Warren E. Burger: We will hear arguments next in Chicago and North Western v. Kalo Brick & Tile. Mr. Johnson, you may proceed when you're ready.
Bruce E. Johnson: Mr. Chief Justice and may it please the Court: This case involves a state law damage action commenced in state court in Iowa because of damages allegedly sustained due to the cessation of interstate transportation service over the Railroad's line serving the respondent's factory. The issues are as follows. First, have provisions of the Interstate Commerce Act preempted state court damage actions founded on state law in the areas of provision of interstate transportation service that are involved in the facts of this case? Secondly, has an earlier ruling of the Interstate Commerce Commission precluded the respondent from relitigating issues that are necessary to the success of the respondent's state law damage claims? Prior to entry of the judgment of the Iowa trial court, the Commerce Commission ruled that the cessation of interstate service over the Railroad's line was caused by conditions that were beyond the control of the Railroad, and the Railroad's issue preclusion defense contends that in order for the respondent's state law theories to be sustained the respondent would have to obtain an Iowa trial court ruling that the conditions that led to the cessation of service were in fact within the control, or could have been prevented by the Railroad. Secondly--
William H. Rehnquist: What was the nature of the ICC proceeding, Mr. Johnson?
Bruce E. Johnson: --The ICC proceeding was an abandonment application. The Railroad filed an application to receive permission from the Commerce Commission to abandon its trackage. The Railroad's abandonment application was filed after the respondent had decided to go out of business and after the respondent had ceased operating his business. The Railroad then filed an application for permission to abandon, and a year and half after service ceased over the trackage, the respondent filed an action in state court seeking damages grounded on state law theories. This case involves the Supremacy Clause, it involves interstate commerce provisions which require interstate carriers to provide interstate service, transportation service; Commerce Act provisions which require interstate carriers to provide interstate car service; it involves the provisions of the Act which regulate the abandonment and extension of lines, and also the provisions of the Commerce Act that entitle a shipper to commence an action for damages either before the Interstate Commerce Commission or in federal district court where they can prove a violation of the Commerce Act on the part of interstate carrier. Kalo did not commence its action before the Commission or in federal district court. Instead, it went to state court and seeks damages under a state car service theory, a state car service statute, a state negligence statute, and common law tortious interference.
William H. Rehnquist: What if the shipper had sought to sue the Railroad under the Hepburn Act, under the Carmack Amendment to the ICC, is federal court jurisdiction there exclusive?
Bruce E. Johnson: Section 9 would permit a damage action to be filed before the Commission or in federal district court. If a damage action were filed in federal district court, under the circumstances of this case, I think that the federal district court would stay the action and refer the issue of causation of cessation of service to the Interstate Commerce Commission.
William H. Rehnquist: But what if it were... you say then that it couldn't be filed in the state court?
Bruce E. Johnson: No, because, if you look at--
Byron R. White: No, what? No, you can't file it, or no, you can?
Bruce E. Johnson: --No, you could not file an action claiming violation of the Interstate Commerce Act in state court. And here is the reason. The Commerce Act has been construed in Puritan, among others, which is a case relied upon by the Respondent... it's been construed to restrict Section 9 damage actions to the forums set cut in Section 9, which are the Commerce Commission and federal district court. And there are good reasons for doing that. First of all, if you restrict it to federal district court or the Commerce Commission, you are going to have one system of federal law which is going to govern damage actions as well as the other regulatory functions of the Commission. However, if you allow the Commerce Act, if you allow damage actions for violation of the Commerce Act to be filed in state court, you are essentially allowing each state to create a separate regulatory system consisting of damage actions and the U.S. Supreme Court faced a similar situation in San Diego Unions v. Garmon, where the U.S. Supreme Court recognized that if it permitted state damage actions to be filed by an employer for economic loss sustained because of peaceful picketing, not violent picketing, then in effect it would be allowing a state court system to create a system of regulation by damage actions which would create a separate body of law competing with the body of law that is created under the federal judicial system interpreting and applying the National Labor Relations Act.
William H. Rehnquist: But it's one thing to say that the body of law has to be common and uniform; but it's another thing to say that concurrent jurisdiction exists between the state courts and the federal courts in applying that uniform body of law.
Bruce E. Johnson: The Esch Car Service Act, and in the context of this case, more importantly, I think, the Transportation Act of 1920 evidence a new and radically different philosophy of Congress with regard to regulation of interstate commerce. The Transportation Act of 1920 was designed to give plenary control, exclusive jurisdiction to the federal system to govern the provision of interstate transportation service, the abandonment of lines, the extension of lines, and the reason for that, the Court in Transit Commission v. U. S. stated, is because it had been found that concurrent state and federal jurisdiction in the areas of interstate commerce addressed in the 1920 Act had been found to be detrimental to interstate commerce. The competing local interest in this case, the respondent's local interest, is economic loss, and if you analyze his state law claims, although the claims of the respondent are couched in terms of state law, they are claiming damage to their business because of cessation of interstate transportation service. And each state law claim requires proof of two things: first, the existence of a duty on the part of the Railroad to provide interstate transportation service; and secondly, to prove that such a duty was breached by the Railroad. It is undisputed... and this is the crucial and central fact of this case... it is undisputed that every rail shipment to and from Kalo's factory was in interstate commerce. Now, if there is no duty on the part of the Railroad after April 4, 1973, when the line became physically impassable, there is no duty on the part of the Railroad after that date to provide interstate transportation service, then Kalo's state law claims fall, because they all presuppose the existence of that duty. This is not a situation where there is a physical injury or something of that nature where there may have existed a stronger local interest.
Harry A. Blackmun: Would your position here be any different if ten percent of the shipments were intrastate?
Bruce E. Johnson: That issue has been addressed by some state courts and that percentage; basically, in state courts, most of the state courts have said, that's not enough intrastate commerce to set aside the overriding national interest. But I think the way to determine that question is to look at Section 1-17(a) of the Commerce Act, which says the states' regulation of intrastate commerce is invalid if it conflicts with a lawful order of the Commission. And I think that the cases indicate that under the Commerce Act, the Commerce Act will govern even intrastate commerce if the effect of intrastate commerce on interstate commerce is so great that it creates an undue burden on interstate commerce. In this case we have no intrastate rail shipments, it's strictly interstate. There's never been any factual dispute about that in this lawsuit. And the respondent has characterized this as a negligence case, a car service case, common law tortious interference. But none of those state law theories hold any weight unless the respondent proves a duty to provide interstate rail service to its plant site. And that is an inquiry which should be addressed under the provisions of the Interstate Commerce Act.
William H. Rehnquist: You say, then, that the State of Iowa can't tell a railroad it must provide the cap service to a particular plant, even though it doesn't conflict directly with the ICC provisions?
Bruce E. Johnson: The State of Iowa cannot require provision of interstate car service under state law. The Esch Car Service Act was enacted to preempt state law, and Missouri Pacific Railroad v. Stroud in 1926 stated that state law has no application to provision of car service in interstate commerce. Now, the Federal Courthouse in Fort Dodge is four blocks from the State Courthouse and the Interstate Commerce Act provides that if there is a violation of the federal car service provisions or transportation service provisions, that may be attacked in the Commerce Commission or in federal district court. And it's attacked under the provisions of the Interstate Commerce Act. The Interstate Commerce Act has been construed to make the forum provisions of Section 9 exclusive with regard to a damage action commenced pursuant to Section 8 of the Interstate Commerce Act. And, as I indicated earlier, the reason for... in addition to the reason for having interstate service questions determined under one act, the Interstate Commerce Act, there is another reason, and that is that the philosophy of the Interstate Commerce Act has been to place the interests in forming a national transportation system, an economically efficient national transportation system, over and above the competing local interests.
John Paul Stevens: Mr. Johnson, do I correctly understand that this argument based on the absence of any state law duty is equally strong if there had been no abandonment proceeding? You don't rely on the abandonment proceeding in connection with this argument?
Bruce E. Johnson: I do not. The abandonment proceeding... the ruling of the Commerce Commission buttresses our argument in two respects. First, before theme was any trial court ruling... which, by the way, the trial court ruled in our favor and the Court of Appeals saw fit to reverse. Before there was any trial court judgment, the Commerce ruled, the Commerce Commission ruled that our cessation of service was not due to any condition that we could have controlled. Now, that puts the Court of Appeals of Iowa's ruling directly in conflict with Section 1-17(a) which says that even regulation of intrastate service is invalid if it conflicts with the lawful order of the Commission. Here we have the Court of Appeals saying that a Webster County District Court can regulate by damage action interstate transportation service in direct contradiction to an order of the ICC. The Respondent admitted in its brief that central and necessary to its state law claim is a finding by the trial court that the cessation of service was due to conditions within the control of the Railroad. And the ICC has found just the opposite. So having followed the Interstate Commerce Act, followed the provisions, gone to the ICC, participated in a proceeding in which Kalo was a party, and having our conduct approved by the ICC, we now find ourselves in the situation of being subjected to exposure of a state law damage action which can be successful by the respondent's admission in its brief only if a trial court reaches a finding opposite to the finding that ICC has already made in a lawful proceeding. So I think that the ICC's order should be issue preclusive, even if there were jurisdiction in the state court. But more importantly, I think that there should be no jurisdiction permitted to a state court when you're talking about simply provision of interstate transportation service.
William H. Rehnquist: Do you say the plaintiff could attack the action of the Railroad either before the ICC or in the federal district court?
Bruce E. Johnson: Under Section 9 the plaintiff may seek damages in either of those forums for a violation of the Interstate Commerce Act.
Byron R. White: But, if he sues in the federal district court, don't the controlling cases suggest or hold that the district court should refer the guts of the case to the ICC?
