law of that particular State might or -- or would govern. Of course this was pointed out in California, an illegitimate would be entitled to -- to the proceeds, so we do not contend that -- that that is the issue here. Now, there are three points that I'd like to try to cover in my argument basically that have been discussed by Mr. Leverett. The first point is we contend that the writ of certiorari should be dismissed as having been improvidently granted. As the Court knows, the writ was granted on November 9th, 1971 and approximately a month later, Congress adopted this 1971 amendment. Now, this amendment speaks directly to the question which is before the Court, the meaning of the word “child children.” The amendment specifically takes care of that -- of that question. And that question just simply will not come up again. And Mr. Leverett has raised a point and from some of the questions from the Court, there may be a question of whether that 1971 amendment is constitutional. We of course would contend that it is constitutional but whether it is or not, that's not a question which is before the Court in this case. That question may later come up. And it -- it very easily could, I -- I guess but it's not before the Court here. The question which is before this Court has been solved -- has been resolved by this 1971 amendment and that question simply will not come up again. And we've cited in our brief the case of Rice versus Sioux City and it's quoted in our brief. And it also have several passages quoted from the case and no need to -- to take the Court's time by going in to that. Mr. Leverett mentioned the case of Jones versus Mayer Company. He contends that that case in effect goes against the Rice case and shows that this Court shouldn't go in and consider this question. But in that Jones case, there was a question of the interpretation of Whites under 42 U.S.C. Section 1982 and that concern the refusal of -- to sell a home or rent an apartment on the basis of race. And while that case was being considered, Congress adopted the Civil Rights Act of 1968. And the Court held that it should go ahead and consider the case which was before it because the 1968 Act had no effect on this section which was under consideration by the Court, the 1982 Section. Of course here, Congress -- the -- the Act that Congress has adopted, the 1971 amendment, speaks directly to the question which is before this Court. It defines the very term which this Court is asked to consider in this case. For those reasons, we feel that the writ should be dismissed as having been improvidently granted. The second point that we would like to make concerns the question of reference to state law. Obviously, we rely on the case of DeSylva versus Ballentine. That case of course does involve the Federal Copyright Act. It does not involve an act dealing with servicemen. But we don't feel that that's any distinction. Now, petitioner has tried to distinguish the case on two grounds. He says that the Copyright Act deals only with the creation of literary and artistic rights or the passing on of those rights. But -- but this Court's opinion at page 582 of that decision pointed out that the evident purpose of this Section 24 which was under consideration in that case is to provide for the office family after his death. The very same question or very same purpose that petitioner contends the Servicemen's Group Life Insurance Act that --
Byron R. White: (Voice Overlap) If I ask you please, under the federal Act as amended, a child includes an illegitimate child under certain circumstances.
A. Felton Jenkins, Jr.: Yes, sir.
Byron R. White: So it's not that the word “child” doesn't ever include illegitimate children.
A. Felton Jenkins, Jr.: That's correct, Your Honor. It -- it could very easily --
Byron R. White: And it -- it sets up some standards for approving who -- whether -- whether the child is actually a child.
A. Felton Jenkins, Jr.: That -- that's correct, Your Honor.
Byron R. White: Has it been denied in this case that this child is a child of the deceased serviceman?
A. Felton Jenkins, Jr.: Well, as I pointed out initially it's not clear in our position. We don't contend he's not the child, we simply say that there's a question of fact on that -- on that point. Simply because there has been no written acknowledgement, no father was listed on the birth certificate, there's been no judicial determination of -- of that fact. And one thing I might mention here --
Byron R. White: Well what if I --
A. Felton Jenkins, Jr.: Sir.
Byron R. White: What if it were admitted?
A. Felton Jenkins, Jr.: Well, under the 1971 amendment, I -- I don't know whether they would fall under any of the categories or not --
Byron R. White: Well, let's assume that they didn't and that an addition, that the -- the aim of the Act is to have a satisfactory proof of whether the --
A. Felton Jenkins, Jr.: Yes, sir. That's correct, Your Honor.
Byron R. White: -- child was a child.
A. Felton Jenkins, Jr.: Right. Well, now I think the --
Byron R. White: Do you think -- and do you think the Act would forbid then making the child in this case a beneficiary under the policy even though the insurance company defendant admitted that he was a child.
A. Felton Jenkins, Jr.: Well, now that's -- Mr. Leverett makes that position. And I've -- I don't know whether I want to agree with or not. One of the categories here if he has been judicially ordered to contribute to the child's support, well I guess that couldn't happen after his death. I think I would have to agree with him, Your Honor. I don't think in this case he would fall under any of the categories, once the deceased serviceman died.
Byron R. White: And it wouldn't make a difference even if the defendant conceded it.
A. Felton Jenkins, Jr.: I don't think so under the meaning of this Act. I guess at that point, you'd have a question of statutory interpretation. By just from reading the Act, I -- I don't think that a situation like that would be covered under the terms of --
Byron R. White: And even if under state -- even if under state law this child would be -- with -- well would be treated as a child. That's a statement --
A. Felton Jenkins, Jr.: That -- that's --
Byron R. White: -- in oral acknowledgement was -- was satisfactory under state law.
A. Felton Jenkins, Jr.: Right. That -- I think that's correct, Your Honor, under the wording of this -- of this statute. But again, you might get back into the constitutional argument that Mr. Leverett says is present that this 1971 amendment is unconstitutional. But here again, that question is not before the Court in this case. It may conceivably come up at some point but it is not before the Court in -- in this case.
William H. Rehnquist: Presumably, even if your client were to admit the fact that the -- the petitioner was a child, you're not in a position to make admissions for the father who was also --
A. Felton Jenkins, Jr.: No.
William H. Rehnquist: -- claiming under the policy.
A. Felton Jenkins, Jr.: But the person down the line, yes, sir. I'm sure that person would -- would certainly have some objection to it. Back to the DeSylva versus Ballentine decision, we simply say that there's no real difference between Federal Copyright Act and the Servicemen's Group Life Insurance Act. They both have basically the same purposes. The other point is Mr. Leverett has always contended that the Servicemen's Group Life Insurance Act has its purpose to look after the people who were dependent on the deceased serviceman or lets a little bit falls in the -- the deceased serviceman can name anyone that he wants to, to receive the benefits under that policy. He could name -- doesn't have to name anyone who's a member of his family. Under the old National Service Life Insurance Act, the serviceman could name someone that he wanted to but he had to name someone within a -- within his family. They were specific categories that he could not go outside of.Of course in this case, he could name anyone he wanted. Our point is there's just no real difference between the Federal Copyright Act and the Servicemen's Group Life Insurance Act.
