William H. Rehnquist: We'll hear argument next in Number 88-854, Spallone v. United States; 88-856, Chema against the United States; 88-870, Longo and Fagan against the United States. Mr. Harmon, you may proceed whenever you're ready.
James H. Harmon: Mr. Chief Justice, and may it please the Court: There, there is no question but in this case of the federal government has the power to squash the City of Yonkers. When our federal courts act, they act directly, not through fronts and not through proxies. They accept the responsibility in so doing, the exercise of their own power. No federal court, not even in the civil rights movements of the 1960s has ever found the need to ask and direct a legislator to cast his vote in favor of enactment of legislation at the price of his own conscience and the cost of his freedom. That, I submit, is just not the way that we do things. The Solicitor General argues for a government in which the judiciary is supreme, a judiciary which drafts laws, directs their enactsment... enactment, interprets them, and presumably holds people accountable for their violation. It is just this type of concentration of power that the... that the Constitution avoids in many different ways.
Byron R. White: You think the... you're arguing for legislative immunity, local legislative immunity?
James H. Harmon: As well as First Amendment, Your Honor, and the discretion inherent in the Court to fashion a constitutional remedy and the limitations on the Court in fashioning such a remedy.
Byron R. White: Do you think you need all of those?
James H. Harmon: We think the Court could--
Byron R. White: What about just the immunity question?
James H. Harmon: --We think the Court could decide this on that basis, yes, Your Honor.
Byron R. White: Well, is that constitutionally based?
James H. Harmon: No, it is not, Your Honor.
Byron R. White: So, it is just a construction of some other federal statute, 1983?
James H. Harmon: It's... it's based upon federal common law as--
Byron R. White: Which some statute wasn't intended to interfere with?
James H. Harmon: --That is correct, Your Honor.
Sandra Day O'Connor: So, Congress could deprive the legislators of their common-law immunity?
James H. Harmon: That is not correct, Your Honor. It is a question of federal common law, and we think that is the whole--
Sandra Day O'Connor: Well, if that is all it is, then can Congress change that?
James H. Harmon: --It, it, it cannot, Your Honor. It would be our position that for Congress to do that would interfere with the rights of the states, guaranteed through the guarantee clause to establish--
Sandra Day O'Connor: So, you are relying on a constitutional basis, not merely a common law immunity?
James H. Harmon: --Yes, Your Honor.
Sandra Day O'Connor: You are relying on the guarantee clause?
James H. Harmon: Yes, Your Honor, although the cases, both Tenney and Lake Tahoe Estates, do not... explain in any detail the extent to which Congress could interfere with the operation of legislative immunity. We submit that if the Congress would take action once the state has selected its particular form of republican government, that this would interfere with the federal government's obligation--
William H. Rehnquist: Well, why do you need to get into that rather difficult question in this case, Mr. Harmon, if, if your argument is basically legislative immunity? Congress has not acted, at least that is your position I take it, to, to remove legislative immunity. Why don't you settle for that rather than trying to raise the hypothetical question of what happens if Congress did try?
James H. Harmon: --Well, I think I as best I could was answering the question about whether or not Congress could intervene, and in, in answering the question I was giving our position in the event that Congress had... has intervened. But, but, but we do believe that this issue can be resolved simply by extending the principle in Lake Tahoe Estates to local legislators. The whole purpose behind legislative immunity was to protect our form of representative government. That was the entire idea behind legislative immunity and this Court has... has accepted the principle as applied to state legislators and, in the Lake Tahoe Estates case, to those regional legislators. And as Justice Marshall said in his dissent in that particular case, there really was no particular argument that could be advanced to deny its application to local legislators in this, in this particular case. However, Your Honor, we also deal in this case not only with the issue of legislative immunity, but with the Court's power and the extent of the Court's power to remedy a constitutional violation, and we would say also the obligation of the Court to remedy a constitutional violation. We'd suggest to the Court that there... that there is an underlying principle underlying our First Amendment argument, the use of the contempt power, as well as the Court's obligation to remedy a constitutional violation. And it would be, this we would suggest, that it is the obligation of the courts to provide a measured exercise of their power in remedying a constitutional violation, taking into account the rights of those who are not before the court. And we respectfully suggest, Your Honor, that in this particular case, this Court used the most intrusive means when it came to the personal rights of the councilmen and when it came to their legislative immunity.
Sandra Day O'Connor: Do you think that legislators, if they enjoy immunity, can waive it?
James H. Harmon: The government has made no effort to argue that in its, in its brief.
Sandra Day O'Connor: Well, I asked you whether you thought it could be waived if there is such a privilege?
James H. Harmon: The answer is we do not believe that an individual legislator can waive the privilege. We do not believe that the legislature itself can waive the privilege, because it is designed to protect our form of government. It is designed to protect our representative form of government. And it cannot be waived by an individual and it cannot be waived by the institution of the legislature, because in the final analysis, it is there to protect the right of the people to select those who they would have to represent them.
Sandra Day O'Connor: What is the effect, then, of the city council approving the consent decree?
James H. Harmon: It has no effect whatsoever on the rights and immunities of any of the individual councilmen. It is our position, however, that the city is bound by whatever commitments it made in the, in the consent decree. That the individual legislators, nonetheless, still retain their First Amendment rights and their vote, and they continue to be protected by legislative immunity.
Sandra Day O'Connor: Does the city yet have the 800 housing units and a zoning plan to accommodate them? Has it ever been done?
James H. Harmon: No, there have been no developers even selected yet for the 800 affordable housing units, Your Honor.
Sandra Day O'Connor: And how's the Court to go about this? I mean, this has been a long time brewing.
James H. Harmon: Well, I, I, I'd suggest to you that we are... I am not standing up here as any kind of a Monday morning quarterback. These councilmen were held accountable through the use of the contempt power for refusing to enact an ordinance which had been drafted by experts and adopted, and, and adopted by the district court. And it was a zoning ordinance, it was an overlay, a zoning overlay which affected all of the zoning in, in the City of Yonkers. It was a major piece of legislation.
Sandra Day O'Connor: Well, can the district court just impose that on the city?
James H. Harmon: In, in, in fact, and I--
Sandra Day O'Connor: Yes or no?
James H. Harmon: --Yes.
Sandra Day O'Connor: And that is not more intrusive?
James H. Harmon: It can do it to this extent, Your Honor. It can do what it did already once in this case, which I just became aware of Friday and which I advised Mr. Starr a short while ago. It can enter an order to the effect that the zoning in Yonkers is deemed to permit a certain type of housing in a, in a certain part of Yonkers. Although the briefs don't reflect this, and this is again not a question of second guessing the district court, on March 20, 1987 with respect to public housing, the district court in fact did enter an order deeming that Yonkers zoning permitted the construction of this public housing. And just last Thursday, the government attorneys appeared before Judge Sand and asked him to do the very same thing with respect to five additional sites. Now, in doing that, Your Honor, it does not implicate the First Amendment rights of, of the councilmen to vote. It does not affect--
Sandra Day O'Connor: xxx immunity?
James H. Harmon: --Nor immunity, Your Honor. Nor immunity. There is no... the court in this case lost sight of what really was important here, and what really was important, as Your Honor has, has pointed out, is to figure out a way and to get moving with respect to building housing in some fashion. Turning toward the councilmen, using means that only left them as targets at the end of, of the line, we submit missed the point and, and, and, and was a case of using intrusive means that did not point towards the accomplishment of the objective.
Byron R. White: What about raising the money? Do you think the court could say I deem that the council has passed a tax measure, or a bond issue, has approved a bond issue for this purpose--
James H. Harmon: Well, in, in this particular case--
Byron R. White: --and then order the executive branch to carry it out?
James H. Harmon: --In, in this particular case, Your Honor, the, the question of cost has not yet arisen. It hasn't gotten to that particular point.
Sandra Day O'Connor: But it will. How's the court going to do it?
James H. Harmon: It is... there is a difference between directing an executive act, in our opinion, and, and directing an act which is purely legislative. It is one thing to levy, to levy a tax, which we believe would be a legislative act and something that a court simply could not do. That... that... that's not to say that in this case, or even... or even in this one, Your Honor, that a court would be powerless to act. We think that, that courts do not have only the authority which is not barred to them, but there are limits on the court's authority, and the courts must act within those particular limits.
Sandra Day O'Connor: How is the court going to effectively produce the money to get the houses built, the housing built?
James H. Harmon: In, in this particular case there is a combination of market incentives encouraging developers to come in and granting tax abatements. That is the method that has been chosen in, in this particular case.
William H. Rehnquist: Well, I suppose there is some... there are some things that maybe a court just cannot bring about.
James H. Harmon: We think that the court's power is limited by the constitutional grant of its power, and it is the responsibility of courts to, to say what the law is, and to levy a tax is not an exercise of, of the judicial power. There may be other ways, though.
Anthony M. Kennedy: Well, if, if, if you stipulate that the city has violated the Constitution, would you say that the court can use all appropriate means to require the city to remedy that violation?
James H. Harmon: All appropriate means within its power, taking into account the rights of persons who are not before the court.
Anthony M. Kennedy: All right. And if all of the expertise and the ability to raise funds and so forth resides within the city council, I take it an ultimate and permitted and appropriate sanction would be a monetary fine against the City of New York for failure to act... or against the... the City of Yonkers for failure to act?
James H. Harmon: We, we, we would suggest that the contempt power be a, a matter of last resort, and that there would be some--
Anthony M. Kennedy: Fut that that would be appropriate, monetary fine, as was imposed in this case against the city?
James H. Harmon: --Yes, Your Honor.
Anthony M. Kennedy: Then, if you-- --But not against the individual?
James H. Harmon: But not against the individual, right.
