William H. Rehnquist: We'll hear argument next in No. 91-122, PFZ Properties, Inc. v. Rene Alberto Rodriguez, et al.-- Mr. Richichi. Am I pronouncing your name correctly?
Thomas Richichi: That's correct, Mr. Chief Justice. Mr. Chief Justice, and may it please the Court: The matter before you involves the deprivation of a landowner's right to pursue a use of his property, a use which was approved more than 15 years ago by the Planning Board of Puerto Rico and upheld on the merits by the Puerto Rican courts. The deprivation occurred in August of 1988 when senior officials of the Puerto Rican Permits Authority, that is the respondent ARPE, denied PFZ a construction permit and dismissed its project. PFZ alleges that the dismissal is actionable under 42 USC section 1983 and that it deprived PFZ of a protected interest under the due process clause of the Fourteenth Amendment and that it was a result of behavior by officials acting under color of state law which was not rationally leaded to a legitimate state objective. The conduct which gave rise to PFZ's claim was the deliberate refusal by ARPE to review and process a set of construction drawings which PFZ had submitted to the agency in order to obtain a construction permit. This was accompanied by the dismissal of ARPE's project based on the deliberate review of another different set of drawings which ARPE knew to be the wrong drawings.
William H. Rehnquist: Mr. Richichi, let me make sure I understand where you're drawing your facts from. The district court granted a motion to dismiss.
Thomas Richichi: That's correct. We are here under 12(b)(6).
William H. Rehnquist: And therefore, ordinarily we would take the well pleaded facts in the complaint.
Thomas Richichi: That's correct, Your Honor.
William H. Rehnquist: There was a pretrial order entered, was there not, specifying--
Thomas Richichi: That is correct, Mr. Chief Justice.
William H. Rehnquist: --What is your position with respect to whether that order may be relied on or not for facts in deciding the legal questions?
Thomas Richichi: Mr. Chief Justice, it is well settled law that the pretrial order acts as an amendment to the original amended complaint and is in effect a pleading in and of itself. We raised that issued on a rehearing with the court of appeals. It said that because that issue had not been raised originally in the briefs before the court that it was not going to consider that in its determination. However, it said in the alternative that had it looked at the pretrial order that its opinion would not have changed. I think the Court is free to consider the pretrial order if it deems that it in fact has amended the complaint in connection with the well settled law. We do not think you need to go that far in order to rule in our favor.
William H. Rehnquist: So you are now drawing your statement of facts that you make to us, then, from the pretrial order as well as from the complaint?
Thomas Richichi: Well, the pretrial order... we would rely on the amended complaint, Mr. Chief Justice. The pretrial order does reflect the state of the record when the case was dismissed, and therefore in drawing reasonable inferences in favor of the plaintiff we believe that it is context and does provide guidance as to what reasonable inferences were appropriate.
William H. Rehnquist: That is not to me an entirely satisfactory answer to my question. You're stating that certain facts happened. The Planning Board deliberately read the wrong set of plans.
Thomas Richichi: That's correct.
William H. Rehnquist: Is all of that derived simply from the amended complaint, or are you relying at least in part on the pretrial order?
Thomas Richichi: Some of the facts that we have relied upon are reflected in the pretrial order. They are also reflected in the admissions that have been made in the papers before this Court and before the court of appeals, but we believe the amended complaint is sufficient to state a claim.
William H. Rehnquist: Well, it may be sufficient to state a claim, but when you give us these statement of facts are you relying on anything that can only be divined from the pretrial order? Well, don't--
Thomas Richichi: No, I don't believe so. I believe these facts are reflected in the amended complaint and the reasonable inferences that can be drawn therefrom.
John Paul Stevens: --May I just be sure of one thing? The amended complaint you're referring to is at page 131 of the Appendix? There's only one amended complaint, is that right?
Thomas Richichi: That's correct.
John Paul Stevens: And where is the pretrial order?
Thomas Richichi: I do not believe the pretrial order was made part of the Appendix by the parties.
John Paul Stevens: So we really don't want to rely on that, then, if we can't have it before us.
Thomas Richichi: Right. PFZ had timely filed the required drawings in February of 1982 for ARPE's processing and review. ARPE did not act on the drawings until 6 years later, and then only after PFZ had sued the agency. Reviewing the wrong drawings, senior ARPE officials concluded, 6 years after the fact, that PFZ had not submitted any construction drawings in 1982 and having missed the deadline for submission the entire project would be dismissed. PFZ submits that this deliberate action cannot be construed to be rationally related to a legitimate state purpose.
Sandra Day O'Connor: Well now, you're relying here on a substantive due process violation?
Thomas Richichi: That's correct, Justice O'Connor.
Sandra Day O'Connor: We didn't grant cert, I guess, on any procedural due process issue.
Thomas Richichi: We requested that the Court review this case because of the procedural due process violations that we have alleged below. The Court declined to accept that issue, so we are here on the substantive due process issues. But yes, we alleged procedural--
Sandra Day O'Connor: Well, on the substantive due process issue do you have to allege a property right in receiving the permit, the construction permit?
Thomas Richichi: --We believe that there is a property right that is protected and falls within the due process component--
Sandra Day O'Connor: To receive the construction permit?
Thomas Richichi: --The property--
Sandra Day O'Connor: A right to receive the construction permit?
Thomas Richichi: --I would articulate it differently, Justice O'Connor.
Sandra Day O'Connor: Well, would you answer my question and then you can articular whatever you want? Is there a right to receive a construction permit under Puerto Rico law?
Thomas Richichi: Yes, there is.
Sandra Day O'Connor: And what is that law? Could I have the citation, please?
Thomas Richichi: That was cite... the law that was cited was in our reply brief at Note 5, page 4, and it indicates that when the Planning Board has acted and approved a project there is a vested right that accrues, that's 23 Laws of Puerto Rico Annotated, section 71. I believe the full citation is in our brief at Note 5, page 4. The Planning Board, having made the policy determination that the use was approved, the ministerial function of the permitting agency was to issue the permit and effectuate that use. If the permit was not issued, then the rights that were granted by the Planning Board had no effect. Therefore, in answer to your question, in this particular circumstance we would say that there is a property right. We would also--
Sandra Day O'Connor: And you say that the law that you cite makes clear that there is no discretion at that stage in granting the permit? That you have a right to receive the construction permit?
Thomas Richichi: --Yes. The... if the required drawings are--
Sandra Day O'Connor: That it's ministerial only.
Thomas Richichi: --That is correct. In fact I would point out that under the current regulations and current law, as the respondents point out in their brief, these drawings are not even reviewed before a permit is issued by the agency, although the agency does reserve that right to do it on a spot basis. But the task is such that the agency no longer even reviews these drawings. The engineer just certifies that they are appropriate.
Anthony M. Kennedy: And I take it this substantive due process inquiry does not depend upon any showing that there was a taking of property? And by that I mean a taking of the real property that is in question.
Thomas Richichi: Justice O'Connor, if we're talking about a taking within the meaning of the Fifth Amendment--
Sandra Day O'Connor: No, that's Justice Kennedy.
Thomas Richichi: --I'm sorry. I apologize to the Court. Justice Kennedy, I was thinking of my answer. The due process clause is distinct from the takings clause and we would submit that in this particular instance there are two different potential claims. The one that has been asserted is the due process claim, the difference being that as the Court pointed out in the first English opinion, takings involves otherwise proper conduct by the government which interferes with property. Here we are talking about misconduct, and in that sense we do not believe that the complaint that we have alleged involves a takings claim. Not that one couldn't be presented, but under these circumstances we are talking about misconduct and that implicates the due process clause.
Anthony M. Kennedy: I take it inverse condemnation can sometime arise from improper governmental action, under the takings clause?
Thomas Richichi: The Court has said that, in the takings context, that sometimes regulation can go too far if there is an improper exercise of the police power. But I think the Court has also made clear that there can be an improper exercise of the police power with respect to a substantive due process claim, and in this particular instance we believe that there was an improper exercise of the police power in an adjudicatory setting and that implicates the due process clause.
William H. Rehnquist: As I recall the court of appeals' opinion in this case, they did not agree with you as to your submission as to the law of Puerto Rico, that that law was so flat out ministerial that it would, that you had a substantive right to a permit once your development project had gotten to the stage it did.
Thomas Richichi: I think the... as I recall the opinion, Mr. Chief Justice, what the court of appeals said was they were assuming the existence of the property right, and even assuming the existence of the property right under Puerto Rican law that they did not feel that there was a claim that had been stated. So as far as the court below was concerned, both the district court and the court of appeals assumed the existence of a property right.
William H. Rehnquist: Of the type of property right which Justice O'Connor questioned you about, do you think?
Thomas Richichi: That is... well, I don't think the court was that specific, but I have to assume that that's what they're referring to when they said we assume the existence of a property right.
Byron R. White: Well, the court of appeals actually said more than that. It said it isn't all that clear whether there's a property right or not under Puerto Rican law.
Thomas Richichi: I believe that's correct.
Byron R. White: And do you suppose that, do you suppose the... is it open in this Court? Is the question open in this Court as to whether there is a property right under Puerto Rican law in the construction permit, or do we have to... is the only issue before us is if there is a property right, was it taken?
Thomas Richichi: I think the only issue is the latter, if there was a property right, was it taken. This Court has said in the State of Washington v. Roberge that the right to devote one's land to a legitimate use is property within the protection of the Constitution. The Court has more recently said in the Nollan case that the right to build on one's property is not even remotely something along the lines of a government benefit, that there is a right to build on one's property. And that one arose in the constitutional context.
