William H. Rehnquist: We'll hear argument next in Number 94-397, the Associated Industries of Missouri, v. Janet Lohman. Mr. Walsh.
Thomas C. Walsh: Mr. Chief Justice, may it please the Court: This case is a Commerce Clause challenge to section 144.748 of the revised statutes of Missouri, which imposes an additional use tax of 1-1/2 percent on all goods purchased from out of State for use, storage, or consumption in Missouri. Now, the Missouri overall taxing scheme is thus as follows. There is a 4.225 State-wide sales tax. There is a 4.225 equivalent State-wide use tax. The challenged statute adds an additional 1.5 percent use tax to be charged across the State on all transactions from out of State. There is no corresponding additional sales tax State-wide. Cities and counties and other municipalities within the State, however, are authorized to enact local sales taxes with the approval of the voters. There is no authority for any such local use taxes. Now, the result of this unusual statutory scheme is a patchwork taxing scheme within the State of Missouri that has 22 different local sales tax rates, ranging from zero percent in several counties to 3.5 percent in one city, and bear in mind that throughout the whole State, the 1-1/2 percent additional use tax is applicable, so the total use tax applicable throughout the State of Missouri is 5.725 percent.
William H. Rehnquist: Is there any correspondence, Mr. Walsh, between the size of the local sales tax and the population of the taxing jurisdiction?
Thomas C. Walsh: Not directly, Your Honor. Some of the higher sales tax rates are in the larger cities, and some of those that have no additional sales tax are the smaller rural communities, but there's no... you can't really draw a specific correlation.
Sandra Day O'Connor: Mr. Walsh, at one time was there a provision that said if a local community imposes an additional sales tax of its own, that it would impose an equivalent use tax at the same time?
Thomas C. Walsh: There was a provision, Justice O'Connor, in 1990, right before this particular law became effective.
Sandra Day O'Connor: Had that been adopted by the legislature?
Thomas C. Walsh: Yes, it had. It was--
Sandra Day O'Connor: Did it ever go into effect?
Thomas C. Walsh: --Well, it was on the books for about a year, but it was never implemented.
Sandra Day O'Connor: Had that been implemented, would you be here?
Thomas C. Walsh: Not at all, Your Honor. I... we have no quarrel with that kind of--
Sandra Day O'Connor: Why was it not implemented? Why was this shift made?
Thomas C. Walsh: --The record doesn't really show that, Your Honor, except that a) the state thought it was easier, apparently, to do it the way that it eventually decided to do it, and b) I think there was probably some concern about whether local voters would actually adopt a local use tax.
Sandra Day O'Connor: Is that the method employed in some other States that allow local imposition of additional sales tax?
Thomas C. Walsh: The record shows, Your Honor, that there are 28 States that allow local use taxes, and every one of them has some sort of mechanism which prohibits the local use tax from being greater than the local sales tax. Missouri is the only State that has adopted this kind of a scheme, except back in the seventies, Oklahoma tried it, and the Oklahoma statute was invalidated by the Oklahoma supreme court under the Commerce Clause, a scheme very similar to this one, but we did have--
Antonin Scalia: But the National Conference of State Legislatures is amicus on the other side. They would like it.
Thomas C. Walsh: --Very much so, yes, Your Honor. They would like to experiment with use taxes and to avoid the strict rule of equality that has pertained to use taxes since this Court started deciding these kinds of cases. The--
Harry A. Blackmun: Mr. Walsh, I may be repeating what Justice O'Connor asked you, but I want to be sure. You are attacking section 144.748, aren't you?
Thomas C. Walsh: --Yes, Your Honor.
Harry A. Blackmun: You are not attacking the local delegation power.
Thomas C. Walsh: The local delegation of sales taxes--
Speaker: Yes.
Thomas C. Walsh: --Your Honor? No, we're not. No. The statute that we're attacking imposes the additional 1-1/2 percent across-the-board, State-wide use tax. It's contained in a separate--
Harry A. Blackmun: It's the latter that causes the difficulty here.
Thomas C. Walsh: --That's the statute that causes the difficulty, and it's a self-contained statute. We're not even attacking the basic 4.225, basic use tax, which is equivalent to the State-wide basic sales tax. It's the add-on that causes the problem.
William H. Rehnquist: It's the combination of the use tax exceeding the sales tax.
Thomas C. Walsh: Yes, it is, Your Honor, but the excess 1.5 is in a separate statute, and it could be invalidated without affecting the base.
Ruth Bader Ginsburg: It is true, is it not, that the scheme that you said you would not challenge in response to Justice O'Connor, if all of the local jurisdictions in fact added on a use tax, would have netted more money rather than less. You had a line in your brief about Missouri attempting to swell its coffers at the expense of interstate commerce, and yet the scheme that you say would be constitutional could have netted the State more.
Thomas C. Walsh: Well, it could have, if the local municipalities had adopted it. One of our objections to this is that the State tried to preempt the local option by imposing this use tax at the State level, and I think it's just a matter of supposition whether the local municipalities would have gone along with a local use tax in all situations.
William H. Rehnquist: Well, if we accept your submission, we would not strike down any provision of Missouri law across the board. For instance, you have no grounds of complaint, as I understand it, about the situation in Kansas City, or perhaps Jackson County, or the City of St. Louis.
Thomas C. Walsh: Well, the statute, though, that creates the problem, Your Honor, is 144.748. That is a statute applicable State-wide.
Speaker: But--
Thomas C. Walsh: It does not produce equality State-wide.
William H. Rehnquist: --Well, but you have to show that it produces a higher use tax than sales tax in a particular jurisdiction. You can't show that with respect to Kansas City or with respect to the City of St. Louis.
Thomas C. Walsh: But you can't... I respectfully submit, Your Honor, you can't take averages, as the State wants to do. You have to look at this tax as it operates in the marketplace--
Speaker: But--
Thomas C. Walsh: --In all the marketplaces.
William H. Rehnquist: --But you have to look at it with respect to each of the taxing jurisdictions. What complaint do you have about the situation, say, in Jackson County?
Thomas C. Walsh: The fact is that this is a State-wide statute.
William H. Rehnquist: In mean... but answer my question.
Thomas C. Walsh: Well, insofar as--
William H. Rehnquist: What complaint do you have about the situation in Jackson County?
Thomas C. Walsh: --Insofar as the... the sales tax in Jackson County is higher at present time than the use tax, there is arguably no damage from the discrimination in Jackson County.
William H. Rehnquist: And the same is true in the City of St. Louis, is it not?
Thomas C. Walsh: It... I believe the sales and use tax are equal in the City of St. Louis, but in... out of... in 841 out of 1,573 jurisdictions in the State of Missouri, the use tax is higher than the sales tax--
Speaker: Mr. Walsh, why--
Thomas C. Walsh: --and that's because... excuse me.
Antonin Scalia: --I agree with you that the State statute appears to be the problem, and perhaps your remedy for the future is that that statute is invalid, but as far as collection of taxes past paid, is it your assertion that anyone, no matter where those taxes were paid, whether in Kansas City or anywhere else, is entitled to a refund?
Thomas C. Walsh: Yes, Your Honor, it is, because the State statute has created the discrimination. It can't be severed. It's--
John Paul Stevens: Well, why not, Mr. Walsh? Why wouldn't it be an adequate remedy to simply say the Constitution prohibits the enforcement of the statute in those jurisdictions where it produces a higher total than produces any discrimination?
Thomas C. Walsh: --Well, I guess that would be some sort of a geographical severance type article.
Speaker: Yes, sure.
Thomas C. Walsh: But the statute is a... it imposes a 1-1/2 percent use tax in... everywhere, to every transaction.
John Paul Stevens: I understand that, but there's nothing wrong with the collection of it in Jackson County, for example. It's only those jurisdictions in which you have this disparity running in one direction. I don't know why your remedy wouldn't be adequate to just say it cannot be enforced in those jurisdictions.
Thomas C. Walsh: But that assumes, I think, that the legislature had some intent that it would apply where it's legal and not apply where it's not legal, and the next--
John Paul Stevens: It would assume the Federal Constitution just requires correction of Federal constitutional violations. It doesn't require a windfall.
Thomas C. Walsh: --But you can't analyze the statute that way, because every year, it changes. Every--
Ruth Bader Ginsburg: Why wouldn't that be a question of State law? I mean, if the... your argument on Federal constitutionality is you can't have a higher use tax than sales tax. If this Court just says that, then why isn't the State free to say, our statute stands to the extent that it doesn't violate that constitutional requirement?
Thomas C. Walsh: --Well, I think that... I think it's primarily, first of all a question of Federal constitutional law, because the--
Ruth Bader Ginsburg: Constitutional law where the use tax higher than a sales tax is no good.
Thomas C. Walsh: --Right.
Ruth Bader Ginsburg: Once that proposition... if that proposition is decided in your favor, then why shouldn't the rest... what happens next, excepting that premise, be for the State to determine?
Thomas C. Walsh: Well, I think the Court has to make a determination, looking at this statutory scheme as a whole, whether there is any basis, whether in State or Federal law, for severing offending parts of this statute and salvaging the rest.
David H. Souter: Yes, but you keep speaking of offending parts of the statute. The question of severance is offending taxing jurisdictions, and how those particular taxing jurisdictions reach the point of offending seems to me is a question of State law. It's the result which is a question of Federal law. Why do we not, in order to rule your way, simply declare the disparity is unconstitutional, leaving it to State law to unscramble the eggs any way it wants to in order to get the required result?
Thomas C. Walsh: Because I think that the issue of facial discrimination here makes the entire scheme unconstitutional.