Bruce E. Johnson: I feel that in the situation we have in this case, where you have physical impassability of the line, I think a district court, where you're talking about awarding damages--
Byron R. White: Well, whether the suspension of service was justified or not?
Bruce E. Johnson: --Yes. I think they would refer this to--
Byron R. White: Or would they have to? That's what I want to know.
Bruce E. Johnson: --I believe they would. In an abandonment proceeding some of the--
Byron R. White: Because of primary jurisdiction?
Bruce E. Johnson: --Yes. Because it would require... if you're going to make a final and conclusive award of damages, I think that you should refer to the ICC, but--
Byron R. White: Suppose the reference was made and the ICC ruled that cessation was proper and no damages, can the district court them come to the contrary conclusion?
Bruce E. Johnson: --Well, that's an appealable decision.
Byron R. White: Well, so in that very case? In that very case or... now, I thought appeal was to a court of appeal?
Bruce E. Johnson: Yes.
Byron R. White: Right?
Bruce E. Johnson: Yes, I think it's--
Byron R. White: So the district court can't come to a contrary conclusion?
Bruce E. Johnson: --Well, I think if the district court decided in the facts of the case that it required the discretion or expertise of the Commission referred it, then the district court would follow the Commission's ruling. If it decided it did not require the expertise of the Commission, and it could decide the issue itself, then it would not refer to the Commission.
William H. Rehnquist: But what if it decided that it should have the benefit of the Commission's views, the Commission said the abandonment was justified, could the district court overturn that finding of the Commission?
Bruce E. Johnson: No, I believe that the district court--
Byron R. White: Don't you have to appeal that to the Court of Appeals now?
Bruce E. Johnson: --Yes. That would be my opinion, because I believe the district court is saving that this is not a decision I think I should make, I think it's within the primary jurisdiction of the Commission. And then I think appeal of that order would be under the statutory procedures for appealing the Commerce decision.
Byron R. White: Well, suppose you start off with damages before the Commission, don't go to the district court, what kind of a proceeding is that? That is a damages action, I take it?
Bruce E. Johnson: Yes, as I understand it. And--
Byron R. White: Well, then what if the ICC says the cessation was justified?
Bruce E. Johnson: --Then they would not award damages.
Byron R. White: Well, and then... let's assume you then go to the district court, would the Railroad... I suppose you would suggest the Railroad would plead res judicata?
Bruce E. Johnson: Yes, I think it would be preclusive.
Byron R. White: There's no difference between that case, and than when you start off in the district court, is there?
Bruce E. Johnson: In the state court, you mean?
Byron R. White: No, in the district.
Bruce E. Johnson: If there's primary jurisdiction. I would prefer to reserve what lime I have left, if any, for rebuttal, if I may. We have divided argument with the Commerce Commission. Thank you.
Warren E. Burger: Mr. Rush.
Henri F. Rush, Jr.: Mr. Chief Justice and may it please the Court: This Court has held in a number of decisions interpreting the Esch Car Service Act, a statute which my colleague referred to, and also the Transportation Act of 1920, which brought for the first time extension and abandonment of rail lines under the jurisdiction of the Federal Government, under federal regulation. This Court has held that the provisions of these Acts vests exclusive responsibility for the regulation of car service and cessation of service in the Interstate Commerce Commission. Principally among those and on which we largely rest our case in this proceeding are this Court's decisions in Colorado v. United States, in the Purcell case, in the Transit Commission case, and in the case of Mo. Pac. v. Stroud. The Government has urged this Court to grant certiorari and appears today to present a single point, but one that is of extreme importance to the Commission in performing its responsibilities under the provisions I have just referred to. That point is that the recognition of a state or common law cause of action for damages in state court in matters relating to an interstate railroad cessation of service would undermine the accomplishment of federal objectives embodied in the abandonment and car service provisions of the Interstate Commerce Act.
William H. Rehnquist: Mr. Rush, what do you do with that last paragraph in Stroud that says the state law has no application to the furnishing of cars to shippers for the transportation of freight in interstate commerce?
Henri F. Rush, Jr.: Well, I would hang my hat on it, Justice Rehnquist. I mean, that seems to me exactly the point here, that a state damage action is asserted on a matter involving either car service or abandonment, both of which have been found to be within the exclusive province of the Federal Government and the Commission to regulate. So that, I mean, I would simply underline that sentence that you read, that it does have no applicability. And that as this Court recognized in the Government case, damages are as effective a way of regulating as injunctive or regulatory relief. Indeed, I would suggest to this Court that the right asserted here to obtain damages after the fact is vastly more pernicious and disruptive of the federal scheme than the seeking of injunctive relief.
Warren E. Burger: Is it a form of review, in a sense, of the Commission's action? judicial review by a state court?
Henri F. Rush, Jr.: Mr. Chief Justice, that thought hadn't occurred to me. They ignored our decision so I think they were not purporting to perform nonfederal Hobbs Act required review. But it certainly--
Warren E. Burger: It has the same consequence, does it not?
Henri F. Rush, Jr.: --Yes, sir.
Warren E. Burger: As though they were reviewing you and the Commission and reversing you?
Henri F. Rush, Jr.: Yes, I think it would. And, of course, a state court could in theory refer a question to the Commission and get an answer back from the Commission. And so I would suppose it might be closer to that, although they did not refer the question, nor did they in any fashion defer. And as my colleague, Mr. Johnson points out, they can't defer, for the plaintiff to succeed.
William H. Rehnquist: Well, would the state court be bound by the action that it got back from the ICC?
Henri F. Rush, Jr.: A state court? I should think so. A federal court, I would think that our decision on referral under the Referral Act would be as binding on that Court as the reasoning which went into it.
William H. Rehnquist: Then, you don't really have a uniform system if, as your colleague contends, where you have it in the federal court alone, since the federal court according to you is not bound to follow the ICC.
Henri F. Rush, Jr.: No, but it would be subject to normal principles of judicial review so that provided the reasoning was sound and we stayed within out statutory authority, they would be obligated to follow it, in my view.
Byron R. White: Why wouldn't that be reviewable in the Court of Appeals rather than in the district court?
Henri F. Rush, Jr.: Because if it were referred, initial review is by law in the district court that referred it.
Byron R. White: That's because of the referral statute?
Henri F. Rush, Jr.: Yes, Justice White. They perform a mixed review and acceptance of the referral, but then appeal from that, of course, goes to the Court of Appeals.
Byron R. White: But review is on the record, isn't it, or is it?
Henri F. Rush, Jr.: Yes, it would be on the record, just as any other agency proceeding. Once--
Byron R. White: But the district court couldn't rehear the whole matter, could it? It would have to review it on the record?
Henri F. Rush, Jr.: --No, sir. No--
Byron R. White: Why?
Henri F. Rush, Jr.: --It would be my view they cannot review it ab initio, that they would have to accept the record made before the Commission. And in that respect it--
Byron R. White: And if the findings are supported by substantial evidence, accept them.
Henri F. Rush, Jr.: --That's correct. So there would be a heavy presumption favoring the valid interpretation of the Commission. I do not want to leave the impression that it had to be accepted regardless, was my only point. But to turn to this question of damages and the problem that we perceive in connection with that, the respondents don't suggest, nor could they in the face of the cases decided by this Court which I have named, that the state court could require the restoration of service. But injunctive relief, actually, is preferable from the standpoint that you have the equitable considerations being laid in that context. And the cases cited in the respondent's own brief demonstrate that when action is brought in federal court, as all of their cases parenthetically I would note, were... they have been properly brought before a federal court... the question becomes one of whether it is equitable to require restoration of service pending & decision by the Commission. That injunction, of course, dies when a decision has been handed down by the Commission, if in fact a mandatory injunction is entered.
William H. Rehnquist: And then the Commission's decision is reviewable only in the normal appellate process?
Henri F. Rush, Jr.: That's correct, Justice Rehnquist. Respondents in the Court, of Appeals relied through their proposition supporting an award of damages ultimately entirely on three decisions of this Court, decided in 1915 and 1916, interpreting Section 22 of the Act. We believe those cases are all distinguishable on the ground that no question of the reasonableness of the Railroad's challenged practice was before the courts, and hence if one were to take a primary jurisdiction approach to the issue of preemption, there would have been nothing to defer to the Commission's primary jurisdiction. However, more fundamentally, we submit that those decisions ought to be found not to have survived the enactment cf the Esch Car Service Act and the Transportation Act of 1920. As I have indicated, this court has held that those enactments vested sole jurisdiction or responsibility, I should say, in the Commission for regulation of the matters of car service and cessation of rail service. This Court has consistently recognized that Section 22 is not to be read literally to absolutely preserve common law rights. It's early decision in Texas & Pacific Railway v. Abilene Cotton Oil Company found that to hold that a state right of damages survived because of Section 22 would be destructive to the pervasive scheme of rate regulation embodied within the Act. And hence it ought to be found hot to survive. We believe that the Esch Car Service Act and the Transportation Act cf 1920 similarly encompass a pervasive scheme of regulation, where interstate commerce and interstate railroads are involved, of all matters relating to the cessation of rail service by such an interstate carrier. We ask this Court to find, as it did in... or to hold as it did in the rate area, that no such remedy survives in connection with these matters under any circumstances. Anything less than that, a resort to the question of, are there issues of primary jurisdiction or not, will simply breed more litigation, I suggest, in this area, and it is not a satisfactory test. In the rate area the Court has absolutely and clearly foreclosed state and common law remedies. We ask it to do so in connection with the cessation of interstate rail service.
William H. Rehnquist: Is primary jurisdiction simply a question of deferral and then the Court ultimately deciding, or is it a question that the Court simply keeps its hands off and it's a decision for the Commission to finally make?
Henri F. Rush, Jr.: Literally, as I've always considered the doctrine, it means that the Court must defer initially to a decision by the Commission.
William H. Rehnquist: When you say "initially", what do you mean?
