Warren E. Burger: We will hear arguments next in Rose against Lundy. Mr. Zimmerman I think you may proceed whenever you are ready.
John C. Zimmermann: May it please the Court, the State of Tennessee seeks review in this case of a judgment of the Court of Appeals from the Sixth Circuit affirming the judgment of the lower court which granted a writ of habeas corpus to Noah Lundy, ordering that he be released from his sentence unless he was retried within 90 days. Following his direct appeal in which his convictions for rape and crime against nature were affirmed, Mr. Lundy sought state petition for post-conviction relief, and it was denied in the state court. No appeal was taken. Then, later, he petitioned for Federal habeas corpus review of four constitutional claims. The first two claims had been presented to the state courts. The second two claims had never been presented to any state court. In our answer, the State of Tennessee objected to the review of the petition in the District Court on the ground that Mr. Lundy had not exhausted all his claims in available state remedies, he had not presented all his claims to the state courts, and therefore, the court, in accordance with the exhaustion requirement, should dismiss his habeas petition until such time as the state conviction and all the Federal constitutional claims which Mr. Lundy sought to raise were adjudicated finally and completely in the state courts.
Speaker: Mr. Zimmermann, what do you make of the paragraph in Judge Morton's opinion in the Joint Appendix on Page 88, where he says, "Since Grounds 3 and 4 have not been presented to the state court, there has been no exhaustion of remedies as to those two. " "Thus this court will not consider them in the constitutional framework. " "However, in assessing the atmosphere of the cause taken as a whole, these items may be referred to collaterally? "
John C. Zimmermann: Your Honor, his statement there, I think, presents to this Court and illustrates to this Court how it is difficult for a Federal court to separate the exhaustive and unexhaustive claims from habeas review, which frustrates the exhaustion requirement. In this case, Your Honor, he correctly noted, in accordance with our contention, that Claims 3 and 4 had never been presented to the state court. And here he said that he would not consider them in the constitutional framework. However, he later says in his opinion that the four claims were... constituted such a mixture of constitutional violations that they could not be separated one from another. He relied not only upon Claim Number 4, which was the instruction issue, but also the statement of the prosecutor set forth in Claim Number 3, which had never been presented to the state courts. He used those to illustrate how Mr. Lundy had been denied his right to due process of law, together with the first two claims. Not only did he do that, but he saw numerous others, a litany, actually, of statements by the prosecuting attorney that had never been presented in the petition, many of which had never been presented to the state courts. He took this litany of remarks by the state prosecutor and said, look at all these remarks. I find possible misconduct, and I find because of all this, because of all these remarks, he is entitled to habeas relief. What we are asking this Court to do is to require that in cases like this, that a state prisoner proceed first all through the state courts, take all his Federal constitutional claims before he goes to the Federal courts, because, you see, in this case many of the constitutional claims, or many of the remarks which Judge Morton, the District Judge, found to be constitutionally defective, we submit, have been waived under state law. No objection had been made as required by state evidentiary rules, procedural rules, and therefore, if the whole case and all the constitutional claims had been given to the state courts, our courts could have conducted whatever evidentiary hearings were necessary, they could have made--
Speaker: You suggest they might have granted relief on the claims which were not made then but are made now?
John C. Zimmermann: --Precisely, Your Honor. The problem here is, the claims of prosecutorial misconduct... it was a different claim in the Federal court from what it was in the state court. The identity of the claim, if you please, of prosecutorial misconduct was twofold in the state courts: Number One, whether or not this remark of Mr. Lundy's violent character was constitutionally defective, and Number Two, in the state court, Mr. Lundy alleged, that the prosecutors had made disparaging remarks about his lawyer. Now, those were the only two acts of prosecutorial misconduct presented to the state courts.
Speaker: How does one go about separating out separate claims of prosecutorial misconduct? What is it in the Federal Constitution that forbids prosecutorial misconduct?
John C. Zimmermann: Well, it is a due process claim, essentially. It could be other claims, such as a Fifth Amendment violation, where a prosecutor comments upon a defendant's failure to take the stand, or it could trigger other constitutional rights, but under Donnelly it is a due process analysis.
Speaker: Do you think that a claim in the Federal court, Federal habeas court, that my rights under the Fourteenth Amendment to the United States Constitution were violated would raise every single conceivable Federal constitutional right that a person had in a criminal trial?
John C. Zimmermann: No, Your Honor. I think the teaching under Picard v. Connor is this. Give the state courts fair notice of what your constitutional complaint is, your Federal constitutional complaint is. Tell them what your complaint is. And that claim itself can be brought over to the Federal Courts, because then you have identified a specific constitutional violation, not requiring, of course, to cite book, chapter, and verse, but you have given the courts, state courts fair notice of what your complaint is. Now, the lower Federal courts, for example, have found such claims as ineffective assistance of counsel to constitute different identity of claims, such as, there might be a conflict of interest in effective assistance of counsel, where a lawyer represented two defendants. Yes, Your Honor?
Speaker: Mr. Zimmermann, would you make the same argument if the two claims that... if there were two claims presented in a petition for habeas and they were wholly independent? Say one was a Fifth Amendment claim, another a Sixth Amendment claim; one a compulsory incrimination claim and another a denial of jury trial or something, or denial of counsel, wholly independent. One of them has been exhausted and the other hasn't. Would you say that the Federal judge should dismiss the entire case, or just say, sorry, but there is one thing here that isn't exhausted, I will adjudicate the other?
John C. Zimmermann: Yes, Your Honor, he should dismiss it and send it--
Speaker: What, the whole thing?
John C. Zimmermann: --The prisoner... exactly. Remand the entire case back to the--
Speaker: Well, what good would it do to remand the claim that has already been exhausted?
John C. Zimmermann: --Well, you are remanding a case. You have to understand, Your Honor, that we are submitting you are looking at a case on collateral review, and many claims, many constitutional claims--
Speaker: I am not sure about that. I think judges still look at habeas corpus petitions in terms of the claims they present, and if, for example, a claim is repeated that he has just ruled on, he doesn't pay any attention to it.
John C. Zimmermann: --Well, what we are trying to... what we are asking the Court to say is this. If he brings the two claims, one is exhausted and one is not, he is still going to get prompt review of his Federal constitutional claims, if he is asked or sent to go back to the state courts, because the--
Speaker: Well, he is not going to get prompt Federal review on one of them that he has already had heard in the state courts.
John C. Zimmermann: --Well, he is going to get prompt review on the second one, and the state courts could grant relief, could discharge him from custody, give him a new trial. But even more so, Your Honor, many times constitutional claims can be deemed harmless--
Speaker: Why would you dismiss it? Why don't you just say he holds it?
John C. Zimmermann: --Well, I would only say dismiss it because that is what the precedents of this Court say, when there has been non-compliance with the exhaustion requirements.
Speaker: Well, we have never... this case wouldn't be here if we had ruled on your claim before.
John C. Zimmermann: Exactly, Your Honor. Exactly. But he is not prejudiced. Whether you call it dismissal or whether you say we are just going to defer ruling on the whole case, what we are trying to ask the Court to do is say, look, in Federal courts you review a state conviction one time. Bring all your Federal claims to Federal court one time. Of course, there is protection--
Speaker: Mr. Zimmermann, supposing as in this case he asserts four claims, the judge looks at it and thinks there is some substance to one or two of them, and appoints counsel for the prisoner, because these pleadings are drafted in a kind of crude way most of the time, and the lawyer looks at them and says, well, the two exhausted claims have merit, but I don't think there is any merit to Claims 3 and 4, I would like leave to amend by dismissing those, 3 and 4, should the judge let him do it?
John C. Zimmermann: --I think the Judge ought to let him do it, if what has happened--
Speaker: Well, in your view, I thought he would have to dismiss, because there are unexhausted claims.
John C. Zimmermann: --Well, in the Fifth Circuit, where they have this rule requiring complete exhaustion, the District Judges take careful... take careful pains, extra pains to make sure the prisoner knows that you might be barred from subsequent habeas litigation in Federal courts. If the state prisoner says, no, these are frivolous claims, or no, these don't have any merit whatsoever, for one reason or another, if he takes his chances with his exhausted claims, he is in effect saying, this is it.
Speaker: Well, nobody would be hurt much by your rule. If that is the rule, he will never put an exhausted claim in his first petition.
John C. Zimmermann: That's correct. And then the Federal courts would have to, if there was a second petition--
Speaker: Well, yes, exactly. Well, they are still permitted.
John C. Zimmermann: --That's correct.