David H. Souter: The facial discrimination is... I was going to say the bottom line. I guess it's the top line. That's where the discrimination is. I don't see where it becomes a Federal question to identify whether one element of a complex State tax scheme is the particular culprit as distinct from the unconstitutional result that all of those elements produce.
Thomas C. Walsh: When you have a 1-1/2 percent across-the-board additional use tax that is applied by the State in every situation, that offends the Commerce Clause, because--
David H. Souter: No. It only offends the Commerce Clause because it's being added on to two other layers of tax, one of which is within the control of particular counties and municipalities.
Thomas C. Walsh: --But at the State level you have 4.225 sales tax, you have 5.725 use tax, and that is... that is the scheme that is being delivered to the counties, the municipalities, the cities, and--
David H. Souter: Are you telling us that in order for you to win your case we have in fact got to, as it were, tell the State how to unscramble the causes that bring about this top line violation?
Thomas C. Walsh: --Our position is that within--
David H. Souter: Well, yes or no. Yes or no.
Thomas C. Walsh: --Yes, because... because our position is that within a single taxing jurisdiction, within any State, if a use tax exceeds a sales tax, that violates the Commerce Clause. That inhibits interstate commerce.
Ruth Bader Ginsburg: Yes, but you mention the word severability. I don't understand why the severability question isn't for the State to decide. If it were a Federal law, yes, it would be for this Court to decide.
Thomas C. Walsh: But the disparity is created by the facial difference at the State level between sales tax and use tax.
Anthony M. Kennedy: Suppose that every county were like Kansas City and Jefferson County, and that there were no disparities because the counties in every instance adjusted their laws so that the sales and use tax were equal. Would there be a violation of the Constitution?
Thomas C. Walsh: That would be statistically improbable, but the facial problem that exists with regard to the overall statute would still exist. There might not be any discrimination in fact.
Anthony M. Kennedy: Well, could you bring a suit in those circumstances?
Thomas C. Walsh: I might not have any injury, but I... no, I probably couldn't.
Anthony M. Kennedy: So if one county, or one municipality, then deviates, then the entire statutory scheme falls?
Thomas C. Walsh: No. The problem is that there's no compensation. There's no compensatory tax rate in the sales tax area that you can point to for which this use tax supposedly compensates. Now, the theory... the only theory that the State has here is that this is a complementary, compensatory use tax, but where is the tax for which it compensates? It's not at the State level, and I don't think this Court has ever upheld a system whereby one sovereign can enact a tax, pass a tax that discriminates against interstate commerce and rely on some other sovereign--
David H. Souter: But you're assuming that we're deciding a question of State sovereignty. Isn't it the State's business to decide how it's going to, as it were, allocate its governmental taxing power? Don't we simply look to the State as a whole and ask what the result is?
Thomas C. Walsh: --The State may allocate taxing responsibility, but it's our position that if the State is going to create a compensatory use tax system, then either it has to do so at the State level, or it has to do so... it has to delegate to the municipalities the right to do so, and require that any use tax be no greater than any sales tax.
William H. Rehnquist: Well, what's your authority for that proposition, Mr. Walsh? Now, it would be something about the structure of State Government. It certainly has nothing to do with interstate commerce.
Thomas C. Walsh: Well, it has to do with the requirement of Halliburton, of Silas Marner, that... Silas Mason. [Laughter] Silas Mason--
Speaker: Good book.
Thomas C. Walsh: --that the use tax, because of its inherently discriminatory and protectionist nature is allowed, but only under very restricted circumstances, and the law is that you must... in building in a use tax you must provide that local and out-of-State sellers are treated equally, local and out-of-State goods are treated equally, and, as the Court said in Boston Stock Exchange, a use tax is only valid if a purchaser, looking at the options between buying in-State and buying out-of-State can make that decision without regard to the tax consequences.
William H. Rehnquist: Now, those are all Commerce Clause principles.
Thomas C. Walsh: Yes.
William H. Rehnquist: But you're urging here something that I don't think has ever emerged in any of our commerce cases or any other case, and that is that somehow the State has to handle it all itself, and you don't look at the net result between taxing authorities and the State, but there's some principle that requires the State to do certain parts of it and the counties to do a certain part of it, and we have many cases saying that the State can divide up its authority the way it wants to.
Thomas C. Walsh: The question... the ultimate question in the case, Your Honor, is, is this a compensatory tax, because a use tax, if it's not a compensatory tax, is prima facie violative of the Commerce Clause. Its only purpose is to protect local industry and, by definition... by definition it discriminates against interstate commerce, so where is the compensating sales tax that this act is designed to protect local merchants against, and at--
William H. Rehnquist: It's in St. Louis, certainly, and it's in Jackson County. You've agreed to both of those.
Thomas C. Walsh: --But it's a lot of places... there's a lot of places where it isn't, and it isn't a tax that compensates for the use tax. It is a range of 22 different... a hodge podge of 22 different local sales taxes.
William H. Rehnquist: Well, but that's true in lots of jurisdictions, that you have a State sales tax, and then you have also a local sales tax.
Thomas C. Walsh: No--
William H. Rehnquist: Certainly you're not attacking that principle.
Thomas C. Walsh: --No sales tax... no use tax, sales tax arrangement has every been upheld, to my knowledge, where there was a difference within a taxing jurisdiction... any taxing jurisdiction--
John Paul Stevens: But wouldn't you agree that you would have no constitutional claim if the cities were all allowed to impose sales taxes of at least 1-1/2 percent, and there was a hodge podge of those from 1-1/2 percent to 5 percent? Then you wouldn't have any claim, would you?
Thomas C. Walsh: --If they were required to, as--
John Paul Stevens: Required to have a minimum of 1-1/2 percent.
Thomas C. Walsh: --And you had an across-the-board use tax--
John Paul Stevens: But a hodge podge above 1-1/2 percent, and the hodge podge does not mean anything, does it? a--
Thomas C. Walsh: --Well, it means that within 841 jurisdictions in the State of Missouri, the use tax is higher than the sales tax.
John Paul Stevens: --No, no, no, I'm assuming that it can't be, that you have a 1-1/2 percent--
Thomas C. Walsh: If you mandated a minimum of sales tax--
John Paul Stevens: --On the sales tax, yes, of 1-1/2 percent.
Thomas C. Walsh: --Then I think you could point to that use tax as compensating for that minimum.
John Paul Stevens: For the minimum, and the hodge podge and the excess would be constitutionally irrelevant. If there's a hodge podge all by itself, it doesn't mean anything. It's just that there is some jurisdictions in which that there is a lack of total compensation.
Thomas C. Walsh: Well, the gross disparity from jurisdiction to jurisdiction is unprecedented. It's--
John Paul Stevens: I understand it's unprecedented, but you seem to agree... at least, I think you do... that if you had the same gross disparity but the minimum of 1-1/2 percent, there would be no problem.
Thomas C. Walsh: --I think an argument could be made under those circumstances that that was a compensating use tax, but I don't find in this case anything that can be pointed to as a compensating sales tax, the tax for which--
John Paul Stevens: Well, it compensates for 1-1/2 percent in Jackson County and St. Louis.
Thomas C. Walsh: --But that's not what this use tax was designed to compensate for.
Speaker: Well--
Thomas C. Walsh: The State just decided they wanted to do it a different way, and there isn't any reason they couldn't have done it the right way. As a result, there are 26 percent of Missouri citizens who live in areas where the use tax is greater than the sales tax, and that's because of this statute. That's 1,300,000 people, who when they decide to buy an appliance from the J. C. Penney catalogue store are going to pay a higher use tax than if they went down to the corner and bought the same--
John Paul Stevens: --So your proposition is that a use tax discriminates against interstate commerce unless in all instances it compensates for a State sales tax.
Thomas C. Walsh: --For a sales tax, yes and that's what this Court has held, Justice Kennedy. That... Silas Mason said, equality is the theme that permeates this--
Ruth Bader Ginsburg: Even though in some cases, in some counties, where there's a larger population, larger percent sales, interstate sales can be said to be preferred because the total tax burden on them will be less.
Thomas C. Walsh: --There is a... in some counties there is a higher sales tax than a use tax, that's correct.
Ruth Bader Ginsburg: Though in those cases you can say the discrimination is in favor of interstate sales.
Thomas C. Walsh: That's what the State argues, but I... you can't discriminate in some areas of the State and say, well, we're sorry about that, but we're making it up over here in Kansas City.
Ruth Bader Ginsburg: Well, that's the question.
Thomas C. Walsh: Well, yes, and I don't think--
Ruth Bader Ginsburg: If you say, can you... if you look at it, the whole picture, interstate sales are being favored, but in particular counties in-State sales are favored.
Thomas C. Walsh: --Well... and I don't know that they're being favored, but there are more sales taxes being collected than if the uniform sales tax rate were 1.5 percent, but the State says, well, we have the right to charge more over here and less over here, but that leads to exactly the kind of trade, or potentially to the kind of trade wars that the Commerce Clause is designed to prevent. What, for instance, would prevent the State of Missouri from enacting large use taxes around the perimeter of the State to frustrate citizens from going across the border and buying goods and having no use taxes in the center of the State? That's what they want the right to do. They even would support by their argument a State statute which authorized the enactment of local sales and use taxes by the local municipalities with no correlation to each other. They would say that any municipality could have a sales tax here--
Ruth Bader Ginsburg: Well, you're saying a lot of things that they would say, but I haven't heard it from them. I thought their whole point was, it's the collection of this is a nightmare if we do it by how much each locality puts on, so we're trying to make it simple, and we're simplifying it in a way that overall interstate commerce is not being disadvantaged. If anything, the interstate... doing... looking at the whole picture, the interstate sales are being taxed less.