William H. Rehnquist: Well, stated that flatly, that there is a right to build on one's property, I mean you have to add any number of qualifications to that. There is not a right to build an 8-story office building on property that's zoned for a single-family residence.
Thomas Richichi: That is exactly correct, Mr. Chief Justice. The protected right here at issue derives from the ownership of the land since the right to use the land is one of the most basic sticks in the bundle of land ownership. The... Puerto Rico, in the statutes that we have cited, recognizes the right to build on one's property and recognizes the right to make use of one's property.
David H. Souter: Well, Mr. Richichi, I'm having trouble seeing where you draw the line between the property right that you are now describing, I think you're describing, and the property right which you described in answer to Justice O'Connor's question, because I understood your answer to her question to be that the property right you claimed, the denial of which you claim was the property in the permit, you had a right to get that permit and that was denied. And yet as I read your allegations, principally those sort of 36 through 40 in the complaint, I read them as referring to an underlying or antecedent right that I think you are talking about now the right to use one's land. And in answer to Justice O'Connor's question I thought you were narrowing the inquiry and saying no, the right here is just the right to get the permit, having fulfilled certain conditions under Puerto Rico law. But now it seems to me that you're arguing what I thought your complaint argued, an underlying right to use one's property, permit system or no permit system. Which is it?
Thomas Richichi: It is the right that you have described, the underlying right to use one's property. What I was pointing out in response to Justice O'Connor's inquiry was that there is also a property right under Puerto Rican law. But the right upon which we rely is the underlying right to use one's land--
David H. Souter: Okay.
Thomas Richichi: --and we believe that the Court has indicated that is within the protection due process clause.
David H. Souter: And you, would you... I think you agree but I want to be sure, that your complaint does not set out allegations from which on its face, if we accept them, one could say that you had claimed a substantive entitlement to this particular permit. Your claim rather is they just didn't process it right. They delayed and therefore they denied me the underlying right. Is that a fair characterization?
Thomas Richichi: I think it goes to more than delay, because there was a denial of the permit after a legitimate use had been recognized.
David H. Souter: But you don't, you don't claim in express terms in your complaint that you had on the merits met every condition necessary to get that permit. That's not what you're relying on.
Thomas Richichi: I believe we do indicate, if the Court needs to go that far we did indicate that the required drawings had been submitted such that a permit could issue. So to the extent--
David H. Souter: Then I guess you're claiming both kinds of rights.
Thomas Richichi: --We believe we should prevail on both rights, that's correct. If it's the right that you have identified or if it's the right that Justice O'Connor has identified, be believe they are both present in this instance. And we would submit that in using or making use of the land that Puerto Rico can subject us to legitimate restrictions under the police power, but that police power is in and of itself subject to legitimate restrictions that have been recognized under the due process clause, and that in fact is where we believe the right has arisen, and we believe--
John Paul Stevens: May I ask this question?
Thomas Richichi: --Yes.
John Paul Stevens: To the extent that you're relying on your response to Justice O'Connor, the specific right to have specific drawings of the project approved, why isn't a state law remedy an adequate protection for that? Why do you have to come into Federal court to get that right protected?
Thomas Richichi: Well, in response to that question we believe that this Court has indicated under Zinermon that the Federal remedy is supplementary so that we are not required in the substantive due process context to first make use of state remedies, and we would submit that that is the appropriate rule. I believe one circuit has--
Byron R. White: But you did resort to state remedies, didn't you?
Thomas Richichi: --Yes, we did, Justice White.
Byron R. White: And you were turned down.
Thomas Richichi: We sought reconsideration before the agency advising them, as the court below said unequivocally, that they had reviewed the wrong drawings. The agency proceeded to review the exact same wrong drawings and affirm its opinion. We then sought discretionary review before the Puerto Rican courts of that administrative decision, and the Puerto Rican courts declined to exercise their discretionary review. So we did have a final decision. We sought administrative reconsideration, that was denied--
John Paul Stevens: You even, you went to the supreme court too, didn't you?
Thomas Richichi: --That was a different circumstance. Yes, we did. Previously we had been to the supreme court with respect to the Planning Board approval and the supreme court approved the Planning Board's approval, and that was some 10 years before. This matter has been, we have been seeking to develop and pursue this property for almost 30 years now.
John Paul Stevens: But maybe you're not required to exhaust. I understand your argument there, but are you in effect saying to us that your right is so clear that if we had gone into state court we clearly would have won?
Thomas Richichi: No. We could not have won because the record was corrupted. The Puerto Rican courts exercise discretionary review which only looks to issues of law, excepting the administrative record, on the basis of what has been presented by the agency. In that particular circumstance the agency looked at the wrong drawings and said these are the correct drawings. It is undisputed that they cannot be--
John Paul Stevens: But then you filed an action in the Puerto Rican circuit court, or whatever the name of the tribunal is, making these allegations, didn't you, that they had looked at the wrong drawings?
Thomas Richichi: --We did bring an action in the Puerto Rican court asking them to exercise their discretionary review.
John Paul Stevens: And they just didn't give you any judicial relief at all, or did they rule on the merits that they had looked at the right drawings?
Thomas Richichi: The, it is... I would compare the procedure to petitioning for certiorari before this Court and it being denied. There is nothing indicated, just the case is not going to be heard. That's its discretionary review, and that is my understanding of the decision that was rendered. We believe that, as I have mentioned, that the Court in the land use context, going back as far as the seminal decision in Euclid and related cases, Nectow and the State of Washington v. Roberge which we have cited, has recognized that the use of one's property, one's land specifically in this instance, is something which falls within the protection of the Constitution. We believe it is--
Sandra Day O'Connor: It sounds like you're trying to make a takings claim dressed up as a due process claim. I'm still confused about what it is you're claiming. It's just, it is totally unclear to me what it is you're really claiming here and what property you say has been taken, and what is the nature of the claim.
Thomas Richichi: --Justice O'Connor, we do not allege that any property has been taken. We have alleged that a property right protected by the due process clause has been deprived. Again I would draw the distinction between the taking and the deprivation, I think--
Sandra Day O'Connor: Is absolute the right to develop the property as proposed by your clients?
Thomas Richichi: --No, it is not an absolute right. It is a right to pursue a legitimate use which is subject to reasonable restrictions under the police power. When the Planning Board exercised its discretion--
Sandra Day O'Connor: Well, what you really quarrel with is that you didn't get adequate procedural due process. That's what really sounds to me like you're saying, that Puerto Rico, the Constitution requires Puerto Rico if they are going to deny you a permit to review it and have some reason for the denial.
Thomas Richichi: --I would respectfully disagree. We could have... in this particular instance we could have had all the due process, procedural due process we wanted. If they continued to look at the wrong drawings and decided to act as arbitrarily as they did and to say we're looking at this and it is something other than what it is, all the procedural due process, all the hearings in the world ultimately would not have helped us. What we're complaining about here is an act of deprivation. We had a right which had been recognized by the Planning Board to develop that property. It was upheld by the Puerto Rican courts on the merits, and the Puerto Rican supreme court. When we went to the ministerial agency and said here are the required drawings and we, that's as we have alleged in the complaint, the agency, under its directive, was to review those and if they were the required drawings it was to issue the permit.
Sandra Day O'Connor: Well, was it still open under Puerto Rican law to Puerto Rico to set aside this area for some kind of wildlife preserve or something of the sort?
Thomas Richichi: Puerto Rico certainly could have enacted legislation to do that. The governor is empowered under certain circumstances to exercise his emergency powers if he thinks there is a danger to the public. And in this particular instance the legislature neither acted nor did the governor exercise his emergency powers.
William H. Rehnquist: That would have required a taking of, a condemnation of your land if they're going to turn it into a wildlife reserve.
Thomas Richichi: That would have required otherwise proper conduct, Mr. Chief Justice, as this Court said, and that is not what was present here. If Puerto Rico wants to take that property they certainly can do it by legitimate means. However, what happened here were that senior officials acted arbitrarily and in violation of the law, and with what can only be believed to be bad faith, and denied us a permit.
Anthony M. Kennedy: What is your best case for the proposition that the bad faith manipulation of procedural processes constitutes a substantive violation?
Thomas Richichi: I think there is bad faith manipulation of procedures in this case because Puerto Rico did not--
Anthony M. Kennedy: But what's your best case from this Court, if there is one, indicating that that kind of manipulation constitutes not a procedural due process violation but a substantive due process violation?
Thomas Richichi: --I would return to my response to Justice O'Connor's inquiry which I think was the same. No matter what procedures were provided, in this particular circumstance we were not going to get a permit because they were going to look at the wrong drawings and say that you had never submitted the correct drawings. So it's not a matter of procedure. The, this is perhaps the easiest case and the most blatant case of arbitrary conduct to understand. They simply refused to look at what was in front of them and called it something else.
Anthony M. Kennedy: Well, based on that statement, what is your, what's the clearest authority from this Court that supports your position?
Thomas Richichi: I think this Court has laid out the standard for evaluating that quite clearly in Ewing.
William H. Rehnquist: But Mr. Richichi, you have been asked to cite a particular case, what is your best case. You have been asked three times now.