Warren E. Burger: At any time up to the point of his death, he could have changed the beneficiary and made the mother of these children the beneficiary, could he?
A. Felton Jenkins, Jr.: Yes, Your Honor. That's correct.
Warren E. Burger: Or the children or both?
A. Felton Jenkins, Jr.: Or anyone he wanted to, yes sir. That's correct.
Potter Stewart: Is there anything in the record here that shows the relationship between the deceased serviceman and his father? Other than that they were father and son? Did it show any particular dependency or lack of it?
A. Felton Jenkins, Jr.: Your Honor, I don't think that it does. The -- the deposition of the father was taken and the -- the son lived in his father's home up until the time he left to go in the service. I -- I don't think there was anything specific on -- on that point. The -- the next point that I'd like to make is this question of congressional intent. Obviously, when Congress makes some comments about the intent of an act, after it's passed, it's not as strong as those comments would have been had they been made at the time the Act was passed. But when you look into a congressional intent, you try to find whatever you can. And very clearly when the Court adopted this -- this 1971 amendment, they spoke directly to that question and they've said that presumably, under the old law, we must look to -- to state law and of course on the floor of the House of Representatives, the same -- the same comment was made. And I can't argue with Mr. Leverett on the point that's not as strong -- an indication of congressional intent as would be present if that -- if those same comments had been made back in 1965. But here again, we -- we have to look to -- to what we have. In any event --
Byron R. White: And the same -- under the 1971 Act, the same rule would apply if -- if he doesn't make beneficiaries as his children? If he just says, “My children.”
A. Felton Jenkins, Jr.: I'm -- I'm not sure I -- but -- you mean if he named the -- the child?
Byron R. White: Well, the problem here is that he didn't name any beneficiary.
A. Felton Jenkins, Jr.: Right, he just checked that block that says to follow in accordance to the precedence set forth in the law.
Byron R. White: Well, what if he says, “My children?”
A. Felton Jenkins, Jr.: Well, Your Honor, I'm not sure that I told my answer to that. Under the form, he should not make that designation. There's a block to check that he wants it to go in accordance with the precedence set forth in the law and if he doesn't there, the next line down says name, relationship, something of that nature. So he should to know to write in that name. Now, you have another question of his intent if he just put down the word children. Because there again, I think you probably would look to what does the word child mean? And you'd -- you'd be right back into state law under this the DeSylva versus Ballentine.
Warren E. Burger: Let me make sure I understand you. If he had requested that the beneficiaries be just, “my children” in quotation marks, no name. Would they have accepted that as a beneficiary designation? A private insurance company will not do so --
A. Felton Jenkins, Jr.: I don't --
Warren E. Burger: -- if I knew of it.
A. Felton Jenkins, Jr.: Well, Your Honor, that's a question that I don't really know the answer so I think that --
Warren E. Burger: Does this Act --
A. Felton Jenkins, Jr.: -- they would not.
Warren E. Burger: -- does this Act permit it?
A. Felton Jenkins, Jr.: Well, no, really it doesn't. And if the serviceman did it, I guess this -- supposedly he's got a Sargent or someone there over and telling him how to fill out the form and he shouldn't fill out that way. That would be -- he would have filled out the form incorrectly. But if -- if he did it, I would think that the children in that situation would not be entitled to the benefits of the policy. That's -- I'm not trying to avoid your question but that's a question that's not in this case, and to be honest with the Court, I -- I don't know the answer to it specifically. We come now to the question of violation of the Fourteenth Amendment, the Due Process and Equal Protection Clause. The Court's heard a good bit of argument today on that point in view of the Louisiana case which preceded this case. And I don't want to re-plow all of that ground. Obviously, we contend that the decision of this Court in Labine versus Vincent controls the situation here. Of course in that case, the question was the interpretation of the Louisiana intestate succession statute, and the Court held that States had to right to make a distinction between legitimate and illegitimate children in that -- in that situation. And the Court distinguished the Labine situation from the situation present in -- in Levy and Glona which were decided a couple of years before. Obviously, we contend that we've come within the decision by this Court in -- in Labine. There are -- are two things, however, I think that I -- I would like to point out on this -- on this question. The present case, this -- this case here presents really a stronger situation toward holding that the Act is not an -- or -- or that designation of distinction is not unconstitutional than was present in either Levy or the Labine case or the -- the Louisiana Stokes case which preceded this case. In all of those three cases, there were some impediments. Now, the Court has used the term barrier, an insurmountable barrier. And I suppose if you really look at those cases maybe the barrier is not insurmountable. There are certain things in each of those situations that -- that could be done but there is some barrier in each of them. In Levy, for example, the tortfeasor could go free if there were no one there to prosecute the action. In Labine, the father could not give the illegitimate his full estate. He was limited to only one third or one fourth. And in the Stokes case which this Court heard this morning, the father could not even acknowledge the -- the child under Louisiana law as being his child. Now, in this case, none of those impediments are present. The serviceman here could simply have named anyone that he wanted to and could have named that illegitimate child to receive the full $10,000. There is no barrier whatsoever here. So --
Byron R. White: When was the -- when was the policy issued?
A. Felton Jenkins, Jr.: Well, it's a group policy and it's issued to the Veterans Administration. I'm not sure of the date of it. I guess back in 1965. The form that this serviceman signed -- he signed in -- in May of 1969, I guess or --
Byron R. White: 1967.
A. Felton Jenkins, Jr.: -- 1967, excuse me. And then the child was born in June of -- of that same year.
Byron R. White: Where was he between May and June?
A. Felton Jenkins, Jr.: I don't think the record shows that -- well, no, it does because he was on his basic training, that's right. And -- and he had -- had come home for some time. I'm not sure of the exact time that he came home. He then went to Vietnam as I recall the way he was killed. But --
Byron R. White: (Voice Overlap) -- in Vietnam after the child was born?
A. Felton Jenkins, Jr.: I think that's correct, Your Honor. I -- I hesitate and I'm not absolutely certain on that point but I -- I think that is correct. In any event, he knew about the child before he died, he came home and said he saw the child. He also wrote some letters making reference to the child so he clearly knew about the child and could have made that -- that designation had he wanted to. So first of all, we -- we contend that this case is a stronger case than any of these other three cases. And the next point is that there is a reason for the distinction between legitimates and illegitimates. And that's really the thing that -- that the Court has looked to and -- and I guess should look to as whether or not there's any reasonable basis for making this distinction. And obviously as this Court pointed out in the -- in the Labine case, the reason for the distinction is to encourage the family unit to strengthen the family unit. We might disagree and obviously, some people do with the -- the merits of doing this to further the family unit. But that's not the purpose of -- of the Court to try to -- to say, “This is -- this is a bad thing or this is a good thing." The Court held in Labine that this was a decision that the Court -- that -- that or that the individual States could make. And for that reason, we submit that there is a valid reason, a valid distinction for -- for distinguishing between legitimate and illegitimate children. In closing, I just like to emphasize again that Prudential feels strongly that this is not a case which the Court should decide in view of this 1971 amendment. We feel that so far as this case is concerned, all of the issues which are before the Court in this case have been solved by that 1971 amendment. That 1971 amendment may raise some additional problems but those problems are not before the Court in this case.