Speaker: Mr. Zimmermann-- --They still are permitted, separate and independent-- --I gather the rule that you suggest Picard, perhaps, suggests, that is, that you ought not let the state prisoner inside the Federal courthouse door if he has Federal constitutional claims until he has tendered every one of them to the state courts--
John C. Zimmermann: That's correct.
Speaker: --first to decide. Isn't that it?
John C. Zimmermann: That's correct, Your Honor.
Speaker: That's the rule you want.
John C. Zimmermann: That's correct, Your Honor. We are not saying that the Federal door of habeas review ought to be shut. Not at all. We defend the writ. We support it. What we want is that the state courts have the first opportunity to finally decide his criminal conviction under Federal--
Speaker: Well, you would say then if he presents one claim to the Federal court after having exhausted it, and then later comes back with a wholly separate claim, which he has now exhausted, that the Federal court should not entertain his second petition at all, because he should have raised it in the first place.
John C. Zimmermann: --Well, that would be a different situation. That would be governed by Rule 9.
Speaker: That situation is covered by the statement you just made. Either present them all at once or that is all.
John C. Zimmermann: A Federal District Judge could find there had been abuse of the writ by successive petition, or he could find--
Speaker: The statutes as they presently are do not require--
John C. Zimmermann: --That's correct, Your Honor. That's correct.
Speaker: --And our cases don't support your suggested rule.
John C. Zimmermann: But here in this case--
Speaker: But you are suggesting that we ought to decide a case to that effect so that they can't parlay this one after another.
John C. Zimmermann: --Exactly, Your Honor. What we are having now is that under the present situation where the Circuit Courts of Appeals have decided, the state courts in particular in this case, should Lundy... the granting of the writ be reversed, what we are being called upon to do is to litigate and relitigate, and a Federal judge many times having to look at the same transcript not once or twice, but three times, and this is particularly aggravated or made acute following the decision in Jackson v. Virginia, a very common... a very common claim for relief is sufficiency of evidence in the state courts, and now it is being more commonly made in the Federal courts. And you take a claim of ineffective assistance of counsel, let's say, and a claim of sufficiency of the evidence, and assuming the ineffective assistance of counsel has never been raised, and the Federal judge has to look at this multi-volume transcript to determine all these issues of sufficiency of the evidence. Then--
Speaker: Mr. Assistant Attorney General, when I practiced in Maryland a few years ago, there was this very simple way of handling this. Any state judge who refused to entertain a writ of habeas corpus went to the penitentiary, and we got along fine. No problem.
John C. Zimmermann: --Your Honor, I think Tennessee's record, the state courts in Tennessee's record clearly establishes that we are very receptive and attentive to Federal constitutional claims. In fact, after Fay v. Noia--
Speaker: Well, on the other hand, what about the theory that you give each prisoner the right to file a piece of paper, which says, I want out for the following reasons, and put them all down, and anything that he doesn't put down, they are gone. Isn't that what you are saying?
John C. Zimmermann: --No, Your Honor. It is different.
Speaker: That is what I--
John C. Zimmermann: Because that is a Rule 9 problem. What we are saying is, if he puts down on that piece of paper five claims, and he thinks, I've got five complaints about the way my trial was run, and he has identified them--
Speaker: --Right.
John C. Zimmermann: --but he has only taken one to the state courts, what we are saying is, go back to the state--
Speaker: I am talking about this paper in the state court. That that is the end. You file one piece of paper, and that is it--
John C. Zimmermann: --In the state.
Speaker: --so far as habeas corpus is concerned.
John C. Zimmermann: If he files one piece of paper in the state courts and takes that one--
Speaker: He can't file any more. Is that your position?
John C. Zimmermann: --Not in Tennessee. In Tennessee, he can file petitions for post-conviction or leave--
Speaker: Right.
John C. Zimmermann: --one after another. They have no Rule 9 bar.
Speaker: That is what I was wondering about. Well, I understood your answer to me, Mr. Zimmermann, to apply only to a situation where he comes into the Federal court and he has, as you say, five Federal claims raised, and he has exhausted only one of them, that the Federal judge, even though that one had been exhausted in the state court, you are suggesting the Federal judge should turn him away until he goes back to the state courts for the other four and gets those determined by the state.
John C. Zimmermann: That is correct, Your Honor.
Speaker: That is your position.
John C. Zimmermann: That is our position, and the reason for that is--
Speaker: That doesn't prevent his coming back with 6, 7, 8, and 9, if he has 6, 7, 8, and 9 later.
John C. Zimmermann: --That's correct. What we are just saying is, if he knows on the front end that he has got five complaints, some of which are not exhausted, send him back to Federal court... rather, send him back to the state court. If a hearing is required, we will conduct a hearing. The record of Tennessee speaks for itself. We have reversed numerous cases on Federal constitutional grounds, and our post-conviction procedure is more liberal, grants more rights to a prisoner than Federal collateral review, for this reason. Not only do we review Federal constitutional claims, but also state constitutional claims, at a time when our Supreme Court is considering some rights for criminal defendants more broadly than the Federal counterpart. So, you see, sending him back to the state courts is not taking anything away from him. It is telling him, look, let the state finally review your conviction. There has got to be some finality. And when a Federal court looks at a criminal conviction, a state criminal proceeding, we have got to know the states have looked at it all and said their last word, and in this case the claim of prosecutorial misconduct, I believe the record could have been more certain as to which claims could have been reviewed, which remarks could have been reviewed by the Federal court, particularly after Wainwright v. Sykes. If our court had only had the opportunity to look at some of these claims, some of these remarks that Judge Morton relied upon in granting habeas relief, if our state courts could have looked at it, we could have either said, this is bad, we are going to grant this man a new trial, or if they could have said, these remarks and claims concerning these remarks are barred because of procedural default, and absent a showing of cause and prejudice, there would have been no Federal habeas review whatsoever. Not only would a rule as we espouse today cut down the work load, I say, or make the haystack smaller when searching for the needle of the meritorious habeas petitioner, but asking the man, the prisoner to go back to state courts for his Federal constitutional claims also gives us the opportunity to write definitive state rulings, controlling state rulings to our lower court judges because, you see, decisions of Federal District Courts in Tennessee, and Courts of Appeals are not binding on our state trial courts. They are persuasive authority, but they are not binding, but the decisions of our Tennessee Court of Criminal Appeals, if they decided the constitutional claims, our own state trial courts would be instructed by them, and guided by their decisions. So, you see, the ultimate relief, the ultimate remedy to bring state trial courts and cause them to correctly decide Federal constitutional claims would be--
Speaker: Is review of right in your Court of Criminal Appeals?
John C. Zimmermann: --Yes, Your Honor. There is an appeal of right in our Tennessee Court of Criminal Appeals, permissive review in the Tennessee Supreme Court.
Speaker: Do your Federal judges in Tennessee follow the practice recently developed that in a criminal case the judge instructs counsel, both counsel that if there are any pretrial motions, they will all be made by a given date, and none will be entertained after that date in order to avoid parlaying them and delaying the trial? Do they follow that rule?
John C. Zimmermann: Yes, Your Honor.
Speaker: In principle, is what you are arguing for essentially the same general kind of thing?
John C. Zimmermann: Yes, Your Honor. I suppose the kind of rule we are asking for is, there ought to be a stage of habeas analysis before we even look at the merits of each claim, and first, has he exhausted all his claims, and if he has, are any of them barred, and if he--
Speaker: You mean, all of his claims that he presents in his petition.
John C. Zimmermann: --That's correct. It is up to the prisoner which claims he puts in his petition, and we have no control over that. But the point, the point is this, that the Federal courts, at this point, anyway, are looking at each individual claim, deciding these sometimes complex exhaustion questions on each individual claim before they start looking at the merits, and what is happening is this, and the scholars have pointed this out. The Federal judges would rather jump over to the merits, look at the merits, particularly if it is rather cut and dry, and say, deny relief on the merits.
Speaker: Mr. Zimmermann, let me ask you again on this case, assume the Federal judge, as apparently this judge did, thought there was substance to the two exhausted claims. Then he looked at the other two claims, as they are here, and he looks at those and says, there is not a chance in the world any judge is going to find merit to the claim that this instruction is bad, that witnesses are generally presumed to tell the truth, that that somehow is a constitutional error. He nevertheless under your rule has to send it back to have it exhausted even though he thinks it is a perfectly frivolous claim?
John C. Zimmermann: Well, not precisely, Your Honor, and this is the reason why. If a Federal District judge looked at a habeas petition, pro se litigants filed it, and he sees 1 and 2 have been exhausted, but 3 and 4 are so frivolous, they don't even state habeas claims for relief--
Speaker: Right.
