Warren E. Burger: We will hear arguments next in Rosewell v. LaSalle National Bank. Mr. Hauser, you may proceed whenever you're ready.
Henry A. Hauser: Mr. Chief Justice, and may it please the Court: My name is Henry Hauser and I'm an Assistant State's Attorney, and I represent the petitioners in this certiorari petition. Certiorari was granted to the 7th Circuit last March. This is a 1983 tax injunction case that was filed in the federal court and it deals with 1977 local real estate taxes which are assessed and contended to be unconstitutionally assessed on the taxpayer in the case at bar. The response of the county tax officials... and that's Mr. Edward J. Rosewell, who is one of the petitioners. He is the County Collector. He has duties under the Illinois statutes to collect real estate taxes which were assessed for 1977 against the property owned by the taxpayer in this case. Mr. Tully is no longer the County Assessor; he's been replaced by Mr. Thomas Hynes. The response that the petitioners filed for this 1983 action was a motion to dismiss, which was premised among other things on the federal anti-tax injunction statute. The motion to dismiss which is set out at Appendix, page 11, also sets out grounds that there was not a claim stated, and that there was available to the taxpayer, again, a plain, speedy, and efficient remedy in the state courts, and also a remedy available pursuant to the state statutory tax system. Secondly, it was contended in that motion that the state taxpayer had available to her in this case a 1983 action in which she could have raised all of the claims which she desired to raise in the federal court injunctive action.
Warren E. Burger: A 1983 action in the state court, are you referring to, now?
Henry A. Hauser: Yes. Our contention is, Your Honor, that the taxpayer had available to her a remedy under 1983 which could have been filed in the state court under the Illinois case of Alberty v. Daniel.
Warren E. Burger: Any other remedies besides 1983 in the state court?
Henry A. Hauser: She certainly did. She had... one of the facts which needs to be made clear in this case is that the taxpayer alleges in her complaint that she had the funds to pay the tax in this case. Therefore, because the taxpayer had the funds available to her to pay the tax in this case and sue for a refund, there is no threatened loss of the property and there is also available to her the possibility of filing a specific objection in the Collector's annual application for the sale of delinquent tax property. So that she clearly had available to her the statutory Illinois proceeding.
Warren E. Burger: Well, her response to that in part is that since the State pays no interest on the tax while the refund's being litigated, that that's not an efficient remedy. What do you have to say about that?
Henry A. Hauser: Well, our response is that the taxpayer would have a right to file a 1983 action in a state court raising that precise claim. So that even if that claim was not available, and the difficulty with part of this issue is that the Illinois Supreme Court has not had a chance... in fact, it's not been given a chance... to rule on the 1983 portion of a claim to interest. The predicate of the taxpayer's argument in this case is basically the Illinois Supreme Court's holding in Clarendon Associates v. Korzen, and Lakefront Realty v. Lorenz.
Harry A. Blackmun: How far behind is your Cook County civil calendar these days?
Henry A. Hauser: It's... well, we're about five years behind right now. The difficulty... I need to make it clear that the specific objections are treated separately from the entire civil calendar in the Circuit Court of Cook County.
Harry A. Blackmun: You would call five years' delay a speedy remedy?
Henry A. Hauser: Well, it's speedy in the sense that if the taxpayer... it's available to the taxpayer, and the taxpayer has a damage remedy that... at least a taxpayer who can pay has a damage remedy available to her. And if the... I think the ruling of the district court was based on Tully v. Griffin. The question in the anti-tax injunction statute is whether there would be a federal right which would otherwise be lost? And there is no right under Illinois law to interest. So the question comes down to, and it's a question that's not been resolved in Illinois, and the question is... and it's, I don't think, presented in this case... whether there is a constitutional right to interest. Now, the way this case has been pled, the taxpayer has not asserted, we suggest, a constitutional right to interest, but it's--
John Paul Stevens: Mr. Hauser, isn't it possible that there's no constitutional right to interest, but that nevertheless, the denial of interest when you have to wait four or five years to get your money back, would prevent the remedy from being speedy, adequate, and efficient, or whatever the statutory language is?
Henry A. Hauser: --Well I think that in that aspect one has to balance the threatened harm from a federal tax injunction against the delay or the harm that's caused to the taxpayer. Now if the taxpayer has available to her in this case, as she did, a federal damage remedy, or--
John Paul Stevens: What is the federal damage remedy? What will that give her? Doesn't that raise the same question? She only gets interest if she has a constitutional right to the interest.
Henry A. Hauser: --Well, she would have to show that, judge.