Thomas C. Walsh: --Well, first of all, Justice Ginsburg, administrative convenience is not an excuse for a violation of the Commerce Clause, and the courts have been uniform in holding that, but you can't look at averages around the State and say, it comes out with more sales tax than use tax. Commerce is conducted in the local marketplace, in the counties, in the cities, and the highways and byways, where individuals are making decisions about what goods to buy and from where, and where merchants are being required to compete against people from out of State, and the State of Missouri has created a situation whereby in more than half of the areas of the State, the interstate vendors are being disadvantaged.
William H. Rehnquist: Well, Mr. Walsh, you say half the areas of the State. Now, the respondents in their brief say that 92 percent of all taxable transactions in the State carry a sales tax rate equal to or greater than the average use tax rate. Do you disagree with that?
Thomas C. Walsh: That... no. That number was found by the trial court, but that relates to the sales being made in-State, not to the use tax analysis, which frankly isn't developed in the record, but what is developed is that 26 percent of the population live in areas where they pay higher use tax than sales tax, and that's not anybody's fault except the State of Missouri.
Antonin Scalia: I guess what you're saying is that a more relevant figure is what percentage of out-of-State sales are made in jurisdictions that charge less than the offsetting sales tax.
Thomas C. Walsh: Yes, and--
Antonin Scalia: And we don't know that.
Thomas C. Walsh: --We don't know that, but we know that 1,300,000 people live in areas where, if they buy from out of State, they're going to pay more.
Antonin Scalia: Do you have any answer, other than administrative inconvenience is no excuse, to the argument that, well, if you do this to us as a practical matter, we can't leave it to local option? Is there any convenient way to allow local option?
Thomas C. Walsh: Oh, absolutely.
Antonin Scalia: And you collect the tax.
Thomas C. Walsh: Absolutely. Section 144.747, the repealed statute that Justice O'Connor questioned me about, did it the way that every other State in the Union does it. That is, it says... the State says to the local municipality, you may enact a sales tax. You may also, at the same time, enact a use tax.
Antonin Scalia: But what you have to do is restrict local option to this extent Sales and use tax have to go hand-in-hand?
Thomas C. Walsh: Yes, unless you impose them both at the State level. Yes, Your Honor. I'd like to reserve the rest of my time, please.
William H. Rehnquist: Very well, Mr. Walsh. Mr. Downing, we'll hear from you.
Don M. Downing: Mr. Chief Justice, and may it please the Court: What petitioners would have this Court do is invalidate a State compensatory tax system that substantially favors interstate commerce overall. Well, this Court's never been willing to do that, for good reason. To do so--
Antonin Scalia: Wait, I'm not sure that that's true. Do you mean that a State can have a blatantly unconstitutional tax upon interstate commerce coming into one county and the State say no, but anybody who does business in this county from out of State shall pay $1,000 a day, so long as that is offset by beneficence to interstate commerce in other sections of the State, and you look on the balance and say, well, on balance, you know, the business in this county is being discriminated against, but they're really good to interstate commerce elsewhere. Is that the argument you say we--
Don M. Downing: --Your Honor, certainly there's ample precedent in this Court's cases... the Bacchus case, for example.
Antonin Scalia: --For that, you say yes, that's okay.
Don M. Downing: No... Your Honor, I'm saying in terms of, if the purpose for that county's action was to protect the local market segment, or an industry, if we're getting into the Bacchus situation where there's an identifiable market segment, that's one issue, but this Court's Commerce Clause cases have looked historically at the overall effect of State regulation on the national economy. As the Court said in the Exxon case, the Commerce Clause is designed to protect the interstate market, not particular interstate firms.
Antonin Scalia: So you... does that mean your answer to my question is, that is okay?
Don M. Downing: If one county enacted a... decided to have no sales tax in order to benefit local businesses, that would be okay, as long as the overall effect of State regulation on the national economy was either neutral or pro interstate commerce, like it is here.
Antonin Scalia: One county can impose a $100 fee on people doing business in that county from out of State, so long as other counties give people doing business a rebate, in equivalent dollar amount?
Don M. Downing: I think that's a different situation, Your Honor, because that's not a compensatory tax case. In the compensatory tax area, this case is analyzed differently from... for example, I think the hypothetical you're talking about is somewhat similar to the Fort Gratiot case the Court decided 2 years ago, where a local county had an environmental regulation in which it decided it was not going to accept out-of-State waste. Well, all the other counties in the State treated out-of-State waste evenhandedly. They treated them just like it was in-State waste, so the net effect of Fort Gratiot, just like I think in the hypothetical you're pointing out, the net effect was an overall burden to interstate commerce. Every county was treated equally. One county was discriminating... net, overall burden. Well, here, the parallel to this case--
Antonin Scalia: Wait, before you get off that one, what you're saying is, if the other counties had favored out-of-State waste, that would be okay, So a State can pass a law saying, the eastern half of our State, no out-of-State waste is allowed. The western half, we favor out-of-State waste, so all out-of-State waste has to go into the western half, and none of it can go into the eastern half. A State can say that--
Don M. Downing: --I think that--
Antonin Scalia: --so long as the net effect is pretty good.
Don M. Downing: --I think the Court could conclude, certainly, that that was not isolationist, that the State was trying to... not to--
Antonin Scalia: Oh, we could conclude anything we want. I'm asking you, is it constitutional or not? [Laughter]
Don M. Downing: --Well, it's not a compensatory tax case. Environmental cases, the Philadelphia v. New Jersey--
Antonin Scalia: Is it constitutional or not?
Don M. Downing: --Yes, I think it could be. I think it could be, under the Philadelphia v. New Jersey case, and under the Chemical Waste case and Fort Gratiot. Environmental regulations have been treated differently by this Court than compensatory tax cases.
Antonin Scalia: We can split up a national market. We just have to do it in a checkerboard pattern, with each square on the checkerboard being less than an entire State.
Don M. Downing: Your Honor, as long as this Court... the Court 2 years ago pointed out in Quill that unlike the Due Process Clause which is concerned with the effect on individuals and particular firms, the Commerce Clause is not concerned about particular interstate firms, it's concerned about the overall effect of State regulation on the national economy. Here, interstate--
Antonin Scalia: Why do you say that? What is your support for that? We don't care what you do to any individual in interstate commerce so long as the overall effect isn't bad. What is your authority for that?
Don M. Downing: --Well, the Exxon--
Speaker: I find that astounding proposition.
Don M. Downing: --The Exxon case specifically held that. It was a situation in which you had three interstate firms that were petroleum refiners, and the State there prohibited petroleum refiners from having a gasoline station in their State, allegedly to protect local gasoline dealers. They didn't want the Exxons and the Amocos coming into their State, and the Court held in Exxon that the mere fact that three interstate firms suffered a net competitive disadvantage as a result of the State statute doesn't matter under the Commerce Clause, because it said, and I quote, "The Commerce Clause protects the interstate market, not particular interstate firms. "
Antonin Scalia: But you're dealing with a provision that is not facially discriminatory there. The examples I've been giving you are examples where on its face the statute discriminates against interstate commerce. I want a case like that, in which where there is such facial discrimination we say, that's okay, so long as somewhere else it's balanced off.
Don M. Downing: Well, Your Honor, I think it turns on how you define what discrimination against interstate commerce is. Here, Missouri's system substantially favors interstate commerce overall. If you define discrimination on a transaction-by-transaction or firm-by-firm approach, I would agree with you. If you define it on an overall level--
Sandra Day O'Connor: Well, how about county-by-county or city-by-city, and clearly, in a good many communities there, there is facial discrimination. I mean, there it is. You have to accept the case on that theory and then tell us how we deal with it and what you rely on, other than that general acceptance case.
Don M. Downing: --Well, in terms of a compensatory tax, the State was attempting to compensate. Mr. Walsh raised that there was nothing for the State to compensate for. Well, in Maryland v. Louisiana, and Tyler Pike, the analysis for a compensatory tax, you look at... you try... the first step is to identify the burden. Not the tax, but the burden for which the State is attempting to compensate. Well, here it's plain. The State was attempting to compensate for the effect of the varying local taxes upon intrastate commerce. It did that by setting a use tax rate, State-wide, which is 20 percent less than the average local tax rate. In Missouri, Missouri businesses are at a 20-percent net competitive disadvantage to interstate firms selling to Missouri residents.
Sandra Day O'Connor: You had a scheme in 1990, one that Justice O'Connor mentioned at the outset of this argument, that wouldn't raise any constitutional questions but it was never implemented. Can you tell us why that scheme was abandoned and this uncommon one adopted in its place?
Don M. Downing: Your Honor, I think Missouri found a better way to accommodate the practical needs of interstate sellers. Interstate sellers... as this Court is well aware from the Quill case, interstate sellers don't like the varying local rate solution, because it is extremely burdensome for them. To determine for every transaction they sell into the State of Missouri, there are over 1,000 taxable jurisdictions. They would have to determine for each transaction the applicable current use tax rate for that transaction. So that's one reason, and it wasn't... Missouri didn't do this out of an altruistic sense to benefit interstate sellers. I don't want to make that claim. But States realized that, to the extent a tax is easy to comply with by a taxpayer, it's more efficient to collect. We get a greater... we can collect a greater percentage of our taxes by setting a State-wide rate, because all interstate sellers now selling into Missouri know exactly what their tax is on a use tax basis, so that's one of the reasons. Another reason is, the identical use and tax rates in each jurisdiction approach, well, it doesn't solve the constitutional problem that Mr. Walsh has tried to point out. It doesn't guarantee equal treatment in each and every instance. For example, suppose Missouri adopted that system, and you had a resident of a local jurisdiction who wanted to purchase a washing machine. He happened to live in a jurisdiction where the local use tax rates and sales tax rates were high. Well, he would have essentially three options. He could purchase from a local vendor and pay a high local sales tax rate, or he could purchase from an out-of-State vendor and pay the equally high local use tax rate, or he could travel to another local jurisdiction in Missouri and pay a low sales tax rate. Well, from the out-of-State seller's perspective, that out-of-State seller is at the precise competitive disadvantage in that situation as he is under our present system, so Missouri recognized that going to this identical rate in each jurisdiction solution doesn't cure any supposed inequality that might exist. So to accommodate the needs of interstate sellers, and to make it more practical, admittedly, also from the State's perspective, it's easier for the State to administer on a State-wide basis, so those are the reasons Missouri went to that system.