John C. Zimmermann: --the rules require him to dismiss those outright, strike those, and only consider the claims... what I am saying is this. On the front end, before we even look at exhaustion, the rules of procedure contemplate that the Federal District judge will say, does any of this state a cognizable habeas claim before I order the state, before I order the state to answer? Now, that is what a Federal judge--
Speaker: So he could have in this case, under your approach, dismissed Claims 3 and 4 as being on their face without merit--
John C. Zimmermann: --Yes, Your Honor, under--
Speaker: --and then gone ahead on 1 and 2, but I suppose when he goes ahead on 1 and 2, part of the review is the harmless error notion in your appellate court's opinion, and in reviewing harmless error, I guess he would have to look at the whole record, wouldn't he?
John C. Zimmermann: --Yes, Your Honor.
Speaker: In fact, one of your complaints is, he didn't look at the whole record.
John C. Zimmermann: Well, that was a matter that we were concerned about, that's true but we submitted under the record that he had, he didn't need the entire record in order to deny habeas relief, but if the Federal... if Judge Morton saw... I think there may be something there, I want to see the whole record, he could have ordered it to be expanded, but under this case, because of the many remarks relied upon by Judge Morton to grant habeas relief, and because of the fact that he said himself, these claims are so inseparable, they are such a mixture, I can't separate them, this case should have been sent back to the state courts for them to look at these unexhausted claims, because, you see, our own state courts are going to have to look at the same record again, and if... and if, under the present analysis by most of the Federal Circuits, if Lundy loses... let's say he lost in the District Court on the two exhausted claims, but he appealed, and while at the same time he appealed he comes over to our state courts and said, here is my unexhausted claims, look at them, well, I would submit that perhaps our state courts would probably abstain from ruling on the unexhausted claims until there is a final decision on the exhausted claims.
Speaker: It seemed to me after reading the state court opinions that his chances of success on those two unexhausted claims were about one in nine million. Isn't that all the more reason why the state courts should be allowed to deal with it first?
John C. Zimmermann: Yes, Your Honor. I agree with the Chief Justice on that.
Speaker: Don't you agree with me, too, on his possibilities? 0 [Generallaughter.] Those odds are pretty heavy.
John C. Zimmermann: Well, Your Honor, let me be... let me say this. There is no question that not all the claims were given at the state courts. Secondly, there is no question that the proof in this case was undisputed. Lundy never took the stand. He never offered any defense. And the state courts said, this overwhelming evidence... here you had a rape case where there was an eye witness present, not only the rape victim, but an eye witness, and all this evidence, including the defendant's own post-arrest statement, all this evidence, they said, this is overwhelming, and for this reason we find these two little... two remarks of the prosecuting attorney to he harmless. They weren't given the opportunity to look at pervasive prosecutorial misconduct as the Tennessee Court of Criminal Appeals did in State v. Hicks this year, where they struck down and overruled a defendant's conviction because of pervasive prosecutorial misconduct, on Federal constitutional grounds. That case merely illustrates to the Court how they conduct their analysis under state law in applying Federal constitutional rights of due process with regard to prosecutorial misconduct. Whether or not he has any chance at all, I don't know. I do know this, that if he goes to the state court, and the state court says he has waived all these things, he is barred from raising them, then I would submit to the court that those rulings by the state courts would be definitive and determinative on whether or not habeas review could even occur later in Federal court.
Speaker: Mr. Zimmermann?
John C. Zimmermann: Yes, sir.
Speaker: You mentioned the Fifth Circuit opinion, Court of Appeals of the Fifth Circuit.
John C. Zimmermann: Yes, Your Honor.
Speaker: Do you recall the dissent in that case by Judge Roney?
John C. Zimmermann: Yes, Your Honor.
Speaker: What do you think of the rule that he would adopt? In essence, as I recall, he would leave it to the discretion of the District Court to decide whether to send the case back to the state courts when in his opinion the interests of justice required that or made it desirable, but if the District Court went ahead and decided two of the four claims that you have been talking about, then the Court of Appeals would be duty-bound to review those, too.
John C. Zimmermann: Well, I believe his opinion is based upon a notion that the exhaustion requirement is nothing more than a discretion to be applied at the discretion, if you please, of the District Court, and that is simply not the case. The exhaustion requirement, we submit, operates as a prerequisite to habeas review, a precondition to habeas review. It has never been, since 1948, anyway, a discretionary tool.
Speaker: Well, didn't Picard say that? Didn't Picard hold that?
John C. Zimmermann: I don't recall--
Speaker: That it was not a discretionary rule? I thought Picard held that. No?
John C. Zimmermann: --That it was not a discretionary--
Speaker: Yes, that the exhaustion requirement is a requirement, period.
John C. Zimmermann: --That is correct, and so did Pitches v. Davies, said it was a prerequisite to habeas--
Speaker: But it doesn't follow from that that you have to... that you can't review the exhausted claims. All that follows from that is that the claims that are unexhausted, you cannot adjudicate.
John C. Zimmermann: --That is correct, but you see--
Speaker: I mean, if the rule were otherwise, the case wouldn't be here.
John C. Zimmermann: --Well--
Speaker: At least six or seven Courts of Appeals are against you.
John C. Zimmermann: --That is correct.
Speaker: And it may be just one or two that are on your side.
John C. Zimmermann: Well, they are on our side partially.
Speaker: Well, do you have any Court of Appeals on your side completely?
John C. Zimmermann: Well, I think, Your Honor, what the Circuit Courts are laboring under is a misunderstanding that habeas review, that there is somehow something that requires immediate and prompt habeas review of a prisoner's claim, and what we are saying is that you can't just break a conviction off in little bits and pieces, and say, have a little bit now and a little bit later and come back through the revolving door again two years later, and a little bit more.
Speaker: You want a rule. If there are any unexhausted claims, it all goes back.
John C. Zimmermann: That's correct. That could be easily applied not only by the District judges and magistrates, but also by Courts of Appeals.
Speaker: The Sixth Circuit says, in its opinion which you are seeking to overturn here, says that the Fifth and the Ninth agree with you.
John C. Zimmermann: That's correct. The Fifth and the Ninth agree with us with regard to how a District Court ought to apply it, but in the Fifth and Ninth Circuits, they say on appeal if the District Judge erroneously looks at the exhaustion claims, we will look at the exhaustion claims, too, and we don't believe that a Court of Appeals should do that, any more than this Court has looked at, for judicial economy purposes, an unexhausted claim. This Court has consistently and repeatedly said it doesn't matter if everyone is granted relief, it doesn't matter if this issue is of great national importance, if it hasn't been exhausted, you go back to the state courts.
Speaker: Does any Court of Appeal, if a habeas petition presents one exhausted claim and one unexhausted claim, does any Court of Appeals say that the District Court may hear them both, on the theory of some sort of a pendant claim?
John C. Zimmermann: I am not aware of that, Your Honor.
Speaker: All right.
John C. Zimmermann: I am not aware of that. Thank you.
Warren E. Burger: Very well. Mr. Smith?
D. Shannon Smith: Mr. Chief Justice... excuse me... may it please the Court... excuse me... first let me make it perfectly clear that we have no argument with the exhaustion requirement. We feel that Mr. Lundy properly exhausted the two claims upon which relief was granted in the District Court. In fact, in the state's answer to Mr, Lundy's petition for writ of habeas corpus, the state admitted the exhaustion of the first two claims, and asked for dismissal of the latter two claims for failure of exhaustion of remedies.
Speaker: You don't agree with him on the flat rule he wants, though, do you?
D. Shannon Smith: I disagree very strongly on the flat rule which he wants.
Speaker: Well, what... then, at some point, I take it you will deal with it. What is a Federal court doing with a case, with an issue which has not been exhausted, no matter how many other points have been exhausted? Why should a Federal court be in that at all?
D. Shannon Smith: In the case or in the unexhausted issue?
Speaker: In his corpus case in the District Court.
D. Shannon Smith: If the--
Speaker: What is the reason for having a Federal district judge deal with an issue which has... on which no relief has been sought in the state courts?
D. Shannon Smith: --Under the exhaustion requirement, the Federal District Courts should not deal with that issue, but if the petition presents along with that issue issues that have been presented to the state courts--
Speaker: Well, you are overlooking the possibility that if the state court had been asked to deal with the unexhausted claim, the claim that was never presented, there might be no case in the Federal court.
D. Shannon Smith: --That's a possibility.
Speaker: A very real possibility, isn't it?
D. Shannon Smith: And it is a possibility that we have to face. However, in this particular case, the two exhausted... or the two unexhausted claims, which were not related to the exhausted claims were improper jury instruction and the prosecution's comment on the defendant not taking the witness stand.