Anthony M. Kennedy: Then what you are really arguing, if you have recalcitrant councilmen who, let us assume, it may not be this case, for their own political advantage, refuse to comply with the court order, you are saying that there is a right in the city councilmen to force the city to go bankrupt?
James H. Harmon: There is a, a right in councilmen to exercise their judgment, to take into account the wishes of their constituents, to take into account their own... their own conscience--
Anthony M. Kennedy: And to force the city to go bankrupt if that is what they conclude?
James H. Harmon: --Yes, and to be held accountable for that at the ballot box, Your Honor.
Antonin Scalia: I have some trouble with looking to the wishes of the constituents, because it seems to me the basic issue in the case is whether the court can order something the constituents don't want. I think you assume that if it followed the appropriate procedure it could order this housing to be built, notwithstanding the fact that constituents really don't want it.
James H. Harmon: That is--
Antonin Scalia: How can we use the constituents as the test of what can be permitted?
James H. Harmon: --Well, we don't suggest for, for a minute that there is a question of majoritarianism here, that the majority... that the majority should rule, Your Honor. We do suggest, however, that the wishes of constituents is simply one of the things that our representative form of government permits elected officials and legislators to take into account--
Antonin Scalia: Even when it violates a, a superior federal law. If there is a federal statute or a federal requirement that these houses be built, how does... how do the local majority of the constituents' views come into the play at all?
James H. Harmon: --Well, we respectfully suggest that that is precisely the problem that has been posed here by the district court, that this Court is being put in the position of deciding which, which rights should be superior.
John Paul Stevens: But aren't you... don't you start here from the premise that there is a federal violation that the court has the power by appropriate means to correct?
James H. Harmon: Yes, Your Honor.
John Paul Stevens: Notwithstanding the fact that the constituents are very much opposed to it.
James H. Harmon: Yes, Your Honor.
John Paul Stevens: So don't... aren't the views of the constituents necessarily subordinate to the court's power to fashion an appropriate remedy? And the only question is whether this is an appropriate remedy.
James H. Harmon: Well, they may... they may be subordinate, Your Honor, but we, as we pointed out in our brief, we... we'd suggest that the views of the constituents, since this was a class action, were views that should have been brought to the attention of the district court. There was no notice here, there was no hearing, there was no fairness hearing before the court accepted this particular form of consent decree. Yes, in the final analysis the court could have disregarded, and had every right to, to disregard the wishes of anybody that might have appeared before it or, or, or any of the people that lived in Yonkers.
Antonin Scalia: Mr. Harmon, I have some, some misgivings about... extending the speech or debate clause in the federal Constitution, not only to state legislatures but even to state, city councils. What if the state itself doesn't think that, that city councils by and large are responsible enough that they should be given the full protection of the speech or debate clause, which, after all, prevents even a libel action against, you know, the most terrible libels uttered in, in the course of the debates. You have a state who says you know, we know our city councilmen and by and large they are not a responsible enough lot that we are going to... we, we are going to immunize them to go about slandering the whole world like that. You say they can't do that, the federal Constitution protects these city councils against libel action, is that what you are saying?
James H. Harmon: It protects the state government's choice of... choice of form of government. And in the case of New York, there is a provision similar in the New York State Constitution to the... to the speech or debate clause. In fact--
Antonin Scalia: No, but you are arguing on the base of federal Constitution here. Let's assume New York State doesn't have that, in fact let's assume the state legislature enacts a statute allowing members of city councils to be sued for libel. You would say that is an unconstitutional statute, that the majesty of the federal Constitution prevents city councilmen from libel actions.
James H. Harmon: --No, Your Honor, we would--
Antonin Scalia: Well, then you are not arguing the speech or debate clause. Now, maybe there is some other principle in the Constitution that says that courts can enact legislation that isn't the speech or debate clause.
James H. Harmon: --It's... it's... it's Article 3, which says that the courts have judicial power. And that is the source of the, of the court's power.
Antonin Scalia: Yes. I think what you are talking is separation of powers, but not necessarily the speech or debate clause. The implications of extending the whole speech or debate clause to a city council--
James H. Harmon: We do not argue that immunity under the speech or debate clause should be extended to local legislators. We think that the principle of legislative immunity already accepted by this Court would be an appropriate vehicle for extending that particular immunity.
Antonin Scalia: --Well, well, put it this way. Suppose a state court had issued this very order, to enforce a federal constitutional violation. Could you have come here? Suppose a New York State court ordered the Yonkers councilmen to enact this ordinance. Would you have had a constitutional claim here?
James H. Harmon: We would have had a constitutional claim based upon the New York State Constitution, and the arguments would have been--
Anthony M. Kennedy: Of course you wouldn't. Would you have a federal Constitutional claim in the case that I've put?
James H. Harmon: --Under the... under the First Amendment, yes.
Anthony M. Kennedy: Only the First Amendment?
James H. Harmon: Yes, but not under the... not under the principle of legislative immunity.
John Paul Stevens: But if you rely only on the First Amendment, supposing it were not a governmental agency but a private corporation that had been ordered to merge or divest itself of certain investments or something like that. Would a member of the board of directors have a First Amendment right not to vote against that proposal being ordered by a court?
James H. Harmon: Yes, we, we, we think he would have. However, Your Honor, we are talking here in, in the vote of a councilman, we're talking about political speech, the most highly protected form of speech,--
John Paul Stevens: You're talking about a vote. He just has to say yes or no on the vote. He can say anything he wants to about how he feels about the vote. But the only speech involved, as I understand, is either the word yes or the word no when they call role.
James H. Harmon: --Yes, Your Honor.
John Paul Stevens: And I don't know why that speech is any different than the director of a private corporation who doesn't want to divest itself of its holdings in South African companies or something like that. Why couldn't that person also have a First Amendment right to say I will vote against it even if the judge tells me to?
James H. Harmon: Well, there is a question of balancing, and there is a question of a compelling governmental interest in that particular, in that particular instance. And whether or not that intrusion upon a First Amendment right is warranted in this particular instance that, that Your Honor has posed.
William H. Rehnquist: Well, where do we get the First Amendment right from, Mr. Harmon? The Constitution, obviously, in the First Amendment protects freedom of speech. In other sections, it talks about the right to vote. It doesn't give the impression or any overlaps. Why is the right to vote in the city council meeting a form of freedom of speech?
James H. Harmon: It is a form of political expression. It is a form of putting out ideas on, on, on public issues out to the... out to the public. It is the basis of, of self-government. The act of voting is the fundamental act of democracy, no matter how it's done.
William H. Rehnquist: Well, it may be a fundamental act of democracy, but that does not by itself demonstrate that it's... it's speech. Why, if a legislator, he takes an oath I suppose to live up to the constitution of the laws and I suppose he's... doesn't he have some obligation to the city if the city has undertaken to do something? How did the city undertake to consent to this decree, consent decree?
James H. Harmon: Well, that is not clear in the record, those, those particular events, Your Honor.
Byron R. White: Well, I know, but everybody seems to agree that the city was bound, and you agree it was bound.
James H. Harmon: Yes, Your Honor.
Byron R. White: And, so it was... how, how was it supposed to act?
James H. Harmon: Well, it was... it was bound to this extent, concerning the legislative action that was called for in the, in the consent decree. We submit that that type of a provision in a consent decree is unenforceable, an agreement to enact legislation sometime in the future, especially in a situation like this where there are no particulars at all outlined in the particular consent decree.
Byron R. White: Well, you say... you say the city could be fined for not living up to its consent, don't you?
James H. Harmon: Our position here is in representing the... individual councilmen, Your Honor. The city was bound by anything that was enforceable in that particular consent decree.
Byron R. White: You don't think the members of the council owed any duty at all to... to do what the city had promised to do?
James H. Harmon: I think perhaps the, the, the city was ill advised here in entering into a--
Byron R. White: I know, but that isn't answering my question. You must say, though, no, the individual council members had no obligation whatsoever to implement the promise of the city.
James H. Harmon: --There was no legal obligation to do that, insofar as the enactment of legislation was, was called for.
William H. Rehnquist: Had there been any change in the membership of the council between the time of the city's agreement to the consent decree and the time of these particular votes?
James H. Harmon: No, Your Honor.
William J. Brennan, Jr.: And these councilmen were the ones who voted for the consent decree, were they not? Two of them were.
James H. Harmon: Two of them were. Yes, Your Honor.
William J. Brennan, Jr.: Two of them. And two of them voted against it.
James H. Harmon: Two of them voted against it, Your Honor.
Byron R. White: And are you representing them, too, or do they have different counsel here?
James H. Harmon: I represent... I am counsel of record for all councilmen for purposes of oral argument. I represent Councilman Chema. The other three councilmen have their individual counsel. But with, with respect to those councilmen who voted against the, the consent decree in the first instance, we respectfully submit that neither one of those councilmen undertook any obligation either publicly or privately at that time or at any, at any time subsequent to that--
Harry A. Blackmun: What do your words "in the first instance" mean?
James H. Harmon: --That means at the time that they voted against the consent decree, Your Honor.
Harry A. Blackmun: Well, what did they do in the second instance? Was there one?
James H. Harmon: Well, there was one later, later on after this court denied the stay to the city and granted the stay to the individual councilmen. In fact, one of the councilmen did... did change his vote as the city's fines mounted, and did make a judgment on his own that it was in the interest of his constituents and the interest of the city at that point to vote in favor of the legislation that the district court had directed be enacted earlier that year.
William J. Brennan, Jr.: So he did feel an obligation to carry out what the city had promised to do.
James H. Harmon: Well, I think he--
Byron R. White: Well, anyway, he did it.
James H. Harmon: --Yes, sir.