Henri F. Rush, Jr.: Well, it's subject to... as I indicated to you earlier, Justice Rehnquist, a review on the traditional grounds of judicial review of Commission decisions. So it has some limited role, but--
William H. Rehnquist: It's not like a review under the Administrative Procedure Act, where any agency action can be reviewed for it's arbitrary or contrary to law.
Henri F. Rush, Jr.: --No, sir, I'm suggesting it is comparable to APA review, but that is a very limiting type of review. It does not make take Court a co-equal partner, it is not at liberty to say, well, here are some facts and here are some facts. You looked at the facts and came out this way, we looked at the facts and come out this way. If what the Commission has done based on these facts is supported by substantial evidence, which as you well know is an elusive test, but if it's supported by substantial evidence, it must be sustained.
William H. Rehnquist: Well, then, for your counsel or your associate counsel for the Railroad to state that the courthouse at Fort Dodge is only four miles or four blocks away, is really rather elusive so far as the plaintiff is concerned because it means that the plaintiff has to come back to Washington.
Henri F. Rush, Jr.: I'm not sure that I follow that argument, Mr. Justice Rehnquist.
William H. Rehnquist: Well, I mean, you can't get a final trial of your case in the federal court if you're right.
Henri F. Rush, Jr.: Yes, that's correct. That's our position.
William H. Rehnquist: Everybody all over the country has to come back to Washington and try their case before the ICC.
Henri F. Rush, Jr.: Well, I would modify that only in one respect, Justice Rehnquist. That is, we have a procedure known as modified procedure which was in fact followed in this case, which would have meant all they would have had to do to try their case would have been to go to their mailbox and mail their pleadings and evidence to the Commission. Then, but only if a material issue of fact were in dispute, would the matter be required to be set for cross-examination. And that indeed, probably, under Commission practice, would have taken place out in Iowa.
Potter Stewart: As I understand it, Mr. Rush, your position is that there is no room here for the doctrine of primary jurisdiction or for a reference to the Commission by a state court, but that the enactment of the Interstate Commerce Act and its companion legislation means that state courts are completely ousted from jurisdiction in this field. Is that correct?
Henri F. Rush, Jr.: That's correct, Justice Stewart. That is exactly our position.
Byron R. White: Do you mean, not only state law is ousted but the state courts are ousted? Right. Just as in ratemaking proceedings.
Henri F. Rush, Jr.: Yes, I would think that's correct. It is conceivable a state court could try an action based on a federal statute and issue we don't have in this case, of course.
Byron R. White: Oh, it is under the National Labor Relations Act. They try collective bargaining cases in the state courts, although it's federal law that's administered.
Henri F. Rush, Jr.: Yes, sir, although our--
Byron R. White: Do you think, here... have there been some holdings that federal court jurisdiction is exclusive?
Henri F. Rush, Jr.: --That's correct, Your Honor, under Section 9 of our Act. Wrongs are complained of--
Byron R. White: Does the present Act say so? Does it say it's exclusively a federal court matter?
Henri F. Rush, Jr.: --No, but the way those cases go, since it says you may bring it in federal court, that that means you must, if you're complaining under it.
Byron R. White: I see; yes.
Henri F. Rush, Jr.: Thank you.
Warren E. Burger: Mr. Blackburn.
M. Gene Blackburn: Mr. Chief Justice, may it please the Court: An affirmance of the Iowa Court of Appeals decision in this case would not do violence to the railroad industry, nor would it do violence to the federal scheme for regulating the industry or to national transportation policy. Instead, Your Honors, we submit that it would cause railroads to make early decisions about abandonment plans. We also submit that it would avoid the practice--
Warren E. Burger: By that you mean that it would go to the state courts first?
M. Gene Blackburn: --Yes, Your Honor. And--
Warren E. Burger: On the abandonment of an interstate line?
M. Gene Blackburn: --The facts of this case, Your Honor, show that the railroad was neglected over a long period of time and ultimately failed because of that neglect. If the Transportation Company had made an early decision to abandon that line, the Kalo Brick and Tile Company which is now out of business could have made management decisions about relocation or could have made management decisions about merger with other companies.
Warren E. Burger: But suppose you're contemplating building this plant, no plant is there, so you build a plant there. Could the state courts of Iowa compel service to that plant?
M. Gene Blackburn: Your Honor, we do not think that is going to be an issue in this case.
Warren E. Burger: No, that's hypothetical.
M. Gene Blackburn: Right.
Warren E. Burger: Obviously not an issue here.
M. Gene Blackburn: No, we would not claim that at all.
Warren E. Burger: But once the service is available, it must be maintained?
M. Gene Blackburn: Right. At least the track must be maintained, and the car service must be maintained under the Iowa statutes.
Warren E. Burger: Well, what else... I'm not sure I follow. What else would there be besides the track and the service?
M. Gene Blackburn: Well, we would suggest, Your Honor, that those state statutes do impose duties upon the Railroad.
William H. Rehnquist: Well, certainly if you were dealing with an interurban service between two cities in Iowa or a public utility, the state would have the right to require the utility to extend its services to any willing customer under existing law, would it not?
M. Gene Blackburn: Yes, Your Honor.
William H. Rehnquist: In the absence of congressional preemption.
M. Gene Blackburn: Right. We would also suggest, Your Honor, that it would be, it would avoid the kind... Railroad and the amicus in this case discussed somewhat obliquely the unreasonable burden upon interstate commerce. We suggest to this Court that there is a reverse burden upon interstate commerce by the action, the unilateral neglect, the unilateral abandonment that the Chicago North Western has taken, and we would also suggest that an affirmance of the Iowa Court of Appeals would have a tendency to stabilize the railroad industry by striking a balance between the carrier, between the shipper and between the Interstate Commerce Commission. We suggest, Your Honors, that the fault, or the problem with the petitioner's position in this case is simple. It was pointed out by Justice Frankfurter in the case of Pan American Oil Company v. Superior Court about 20 years ago, and that is this, that a party who brings the suit is the master to decide what law he will rely upon. And in the district court of Iowa, the Kalo Brick & Tile Company relied upon three theories. The first was failure to provide car service upon reasonable notice and within reasonable time, pursuant to Iowa Statute 479.3. The second and the most important one to the issues here, is the fact that Kalo pled a cause of action based upon the negligence of the Railroad and its employees, a state statute. And that statute, I've pointed it out here and I don't like to take a lot of time reading, but it says,-- "Every corporation operating a railroad shall be liable for all damages sustained by any person in the consequences of the acts of the agents. " There is also a third, kind of a throwaway issue and that is, interference with prospective business advantage or business relationships. Now, both the Railroad and the amicus before this Court have characterized this case as either, number one, a car service case, or number two, an abandonment case. And they have conveniently for purposes which are obvious to this decision, have avoided discussing either in their briefs or in argument the question of the Iowa negligence statute, which is 479.122.
John Paul Stevens: Mr. Blackburn, could I ask you a question about the negligence theory?
M. Gene Blackburn: Yes, sir.
John Paul Stevens: Assume that the Railroad was losing money on this line and they went in before the ICC and got an abandonment on economic grounds that it's a loss operation and it's not necessary to maintain the public interest and the ICC gave permission. Would there have been any duty under Iowa law to continue to operate?
M. Gene Blackburn: Your Honor, we do not contend... and here is where the amicus and the railroad and we are in agreement... we disagree, we do not disagree with very much of what they said. We simply say, what they say does not apply to the facts of this case.
John Paul Stevens: Your answer is, no, I take it?
M. Gene Blackburn: My answer is, no.
John Paul Stevens: Well, if there's no duty in that case, they can willfully abandon. Why can't they negligently abandon?
M. Gene Blackburn: Because the Interstate Commerce Commission Act does provide for provisions for abandonment and has language to the effect.
John Paul Stevens: But I mean, as a matter of Iowa law. I'm assuming they comply with federal law in either case, and I'm asking you, as a matter of Iowa law, if they can willfully abandon, why can't they carelessly abandon? It would... that's reaching the same duty, I would think.
M. Gene Blackburn: Well, we would suggest they could, but then they would subject themselves to the jurisdiction of the Iowa court if they carelessly abandoned. We say that is this case.
John Paul Stevens: But if they don't have a duty to refrain from willful abandonment, what is the nature of the duty to refrain from negligent abandonment?
M. Gene Blackburn: We would suggest, Your Honor, under... the duty arises under the statute that provides--
John Paul Stevens: Well, would they have a defense to your action if they filed an answer and said, we didn't do this negligently, we planned it five years ago. We let the ponds develop and we were doing it because we intended to abandon. It's exactly what our corporate objective was.
M. Gene Blackburn: --No, I do not... I do not think that would isolate them from liability, if that's what your question is.
John Paul Stevens: But you seem to acknowledge there'd be no cause of action if it were willful, but there is a cause of action if it's negligent.
M. Gene Blackburn: Well, maybe I misspoke myself, Your Honor. I may have--
John Paul Stevens: My first question is, assume no negligence but merely a corporate plan, let's abandon this line because we're not making any money. And I'd ask you, would that violate any Iowa duty? And I thought you said, no.
M. Gene Blackburn: --Oh, I'm sorry, I intended to say, yes, if that was the question.
John Paul Stevens: So then your claim does not really depend... your duty exists whether they were negligent or not?
M. Gene Blackburn: Whether they were negligent or not, yes.
William H. Rehnquist: At any rate, we have the decision of the final court in Iowa that passed on the question that in the circumstances of this case a damage action was permissible under state law. So that unless there's a federal question that the Iowa court decided wrongly, Iowa allows recovery here.