Thomas Richichi: I think Ewing lays out the standard to be applied in that particular instance, and the Euclid, Nectow, and State of Washington cases all, State of Washington v. Roberge, all recognize that there is a protected interest within the due process clause. Ewing was an 8 to 1 decision by this Court in which it laid out the standards, and it indicated that bad faith, the lack of a genuine decision I think was at the heart of the Court's decision there, and I think that is present here without a doubt. There was not a genuine decision--
Anthony M. Kennedy: Weren't those all cases where the allegation was that there was a taking under the takings clause?
Thomas Richichi: --No, Ewing was a, specifically a case in which this Court assumed that there was a substantive due process protected property interest, and in that case what the Court said was there is, if there is a question as to whether the decision, the adjudicatory decision was genuine, if there is a question as to whether it's in good faith, if there is a question as to whether judgment was in fact exercised by the decision-makers, then you would have, you would meet the test for a due process violation.
William H. Rehnquist: What's the name of the other party in the Ewing case?
Thomas Richichi: I'm sorry, it's the Board of Regents of the University of Michigan v. Ewing. I apologize,--
John Paul Stevens: It's a case in which we rejected the substantive due process--
Thomas Richichi: --That's correct.
William H. Rehnquist: --It isn't cited in the Table of Authorities.
Thomas Richichi: I'm looking in the brief.
William H. Rehnquist: I don't see it here.
Thomas Richichi: It is a case which--
William H. Rehnquist: This is your best case and it's not cited?
Thomas Richichi: --With the Court's indulgence. I am sorry. It's principally... I apologize to the Court. It's Regents of the University of Michigan--
William H. Rehnquist: Oh, regents.
Thomas Richichi: --and it is a principally relied upon case we have cited passim throughout the brief.
William H. Rehnquist: Thank you.
Thomas Richichi: That is the case that we would point out, we would point to which establishes the standard. Just briefly, if I can describe Ewing, there the Court assumed the existence of a property interest. It was a claim that there was a right to university enrollment, and I think what the Court says, we don't know if that rises to the level of due process, but we will present the standard. And we think we fit within that standard.
Antonin Scalia: Mr. Richichi, who are the senior officials that you, that are involved here that you claim acted arbitrarily or in bad faith?
Thomas Richichi: This is the administrator of the agency who is no longer there, there is a gentleman also who was the regional administrator who is now the deputy administrator, and certain other assistant administrators, all senior officials of ARPE.
David H. Souter: Mr. Richichi, if instead of having the equivalent of cert denied when you went into the Puerto Rican courts the court had taken the case, it considered your claim that they looked at the wrong drawings and had rejected you in bad faith for that reason and had said no. They looked at the right drawings. We find that as a fact, and based on the right drawings they had a right to reject the permit that you were asking for, deny the permit that you were asking for. And you leave the court saying the court got it wrong, the drawings were the wrong ones and if they had looked at the right ones we would have been entitled to the permit. Would you have a substantive due process claim to bring here or to bring into a Federal court?
Thomas Richichi: If I understand the hypothetical correctly, I believe we would, because the remedy under the due, under section 1983 is supplementary, it is not derivative, and therefore if in fact there has been misconduct, and this is just the sort of thing that 1983 was intended to prevent, if there has been misconduct by the state and you can't get a fair hearing within the state, then you have access to the Federal remedy. So--
David H. Souter: But you're calling a fair hearing an unfair hearing, what could also and I think would normally be described as a claimed erroneous hearing. Most people who get turned down think there is something wrong, and that does not make it an unfair hearing.
Thomas Richichi: --I understand--
David H. Souter: And it seems to me in my hypo the State of Puerto Rico, the Commonwealth of Puerto Rico is assuming that you have a property interest there subject to adjudication, and it is giving you process to adjudicate it. You are dissatisfied with the result, and you may even be right that they are wrong, but would that state a substantive due process violation simply to say they got it wrong?
Thomas Richichi: --No. Mere mistakes, errors in judgment, or where there is not some deliberate attempt to deprive us of the right through an arbitrary, through arbitrary means not rationally related to a legitimate purpose--
David H. Souter: Then... I'm sorry.
Thomas Richichi: --Under those circumstances, if it's a mistake or a good faith error or some misjudgment, then I don't think we would have stated a due process claim.
David H. Souter: Then does your claim therefore here boil down to the fact that they did not give you any process at all and instead simply denied your opportunity to appeal on the merits?
Thomas Richichi: That would be part of it, but we were denied... there was a decision by the agency denying us a use. I don't know if I would look to the appeal as where the action, the complained of action occurred.
William H. Rehnquist: Thank you, Mr. Richichi. Ms. Ramirez, we'll hear from you.
Vanessa Ramirez: Thank you, Mr. Chief Justice, and may it please the Court: I would like to start my exposition going back to what Justice Souter was asking Mr. Richichi. This case from the very beginning has dealt with his claim, with petitioner's claim that he has a property interest in a construction permit. It has... if we look at the record of the case all throughout the briefings, from the district court on to the court of appeals, never ever did petitioner rely on these zoning cases from the beginning of the century. There is no mention of Nectow, no mention of the Roberge case, no mention of Village of Euclid. This has always been considered by both courts below as a claim that the denial of a construction permit violated both his due process right, procedural due process right, his rights to substantive due process, and his equal protection rights. So I don't think there is anything in the amended complaint that would lead us to believe that he is arguing anything other than he has a right to a construction permit. And our position is that he has not cited to any statute or any regulation or any provision in Puerto Rico law to demonstrate, that is he has not pressed the argument that because he did as the statute provided he was anywhere near the moment where he could get a permit.
Sandra Day O'Connor: Well, Ms. Ramirez, I asked this question and was referred, I believe, to Note 5 on page 4 of the reply brief and the citation to certain laws and regulations in Puerto Rico that the petitioner says make clear that ARPE, if that's what we're calling it, lacked any discretion other than to determine whether the construction drawings had been assembled and submitted, and that they were required by Puerto Rican law to grant the permit.
Vanessa Ramirez: Well, it is not correct as a matter of law, Your Honor. The only... I don't have it in my memory what issue he was citing in the reply brief. Of course this is after we made a comment in our respondents' brief that he had not pressed an argument that he could derive the property interest from state law. And he is citing to what he calls history, history of the statute. But the only, conceivably the only statute in Puerto Rico, the only disposition of positive law that he could rely on is the one that was examined by the district court in opinion and order, it is page 481 in the Joint Appendix. It says ARPE shall issue the corresponding permit based on the compliance with the regulation provided in this section, and that is 23 Puerto Rico Laws Annotated, section 42c. Again our argument is we have to indulge the petitioner with all favorable inferences that will derive, reasonably derive from his pleadings, because the procedural stance of the case will be on a motion to dismiss. He, the petitioner has studiously avoided to recite the facts of what happened after he made an original submission of plans to ARPE. The complaint has a chronological recitation of facts coming from the Planning Board, which is a different agency, but when he goes to ARPE and he gets preliminary approval for effect of construction drawings he does not, there are no allegations from which we could derive the idea that the permit process was somehow so far along or he has progressed through the progressive steps so that ARPE would have no discretion to withhold the permit.
Sandra Day O'Connor: Well, is it your view that ARPE has a wide range of discretion in reviewing construction drawings whether to grant the permit or not, even when the Planning Board has issued its approval?
Vanessa Ramirez: Yes, Your Honor, that is our position and in our brief in response, respondents' brief, this is, we cited to the precise statutory provisions that should indicate to the Court that ARPE is a separate agency. The Planning Board will approve the use of land for, of undeveloped land for certain purposes. It gives out the site permits. But ARPE has been delegated with all the powers to decide how you are going to subdivide your land, the subdivision part, which is where construction drawings get into. You have to subdivide your lands in such a way, and this is why you require ARPE to require the endorsements of so many public bodies, so many commonwealth agencies. And the reason this project has not gotten off the ground is because the petitioner refuses to comply with ARPE manual of procedures which says you must bring construction drawings approved by all the, endorsed by all the pertinent agencies. And one of these agencies is the Environmental Quality Board who has been asking since 1974 for the filing of an environmental impact statement. And petitioner refuses to do it because he believes that once he got approval to develop the land in that site among the manuals he does not have to comply with that.
Byron R. White: The court of appeals didn't decide the case on the basis of an argument that you're making now. The court of appeals said well, let's just, we'll just assume that there is a property interest--
Vanessa Ramirez: That is correct, Your Honor.
Byron R. White: --in this construction permit. Nevertheless, there is no denial of, there is no substantive due, no violation of substantive due process because just refusing to live up to state law doesn't state a claim.
Vanessa Ramirez: That's correct, Your Honor.
Byron R. White: Now, are you defending the court of appeals' basis for denying the substantive due process claim or not?
Vanessa Ramirez: I agree that the court below, although it was very skeptical that the petitioner had acquired an entitlement to the permit protected under the due process clause, they assumed for all purposes of the argument that--
Byron R. White: All right, now let's assume there is a property right in the construction permit--
Vanessa Ramirez: --What the court of appeals--
Byron R. White: --Now, do you defend the court of appeals' decision that nevertheless there is no valid substantive due process claim?
Vanessa Ramirez: --I defend it, Your Honor, because something more than an allegation of a 5-year delay must be shown, must be shown, because otherwise this is how a substantive due process is so marvelous--
Byron R. White: Well, the court of appeals--
Vanessa Ramirez: --Everything becomes constitutional.
Byron R. White: --The court of appeals said well, even if ARPE, or whoever it was, even if there was a violation of state law--
Vanessa Ramirez: State law, yes.
Byron R. White: --state law, Puerto Rican law, that doesn't necessarily entitle this developer to relief.