Harry A. Blackmun: Was that your client or someone else's?
James H. Harmon: That was my client, Justice, yes.
Antonin Scalia: Of course, to the extent it is a First Amendment right you are relying on, you, you are not asserting that that is not waivable, are you?
James H. Harmon: Again, that is not an issue that has been presented by the, by the government, but it would be our position that, in this particular instance, the First Amendment act of voting by an elected legislature in favor of legislation is not waivable. There's a public interest inherent and important in the act of that particular vote.
Byron R. White: Is... is this like the court ordering somebody to say something he didn't, doesn't want to say? Courts are always doing that. Courts are always ordering employers to post notices that they... which they never wanted to post.
James H. Harmon: Well, that we submit is an executive type of function and it does not--
Byron R. White: Well, it is because the... the... the employer has been found to have violated a law and they want to... and, and the agency wants to provide a remedy, and they say post this notice.
James H. Harmon: --Well, it, It also does not require, and we question whether anything in the Constitution permits a court to compel someone to publicly--
Byron R. White: The employer, it won't do the employer any good these days to say the First Amendment protects me, I have freedom of speech, why should they be able to order me to say something I don't want to say?
James H. Harmon: --Well, there is a question of the competing governmental interest on one side as opposed... as opposed to the other.
Byron R. White: Are you willing to apply that here in the First Amendment, on your First Amendment argument, weighing, weighing the governmental interests against the private interests?
James H. Harmon: Yes, we are willing, we are willing to do that, Your Honor. And we suggest that that particular balance is struck in this way, that the court's order was totally unnecessary. Since the court's order was unnecessary, since the court could simply have deemed Yonkers zoning to permit the particular housing at stake here, there was no interest at all to be served, no governmental interest at all to be served by directing the councilmen to vote in favor of the zoning.
Byron R. White: xxx said, well, just to make it clear I am going to draft... redraft the ordinance. Here is the ordinance as it is now deemed to have been enacted.
James H. Harmon: Excuse me, Your Honor, I didn't understand that.
Byron R. White: Well, wouldn't, wouldn't the court have, have had to redraft the zoning... the existing zoning ordinance so everybody would know what the law is?
James H. Harmon: That is not what the district court did in this case.
Byron R. White: I know, but you say that was an alternative, a less intrusive alternative.
James H. Harmon: Yes, Your Honor.
Byron R. White: But it would have involved redrafting the zoning ordinance.
James H. Harmon: It, it would not have required a redrafting of the zoning ordinance. It was permissible, in our view, for the district court to do simply what it had already done, namely which was to simply enter an order deeming that Yonkers zoning permitted the construction of a certain type of housing in certain parts of Yonkers. As we have argued here, Your Honor, this, this is, as we see it, a case of ends and means, and we believe that the district court lost sight of the end here, lost sight of the goal, which was housing in this particular case, and resorted to a means which the Constitution did not permit. Our position does not rest on the principle that local government may disobey lawful federal court orders, as the Solicitor General will argue. Rather, in the words of this Court in the Catholic Conference case, it rests on the central principle of a free society that courts have finite bounds of authority, some of constitutional origin which exist to protect citizens from the very wrong asserted here: the excessive use of judicial power.
Byron R. White: Your argument sounds as though it is, it's... it's... you could make just as strong an argument of saying this is just a matter of equity; this is just a matter of equitable principles applying to what remedy a court could, could issue, without even raising any constitutional issue.
James H. Harmon: The constitutional issue is, is raised by the fact that there is a, a proven constitutional violation, that the court is exercising its authority to remedy that violation. And the sole question we would suggest before this Court is what the court can do within the limits of its power and taking into account the rights of--
William H. Rehnquist: Well, that is a matter of equity, certainly. You could just say that remedy was improvident without--
James H. Harmon: --And that, in general, is our position. That it is improvident for these various reasons: that the rights of the legislatures, the First Amendment rights were needlessly intruded upon and that their legislative immunity was, was likewise intruded upon.
Antonin Scalia: --But it would be okay if they were needfully intruded upon? That, that wouldn't... right then, that argument would assume that they could needfully be intruded upon.
James H. Harmon: In this, in this particular case the court had an alternative, a specific alternative which, which it could have used and which it did use in the past. Therefore, we'd submit that in this particular case, the court did have a less intrusive option which it had used in the past and, for whatever reason, which maybe the Solicitor General will explain, chose not to do that again but chose rather to focus on the councilmen and the contempt power.
Byron R. White: xxx in your argument you could say normally you don't impose contempt except to the... as a last resort.
James H. Harmon: We agree with that, Your Honor.
Byron R. White: And that is not a constitutional argument. That is just an argument about what is the proper remedy.
James H. Harmon: We agree that the court could resolve the case on the basis of the contempt power and the court's supervisory authority over the, over the exercise of the contempt power. That the principle is the least--
William H. Rehnquist: Thank you, Mr. Harmon, your time is expired. Thank you. General Starr.
Kenneth W. Starr: Mr. Chief Justice, and may it please the Court: Not long before this lawsuit in Yonkers was filed, Justice Lewis Powell, writing in dissent in the Columbus, Ohio School Desegregation case, issued a warning to federal judges across the country. He warned that in cases involving the elimination of racial discrimination, of eradicating racial discrimination roots and branch, that federal judges would confront situations in which local elected authorities would seek to abdicate their responsibilities. They would welcome judicial activism, Justice Powell's words, rather than face up to the politically difficult and sensitive task of remedying discrimination, of upholding the Constitution of the United States. In this case, Judge Sand, affirmed by an able and unanimous court of appeals, presided over the liability phase of these proceedings and then the equitable remedial proceedings with great patience, as the court of appeals expressly stated, with great courage. In the face of the most difficult and daunting and at times threatening circumstances, the judge never flinched from doing his duty. But he also refused to permit the elected authorities of Yonkers from doing their duty. He refused specifically, even though he considered it, he refused to establish himself as the housing czar of Yonkers by creating an affordable housing commission, which he considered, but which the city objected to, the city council members objected to. He thought the better of it. He also declined to deem legislation passed. He had indeed in the past taken certain steps with respect to deeming certain acts to be done, the Rule 70 approach, which--
Sandra Day O'Connor: Has the judge now done that, though, to a degree?
Kenneth W. Starr: --He has done it with respect, Justice O'Connor, to specific sites in the public housing arena. There are two aspects of the remedy, it is important for the Court, as I am sure it appreciates, to bear that in mind. The first part of the remedy, public housing, is not involved in this case. With respect to that, the judge has, indeed, from time to time deemed specific steps to have been taken. But he said in this instance, involving affordable housing, this is different. This is such an important and pivotal piece of legislation that I am not going to deem the legislation passed. I invite the Court's attention to the colloquy that is set forth at page 357 of the Joint Appendix, where Judge Sand said I have a sense of what my powers are, but also what is appropriate. If I knew I never had to come back to the city council for any further action, then I might very well be willing to deem the legislation passed. I believe I do have that in my power. But I know, given the political structure of Yonkers, that I will have to come back to them, and thus I want to consider stripping them entirely of their authority by creating the Affordable Housing Commission, reporting to the court. It was that that the United States objected to, that the city council members objected to and that the city objected to. On what grounds? The grounds was, do not strip us of the power that we enjoy under state law. And he declined to do that. He thought the better of it, and he said I am, therefore, going to simply hold the city to its obligations. And what were its obligations? The obligations were set forth--
William H. Rehnquist: This was after the, after the consent decree had been entered?
Kenneth W. Starr: --Yes, Your Honor. The consent decree was entered in January of <nineteen eighty-eight> [= 1988]. The colloquy of which I am now speaking took place in June of 1988. These contempt proceedings occurred the following month.
Anthony M. Kennedy: Were the city councilmen represented personally in that colloquy?
Kenneth W. Starr: They were not in that colloquy, but the attorney for the city, Justice Kennedy, represented that he was, in fact, conveying to the court the strongly felt views of the city council. He didn't enumerate or identify specific members, but he was speaking for the city council in that particular colloquy.
Anthony M. Kennedy: Are, are you saying that that colloquy and the rest of the proceedings in the district court are tantamount to a finding that all other remedies were inadequate?
Kenneth W. Starr: Well, I think this judge reached the stage where he determined that there had to be obedience to law, and that any other remedy was, in fact, unduly intrusive with respect to principles of federalism and comity that this Court has mentioned and emphasized time and again... Rizzo against Goode, Milliken v. Bradley One... concerns about unnecessarily stripping the elected authorities of their power. And he chose instead to do what judges have done from time immemorial, which is to hold them to their obligation, to their duty under the consent decree and under the housing remedy order.
William H. Rehnquist: General Starr, your opponent made the statement in his argument that no federal court has ever before required legislators to... cast their votes in a particular way. Now, what you just said makes me think perhaps you disagree with him. Do you know of cases where legislators have been required to vote in a particular--
Kenneth W. Starr: Oh, yes, Your Honor, Mr. Chief Justice, at pages 30 to 32 of our brief we enumerate a number of cases arising under the contract clause that go back to the mid-19th century, where federal courts, affirmed by this Court, directed local legislative bodies to take specific action to levy a tax increase. This Court, in an opinion by Justice Black, who was a friend of federalism, said in the Griffin v. County School Board case--
William H. Rehnquist: --That is dicta though, in the Griffin case.
Kenneth W. Starr: --My brethren would agree with you, Mr. Chief Justice. I, I must respectfully suggest that, in that case, the court was speaking to the federal judge and telling the federal judge what was permissible or impermissible. And what the court said in language which is quite clear is that the federal judge, if it is necessary, can direct them, them being the elected board of supervisors of Prince Edward County, Virginia, to exercise the power that is theirs. That's what is--
William H. Rehnquist: That would convert a great deal of dicta into holding, if everything a court says that might be done in a case be... becomes a holding. I thought a holding was something that the facts of the case required the court to decide it.