Byron R. White: So under the 1971 amendment if the -- if the illegitimate child offers proof that he was actually a child of the dead serviceman, the Court just won't hear him?
A. Felton Jenkins, Jr.: Yes, sir. That's --
Byron R. White: Unless he offers --
A. Felton Jenkins, Jr.: That's my understanding of --
Byron R. White: Unless he offers the kind of proof just --
A. Felton Jenkins, Jr.: That's --
Byron R. White: -- like that?
A. Felton Jenkins, Jr.: -- that's spelled out in the Act. That's correct, Your Honor. Thank you.
Warren E. Burger: Thank you, Mr. Jenkins. Mr. Leverett, you have anything further?
E. Freeman Leverett: (Inaudible)
Warren E. Burger: Thank you, gentlemen. The case is submitted.


Warren E. Burger: United States against Webb and others. Mr. Solicitor General.
Erwin N. Griswold: Mr. Chief Justice and may it please the Court. This is a federal tax case involving the application of the Social Security Old Age Tax and the Federal Unemployment Tax to the owners of ships with respect to captains and crew members who fish off the South Atlantic Coast and the Gulf of Mexico for Manhattan. Manhattan are a frequently encountered fish which is not regarded as edible by humans, but which is caught in large quantities and processed into fish meal and fish oil which are used primarily for fertilizer or for feeding poultry and other livestock. The case comes here on a writ of certiorari to the United States Court of Appeals for the Fifth Circuit. The statutory provisions involved are set forth in the appendix to the Government's brief at pages 39 to 41. Before stating the facts, it will be helpful I think to put the precise terms of the statute before the Court. The Old Age Tax is imposed by Section 3111 of the Internal Revenue Code and is in terms at equal to the following percentage of the wages paid by him with respect to employment. And then in Section 3121, the term wages is defined. Now, wages means all remuneration for employment and then in 3121 (d), there is a definition of the term employee to include any individual who under the usual common law rules applicable in determining the employer-employee relationship has the status of an employee. In this setting out in our brief of the statutory provisions, we omitted one at this point which may have some conceivable application. It is in Section 3121 (b) (4) and it provides that employment shall not include services performed by an individual on or in connection with a vessel, not an American vessel or in connect or in connection with an aircraft, not an American aircraft, if (a) the individual is employed on and in connection with such vessel or aircraft went outside the United States and (b) such individual is not a citizen of the United States or the employer is not an American employer. Now, that's entirely an exclusionary provision. It leaves only the inference that it was intended to apply to American citizens employed on American vessels by -- owned by American owners --
William J. Brennan, Jr.: Mr. Solicitor General, you said that was (b) (4) or (d) (4)?
Erwin N. Griswold: That is (b) (4).
William J. Brennan, Jr.: Thank you.
Erwin N. Griswold: 3121 (b) (4) contains a negative pregnant that Americans employed on American owned vessels are covered. I would say as Mr. Lyman will remind you that that is still subject to the definition of employment or employee in Section 3121 (d). Now, that's the Old Age Tax, there is also an Unemployment Insurance Tax. The Old Age Tax you will recall is imposed on both the employer and the employee with the employer under obligation to withhold the employee's share and pay over the total to the treasury. The Unemployment Tax is imposed only on the employer and there again, it is imposed at a percentage of the total wages paid by him during the calendar year with respect to employment. This appears on page 40 in the appendix to our brief. The term wages is defined to mean all remuneration for employment. And again, we have the term employment defined here saying there's somewhat more complicated manner. Employment is defined as any service performed -- any service of whatever nature performed after 1954 by an employee for the person employing him; (b) on or in connection with an American vessel and then you come to the end of that at the top of page 41, except and this gets very involved because this exception I'm about to state is then subject to an exception itself, except service performed by an individual in or as an officer or a member of the crew of a vessel while it is engaged in the catching, harvesting, cultivating or farming of any kind of fish, shellfish and so on and here's the next exception, except (b) service performed on or in connection with a vessel of more than ten tons. So they take out all fishing, but then they except from that take out service on vessels of more than ten tons. And all of the vessels involved in this case were of more than ten tons so that it comes within the exception to the exception and thus is included in the definition of employment. But again, it's subject to the provision in Section 3306 (i) that for purposes of this chapter, the term employee includes an officer of a corporation, but does not include any individual who under the usual common law rules applicable in determining the employer-employee relationship has the status of an independent contractor or (2) any individual who is not an employee under such common law rules. Now, that is the statutory setup. It is part of a large whole but one can focus rather closely on those provisions; one in the Old Age Tax and one in the Unemployment Tax which -- by which Congress has emphasized that the test of employment is the common law -- the usual common law rules applicable in determining the employer-employee relationship.
Potter Stewart: Mr. Solicitor General, as I read this now under your guidance, I gather that we come right down with respect to both taxes to the definition of employee in each case, don't we? In other words, this definition of unemployment under the second tax, we really end up that the door by which we're heading, it doesn't add or subtract much of anything, is that right?
Erwin N. Griswold: I think -- I think that's exactly it except that I would say that this definition comes as a piece of a mosaic which also includes some references to fishing and ships and boats of more than ten tons and thus, it is perfectly plain that Congress did not intend to exclude employment on the ship such as are involved in this case.
Potter Stewart: Right.
Erwin N. Griswold: But I fully agree that a large part of the problem before the Court is the application of this common law test specified in the statute to the facts of this case.
Potter Stewart: And the test of the definition of the word employee?
Erwin N. Griswold: The determining whether these people are employees.
Potter Stewart: Under 3121 (d) and under --
Erwin N. Griswold: 3306 --
Potter Stewart: 3301 (i), (b) (i).
Erwin N. Griswold: Yes Mr. Justice --
Potter Stewart: Thank you.