Vanessa Ramirez: The standard which the first circuit was using is one that this is not enough. Something more is needed than merely an allegation that they have illegally departed from state law or state procedures. And I defend that standard.
Byron R. White: You defend that, but you also say that you have another ground, namely that there wasn't any property interest at all.
Vanessa Ramirez: Oh, yes, but this is because they assume the property interest. The opinion from the court below also did the same.
Byron R. White: I take it as a respondent you are saying you can affirm based on the fact, based on the fact that there is no property interest at all in the construction permit.
Vanessa Ramirez: The court could do it as a matter of law, but the problem is that when this case comes to this Court it is different. It is no longer the construction permit itself, although that is the precise question in which this Court has granted certiorari. It comes now with a claimed right recognized by this Court in early zoning decisions that says that the landowner has a right to develop his land to any legitimate use. Now, our view now is that as far as petitioner is relying on those zoning cases for that proposition, it is because he is trying to supply the deficiencies in the pleading which should have been where are the statutory provisions in Puerto Rico or the positive law from where I can show the Court that I derived a right to a construction permit.
William H. Rehnquist: Ms. Ramirez, this perhaps follows up on Justice White's... the sentence, the last sentence in the court of appeals' treatment of the substantive due process claim says even assuming that ARPE engaged in delaying tactics and refused to issue permits for the Vacia Talega project based on considerations outside the scope of its jurisdiction under Puerto Rico law, such practices without more do not raise to the level of violations of the Federal Constitution under a substantive due process label. So, if we're going to review that judgment we have to make the same assumptions that the court of appeals did, I think.
Vanessa Ramirez: That is correct, Your Honor, and that... yes, we are defending the standard from the policy of U.S. courts, but this is because they assumed the existence of the property interest. It is correct. The thing is--
John Paul Stevens: May I just raise a question here? They not only assumed the existence of a property interest, but they also assumed, I guess this is what paragraph 38 of the amended complaint says, they assumed that there were deliberate, totally unjustified delays in processing. It was an arbitrary refusal to process. Didn't they make that assumption too?
Vanessa Ramirez: --I think the court of appeals did not go beyond the pleadings. It limited itself to the allegations in the amended complaint, and it, there's a footnote on page 1 of the court of appeals' opinion that says we know that the district court went beyond the pleadings and got into the pretrial facts, but we are not going to go beyond that. So the claim that is here before the Court arises from paragraph 37 in the amended complaint, and that's page 1137 in the Joint Appendix, and to that effect both courts assumed that there had been what could be called an undue delay because the plans had been filed 6 years ago. But there is nothing about pretextual review, nothing about political considerations or improper motives. None of that is pleaded in the amended complaint. And if we're going to use the standard of review that requires us to look at the proprietary of the granting of a motion in our favor under 12(b)(6), we are asking the Court to limit itself to the amended complaint, the allegations. And finally as a matter of law they raise the substantive due process claim.
John Paul Stevens: But may I interrupt again? Supposing it's a fair reading of the complaint to say (a) we had a property interest here, and (b) we had an application that was on file in 1982 and they, for no reason at all, refused to process it for 6 years. They weren't corrupt, they weren't, whatever it was, they just arbitrarily said we are not going to process this. Isn't that, on that state of facts does that violate substantive due process?
Vanessa Ramirez: Your Honor, substantive due process, if it is conduct that shocks the conscience, a 5-year delay I would say does not shock the conscience. It is so open. It is so--
John Paul Stevens: Is that the question as you see it, then, whether a government agency can sit on its hands for 5 or 6 years without any reason at all, they just aren't going to do their work, whether that shocks the conscience or not?
Vanessa Ramirez: --Well, Your Honor--
John Paul Stevens: Is that the issue?
Vanessa Ramirez: --within the substantive due process context, but the petitioner was mentioning the Ewing case, Regents of University v. Ewing, and this is the case that most closely resembles our case in the sense that because we're not dealing here with application of a means-ends analysis to a piece of legislation, which was what was involved in the zoning cases, what do you have? You have somebody who is unsatisfied with an adjudication, and the only case that comes to my memory is this Regents case, the Ewing case, where this Court, and I believe the decision was unanimous, the Court unanimously assumed the property interest in the continued enrollment in the medical program, then went on to assume that there was a substantive due process claim, that that kind of property qualified for protection under the substantive compartment of the due process clause, and they turned the case into a procedural one. It is judicial review to see whether there are facts that would reasonably support the decision that was made so that it cannot be called arbitrary. So if there is a case where substantive due process and procedural due process overlap, this will be the case. This will be the case. He would need an adjudication to be satisfied that what happened was not arbitrary, that there was some grounds for the decision, and the problem is that he did not get an adjudication on the merits. So they deprived, the courts of Puerto Rico did not give him a change to appeal on the merits because they denied discretionary review, which does not mean that he doesn't have other adequate state remedies.
John Paul Stevens: He says he has no other state remedy, and you say he does have a state remedy?
Vanessa Ramirez: Well, he does. He can go into court--
John Paul Stevens: An action to make them look at the right drawings?
Vanessa Ramirez: --he has tort damages, and accuse Mr. Rodriguez. The only person here, the only respondent here is Mr. Rodriguez. The allegations have been going on that there is this conspiracy at ARPE, that high level officials were involved. The only respondent here is Mr. Rodriguez. And all of the pleadings in the complaint even sound like respondent superior, that he should answer because he was ARPE's chief, which is a defense that we promoted in the courts below. We really don't... what he, what petitioner is proposing now would throw away what we understand has been the analysis that this Court does when it is presented with a substantive due process claim. You need to find a fundamental interest, you need to allege an interest that is fundamental in the sense that it is a liberty interest either deeply rooted in the nation's history or tradition or because it is implied in the concept of order liberty. Petitioner is admitting that it does not have a fundamental interest. This he admitted in his brief. Now in his reply brief at page 11, Note 19 he admits that he does not have a liberty interest. So what do we have? Is this the kind of property interest that qualifies for substantive due process protection? Why should he rely on the Court's early zoning decisions? It would be axiomatic to say that a landowner has a right to use his land or devote it to any legitimate use. That's only axiomatic. The Court did say, though, they say that, but it was said in another context when you were, when the Court was examining, according to the economic due process substantive theories, the substance of legislation, the substance of an ordnance, the substance of a piece of legislation, and saying well, it is or not arbitrary and capricious. So he has the Court already doing a referendum for his property right. The Court has already said it, and I would be in an awful position if I would have to argue to Your Honors that the Court has never recognized a property interest in a landowner's desire or wish to devote his land to any legitimate use. So there must be something else involved here. And if we don't have a fundamental interest and if he doesn't have a liberty interest which has been qualifying for protection under the due process clause, then I don't know what he has unless it is a claim that there has been a wrongful adjudication of his claim, which sounds to me like procedural due process. If there are no more questions.
William H. Rehnquist: Thank you, Ms. Ramirez.
Vanessa Ramirez: Thank you, Your Honors.
William H. Rehnquist: The case is submitted.
Speaker: The honorable court is now adjourned until Monday next at ten o'clock.


William H. Rehnquist: We'll hear argument next in No. 86-1172, Goodyear Atomic Corporation versus Esto Miller and the Industrial Commission of Ohio. Mr. Tait, you may proceed whenever you're ready.
Robert E. Tait: Thank you, Mr. Chief Justice, may it please the Court. From appellant's perspective, the single issue involved in this case is whether the State of Ohio may be permitted to impose its safety regulations on a nuclear production facility which is exclusively owned and controlled by the United States of America, and essential to the national defense. Very briefly at the time this action arose, the Goodyear Atomic Corporation, the appellant herein, operated a nuclear production and utilization facility located near Portsmouth, Ohio, under contract with the United States Department of Energy. This facility is one of only two of its type in the United States, and is the only facility in America capable of enriching uranium to the assays needed to power our nuclear ships and submarines. Because of the critical importance of this particular operation, Congress has mandated that the Department of Energy be the exclusive owner of all land, buildings and equipment associated with this operation, and significantly that DOE establish radiological and non-radiological safety regulations with which its contractor operators must comply. Now, as noted in the record, the operating contract under which Goodyear operated the facility in question contained a specific provision implementing that requirement. This particular case arises out of a simple Workers' Compensation claim involving a former Goodyear employee, the appellee, Esto Miller. In 1980, Miller fell from a scaffolding and fractured his ankle. He was paid normal workers' compensation benefits and subsequently returned to work.
William H. Rehnquist: I take it there's no doubt here, Mr. Tait, that the regular incidence of Ohio Unemployment Compensation law apply to the Goodyear Atomic plant?
Robert E. Tait: There is no question, Your Honor, that in accordance with 40 U.S.C. 290, the Workers Compensation benefits, normal Workers Compensation benefits do apply to the operations of this plant and to Goodyear employees, yes. And there has never been any question, nor has there ever been any dispute as far as I'm aware with respect to those type of benefits. The dispute arose in this case, however, because in addition to his normal workers' compensation benefits, Miller sought to hold Goodyear liable for an additional award, allegedly based upon their violation of a specific safety requirement promulgated by the State of Ohio. Now, when he filed this application, the administrative body charged with enforcing these requirements, the Industrial Commission of Ohio, dismissed the application, recognizing their belief that it was preempted by Federal law, by the Atomic Energy Act, and by principles of Federal immunity. ,--
Harry A. Blackmun: Not a great deal involved, was there?