Kenneth W. Starr: --I do not quarrel that it was not the holding in the, in the case, Mr. Chief Justice, but--
William H. Rehnquist: xxx do you mean holding in dicta now? [Laughter]
Kenneth W. Starr: --I would... I, I would certainly say that if the court has given guidance to a district judge as to what can be done, that that guidance should be taken very respectfully and very seriously.
Byron R. White: Well, that may be, but of course, in that case the... it didn't really say that legislators could be required to vote for any specific piece of legislation. They just had to... they just had to get with it and provide for the reopening of public schools.
Kenneth W. Starr: That is true.
Byron R. White: So they could have done that in all sorts of ways, I suppose.
Kenneth W. Starr: Well, it was a bit more... I don't dwell on that one sentence, but it was rather specific, Justice White, with respect to directing them to levy a tax increase. That is fairly specific. It doesn't tell them how much, but it does say you can direct them to levy a tax increase. But there are other instances in which federal courts have, with this Court's approbation, ordered the enactment of a particular kind of statute or plan, particularly in the Voting Rights Act area and with respect to reapportionment. This Court's decision in Wise against Lipscomb, which is cited in the briefs, is quite clear that at least as a temporary remedy, the courts can in fact impose a specific reapportionment plan on a state or local jurisdiction. In the fair housing area--
William H. Rehnquist: But now does... does that plan... when a court says that under their... Voting Rights Act this plan is going to obtain at least temporary... does that require enactment by the legislative body?
Kenneth W. Starr: --In that instance it does not. That would be an imposition by, by--
William H. Rehnquist: Well, then that isn't a very good example, is it?
Kenneth W. Starr: --by, by the court. But it is, in fact--
William H. Rehnquist: That isn't a very good example, is it?
Kenneth W. Starr: --It is not a particularly good. However, it is a, it is a temporary expedient prior to the legislative body enacting its own plan.
Byron R. White: That's... that's more like... if the court here had said I deem this legislation to be in effect. That, that is closer to this Voting Rights example.
Kenneth W. Starr: I, I would respectfully disagree with that. If one looks at the precise terms of the order, the order of July 26, 1988. That order did not say here is an ordinance which you must enact, very specifically. You cannot change anything; you just must vote to enact it. It, rather, used... the language of that order was tied to the language of the consent decree itself. Section 17 of the consent decree put an obligation on the city to enact a legislative package that would accomplish a variety of things in order to make affordable, assisted housing available for lower-income and middle-income residents of Yonkers. It was a broad mandate that was vested in the city council, directed to the city council, which they could have complied with. As the court of appeals specifically said, they would have been in compliance with this order if in the city council meeting they had come forward in good faith to the judge and said we now have alternative B. It accomplishes what we agreed to accomplish. Here is the alternative. But they did not. A message I would like very much to leave for the Court is they simply chose not to obey. And furthermore, they said we don't have to obey. And what this case is ultimately about is the power of a court to direct compliance with its orders, consistent with principles of federalism and comity.
Sandra Day O'Connor: Well, General Starr, I guess no one here is disputing that the court can do something to compel compliance. I didn't hear the attorney for the Petitioners argue to the contrary. I think it is more a question of whether the something can include a direct order to the legislators to vote a certain way. What is the closest case authority you would cite to us for that proposition over a claim of legislative immunity?
Kenneth W. Starr: Well, if I may, the authorities I would principally rely upon are the authorities from the 19th century and the early 20th century, which in case--
Sandra Day O'Connor: Was there a claim there, to your knowledge, of legislative immunity that was asserted?
Kenneth W. Starr: --There was none. I would respectfully urge the Court to reject the applicability of that doctrine here. Immunity, which is their principle, not their sole claim, immunity has to do with being sued: being sued for money damages, being sued for injunctive relief. It does not have to do with one's obligation under law to comply with low... lawful orders of the district court.
Antonin Scalia: Can we order Congress to enact a statute, General Starr?
Kenneth W. Starr: We could not by... the courts could not by virtue of the speech or debate clause.
Sandra Day O'Connor: Do you think the court-- --But you just said... you just said no. You said the speech only has to do with money damages, or... oh, the immunity only has to do with... I see. I'm sorry, I thought you were talking about speech or debate.
Kenneth W. Starr: All right. They are relying on common law immunity. They want this Court to create doctrine that will protect them as a shield against lawful orders of a federal court.
Antonin Scalia: Suppose the speech or debate clause didn't exist. Do you think that's the only obstacle? You think a court could direct the Congress to enact a particular statute, it is only the speech or debate clause?
Kenneth W. Starr: Absolutely not.
Antonin Scalia: You think the separation of powers--
Kenneth W. Starr: The separation of powers concerns would be grave by the judiciary directing a coordinate branch to take a specific action. It, it... I would not rule it out, but it would raise the gravest separation of powers question, whereas--
Antonin Scalia: --One, one last step, it, it... you know, they refer to the unification of two powers within one branch is the definition of tyranny, you think it would be okay for the court to unite within itself judicial and legislative powers where those legislative powers are federal, but it would be okay for a court to unite within itself judicial and legislative powers, so long as those legislative powers are only state legislative powers--
Kenneth W. Starr: --I think to--
Antonin Scalia: --which are probably more extensive than federal legislative powers.
Kenneth W. Starr: --to the contrary, again.
Antonin Scalia: Doesn't that scare you a little bit, too?
Kenneth W. Starr: It gives me great pause because of principles of federalism. I would be gravely concerned with a federal court order to a state legislature. It is not unheard of, and it is done, but that raises more profound questions of federalism and comity than it does to a local council which does not even enjoy the state constitutional immunity that exists by virtue of the New York State Constitution.
Antonin Scalia: I am not worried about federalism. I am worried about, about what a court is and what a court can do. Can a court act as a legislature, state or federal, it doesn't matter to me.
Kenneth W. Starr: It is more troubling and it is, indeed, in this case, one of the reasons that the district court said instead of my acting as a legislature as they now suggest he should have done, he said instead I am going to use a traditional power, the contempt power, to enforce an obligation and which will, in fact, result in no restructuring whatsoever of the local governmental apparatus in Yonkers. That, in my judgment, was a very restrained remedy and, indeed, this Court, Justice O'Connor in her dissent, in the Paradise case joined by the Chief Justice and Justice Scalia, suggested that contempt was a less-intrusive or less-heroic remedy if you will than imposing a regime of racial preferences. Civil contempt, that is important; this is not a criminal contempt case. But civil contempt is a time honored, as this Court well knows, traditional and indeed everyday way that courts go about enforcing their orders.
Anthony M. Kennedy: Well, if we concede, General Starr, that the Constitution of the United States, because of its separation of powers scheme would prevent our ordering Congress from voting for a certain act, that is not because it is just a quirk of the constitutional structure. It is because there are some very basic concerns we have about demarcation of the lines of political responsibility. And I am not sure why those same concerns are not abundantly present here, and why just as a matter of controlling the court's discretion as being a wise or an unwise use of discretion, all of those considerations aren't applicable to the city council.
Kenneth W. Starr: Justice Kennedy, those concerns are in fact raised by Mr. Harmon's suggestion as to what the court should have done. He would now suggest that the court should have in fact enacted that legislation itself, as opposed to--
Anthony M. Kennedy: But if, if that had happened the record at least would have been clear as to how the legislation was created, what its authority was, what its source was. But what you are suggesting completely blurs the line of political responsibility as we commonly understand it. It would not be at all clear to the people of Yonkers that their legislators voted for the action because the legislators approved of it or because they were compelled to do so.
Kenneth W. Starr: --Justice Kennedy, I think the court of appeals responded to that concern, although not in those terms. But it made it quite clear that this avenue of using the contempt power to require them to fulfill their obligations permitted the political process to run its course, for them to have a city council meeting, to have a hearing, to have thoughtful suggestions, to have alternatives advanced that... the council--
Anthony M. Kennedy: But it is a charade because the outcome is foreclosed.
Kenneth W. Starr: --The outcome in a broad sense is foreclosed with respect to the requirement to enact an ordinance that accomplishes what Part 6 of the Housing Remedy Order and Section 17 of the consent decree... remember, the consent decree was final, they sought to vacate it, that motion was denied. That is final, that is a final judgment of the court.
Sandra Day O'Connor: I just can't understand how it's giving greater latitude to the council to send it back to them, telling them how to vote than it is to go ahead and put it into effect. I mean, that is just hard for me to grasp.
Kenneth W. Starr: It means by virtue of what the court did that it did not raise those profound questions of the nature of the power that is being exercised. That's point one, which isn't responsive, but this I hope will be responsive. What the court of appeals said was that the very purpose of the state notice and hearing requirement was to give the city council an opportunity to meet in the city hall of Yonkers, not for Judge Sand in chambers to say here is the ordinance that I want to be in place and I hereby enact it myself or I nominate an individual or entity to enact this ordinance. He said rather, let the political process run its course, but their discretion. I, I--
William H. Rehnquist: So long as it reaches a foreordained outcome.
Kenneth W. Starr: --Foreordained in the sense, I must agree with that, with respect to enacting an ordinance that fulfills the purposes of the consent decree. But there would be an enormous amount of running room for the... for the council to come back to the judge and to say judge, who was indeed the soul of patience throughout this, we have not been obedient in the past. Indeed we have been flagrantly contumacious, as the city itself in its brief admits, but we have decided to do our duty. Here is our alternative--
Anthony M. Kennedy: Well, I suppose that option is always open to them.