Speaker: Well, Mr. Smith, let me ask you the same question I asked your opponent, and that is, what do you make of Judge Morton's comment on Page 88 of the appendix that "Since Grounds 3 and 4 have not been presented to the state court there has been no exhaustion of remedies to these two. " "Thus this court will not consider them in the constitutional framework. " "However, in assessing the atmosphere of the cause taken as a whole, these item's may be referred to collaterally? "
D. Shannon Smith: Your Honor, I believe he is saying that because these two, the latter two claims have not been exhausted, that the court cannot grant relief on those two claims. However, in assessing the merits of the first two claims, and the State Court of Criminal Appeals of Tennessee also found merit in those claims, but found it harmless error, but the Federal court, in assessing those first two claims, had to look at the atmosphere of the trial as a whole, and that involved looking at the errors that were raised in the two unexhausted claims. However, I don't believe relief was granted on those two errors. It was granted on the first two claims which were exhausted, prosecutorial misconduct and the limitation of cross examination.
Speaker: But he did consider, certainly in his findings of fact and conclusions of law, a great deal of matter that would be subsumed under the unexhausted claims, did he not?
D. Shannon Smith: That's correct, but I believe he reviewed those and mentioned those to show their impact on the exhausted claims, making... substantiating his decision that this was not harmless error, but was prejudicial error.
Speaker: Well, without them, then he may not have granted relief.
D. Shannon Smith: Taking those... taking those two claims, the two exhausted claims on their own, isolated, perhaps not. I don't think he can isolate them. He has got to look at them in the context of the trial in order to find whether they are harmless error.
Speaker: That really means that they are inseparable, and that the whole thing should have been exhausted.
D. Shannon Smith: No, Your Honor, I don't believe that these claims are related.
Speaker: Well, that means we throw away Picard then.
D. Shannon Smith: I believe he has get to look at the exhausted claims in the context in which they occur, in order to decide whether it is harmless error or prejudicial error, and in looking at that context, he has to look at the whole trial, including those errors which were unexhausted, but nowhere does be say that he is granting relief. In fact, he states just the opposite, that he will not consider the unexhausted claims in the constitutional framework.
Speaker: But don't his findings and conclusions strike you a little bit like the lines that, "Julia, saying she'd never consent, consented? "
D. Shannon Smith: Your Honor, if I had to write the opinion, I think it would have been written in somewhat different language. I realize that it is difficult in reading the opinion to separate the claims.
Speaker: Sometimes busy District judges don't have time to write opinions as carefully as possible and your friend wants to give them more time by taking these cases away.
D. Shannon Smith: Your Honor, I think the court considered what was put in front of it by Lundy and by the Petitioner in this matter. I think it took the time, it reviewed the record that was placed in front of it. He states in his opinion, the District Court judge, that he reviewed the record, and I think he wrote the opinion, and I think basically he granted relief on the two exhausted claims. As I pointed out before, the Criminal Court of Appeals of Tennessee also found--
Speaker: Do we know, Mr. Smith, when the state courts considered and decided the two exhausted claims, did they consider them in the context of the gloss put on by the other two claims? Do we know that or not?
D. Shannon Smith: --In the opinion written by the Criminal Court of Appeals of Tennessee, it does not appear that they did. It appears that they were--
Speaker: Were you in the case then, Mr. Smith?
D. Shannon Smith: --No, Your Honor. It appears that the two exhausted claims were considered together by the Court of Criminal Appeals of Tennessee.
Speaker: But we don't know whether they considered them with the gloss of the other two?
D. Shannon Smith: I don't believe they did. Petitioner argues that if a petition for a writ of habeas corpus contains a mixture of exhausted and unexhausted claims, the entire petition must be dismissed without regard to the merits of the exhausted claims. The prisoner must then leave his exhausted claims, which may be meritorious, sitting on the District courthouse steps and go back to the state courts with his unexhausted claims,-- Now, the basis of the proposition put forth by Petitioner, at least in his brief filed in this Court, was comity. In the reply brief filed in this Court, he stated that the basis of this proposition was jurisdictional, that the District Court did not have jurisdiction to hear petitions which contained exhausted and unexhausted claims. I don't believe that this is the case. If the Court wishes to pursue that matter, this is the case in which it is to be raised. If it is the case, and if the Court feels so, I feel that both sides should be permitted to brief that jurisdictional issue. As to the argument based on comity, again, we are in agreement with the exhaustion requirement. 28 USC 2254, Subsection C, requires exhaustion of state remedies as to the question presented before the Court can grant a writ of habeas corpus. It does not require exhaustion of every question presented in a petition before a writ can be granted on the basis of an exhausted question contained in the petition. When the rule was codified in 1948, it was designed to recognize the law as it existed at that time. As it existed at that time, it referred to a question, a claim, individual. There are no cases since then from this Court which apply that requirement in the manner requested by the Petitioner. The Gooding case in 1972 and the Francisco case in 1974, in both those cases, this Court considered petitions which included mixed claims. In this case, the state of Tennessee has had a full opportunity to review the two exhausted claims. The policy served by the exhaustion requirement would not be furthered by requiring submission of the unexhausted claims to the state courts of Tennessee. The conflict is already there between the state court and the Federal court. The conflict is there on the two exhausted claims. Sending the case back to the state court would produce one of two results. Either the state court reaches the same result as the Federal court for a different reason, that being the unexhausted claim instead of an exhausted claim, or the state court goes through the futility of considering the two unexhausted claims, knowing full well that the District Court has already found... and the Circuit Court both have already found merit in the exhausted claims, and no matter what their ruling, the petition is going to be granted at some date in the future.
Speaker: Inescapably, you've got two different courts, two different jurisdictions dealing with the same general set of complaints.
D. Shannon Smith: Correct.
Speaker: Not in a hierarchy of review court, but in effect the District Court becomes a reviewing court--
D. Shannon Smith: That is correct.
Speaker: --of the Supreme Court of the state.
D. Shannon Smith: It is our position that neither result which may come about from sending this case back to the state court would promote comity, and in the meantime, Lundy remains in prison while he pursues his claims through the state court, claims in which he now has no interest, because he has had two claims which a District Court and a Circuit Court have found merit in. He sits in jail and pursues his claims. Comity does not demand the state court to go through the futile or the academic exercise of considering a case when the results of that case are already known. As to the state itself, it suffers a disadvantage in the passage of time because it makes retrial more difficult at the time the writ is finally granted and a retrial ordered. In his brief, the Petitioner states that the state courts would have applied a contemporaneous objection rule and refused to consider claims that could have been but were not presented on direct review of conviction. The two unexhausted claims in this case were not presented on direct review of his conviction.
Speaker: Were they preserved at the trial, objections, appropriate objections?
D. Shannon Smith: No.
Speaker: So there are two faults.
D. Shannon Smith: Correct, and the state court, I am sure, would see those two faults immediately upon considering it. Perhaps the District Court thought that through and realized the futility of sending those two unexhausted claims back to the state courts, to have them merely invoke a contemporaneous objection rule, meanwhile with the Petitioner sitting in jail.
Speaker: Well, I take it you do recognize that the District judge relied to some extent on the unexhausted matters, to some extent anyway.
D. Shannon Smith: He considered them.
Speaker: Yes.
D. Shannon Smith: He considered everything in front of him, and those--
Speaker: Well, and you said in answer to my question that perhaps without them he might not have granted relief, and if that is true, if he presents the whole ball of wax to the state court again, perhaps the state court would grant him relief now that they wouldn't have on his exhausted claims alone.
D. Shannon Smith: --The state court had the entire trial transcript in front of it.
Speaker: I know, but he wasn't making these particular claims.
D. Shannon Smith: He did not make those particular claims at that point.
Speaker: Which he did in the Federal court.
D. Shannon Smith: Okay. When I say that perhaps without these unexhausted claims the District Court judge would not have granted relief, I perhaps did not explain myself very well. In fact, I am quite sure I didn't. Had these--
Speaker: At least you didn't mean it.
D. Shannon Smith: --Had these... not now, I didn't. Had these unexhausted claims not been Presented to the District Court, and the District Court had only these two exhausted claims to consider, I believe that in reviewing the record, the District Court would have considered those two exhausted claims in the light of what else went on, including these two unexhausted claims, even if they weren't presented to it. That is where I think the unexhausted claims come in. It considers the exhausted claims in the light of the erroneous jury instruction, whether or not it was a claim, and in the light of the Attorney General's comment on the defendant's failure to testify. I hope I have made myself a little clearer. I feel that the effect of the adoption of Petitioner's view would be to overwhelm the state courts with consideration of after thought or frivolous claims, while the Federal court would be sitting on meritorious claims or else the meritorious claims would be sitting on the courthouse steps. Meanwhile, the prisoner remains--
Speaker: Well, isn't that a rather persuasive reason to require them to be put all in one bag and delivered to one court at one time?