Robert E. Tait: --No, there was not a great deal involved, and in fact there has never been a great deal involved with respect to this particular claim as a monetary matter. However, through a mandamus action that was initiated on behalf of Mr. Miller both the Ohio Court of Appeals and the Ohio Supreme Court reversed the administrative determination because of what they perceived to be somehow a significant distinction between radiological and non-radiological hazards. Now, what is clear from those decisions is that neither of the Ohio courts understood the issue in this case. They first and foremost refer to this operation as a power plant. It is not a power plant. They completely failed to recognize the fundamental distinction between an NRC operated power plant and a DOE-owned and controlled Federal nuclear production facility. Thirdly and most importantly, the Ohio Supreme Court in particular failed to recognize the significance of the Federal ownership of this particular facility.
Sandra Day O'Connor: Well, does it make any difference that the Federal facility is being operated by a private contractor?
Robert E. Tait: Your Honor, we submit that it makes no difference whatsoever. And we submit that this Court's decision in the case of Hancock v. Train should be dispositive of this case. Coincidentally, the Hancock decision involved the sister operation to the Portsmouth facility. That involved Paducah, Kentucky. Now, despite the fact that the Paducah operation does not have the same national defense and security considerations as this facility does, nevertheless, this Court in the Hancock decision reiterated the basic Constitutional doctrine that absent express Congressional authorization, such facilities are free from State regulation.
Sandra Day O'Connor: Was there any discussion in Hancock of how to reconcile that with Penn Dairies?
Robert E. Tait: Well, Your Honor, the Penn Dairies line of cases which are raised by the appellant as a way to try to evade the Hancock immunity in this case, seems to me to involve three different areas of inquiry. First of all, the majority of those cases involved contractors that were providing goods and services to the Federal Government as opposed to actually involved with the day to day operation of a Federal facility, in effect, surrogate Government employees. Secondly, with the exception of the New Mexico tax cases, I'm not aware that any of those matters involved a nuclear facility or facilities that had any national defense input. Thirdly, and perhaps most significantly, however, the Penn Dairies line of cases it seems to me creates a distinction between an impact upon the expense or cost of the Federal operation of the facility as opposed to the day to day conduct of that facility. And I think that's an important distinction.
Sandra Day O'Connor: What if this were a third party tort action under State law not involving an employee. Is that somehow preempted in your view also?
Robert E. Tait: Well, it would seem to me that the question would become the extent of the effect of the action on the operation of the facility itself. I suppose if you have an action where an employee, for instance, is in the parking lot of the facility and somehow gets run over by a forklift operated by a Goodyear employee, then there is perhaps a question of whether or not the immunity that was established by this Court in Hancock can apply. However, in this particular instance--
Sandra Day O'Connor: What's your answer?
Robert E. Tait: --I suppose my answer, Your Honor, is that it depends on the particular circumstance how far the Federal immunity applies. It is dependent upon the affect on the operation, on the affect of the Federal function. If in fact the State law--
Sandra Day O'Connor: Well, the effective of a State tort action is generally in a sense regulatory. If the contractor has been operating negligently, the State tort action will cause the behavior to change.
Robert E. Tait: --If in fact the basis behind the State tort action is contractor operation that is basically in compliance with how the Federal Government has instructed him to operate. And therefore would provide some sort of chilling effect on how he operates the facility. And I guess our position would be that the immunity would apply to that contract because it would go to the very heart of the Federal function. In this particular case, however, we don't have that difficult a situation as far as we're concerned. What you have are literally thousands of pages of safety requirements promulgated by the State of Ohio, enforced by an Agency of the State of Ohio in which they are requiring a Government contractor to comply.
Antonin Scalia: Mr. Tait, to add on to Justice O'Connor's question, what if there was a Federal Statute that said State tort law shall apply, notwithstanding otherwise applicable Federal immunity. Then would you still have to say it depends on the circumstances?
Robert E. Tait: Well, if I interpret the Hancock decision correctly, Your Honor, if in fact there is specific Congressional authorization of the type of State activity that is attempted to be imposed on the facility, then that expresses the Federal Government's Congressional intent to allow that type of application.
Antonin Scalia: Well, here we don't have a statute that says State tort law shall apply. We have a statute that says State Workmen's Compensation laws apply.
Robert E. Tait: That's correct.
Antonin Scalia: And at the time that statute was enacted, as I understand it, what, one-seventh of the States' Workmen's Compensation laws had a provision like this.
Robert E. Tait: That's correct.
Antonin Scalia: You say that they regulate the activity rather than they're just monetary. Well, in a way, they just increase the cost to the Government, and I'm not sure that's a valid way to distinguish the cases that respondent's come up with. Your client can just roll along and pay more money in Workmen's Compensation, I presume, and disregard the State requirements, couldn't it? You're only talking money.
Robert E. Tait: As a practical matter, Your Honor, I don't think that's possible. If you have a client who is willy nilly disregarding safety requirements, it seems to me in this day and age, that the first thing you're going to have is tremendous labor difficulties where the union is going to say the employer is not encouraging employee safety. In fact, the employer is engaging in activities that fly in the face of employee safety.
Antonin Scalia: And your response would be that the Supreme Court didn't say we have to obey these State rules. The Supreme Court only said that we have to pay the Workmen's Compensation.
Robert E. Tait: It seems to me that if we would so respond, Your Honor, that's small solace for the union, nor is it going to help our labor difficulties at all.
John Paul Stevens: if you rely on the labor situation, would it not be possible independently of a State requirement for the labor union to negotiate a contract which contained a provision that the employer would agree to abide by State regulations even though not compelled by State law to do so. That I suppose would be permissible under--
Robert E. Tait: It seems to me that that's permissible, Your Honor, but again, we would argue that first of all that was certainly something that was not contemplated by the Congress when they passed the Atomic Energy Act, which requires exclusive control.
Byron R. White: --Well, Mr. Tait, isn't there a Code of Safety, a Federal Code, that your client has to abide by?
Robert E. Tait: Yes, Your Honor. The important distinction is in fact that the safety regulations which are applied to this plant by reason of the Atomic Energy Act are specifically promulgated by the Department of Energy. These safety regulations which the Department promulgates are applicable to these facilities, this small number of facilities. Congress so intended in the Atomic Energy Act. OSHA has recognized that their requirements do not apply to these facilities by reason of the Atomic Energy Act. And we submit that if you have such a recognition by another entity of the Federal Government that certainly the State of Ohio's requirements--
Byron R. White: Well, the question is what Congress intended.
Robert E. Tait: --Absolutely.
Byron R. White: I suppose if there was some real conflict between a State regulation and this Federal code, I suppose the Federal code would be supreme. But this regulation that was violated here, State regulation,--
Robert E. Tait: Scaffolding regulation.
Byron R. White: --Scaffolding regulation, that is not inconsistent with any provision--
Robert E. Tait: The scaffolding regulation itself is not inconsistent with any Federal regulation. They're clearly are regulations again in this three volumes and thousands of pages of regulations that are inconsistent with Department of Energy Regulations, and with which this operation, as I understand it, simply could not economically comply. But the point I believe, Your Honor, as this Court has recognized in International Paper and in Garment and in many of the cases is that where you have an effect, in effect serving two masters, that it creates some sort of chaotic regulatory scheme and invites conflict. And even if we were to leaf through these entire pages of regulations and point out this regulation being in conflict having to do it on a case by case basis necessarily negatively impacts on the way this operation is conducted.
Byron R. White: --Well, I take it you say that absent this permission to apply the State Workmen's Compensation Act, it would be clear that the State could not regulate anything here.
Robert E. Tait: That's correct.
Byron R. White: And you say that this provision of with respect to the Workmen's Compensation Act wouldn't really change that.
Robert E. Tait: Section 290, yes, Your Honor. And if I may, the United States is going to address that issue more completely and I would like to reserve the remaining time for rebuttal, if I might.
William H. Rehnquist: Thank you, Mr. Tait. We'll hear now from you, Mr. Merrill.
Thomas W. Merrill: Thank you, Mr. Chief Justice, and may it please the Court. The initial question in this case as Mr. Tait has discussed is whether the doctrine of Hancock v. Train applies to a State that seeks to enforce its specific safety regulations at nuclear--
William H. Rehnquist: Did Hancock v. Train involve anything like Section 290 here?
Thomas W. Merrill: --Hancock v. Train involved what was I think a closer question, Mr. Chief Justice, which whether Section 118 of the Clean Air Act constituted specific authorization to the State of Kentucky to regulate a Federal facility, such as Paducah production plant. And the language of Section 118 was if anything much more of a clear authorization on the part of Congress permitting State regulation than Section 290 is.
William H. Rehnquist: But if we affirm the judgment here, it doesn't seem to me we're authorizing blanket regulation of these facilities by the State of Ohio. We're simply saying the State of Ohio can impose a Workmen's Compensation judgment one half times again because of violation of its safety regulations. We know that it can impose the initial workmen's compensation award by 290.
Thomas W. Merrill: That's correct, Your Honor. I would emphasize however that at some point, you have to draw the line in determining what a workmen's compensation law is. The relevant language of Section 290 simply authorizes States' workmen's compensation laws to apply on Federal property and facilities. The appellees in this case have conceded that a new provision in the Ohio Statute added in 1986 that allows the Ohio Industrial Commission to issue mandatory orders to employers requiring that they comply with specific safety regulations could not be applied to the Portsmouth Fuel Production Plant. That by itself suggests that the mere fact that the State has labeled something a workmen's compensation law or has instructed its Industrial Commission to enforce the law is not enough. You have to ask the question of what Congress had in mind.