M. Gene Blackburn: Yes, Your Honor, that is true. And that is based upon... and this is an issue that goes to... when this case was first started plaintiff's attorneys relied upon three United States Supreme Court decisions and three Iowa Supreme Court decisions and a decision of the 9th Circuit Court of Appeals for establishing state court jurisdiction. And to our knowledge those cases, none of them, have ever been overruled. It is also important, Your Honors, to find, to note, we feel, to this issue, that the trial court found as a fact that the Railroad, the imponding of the water was a factor in the failure of this Railroad, and that the permitting ponded water to stand was not good maintenance practice. That's noted at Appendix, page 16a. I don't want to burden the Court with facts, but I think the chronology of these--
Thurgood Marshall: Mr. Blackburn, before you get to facts, are you going to talk about the Colorado case? You talked about the other one.
M. Gene Blackburn: --Yes, Your Honor.
Thurgood Marshall: Thank you.
M. Gene Blackburn: We think those cases are all cases involving regulation and not remedy, and the amicus disparages our attempt to distinguish between the remedial effect as opposed to the regulatory effect of a regulatory scheme. And Your Honor, we suggest this, that... and it might be somewhat trite to suggest that the regulatory scheme falls basically within what we've known as the police power, whereas the remedies involve suits between parties. And so therefore we think that there is a great distinction in those kinds of cases.
Thurgood Marshall: Well, wouldn't that remedy destroy the Colorado case?
M. Gene Blackburn: Well, Your Honor--
Speaker: In quotes, as you put it? Would it destroy it?
M. Gene Blackburn: --We simply suggest that the Colorado case was a regulatory case and most of the cases relied upon by the amicus and the Chicago North Western are cases which are apposite to this case. They are cases involving discrimination, they are cases involving reparations, they are cases involving national transportation policy, they are cases which involve any number of things which are not within the facts of this case.
William H. Rehnquist: How about the Stroud case, that last language there where it says that obviously the state law has no application to the furnishing of cars to shippers for the transportation of freight in interstate commerce?
M. Gene Blackburn: Well, that again, Your Honor, is a nice statement but taken... it's in the case itself, it's stated somewhat hypothetically without reference to the facts of the case. And we have no argument with the suggestion of the amicus or the Chicago North Western that the Interstate Commerce Commission does have exclusive jurisdiction over such things as rates, over such things as abandonments, over such things as rate discrimination, discrimination against the furnishing of cars. But our approach is fairly narrow in that it arises basically under an Iowa negligence statute which has nothing to do with national transportation policy, which has nothing to do with the intercession of administrative expertise, and it has none of the rubric of your ordinary regulation-type case. The facts: basically, the Kalo Brick & Tile Company which was a family business, been in business for almost a hundred years, had been served for 75 years by this same rail line, had been served very well until 1960 when the Chicago North Western took it over. During the '60s, not only did the track begin to fail, but Kalo was not getting the switches, Kalo was not getting adequate cars... they were getting bad cars, they were getting all sorts of poor service. They were promised better service but it never came. And so, consequently, through that period of time they were led to believe that things will be better, but they never got better. Now, the Court is obviously aware that the cause of the failure of the railroad was because of imponding water along the side of the tracks. In April of '73 the track became impassable, and then in August. Kalo because it required railroad transportation to be competitive in its business, sold its assets and went out of business. And it wasn't until three months after that, that finally the application for a certificate of convenience and necessity was filed with the Interstate Commerce Commission. Now, our point, going back again to the Iowa negligence statute, is this: that tort became, that state court tort action became complete on the day when the damage existed. And I think that's general negligence law. So the negligence, and the damages, if any, were established in August, quite a bit of time prior to the time that the railroad made application for abandonment. Now, we submit, Your Honors--
Harry A. Blackmun: Mr. Blackburn, for a time did Kalo transport its interstate shipments by truck?
M. Gene Blackburn: --There was, Your Honor, yes, a short period of time when alternate facilities were offered by truck to the landing dock, to the railhead, or whatever, but that simply did not work out. I think that--
Harry A. Blackmun: Did not work out financially?
M. Gene Blackburn: --And I think physically it does not work out, because you get a certain amount of jiggling and there's a special way of packing bricks, as I understand it, and loading and unloading and so forth. We submit that it was not... no matter what might be said about the preemption statutes, and the cases that interpret, we simply say that it was not the clear and manifest purpose of Congress to preempt the state court duty to exercise reasonable care, or to take any cumulative remedies in the state car service statutes. The negative intent of the congressional Act is manifest in several ways. Number one, throughout the Esch Car Service Statute, and the Transportation Act of 1920, Congress felt it right to leave intact Sections 8, 9, and 22 of that Act, which are the very sections relied upon in Puritan Coal.
William H. Rehnquist: Are those set forth anywhere in the briefs?
M. Gene Blackburn: Yes, Your Honor, they are.
William H. Rehnquist: In the Appendix?
M. Gene Blackburn: And in the Appendix.
Thurgood Marshall: Mr. Blackburn, under your theory would it be possible to have exactly 50 different theories of negligence for abandonment of interstate railroads?
M. Gene Blackburn: Your Honor--
Thurgood Marshall: Is that possible?
M. Gene Blackburn: --therein lies the distinction. We do not claim that there was negligent abandonment. We claim that there was negligent maintenance of the track which ultimately caused abandonment.
Thurgood Marshall: Could there be 51--
M. Gene Blackburn: Yes.
Thurgood Marshall: --Different maintenance of track theories of negligence in the country?
M. Gene Blackburn: Yes.
Thurgood Marshall: Do you think that's what Congress wants?
M. Gene Blackburn: Let me rephrase that. I'm sorry I preempted the question.
Thurgood Marshall: I think you'd better.
M. Gene Blackburn: I think negligence law is general law. It commences from the duty to exercise reasonable care. It's basically hornbook law. It does not vary that much from state to state.
Thurgood Marshall: But could it?
M. Gene Blackburn: If possibly could.
Thurgood Marshall: I say it possibly could, so you agree it possibly could.
M. Gene Blackburn: I agree it--
Thurgood Marshall: And it possibly could have 50 different theories about running railroads.
M. Gene Blackburn: --Yes, Your Honor.
Thurgood Marshall: And that gives you no problem?
M. Gene Blackburn: It gives me no problem to this extent, that I think it creates a... let me analogize to another area of modern tort law. The emergence in the last 20 years or 25 years of products liability litigation has caused manufacturers to recognize their duties and their obligations to the consumers. Now, I don't think there are very many people except perhaps some manufacturers who would not say that that has a salutary and good effect. And I think the same thing would happen in this kind of case. The railroads in this case, I think, in this country, I think everyone would admit are in bad condition. We've had a regulatory scheme since 1887 which has not cured those conditions. Now, we're simply saying that the state tort claim would put the presence on the railroads to make those decisions rather than to let the railroads fall by neglect and what we term abandonment by neglect.
William H. Rehnquist: Well, are you saying then, that's a products liability theory?
M. Gene Blackburn: No, I'm not suggesting that. I'm simply saying that that's an analogy that the products liability cases have caused manufacturers to recognize their duties.
William H. Rehnquist: But those have been generated largely by state court fashioning of tort law remedies. Here we have congressional statutes that govern us and we aren't free to depart from them.
M. Gene Blackburn: Except, Your Honor, that we're saying that the way this case is pleaded it's not pleaded within those federal guidelines. The case was pleaded as a state court case. I think the best case in support of our theory, and it doesn't get to the question of primary jurisdiction or preemption, is the case of Johnson against Chicago, Milwaukee, and St. Paul, out of the 9th Circuit, which is a diversity case. And the court reached some of these issues that we're talking about here. In any event, Section 22 of the Act preserves to the states, preserves in clear and unqualified language, existing remedies. And states, the remedies provided for in this subtitle are in addition to remedies existing under another law or at common law. And that is in the 1978 recodification to the Transportation Act, and it's significant to note that that section which is 101.03 was given its separate place, and it was taken out of a rate section, which was 22, which defined rates, and it was given special emphasis by giving it a special section. We also suggest, Your Honor, that the law as pronounced by this Court in the case cited by the petitioner, Jones v. Rath Packing Company, is that there is an assumption against preemption, particularly unless there is a clear and manifest purpose otherwise. We suggest also that there is no conflict between state law remedies or any federal or regulatory scheme. One of the questions that was posed in opposing counsel's discussion I think can be answered in this way. Under Kalo's theory of negligent track maintenance and granted it's a narrow theory, there is no cause of action in federal court or before the Commission. We do not contend that there is. There are no federal track maintenance standards. The only way that Kalo could get into federal court would be, under this theory, would be via diversity action, which would call upon the district court to grant original jurisdiction. Any claim... and we concede... any claim that is made under the Act must be made through the Commission, and then referred to the federal court, or if it's brought in federal court, I would agree with the question that was previously asked that it probably must be referred to the Commission. But that overlooks our theory of the case. Our theory, the federal act, the federal Interstate Commerce Act, does not encompass negligent track maintenance. Our theory is narrow but it's viable under the decisions of this Court, and we know of no case which overrules the Puritan case. It's never been expressly overruled, and I think this Court has said on several occasions that it did not favor implied overruling of cases. But in any event our theory is based upon negligent track maintenance and there's nothing about that theory which imposes or incites a federal rule or a federal statute. Now, one of the theories that the Railroad would have us follow is, if you're is, harmed, you seek injunction. Well, Your Honors, in this case, injunction was not an adequate remedy. It would be foolish for the Kalo people to spend their then inadequate resources to enjoin the abandonment of a railroad that had already failed, and for which they'd been told that it wasn't going to be rebuilt. But the injunction theory, which they would have us follow, is a very narrow theory. Under the 8th Circuit decisions which are cited in, I think, both briefs, the Interstate Commerce Commission v. the Chicago North Western, and the Interstate Commerce Commission v. Chicago, Rock Island, & Pacific, the Chicago, Rock Island, & Pacific case indicated that the only question before in that proceeding is whether or not there is an illegal abandonment. Well, at that point of the proceedings, Kalo was out of business and had no incentive to proceed further by injunction. Likewise, those issues, of course, go to the question of the primary jurisdiction. If the Interstate Commerce Commission had no primary jurisdiction... in other words, if this does not involve questions of national transportation policy, if it does not require the administrative expertise to solve this problem, if it is of a kind of problem that can be handled by the conventional wisdom of judges, then the ICC has no primary jurisdiction, unless it's found somewhere else within the statute. And under our theory, once again, we'd say it's not found anywhere else in the statute. So if there is no primary jurisdiction, there is no collateral estoppel. And there are other reasons for denying collateral estoppel in this case. First, there are policy reasons. The issues are not the same. The issue before the Commission was limited to one thing: was the Railroad entitled to a certificate of convenience and necessity which would permit it to abandon the line? The issues before the state court were negligence, car service issues, and with the defense that the failure of the road was an act of God, which I think is rather interesting. Because under Iowa law and under law generally, and this is also cited in the 9th Circuit case of Johnson v. Chicago, Milwaukee, in order for a defense in a civil suit, the extents of acts of God in a civil suit to be a defense, it must be the sole proximate cause. Now, Kalo... another reason for denying collateral estoppel in this case before the Interstate Commerce Commission is this: Kalo had no incentive to go to Washington to be involved in those proceedings. It was out of business. This Court also announced the Fairness Doctrine in the Parklane Hosiery case, and we call your specific attention to Note 15 of that case, which sets forth the fact that it may often times be unfair to call a party out of and come to a foreign forum to litigate issues which are beyond the reach of its own discovery procedures and so forth. I also call the Court's attention to the general rule of the restatement of judgments which is now in a tentative draft fourth edition, which says, in the case of a judgment entered without contest by concession, consent, or default, none of the issues is actually litigated. "Therefore the rule of this section does not apply with respect to any issue in a subsequent action. " Finally, Your Honors, with regard to the question of collateral estoppel or res judicata or issue preclusion, we suggest that... and writers have suggested that there is a general fear that overuse of issue preclusion will cause litigants to overtry their cases and therefore you get a reverse-adverse effect, because the reason for the collateral estoppel rule in the first place is to preserve the judicial economy and not extend it. Also, Your Honors, I would suggest that collateral estoppel should never be used as a trap for the unwary. Once again, Your Honors, we would suggest that an affirmance of the Iowa Court of Appeals would provide a check against abandonment by neglect, and a balancing process between the regulated, the regulator, and the public. We thank you very much, Your Honors, and it's been an honor to be here.