Erwin N. Griswold: Now, this case was tried before the District Court without a jury. There was an extensive stipulation of facts. There were also depositions and evidence on all of which, the District Court made findings of fact and conclusions of law. The underlying facts are essentially not in dispute and they maybe summarized as follows. The fishing involved in this case was partly in the South Atlantic Coast and partly in the Gulf of Mexico. There are 14 respondents in five cases which were consolidated in the court below. Each owns one or more boats which Fish for Manhattan, their cost varying between $24,000.00 and $157,000.00. In other words, the respondents all have substantial capital invested in the enterprise. The respondents sell the fish to processing plants. The respondents who not only own the boats, keep them fully equipped, paid for all their repairs and paid for insurance on the boats. They paid for fuel for the boats, all of the fuel for the boats. The method of operation was one which has an ancient history in the fishing business. It seems to go back three or four centuries at least. It's called the “lay system.” There are some variations, but the owner of the boat from people whom he knows secures the services of an experienced fishermen as a captain of the vessel. He is selected because of his honesty and experience and his ability to enlist and organize and supervise a crew. When the captain has been chosen, he arranges a crew and here I would like to turn to some of the findings of the District Court so that there can be no suggestion that I am not representing the facts adequately. Finding 13 on page 320 of the record, the arrangement between the plaintiffs and each captain was entirely oral. The term of the arrangement was not specified, but it was understood to persist for a fishing season. It could be terminated by either party voluntarily or involuntarily at the conclusion of any trip during the season. That seems to me to show a great potentiality for a control by the boat owners, but this could occur only when a boat was in port and before another fishing trip was commenced. While the arrangement could be so terminated, custom and practice was for it to be continued for the season.
Warren E. Burger: I suppose Mr. Solicitor General that it could also be argued that that flexibility also gave the master of the vessel quite a bit of control in --
Erwin N. Griswold: Inevitably Mr. Chief Justice and that of course I suppose is inherent in the post of being the master of a vessel while it is at sea.
Warren E. Burger: Well, I was thinking in terms of his power to terminate the contract at the end of any voyage --
Erwin N. Griswold: Yes, I suppose any employee ordinarily can quit at any reasonable time. That doesn't negate the fact that he is an employee.
Potter Stewart: What is tenure of the trips typically? Is it just one day trips?
Erwin N. Griswold: The trips were ordinarily one day in the Gulf. They occasionally were longer in the South Atlantic, particularly in the winter. At this time, there were not refrigerated ships although there are now and the controlling factor, the Manhattan being quickly perishable, the controlling factor was the temperature. In the Gulf, the temperature is always high and the trips were one day. The evidence shows that in the South Atlantic, they occasionally lasted three or four days. They were ordinarily short trips. Now I call attention to finding 22 on page 323. In negotiating for the service of a captain, it was understood that the captain would select the crew members. Prior to commencement of a new season, the tax payers who are the boat owners and the respondents here would furnish the captain with the pay scale of crew members and the crew size to be employed for the season. If a bonus was to be paid for fishing the entire season, this information also was furnished to captains. So I point out that the owners here fixed the -- I can't quite say the rate of pay because under the lay system, the men are paid so much for a thousand pounds of the catch but they fix the rate per thousand pounds that the men were to be paid. And then I call attention to finding 24 on page 324, defendant contended and the plaintiff denied that the captain was required to pay a crew member not less than the scale established by the plaintiff. The testimony of the various captains leave no doubt that the plaintiff not only fixed the pay scale of the crew, but also the number of the crewmen to be hired and finally of the findings, I would refer to finding 46 on page 333. The plaintiffs did have the right to control the results of a captain's work and interfered in the process to some degree to assure a proper result from the undertaking. Next, I would like to point out that the evidence is clear that the captains were required to obtain from each crewman, the evidence says a W-2 form, but the W-2 form is the one by which you report to the individual at the end of the year what has been withheld. It is actually this familiar W-4 form which is the employee's withholding exemption certificate and then it was also a part of the procedure duly established and carried out that the captains at the end of each trip turned in the data with respect to the crewmen showing which crewmen had served and what the amount of the catch had been and what the rate per thousand pounds was for each crewman. And in our reply brief, we have reproduced exhibits one and two which were introduced into evidence in the court below and about which there is no controversy or dispute. These show that for each individual, what is headed at the top a payroll and they show the amount of fish caught, the rate for each man, the total payment, the Social Security Tax withheld, the income tax withheld, the amount deducted for each individual for his share of the cost of food because the crewmen paid for the food, the amount deducted for advances which had previously been made, the other deductions which were because as I understand it, the crewmen paid $5.00 each to provide the pay of the cook -- the cook being thought of as providing their meals which were their responsibility. Finally, the balance and then also at the bottom of the second sheet of exhibit one are shown the other checks which were issued which included payment for the food and these under -- according to the record were all the ship owner's checks, the respondent's checks here. They got all the money and they paid all the bills. And finally, exhibit two which is at the back shows the individual record which was kept for each member of the crew, again showing these deductions which are aggregated at the bottom of the page for the whole year so that they could be duly reported to the individual on the form W-2 the amount of deductions for Social Security Tax, for income tax and for other matters. Now, let me point out that this -- the fact that this case is here, it seems to me to be an instance of the difficulty we sometimes get into in this country in administering relatively simple matters. It is nearly 30 years ago that the treasury issued a ruling with respect to this situation saying that captains and crewmen operating under the lay system are employees and are subject to the Social Security Tax. This is SST Social Security Tax 387 which was published in the Accumulative Bulletin for 1940 Volume 1 and this is cited in our brief. In addition, this Court had decided cases like the Silt Case in 331 US which involved another group of relatively simple workmen. They were coal unloaders there. They furnished their own picks and shovels. In this case, the men furnished nothing except their foul weather gear which would be boots and raincoats. In the Silt Case, this Court reversed both of the lower courts and held that the coal unloaders were employees. In addition to the Silt Case, there are of course many cases under the Fair Labor Standards Act and under the National Labor Relations Act. Now, it will be said by Mr. Lyman that neither the Silt Case nor SST 387 are relevant because they were both issued before the Congress amended the statute in 1948. And it was in 1948 that Congress put in this language about the common law test to which Mr. Justice Stewart referred awhile ago. But as is pointed in our brief at the time that Congress put this into the statute, the legislative history plainly showed that Congress was endorsing the Silt Case. It referred to the -- on page 15 of our brief is a quotation from the Senate Report. In the view of your committee, these decisions affirm that the usual common law rules realistically applied must be used to determine whether a person is an employee for purposes of applying the