D. Shannon Smith: --Your Honor, that would be a nice way to have it.
Speaker: Well, is there any logical reason why we shouldn't have that "nice way"?
D. Shannon Smith: We are dealing, and we have to remember, the majority of these petitions are filed pro se by men who are uneducated in the law, and possibly uneducated, period. The idea has been put forth that these uneducated men can use the law in order to orchestrate their claims so as to always have a couple sitting back here in case these get turned down, and they can keep coming back and coming back. This Court in 1976 adopted a form for use in these cases. It was the form that Lundy used in this case. It is a pre-printed form.
Speaker: When you say "this Court", you mean the District Court?
D. Shannon Smith: No, Your Honor, this Court, the Supreme Court.
Speaker: And in connection with the Rules of Civil Procedure.
D. Shannon Smith: Correct. It contains in that form instructions. Number 6 of that instruction reads, and I quote... this is in the Appendix at Page 66... "Your attention is directed to the fact that you must include all grounds for relief and all facts supporting such grounds for relief in the petition you file seeking relief from any judgment of conviction. " To an uneducated man, who has probably never heard of the exhaustion requirement, let alone mixed claims presented in a petition, who is trying to follow directions, when he sees that, he is going to put down every claim he can think of. He is not a man who has gone through trial with the benefit of legal experience, able to Dick out an error here and an error there. Sometimes it may be years after that somebody, a cellmate tells him about what happened at his trial that was error, or something--
Speaker: Right, or he read something in the newspaper.
D. Shannon Smith: --Yes, it comes to light to him.
Speaker: So the form is a trap.
D. Shannon Smith: If the Court--
Speaker: It doesn't say present every claim that you have already presented to a state court.
D. Shannon Smith: --No, it goes into a caution later in the form about having exhausted claims, but if the Court adopts the rule saying that mixed petitions must be dismissed, then this form is a trap. That is correct.
Speaker: You are aware, I am sure, that there are districts in which there are litigants of this category who have filed 50, 75, 100, or several hundred petitions seriatim over a period of time.
D. Shannon Smith: I am aware of that.
Speaker: Each one of which had to be separately dealt with by a Federal District judge.
D. Shannon Smith: I am aware. Your Honor, I think that Rule 9(B) and the Code Section 2244 give the District Courts ammunition to deal with something like that, and I don't feel that because some people have abused the writ, that we should take the man who has a meritorious claim and say, you've only got one shot at this, and you are going to sit in jail until you put everything through the state Courts, all these possible claims, before you can come to the Federal District Court. I feel that is denying him access to the courts. As to the restriction of cross examination of the complainant witness, that one error in itself I feel would call for granting of the writ. Everything else set aside, the right of cross examination is so vital, especially in a case like this, to the guarantee of a free trial, that the denial of that restriction is prejudicial error. This Court has found so in the Alford case. There is reference made in the Petitioner's brief to a jury-out hearing.
Speaker: And that claim was exhausted.
D. Shannon Smith: That claim was exhausted, and it was so admitted in the state's answer. There was reference to a jury-out hearing where some of these questions were posed to the complainant witness, but a jury... or a hearing... a cross examination outside the trier of the fact is of absolutely no value. The jury has a right to see that witness when she is asked that question and when she answers that question. Can she look them in the eye? Does she hesitate? Does she... they have a right to observe her demeanor. And that issue alone, I think, calls for the granting of the writ. In closing, the writ of habeas corpus is designed to give relief to those unjustly imprisoned. It is a fact. I stated before, that most of these petitioners file these pro se, and most petitioners are uneducated, at least in the law. The exhaustion rule as treated by the court is a law of timing. It is not a rule of jurisdiction. It is not and neither is it meant to he an obstacle to be put in the path of a prisoner who is imprisoned unjustly, and merely to say that because there are those who file frivolous claims, we must deal more harshly with those who have meritorious claims. I don't feel that is the correct way to interpret the law. There are two courts now that have found merit in Lundy's petition. We ask this Court to affirm the decision below. Thank you very much.
Warren E. Burger: Do you have anything further? There is only one minute remaining.
John C. Zimmermann: No, Your Honor.
Warren E. Burger: Thank you, gentlemen. The case is submitted.


Earl Warren: Number 404, Offutt Housing Company, a Corporation, versus County of Sarpy. Mr. Adams.
Dixon G. Adams: May it please the Court. It is the position of the respondents in this case, first, that Congress has consented to this tax. And that in so doing, Congress has waived any immunity that might result from exclusive jurisdiction. Secondly, this tax was not imposed upon any property or interest in property of the United States, and only the property of the Offutt Housing Company, the petitioner has been taxed. Now we rely upon a flat consent by Congress to this taxation in the -- the legislation under which this project was constructed. The list and I referred to page 132 of the record.
Hugo L. Black: Do you have any particular language of the consent on which you rely and printed in your brief the particular --
Dixon G. Adams: It is printed at page 24 in our brief, Mr. Justice, a particular language in Section 6 of the Act of August 5th, 1947, the second paragraph on page 24.
William O. Douglas: Section 6?
Dixon G. Adams: Section 6. Now the lease recites as follows. Witnesses, that under the authority of the Act of August 5th, 1947, 10 U.S.C. 1270 and the Act of August 8, 1949 Public Law 211 81st Congress, and goes on to lease 63 acres of bare land to the petitioner here for a consideration of $100 per year. Now the Wherry Act was not a leasing act. It was an amendment to the National Housing Act and it extended the provisions of the National Housing Act to this type of rental housing, but it gave no new authority to lease. The Congress looked to its prior authority which was contained in the Act of August 5th, 1947, which is set out on this first section which is set out on page 22 of the appendix in our brief. This was a general Military Leasing Act. Now the leases made under the authority of the 1947 Act were generally limited to a term of five years, and they were also cancelable in the event of a national emergency. And this, of course, would not work under the Wherry Act because it made profits impelled profits and made financing very difficult. So these provisions, these limitations were removed in the Wherry Act in Section 805 of the Wherry Act. But the Wherry Act itself in Section 805 which is setout at page 26 in the appendix to our brief recites, 'Whenever the Secretary of the Army, Navy, or Air Force determines that it is desirable to lease property within the meaning of the Act of August 5th, 1947 to effectuate the purposes of this title, the Secretary concerned is authorized to lease such property under the authority of said Act. And that goes on to say that the two limitations as to duration and as to cancellation in the event of a national emergency should not apply. The rest of the Act of August 5th, 1947 was not disturbed. And it is our contention that Section 6 was incorporated and that the consent of taxation applies to this property. Now this consent was the basis for decision in all of the cases decided by appellate courts both state and federal, which have passed upon the consent proposition in Wherry Act cases. The first such case was Meade Heights, Incorporated, versus State Tax Commission of Maryland decided by the Maryland Court of Appeals. There as here, the United States had exclusive jurisdiction over the land. The distinction in the Maryland case, Meade Heights case, was that the least involved purported or vested title in the lessee title to the improvements. Here, the lease purports to vest title to the improvements of the United States.
Harold Burton: Do you regard the tax here to be upon the lease to hold interest on the lessee's interest or upon the profit.
Dixon G. Adams: We have taxed it as personal property. We taxed --
Harold Burton: And you're not taxing a lease hold interest as such.
Dixon G. Adams: We don't contend that we've taxed the lease hold interest.
Speaker: You claim the United States doesn't own a property.
Dixon G. Adams: We claim that the petitioner owns a property and we will demonstrate that.
Speaker: Suppose that -- suppose we will decide that a property was owned by the Government, would you have a different conclusion there?
Dixon G. Adams: If this Court decided that the property was owned by the Government, I would say that the most we could tax would be the leasehold interest.
Speaker: Pardon me.
Dixon G. Adams: The most that we could tax would be the leasehold interest. But in the Meade Heights case, the Court --
Speaker: Well have you -- have you taxed the leasehold interest here?
Dixon G. Adams: We have not taxed -- we've taxed it as personal property.
Speaker: You've taxed only the improvements.
Dixon G. Adams: The buildings --
Speaker: -- the improvements --
Dixon G. Adams: -- and the other personal property which is admittedly the appliances.
Speaker: So those buildings are -- are the property of the Government who have no claim.
Dixon G. Adams: That's right. If they belong to the Government, but they don't belong to the Government unless four meters to control on the substance.
Speaker: I didn't understand your last sentence.