Warren E. Burger: Do you have anything further, counsel?
Bruce E. Johnson: A very short one.
Warren E. Burger: You have one minute remaining.
Bruce E. Johnson: Thank you, Mr. Chief Justice. I'd just like to call the Court's attention to the Puritan case cited by the respondent, wherein the Court in Puritan says that the Congress evidenced its intent to make the Commerce Commission and the federal district court the exclusive forums for Section 9 damage action. And their reason for that is that after Section 9 was enacted by Congress, it enacted the Carmack amendment on freight loss and damage claims, which specifically gave actions in state or federal court. Secondly, that the Johnson case, the 9th Circuit case cited by respondent in his argument as his foremost case, specifically states that it is deciding the case under federal law and declined to apply state law. And that case was tried in a federal district court. I have nothing further, unless there are some questions.
Warren E. Burger: Thank you, gentlemen. The case is submitted.


Warren E. Burger: We will hear arguments next in 76-607, Miree against DeKalb County and the three consolidated related cases. Mr. Mozley you may proceed, when you are ready.
J. Arthur Mozley: Mr. Chief Justice, May it Please the Court. Mr. Heldman and I have a divided argument persuading to a permission of the court and I will speak for approximately 15 minutes and we will provide the court with a brief outline of the case and will devote my arguments to the questions of Federal preemption and implied private rights. Mr. Heldman will argue the issues involving third-party beneficiary status, whatever time remains after our argument, we would like to reserve for rebuttal.
Warren E. Burger: When you say implied private rights, do you mean an implied cause of action under the Federal Airport Act?
J. Arthur Mozley: Yes, I do Your Honor.
Warren E. Burger: Will you address yourself somewhere in your argument to where that was first raised. I have read that District Court opinion and the Court of Appeals opinion and I find no hint in either of them that that was ever raised.
J. Arthur Mozley: I believe that it was raised throughout the case Your Honor in terms of being beneficiaries of the safety covenants in the grant agreements and being able to sue as third-party benefits -- to sue for breach of those grant agreements as third-party beneficiaries.
Warren E. Burger: You are simply talking then when you say implied right of action, you mean a third-party beneficiary claim not an implied Cort versus Ash type of claim.
J. Arthur Mozley: Yes sir, I am speaking of an implied Cort versus Ash type of claim based upon breach of these safety covenants in the grant agreements. The safety covenants in the grant agreements are also statutorily imposed safety covenants under the Federal Airport Act.
Warren E. Burger: Well, are they two different theories of action?
J. Arthur Mozley: Yes sir, I believe that if we wanted to possibly split hairs, they would be two different theories, yes sir.
Warren E. Burger: Well, then if you have time to say when you first raised your Cort versus Ash claim.
J. Arthur Mozley: I believe it was probably in the Fifth Circuit Your Honor, when it became apparent that the Fifth Circuit had turned a question on Federal Law. These cases May it Please the Court arise from the crash of Lear Jet airplane at the DeKalb-Peachtree Airport airport, caused by ingestion of large number of starlings in both jet engines. The starlings had been attracted to the airport by an open raw garbage dump maintained by the County alongside the only Jet runway at the airport and this garbage dump had been in existence for sometime and as the record reflects was an attraction to literally huge flocks of, tens of thousands of starlings to the Jet runway area. Prior to the crash and under the (Inaudible) of the Federal Airport Act and related regulations of the county and the FAA, had in and into a series of six grant agreements, where about the County had received federal funds for airport improvements, including construction of the very jet runway in question in this case. These grant agreements imposed upon the county, the following specifics safety covenants. One; operation and maintenance of the airport in a condition ‘safe for aeronautical users,’ two; restriction of airport property to uses compatible with normal airport operations including ‘landing and takeoff of airplanes’, three; prohibition of any activity at the airport that would interfere with its use for airport purposes and four and possibly…
Warren E. Burger: Did you say air force?
J. Arthur Mozley: Airport purposes, excuse me Your Honor and possibly the most important is four; mitigation and removal of existing airport hazards and airport hazards being defined by Federal Law, as anything that adversely affects safety of life.
Warren E. Burger: Now, these recitals in the statute, these are the conditions on which the federal government makes the grant.
J. Arthur Mozley: These were recitals in the grant agreements between the FAA and the County and they are also statutory requirements under the Federal Airport Act.
Warren E. Burger: Well, they come into the contract because they are in the statute.
J. Arthur Mozley: Yes sir, they come into the contract because Congress required them to be there. The petitioners based their claims against the County on basically four theories; negligent operation of the airport, maintenance of a nuisance, maintenance of a Federally prescribed airport hazard, which is the implied private claim, Mr. Justice Rehnquist that we claim we have and breach of the grant agreement safety covenants.
William H. Rehnquist: Why does the District Court then refer to your claim as a diversity suit in the Fifth Circuit too?
J. Arthur Mozley: We have both types of jurisdiction here, Mr. Justice Rehnquist. We have complete diversity jurisdiction and if we have federally protected rights then we have federal questions jurisdiction also.
William H. Rehnquist: I do not doubt it, but all I am saying is the District Court opinion refers to it as diversity litigation, the Fifth Circuit refers to it as diversity litigation.
J. Arthur Mozley: That is correct, Yes sir. The issues here therefore are whether…
Warren E. Burger: But your federal question jurisdiction is linked entirely to your claim of an implied cause of action, I think if you do not have an implied cause of action then you do not have a federal…
J. Arthur Mozley: We do not have a federal question type jurisdiction.
William H. Rehnquist: But we would still remain with complete diversity of jurisdiction.
J. Arthur Mozley: Yes sir, with respect to our argument based upon federal preemption, we wish to make these points. A federal safety regulation of aeronautical interstate commerce extends to practically all phases of aviation and it specifically includes federally funded airports. The primary purpose of federal regulation of aviation including the safety covenants involved here is to provide for the safety of interstate aeronautical travelers. The extensive and pervasive federal regulation of aeronautical commerce by a necessity must preempt and preclude any conflicting local laws of policies. This is simply a logical extension of this court’s rulings in Northwest Airlines, Inc. versus Minnesota, and City of Burbank versus Lockheed Air Terminal. Application of a Local County Immunity Law, to shield the county for liability for breaches of safety covenants imposed by congress, certainly does absolutely nothing pollster or enhance the federally expressed concerns for airport safety. To the contrary, shielding the county from liability can serve only to emasculate and burden the federally expressed concern for aeronautical safety and for safety at federally funded airports.
Speaker: If you had a highway negligently built but with a Federal grant of money and joint construction project of the State and Federal Government, will the State in these circumstances be liable in charge or will it have sovereign immunity for the negligence, maintenance or construction of highways?
J. Arthur Mozley: A lower court Your Honor has held that the State would have sovereign immunity, in a different factual situation in this case, we believe that aeronautical commerce and the extensive federal regulations of aeronautical commerce and the deep concern of the Federal Government with safety distinguishes this case from the example Your Honor I have just cited. However a lower court has held as recited briefs that sovereign immunity would exist under the limited example, Your Honor I have just gave. So it is our position that the doctrine of federal preemption here must preempt the county’s immunity because otherwise the safety objectives of the covenants would be completely forted.