William H. Rehnquist: I might also suggest that circumstances alter cases. We don't have that case before us, we have this one.
Thomas W. Merrill: That's correct.
Antonin Scalia: I'd also suggest that one-seventh of the States didn't have that kind of a provision at the time this adoption of the workmen's compensation law was enacted by the Congress.
Thomas W. Merrill: That's correct, Justice Scalia. And in many cases, the existing legal landscape or the state of the law in effect at the time that the Congress passes a statute is a relevant consideration to look to in deciding what Congress must have meant. But we would submit that there are several aspects in the background of the language and the legislative history of Section 290, which strongly suggest that Congress did not have any but the narrowest purposes in mind when they enacted that particular statute. First, let me address a more general issue which is raised by the appellee's reliance on another Federal Statute and which I think is also relevant in understanding Section 290, and which has not been adequately brought out in this case because the issue really only arose when the appellees filed their brief. The appellees referred to a statute 16 U.S.C. 457 as being relevant to this case. That statute authorizes the application of state wrongful death and personal liability law on property which is subject to the exclusive jurisdiction of the United States. This particular statute is irrelevant, utterly irrelevant to this particular case because it only applies in Federal enclaves, areas that are subject to the exclusive jurisdiction of the United States. The Portsmouth Gasification Plant is not a Federal enclave. When the Atomic Energy Commission purchased the site in 1952, it did not take the necessary steps to insure that the property would be subject to exclusive Federal jurisdiction, and so by its terms, Section 457 does not apply to the Portsmouth Plant. More fundamentally, Section 457 does not go to the question of Federal immunities, the question which is at issue in this case and presented by the Hancock decision, 457 concerns the question of the scope of state territorial jurisdiction over Federal property. And Section 457 simply says that any objection to the territorial application of State wrongful death and tort law is waived, but it does not waive any Federal immunities. For example, in this Court's recent decision in Westfall v. Irving arose out of a tort allegedly committed at an Army depot which was a Federal enclave. The only reason State tort law applied in Westfall at all was because of Section 457, but no one in that case contended that Section 457 constituted a waiver of any immunity that the Federal employees had. And in fact, this Court recognized that if the employees were conducting a discretionary function, they would be immune from any such tort action. So there's a distinction between territorial jurisdiction and immunities, and Section 457 only addresses the former claim.
John Paul Stevens: Mr. Merrill, may I just ask in that connection, supposing there were a suit by one employee against another arising out of some charge of negligence in the plant. That could be decided as a matter of State law, I suppose?
Thomas W. Merrill: Yes. Yes, Your Honor, or a third member of the public entered the property and was tortiously injured, State law would govern. Not because of Section 457 because this is not a Federal enclave but simply because the application of tort law in such a way that it would not constitute a regulation of the facility itself would not trigger the Hancock type Federal facilities immunity.
William H. Rehnquist: Well, suppose a member of the public slips and falls as he comes in and says it was just unsafely maintained. Now, that certainly has something to do with how the place is kept up in Justice Steven's hypothesis. And your answer is still the same, I take it?
Thomas W. Merrill: Well, Justice Rehnquist, we think it's a more difficult question. It would present a much more difficult question to what extent the application of ordinary tort principles or State negligence law represents a regulation of a Federal facility, as opposed to simply a regulation of a private dispute between two parties or a regulation of a contractor's relationships to its employees. In some situations, we think that it would be in effect a regulation of the facility. For example, if the predicate for the action was the fact that the defendant had allegedly violated a specific State safety regulation and that was constituted per se negligence. We think that would really be no different from the application of a specific safety regulation in this case. But those difficulties in line drawing with respect to tort actions aren't really presented in this case, because here you have a specific State safety regulation which is clearly regulatory in its effect, and its application, we think, triggers the Federal facilities immunity. Let me turn then to Section 290, and the reasons why we in particular think that Section 290 should not be read as authorizing the application of the State safety regulations in this case. First of all, the problem that gave rise to the enactment of 290 was real a problem very much like that addressed by Section 457. That is, it was a question of territorial jurisdiction, and specifically, the Golden Gate Bridge was being constructed in California, and both ends of the bridge, private contractors had to perform work on Federal enclaves. And this Court had recently held in a case called Murray v. Gerrick, Section 457 was not broad enough to authorize the application of State workmen's compensation laws on Federal enclaves. And because of that decision, a number of insurance carriers were resisting the payment of workmen's compensation claims for people injured in the construction of the Golden Gate Bridge. So the immediate problem that gave rise to the enactment of Section 290 was a territorial jurisdiction problem, it was not a Federal immunities question. To be sure, Section 2 is drafted more broadly than Section 457. It does not simply apply to enclaves, it applies to all Federal property. But given that there's no suggestion in the history that Congress was thinking beyond the question of territorial jurisdiction, we think that the Court should be reluctant to construe that statute as in effect a waiver of a Federal facility immunity, such as the type recognized in the Hancock case. Second, there is a specific legislative history in the enactment of Section 2980 that addresses the question of State safety regulations. The version of Section 20 that initially passed the House provided that no only State workmen's compensation laws but also State safety and insurance laws would apply to Federal buildings and projects. The Senate amended the bill by deleting this particular reference to State safety and insurance laws. And the Senate report specifically observed that the reason for the deletion was that these provisions were objected to by procurement agencies of the Government inasmuch as such provisions would not only produce conflicts of authority between State and Federal officers, but would also mark a wide departure from the well established principle that Federal officers should have complete charge of any regulations pertaining to Federal property. The House then acceded to the Senate's amendment. And that history, we suggest, is strongly probative of the fact that Congress had no intention when it enacted 290 of waiving any immunity objection to the application of State safety regulations to Federal facilities. Finally, as if to underscore the narrowness of 290, Congress added a proviso to the Statute expressly reaffirming, "by the passage of this section, the United States of America in no wise relinquishes its jurisdiction for any purpose over the property named, with the exception of extending to the several States within whose exterior boundaries such place may be, only the powers above enumerated relating to the enforcement of their State workmen's compensation laws. " Now, again, this does not define what State workmen's compensation laws means, but it does strongly suggest, we think, that Congress did not intend Section 290 to be used as a vehicle for enhancing State regulatory control over Federal property. Putting together the background of Section 290, the text and the legislative history, we think that as a matter or ordinary statutory construction the correct conclusion to draw would be that that statute does not authorize the application of anything more than traditional State workmen's compensation laws to Federal facilities. However, this Court's decision in Hancock requires even more. As stated in the companion case of EPA v. Water Resources Board, Federal facilities are subject to State regulation only when and to the extent that Congressional authorization is clear and unambiguous. And whatever can be said about Section 290 as a matter of ordinary Statutory construction, we think it's plain that it can't pass this more exacting standard. If there are no further questions.
William H. Rehnquist: Thank you, Mr. Merrill. We'll hear now from you, Mr. Jaffy.
Stewart W. Jaffy: Mr. Chief Justice, and may it please the Court. As an employee in the State of Ohio, I'm covered by the Ohio Workers Compensation law. I'm covered as an attorney during my work. I would be covered if I worked in a factory. I would be covered if I worked for the Goodyear Company, which is an Ohio Corporation, and I would be covered if I worked for Goodyear Atomic, which is a subsidiary of the Goodyear Corporation. And in fact, the appellant and the Solicitor General concede that Mr. Miller, the person who was injured in the industrial accident, is covered under the Ohio Workers Compensation Law, and covered pursuant to 40 U.S.C. Section 20. No argument on that part of it. What the appellant would like to do is to carve out part of that Ohio Workers Compensation law, persuade you that in fact it is not really workers' compensation, and tell you for that reason it does not enjoy the protection of 40 U.S.C. Section 290. I'm going to discuss with you today a little bit of the facts of the case, some of the history that will explain to you how it is that this provision for additional compensation was placed into the Ohio Constitution and provides this additional compensation to injured workers in Ohio. In addition to that, I will discuss some statutory interpretation with you. As is probably clear to you, Mr. Miller, while working for Goodyear Atomic, was engaged in maintenance work. he was not doing radiological work. He was standing on top of a manually propelled scaffold or high horse ladder, as it's called. The ladder is such that it may be lowered to the ground, it may be raised to a height of sixteen feet. It has a platform on the top of it, and there's a guard rail so that a person does not unwittingly fall off. What really happened was that Mr. Miller needed to lower he ladder. In order to do that, he first had to lower the guard rail. Now, there he is in a squatting position on the ladder starting to lower the guard rail, and what happened was that a projection from the rail, a bolt that protruded, caught the glove that he was wearing, pulled him off balance, he fell to the ground, fractured his ankle, injured his heel. Now, no argument that it happened, no argument that it's covered under Ohio Workers Compensation Law, no argument that in fact Goodyear Atomic is a complying employer under the Ohio law. Goodyear pays premiums to the State of Ohio for workers compensation coverage. And in fact when this accident happened, Goodyear certified the claim. They said to the State of Ohio, yes this happened, yes this man is covered, yes he should be paid the money. And Mr. Miller was paid worker's compensation. He received because he was off work 29 weeks, the sum of $258 a week. After he returned to work, he was awarded another type of Ohio's worker compensation and that is called a disability award because he still had some residual disability. And so he received another 16 weeks of worker's compensation at the rate of I think it was $83 a week. And then he applied for this award that's the subject of the case here today. An award that is called an additional award where there is a safety violation. The additional award is provided under the Ohio Constitution. I'll discuss the history of it with you in a moment. But so that you understand, our Constitution says, if the industrial Commission determines there is a safety violation and that it caused the accident, the Industrial Commission may award no less than 15 percent of what had been paid to this man by way of workers compensation, no more than 50 percent of what has been paid to this man by way of workers compensation, so that the additional award is I think tied into the whole worker's compensation program. What you have in front of you today is a case that involves as a minimum to this claimant, something like an award for additional compensation of $1328. The record in this case that was filed in this Court cost more than the minimum award. ,-- The maximum award that this individual may receive is $4439. And that's what we're involved with. Now, how do we get to the additional award, how did the State of Ohio provide for it. If I were that employee working in Ohio in 1900 and I got hurt in 1900, I would have sued Goodyear Atomic for my injury. I had a common law suit is what it amounted to. By 1921 Ohio changed the procedure. And Ohio wasn't the only state that changed that procedure, and I may say a few of these things about worker's compensation because I assume that you're not familiar, and there's no reason for you to be familiar with worker's compensation. They're State matters traditionally. But in 1912, Ohio provided by its constitution, vote of the people, for a worker's compensation program. They were much like many other States. All states were going through this process of adopting workers compensation programs. So that there was created a State Industrial Board and the purpose of it was to pay compensation where a person was injured because everybody recognized the old system didn't work. We had become some type of an industrialized society by then. But there was in that Ohio Constitution in 1912, a provision which retained the right to sue at common law, the right to sue that employer where in fact the injury occurred because the requirements dealing with the preservation of life or safety had not been met by the employer. So here I am in 1912. I, the employee, have a right at common law to sue. And it stayed that way in Ohio from 1912 until 1923 because people figured out by 1923 that it was not a good idea to permit the suit, that it really didn't serve the purpose intended by workers' compensation. And in 1923, our Constitution was amended, and it is that amended that we're considering here today. Because in 1923, the right of the worker to sue was taken away, and it was replaced by this additional award which is in front of me today.