Kenneth W. Starr: --That option is, indeed, always open to them, but they have not sought to avail themselves of that option.
Byron R. White: I take it the liability of the city and the contempt against the city is a fore... foregone conclusion, that the city's liability is settled, is that it?
Kenneth W. Starr: That is true.
Byron R. White: And of course, the running fine against the city put unbearable pressure on the city council, I suppose. And one of them finally reacted to it.
Kenneth W. Starr: That is true.
Byron R. White: And I suppose that, that... that, is arguably in your favor, I suppose.
Kenneth W. Starr: Well, I would think it is in my favor. It is used against me by my colleagues on the other side to say look, the contempt citation against the city itself was efficacious. On September 9, 1988, once this Court denied the stay, the ordinance was indeed passed, but only at an expense to the city, the people of Yonkers, ultimately the victims of discrimination themselves. And this Court has made clear that in the equitable remedial setting the qualities of mercy and practicality are pivotally important. This judge knew that in order for housing, this is different than just admitting James Meredith to the University of Mississippi. As important as that was and as difficult as that was, this is getting housing built that is market rate development housing that requires a panoply of changes in zoning laws, tax laws--
William H. Rehnquist: Doesn't a court have to say once in a great while, Mr. Starr, this is just... we can't bite off that much? Just because there is so much, as you say, getting one individual admitted to a university is quite a different universe than the sort of thing the district court was... was going to undertake here. Now, aren't there... does the law say that he must be careful about what he does, but come what may, he must... he may accomplish this result whatever happens?
Kenneth W. Starr: --Well, in this instance--
William H. Rehnquist: Or does it not say that there are some cases he is going to stop short and say the powers of the... the equitable powers of this Court just do not encompass going that far, even though we cannot fully remedy the, the violation?
Kenneth W. Starr: --I think the principles of equity constantly must guide the judge. I do not think, however, that the judge should in fact say, absent the most extraordinary circumstances, that even though there is a violation of the Constitution, a proven violation of the Constitution, and I know that there is a remedy that would be effective, that it is too difficult, it's too divisive, it's too sensitive, and therefore, I will not as a matter of discretion remedy discrimination. The underlying duty of the court is to remedy the discrimination. The Court cannot do the impossible--
William H. Rehnquist: Fiat justitia, ruat coelum. Is that what you stand for, that no matter what--
Kenneth W. Starr: --I beg your pardon? [Laughter]
William H. Rehnquist: --Let there be justice, though the heavens fall.
Kenneth W. Starr: Not at all. We never reached, my reading of this record suggests that we never reached the point of impossibility, and, indeed, the remedy is moving forward with the political structure of Yonkers intact.
Byron R. White: I take it you would say that if this... if the remedy that the judge employed is beyond the power of a court, or it shouldn't be... he shouldn't have issued that kind of remedy, that then the enacting of an ordinance should also be beyond the power.
Kenneth W. Starr: Quite right. The judge may not, this Court has stated most recently in the Pangilliman case, authored by Justice Scalia, that the powers of equity are broad, but they are not so broad that one can run afoul of a... of a statute, much less a constitution, but--
Antonin Scalia: He didn't have to enact an ordinance. Isn't the only thing he had to do was what courts always do, what, what John Marshall did in Marbury versus Madison: ignore a law that is not constitutional. He could have simply ignored the existing ordinance and said any housing that goes forward in the face of this ordinance, which is obstructing what is constitutionally required and, therefore, is unconstitutional, can simply ignore the ordinance. He doesn't have to write a new one.
Kenneth W. Starr: --Mr. Harmon would have you believe that the only ordinance of concern was the zoning ordinance; that... that's, with all respect, completely wrong. The housing remedy order, and I invite the Court's attention to Part 6 of the original Housing Remedy Order, and then Section 17 of the consent decree. This is new law. It is not just let's override the zoning statutes or another ordinance of Yonkers. This is new law to create something that does not exist.
Antonin Scalia: What... what was the... what was Yonkers doing that was unconstitutional and which this was remedying? What, what was the unconstitutional act that this was remedying?
Kenneth W. Starr: The forbidding, or the intentional discrimination against individuals on grounds of race with respect to housing, housing, both public housing and market-rate assisted housing. This... the issue that has come before us, is not public housing. This is market-rate assisted housing, which is eventually going to be built by private developers who will have a certain percentage of those apartments or townhouses devoted to, to lower-income and middle-income housing. That is complicated stuff.
Antonin Scalia: It is complicated stuff, but, but the only, the only whip that the city had over the whole thing was the zoning. And if the court just said you are using that... you are using that tool in an unconstitutional fashion, we will simply disregard the zoning law. Builders can go ahead in, in disregard of the zoning law. That is classic. That is the classic way in which courts handle things of this sort.
Kenneth W. Starr: I have to disagree. That was not all that the affordable housing ordinance did. It created and facilitated a complex set of what were called mandated incentives: here are some attractions for private developers to go out and do something that they may not otherwise do. That is different--
Byron R. White: Tax incentives... tax incentives included?
Kenneth W. Starr: --There were tax incentives, tax abatements, and the like, but there were a series of, the term used in Section 17 is mandated incentives. A very complicated package was going to have to put together.
Antonin Scalia: Well, that may well be, but that was not unconstitutional. I mean, it seems to me if, if you ask what is the minimal unconstitutional action that had to be eliminated by the court, it was simply preventing the buildings from going ahead through the, through the zoning law, wasn't it?
Kenneth W. Starr: I think we have moved beyond that, Justice Scalia.
Antonin Scalia: Oh, I am sure you have, but that is the problem.
Kenneth W. Starr: No, the point that I have moved to is the capacity of the court to enforce an obligation, a decree. They had agreed to the decree. This was an obligation. The obligation was not we will do that which is minimally necessary in order to eliminate unconstitutional discrimination. That was not the obligation. The obligation was set forth in the terms of a consent decree, Section 17 put this affirmative obligation on them to enact a very comprehensive--
Antonin Scalia: All right, but at this stage we are no longer talking about the glorious enforcement of the Constitution by a district court, but we are simply talking about how far a district court can go in order to enforce, enforce an agreement that isn't required by the Constitution.
Kenneth W. Starr: --To enforce its own judgment, which is designed to eliminate racial discrimination by remedy--
Antonin Scalia: It may be, but if you don't enforce it to the hilt, and if you say gee, our powers just don't enable us to enforce it to the hilt, the conclusion you come to is not, and therefore the constitutional violation must endure, which is a scary conclusion ever to have to come to. But you, you acknowledge that you can eliminate the constitutional violation at least, although perhaps you cannot achieve complete compliance with the... with the agreement that the city entered into. You could... you could achieve... eliminate the constitutional violation simply by ignoring, saying we will take no account of this unconstitutional zoning ordinance. That would be enough.
Kenneth W. Starr: --The zoning ordinance, I, I, I hate to be stubborn on the point, but it wasn't the zoning ordinance that was unconstitutional. It was we must build in the other three quadrants of Yonkers, at least as the goal, 800 assisted housing units, and we are going to have to take a lot of steps in order to do that; zoning changes are only part of it. The zoning didn't say thou shalt have no assisted housing here. That wasn't the problem. The problem was, and everyone agreed that this was the problem: there had to be a complicated set of incentives developed so that private developers would want to come forward and build housing that lower-income people to... could go into. I think, with all respect, it fails to appreciate the complexity of this record by saying there is simply one, or even two, ordinances that could have been overridden. I quite agree--
William H. Rehnquist: I think you've answered the question, General Starr.
Kenneth W. Starr: --I thank the Court.
William H. Rehnquist: The case is submitted.
Speaker: The honorable Court is now adjourned until tomorrow at 10 o'clock.


William H. Rehnquist: We'll hear argument first this morning in No. 91-1229, United States, by and through the Internal Revenue Service v. Bruce J. McDermott. Mr. Feldman.
James A. Feldman: Mr. Chief Justice, and may it please the Court: This case concerns the relative priority of a Federal tax lien and a private state law lien as to a specific piece of real property that was acquired by the debtor after the date the Federal tax lien was filed. It is after-acquired property in that sense. The relevant facts can be summarized simply. The Federal tax liens at issue in this case arose on December 29, 1986 at the time the taxes against the debtor were assessed. On July 6, 1987 respondent Zions docketed its judgment against the debtors. That judgment under state law constituted a lien against the debtors' real property, then owned and after-acquired. On September 9, 1987, about 2 and a half months later, the IRS filed a notice of Federal tax lien. And finally about 2 weeks after that on September 23, 1987 the debtors acquired the subject property known as the South Street property, the right to which are at issue in this case. The order therefore was the Federal tax lien arose, then the state judgment was docketed, then the Federal tax lien was filed, and then the debtors acquired the property. And the question is whether the IRS's lien has priority as to that piece of after-acquired property. The general rule as to the priority of a Federal tax lien is that a Federal tax lien has priority over all competing interests unless at the time the Federal tax lien arose the competing interest was specific and perfected. The rationale, I think, of that rule is that the Federal tax lien can only take so much of the property as is the debtors' and if at the time the Federal tax lien arises some other lien has come and essentially grabbed a part of that property, the Federal tax lien can only take the balance of the interest that was the debtors'. Now, there are exceptions to that rule and one of the exceptions is section 6323(a), and that provides that a Federal tax lien is not valid against a judgment lien until the Federal tax lien is filed. Now respondent claims that in this case, this case arises, he is entitled to the benefit of 6323(a), and the effect of that provision therefore is just to move the date from the date of assessment, from the date the tax lien arises on which you determine priorities, to move the date until the date the tax lien was filed, which in this case was September 9, 1987. I think there are thus two issues in this case. The primary question and the one that the court of appeals got wrong was whether the debtors' interest was specific and perfected as of September 9, 1987. In our view, I mean, in our view the lienholder's interest was not specific and perfected as of that date, and accordingly the tax lien would have priority. There is a second question which the court of appeals didn't rely on, but I think maybe the district court did, and that is whether the fact that the Federal tax lien attached to the property at the same time as the state tax, as the judgment lien, whether that alters the result that would follow from a finding that the state lien wasn't specific and perfected as of the date of filing of the Federal tax lien.