Dixon G. Adams: We -- we submit that these buildings do not belong to the Government, they belong to the petitioner. Now, the Court in the Meade Heights case --
Felix Frankfurter: Yes, may I ask you --
Dixon G. Adams: Yes, sir.
Felix Frankfurter: I found a little (Inaudible) in mere statement --
Dixon G. Adams: Surely.
Felix Frankfurter: -- that the petitioner carried to my view, that if the petitioner is Nebraska could not pass the leasehold, meeting the value of the lease as personal property which I take it Nebraska (Inaudible) leasehold personal property.
Dixon G. Adams: Well as I read Your Honor, the Nebraska court's opinion, a leasehold in Nebraska is taxable as personal property.
Felix Frankfurter: That's the way I read it.
Dixon G. Adams: That is the way --
Felix Frankfurter: Tell us what you say -- that you reject that?
Dixon G. Adams: No. I -- I don't reject that except that I say we taxed them as personal property. We don't want to make any playing that we tax the leaseholder, we tax them as improvements upon leased lands. But we think they belong to the petitioners so we don't think it makes any difference.
Felix Frankfurter: They, what is they?
Dixon G. Adams: The buildings.
Felix Frankfurter: The lease -- what?
Dixon G. Adams: The buildings.
Felix Frankfurter: But suppose -- I would like to have your view on this. Suppose without any of this -- without bothering by form and substance, suppose I were to conclude that -- that Offutt is a lessee in the ordinary conventional sense terms, is it your position if Nebraska could or couldn't show the Wherry Act taxed the words of that -- that Act --
Dixon G. Adams: I think --
Felix Frankfurter: -- leads to -- to an asset of the (Inaudible)
Dixon G. Adams: I'd like to answer it this way.If you should conclude that what the petitioner has is a leasehold interest, I still think we can tax it. Because Nebraska -- the Nebraska opinion at page 206 are being said that in Nebraska, a leasehold is classified as personal property.
Felix Frankfurter: Well that certainly -- the power to class -- the choice in classifying whether it's to be treated as realty or personal is for the State in which the property is and therefore it cannot turn on whether Nebraska regardless if the person would be real -- perhaps it's really in with this -- this interest whatever you label which Offutt Company has in this effort. It's something that Nebraska can tax in view of its relation to governmental immunities.
Dixon G. Adams: That's right and whether or not any interest of the Government is actually being taxed by -- I mean that is why --
Felix Frankfurter: Well, then why -- why are you -- why does it seem important to you for you to differentiate your ground of support from what one reads or at least (Inaudible) as I read the opinion of Nebraska Supreme Court.
Dixon G. Adams: I'm not trying to make any distinction. I merely go into that because the title here, the paper title to these things is -- is in the United States under the lease. So I do think it's important that the Court recognized it in substance, these buildings are the property.
Felix Frankfurter: Well, of course if somebody who has an interest to a property for a thousand years for practical purposes has dominion over.
Dixon G. Adams: That's right.
Felix Frankfurter: Is that all you mean? Or you mean something more esoteric to that?
Dixon G. Adams: No, I think that's what I mean.
Felix Frankfurter: All right. I can understand that too.
Speaker: Well I've always understood the billing build upon the land is part of the land. Is there something in the contract or circumstance of this case that severed these buildings on the land and make some chapters or make some -- some personal property?
Dixon G. Adams: There -- there's this. That the -- the evidence, the record will show that these buildings will never outlast the terms of the lease, that they're (Voice Overlap) --
Speaker: Does that make them personal property?
Dixon G. Adams: Is it what?
Speaker: Does that make them personal property?
Dixon G. Adams: We believe it makes, it makes some personal property, yes.
Speaker: I was to build upon the 99-year leases and outlive the lease but I always understood it's part of the land.
Dixon G. Adams: We -- we believe that what our Court was saying is that here, the entire beneficial interest to this property is in the lessee and that you can tax it as personal property.
Felix Frankfurter: Mr. Adams, is this interest is that the neutral enough words that this monetary value that belonged to the Offutt in relation to this building. Is that (Inaudible) with the consent of the United States?
Dixon G. Adams: Yes, under the lease.
Felix Frankfurter: Under the lease. So that he got something of value.
Dixon G. Adams: Oh yes, he has. He --
Felix Frankfurter: And therefore (Voice Overlap) is whatever label Nebraska depends on, whatever the common law you maybe as to what a leasehold is. Whether that something in which you can get money tomorrow on the air force or whatever (Inaudible) whether that's taxable thing. Does it make any difference what (Inaudible) you based on it?
Dixon G. Adams: We don't think so.
Felix Frankfurter: Because I dont understand --
Dixon G. Adams: We think they have something (Voice Overlap) of value as demonstrated by the fact. The mortgage that they have for almost $5 million. Now the Meade Heights case found that there was consent by Congress to this taxation. And just in passing, I'd like to say that counsel said that he was happy to see that the Solicitor General is still on his side, but I note from the opinion of the Meade Heights case that the Solicitor General who I believe is the same gentlemen was at that time the Chief Justice of the Maryland Court of Appeals and he found that there was consent. He now urges the other way. The next --
Felix Frankfurter: This is official now.
Dixon G. Adams: The next Wherry Act case to which I would like to refer is the opinion of the Third Circuit Court of Appeals in Fort Dix Apartments Corporation against Borough of Wrightstown. Again, land where the United States had exclusive jurisdiction and that case involved both types of leases, one, which vested the title to the improvements in the lessee and another which purported to vest title in United States. And the New Jersey Court in a decision which one judge said and held that they were subject to taxation by New Jersey. Conley Housing Corporation against Coleman, decided by the Supreme Court of Georgia, held to the same effect that there was a consent here, and there the titled was vested in the lessee. Dayton Development Fort Hamilton Corporation against Boylan, the New York Supreme Court case held in the same effect. There is an error in the citation of that in the brief of amicus curiae, the correct citation is 133 New York Supp.2d, page 831 rather than 820.
Felix Frankfurter: (Inaudible)
Dixon G. Adams: The brief in the amicus for Grant County or Washington. The change should be in the page number, it should be 831.
Felix Frankfurter: What page is -- what page is that? (Inaudible) -- all right what is the case --
Dixon G. Adams: The correct citation is Dayton Development Fort Hamilton Corporation.
Hugo L. Black: It should be 831.
Dixon G. Adams: It should be 831.
Felix Frankfurter: 831?
Dixon G. Adams: Page 8 (Voice Overlap).
Felix Frankfurter: That's all right.
Speaker: (Inaudible)
Felix Frankfurter: Thank you very much.
Dixon G. Adams: Now those are the -- and of course this -- this case including this case in the Supreme Court of Nebraska's opinion and the only cases which have passed upon this question of consent and they only have found that the Congress consented to this taxation. There is a Virginia decision cited in the reply brief of the petitioner but there the Court didn't pass upon the question of consent. They merely said that this is a leasehold interest and Virginia doesn't have a statute which will reach the interest. So they didn't pass on the question of consent. Now the petitioner argues that Section 6 of the 1947 Act is not applicable to leases made under the 1949 Act, the Wherry Act, and that the very reference in the Wherry Act to the 1947 Act isn't sufficient. But Congress must have reviewed the 1947 Act when they removed these two limitations as to length of lease and the cancellation in the event of the national emergency and they could have said that Section 6 is not to apply but they didn't -- so we submit that if it did. In another way, there is an indication here that Section 6 of the 1947 Act applies to leases made under the Wherry Act. The Court will note that Section 6 contains two sentences. The first is the lessee's interest made or created pursuant to the provisions of this Act shall be made subject to state or local taxation, that's the first sentence. The second sentence says any lease of property authorized under the provisions of this Act shall contain a provision that if and to the extent that such property is made taxable by state and local governments by Act of Congress. In such event, terms of such lease shall be renegotiated. Those two sentences are Section 6 of the 1947 Act. Then looking at the lease involved at page 137 of the record, paragraph 8 of the lease, which deals with taxes, the Court will note that there are also two sentences in that paragraph for the lease. The first one provides that the lessee shall pay to the proper authority when as the same become due and payable, all taxes, assessments and similar charges which at anytime during the term of this lease maybe taxed, assessed or imposed upon the Government or upon the lessee with respect to or upon the lease premises. The second sentence provides in the event any taxes, assessments or similar charges are imposed with the consent of the Congress of the United States upon the property owned by the Government and included in this lease. As opposed to the leasehold interest of the lessee, therein, this lease shall be renegotiated. So we submit that the Government itself and the Government prepared this lease recognized that Section 6 would apply to leases under the Wherry Act. And so they complied with the statutory mandate and included that provision in their lease and they cannot now be heard to say that Section 6 doesn't apply to Wherry Act leases.