David H. Souter: Well, you say easier to administer. Don't you mean easier, in a way, to legislate, because I take it the tax is actually paid to the county or the municipality. It's not paid to the State, and then the municipalities and counties remit the State portion to it, is that correct?
Don M. Downing: No, Your Honor, it's paid to the State, and then the State remits to the local Governments. It keeps a 1 percent administration fee, in essence, and then remits the remainder to local Governments.
Antonin Scalia: And you say in the age of computers it's really a lot of trouble to figure out?
Don M. Downing: Your Honor, that's... that's--
Antonin Scalia: In the various counties, you have... you know where it's being sold into, and you know what the tax rate is there. It doesn't seem to me like a whole lot of trouble.
Don M. Downing: --Your Honor, as a matter of fact, the Court pointed out in Quill that very point, that even in the age of computers, the ease with which interstate sellers can calculate... you see, within various counties, you have different taxable jurisdictions. You can't just go by the county. You can't just go by the city. You can't even go by the zip code.
Antonin Scalia: You know what I would tell those... I would tell those sellers, well, just... if it's a whole lot of trouble, just pay 1-1/2 percent and you'll be sure always to be giving enough, which is what you're making them do. They could do that voluntarily, if it was really a lot of trouble to figure out what the proper rate was.
Don M. Downing: Well, Your Honor, it's interesting that you mention that, because currently pending before Congress, Congress in response to this Court's decision in Quill is actively considering this session a bill which would enable... and essentially adopt the Missouri system, which would allow States to set, on a State-wide basis, a State-wide use tax rate based on their local sales tax rates. And my point is not that this Court should necessarily defer to Congress, but that in these difficult practical issues of State taxation... the Court in Quill expressly recognized that Congress may well be better equipped to address some of these issues than this Court, and that was one of the reasons the Quill court chose not to overrule the Bellas Hess case. That case provided a bright line rule that States could use in devising their tax systems. Well, that's the situation here. The bright line rule that General American and this Court's cases have devised in this area is that if the tax that the State imposes on in-State sales, if the average tax is greater than or equal to the tax on interstate sales, then there's no Commerce Clause concern.
Sandra Day O'Connor: Well, I thought the bright line rule was no facial discrimination.
Don M. Downing: Well, Your Honor, again that gets to the issue, do you measure discrimination on a transaction-by-transaction approach, or do you measure it on an overall State-wide basis?
Sandra Day O'Connor: Jurisdiction by jurisdiction, I suppose.
Don M. Downing: Well, again, I would submit that this Court has never invalidated a State tax, compensatory tax, that on an overall basis is favorable to interstate commerce like Missouri's is here.
David H. Souter: But have we ever distinguished between... have we ever, rather, ignored jurisdictions in the way that you are asking us to ignore jurisdictions, because what the State is doing, as you described to me a moment ago, is becoming a collection agent for the various sub-State jurisdictions, but the tax... to the extent that there is a differential, the tax is a tax of that sub-State jurisdiction, and you are in effect saying, ignore the actual taxing jurisdiction in this case. Have we ever done that?
Don M. Downing: Yes, Your Honor, on at least three occasions I can think of. The General American case is one which is discussed extensively in the briefs. That case plainly involved, just like here, a State which had varying local tax rates, and a State-wide rate that was set to compensate for those varying local rates.
David H. Souter: So that the rate for any given transaction was going to be the same, isn't that correct?
Don M. Downing: No--
Speaker: --and that's not so here.
Don M. Downing: --That's not... that system plainly allowed for the same possible instances of unequal treatment that our system... just like here. In that case, Louisiana parishes had varying local rates that applied in-State, and a State-wide rate that applied to nonresident railroad companies, so it plainly... just like here, it allowed for possible instances--
David H. Souter: But that wasn't a Commerce Clause case.
Don M. Downing: --Your Honor, I would beg to differ, with all due respect.
David H. Souter: Wasn't that an equal protection case?
Don M. Downing: Justice Cardozo believed it was a Commerce Clause case, in the Silas Mason case, and Professors Hellerstein and Hartman in their treatises in this area, respected commentators, both analyzed that case as a Commerce Clause case. I would grant you there is some ambiguity in the language--
Antonin Scalia: Unfavorably, as I recall, in the case of Hellerstein. He thought it was a Commerce Clause case that was decided wrong, or at least wouldn't be decided that way today.
Don M. Downing: --He indicated something to that effect, Your Honor, I would grant you that, but again--
Antonin Scalia: Let me--
Don M. Downing: --Professor Hellerstein--
Speaker: --Oh, go ahead, finish your answer. I didn't mean--
Don M. Downing: --No... I was going to another thought.
John Paul Stevens: --Would you just comment on one point that it's hard for me to get out of my mind? If the law has been as clear as it has been since 1926 with the General American tax case, and if the advantages of your system are so obvious, why do you suppose you're a pioneer?
Don M. Downing: Well, Your Honor, I think in large part the States... for example, the equal use tax and sales tax rate in every jurisdiction States, well, that has some superficial appeal to it from a Commerce Clause perspective, I would grant you that, but Missouri was aware of the practical needs of interstate sellers. I mean, it was fully aware of the Quill case, as it was going up through the courts to this Court, and there the interstate commerce and the interstate sellers came into Missouri and said, listen, there's a problem here. We've got a practical problem of State taxation. We want to comply with your tax, but it's very difficult for us to do that. Can you help us? Missouri sets a State-wide rate that makes it very easy for them to comply, and I might add that the interstate sellers are the ones in favor of the pending congressional legislation. They're the ones who want State-wide rates, even though there might be possible instances in which there could be inequality.
Antonin Scalia: Mr. Downing, can I ask you to imagine for a moment the unlikely and horrible event that we don't agree with you on the constitutionality of this scheme. I assume you would prefer that we not say that all of the imposed taxes are unconstitutional, but rather, only those that exceed the local rates in the counties affected. I assume you would prefer that outcome to--
Don M. Downing: Absolutely, Your Honor.
Antonin Scalia: --Why? Why is that a proper way to do it?
Don M. Downing: Well, Your Honor, there's certainly no unconstitutionality under the Commerce Clause for a State in any local jurisdiction to have a use tax rate that's lower or equal to its sales tax rate.
Speaker: All right, but--
Don M. Downing: I think Mr. Walsh concedes that.
Antonin Scalia: --Suppose a State just passes a general law saying all out-of-State sales shall pay... all out-of-State sellers shall pay $500 a year to the State, all right. Now, would we analyze the constitutionality of that by going case-by-case to find out whether in fact for this particular seller the sales taxes that that seller avoided offset the $500 and say only those who ended up paying more than would have been taken out of their hides in sales tax, only those have been treated unconstitutionally? We wouldn't do that, would we?
Don M. Downing: No, Your Honor. Under this Court's cases the compensatory tax has to reach substantially equivalent events. There, I don't think you would have any events that the $500 flat rate fee were taxing, so under the Court's precedents, no, that would not be analyzed as a compensatory tax case.
Antonin Scalia: So you say once you're taxing substantially equivalent events, then it's only where there are differences at most, where there are differences that we would require the funds to be refunded.
Don M. Downing: Absolutely. I'd like to move on to a different subject. Even if this Court were to require the transaction-by-transaction or firm-by-firm approach advanced by the petitioners, the respondents nonetheless should prevail in this case. They haven't provided any evidence in the record at all that any interstate firm has suffered any competitive disadvantage when attempting to sell to Missouri residents. Now, even if they had... even if they had pointed to and produced evidence that there is an interstate seller that competed in a local jurisdiction where the use tax rate was higher than the sales tax rate, and competed in that local jurisdiction with a Missouri business, well, that wouldn't end the analysis, because then one would have to focus--
David H. Souter: Well, but may I just interrupt you? Your whole argument, I take it here, is rejecting the notion that there is a facial discrimination, so on this argument, it's a pure allocation of burden argument, is that right? If we say there is a facial discrimination, then I take it this argument would not have any application.
Don M. Downing: --If you conclude, under the Court's cases, it's a facial discrimination because the transaction-by-transaction approach is the approach the Court wants to adopt--
David H. Souter: Or taxing jurisdiction by taxing jurisdiction approach, but in any event, if we... to the extent that we say there's a facial discrimination, I take it this argument would not be inappropriate, right?
Don M. Downing: --The lack of injury argument? I think--
David H. Souter: Yes.
Don M. Downing: --I think you're right. I think the Court's cases on a facial challenge do not require petitioners to show injury, but I would submit to you--
William H. Rehnquist: I don't think that's entirely correct. You're suggesting, and you suggest you're in agreement with Justice Souter, that someone can come in and attack a tax that he claims discriminates against interest... even though he has suffered no injury from the thing?
Don M. Downing: --No, Your Honor, I didn't mean to say that. What I... that's a standing question.
Speaker: Well, that's what I would have thought.