Sandra Day O'Connor: May I ask, Mr. Feldman, now, if we weren't dealing with after-acquired property but had a judgment lien on all property of the debtor, would you think a subsequently filed Federal lien would take priority?
James A. Feldman: If, well, I think that that is exactly what this Court decided in the case of United States against Vermont.
Sandra Day O'Connor: Yes, I thought so too.
James A. Feldman: And the issue in that case was whether a lien is sufficiently specific, that is if it just identifies all of the debtor's property rather than giving a specific legal description of the property.
Sandra Day O'Connor: That's pretty specific, if it attaches to all.
James A. Feldman: Right. And this Court held that that was sufficiently specific. And I think the task that is derived from Vermont is whether, on the date of filing of the Federal tax lien whether, if you can determine on that date that a particular piece of property was subject to the judgment lien, then it was specific and perfected on that date. If you can't--
Sandra Day O'Connor: Well, is it enough that you can say it's clear that any subsequently acquired property will be immediately covered by the judgment lien? And it is clear that it would be, isn't it?
James A. Feldman: --Yes, I don't think... there's no question under state law that judgment lien--
Sandra Day O'Connor: So specificity isn't a problem.
James A. Feldman: --Right. We don't think specificity is a problem. The problem is that under the settled task for whether a judgment lien is specific and perfected is whether the identity of the lien or the amount of the lien and the property subject to the lien were established. In this case the property subject to the lien was not established as of the date on which you measure the priorities, which is September 9, 1987.
Sandra Day O'Connor: Well, whose lien attached first in your view, or were they simultaneous?
James A. Feldman: Well, that actually gets to the second question I mentioned. Both liens attached to the property at the same time, but there's nothing hinges on when the Federal lien attached to the property. The case turns on, the question is whether as of the date of notice whether the state lien had already attached to the property. And since, in our view since it hadn't--
Sandra Day O'Connor: Well, what's the statute designed to protect, reliance interests--
James A. Feldman: --Yes.
Sandra Day O'Connor: --of the creditor?
James A. Feldman: Yes, primarily.
Sandra Day O'Connor: And does the creditor have the judgment lien credit or have any reliance interest on property subsequently acquired, do you think?
James A. Feldman: I don't think he does. I think actually if you look at the statute and you look at what Congress did in 1966 when it overhauled the statute and passed the Tax Lien Act, it specifically dealt with the question of after-acquired property and it looked at all the types of after-acquired property and types of security interests and made a narrow exception to the general rule of Federal priority as of the date of notice was filed, a narrow exception to that rule for certain kinds of commercial financing transactions, only as to certain kinds of property, and only for a limited period of time, that is 45 days after the tax lien was filed.
Sandra Day O'Connor: If there had been no Federal Government here but we had a situation of private parties, what would be the result under the Uniform Commercial Code of state law generally for after-acquired property?
James A. Feldman: It's a little bit hard to answer that question because the Federal Tax Lien, I'm not sure what, how, that is not something that is governed by the Uniform Commercial Code. There would be some interest in property, certainly the interest of a purchased money lender or the interest of an inventory financier or an accounts receivable financier, just the parties who are protected by the Tax Lien Act. Those interests under the UCC as a general matter, although it's quite complex, would have priority over a judgment lien creditor as to the after-acquired property. But, on the other hand, a Federal tax lien itself is not subject to the UCC and it's difficult to say what, there's no, really no other way to answer that question.
John Paul Stevens: Is your argument that nothing turns on when the Federal tax lien was perfected?
James A. Feldman: Nothing turns on when it attached, and I think that follows from a number of--
John Paul Stevens: Well, is that the same as perfected?
James A. Feldman: --Yes, I think that's part of perfection. If you look at the test for perfection it's whether the identity of the lienholder, the amount of the lien, and the property subject to the lien was established. And I think part of establishing that the property was subject to the lien was establishing that this particular lien had taken hold of this particular property.
John Paul Stevens: So everything turns on when the judgement creditor's lien perfected, but nothing turns on when the Government's lien was perfected?
James A. Feldman: Right. The relevant thing you do is take, what you do is you take a snap shot of the situation as of, in ordinary cases as of the date the Federal taxes were assessed, but in cases under 6323(a) at the date that the tax lien was filed. You take a snap shot of that situation and say as of that date had the judgment lien attached to the property at, was a definite amount, was the identity of the lienholder specific. If it wasn't, then the tax lien takes the property and the judgment lien is junior to it. If it had already attached to that property and was established as of that date that that particular piece of property was subject to the lien, then that lien would be superior to the Federal tax lien.
John Paul Stevens: What happens with the proceeds in a title company? Suppose the judgment lien creditor is superior to the Government because its lien was perfected before the assessment and before notice of the lien, and then the property is sold and money is sitting in the escrow company. Does the judgment creditor's lien follow that money, or is this after-acquired property so that the Government's subsequent lien could now attach and be superior?
James A. Feldman: The question there would be whether you trace the proceeds of the property, whether the lien on the property attaches also... you trace the priorities through to the proceeds. I can't tell you for sure. I think that you do, but I can't give you a firm answer on that.
William H. Rehnquist: What if the South Street property here had been purchased with an exchange of other real property to which the judgment creditor's lien had attached, then surely it would carry over to the South Street property, would it not?
James A. Feldman: Right. I would think it would. In this case it wasn't, the debtor had no rights in the South Street property to which the judgment lien could attach as of September 9.
William H. Rehnquist: Well, how was the, what was the consideration for the acquisition of the South Street property?
James A. Feldman: The debtor had previously owned the property and had sold the property. He had essentially what amounts to a mortgage, except that under Utah state law in this circumstance it was considered an interest in real property, in personal property and not real property.
William H. Rehnquist: And therefore the judgment creditor lien didn't attach?
James A. Feldman: It didn't attach because it was personal property at that time and the judgment lien only attaches under state law to real property. It was only when that interest became a real property interest of the debtors, which was on September 23, after the Federal tax lien was filed, it was only then that the judgment lien attached to the property.
David H. Souter: Mr. Feldman, in a case of simultaneous perfection do you take the position that 6323(a) breaks the tie?
James A. Feldman: I think our position is that, if you mean a case of simultaneous attachment, if we're talking specifically about that type of perfection--
David H. Souter: Yes.
James A. Feldman: --It would be our view that both the amendments, the clear intent of the amendments which is to limit the extent of a security interest in after-acquired property for a period of 45 days and only in certain given cases which did not include judgment liens, it would be our position that both that and 6323(a) and (c), I'm sorry, 6321 and 6323(a), all of those support our position. 6321, which is the basic rule, says that the Federal tax lien arises at the time the taxes are assessed. It doesn't say at the time the taxes are assessed or attached, whichever is later, or if there is some kind of perfection that it arises at a different time. That states a Federal rule that for purposes of, for Federal law the Federal tax lien arises at the date the taxes are assessed. Now, 6323(a) switches that, moves that, just simply moves that date back to the date that the notice is filed, but you still do the same thing on that date that you would do in one of the other cases under 6321, which is you look as of that date as to whether the judgment lien had attached.
David H. Souter: What does that tell you about simultaneity, when two of them attach at precisely the same moment?
James A. Feldman: I guess, I think the import of our argument is that the date that the Federal tax lien attaches in an after-acquired property case is not a legally significant date, that Congress set those legally significant dates as being either when they're assessed or when the tax lien is filed. The fact that it attached at a later date is not legally significant. And in fact when Congress considered the after-acquired property issue, in all cases of after-acquired property you're going to have situations similar to this in which the state lien and the Federal lien, or the judgment lien and the tax lien attach at the same moment to the property. Congress wanted to limit the cases in which a private party could have superiority over the Federal tax lien among those cases of after-acquired property in very limited ways, only for a period of 45 days, for example. If the court of appeals were right here the judgment creditor has a far superior interest to those the Congress specifically wanted to give priority to in the Tax Lien Act because the judgment lien would be good indefinitely for after-acquired property. If the debt... it's true in this case it was 2 weeks, but if the debtor had acquired the property a year later under the court of appeals' opinion the result would have been exactly the same. And I don't think that's consistent with what was Congress' decision to limit very carefully the classes of after-acquired property that would have, as to which a private creditor would have superiority over the Federal lien.
Anthony M. Kennedy: Mr. Feldman, are you talking about Congress' decision... you're talking about the 1966 decision?
James A. Feldman: Yes, because that's where it--
Anthony M. Kennedy: Is it your view that the law with respect to the issue that's before us today changed in 1966?
James A. Feldman: --No, it's not. I think--
Anthony M. Kennedy: So we really, the 1966 act really does shed any light on the problem that we have before us, does it?
James A. Feldman: --Well, let me put it this way. The, I think the rule of law that we're suggesting governs this case was clear long before 1966.
Anthony M. Kennedy: So you don't need to rely on it.
James A. Feldman: I don't have to rely on that, but I do think Congress then enacted those amendments in 1966 in reliance on that.
Anthony M. Kennedy: In other words you're relying on what you perceive to be Congress' understanding in 1966 as to what the law then was?