Social Security Tax. And in 1950, two years later referring to the situation, the House -- the Conference Report said a restricted view of the employer-employee relationship should not be taken in the administration of the federal old age and survivors' insurance system in making coverage determinations. So I find nothing to indicate that the language of the statute put in 1948 was intended to repeal or overrule the Silt Case, nothing to indicate that the early administrative interpretation should not be followed. I would point out that we are here dealing with a maritime employment. We're necessarily concerned with the customs of the sea and the law of the sea. Under the law of the sea it's perfectly plain that this captains and crewmen would be entitled to maintenance and cure, would be entitled to a protection under the Jones Act. The proposition that captains and crews under the lay system are employees for purposes of the Social Security Taxes has been accepted by the Court of Claims in two cases, cited at page 37 of our brief. One involving fishing for scallops from New Bedford and the other involving fishing for shrimp and oysters in the Gulf of Mexico and also by the Court of Appeals for the First Circuit affirming per curiam in opinion by Judge Genio in the District of Maine involving a fishing trawler operating out of Portland, Maine. The only problem has been in the Fifth Circuit and there are things got off to a bad start in Enochs against the Williams Packing and Navigation Company, cited on page 37 of our brief. That was a suit to enjoin the collection of these taxes in circumstances essentially the same as those here and both the District Court and the Court of Appeals in the Enochs case allowed the injunction. That involved, as far as both courts were concerned, a determination that these people were not employees. When the case came here, this Court reversed, holding that it was not appropriate to disregard the statute and ignore the restriction on injunctions against the collection of taxes, but there is that left standing the rest of the Fifth Circuit decision. And in the Crawford Packing case, cited on page 37 and in this case, the Court of Appeals has understandably continued to follow its decision in the Enochs' case, otherwise repudiated by this Court that these people were not employees. Now, even under the common law test, even if it's given a narrow construction, we contend that these captains and crewmen came within. Here, all of the capital came from the ship owners. They owned the ships. They paid for their repairs and for their fuel. They paid for the nets which cost some $10,000.00. All the men provided was their foul weather gear, boots and slickers and the like. They did not even provide picks and shovels as in the Silt case. The rate of compensation of the captains and crews was fixed by the owners. The size of the crews were determined by the owners. The captains could change this, but only at the expense of themselves or of all the crew. The owners were the entrepreneurs, they were in charge, they fixed the pay scale. The owners paid the bills. They were the only ones that had money in hand for the purpose. They took out insurance and took the gain of the price when fish went up and took the risk of loss. They were clearly in-charge and that should be enough when the statute is realistically applied. Even under a strict view of the common law test and when this question arises in the maritime setting as it does here, that conclusion becomes even more clear. There are three ways it seems to me that this case can be decided; one is practical and workable. The others lead only to uncertainty and confusion. Now first, the Court can hold that the captains and the crews were the employee's of the owners thus reversing the decision below. That's what the parties actually did here. That makes the Social Security System realistic and workable as applied to these workers who have no capital investment, no management of the enterprise. That puts the paperwork of withholding and tax paying work and practically be handled as it was handled in this case. Or second, the Court can hold that the captains and crews are not employees of the ship owners. That would eliminate withholding of income tax under of worker's share Old Age Tax and it would eliminate payment of Old Age Tax and Unemployment Tax by the owners. This can be set forth. People would know where they stood, but it would mean that the captains and the crews would have to pay their income tax without withholding and would have to pay self employment tax at an increased rate.
Potter Stewart: Is there any chance that the crew would be -- the members of the crew would be employees of the captain?
Erwin N. Griswold: I suppose so, I don't know. There is some suggestion that Mr. Lyman suggests in his brief --
Potter Stewart: That they'd be probable.
Erwin N. Griswold: -- that they would be self employed and pay their own tax which seems to me to be quite unrealistic.
Potter Stewart: I think if they're not employees of these respondents, they would be employees of the captain, is that right?
Erwin N. Griswold: That could be but that isn't the way the captain thinks of it. He doesn't --
Potter Stewart: He wouldn't like it, I suppose?
Erwin N. Griswold: -- maintain employment records and carry on relations with the union and things of that kind. And finally, the question could be left for the decision of the trier of the facts in each case. That is what has happened so far in the Fifth Circuit. It happened for example in the Enochs' case when it went back to the District Court after this Court's decision that the collection of the tax could not be enjoined, but that way it's chaos. A jury verdict establishes no rule. It would not bind others now would it bind the same parties on slightly different facts. There have been numerous jury verdicts on this question in the fifth Circuit and they give no guidance to anyone. That approach makes it impossible for the treasury to administer the statute in a fair and consistent manner and makes it equally impossible for boat owners or captains or crew members to know what their responsibilities are. There's no dispute as to the facts in this case. Most of the facts were stipulated. There was evidence but there's no contradiction in the evidence. Though we would have put some of the matters somewhat differently, the Government accepts the findings of fact made by the District Court. Our position is that those findings lead as a matter of law to the conclusion that the captains and crews here were employees of the owners of the ships who provided the means and made the rules and took the money and paid the bills. Accordingly, we urge that the judgment below should be reversed.
Warren E. Burger: Thank you, Mr. Solicitor General. Mr. Lyman?
Joseph J. Lyman: Mr. Chief Justice and may it please the Court. The respondents say that the only question of substance here is whether the concurrent findings of fact of the District Court and the Court of Appeals below are amply supported by the record. And whether those courts applied the proper legal standards in reaching the conclusion of law or whether the findings and conclusions are clearly erroneous. Now, these cases are suits for refund of Federal Employment Taxes erroneously paid on the earnings of certain fishermen who used and operated the respondent's Manhattan vessels. Now, the sole--
Byron R. White: Do you --
Joseph J. Lyman: Yes sir.
Byron R. White: Excuse me. Do you contend the conclusion of the finding of no employment relationship is a finding of fact subject to the clearly erroneous rule or is it a legal question?
Joseph J. Lyman: A mixed question of law in fact I believe Your Honor --
Byron R. White: Well, what if it is? What about on review?
Joseph J. Lyman: Well, Your Honor, I would say that on review that where a statute would preclude the decision of the District Court, I would say that would be a question of law and reviewable on appeal where the statute would preclude the decision. However, where fact elements are concerned in this mixed question, the reviewing courts are bound by the clearly erroneous rule and a reviewing court will set aside a trial court's decision only when the facts found fall short at meeting the statutory requirements. I believe that was this Court's ruling in Trust of Bingham --
Byron R. White: What that means is that the court accepts the historical facts found unless they're clearly erroneous, but then it's a question of law as to whether they meet the standard?
Joseph J. Lyman: That's correct.
Byron R. White: So there is no clearly erroneous rule in reviewing that conclusion of the fact.