Don M. Downing: What I was addressing was the injury in fact, and I'll move right to the standing question, then. Petitioners themselves have shown that they have suffered no injury in fact. As this Court pointed out 2 years ago in the Lujan case, in order to show injury in fact, a plaintiff must plead and prove... to show standing, excuse me... a petitioner must plead and prove that there's an injury in fact that's both concrete and particularized, and that is fairly traceable to the alleged unconstitutionality that he claims.
William H. Rehnquist: Now, the State and the petitioner stipulated here, didn't they, on some facts?
Don M. Downing: The only record of stipulation is that they would... the petitioners would have significant administrative costs of compliance with the system.
William H. Rehnquist: There was no stipulation that governed whether any particular plaintiff suffered injury as a result of the operation of the Missouri--
Don M. Downing: Not at all, Your Honor, not any injury that's fairly traceable to the unconstitutionality of the system. The fact that there are differing use rate, or higher use tax rates in certain jurisdictions than sales tax rates, that's the unconstitutionality they claim that's in our system. They haven't claimed any injury as a result of that.
Antonin Scalia: --They haven't even claimed paying... they haven't even claimed paying the use tax in a jurisdiction that has a lower sales tax? If they've claimed that, they've claimed injury.
Don M. Downing: They have not claimed that. There's no evidence in the record that they've claimed that. The only transaction that is in the record is petitioner Alumax Foils made a purchase in St. Francis County, where the use tax rate is higher than the sales tax rate. Well, they paid sales tax. That was an in-State transaction. They paid sales tax on that transaction. Well, under their system, if the sales tax rates had been moved up to be equal to the use tax rate, they would have paid more sales tax, so they haven't been injured by any unconstitutionality in the system. Let's look at Alumax Foils where they're based. They're based in St. Louis, where the use tax rate and the sales tax rates are identical. They certainly haven't shown any injury in fact in those counties. They don't claim there's any constitutional problem in those counties.
Antonin Scalia: Do you really want to win this case on that ground so we can do it again another day?
Don M. Downing: Well, Your Honor... no. Certainly, I would prefer that this Court say that you must look at the overall effect of State regulation on the national economy, just like you did in Quill 2 years ago. I would prefer the Court to say it's the interstate market that's protected by the Commerce Clause, not particular interstate firms.
David H. Souter: But if we have a facial discrimination and there is a transaction that is taxed, the party... the seller to that transaction would pass your test, would he not?
Don M. Downing: I'm sorry, I need to hear the hypothetical again.
David H. Souter: If we have a facial discrimination, and one of the petitioners--
Don M. Downing: In a particular local jurisdiction--
David H. Souter: --And one of the petitioners here is an interstate seller whose transaction was taxed at the facially discriminatory rate, that's enough, isn't it?
Don M. Downing: --Right. There's no evidence of that here, Your Honor. There's no evidence in the record at all that any... let me move on to the other petitioner, which is Associated Industries, which has both in-State members and out-of-State members. As to their in-State members, there's no evidence in the record that any in-State member is located in a jurisdiction where the use tax rate is higher than the sales tax rate. There's no evidence in the record--
Speaker: No allegation, either?
Don M. Downing: --No allegation. No allegation whatsoever. There's no evidence in the record that they had any transactions in any jurisdiction in which the use tax rate is higher than the sales tax rate, and moving on to their out-of-State members, there's no evidence in the record that any out-of-State member of Associated Industries competes with any Missouri business in any local jurisdiction in which the use tax rate is higher than the sales tax rate.
Antonin Scalia: No allegation that any of them paid the use tax in the juris--
Don M. Downing: Oh, to be sure, they paid the tax, but that's--
Antonin Scalia: --In a jurisdiction that had a lower sales tax.
Don M. Downing: --No. No, there's no allegation to that effect at all in the record, Your Honor. They have alleged simply that they paid the use tax. That's the extent. There's no allegation they paid it in a local jurisdiction where the use tax is higher than the sales tax.
William H. Rehnquist: Well, but now, wait a minute, in the supreme court of Missouri opinion on page A-2 of the petition, the opinion says "The parties, however, have stipulated that appellants pay sales taxes in geographical areas where the aggregate sales tax is less than the aggregate use tax. "
Don M. Downing: Your Honor, that may be in the Missouri supreme court's opinion, but it's not in the record.
William H. Rehnquist: Well, we take a care pretty much the way the State supreme court gives it to us on factual matters.
Don M. Downing: Well, Your Honor, I don't... I'm not precisely sure what the Missouri supreme court meant by that, but if they meant to say that there's stipulation in the record that Associated Industries does business in a local jurisdiction where the use tax rate is higher than the sales tax rate, I don't think there's anything in the record about that. That's my point. So neither--
John Paul Stevens: Do you make this point in your brief in opposition?
Don M. Downing: --Your Honor, we had it in our brief, and one of our amicus made the argument, frankly we thought in a very good fashion. We didn't want to have this Court read duplicate points on that, so we adopted it in a footnote in our brief. I can point that out to you if you'd like me to show you where we--
John Paul Stevens: Well, no I accept that. Just tell me.
Don M. Downing: --Okay. We did. We thought it was a very important argument, because it's jurisdictional to this Court. Finally, I'd like to make... really, I'd just like to say, really what we have here in this case is a group of local Missouri businesses who don't like section 144.748 simply because it represents a tax increase to them. They're not concerned about any supposed undue burdens or unequal treatment on interstate commerce. If there were such burdens, they're not the victims of it. Rather, they've lost in the Missouri political process, of which they are a part. They are Missouri businesses, and they want this Court to overturn the sound judgment of the Missouri legislature, a judgment which I might add goes further to accommodate the practical needs of interstate sellers than Missouri was required to go, so I would just respectfully submit to this Court that it not allow petitioner's feigned concern for any supposed burden on interstate commerce which doesn't exist here to transform what is essentially a local political question... a local political issue into a Federal constitutional question, which we don't think is presented here. Finally, I'd like to offer just a couple of--
John Paul Stevens: I just had one other question on the basic standing. If their challenge is to the entire statute, then they wouldn't have to allege, which I think your opponent argues, rather than just to the jurisdictions where there's a disparity. They do have standing to make that challenge, don't they?
Don M. Downing: --Standing to make the challenge that it's... as applied in every case it's unconstitutional?
John Paul Stevens: Yes. They're claiming a total refund of the whole... so that much is at least before us.
Don M. Downing: If they could succeed in their argument as applied in every xx--
Speaker: Yes.
Don M. Downing: --Absolutely, I agree with you. Finally, I want to make three observations that this Court made 2 years ago in the Quill case, which was the last time this Court had an opportunity to analyze the Commerce Clause issues raised by sales and use taxes. First, the Court observed and reaffirmed the Bellas Hess case in large part because it viewed Bellas Hess as providing a bright line rule here. As I mentioned before, the Court now has an opportunity to provide another bright line rule that would greatly aid States in devising tax systems that they could be sure would satisfy the Commerce Clause. The identical treatment in each and every instance approach, the problem, from the State's perspective, of that approach is the State would have to be clairvoyant and try to imagine a possible contingency. Well, could we have any possible area of unequal treatment? I dare say that the States that have adopted the identical use and sales tax rates in each local jurisdiction probably thought that they had solved the constitutional problem of... that if there was a constitutional problem, they have outlawed any unequal treatment. Well, the example that I gave you a few minutes ago shows that that system can result in the same kind of instances of unequal treatment that our system has, so it would be much easier for the State to say, listen, we have a tax on interstate commerce, we have a tax on intrastate commerce. As long as the tax on interstate commerce is not greater than the tax on local commerce, on an average basis, the tax is constitutional. Unless, of course, as Justice Scalia pointed to... unless, of course, there was an identifiable market segment or industry that was singled out for special protection, as was the case in the Bacchus case.
Ruth Bader Ginsburg: How does it work in States that have the county option? Does the State also collect and remit to the individual county, depending on what that county's tax rate is?
Don M. Downing: Your Honor, I'm no certain of how various other States perform the task of collection. I'm not certain whether it goes to the county or the State, like it does in our system.
Ruth Bader Ginsburg: Your system, you were the innovator of it.
Don M. Downing: It's... you're right, Your Honor. we had the benefit of looking at what other States have done, and also the input from the interstate firms that were involved in the Quill case, so we were fully cognizant of what other States had done when we devised our system. The second point I'd like to make from the Quill case is, the Court recognized that the critical importance of the doctrine of stare decisis in the area of State taxation, for at least 67 years, the overall burden approach has been firmly embedded in this Court's precedents. For the Court now to change that rule would raise all sorts of new questions and undoubtedly engender substantial litigation over the validity of a whole host of State taxes that had been enacted during that time period. I would submit that the Court need not open that can of worms here. The third point I wanted to make about Quill is the point I made before. Congress has plenary power in this area, as the Court recognized in Quill. If it wanted to, it could outlaw the Missouri system. It has chosen not to for the last 67 years... the overall burden approach... and so therefore I would respectfully submit that unless there is a clear, adverse effect on interstate commerce overall, the Court should be hesitant to exercise its jurisdiction in this area.
William H. Rehnquist: Thank you, Mr. Downing. Mr. Walsh, you have 4 minutes remaining.
Thomas C. Walsh: Thank you, Your Honor. This is a discriminatory tax case. This is not a burden case like Exxon, this is not a health or safety measure, it's not economic regulation, it's not environmental. It's a discriminatory tax case, and it's guided by the Court's opinion in Complete Auto Transit, and the third element of Complete Auto Transit is, no discrimination against interstate commerce. This Court has decided three use tax cases since use taxes came into being back in the thirties. The first was the Silas Mason case... strict equality. The second was the Halliburton case in 1963, where Chief Justice Warren struck down for the Court a use tax which did not provide strict equality. There was a differential in the basis between the way the use tax and the sales taxes were calculated.