Speaker: So, I take then your position includes the notion that the federal law of government’s has controversy and you think that Court of Appeals simply made a mistake in saying that you were not entitled to sue under Federal Law here.
J. Arthur Mozley: Yes sir.
Speaker: That is exactly the opposite position for what you took in the District Court and the Court of Appeal.
J. Arthur Mozley: Well, no sir we that is quite not correct Justice Stevens.
Speaker: But you have won in the District Court on Georgia Law, did not you?
J. Arthur Mozley: No sir, the District Court ruled against us. The original Fifth Circuit opinion ruled in our favor and it was only really until we got to the Fifth Circuit and to the en banc majority opinion that the question of Federal Common Law really became involved in the case. Well, the parties had overlooked it or whether the earlier courts had overlooked it remains to be same.
Speaker: Well, I take that you would not if Georgia, would you concede that if Georgia -- what is your position if Georgia law applies to this case?
J. Arthur Mozley: Our position that Georgia’s Law of third-party beneficiaries is exactly the same as the Federal Law should be under Cort versus Ash under the original opinion of the Fifth Circuit that anyone who is an intended beneficiary of a safety covenant can sue for breach of contract and that such principle applies to counties.
Speaker: But if we disagreed with the Court of Appeals on which law governs, I suppose we would be remand to see what the Georgia Law is.
J. Arthur Mozley: No sir, I believe the Georgia Law has been stated in the Fifth Circuit opinion and is untouched by any reversal and that is that a County has no immunity will respect the claims arising from contracts. It was lawfully authorized to me.
Speaker: So, Judge Morgan took one position kind of had a detailed analysis, Judge Dyer took another position with a much less detailed analysis at Georgia Law.
J. Arthur Mozley: Yes, Sir. But Judge Dyer did not disagreed with Judge Morgan’s comments that a Georgia County can be sued for breach of any contract, that was lawfully authorized to me.
Speaker: But you think that panel decision is still in effect.
J. Arthur Mozley: That aspect of the panel decision is in effect because it is in part I, II, and IV of the panel decision that was adopted by the en banc majority. May it Please the Court, I would like to turn now briefly to the subject of our Equal Protection argument which was first made it to the Fifth Circuit and it is basically an argument that application of county immunity here or any interpretation of the county immunity statute would work the denial of equal protection. We have this situation, under the classification scheme urged by DeKalb County. If the County seat of DeKalb County, the City of Decatur had operated this airport, we would not be involved here. There would be no immunity issue. So, the result of the classification scheme urged by the county is simply that some suits against some local governmental entities can be allowed but other suits against it practical identical local government entities will respect to identical airports or disallowed. We believe this is an unconstitutional burden on the Rights of interstate aeronautical travelers and which serve to deny them equal protection. May it Please the Court, I would like to reserve whatever time I have.
Warren E. Burger: Very well, Mr. Heldman.
Alan W. Heldman: Mr. Chief Justice may it Please the Court. I represent the Miree petitioners, there are three minor children whose father and mother were both killed as passengers on this airplane. They are from Birmingham, the crash took place near Atlanta. I would like to begin by responding if I may to your question Mr. Justice Rehnquist and yours Mr. Justice White with respect to the question of whether Federal Law was asserted below and whether the notion of an implied federal remedy was asserted below and I think I responded to this on the first page or so of our Reply Brief but most specifically I can refer you to joint appendix at page 21 which is part of our complaint and I am assured by our council in the related cases that there was similar language there. At page 21 in the record, we asserted that the maintenance of the garbage dumped at the airport constituted an airport hazard is defined in several recited sections, at section 1711 is the definition of airport hazard but 1718(3) requires the aerial approaches will be protected and that adjacent land use should not be incompatible. We think that is more than adequate assertion of federal remedies for...
Speaker: It is simply your third-party beneficiary theory, is not it?
Alan W. Heldman: Your Honor, it has no relationship to the third-party beneficiary argument and in the context of the paragraphs of the complaint, it is unrelated. As a matter of fact the original complaint asserted to cover the waterfront; we argued the tort, nuisance contract, pleaded rather.
Warren E. Burger: Are you talking about page 22 of the big of the big joint appendix.
Alan W. Heldman: Page 21 Your Honor.
Warren E. Burger: Page 21.
Alan W. Heldman: Paragraph 28, there on. And those section references are to the specific Federal Statutory requirements, that areal approach is being protected and that adjacent land not reused incompatibly, it had in mind various sort of situation that we have here. The County own this airport, the County maintain an open garbage dump literally adjacent to the runway and over a period of years, they were told by the FAA that they were getting reports of flocks of birds interfering with aerial navigation, there were actual reports made from the FAA that the County of birds striking airplane yet not with fatal result and what we have is a apathetic response not to say a hostile response from the county. Why? Simply, because the County deemed itself to be immune and there was no adequate sanction to make them take notice of this problem. So, it is not positioned that the immunity here calls these deaths. Immunity created an apathetic attitude with respect to ignoring these Federal Safety Standards and I think it is fair to say, but if this County had to recognize an absence of immunity, this would not have happened.
Thurgood Marshall: Could it be some federal agency closed it down.
Alan W. Heldman: Your Honor the FAA…
Thurgood Marshall: My question was, could.
Alan W. Heldman: My answer has to be I do not know, I can answer you to this extent Mr. Justice Marshall. After this sad crash and after these deaths, the FAA brought a law suit to close it down and…
Warren E. Burger: At the airport or the garbage dump?
Alan W. Heldman: Close the garbage dump down and having up, I am afraid to go beyond the record but my impression is that that was vigorously defended and ultimately compromised, also if I may continue outside the record I think the…
Speaker: You mean you would not raise an airport without Federal approval?
Alan W. Heldman: The federal approval for say, was never withdrawn, there were threats from…
Speaker: Could not it be withdrawn, could not it have been withdrawn?
Alan W. Heldman: That I do not know Your Honor.
Speaker: I mean your argument is that this immunity did it, Federal Government had little responsibility to that too, did not it?
Alan W. Heldman: Well, we have sued the United States Your Honor and we do feel that there was our responsibility. I want to suggest that there is a spectrum here of a reasonable possible result with area applied State Law of the Georgia third-party beneficiary exception to its general immunity doctrine being at one end of a reasonable spectrum and the implication of a federal remedy, under Cort versus Ash at the other end of a reasonable spectrum and while adopting both of those arguments, I think it might be more useful if I would develop myself primarily to the application of Federal Common Law to some or all of these issues. The irony of the case is the majority of the panel decision below, took the case as an Erie case construed properly, Georgia Law to find this narrow contract exception to the general rule of County immunity and granted us standing. Judge Dyer (ph) who dissented from that said “No, this is a case where serious federal interests are involved. This is the United States as a part of the contract, United States is a defendant in the lawsuit. This is aviation which is federally preempted, so we have got to trial those case on the Federal Common Law. Then he went on and found that as a matter of Federal Common Law, the old restatement of contract through 145 from 1932 would give us the less liberal and a result that we kept -- a standard we can not meet as third-party beneficiaries. He ignored the recent cases including the Bossier Parish case which you Mr. Chief Justice set on the panel of with the Fifth Circuit ten or so years ago where you held that children had a standing to assert rights as third-party beneficiaries under an agreement an agreement between a County and the United States with respect to access to schools that was certainly a Federal Common Law decision. The City of Englewood case from the Ninth Circuit is an airport grant agreement case which held that only the City of Englewood, but individual citizens there as the class could sue as third-party beneficiaries to enforce the aviation grant agreements. So, we assert that very clearly Federal Common Law is at least as liberal on the third-party beneficiary issue as this Georgia Law and I think this is ought to be put to rest by the fact that just about ten years ago, the restatement draftsmen offered a new Section 145 which brings doctrinal third-party beneficiary concepts in line with reality and so that we know there is no significance difference between the rights of third-party beneficiaries with respect to contract which government is a party and with private.
Warren E. Burger: Well in terms of immunity in this case, with respect to the contract claim, do you have to rely on the panel decision?
Alan W. Heldman: In construction of George Law, if this court should deem that this is a area case, I would assert that the panel’s majority decision ought to control, that’s the correct interpretation…
Speaker: Well let us assume it, is not the -- assume, it's a federal question, but let us assume that the Georgia Law is that the County is immune from contract claims.
Alan W. Heldman: Your Honor, I do not think any judge in the court below took that decision.
Speaker: Let us assume that Georgia Law is that the County is immune also from contract claim.
Alan W. Heldman: Then I would think that that would be overpowering urgency for the court and not to consider this a mere area case because I think that would…
Speaker: Well I know but let us assume we decided on the one hand that Federal Law governs this case. Well, then we are faced with the problem that…
Alan W. Heldman: If Federal Law governs this case, you can interpret the contract to which the United States was a party and which involves the federally preempted area of commerce, you can construe it by Federal Common Law rules…
Speaker: What about the immunity of the County?
Alan W. Heldman: That is not a constitutional issue. There was some phrase there at the State and there was some phrase with sovereign immunity. We do not have that. This is Lincoln County v. Luning from this court in 1896 or 1898.
Speaker: You mean this is not a 11th amendment.
Alan W. Heldman: This is not a 11th amendment case. This is not in State of Georgia, it is a county and the only immunity is the immunity asserted by a Georgia statute. Now, our opponents talk about this was constitutionalized in Georgia’s constitution. That was after the bill and is of no relevance. This case we have here merely a Georgia statute which says that a county will be immune from tort and the Eleventh Amendment does not require this Court in a federal question case.
Warren E. Burger: Is not that Georgia statute entitled to some kind of credits?
Alan W. Heldman: As Your Honor suggesting full question, credit or…
Warren E. Burger: No, I have just said some kind of credit.