Joseph J. Lyman: I don't see how it could be there, no Your Honor, that's correct. Well, the sole issue before the District Court was whether the boat owners, also the respondents here reliable for the excise tax portion of the employment taxes imposed on their earnings of the fishermen and that's the captains and the crewmen. Now, the respondent's liability or non-liability for these taxes depended upon the definition of the term employee and that term is defined in two sections of the Internal Revenue Code, both of which adopt the common law control test. Now, the trial court held that the tax per owners had proved their claims for refund and as a consequence, the fishermen were not their employees under those statutes, for other purposes it may have been, but under those statutes, they weren't. Now, the trial court resolved all issues under these statutes. All issues of facts in favor to the boat owners and particularly, those issues as to the absence of control over the manner and method in which the work was done. Now, the Circuit Court refused to set aside the trial court's findings and conclusions since they were the result of a choice between two permissible views of the weight of the evidence and held they were not clearly erroneous. Now, the District Court made 51 separately numbered detailed findings and covering about 19 pages of this record. Briefly, I would say the needle points as far as our presentation is concerned would be this. The respondents were owners of Manhattan boats. They equipped and maintained them, repaired them for commercial fishing purposes. They contracted with the captains to gather the fish. Now, an owner would relinquish complete control of that boat to a captain. The captain would then staff it with his own crew, his own organization which consisted of mast to bow mates engineers, pilots, experienced net man, and a cook or maybe two. The captain will then provision the boat at his own expense and anyway that he saw fit and all of these was without any interference by the owners.
Byron R. White: You mean the provision, you mean groceries and foods?
Joseph J. Lyman: Groceries, yes, Your Honor.
Byron R. White: And those were deducted from his share of the take?
Joseph J. Lyman: No, he paid those out of his own pocket.
Byron R. White: Well, that's what I mean.
Joseph J. Lyman: Oh, yes.
Byron R. White: But the old -- if no fish were caught, the captain was out at the groceries?
Joseph J. Lyman: That's right. Many times that's happened.
Byron R. White: So he took the risk of loss and --
Joseph J. Lyman: That's correct.
Byron R. White: --in this enterprise?
Joseph J. Lyman: Yes Your Honor
Byron R. White: Only for the groceries?
Joseph J. Lyman: Groceries or that would be all.
Byron R. White: Because fuel and other things --
Joseph J. Lyman: No, those were all paid by the owners.
Byron R. White: But the captain -- and also, I suppose that the -- that the -- well, the crew members were paid also when the fish were caught weren't they?
Joseph J. Lyman: That's correct.
Byron R. White: Okay.
Joseph J. Lyman: Your Honor, just to bring that up, the crew members are paid out of the pocket of the captain.
Byron R. White: Oh yes but only if fish -- he didn't owe them anything unless they caught some fish?
Joseph J. Lyman: That's correct. I want to correct one -- correct -- just want to give my view of Mr. Griswold's statement that this was a lay system. This wasn't a lay system at all. This was a pure sale. In other words, when a fish boat came in and the captain came in with a large catch, he sold that --
Byron R. White: To the owner?
Joseph J. Lyman: To the owner.
Byron R. White: And then the owner sold to the plant.
Joseph J. Lyman: The owner and the plant had another arrangement or some kind. The plant was not a party to this suit and it's important that the plant was not a party to this suit because in one of these findings which Mr. Griswold mentioned, he said that the respondents made a payroll record, that wasn't so. The plant made up his payroll records. The plant was in the middle acting as agent you might say for the captain and also for the owners because it was to the plant's interest to get as many of these people to bring fish in as possible. Well anyway, the captain agreed without a guarantee of any kind to make fishing trips for a season and return the catches to the plants that were owned by the parties who were not parties to this suit. Now, the price that the owner paid to the captain was agreed upon between the owner and the captain and this was if the Court please, a bilateral decision after negotiations. This wasn't something I said I'm going to give you this much and that's all you get, this was a give and take proposition. The prices differed with the seasons and even differed among owners and captains. But once a price was fixed for a season, it remained that price during that season. Now, there was nothing in the arrangements which indicated that a captain would be offered a boat beyond a single season or that he would promise a fisher boat for anybody else beyond the single season. There is no connotative relationship here in any meaningful sense.
Warren E. Burger: Well, did he promise to fish it beyond a single voyage?
Joseph J. Lyman: Yes, I would say that it was contemplated here that they would take it for the season which was about four to five months or six months depending where they were.
Warren E. Burger: But terminable at will by either parties?
Joseph J. Lyman: Yes, but as a practical matter if the Court please, if the boat is equipped and ready to go and there are plenty of fish out there and the captain has his organization, I cannot imagine that an owner would just willy nilly fire a captain and leave a profitable venture sitting at the dock. If any one is going to quit, it would be the captain. Of course if the fish disappeared or captain fell ill, of course that might end the voyage. But the owner, he hoped and prayed the captain would stay and he had a good crew and that he wouldn't lose the crew. Now, these captains were free to perform these services for any boat owner anywhere at anytime. There was no suggestion if the owners had a preferred call and the time or efforts of these captains. Now, the crew was hired and paid by the captains. Now, the compensation paid to the crew came solely out of the pocket of the captain and if there was a catch, Mr. Justice White, the proceeds of that sale became the captain's money. There's no lay system here. It was then divided among the crew in accordance with the prior arrangements with the captain and the crew. If there was no catch as you say then no one is paid. Now there was no evidence in this record of a union contract involved at all or bargaining agents between any of the parties. Each captain dealt with each owner on an individual basis and each crewman dealt with each captain on an individual basis.
Thurgood Marshall: Who fixed the terms of this amount of money for the crew?
Joseph J. Lyman: Your Honor, the amount of money was issued in a pay scale by the owners. Now, the District Court said nothing more than that, but I attribute that Your Honor to the owner's control over the result of this enterprise because if somebody didn't do something to stabilize what these men would get in a plant area, there'd be chaos. They would be raiding each others' crews' right in the -- right down at the dock. So -- and that has happened many times. So to avoid that, the captains actually and the owners would get together and it may violate anti trust laws but they would fix that price that these crews would get. And then once the crews were fixed, I think there's a finding which states that the captain had discretion to vary that once he was out, but that was the purpose of that Mr. Justice Marshall.
Thurgood Marshall: Who hires and who fires?
Joseph J. Lyman: The owners--
Thurgood Marshall: The captain hires?
Joseph J. Lyman: Pardon?
Thurgood Marshall: The captain hires.
Joseph J. Lyman: The captain hires the crew entirely.
Thurgood Marshall: Can the owner fire?
Joseph J. Lyman: No Your Honor, absolutely not. That was specifically found.
Thurgood Marshall: He can't fire any member of the crew?
Joseph J. Lyman: Well, the Court so found and it has never happened. I mean, the owner now cannot fire any member of the crew.