Harry A. Blackmun: I take it that you're convinced that this is compensatory and not regulatory in view of the history you've recited?
Stewart W. Jaffy: Yes, sir. I think the history demonstrates that this is compensatory. I think it is designed by the State to pay the worker who is injured. I think in fact when you look at it, you come to recognize that the State has provided a certain amount of compensation for just a plain injury.
Sandra Day O'Connor: Well, Mr. Jaffy, would this be a different case at all if the safety standard at issue for the additional award were one that were contrary to the particular applicable safety standard adopted by DOE?
Stewart W. Jaffy: I don't think it would be a different issue. I think it would be the same issue. I have to emphasize of course and I'm certain the Court understands, in this instance the safety requirement is virtually identical.
Sandra Day O'Connor: I understand that.
Stewart W. Jaffy: There's no difference. But if there were a difference, let's assume that for the moment which is your question, I don't think it would make any difference. Ohio, in fact, is saying, you, Mr. Miller, have been hurt as a result of overlooking this particular requirement. If in fact that's so, you're going to be paid additional compensation because we look to this situation as being a situation of some culpability on the part of the employer. Now, Goodyear Atomic in that situation, same assumption, conflict of provisions, Goodyear Atomic is entitled to do what I think Goodyear Atomic was entitled to do anyway, which is to totally disregard if it so chooses, what it is that the State of Ohio has provided by way of a safety requirement. What triggers anything in Ohio is the fact that there has been an injury. Goodyear Atomic--
Antonin Scalia: There has to be a violation, too, Mr. Jaffy, and that's what I'm a little bit hung up on. I have no problem in light of Section 290 of applying the workmen's compensation law by its terms. The trouble is that the Ohio Workmen's Compensation law does not apply and does not provide the added amount unless the employer is within the terms of the compensation law, in violation of a safety rule of the Industrial Commission. So to find that this employer is within that provision of the Compensation law, I also have to find that the employer was violating a safety rule of Ohio, which means, it seems to me, I have to find that he was subject to the safety rule of Ohio. Isn't that what the Statute says?
Stewart W. Jaffy: --So that you and I are both perfectly clear, I don't think you have to make a finding on whether there is a violation or not. I think where this case is right now is a question of may the State of Ohio proceed to make a determination that there has been a violation, and if in fact, it so finds, may it then award additional compensation.
Antonin Scalia: Well, and don't we also have to find that this employer can be in violation of Ohio's regulatory laws, or can we let Ohio say he's in violation, when he isn't?
Stewart W. Jaffy: Justice Scalia, if I may, I think what you need to find is that Congress provided by 40 U.S.C. 290 that State workers' compensation laws are applicable. I think the Statute is very clear. I think it is a situation where Congress has spoken, and I think it is entitled so to speak, and I think it is entitled to make a change.
Antonin Scalia: I'm willing to say they are applicable, but they only apply if he is in violation of the State law. That's all Congress said. You can apply them but you have to apply them by their terms. This one says he has to be in violation of Ohio law. That raises a totally separate question having nothing to do with the Workmen's Compensation law. Is this employer in violation of the Ohio safety laws?
Stewart W. Jaffy: I don't think it raises a separate question, because all that Ohio does, if it determines that the injury is due to the safety requirement not having been followed, all that happens is that compensation is paid to Mr. Miller. Goodyear might choose to do absolutely nothing, other than pay. Goodyear may decide that they couldn't care less that this particular safety requirement of Ohio. Goodyear may never again have to pay anything because no one is ever again hurt in Ohio. Goodyear came to Ohio, Goodyear Atomic came to Ohio and that plant opened in 1953. And from 1953 through 1980, with these thousands of pages that the attorney for the appellant says exist, Goodyear was never called on to pay any additional compensation. There was never any injury. And I might add to you, there are not thousands of pages, either. The pages for the factory and workshops safety provisions in Ohio number some approximate 230 pages. They are not all those volumes that were exhibited to you. This is actually the Ohio Factory and Workshop Provisions. Goodyear, when that claim was filed, Goodyear advised the State of Ohio that it followed the Ohio Safety Requirements. You will find that in the record at page J-43, is the response of Goodyear. They have followed our Ohio requirements. Apparently, they didn't have any trouble following our Ohio requirement. And so there we are. And as I say, I look at this case and say, I think, it's really a question of did Congress permit this. It seems to me the Statute is clear. And I have to disagree with some of the comments made by the Solicitor General as to the history of that particular statute and as to its significance. And I think it all goes back to 16 U.S.C. 457 when Congress passed 457, it remitted a tort action, and there were courts, as you probably understand, who felt that 16 U.S.C. 457 applied to Workers' Compensation. Until this Court decided Murray v. Gerrick & Co., and kind of threw up in the air the question of, was workers' compensation covered, there had been decisions that said workers' compensation was covered under 457. So that had we without even getting to 290, had we had just 16 U.S.C. 457 which applied to workers' compensation, Mr. Miller would have had his claim covered, as permitted by Congress.
John Paul Stevens: Mr. Jaffy, you referred us to the letter of Goodyear about this incident as the Joint Appendix at 43.
Stewart W. Jaffy: Yes, sir.
John Paul Stevens: That letter refers to the fact that the scaffold had been inspected by the Safety Department and found to be in satisfactory condition. Do you know whether that refers to the Ohio Safety Department or the Company Safety Department?
Stewart W. Jaffy: It refers to the Company Safety Department.
John Paul Stevens: I see. They were not routinely inspected by the Ohio safety inspectors.
Stewart W. Jaffy: No. If I might say, not only was the ladder inspected by the Company safety department, you will find in there, and I think it's at JA-50, a report from the Union safety representative who also inspected that particular scaffold. So that this Court understands, the parties entered into a stipulation of fact, if there's a question, for example, as to the involvement of the security interests of the United States, these parties entered into a stipulation of fact as to what happened. Goodyear provided pictures of the scaffold so that the State of Ohio could see what the scaffold looked like. There was an accommodation, if you will, of--
William H. Rehnquist: No on site inspection of the plant by the Workmen's Compensation people?
Stewart W. Jaffy: --No, no on site inspection. And it may very well be that to some extent that makes it difficult for the claimant to establish what happened, because in Ohio, the burden is on the claimant to show that the claimant is entitled to the compensation. Nevertheless, that's the claimant's problem. That's not in front of you today. The point that I make is that it is possible and in fact the parties did make accommodations in connection with this matter. By the time the case got to the Industrial Commission, the Department of Energy had come in, they raised a pre-emption argument, and it may very well have been the first time that kind of an argument has ever been raised to the Ohio Industrial Commission, and they backed off. Both of our Courts, the Court of Appeals, and the Supreme Court, were in favor of granting a mandamus or that the Industrial Commission go forward and make a determination in this matter, and from there, your Court noted probable jurisdiction, and we're here today. If you look at it in terms of the statute, it seems to me that 290 was and is written about as broadly as a statute could be written. And you can almost see the Congressional people trying to write it in such a fashion that should this Court come to grips with this problem again, the Court would understand that the intent of the Congress is to permit workers' compensation to be paid as the State would provide. And the language they use is in the same way and the same extent. And they have started out in such a fashion that it's about as broadly written as anything could be when they say whatsoever authority the State is authorized to handle workers' compensation has the authority to proceed with this matter.
Antonin Scalia: Mr. Jaffy, I think what the Government's position would be is that in the same manner and in the same extent simply means this, that where a person is not in violation of a State regulation, he should not be assessed the surcharge. And they claim that this particular contractor is not within the meaning of the Ohio Workmen's Compensation law, in violation of any State regulation, because those State regulations do not apply. Now, are you maintaining the position that the regulations are applicable, that the Ohio authority has power to regulate plant?