Felix Frankfurter: What are the petitions then to that application of constructive (Inaudible)?
Dixon G. Adams: Our construction of that paragraph --
Felix Frankfurter: Not yours but the petitioner (Inaudible)
Dixon G. Adams: Well I -- I think they mean that -- that there's -- if there's anything here in this -- I don't think they've answered this question -- my contention there. It never answered that.
Felix Frankfurter: They -- they renegotiated to cover both the taxation of what (Inaudible) --
Dixon G. Adams: I -- I think their position to be that they say well Congress has never consented to the taxation of anything but if it should then this lease shall be renegotiated. But do we submit that that can't be, what would be -- there's $100 a year rental to the Government, what would be the sense of renegotiating that? The lease -- under this provision, the lease they could renegotiate would be half of it or $50 a year. So -- so it doesn't make sense. Now our construction of Section 6 is this. That the first sentence refers to the property owned by the lessee and here that's the buildings and the other personal property. And the second sentence in Section 6 refers to the land, and, of course, we haven't taxed the land, but the land clearly belongs to the Government. Now should the Government consent to the taxation of the land, this lease would be renegotiated. As to the improvements, there already have been consents. The Maryland court said, as we read this provision it's called for renegotiation only in the event that Congress should consent to taxation of the Government's interest in addition to that of the lessee, which is recognized as fully taxable as of the date of execution.
Felix Frankfurter: But that is going to happen to the Maryland case that -- I don't mean to imply but the failure of the Government to seek review and to determine the legal question but I'm curious to know what did happen to that decision.
Dixon G. Adams: The Government intervened.
Felix Frankfurter: What happened after the Court of Appeals of Maryland?
Dixon G. Adams: It was not appealed.
Felix Frankfurter: What's the date of that case?
Dixon G. Adams: March 13th, 1953. I understand from the petitioner's brief that they were seeking certiorari in the Fort Dix case but that's where my information functions.
Felix Frankfurter: The Maryland case had no (Inaudible)
Dixon G. Adams: No.
Felix Frankfurter: (Inaudible)
Dixon G. Adams: That's right.
Speaker: How -- how many years (Inaudible)
Dixon G. Adams: I -- I think the lease involved was the same with the exception of -- in the Maryland lease, the lease purported or vested title to the improvements in the lessee. And here they change the form of lease to --
Speaker: That's Section 11 of this case.
Dixon G. Adams: That's right.
Speaker: And that's the difference between the two cases.
Dixon G. Adams: That's right.
Speaker: I suppose you're going to comment to Section 11 later.
Dixon G. Adams: Yes, sir. We plan to comment on that quite extensively.
Speaker: (Inaudible)
Dixon G. Adams: Yes. Now, so that's where we -- we rely for express consent. But we -- we say that in two ways, Congress has consented to this tax by implication. First of all, there is Section 807 of the Wherry Act which is setout on page 26 of the appendix to our brief. And which provides as follows. Nothing in this title shall be construed to exempt any real property acquired and held by the Commissioner under this title from taxation by any state or political subdivision thereof to the same extent according to its value as other real property is taxed. Now we don't say that that is a direct consent but we do say that the inclusion of this section by Congress would appear to evidence and intent or an indication that Congress intended that this property should be treated the same as any other property insured by on which the Federal Housing Commission insured the mortgage, it shouldn't be put on any other basis. That's the only construction of it that we can make. This was the --
Hugo L. Black: What do you say you think that section means other than (Inaudible)
Dixon G. Adams: We -- we think it was -- it was an indication that Congress intended that this property should be treated the same as any other property on which there was an FHA insured mortgage. Now the District Court in New Jersey decided the case for the demurral there the municipality under this section. And the District Court there said that, certainly, a private corporation like the petitioner shouldn't be preferred to the Commissioner. But we don't say that this is a direct consent of taxation, but we say it's an implied consent to taxation. Now, in the third way, we say there's consent by implication. This is a lease for 75 years to a private corporation. And it was authorized by Congress and Congress in Section 805 of the Wherry Act set no term, no length of time on this lease, presumably this could be a lease for 150 or 200 years. That the same section also gave the secretaries power to sell the property. And we believe that such a statute as that impliedly waves exclusive jurisdiction and impliedly consents to this tax. And as authority for that, we've cited the case of S.R.A. versus Minnesota decided by this Court which involved property over which the United States had exclusive jurisdiction. It was sold as authorized by Congress under an executory contract of sale. A legal title remaining in the United States. And the S.R.A. Incorporated there contended that there had been no waiver of exclusive jurisdiction and you couldn't tax anything over which the United States had exclusive jurisdiction, but the Court there announced what it called the rule of necessity and said that certainly the unrestricted transfer of this property waived any -- any such claim that the United States still had exclusive jurisdiction. And we believe that a -- a lease of this type for 75 years to a private profit seeking corporation brings at somewhere close to the rule of this Court as announced in S.R.A. against Minnesota.
Speaker: The S.R.A. case (Inaudible)
Dixon G. Adams: It was an -- there had been no date.
Speaker: The brief would say --
Dixon G. Adams: It was an executory contract sale -- initial sale. Now the petitioner relies quite strongly upon Surplus Trading versus Cook. But we think it's distinguishable, there was no lease involved and there was absolutely no question of consent by Congress. Now as to who owns the buildings, the petitioner here confuses title the abstract concept title with beneficial ownership and here the entire beneficial ownership is in the petitioner. Clause 11 of the lease purports to vest title in the United States, that's the clause that -- that's on page 138. The petitioner suggests in its brief that -- that the army used the old form and the Air Force didn't but the Moses Lake case indicates that the Air Force did the same thing when they first started making leases under the Wherry Act, they vested title to the improvements in the lessee. And when it appeared that these units were going to be assessed, they changed the form of the lease and read -- in Moses Lake they actually presume to modify the lease retroactively to vest title to the improvements of the Government. But that's the form, that's the paper. The substance is this. And that, first of all, it was never the intention of Congress that title to this building should be in the United States and any reading of the debates in Congress for instance our brief at page 16 will indicate that Congress understood that title to these things as to be on the lessees. Mr. Manoli said it's a strictly private enterprise building which probably construction is moved out and the whole matter is turned over to private enterprise. And Mr. Johnson said, I'm reading down toward the bottom. In other words we propose to have contractors build houses on military installations and pay the rental allowance provided by law for service personnel in form of rent to the contractor so that in 30 years, the house will be paid out. When the installments have been paid out to the contractors, the house and land become the property of the Government not before but after and other indications in the debates in the committee are the same. Senator Capehart said, there possibly should be a provision that if the base abandoned and the houses are there without military tenants, the owners would be permitted to rent them to civilians or sell them. That's at page 41 of the Senate hearings. Now, the building is here have a usual life of less than the term of the lease. And I would like to read the testimony on that subject at page 108 of the record. This is the president of the petitioner corporation testifying. Mr. Wilson question - "How long have you been engaged in the building and rental of houses in that business?" Answer - "42 years."
Hugo L. Black: What -- what page is that?
Dixon G. Adams: 108, Your Honor.
Dixon G. Adams: About the --
Hugo L. Black: Yes, I see it.
Dixon G. Adams: Question - "Now from your experience then, with the construction of houses, and the building and renting of houses, what would be the expectancy of these units that were constructed at off the field." Answer - "We are thinking rather go along with the F.H.A. and the mortgage folks, we put a 35-year life on these buildings." And on page 113, the petitioner's counsel tried to qualify that, and he said. Question - "You testified that the life of these buildings were estimated to be 35 years did you not?" Answer - "I did." Based upon your experience these buildings with proper maintenance when repaired this type of construction for these buildings be maintained and referred to have a longevity in excess of the term of the lease. Answer - "Yes they could." Question - "Would you deem it profitable throughout the housing company to maintain them and refer them so that their longevity will exceed the term of the lease?" Answer - "Do you mean the term of the 75-year lease?" Question - "Yes sir." Answer - "I have always considered that any building that was 75 years old was not worth maintaining any prior than that. So that's all the testimony that 's in this record on useful life of these buildings, and we submit that at the end of this lease, there won't be anything left for the Government to inherit." Now,
Hugo L. Black: When the Court signed (Inaudible)?
Dixon G. Adams: The Nebraska Supreme Court?
Hugo L. Black: Yes.
Dixon G. Adams: But if --
Hugo L. Black: What was that -- was there any finding to support the conclusion we read on that.
Dixon G. Adams: There's a finding in the Nebraska Supreme Court's opinion, yes sir.
Speaker: What do you mean by the -- it was a lower court finding?