Sandra Day O'Connor: Excuse me just a moment. I hate to interrupt you when you're on your final thing. Are you going to address standing at all?
Thomas C. Walsh: Your Honor, as, I think Justice Stevens said, we are attacking the statute on its face. It is stipulated all of the members of our organization and the individual petitioner here have paid the use tax since it went into effect, so the facial validity is challenged by us for having paid the use tax, and--
William H. Rehnquist: Is it also stipulated that you paid it in jurisdictions where the use tax was higher than the sales tax?
Thomas C. Walsh: --Not expressly, no, but we have paid the tax. We are attacking 144.748 on its face. We're not asking the Court to carve it up and uphold part of it where it's legal and part of it where it's not legal, because we don't think the statute is susceptible--
Ruth Bader Ginsburg: Obviously not. You don't want any it.
Thomas C. Walsh: --Well, but the statute isn't susceptible to that, Your Honor. I mean, you'd have to seriously rewrite this statute, which is a State enactment, in order to come up with that sort of--
Ruth Bader Ginsburg: Oh, we wouldn't have to do anything except say what the principle is, and the rest is for State law.
Thomas C. Walsh: --Well, the principle is that a taxing system that treats a use tax and a sales tax differently is now and forever discriminatory and facially invalid, and it's not General American that controls that. General American was not a use tax case, was not even a modern type of compensatory tax case. It was more an equal protection case than a Commerce Clause case. The law in this area, if you want to talk about stare decisis and the bright line, the stare decisis and the bright line come from Silas Mason and the Halliburton case, and in Halliburton the Court said, "The conclusion is inescapable. " "Equal treatment for in-State and out-of-State taxpayers similarly situated is the condition precedent for a valid use tax on goods imported from out of State. " That's a bright line. That's the line that the State of Missouri for its own reasons decided to cross in this case and experiment with a new type of taxation which, if permitted by this Court, I suggest could lead to all sorts of abuses and, in fact, some of the amici are sort of champing at the bit to see whether the opinion of the Court in this case will open some new loopholes in use tax regulation which, since 1937 in the Silas Mason case, have been closed. The bright line is desirable. The bright line is equality. The State of Missouri either can enact either local sales and use taxes at the State level, or it can delegate to the States... to the subdivisions the right to enact local sales and use taxes, as 28 States, other than Missouri, have done. You're right, Justice Souter, they are a pioneer... I guess, Justice Scalia... they are trying to be a pioneer here. We think that's illegal.
William H. Rehnquist: Thank you, Mr. Walsh. The case is submitted.


Earl Warren: Number 3 Ellen Goett, as Administratrix of the Estate of Marvin Paul Goett, Deceased, Petitioner, versus Union Carbide Corporation and Amherst Barge Company. Mr. Gold -- or Mr. Goldstein you may proceed.
Harvey Goldstein: Mr. Chief Justice, if it please the Court. In this matter, arising out of the maritime tort was brought for damages for wrongful death and for personal injuries. The case was originally started on the civil side of the United States District Court in West Virginia, but was transferred on motion to the admiralty side over objection of the respondent, I might add, and it was tried before the judge as an admiralty suit. The case involves Marvin Goett, who was a maritime worker employed by the respondent, Amherst Barge Company. That Company had a marine repair yard just outside of Charleston, West Virginia. The vessel that was involved in this case was an unpowered and unmanned tank barge, which was owned by the respondent, Union Carbide and which was turned over to Amherst Barge for painting, sandblasting and for minor repairs. The words, “minor repairs” are actually set forth in the contract between Union Carbide and Amherst Barge and in addition to that, in answers to interrogatories presented by Union Carbide, they conceded that the repairs were indeed minor. The lawsuit was predicated upon Carbide's negligence and Carbide's failure to provide a seaworthy vessel to Mr. Goett. There was at no time any violation of coast guard regulations or statutes involved in the suit. The barge itself was turned over by Carbide to Amherst on October 2nd of 1956. On October 4th or October 3rd, one of Carbide's men came aboard the vessel to inspect the vessel and to discuss the work which had to be done and at that time, knew or must have known of the conditions which existed aboard the vessel and those conditions were as follows. There was complete absence of any safety or lifesaving equipment aboard the vessel. By that I mean there were no lines, no mooring lines, no life jackets, no life tools itself, no rowboats or anything of that nature which could have possibly saved the man if he did in fact go overboard. Goett was one of six men who went aboard the ship. And the first operation to set the ship up for the painting operation itself was to sandblast the deck of the vessel and that of course is equivalent to simply chipping the paint off the deck so that it can be painted on the metal itself. Nobody knows exactly what happened. There was no evidence at all as to why Goett did fall overboard, but the fact remains that one of the men suddenly realized that Goett was missing. When he ran over to where he last saw his fellow worker, there was the man in the water and he subsequently did drown although three of the men at various times jumped into the water in an effort to save him. Of course, because of the complete absence or lack of any safety equipment, there could be no effort made to save Goett other the men themselves jumping in and to try to do the job.
Speaker: Where is that statement made in the Court's opinion that when they jumped in, they -- they brought the mop? Was -- was there any significance to that?
Harvey Goldstein: No, sir. That was simply due to the panic of the man himself and the District Court Judge accepted it as such.
Speaker: Yes.
Harvey Goldstein: He could not swim. The findings of the District Judge were as follows. Number one that it was foreseeable to Carbide that men would go aboard the vessel to do the work. In fact, it was obviously a necessity to do the work. That there was the duty upon Carbide to provide a safe place to work, and that it was negligent for Carbide not to equip the vessel knowing that men who were going aboard had to do the work with some lifesaving equipment, that the barge itself, because of the lack of that equipment was not seaworthy at the time of Goett's death, that the proximate cause of his death was that lack of the equipment involved. The Court then stated that the barge could not be considered to be unmanned at the time of Goett's death because there were men working aboard her, although when the barge was actually in transit, she is unmanned as well as being unpowered. She is simply a floating steel tank. The Court further stated that at the time of Goett's death, Amherst, the repair yard owner had the exclusive control over the vessel. And as conclusions of law, the Court stated that the case involved negligence that there was liability because of the fault of Carbide in failing to set forth or place upon the vessel that safety equipment, that the case was not one of liability without fault. And although I would say for a moment that that statement by the Court is open to interpretation, I have interpreted it to mean that the Court found that because of the negligence with fault, found where the liability with fault found against Carbide, the Court then felt it did not have to say there was also liability without fault because it did find that the fault did exist. The Court further stated that there was no contributory negligence because of course being a death case the burden was upon Amherst and Carbide to determine why Goett fell off the vessel and of course there was no evidence ever brought forth as to the reason why he actually fell. The Court further stated that there was no assumption of risk. It stated that while Goett may have possibly assumed the risk of falling off the vessel itself the actual falling into the river which was based -- which was the -- the grounding of the case itself, the actual failure to rescue that Goett did not risk at all. He assumed no risk of the failure to rescue itself. Since the case was predicated upon the West Virginia Wrongful Death Statute which had a monetary limitation of $20,000, the Court said that it would find that that monetary limitation was applicable and determined that there was -- there would be an award of $20,000. However, in order to avoid a possible second trial in the matter, we asked the Court and the Court did find an alternative damages under the damages rule of the general maritime law and that was in the sum of $50,000. The Court then determined that there was -- should be no indemnification over from Carbide to Amherst because Carbide itself was the party who was actively negligent in failing to place the equipment aboard the vessel. The Court of Appeals reversed the District Court decision on these grounds. Number one, the Court said that there was both negligence and unseaworthiness claimed by the petitioner in the case. The Court then said that as far as unseaworthiness was concerned, Goett was not a member of that class to whom the talking of unseaworthiness would apply. The Court further stated that it did not agree with the District Court Judge and found that the barge was seaworthy at the time of Goett's death. As for the negligence count, the Court stated that the only duty owed to Goett by Carbide, was to warn Goett of any latent defects not patent defects and that the lack of safety equipment aboard the vessel was obviously known to Goett as well as everyone else and therefore Carbide, had performed its complete duty to Goett and could not be negligent. The question of whether or not this Court's decision in the Harrisburg in 1886 was left open since both the District Court and the circuit court felt that it certainly was a matter for this Court to take up. The Harrisburg, as this Court well knows, is the decision and as a practical matter the only decision, which has stated that there is no cause of action for wrongful death under the general maritime law, absent a state statute. All of the cases which have confirmed or affirmed the -- the doctrine that there is no cause of action for wrongful death have cited the Harrisburg as the prevailing reason for the ruling itself. And so the only -- the only case that is really involved here is the question of whether Harrisburg was a correct enunciation of law by this Court some 60 or 70 years ago.
Potter Stewart: Is that the only case involved in maritime, that's the only case you have to overcome?
Harvey Goldstein: Yes, I believe that if I do overcome the Harrisburg decision and that this Court now reverses its ruling in the Harrisburg that there would be I think as a matter of course the statement that there would be a cause of action under the general maritime law for wrongful death even absent a state statute on the subject because all of the cases cited both by this Court and various other courts have uniformly cited the Harrisburg as the controlling case on the subject.
Speaker: (Inaudible)
Harvey Goldstein: I'm sorry I didn't --
Speaker: What about Tungus?