James A. Feldman: That's correct. And I think that by enacting the statute that it did in 1966 it really adopted that prior law, and the exceptions to the rules about after-acquired that it enacted in 1966 wouldn't make any sense if it turned out that other, all kinds of other security interests other than the ones Congress named had a priority over the Federal lien that was so much more substantial than the priority that Congress chose to give the particular classes of creditors.
Anthony M. Kennedy: Where do you first quote the 1966 statute in your briefs or cert petition?
James A. Feldman: In the brief... excuse me?
Anthony M. Kennedy: Where do you first quote it in your papers, the 1966... I know it's in the reply brief. Was it in the--
James A. Feldman: Oh, no, it was in our brief. It was on about page 15, the section from 15 to 18 addresses the 1966 act. I think there is another line of cases that--
Anthony M. Kennedy: --Oh, I had the wrong brief. Yes, thank you.
James A. Feldman: --There's another line of cases that also suggests the same result, and that is this Court has never specifically addressed a case involved after-acquired property but it has addressed cases involving a very closely analogous situation, and that is what might be called after-acquired debt or after-incurred debt. In the cases of United States against Pioneer American Insurance, United States against Equitable Life Insurance, those cases involved mortgages that included clauses providing that if the mortgage was foreclosed that the attorneys' fees for the foreclosure would be added to the principal amount of the debt due secured by the property. In both of those... and so those cases involved after-incurred debt, a debt that is added on to the secured amount. In both of those cases those attorneys' fees were incurred after the Federal tax lien was filed, and in both of those cases this Court held that that after-incurred debt, that the security interest as to that after-incurred debt was junior to that of the Federal tax lien. I think the same result, there's no reason not to adopt the same reasoning and the same result--
William H. Rehnquist: What was the reasoning in those cases? Would interest that accrued later be junior too?
James A. Feldman: --You know, I'm not sure what the rule was before 1966 as to interest. I believe that in 1966 Congress specifically provided for interest and actually provided for some other kinds of costs that were attendant, for instance on a mortgage, to be included in the principal amount as a specific exception to the general rule. But the point was that these after-incurred debts in this Court, this Court decided in two different decisions that these after-incurred debts, even if they were relatively certain in amount and relatively certain to be incurred, that the security interest as to those debts was junior to the Federal tax lien.
William H. Rehnquist: What was the reasoning of the Court?
James A. Feldman: It was applying the test for perfection that I have suggested here, which is, in those cases the amount of the debt... you remember the test requires the identity of the lienholder, the amount of the debt, and the property subject to the debt be established.
William H. Rehnquist: That would go for interest too, I would think.
James A. Feldman: It probably would, yes. I think that's right.
William H. Rehnquist: It seems a rather strange ruling.
James A. Feldman: That's right. Well, Congress did take care of some of those situations elsewhere in the amendments in provisions other than those that I was talking about before. In any event, I don't, there's no reason why the, why if the amount of the debt was not clear because the debt hadn't actually been incurred at the date of filing, therefore the interest in that, that after-incurred debt was not superior to the Federal tax lien, there's no reason why the court of appeals ruling that after-acquired property should be treated any better. I think those cases provide a close analogy to the decision that should be reached here.
William H. Rehnquist: You agree, don't you, Mr. Feldman, that if the South Street property had been owned by the debtor here at the time that the judgment lien was filed in Salt Lake County, then the judgment creditor lien would be prior?
James A. Feldman: Yes. If the taxpayer acquired an interest in that property, a real property, an interest in the property recognized by state law between July 9, 1987 and September 9, 1987, at any point during that time, that interest, the judgment lien would have a superior interest in that property to the Federal tax lien. But it's our, in this case because the debtors' interest in the property was not acquired until after the Federal tax lien was filed, the Federal lien should be superior. If there are no other questions I'd like to reserve the balance of my time.
William H. Rehnquist: Very well, Mr. Feldman. Mr. Davis, we'll hear from you.
T. Richard Davis: Mr. Chief Justice, and may it please the Court: In 1827 Justice John Marshall enunciated what was, he deemed, a cardinal rule, which was a prior lien gives a prior claim entitled to prior satisfaction from the subjected binds. This has become known as the doctrine of first in time as first in right, and it has become the general Federal common law in the area of competing lien claims. This has also been adopted and codified by use of the, for the Government in establishing the competing liens between a Federal tax lien and certain competing liens as provided in section 6323. Because of a contractual stipulation which preceded the litigation in this matter and the acquiescence by the IRS in the Tenth Circuit opinion in all but one issue, the facts of this case are very simple and make a singular issue presented to this Court. That is will this Court apply the first in time rule in favor of a prior perfected judgment lien over a subsequently filed Federal tax lien when property purchased by the, as against property purchased by the debtor subsequent to all the liens, the after-acquired issue. The facts are not in dispute. It is important to note that Zions Bank did everything that was required of it to perfect under state law a general lien on all real property owned by the debtor located in the County of Salt Lake. Section 6232 does not explicitly resolve the issue of after-acquired property, but it provides the framework which, very compatibly with prior decisions of this Court and with the intentions of Congress as shown since the institution of the Federal tax lien in 1866, allows a consistent pattern of recognizing the integrity of a judicial judgment lien obtained by a private party.
William H. Rehnquist: The Government's argument, Mr. Davis, as I understand it, is that the property used to purchase the South Street property was property to which the judgment creditor's lien did not attach under Utah law. Do you dispute that?
T. Richard Davis: I do not. That is correct.
William H. Rehnquist: So that when the South Street property came into the hands of the debtor it had not been previously subject to any lien under state law.
T. Richard Davis: Not pursuant... that is correct as the facts in this case have been shaved down. Both parties have, they abandon whatever rights they had to any property of Mr. McDermott, or any rights they had to this property until the property was repurchased by McDermott at the foreclosure sale. Then both liens attached to that property simultaneously. The question is whether the prior entry of the judgment lien has any effect at all as against a subsequent filing of the notice of tax lien. We believe it does. The choateness doctrine, as it has been declared by this Court, was codified by the Treasury Department in its regulations. It requires, it sets forth, as counsel has stated, a requirement of the establishment of the amount of the lien, the identity or the lienor, and the establishment of what property is to be liened. The property, being general in nature, is sufficient under prior pronouncements of this Court.
Antonin Scalia: I don't know... I don't see how the third requirement is met. You don't know what property it attaches to until some property is after-acquired. If other real estate had been acquired it would have attached to other real estate. If this real estate had not been foreclosed upon, this real estate, it would not have attached to this real estate. How can you possibly say that the property has been identified?
T. Richard Davis: This issue, I think it's a difference between the word identified and established. The standard is not now, nor ever has it been through this Court or by statute, that the property must be identified, merely that it must be established. That was the issue which came before this Court in both the New Britain and Vermont cases. Both of them sought... well, the most relevant one would be the Vermont case wherein a prior state lien which was general in nature was attacked by the general Federal tax lien, which was also general. This Court held that the fact that the state lien was general in nature, covering all of the property, it identified no property in particular, was sufficient.
Antonin Scalia: It was all, it covered all extant property. If you ask what property is covered you could have pointed, you say it's this property or this property or the other property. In your case if you asked what real estate is covered by this lien you'd say well, gee, I, I, it covers this current real estate, but what future real estate I can't tell you until he acquires it. That's quite different from the Vermont case, it seems to me.
T. Richard Davis: There's no question the facts are different, and I agree, but I think this is not an illogical step to say that a general lien which is established upon all property, either now or hereafter acquired, is still on all property, whether now or hereafter acquired. And the establishment is set forth. It's not the identity that's important, but it's the establishment of that property, the fact that it's all property. That's how I read that case.
Antonin Scalia: Well, I don't find, I find that not only not in accord with the 1966 understanding of Congress, but not in accord with what in general commercial law is regarded to be the perfection of a lien. I think just the common law understanding is that the lien doesn't attach until the property is identified, and that's why the provision of the Uniform Commercial Code containing an after-acquired property clause was a real innovation, because it was generally understood in the common law that you can't attach until you know what the property is. It's simply--
T. Richard Davis: I believe that's the case with the Uniform Commercial Code. I believe there is a distinction between personal property and real property, and we're only dealing with real property. The common law in the State of Utah and the Federal common law is predicated upon first in time and first in right and does not require that that property be specifically identified. All property which is covered by a lien is subject to that lien when it states all property. I believe that the Uniform Commercial Code is directed only to personal property because of its nature, which can, it can be consumed or transported and other issues that way. As far as real property it stays and is subject to permanency as set forth in the recorder's office in the relevant county.
Antonin Scalia: --I understand, of course the UCC applies only to personal property, but what I'm suggesting is that it made an innovation with respect to personal property, and that the old law with respect to personal property was the same as the old law with respect to real property, that you don't have a perfected lien until you know what the property is. Do you think in common law it was, there was a distinction between personal and real property, you could perfect a lien before you knew what the property was?
T. Richard Davis: Certainly there could be no lien until the property was established upon which that lien could be set.
William H. Rehnquist: Sure. In the Vermont case, Mr. Davis, the, as I understand it under Vermont law the lien attached to all of the debtor's real property and it wasn't any more specific than that, but you could at least go into county or I guess in Vermont town recording offices and find out what property the debtor had as of the time. Here in July there was no way to identify the South Street property as property of the debtor.
T. Richard Davis: The debtor had no real property interest in that, in the South Street property, that's correct.
William H. Rehnquist: Well, no... yeah, no real property, so this is certainly a case that is not in any way controlled by the Vermont case.
T. Richard Davis: It's not controlled by it, it's just the same reasoning that I would put forth that a specific lien is not required, a general is sufficient.
William H. Rehnquist: Well, but, but in, the words may not be all that important but under Vermont law as of the time the lien was filed you could, you knew what specific pieces of real property that lien attached to.