Alan W. Heldman: I think if this was an Erie case certainly so, but there is a whole lot of cases starting with Pardon from Alabama which holds that even the State itself, which on the face of it has the 11th amendment protection waive the immunity when it enters a federal sphere of commerce and it is my contention that…
Warren E. Burger: But there has never been any question about the power to waive the immunity and many States have indeed waived…
Alan W. Heldman: Pardon in that line of case as Mr. Chief Justice were implied waive first not…
William J. Brennan, Jr.: You mean running the airport in and of itself, that was implied in running a railroad.
Alan W. Heldman: That is exactly right Mr. Justice Brennan, but there are many cases, the recent Seventh circuit case Kohr involving an air crash found that Federal Common Law ought to control with respect to the various substantive issues. They are the issues were contribution and indemnity, that they did not even have a contract as we do here. So I would say that a fortiori here where we are interpreting a federal contract in the rights of parties under that federal contract, that Federal Common Law opt to.
Warren E. Burger: Did you said the United States also?
Alan W. Heldman: Yes, Your Honor.
Speaker: And is that suit still pending?
Alan W. Heldman: Yes, Your Honor...
Speaker: And you sued there under the $10,000 limit of the…
Alan W. Heldman: They are defended, the United States is defended in this action and the…
Speaker: Federal Tort Claims Act.
Alan W. Heldman: Yes Sir. The United States also may cross claims against a case.
Speaker: No that was your -- did you make any assertions in the District Court or lower courts as what the controlling law was in that action?
Alan W. Heldman: We resided compliance was the conditions preceding to the Federal Tort Claims Act and then resided the appropriate section of title 28 with respect there too and I think generally, being incorporated all of our allegations. The original complaint was lengthy and very shortly after complaint was filed a very lengthy amendment was filed which is in the right…
Speaker: Am I reading the wrong compliant on as large the joint appendix page nine, is that where the complaint begins?
Alan W. Heldman: That is our complaint, yes sir.
Speaker: Jurisdiction is based on 1346(b). Is that it, is that the Tort Claims Act?
Alan W. Heldman: Yeah, this Your Honor, I might say, just by way of an aside that the question came up just during briefing as to whether the United States has been dismissed from the action and the I would not elaborate here, but I think it is very clear and I did in my Reply Brief I think adequately support the contention that the claims of United States was still alive.
Speaker: Any reason you know why the United States is not here?
Alan W. Heldman: The United States is determined early on in this litigation that its interest would not be affected here by because it is the motion to dismiss had never been -- the county’s motion to dismiss the United States’ have cross claims had never been ruled upon, I understand that that is still the United States.
Speaker: But the breadth of the potential of these issues is such that I wonder that the United States is not in front of the court giving there views at the matter.
Alan W. Heldman: I think, Mr. Chief Justice, the United States was simply relying upon the fact that it is that the motion to dismiss its cross claims was not granted and that is a matter of clear law. The United States filed a memorandum and I think that is some reference to those cases are in my Reply Brief and I make it perfectly clear that the County can not assert sovereign immunity or governmental immunity vis-a-vis the United states. So, well there maybe perhaps some confusion in the record, I think the United States is under no fear that its claims there have been jeopardized.
Speaker: Yes, but you are asserting that a liability against them, your…
Alan W. Heldman: Well that issue is not forced today. The motion to dismiss the United States filed against our claims and not before Your Honor today.
Speaker: Even if you lost here, you still have your suit against the Unites States.
Alan W. Heldman: It is one last suit, but the only thing that is before you today is the county’s motion to dismiss the various petitioners’ original complaints.
William H. Rehnquist: But your theory of an implied cause of action, the Federal Airport Act certainly might develop principles that could involve the United States as the defendant, could not it?
Alan W. Heldman: That Mr. Justice Rehnquist that is something that has not come up and I am not sure I can answer that adequately, but of the top of my head I do not see why, we have an adequate remedy against the United States on the Tort Claims Act here. The fault of the United States would be with respect of operation of the power and the failure to report to this power that there had been bird sliding.
Speaker: Would it include the failure of the United States to close this airport down as a hazardous place on your theory of the case?
Alan W. Heldman: It could.
Speaker: Mr. Heldman, I hate to ask this question, but is there a case still pending in the District Court against United States and if there is, was there a ruled order entered pursuant to Rule 54 (b) making this a proper appeal?
Alan W. Heldman: Your Honor the claims against the United States are still pending, the claims of the petitioners against DeKalb County went up under 1292 (b) and on that I certify interlocutory matter. I would like to close by bringing back my emphasis to the middle of this spectrum away from an implied federal remedy on the one hand and away from the contract concept on the other hand into the notion that the court can resolve this matter by applying proper principles of Federal Common Law here. Both proper principle of Federal Common law with respect to the rights of third-party beneficiaries and also a principle that Federal Common Law will not embrace archaic doctrine of immunity for a party which contracts with the United States in a preempted area of commerce specifically aviation where the whole thrust of the statutory scheme and the whole thrust of the contract is safety. If you read this record, you will see that it is not a philosophical statement to say that immunity caused this air crash. I see that my time is up, thank you.
Speaker: Just one question, you mentioned the Pardon case, do you consider the operation of railroad in Pardon as a complete parallel to the Federal Regulation of all airports?
Alan W. Heldman: In Pardon on the one hand, you have the state itself deemed to have waived its immunity by entering the area, our case is a fortiori. On the other hand, that was an FELA question in Pardon and I think that that phase of the case was easier than the…
Warren E. Burger: But that was on the old concept for the proprietary aspect of the railroad, was it not in part.
Alan W. Heldman: I do not recall that it went on a proprietary governmental distinction in any of it's, the operation of the airport.
William J. Brennan, Jr.: I am quite sure it did not…
Alan W. Heldman: I believe he wrote that opinion Mr. Justice Brennan, thanks.
F. Clay Bush: Mr. Chief Justice, May it Please the Court. I am here on behalf of the DeKalb County and there are multitude question that this court has presented, but let me go ahead with what I’ve prepared as and it will probably bring in some of the question which you all have raised to the various opposing council.
Warren E. Burger: You can do well if you can avoid questions by a statement like that.
F. Clay Bush: Let me point out that in the initial panel opinion, as raised by the dissent by a Circuit Judge Dyer. He stated in a footnote that if Georgia Law applied to this case, it would change the result and that footnote along with the dissenting opinion was adopted, by eight judges of the Fifth Circuit. Now, we are here before this court today, not on any 54 (B) certification, we are here because the judgment entered for DeKalb County. An appeal was taken from that judgment in approximately late September, 1974. Two opinions were entered by District Judge William C. O’Kelley, the first one in June of 74 and in that first one; he basically stated his opinion that DeKalb County was immune from suit if the Diversity law applied.
Speaker: But these cases are still pending against some other parties…
F. Clay Bush: There was Mr. Mozley who is here to argue about on behalf of Fireman's Fund, Southeast machinery and machinery buyers, the various defendants and plaintiffs he represents in dual positions, a motion for reconsideration. The court reconsidered it, entered its opinion on I believe September 25, 1974. Then entered judgment for DeKalb County by which an appeal was taken. There are no cross-claims we contend pending against this right now, the suit is here upon a proper judgment entered on behalf of DeKalb County and it was appealed…
Speaker: 54 (b) has anything to do with that?
F. Clay Bush: He did entered pursuant to 54 (b) we directed the clerk to enter judgment on behalf on DeKalb County and judgment was entered and it is in the appendix Your Honor. Now, if I may proceed…
Speaker: And did the District Court say there was not any reason for delay?
F. Clay Bush: I believe he may have Your Honor, but a judgment was entered, in his opposition. It was not meant to subsequently to delete one individual. They had been included in which should not been. If this Court should consider Georgia Law, we would direct this court’s attention to particularly the decisions that have occurred, since Judge William C. O’Kelley who we contend had his pulse upon Georgia Law and we would show this court that in January of 1975, the Supreme Court of Georgia in Azizi and in Shelly had before the situation where they were going to review the constitutional immunity doctrine again. There, they had situations and occurrences and acts that have occurred before the constitutionalization of this immunity rule and here they said, that it is no longer open to abrogation by the Supreme Court of Georgia because it is a matter that has been a part the Constitution of Georgia, it has been ratified by the people, it has been passed by the Legislature of Georgia, has been examined by the Executive Branch, the State Government of Georgia. Therefore, it is no longer open to the judicial abrogation by Georgia Court or by a construing Georgia Law. Now, in the later part of January of 1975, in William v. Georgia Power, it was a matter involving Hancock County and in that case there had been allegation of nuisance and allegation of third-party intended to beneficiary, to an agreement between Georgia Power and Hancock County, in the plaintiff said that they were third-party beneficiaries. Supreme Court of Georgia said, “No, immunity” to both third-party beneficiary and to theories of nuisance. In October of 75, in Revels versus Tift County, we had a slip and fall, a simple negligence action in a County Court House of the Tift County, no immunity. In March of 1976, now this was after the panel opinion, where we strenuously disagreed with what judge Morgan stated, as what he considered to be the Law of Georgia on third-party beneficiary. Approximately two months after that panel opinion, in March of 76 in a case of Backus versus Chilivis , there was a situation where a person had contacted with Glynn County Georgia, which is down near Brunswick and in that case, the plaintiff said, “Why am a third-party beneficiary of that contract?” Supreme Court said, “No, that person was not an intended beneficiary” and it stated that no citizen is a third-party beneficiary of the government contract. Then more recently, in February of this year, the Supreme Court of Georgia had a State Department of the State Government of Georgia, contracting with the health facilities services on Medicaid payments, they promulgate certain regulations wherein they say that, there are maximum reimbursement sealing and these maximum reimbursement sealing cause them some money and plaintiff sued and Supreme Court of Georgia said, “I am sorry, we have immunity. You’ve sued the State in that particular instance, the state has not agreed to pay you damages or waive its immunity and since it stands before us with immunity, we must apply it.