Harvey Goldstein: Well I think Tungus also cited the Harrisburg or if it did not it cited cases which in turn cited Harrisburg as controlling on this subject. So that we get down to the -- to the point of Harrisburg setting the ruling or setting the pace for the ruling in 1886 and then the -- the cases coming afterward simply citing Harrisburg as the controlling case.
Speaker: They'd all call with it if you prevail, wouldn't they?
Harvey Goldstein: I would assume so and I hope so. In Harrisburg, which was an action in rem, there were three questions set up by the Supreme Court and that was number one, whether or not a cause of action under the maritime law would exist absent a state statute. Number two, whether or not there was a remedy if there was a state statute which the general maritime law or the admiralty jurisdiction could then accept. And number three, if the state statute of limitations would then be held applicable in a case arising out of a maritime tort. The Court first freely conceded that under French or under Scottish law, there was a cause of action for wrongful death. And they stated that under the English law, as we know there was a common law maxim and that there was no cause of action under British law for wrongful death. They then held that they found no case in which any country or any civilized country had a different ruling for a maritime tort as it would have for a tort which occurred on land. And therefore since we were a common law nation as was England and England did not have such a right of recovery, that we could then not have a right of recovery either. The Court further stated and I find, of course, that this sentence is open to construction, but the Court stated that we must declare what the law is not what it should be or not what we think it should be. And I think it's fairly clear that the Court felt that it was setting forth a very, very narrow doctrine on a legalistic or technical point which they felt bound to follow not which what they found would be acceptable to them as an equitable question. I think that the question of the reason for the British rule must come under some scrutiny. Certainly, I believe it is well known that under the civil law, under the French Law, under the Scottish Law, in fact under the law of most continental nations which was predicated upon the Roman law there was and always has been a cause of action for wrongful death arising out of a tort. I think it's also conceded that maritime law, as we know today, came into England at a comparatively late date, somewhere around the 12th Century and that at time, the law came into an opposite end of the spectrum so to speak through the common law itself. That is, the maritime law became one of the king's prerogatives and which the king used to attack parliament and the common law which were lined up on the same side.
Speaker: Could I inquire as to why you think you've got to ask us to overrule Harrisburg and the cases that have followed it in order to prevail in your case?
Harvey Goldstein: I think for these reasons sir. If the Harrisburg decision is now overruled, and the Court finds that there is a cause of action from general -- under the general maritime law absent of any statute, I think that the Court would find in following that ruling that all of the duties, all of the responsibilities as between the parties would be determined by what we now consider the general maritime law principles, such as the lack of assumption of risk, such as the duty that would evolve upon Carbide in this case under the maritime law as against state law.
Speaker: Did the Court of Appeals deal with the question as to whether the West Virginia Wrongful Death Statute embraced the cause of action for unseaworthiness?
Harvey Goldstein: No, sir. It felt that it did not have to decide that because it found that Goett was not of the class and also that the vessel was seaworthy.
Speaker: What did the District Court do on this count?
Harvey Goldstein: The District Court simply made that one -- I would say unclear statement that we find that there is no liability without fault applicable here. This is a negligence case. The question of whether or not the District Court meant that there was no cause of action for unseaworthiness or simply whether it did not have to find that there was a cause of action for liability without fault since it found liability with fault was open and I think it's open to interpretation. I don't know the answer for sure.
Earl Warren: Do I understand in answer to Justice Harlan's question that -- that you must have that case overruled or do you -- you lose?
Harvey Goldstein: No sir, no sir. That is not my point at all. I would say this. That the overruling of that case would then take away all of these various questions which exist in this case, in the Skovgaard case, in the Halecki case and there are all of the cases coming before those since the cases would then simply follow as a usual run of the mill if I might say cause of action under the general maritime law so that there would be absolutely no difference whether or not the case was one for personal injury or for wrongful death. Now --
Earl Warren: Well in the event that we do not follow you on -- on that, has the court below determined what the state law is by which the case must be governed?
Harvey Goldstein: Yes, sir. I think it has and I think it has determined it in my favor, but not in my decision. That's the problem. It determined it in a later case. The various questions which the Court felt it did not have to answer in this case below, it then answered in a later case this past July, the case of Holley against S.S. Manfred which is 269 Fd. 2nd and it stated there and I might add that that was a case coming out of Virginia, and not West Virginia, it -- but having the same language in its wrongful death statute. It stated there that the language if death had not ensued could only be interpreted as saying that there should be no difference at all between an action for a wrongful death and an action for personal injuries. The Court cited with approval the Halecki case which stated just that same thing that it would -- well in fact Learned Hand, Justice Learned Hand stated that it would be to the last degree capricious and irrational to say that there should be a difference of duties as between the parties simply because there was a wrongful death case and not a case of personal injuries.
Earl Warren: So should we -- do you want us to find what the state law is here or -- or should we send it to the Court of Appeals to have them determine in this case what the state law is?
Harvey Goldstein: Well, I would think that based -- or predicated upon what the Court of Appeals has already stated in Holley, in the Holley case, I would think that this Court could now find that in this case the circuit court would find the same thing.
Potter Stewart: Well the Holley case involved the different state statute, isn't it?
Harvey Goldstein: It involved Virginia as well as (Voice overlap) that in the West Virginia (Voice overlap)
Potter Stewart: -- and the Virginia Statute as expressly referred to actions in admiralty didn't it?
Harvey Goldstein: Yes sir but that part of the statute --
Potter Stewart: But it was not.
Harvey Goldstein: That part -- that is correct sir, but that part of the statute was not involved. The only part of the statute and the basis for the Holley case decision was that part that stated, “If death had not ensued,” and of course that exact language is in the West Virginia Statute also. And in addition to that there are many, many West Virginia statute -- cases in which the courts of West Virginia have stated that they will construe similar statutes as West Virginia -- as Virginia in like manner to which the statutes of Virginia have already been construed. So that --
Felix Frankfurter: But we would have to make a jump and say, “West Virginia -- Virginia equals West Virginia and therefore West equals Virginia?”
Harvey Goldstein: That's correct sir. That is correct or an alternative would have to send the case back to the circuit court for a further finding as to whether or not the West Virginia statute would now say the same thing. Going to Harrisburg for a moment, I think first that it's quite obvious that the reason for the lack of difference between sea and land decisions under the civil law is that the maritime law is part and parcel of the civil law today and has always been part and parcel of that law. Second, the fact that there is no difference in the English Law between land and sea decisions is that very simply, the admiralty law has been made subservient to the common law in England and was, shall I say, part of the price paid by the king in England when he was restored after the -- after the defeat of Cromwell. Now that defeat of Cromwell was engineered by parliament and the price that the king had to pay the parliament, and the common law was the taking away or the subservient position of the king's prerogatives among which was the admiralty jurisdiction. So that the admiralty jurisdiction for the first time in 1664 or 1668 became subservient and followed the same rule as the common law to which the common law (Inaudible)
Felix Frankfurter: Why don't you go to the American history?
Harvey Goldstein: I will sir in one second.
Felix Frankfurter: But -- and taken into account something that gives me much more relevance in Government as to Cromwell, namely, that after Harrisburg, Congress dealt with this problem. It would seem to find those difficulties that Congress dealt with this problem, but chose to deal with it in its own way, namely, in a very limited way.
Harvey Goldstein: But you're -- you're assuming I -- I assume you're mentioning the death on the High Seas Act.
Felix Frankfurter: That's exactly what I --
Harvey Goldstein: And -- and the Jones Act itself.
Felix Frankfurter: Yes. Now what do you do with that? And not only did they deal in the restricted way but it expressly dealt with by reference to the state survival statute, (Inaudible) to the States.
Harvey Goldstein: That is correct sir but it did not deal with the question of whether or not the common law death maxim was in fact do or should have been overruled.
Felix Frankfurter: But it -- it dealt with the problem. It dealt with this very problem and instead of doing what was one can have a great deal of difficulty with general outlay, but this is a survivor, and the old common law limitation upon the survivorship generally and (Inaudible) the admiralty law. Congress faced that problem but chose to deal with it through the -- it was there in a -- within a very restricted caucus and explicitly so far as then Congress speaks explicitly in the statutory language it said this (Inaudible) retain all the states of (Inaudible)
Harvey Goldstein: That is correct but I don't --
Felix Frankfurter: You're now asking us to say, “Despite that -- despite that for the Congress to hold because it's called there as in many ways initiating powers in regard to maritime matters, we should now overrule -- it has spoken in this regard for it to follow including its important legislative means, very important legislative history.
Harvey Goldstein: May I say this? Number one I do not consider that Congress expressly shut out any further judicial decision on the point. I think simply that Congress was legislating on a national basis on a maritime cause of action and they felt that this particular matter at this point was such that state statute should control in the matter, but that does not say that Congress shut the door to any further statement --
Felix Frankfurter: Do you mean to say that the Supreme Court should not overrule itself?
Harvey Goldstein: That's correct.
Felix Frankfurter: It did not say that.
Harvey Goldstein: It did not say that all.
Felix Frankfurter: It did not.
Harvey Goldstein: I think that in addition to a legal reasoning for overruling Harrisburg and that is that there has been and never was any merger under American law with the English law concerning the Wrongful Death Statute or -- or the right of action under the general maritime law of (Voice Overlap)
Felix Frankfurter: You have mentioned in your colloquy, I think we deal -- we've raised a very interesting question if Congress had said that and an enterprising lawyer like you would come to this Court and say, “Of course Congress can't bind your -- and you're under Article III.”
Harvey Goldstein: That of course is something.
Felix Frankfurter: I think you'd make that argument, wouldn't you?