Dixon G. Adams: I don't believe there's a lower court finding, is there? I'll have that checked to see if we could (Inaudible). Now the petitioner has here a 75-year lease for which it pays $100 a year. It has the right to possession for 75 years and the right to all profits out of this project for 75 years. The petitioner mortgage of its interest which it now claimed a worth little or nothing to manufacturer's trust company of New York for almost $5 million. And in this mortgage which is in the record at page 170, it mortgaged three things. It mortgages leasehold interest in the land, it mortgaged of the buildings and improvements, and it mortgaged its other personal property on the lease premises. It also worn to its title to these things in the mortgage, that's on record 171.
Harold Burton: Record what?
Dixon G. Adams: 171. Toward the bottom of the page it says the intention being to convey hereby an absolute title and be simple including all rights homestead and other rights and interest as aforesaid. Now, at another point in the mortgage, record 176, it's provided that all awards of damages in connection with any condemnation for public use of or injury to any of the said property are hereby signed and shall be paid to the mortgagee. So if the property is condemned, the manufacturers trust company gets the award.
Hugo L. Black: What does the Government get -- what beneficial interest does it retain?
Dixon G. Adams: We say it retained none. The petitioner argues that its these restrictions on the lease in the form of right to designate subtenants with certain exceptions. The right to control rentals, things of that nature.
Hugo L. Black: That's a kind of a restrictive company, isn't it?
Dixon G. Adams: It's -- it's --
Hugo L. Black: Like a restrictive company underneath?
Dixon G. Adams: It's a restriction of a type but we don't think it detracts it in the lease from the value of the petitioner's interest here. As a matter of fact, it might make it more valuable because the Government is practically guaranteeing 100% occupancy of these buildings. Now if the Government fails to designate a tenant within 30 days under paragraph 3 of this lease, then the petitioner can rent to anybody, any civilian. There's no military connection.
Hugo L. Black: What are the terms and conditions on which the Government can get property there?
Dixon G. Adams: We don't find any that they can get it back for 75 years.
Hugo L. Black: None at all.
Dixon G. Adams: They can condemn it.
Hugo L. Black: Condemn it.
Dixon G. Adams: Yes.
Hugo L. Black: But they have to pay for it.
Dixon G. Adams: But they'd have to pay for it. And the prior -- the condemnation award would be split between the mortgagee and the lessee here based upon their respect.
Hugo L. Black: Those are the full value of the property.
Dixon G. Adams: Full value as we read the -- possibly not the land but certainly the buildings.
Hugo L. Black: Is that the only way the Government can get it back?
Dixon G. Adams: As we read the lease.
Earl Warren: In the event this is rather -- the -- some of these buildings are rented to civilians. It must -- do they get the benefits of the low rent too?
Dixon G. Adams: I believe that the rent would be the same. There's a provision in the lease that after the F.H.A. mortgage is paid off from then on the rents are to be agreed upon between the Government and the housing company, but in any event they can't be less than they were before. But, I think that the civilian tenants would probably receive the same rentals. I don't know if there's any indication one way or another.
Hugo L. Black: What are the terms under which civilians can rent the property.
Dixon G. Adams: It's in paragraph 3 of the lease at page 134. Generally, if the commanding officer fails to designate military or civilian personnel of the Army, Navy, Marine Corps or Air Force to whom the unit or units shall be leased within 30 days after receipt of written notice from the lessee that such unit or units are available for lease then they can go ahead -- they can go ahead and rent it to civilians.
Earl Warren: What would happen if they close camp as they do in so many parts of the -- of the country, would it be open to unrestricted rentals then on the part of the civilians?
Dixon G. Adams: Yes. It could be rented to someone with no military connection.
Earl Warren: Yes and -- would there -- would there be fixed rentals then or would they be freed from those -- those low rentals.
Dixon G. Adams: I'm not sure that the record reflects that one way or another. There's no provision in the lease that requires. I don't think that the rentals would be the same.
Speaker: There's a guarantee of the mortgage does it not?
Dixon G. Adams: The F.H.A., Federal Housing Administration insured the mortgage but of course the petitioner pays the same premium for that, I would pay mortgage on my house.
Hugo L. Black: Could you do that in accordance with this general practice of insurance mortgages on property?
Dixon G. Adams: Well the specific purpose of the Wherry Act, Your Honor, was to extend these mortgage insurance provisions to this type of rental houses, but the premium --
Hugo L. Black: Extend the general provision --
Dixon G. Adams: Of the National Housing Act to military rental houses. Prior to this time apparently, it had been difficult or impossible for F.H.A. to insure this type of loan because there was too much risk involved. The Congress --
Speaker: Wasn't it -- wasn't it more than an extend? What was the language of the Act in directing or I what is the direction?
Dixon G. Adams: Well the Wherry Act itself -- it was an authorization to extend the --
Speaker: Well there's -- there's a difference between an authorization and a correction. It was the -- it was merely to give the Federal Housing Administration the power to insure?
Dixon G. Adams: Yes.
Speaker: Or was it a direction that they should ensure when asked to do so by the (Inaudible)
Dixon G. Adams: It extend -- it gave them the authority to it.
Speaker: Nothing but authority.
Dixon G. Adams: Well, on a certification by the Secretary of the Department concerned that there was no -- and that this was a permanent base and that there was no indication of that --
Speaker: No indication.
Dixon G. Adams: -- activities would be curtailed, I guess.
Speaker: And -- and they had that certification of course.
Dixon G. Adams: They did.
Speaker: Under those circumstances, they were compelled to insure?
Dixon G. Adams: I don't want to say one way or another whether they were compelled to but at least they did. They did insure the mortgage.
Speaker: Now (Inaudible) whether or not the Government has a responsibility over and above the parties of the land or whether they weren't making sure that the money that was put into it would in turn against the issue.
Dixon G. Adams: I don't think that the Federal Housing Administration acts in any different capacity here than it does on any -- any other loan. Another indication of ownership here is the fact that the hazard insurance, the proceeds of the hazard of insurance are payable to the lessee and the security holder. That's also provided by the lease and the mortgage. In other words if the building is burned down, the lessee and the security holder can split up the insurance money and the Government gets nothing. So that we think that's another indication that the petitioner actually owns the buildings and improvements. The cases we have examined have held that their title in the United States does not prevent taxation of the whole value of property to the equitable owner. The petitioner relies upon the United States against Allegheny County but we distinguish that case which is commonly called the master case. And that here we're not trying to tax any government property. There, Pennsylvania was trying to tax the property of the Government by calling it the property of master, at least that's what the Court said. But here, the Government owns no property and these things that they rely on as government interest in this thing are really not government interest at all. The Court in the master case said that we're a private interest in government property are so preponderant that all the -- the Government has the naked title then the whole value is taxable to the equitable owner. And the conditional sales cases like S.R.A. against Minnesota and New Brunswick against United States were to the same effect, that the bare legal title in the Government doesn't prevent the taxation of the property to its equitable owner.
Hugo L. Black: Is there any difference in the way the Government handles this and the assistance it rendered under the Housing Act outside the fact that it is here, put it in the form of a lease of $50 to $100 a year.
Dixon G. Adams: I don't quite understand your question.
Hugo L. Black: The General Housing Act provides a system to ensure mortgage and so forth. What differences in the way the Government handled this one, this place, the way it handled the other outside just one on the lease.
Dixon G. Adams: I don't think there's any difference outside the lease.
Hugo L. Black: Does the Government under its General Housing Act provides for the kind of rental that must be accorded people who rent the houses? Does it reserve that right?
Dixon G. Adams: No. No, there is a distinction. They don't reserve the right normally under an F.H.A. mortgage to determine the rental.
Hugo L. Black: So they formally did, have they stopped there?
Dixon G. Adams: Well, I believe so, but they do -- they do prescribe the rentals here. But we -- we think this, that these rentals while, of course, Congress hope to hold them down are necessarily based upon what the amortize cost of the project is. In other words, the rentals had to be enough to amortize the -- the loan and -- and allow a reasonable profit to this lessee or he never would enter into the transaction. So that's -- that's what the rentals are based upon. In concluding my part of this argument and I will turn part of it over to Mr. Entenman, my colleague here. I just like to say that the -- the courts have repeatedly held that the states could reserve the rights for instance to execute civil and criminal process upon these -- these reservations. To the end that the reservation wouldn't become a refuge or sanctuary for completely private personal property that had no other basis for immunity other than its mere location upon the land. And we believe that this is specially true, this place shouldn't be permitted to become a sanctuary for private property and this is specially true where Congress has spoken as clearly and it's expressly as it has here that this property should in any event be subject to taxation.
Earl Warren: We'll recess now.