Speaker: Mr. Bush, are you arguing if we should conclude that Georgia Law controls that we should decide the Georgia Law question or should we send it back to the Court of Appeals to decide that?
F. Clay Bush: I do not really seek to advice the court on which position it should take, it is clear to me Your Honor that Georgia Law, if it is applied by this court or by the Fifth Circuit, we would clearly hold DeKalb County immune from the suit and as well as the third-party beneficiary arguments would find that the county…
Speaker: It was not clear that the majority of the panel in the Court of Appeals.
F. Clay Bush: There was some disagreement and it was…
Speaker: Well, in that disagreement they squarely held against to you.
F. Clay Bush: Well, they squarely held on the theory of applying two cases which those two cases were subsequently two months later in Backus versus Chilivis distinguished. They applied a case called Smith v. Ledbetter bros. which was a case where they suit a person who had done some roadway construction and a highway traveler as a suggestion of Chief Justice was injured and they sued the individual who had actually done the work and the Court of Appeals of Georgia said, “Well that was a proper theory of recovery.” Now, the Supreme Court of Georgia, that was a fairly old case, and Supreme Court of Georgia in March of 76 said, “That case, it simply does not apply this is ensuing people who have contracted with the government or the government itself.
Speaker: That maybe the third-party, in most case maybe related to the third-party beneficiary matter but is that the same question as immunity?
F. Clay Bush: We contend it is two fold Your Honor.
Speaker: Yes, I thought we think so and what about the Georgia Law and immunity of the County?
F. Clay Bush: We contend Your Honor that we are still immune particularly because of the constitutionalization of immunity rule that we have referred to in our brief. It is now a situation and as expressed in October 75 by the Supreme Court of Georgia in Revels versus Tift County that was a specific case where there was a slip and fall in the County Court House and a simple negligence action against Tift County and they said, “County is now immune from suing and its (Inaudible).
Speaker: The Fifth Circuit does not seem to agree with you.
F. Clay Bush: There was also a member of the majority opinion, who adopted that footnote of Judge Dyer that, Judge Haire (ph) was also a Georgia Judge. So, we have a situation where one Georgia Judge from the Fifth Circuit was saying one thing and one Georgia Judge was saying another. But I will state to you Your Honor, that a panel opinion…
Speaker: What about we non-Georgia judges?
F. Clay Bush: I would suggest to you Your Honor that the panel opinion failed to their cognizance and failed to realize after the panel opinion and when the time of the en banc of the opinion was written of the Backus versus Chilivis decision, I would as simply commend that to Your Honor’s attention.
Speaker: What if we decided that Federal Law applies, then what about immunity?
F. Clay Bush: We have contend Your Honor, there is no case that I have seen from this court that deals with that issue. There is a Fifth Circuit case called McCord versus Dixie Aviation, which says that states sovereignty is unimpaired in the aviation area. At this point I would like to call Your Honor’s attention to a decision of…
Speaker: State sovereignty, what about this County immunity? That is not state.
F. Clay Bush: Well Your Honor it is our contention that it is not only a state statutory immunity but it is a state constitutional immunity…
Speaker: Maybe, but still a State is not in Eleventh Amendment.
F. Clay Bush: Well, it was our position in the brief and it is still our position…
Speaker: Well, it's not Eleventh Amendment.
F. Clay Bush: Well, we are not suggesting the State of Georgia is involved in this case. We are suggesting that multitude.
Speaker: But the County immunity is certainly in Eleventh Amendment.
F. Clay Bush: Well, we would completely agree that the Lincoln County v. Luning is positive of that issue. In that particular case and I reviewed that Lincoln County, it was a particular County in Nevada, I believe, Your Honor and that was a County that was apparently drafted as a municipality as in Georgia. In Georgia counties are considered arms of the state. We decided the Supreme Court of Georgia decision on that particular point.
Speaker: Well California made that argument in Moor v. Alameda County too and we rejected it.
F. Clay Bush: Well, it is my position also as well that these are situations where the allegations multiply even of these present petitioners is into the tens of millions of dollars, as far as damaged suits and this is simply a situation where the county has no capability and we would have no capability under the government immune to pay for such judgments and a plead would have to be made to the general assembly of Georgia to pay these judgments and there under Edelman v. Jordan in Your Honor’s opinion, we may commend to the Eleventh Amendment because the state maybe called upon through its general treasury to pay for these particular judgments.
Speaker: But the state could surely just decline to appropriate the money.
F. Clay Bush: They certainly could Your Honor, but that would be their decision in our regard but I am not completely agreeing that Eleventh Amendment is not applied.
Speaker: McCord case cited in your agreement.
F. Clay Bush: It is, Your Honor. You have it, even I have mine. Mine is red color, Your Honor.
Speaker: Anybody get rid of that nuisance of this airport, if the county has immune.
F. Clay Bush: I do not agree that what Mr. Heldman said that, the suggestion is that the County refused to doing anything about, because they were immune. The County all during this time was trying to find the place to put its County garbage. It is a Semi-Urban County and it’s a situation where no one in the County wants the garbage dumped next door to them. It is a situation of placement disposal of garbage.
Speaker: If the county had to pay a few million dollars in damages they might get interest.
F. Clay Bush: It certainly might Your Honor. It is already been alleviated. Let me point out to the Court as to the federal question that’s present. This court through Justice Stewart unanimously held in a case that I by my own mistake have not directed this Court’s attention to, a case called Executive Jet Aviation versus City of Cleveland. That is 409 US, 249 and 34 L.Ed. 454. That case also was a bird ingestion case. In that case, there was Charter Flight arising of Cleveland, Ohio and it took off and start off towards Lake Erie and ingested some goals crashed in Lake Erie. A suit was filed Ohio federal Court. Not alleging diversity because there was no diversity. They filed to base upon Theory of Admiralty and upon the Theory of the Death of the High Seas Act for obvious reasons; there is no Federal Wrongful Death Action, explicit in any of the aviation statutes. This court dealt greatly with the admiralty questions but at the conclusion of dealing with the admiralty issues, I think Justice Stewart for unanimous court made an expression that is completely applicable to this case and to the federal issues that have been raised. In the situation before us which is only fortuitously and incidentally connected to navigable waters and which bears no relationship to traditional maritime activity. The Ohio Courts could plainly exercise jurisdiction over the suit and could plainly apply familiar concepts of Ohio Tort Law without any effect on maritime endeavors. It may be as petitioners argued, that aviation tort cases should be governed by uniform substantive and procedural laws and it such action should be heard in the Federal Courts so as to avoid the diversion results and duplicities litigation in multiparty cases. If federal uniformity is the desired goal with respect to claims arising from aviation accidents, Congress is free under the Commerce Clause to enact legislation applicable to all such accidents whether occurring on land or water and adapted to the specific circumstances of their commerce. I cite also with regards to that a bill that was introduced by Senator Tydings in 1969. I have cited in my brief. Senator Tydings suggested in his bill thought that there should be exclusive federal jurisdiction, a federal cause of action and a federal remedy for Aviation Act. The case though had substantial testimony in hearings was never reported out of committee. It never got anywhere. The reason is because there is a body of State Law to apply and we contend that this State Law protects us in this respect. Again, the suggestion that there are safety requirements that these safety requirements should be recognized by this court and thus create a private cause of action. Congress has that right. Congress has that ability and Congress has not created a private cause of action, a private remedy. Private remedy for wrongful death, which is unrecognized and we contend this Court should not imply such a remedy from a sovereign legislation and in an Executive Jet Aviation case, they refused to, in a bird ingestion case. The citation of the City of Englewood case, we contend this, out of the Ninth Circuit and the alleged conflict in the federal circuits between the fifth and the ninth circuit that City of Englewood case is an eminent domain case. They recite particular facts. There was no injuries involved, no wrongful death, nothing such as that and they also distinguished because they say that non aeronautical users were involved. Here these people contend, they are aeronautical users. So they recite those authority cases that do not even have a factual basis really. Are there any other question? We are nearing 12 and out. But I am concluded with my argument; if the court has any other questions. Thank you, Your Honor very much.
Warren E. Burger: Certainly not.
J. Arthur Mozley: May it Please the Court, I would like to respond briefly to council’s arguments, that the county has immunity of the contracts claims.
Warren E. Burger: Mr. Mozley, your time has actually expired but we will give you till 12 o’clock.
J. Arthur Mozley: Alright, thank you very much Your Honor. (Inaudible) your friend’s time.
J. Arthur Mozley: Thank you. On page a 22 (a) of our petition for sir, we incorporated the decisions in the courts below and I want to call attention to this court to the facts that in the initial panel opinion Judge Morgan of the Fifth Circuit said, talking about the Southern Airways versus DeKalb County case involving this precise airport, the court rule is since the Georgia Uniform Airport Law expressly authorizes a county to contract, “The logical inference of that statute is that the County maybe sued for breach of contract. This is consistent with several other Georgia decisions which hold that statutory authority to contract is necessarily a statutory waiver of immunity to suit for breach.”
Warren E. Burger: What contract was he referring to do you think?
J. Arthur Mozley: The contract in this case was a contract authorized by the Uniform Airport’s Law which is same type of contract we have here Your Honor, of FAA, Grant Agreement. So the Georgia Law on immunity is that, “Immunity for a county does not extend to suits based upon contractual obligations.” And as Mr. Bush had pointed out…
Warren E. Burger: The en banc majority and a footnote disagree with that?
J. Arthur Mozley: No, sir the majority in the footnote simply said, “We believe that under Georgia Law, the result would be the same because under Georgia law, these petitioners are not indented beneficiaries. It was question of whether we were intended beneficiaries not an immunity question. Thank you.
Warren E. Burger: Thank you, gentleman. The case is submitted.