Harvey Goldstein: Yes, I think perhaps. I think the Court -- this Court in Funk against United States has expressly shown that this Court now has the power to rule on the basis of social outlook rather than on strict legal technicality and by that I mean this. In Funk, there was a question of whether or not the common law rule as to evidence of a wife not testifying against the husband was involved. Mr. Justice Sutherland said, “There is no rhyme, no reason why the common law doctrine should stand that we consider that conditions have been so altered at this time that we should now make a rule in the light of present conditions and he then proceeded to overrule the common law maxim as to that point. I think recent cases in various high state courts have shown that the courts do not feel that they are bound to withhold judgment because of any lack of legislation on the point. I have for example the case of Woods against Lancet in which the Court of Appeals when New York stated that a cause of action for an unborn child would now be permitted whereas on the common law it was never permitted.
Speaker: Could I ask you a question? Is the -- do you dispute the statement in the Court of Appeals' opinion that when this barge is in operations, she was unmanned?
Harvey Goldstein: No, sir. When -- when you say operation you mean transit, actual transit?
Speaker: Well when she was in the dry dock being repaired, when she was being used for the purpose which she was intended she was an unmanned vessel?
Harvey Goldstein: That is correct sir.
Speaker: You agree with that?
Harvey Goldstein: Yes sir. Yes. She was unmanned.
Hugo L. Black: Could I ask you if you're going to lead yourself at that time special case on the basis that maybe you will not get to have (Inaudible)
Harvey Goldstein: No. I intend moving to the negligence part of the case right now sir. As to the negligence part of the case itself, since Holley has now determined that the negligence or the duty of Carbide should be determined under maritime law, and not under the state law doctrine, that the decision of the circuit court stating that the sole duty of Carbide was to warn Goett of latent defects could not possibly be applicable to this case since under the general maritime law it's a well-established fact I believe that the duty of any vessel owner is still to provide a safe place to work. Now the question of whether or not Goett assumed the risk, I think, can be clarified very briefly. Assuming then, that under the Holley decision, the doctrine of assumption of risk must be determined by maritime law and not state law, it then becomes obvious that under maritime law the test being, whether or not, Goett had a freedom of choice of safe or unsafe conditions, or safe or unsafe equipment, that there was no freedom of choice in this case and that therefore, Goett could not have not assumed the risk. One further point as to the question of the $20,000 limitation, under the West Virginia Statute I think that that limitation although the State -- that statute must be taken as a substantive hold is also qualified by the question of whether or not the admiralty forum as can any forum decide that such a limitation is against the public policy of the forum. Now if that is so, and I believe it is, the admiralty forum then has the right and in fact has the duty to determine whether or not that monetary limitation by a foreign forum is then against the public policy of the forum in which the case is being tried. Now that being so, I think the admiralty rule that there should no limitation of money recovery under any circumstances must follow to be applicable here in this case. The Workmen case is the major case that I refer to. In Workmen, there was a municipal statute in which the City of New York was bound to limit its own liability to $10,000. The liability in that case exceeded that amount. And the question before this Court at that time was whether or not the full indemnification should be paid or whether or not there was indeed the limitation of $10,000. And this Court stated that it would be in derogation of general maritime rights and duties to say that any State could limit its liability in a case arising within the maritime jurisdiction. And I think that case as much as any, simply states for the proposition that there can be no limitation of any recovery in a maritime tort. Thank you.
Earl Warren: Mr. Love you proceed.
Charles M. Love: If Your Honors please, before proceeding with what oral argument I have, I would like to answer Your Honor, Mr. Chief Justice's question as to whether or not the state courts have decided this question of what law would apply. The state court -- the answer given to you by the counsel for the petitioner was that the Circuit Court of Appeals had decided it. Now the state courts have not decided it, and the Circuit Court of Appeals has not decided it as to West Virginia yet did in the Holley versus Manfred case decided by the same Court which decided the instant case which is presently before Your Honors. With regard to the Virginia statute decided that it would apply admiralty rules but as pointed out by Mr. Justice Stewart that is a different statute and specifically recognizes the rights in rem and against ships which the West Virginia statute does not. I might further point out historically that the Virginia statute was amended after a decision which probably indicated that it should have been amended but it certainly has no effect on West Virginia anymore than -- than a higher statute or a California statute. Now I would like to say to Your Honors that the facts of this case are extremely simple. On a beautiful day in West Virginia, and this is shown by the record that it was 80 degrees and clear in October in 1955 a sandblaster by the name of Marvin Goett, who'd been employed for many months by the Amherst Barge Company which was a company which not only operated barges but for the purposes of this case, it repaired barges, and it had a contract which is in the record, to repair this barge, CC204 owned by Union Carbide. Marvin Goett, as a sandblaster, was and -- at which occupation he worked for many months was on the deck of this dumb barge as they're sometimes referred to as the plaintiff's counsel referred to it as a floating tank. It has a flat deck. It's crowned six inches in the center. It has no other superstructure except the pipeline down the middle, and it's simply a -- a floating tank with a flat top subject to that six-inch crown. It's a 195 feet long and I believe 50 feet wide. Now Mr. Goett was sandblasting on that barge in the afternoon of the second day he'd been working on it and suddenly they noticed he was gone. Nobody knows whether he fell into the river, whether he jumped into the river, whether he was pushed into the river or how it happened. The evidence is simply silent as the plaintiff's counsel requests to this Court and says in his bait, nobody knows how the man got in the river. He was found in the river. Now, whether or not that proved negligence against anybody under any circumstances, I don't know but those are the facts in this case, supplemented to be fair to some extent by the fact that he was seen from one to five minutes before that time using this sandblasting machine which is quite a machine by the way and has two hoses. It has to be constantly replaced with sand and has power to propel that sand with such force against the object to be cleaned that it will strike off the impurities and defects. He was wearing not only a hood to protect himself from the sand which came down all over his shoulders and was -- there's some kind of an icing glass or other transparent front on it but also a respirator to keep from breathing the sand. He had all of those at the same time. And it is interesting to note that the plaintiff expert in this case, Captain Evagate said that he never saw anybody sandblasting on a tank without wearing a life jacket which Mr. Goett did not have on. Anyway, he fell into the river and the evidence was that he was in the river from 10 to 15 to 20 minutes before he went down. The evidence further was that there was a life ring on the digger boat attached to which the barge was attached. Now --
William J. Brennan, Jr.: What's a digger?
Charles M. Love: The digger boat in this evidence, if Your Honor please, and I thank you for asking me, the name digger as I understand it, has no particular significance except that in this case it is a permanently moored boat to which this barge and other barges which this contractor works on is permanently attached down river. In other words it takes place of the tow boat if it were in transits, but --
Felix Frankfurter: Is that a West Virginia word? Is it?
Charles M. Love: The judges -- no sir. And it's not in the record. I think I know how it got its name but anyway if for this case it simply takes the place of the barge. Well with respect to the barge itself, now I'm -- I'm sorry.
Charles E. Whittaker: How can you (Inaudible)
Charles M. Love: From 10 to 15, maybe to 20 minutes I can cite Your Honor to the place in the record that that is -- now record page 81 and 82 and I'd say that he fell off the rescuers, nobody knows why. There was the assumption on the part of the plaintiff's counsel that he -- it was because of panic and it may well have been, I don't know.
Earl Warren: Did the trial court find that on subject?
Charles M. Love: I don't believe so.
Potter Stewart: Were there any employees or agents of Union Carbide Corporation in the area at the time of this man's death?
Charles M. Love: No Your Honor, there were no Union Carbide employees or agents there from the time -- from before the time this happened until the 7th that was two days later and for that time, the barge had taken up on the marine way out of the river. The -- this trial court found then the Court of Appeals also that -- the Court of Appeals didn't simply affirmed it. The trial court found that the barge was in the exclusive custody and control of the contracting company, the Amherst Barge Company. I started to say something about the barge. I -- I described it somewhat and I -- I only want to say further that it was turned over to Amherst in exactly the same condition that it was used and had been used since its purchase in 1948. And there was nothing taken off of the barge and nothing put on it. It was simply delivered as the contract required to the dock and marine ways of the Amherst Barge Company for these repairs. Whether these repairs were major or minor, I don't know. I do know that it -- they cost about 10% of the original cost of the barge therefore I think it would be safe to say that original cost to something over $48,000 and the cost of these of repairs was $4700 and something. I don't know that that is material, but anyway, it was delivered to Amherst in exactly the same condition that it was operated. On that particular point, Your Honors will remember that it is the contention of the petitioners that not only that we should deliver the barge as it is but that we should do something special to the barge as to the barge when actually it is being taken out of navigation and being delivered to a contractor for work extensive enough to require dry docking. Now the history of this litigation pretty well told Your Honors by the plaintiff's, the petitioner's attorney. This was action was brought on the law side of -- on the civil side, I should say, in the federal court in the Southern District of West Virginia and after it was brought against Union Carbide only, Union Carbide filed a third party complaint as it could under the federal rules bringing in the contractor, the barge company and then answering. The case pend -- was pending for -- I don't something over a year but it was transferred into admiralty on the day of trial. Now it is true that some two weeks prior to that time, the Court had announced it would sustain a motion then made to transfer the case into admiralty. I repeat that not because I think it is of much importance, but because I think it points up to some extent what we are discussing in this case. I listen as I'm sure Your Honors did to the attack upon the Harrisburg and not only upon the Harrisburg I might say but upon the dozens of cases cited in footnote number one of our brief following the rule laid down by the Harrisburg and insinuating that this is a great social or moral problem which is being presented to the Court at this time and that here is a wrong which cries out for righting and in injustice concerning which something should be done as extreme as to overrule many cases of this Court or even one case of this Court and to ignore at least two acts of Congress which have touched upon the matter, significantly. Now --
Earl Warren: We'll recess now.