Thurgood Marshall: But he could fire the captain?
Joseph J. Lyman: Well, Your Honor, let's put it this way. If you say fire, he could take his boat and say that to tie it up or he could refuse to give him a boat the following season. Well I would construe that to mean rather than firing him that he just didn't want to renew the contract at the beginning of another year.
Thurgood Marshall: Well let's suppose he caught him stealing money during the --
Joseph J. Lyman: Well --
Thurgood Marshall: Can he get rid of him?.
Joseph J. Lyman: Your Honor, I would hope he would and I couldn't -- I don't see how that would turn him into an employee.
Thurgood Marshall: Well I mean why would he be interested in whether they steal and not if he is an independent contractor?
Joseph J. Lyman: Well I'm afraid I don't follow that.
Thurgood Marshall: Well, you say it's completely independent that the owner pays and he hires and he fires --
Joseph J. Lyman: That's correct.
Thurgood Marshall: --and pays him out of his own pocket?
Joseph J. Lyman: Yes sir.
Thurgood Marshall: Well, how could he steal from himself?
Joseph J. Lyman: I don't think he could, but if he was just a thief at heart and stole something else, I'd imagine he'd get rid of him.
Thurgood Marshall: Oh, I see.
Joseph J. Lyman: It was open for the District Court here to hold that for the purposes of this two Acts, that fisherman could very well have been employees of the owners. But it's obvious from the findings that the District Court had the common law test clearly in mind. For example, the Court found specifically that the tax payer had no right to nor attempted to instruct the captain or crew as to their fishing activity or how to accomplish it. Another specific finding; there was no expressed agreements specifying the extent of the tax payer's control over the captain's activities. Another; it was clear that no actual control was exercised over the details or the manner and method employed by the captains and crews. One more, the tax payers had a right to control the results and interfered to a degree only to assure a proper result from the undertaking. And then the tax payers had no control over the crewmen nor did they attempt to exercise it through the captains. Now, the petitioner has ignored these findings both in his brief and in his oral argument.
Speaker: Mr. Lyman--
Joseph J. Lyman: Yes Your Honor.
Speaker: It turns out that the standard should be the maritime standard and not the technical common law standard. Do you disagree with the conclusion of the Court of Appeals on that premise, the case would go against you?
Joseph J. Lyman: Well, the Court of Appeals did say that if the Maritime entered --
Speaker: Said that flatly, didn't it?
Joseph J. Lyman: Yes and if the maritime standard were to be applied, then it said we would have to reverse this decision.
Speaker: So that really what this case all boils down to in the last analysis is in what sense common law was used in the statute, whether in a technical common law sense as distinguished common law from equity or admiralty law, or whether common law in the sense that general principles as opposed to some free willing operation by the administrative agency? Isn't that what the case boils --
Joseph J. Lyman: Yes, I guess -- I would say that would be a fair statement Your Honor. So in summary, the captains participated in bilateral decisions and negotiations in fixing the price and they exercised a high degree of independence in conducting their operations and exercised initiative and decision making authority. Well, Mr. Justice Harlan, I -- you're absolutely correct in that respect because one of the points I believe that petitioner raises and petitioner raised numerous points and we did our best to brief each one thoroughly, but we think two points raised in the main brief and one in the reply brief suggest a discussion. The first is in evaluation of the relationship here between the boat owner and the fishermen for these tax purposes, what legal standard should be applied? The principles of general Maritime Law as they contend, or the principles of the common law in the statute as we contend? The second point was assuming the petitioner's contention that this case involves a mixed question of law and fact, would that circumstance call for a different result and not reached by the concurrent decisions below? Now in the reply brief if the Court please, there was a new point raised and it poses this question. Is proof of filing an employment tax return and the payment of the tax a defense against a suit for its refund? Now, we didn't get a chance to brief that for the Court because the reply brief was served on us I think only Thursday or Friday. I want to discuss that briefly here if I may. At pages four through six which is point three of the reply brief, the petitioner says that because the respondents filed employment tax returns and paid the taxes and kept good records, the respondents thought or believed that the captains and crewmen were their employees and for that reason, our suit for refund should be dismissed. Now, if belief is to be a criteria of employment status, it's material only when one party believes that he has the right to control and direct the activities of another and the other believes that he must submit to that control, but I find it puzzling how filing a tax return can come to that same arrangement. Now, people pay taxes and file returns for many reasons and I don't think that they ponder legal concepts when they're about to do it. Now suppose the respondents here had made their own determinations and decided that the fishermen were independent contractors and decided not to pay the taxes, what would've happened? Well of course a number of things would happen, but experience in the fishing industry showed this. That the tax collector would file liens on the boats, attach whatever property at hand, including bank accounts and literally tie up your business. Now this happened in Enochs versus Williams Packing Company which came to this Court. It will be remembered that William's was a shrimp boat fleet operator. He had made a decision that these men were independent contractors and had for a long time. He didn't pay any tax and he didn't file a return. An assessment of about $50,000.00 was made. A -- his boats were tied up. The -- William's went to the District Court and obtained an injunction against the collection. The Circuit Court affirmed with one dissent. It came here on jurisdictional issue of enjoining the collection of taxes. The injunction was dissolved. It was remanded with directions to dismiss the complaint. Thereafter, Williams paid a small amount of that tax and not because he believed that these people were employees and he filed another suit in the District Court and the Government counterclaimed for $50,000.00 for whatever the assessment was. William has prevailed and the Government's counterclaim was dismissed and that's in William's Packing versus U.S, the number is 2631 in the Southern District of Mississippi, the judgment was filed February 18, 1964. Now, the Government made the same contention without success in another employment tax case. This involved the employment status of certain mechanics and their helpers, they call them applicators. The Court's treatment I think is worthy of consideration here since we didn't get an opportunity to brief it. Please permit me to read just a short paragraph from the case of Rayhill versus United States, 364 F.2nd 356 and this will complete my analysis at this point. In that case it said, “Nor in the circumstances of this case can an intent to create an employer-employee relationship be inferred from the fact without more that plaintiff withheld from, and paid the appropriate federal taxes on the earnings of the applicators. Failure to have made such withholdings and payments might have subjected it to assessments and penalties and possible criminal sanctions. Then, too, the plaintiff could not have challenged a deficiency in the tax court or had a reasonable prospect of obtaining an injunction to restrain enforcement of the tax,” citing Enochs versus Williams Packing. “One need not resort to martyrdom to obtain judicial determination of the issue here. To suggest that plaintiff should not have paid the tax if it believed that the applicators were not common-law employees would be to approve snares and traps for the unwary. In addition, the payment of the tax was a jurisdictional prerequisite to the filing of this suit. It would be an unusual law which first required the payment of a tax as a jurisdictional prerequisite to the filing of a suit for its refund and then permit its payment to be a ground for a defense against the claim. Before going into that maritime oriented employee point, I'd like to mention this that the petition for the writ here indicated that the decision below will disrupt even handed administration of the Social Security Act and would cause certain fishermen to lose Social Security benefits and we take exception to that in full. The petitioner did not pursue this point when he had its brief on the merits. We think the contention raised important issues respecting the social and remedial aspects of the Social Security Act and should be -- and should not be ignored simply because it was raised. Now, the decision below does not deprive the fishermen of their Social Security benefits. In holding that these fishermen were not employees, it follows as a consequence that they were self employed or independent contractors which Congress put into one group.