Stewart W. Jaffy: No, sir. I do not say the Ohio Industrial Commission has power to regulate. I say the Ohio Industrial Commission has power to pay the compensation to the person that got hurt.
Antonin Scalia: But it's only payable if the person's in violation of a regulation. That's the way the compensation law reads.
Stewart W. Jaffy: It is a way of explaining or trying to explain that there is this requirement. It's much different, Justice Scalia, then let's say we brought a suit, and we argued that this was negligence per se that had occurred here, because there is a State statute that says this is a particular requirement. There isn't any real difference. That's exactly the same situation here. The State has tried to protect the work place safety of people, and they have tried to do it in this fashion, and all that happens is, with this particular section we're talking about or this particular safety section, it has provided that the exposed surfaces are not supposed to have any sharp edges, burrs or protruding parts. Which is virtually the same as the OSHA standard. And in fact, it had a protruding part and the man got hurt. And when the union representative made his safety inspection some six or seven months later, the protruding part was still there. It had not changed. Goodyear had not done anything with it, and they didn't have to do anything with and no one from the State of Ohio came in to make them do anything with it. The only thing the State said was, okay, if in fact, this violating is here, there's going to be some money paid to this man. One of the things the Solicitor General talks about in his brief is that the State may provide for compensation but they can't just go throwing it out. We're not going to enrich this person, we can't give him more than full compensation. And I don't really know what full compensation is, but if you look to what Ohio does, Ohio basically gears its compensation on a person's salary. It has a limit which is 66 2/3rds percent of the individual's salary. It also has a limit which is a statewide maximum so regardless of how much you make, you cannot receive more than whatever is the statewide maximum. If in terms of 66 2/3rds percent, it's based on wages, there is no provision for pain and suffering that the individual may have had, there is no provision for loss of consortium, strictly limited to wages. Now, if you add in the additional compensation which is this award, and I've tried to say to you, this is all one package of workers' compensation, let's say you add in the maximum of 50 percent of what has been paid in workers' compensation. If you take the 66, and you take 50 percent of that, the State is going to award another 33 percent, bringing you up to roughly 100 percent of the person's wages. That the State of Ohio has considered full compensation. It seems to me that this is not just throwing money away to a claimant has been hurt, it is a legitimate effort of the State to pay a little more where there is culpability on the part of the employer, it is something that the employees of the State have given up by way of their giving up the right to go into Court and sue. And that was the trade off. They gave up the right to go into Court and sue in return for having the Industrial Commission make the particular awards. The appellant here, and the Solicitor General, would agree that the basic compensation may appropriately be paid under 290, but they want to carve out the additional compensation. Nevertheless, they still want to retain the right of not being sued by the employee, which is what that 1923 amendment provided.
John Paul Stevens: Mr. Jaffy, can I just clear up a couple of things in my own mind. Would you agree that Ohio could not impose a penalty payable to the State for a safety violation of this kind?
Stewart W. Jaffy: Yes, I think that I would agree to that.
John Paul Stevens: So to that extent, the regulations are preempted. And they also could not close down the plant, or deny them the opportunity to operate as they did in the Hancock case?
Stewart W. Jaffy: Yes. There's no question about closing down the plant, and very frankly, I think that's the key element with the Hancock case and it involved more, as I'm sure you know, more than just an AEC operation. When the State of Kentucky decided that they were going to impose a permanent requirement, they affected the Army in Kentucky, the affected the TVA in Kentucky and they affected the AEC in Kentucky. And the bottom line of what they were saying was, it doesn't matter. Let me go back one second. Congress provided that the State had authority under the Clean Air Act to make provisions dealing with pollutants of the air. When Hancock hit this Court, you were in the situation of looking at it and saying, it doesn't matter if the Army, the TVA, and the AEC are in compliance with all of Kentucky's requirements on clean air. If they don't get the permit, they will be shut down. And basically I read Hancock to say that... I don't think Hancock applies to our situation at all... I read Hancock to say that there is no way any State may shut down an operation of the Federal Government. And I hasten to add, Justice Stevens, that the State of Ohio makes no moves in those directions. All that we have involved here today is we pay the man the additional money.
John Paul Stevens: Let me ask you one other question. You showed us the size of the regulations. I imagine the Federal Regulations are probably just about as big, I don't know. But what is the sanction for violating the Federal regulation of this kind? What remedy is the Federal?
Stewart W. Jaffy: There is nothing paid to the claimant, number one. In other words, Congress has made no provision for any kind of a Federal remedy for violation of the OSHA regulations.
John Paul Stevens: Well, not OSHA, but there's special regulations, not OSHA regulations, but regulations related to this particular plant as I understood it, or at least to nuclear facilities.
Stewart W. Jaffy: They have authority in connection with the radiological aspects to provide regulations.
John Paul Stevens: But don't they also provide safety regulations for the non-radiological aspects of the operation?
Stewart W. Jaffy: The legislation permits them, the legislation permits them to adopt. They in fact proceeded to adopt the OSHA regulations.
John Paul Stevens: Oh, I see, the OSHA regulations do apply.
Stewart W. Jaffy: Yes, as to non-radiological aspects, okay. And there is no provision under OSHA for any kind of a remedy to the person who is hurt, no Federal remedy, in other words. And I guess what I'm saying is that there is a presumption that where the Federal Government has not provided for a remedy to the person who is injured that the State remedies would apply.
Antonin Scalia: We'd have no problem here of course, and I assume the Government would concede the case... I assume the Government would... if the Ohio provision read that this surcharge is applicable if someone violates a specific safety rule of the Industrial Commission or of any other Governmental entity which may have jurisdiction. Presumably, Ohio could do that, and if it read that way, I guess the Government would agree with you that the surcharge is chargeable, which means Ohio would look to see whether there had been a violation of OSHA or not.
Stewart W. Jaffy: Well, we may be making this more complicated, Justice Scalia, than we need to.
Antonin Scalia: Well, we tend to do that.
Stewart W. Jaffy: And very frankly, I have to apologize, I'm not certain that I at all understand the distinction that you're trying to make. Our provisions for State requirements are requirements adopted by the Commission or requirements adopted by our State Legislature.
Antonin Scalia: Well, what I'm saying is I think it would be unfortunate if this thing sort of falls between the cracks, that is to say, if it didn't violate the Ohio provision, but did violate OSHA, surely there ought to be a surcharge applicable. And I assume Ohio could write it that way. It could say, if you violate our standards or the standards of any other governmental entity that's applicable, we're going to hit you with a 15 percent or whatever surcharge.
Stewart W. Jaffy: I think if the State of Ohio were to adopt the OSHA regulations as part of their safety requirements, what you're saying is 100 percent correct. Ohio has not done that. I might say unfortunately, they haven't done it, but they haven't, and that's the status of where we are today. The Industrial Fabricators case which is in the Appendix which was a Federal District Court case coming out of our Southern District of Ohio, involved an argument which in some ways parallels this because the employer there was arguing that the additional safety award should not be paid because it conflicted with OSHA. The Federal District Court didn't agree with that. The Federal District Court indicated, I thought very clearly, that our additional compensation is a compensation matter, primarily. While it may have some incidental effects in terms of causing an employer, if you will, to clean up his act, that's not the primary purpose of our Ohio law. And I think that case, and the Ohio Supreme Court cases that have been cited, indicate this.
William H. Rehnquist: Thank you, Mr. Jaffy, your time has expired. Mr. Tait, you have two minutes remaining.
Robert E. Tait: Thank you very much, Mr. Chief Justice. Very quickly, I'm having a little bit difficult time comprehending where Mr. Jaffy's coming from with respect to first of all, telling this Court he agrees I assume pursuant to the Hancock doctrine, Ohio would not have the authority to impose fines for violation of a specific safety requirement. At the same time indicate that they have the authority to order an employer to pay compensation to an employee. Clearly, the primary basis behind the specific safety requirements promulgated by the State of Ohio are to promote safety. No one questions that and the Attorney General on behalf of the Industrial Commission concedes that fact, that the primary basis of those requirements are to promote safety through regulation of employer conduct. Now, assuming that you take that as a given, and I don't think that you can simply ignore the practicalities of it--
John Paul Stevens: Well, Mr. Tait, what about Justice Scalia's question. Supposing Ohio changed its statute and said that you get the extra money if you violate either a State law or if it's been preempted, a Federal regulation that is applicable to that facility. That would be permissible, wouldn't it? And if that's the case, you're not fighting about much because the legislature of Ohio car correct it very promptly.
Robert E. Tait: --Mr. Justice, I believe that pursuant to Hancock, that decision is placed in the hands of Congress. Hancock says that where you have a Federal facility--
John Paul Stevens: No, no. My question is what if the Ohio legislature passes such a statute?
Robert E. Tait: --Yes. But I believe that the answer to that question, and I assume it's the answer that the United States would maintain is that that decision whether to impose for violations--
Speaker: No, it's not fines, it's additional compensation.
Robert E. Tait: --of Federal facilities, or for violation of Federal safety regulations is within the hands of Congress.
John Paul Stevens: And that now Congress has said there shall be no remedy for such a violation?
Robert E. Tait: Congress has given the Department of Energy, and the Department of Energy has promulgated its own regulations, a pervasive scheme and a pervasive scheme of remedies.
William H. Rehnquist: Thank you, Mr. Tait. The case is submitted.