T. Richard Davis: It would be discoverable, that's correct.
William H. Rehnquist: Yeah. And under your theory certainly that wouldn't be the case.
T. Richard Davis: Generally that is correct. This case had specific facts which made it different as a matter of fact. Zions did understand and the fact that it would, that the debtor would be obtaining title to that property soon or there was a good chance that was happening, because--
William H. Rehnquist: But that doesn't, that doesn't affect the lien.
T. Richard Davis: --That did not affect the lien, but it gave, Zions had knowledge that that would be coming into, that the property would be coming into Mr. McDermott's hands because of the nature and the assessing of the foreclosure notices.
William H. Rehnquist: But that can't bind another judgment and it certainly can't bind the Government, the fact that Zions may have had knowledge.
T. Richard Davis: All parties had knowledge because that was recorded. For the foreclosure a lien, a notice of the foreclosure had to be filed. That was why, and it's that issue of reliance which was addressed earlier which is important. Reliance was important to a judgment lien. A creditor who has a lien or who has a claim against a party will not pursue that party if he knows the party is impecunious, if he knows there will be no property thereafter to obtain. In this case and in many cases where the creditor understands that the party is going to be obtaining property either through foreclosure or gift or devise or some such way, there would be a reliance that was exercised on the half of that judgment lien creditor.
William H. Rehnquist: But how does that fit into the congressional statute here, the fact that the competing judgment lien creditor may have relied on the judgment debtor to eventually acquire property?
T. Richard Davis: I think the statute is silent as to after acquired property. I think the framework which allows the recognition of a general lien is as far as we can go in looking at the statute to find whether this will fit within the choateness doctrine.
William H. Rehnquist: I didn't know that choateness had anything to do with reliance.
T. Richard Davis: I think the reason for, the choateness doctrine requires that the lien be, that the lienor be identified, the amount be ascertained, and the property be established. I believe the reason for that is so that anyone else can rely upon what that lien is all about. I think the service is entitled to reliance also upon the actions of other entities. I think that Congress, not only in 1966 but beginning in 1913 and again in 1939, began not to cut back on private competitors with Federal tax liens, rather to allow those liens to compete fairly as on an equal footing with the Federal tax lien. I think the, it's important to understand the time of perfection in either lien or both liens is important in any case, whether it's before or after the acquisition of property to which that lien will apply, to encourage the diligence of filing, the diligence of enforcement of claims and liens upon property. If that does not happen the secret lien doctrine, which was the beginning doctrine which was used in 1866, then carries over. Basically what we have here is a secret lien of the United States which comes in and primes a lien which was placed by a private lien claimant. I believe that the congressional intent clearly, under 1966 acts and prior to that as reviewed by various Federal courts, states that the purpose of that act was merely to put them on equal footing and encourage both parties to act diligently in obtaining what rights they are going to receive. Only two circuits have looked at simultaneous attaching or perfection. Those are the Fifth Circuit in the Southern Rock case, and the Tenth Circuit in McDermott. Both circuits saw that it was important to encourage the diligence, encourage that parties can rely upon record title acts in the various counties in which the liens are set. Zions acted diligently. It performed all acts required of the bank to perfect its general lien on all of Mr. McDermott's real property located in Salt Lake County. It is neither logical nor equitable to allow a 2 month later lien come and prime and subordinate the bank's lien. The integrity of the record title acts throughout the county or the country relies on the consistent judicial support of preferring a prior recorded lien to those subsequently recorded. The judicial and legislative preference for Justice Marshall's cardinal rule over the IRS's current desire to resurrect the secret lien doctrine must continue to protect all creditors and preserve confidence in the system. If I might digress a bit on the 1966 act, as the, as counsel mentioned, that several amendments to that act showed that Congress tried to cut back on private rights. Basically those concerned issues which are not relevant to this matter. The UCC issue, the purchased money security interest, neither of those are relevant to this case nor the issues at this Court. Basically the Congress gave the judgment lien creditor a priority to act on an equal footing requiring recording, perfection in a traditional manner of perfection of real estate liens, equally, without regard to the supreme rights of the sovereign. This Court can accomplish the reaffirmation of the principle of first in time by reaffirming, by affirming the decision of the Tenth Circuit and allowing the general lien to have attached effectively to the after-acquired property. Thank you.
William H. Rehnquist: Thank you, Mr. Davis. Mr. Feldman, you have 12 minutes remaining.
James A. Feldman: I just wanted to mention, Mr. Chief Justice section 6323(e), in response to your question before, would give the holder of a security interest that's superior to a tax lien a right to the interest that accrues even after the tax lien was filed. That's 6323(e).
Speaker: Thank you.
James A. Feldman: If there's no other questions--
John Paul Stevens: Mr. Feldman, I do have a question. I meant to ask this before. At page 14 of your brief you address the hypothesis that the liens were, became, were perfected simultaneously, and you say in effect that the statute says that if the private lien were not, did not attach first then the Government, the Government wins a tie. And you seem to be quoting the statute, but I don't think the statute says that. And I wonder could you comment a little bit on what, why you would say if there were a tie you wouldn't somehow or other share the proceeds or something, but rather would give the Government priority?
James A. Feldman: --Yeah, I mean, there's two, I think there's two distinct questions there. One is where there really is a tie would be a case, I would regard a case as for instance the Fifth Circuit case, the Southern Rock case, where there really was simultaneously with the Federal filing there was a state filing, and that would be a real tie case. I think the underlying rationale, even in a case like that the Government should win, because I think the underlying rationale is that unless the prior, is that the Federal tax lien is a very potent form of lien and unless at the time the Federal tax lien either arises or is filed, if at that moment the other lien hasn't already taken the property the Federal tax lien is what attaches to the debtor's property and has a superior interest then.
John Paul Stevens: But this is, there's no specific statutory provision addressing the question, is there?
James A. Feldman: I think that you could read the word until in 6323(a) to accomplish that.
John Paul Stevens: That's what you'd rely on?
James A. Feldman: Yes.
Byron R. White: Is there a regulation specifically on the point you're making?
James A. Feldman: I don't think there's a regulation specifically on the point I'm making. There is, the regulation does make clear that in a case like this the respondent is not a judgment lien creditor because in order to, it can't take advantage of the 6323(a) exception because under the statute you're not a judgment lien creditor unless, as this Court has said repeatedly, your interest, the identity of the lienholder, the amount of the lien, and the property subject to the lien are established at that point in time.
Byron R. White: You say in this case there wasn't any tie at all--
James A. Feldman: No, in this case there wasn't a tie. In this case--
Byron R. White: --because your lien was filed earlier.
James A. Feldman: --That's... well, we were... no, we filed later than they filed, but as of the time we filed they didn't have any interest in this property at all. In fact it's a stronger case than the numerous cases--
Byron R. White: But you, your lien, you think your lien attached to this after-acquired property as of the date that you filed, first filed your lien?
James A. Feldman: --That would be one way to put it. I think that the--
Byron R. White: Well, that's the only, that's what you're claiming.
James A. Feldman: --Right.
Byron R. White: Otherwise there would be a tie.
James A. Feldman: I think the question of when our lien attached to the property is not a legally, there's nothing that makes that a legally significant question. If it... then that is really to say the same thing as the date of attachment was as of the date that it was filed, or in the case that didn't come within one of the 6323(a) exceptions it would be when the Federal tax lien arises, which Congress provided was the date of assessment.
William H. Rehnquist: And why did your, why did the Government's Federal tax lien in September attach to the South Street property when the earlier July lien didn't?
James A. Feldman: Again, I think the key point is that the date--
William H. Rehnquist: Well, answer my question.
James A. Feldman: --Right. We did, we attached to the property on September 23, 1987, on the same date as respondent--
William H. Rehnquist: Why? Because your lien covered personal property as well as real property?
James A. Feldman: --Well, that's a separate question. We, our lien did cover real property as well as personal property. It was the holding of the district court that we waived our rights to the taxpayer's personal property. We think that was mistaken, but we didn't, don't challenge that here.
William H. Rehnquist: So when did your lien take effect?
James A. Feldman: Our lien attached to the property on, at the same time as respondents', on September 23, 1987, but the priority of the Federal lien should be determined as of the date of filing. The question is whether as of the date we filed, whether at that point respondents' lien was specific and perfected, and it wasn't in this case.
William H. Rehnquist: So you say your lien as of the date of filing covered the South Street property?
James A. Feldman: Yes. I mean, that would, legally that would be, that would have the same effect as the--
William H. Rehnquist: Obviously, you know, you're not, you don't feel comfortable saying yes. Why not?
James A. Feldman: --Well, I think the Federal lien attached on September 23, 1987. I just don't think that attachment is a relevant question to ask in determining who has, attachment of the Federal lien--
William H. Rehnquist: Well, permit me an irrelevant question then. [Laughter]
James A. Feldman: --Yes. I'm comfortable in saying that on September 23, 1987 that was the date that the Federal lien attached.
William H. Rehnquist: Attached to the South Street property.
James A. Feldman: That's right. But that the priority of the United States, as is the case with many of the exceptions in the Tax Lien Act and elsewhere in the UCC when you're dealing with prior, with private creditors, it is frequently the case that the priority is not measured from the date of attachment but is measured from some other date. And it's our position that under Federal law the priority is measured from the date of filing in the 6323(a) case.
Antonin Scalia: Well, this is, you know that there is no such word as choate, but choate is to inchoate as sult is to insult. I mean-- [Laughter]
James A. Feldman: Have I used the word?
Antonin Scalia: Somebody has used it around here. I heard it.
James A. Feldman: I've been trying not to. Thank you.
William H. Rehnquist: Thank you, Mr. Feldman. The case is submitted.