Potter Stewart: Or why not employees of the captain?
Joseph J. Lyman: Your Honor, that issue is not before the Court.
Potter Stewart: I know, I understand that but why does it follow inevitably if they're self employed if they're not employees of these respondents?
Joseph J. Lyman: Well, in the posture of this case Your Honor, we only have the tax refund of the employer -- of the respondents.
Potter Stewart: Yes.
Joseph J. Lyman: We don't have the situation of a captain having paid the tax on their earnings. However, going into that point, in the case of U.S. v. Joe Graso and Sons which is in our brief, this question came up sometime ago when the Government tried to file a third party complaint to make the captains liable for the taxes if the owners were not liable. It was held that it was being an independent action the third party complaint was dismissed. It didn't get to that point. Also the court in Graso did say that it is quite possible that the relationship between the captains and the fishermen would not be that of employer-employee. You'd have to test it against the statute first. As a matter of fact, the Department of Justice in an anti-trust case was quite successful in prosecuting members of the fish industry. In Local 36, International Fishermen and Allied Workers versus U.S. 177 F.2nd 320 which is cited Graso and there it was found that the captains and the crewmen were joint venturers. In that case, the Government needed proof of joint venture rather an employer-employee for the success of their prosecution and even though Social Security taxes were paid in that case and the defendants tried everything to prove an employment relationship, the Court held it as a joint venture between the captain and the fishermen. I'd like to say that these fishermen are not loosing Social Insurance benefits because by virtue of the 1950 amendments of the Social Security Act, benefits were extended to the self employed for the first time. Prior to these amendments, it's true they may have been deprived of such benefits. So the distinction today between the common law employee and the self employed person or the entrepreneur with respect to Social Insurance at least is no longer meaningful. It's now only a tax matter. The question is who pays the tax and what is the difference? As far as the even --
Potter Stewart: Are there the same maximums with respect to employees as exist with respect to self employed people? It's only up to a certain amount of income in both cases, isn't it?
Joseph J. Lyman: In both cases, the same in both cases.
Potter Stewart: The same.
Joseph J. Lyman: Except the rate is a little different. I think that the self employed would pay something less than three-fourths of the total that would be paid between an employer and employee.
Potter Stewart: But basically the same benefit -- ultimate benefits?
Joseph J. Lyman: The ultimate benefits. As a matter of fact Your Honor, there is one benefit I think the self employed man gets that the common law employee does not and he can participate in the I think it's the 1964 Self Employment Pension Act where lawyers are doing it and I'm sure that there are some fish captains that do it. Now, this equality between the two categories is demonstrated because the earnings credits of these people which determine their benefits, they're entitled to the same weight and dignity. The Social Security Administration is the same administration that dispenses benefits to both. The same tax collector collects taxes for both. Now, the petitioner's main thrust here is that the common law test should not be applied, but the rule governing employment relationships under maritime law should be decisive in fixing the respondent's tax liabilities. Now, if liability for these taxes is to be so determined, it is a matter for Congress' consideration rather than this Court because it involves federal fiscal policy and prerogatives of legislative definition. I might say that during the pendency of this case, the treasury department attempted to seek an amendment of this Act to call these fishermen statutory employees but Congress took no action on it. The Congress' failure to act if the Court please doesn't tell us anything, but it does -- but the incident does tell us this that the Treasury Department felt that it was vulnerable to adverse decisions by the finder of fact who would apply the common law rule, otherwise, the Treasury Department wouldn't be concerned about it. Now, the petitioner raised and said if a seaman is entitled the maintenance and the cure from the owner, he must be the owner's employee under maritime standards, now I'll accept that. But petitioner concludes without more that the seaman mechanically becomes an employee for federal employment tax purposes and hence a common law employee. Now the same individual can be an employee and an independent contractor at the same time. This Court said in the Labor Board versus Harris, a brief quote, “An individual maybe an independent contractor under the common law control test for purposes of imposing vicarious liability in tort, and maybe an employee for the purpose of other litigations such as unemployment insurance. ” I see my time is about to expire if the Court please but I want to say this that the fishermen in this case whom the Court found did not meet the common law test of master and servant are nevertheless entitled to maintenance and cure by virtue of their marine employment. The Court said in Aguilar versus Standard Oil Company when this particular question came up. It says “Whether by a traditional standards that boat owner is or is not responsible for the injury, yet under maritime law is nevertheless liable as an incident of the marine employer-employee relationship. ” We suggest that the main thrust of petitioner's point there is without a merit. I'd like you say in concluding that this decision is not contrary to public policy as Mr. Griswold has suggested. It will not frustrate the remedial aims of maintenance and cure or other maritime rights. There are many independent contractor relationships which are workable under the Social Security Act and the rulings of the Commission of Internal Revenue will demonstrate that. One outstanding that comes to mind is that he considers a self employed person, one who is able to carry on his own business. A poll taker for one who is advertising agencies simply because this poll taker works on a job-to-job basis and yet he is paid by the company, directed by the company nevertheless is a ruling. The Internal Revenue Service contained an internal revenue bulletin number 1965-30 of July 26, 1965. It says that those who conduct surveys on certain types of advertising are self employed persons. They're in a business of their own simply because they knock on a door and fill out a form for some company. Certainly, fishermen who are more skilled and who have a way of life are certainly more in keeping with a trade or business and some poll taker or a real estate salesman for instance, they consider him a self employed person. A taxicab driver, the Internal Revenues put out many bulletins to taxicab drivers are considered independent contractors. Although they drive the cab of the company, the company has great expenditures and the real man, this company has great expenditures in promoting and keeping an office open, yet the Government finds for tax purposes, he too is a self employed person. So in conclusion, we ask that the Court consider that the common law test be applied and then if there's any other test to be applied that the Department of Justice address itself to the Congress. Thank you.
Warren E. Burger: Thank you Mr. Lyman. The case is submitted. Thank you for your submissions.