John Paul Stevens: I don't think that responds to my question that one might assume there's no federal constitutional right to interest, and nevertheless feel that a remedy which denies interest on withheld money for a five-year period is not an adequate remedy, within the meaning of the statute.
Henry A. Hauser: Well, again we argue the policy that under Tully v. Griffin, as long as long as the taxpayer suffers no irreparable injury, that whatever one might want to say qualitatively--
John Paul Stevens: Well, it's surely irreparable if you lose the use of the money for five years. You're never going to get it back. That's irreparable. Maybe it isn't serious enough to trouble you but it is irreparable.
Henry A. Hauser: --No, Your Honor. It can be a serious matter, and it certainly can support a damage claim.
John Paul Stevens: Well, but it only supports a damage claim if there's a constitutional right to interest.
Henry A. Hauser: Well, then, what's the... I question the policy behind the other side of the argument that there is some reason why there should be, why that must lay?
John Paul Stevens: Well, the reason would be that an adequate remedy ought to make the litigant who's been harmed whole. That would be the reasoning, I suppose.
Henry A. Hauser: Well, the damage remedy certainly does that, Your Honor.
Warren E. Burger: Well, five years at 15 percent a year, or even ten, to make it easier to compute, at least for me, that doesn't make them very whole, does it?
Henry A. Hauser: Well, let me refocus that. If the taxpayer can demonstrate an unconstitutional overassessment and if in fact the interest is a measure of damages, then the taxpayer will have a right to interest, and a taxpayer is therefore made whole.
John Paul Stevens: Yes, but these are all "ifs". You don't concede on behalf of the County, do you, that she's entitled to interest?
Henry A. Hauser: No, we don't, Your Honor. We do not... the difficulty--
John Paul Stevens: You just say she's got a right to file another lawsuit and see if she can get it?
Henry A. Hauser: --Right. That's exactly right. In the argument that lawsuit has indeed already been filed and that cause of action basically acknowledged by the 7th Circuit. So we have a disappearance here of... you have a federal tax injunction where the taxpayer has available to her a federal damage remedy. I need to make one thing clear--
Byron R. White: But only predicated on a constitutional violation?
Henry A. Hauser: --Well, that's so; that's so. But why else? In other words, the policy is, the real question is the policy behind the federal injunction for state taxes.
Byron R. White: Right.
Henry A. Hauser: And we respectfully submit that the risk... the complaint alleges, and I need to clarify this, the complaint alleges a two-year delay, not a five-year delay. When I responded to one of the Justices' questions, the very last year that's still open in Cook County is five years old, but the average delay which is alleged under this remedy is two years, and that's admitted for the purpose of the motion to dismiss. This doesn't take into account the fact that the taxpayer has 90 days within the filing of a specific objection to arrange a pre-trial settlement discussion with the lawyers for the County.
Byron R. White: What's the calendar like in the federal court for Cook County?
Henry A. Hauser: The calendar of the federal court? It's probably as crowded as any federal district court in the nation.
Byron R. White: Well, is it slower than... is it as slow as the state court?
Henry A. Hauser: Well, we don't have any federal tax cases, Your Honor, with which we can measure this. This is a leading case.
Warren E. Burger: What's the civil calendar generally?
Henry A. Hauser: That I couldn't say, Your Honor. That I couldn't say.
Byron R. White: Well, now, what's the interval from the filing of the complaint to trial in the federal court?
Henry A. Hauser: I have no idea, Your Honor. The record doesn't show it. I wish I could help you out there but I can't.
Byron R. White: It's probably pretty long, isn't it?
Henry A. Hauser: Well, it's probably... the question is whether that, whether the federal remedy is any speedier than the state, if we're talking about damage remedies. The question is, what has the taxpayer lost if she gets all of the interest back? In other words, if the delay deprives the taxpayer of the use--
John Paul Stevens: Mr. Hauser, you keep saying, if she gets the interest back. But your position is she's not entitled to interest. Isn't that correct?
Henry A. Hauser: --Except that her position is that she--
John Paul Stevens: I know what her position is, but your position is that she's not entitled to interest. Isn't that correct?
Henry A. Hauser: --Under Illinois law.
John Paul Stevens: Under Illinois law or under the Federal Constitution?
Henry A. Hauser: Well, we argue that also.
John Paul Stevens: Yes. You say she's not entitled to interest, so how can you rely on the fact that she might win her lawsuit as the reason why she should lose her lawsuit?
Henry A. Hauser: Well, if she can demonstrate the right to the interest, she ought not... unless she can demonstrate the right to interest--
John Paul Stevens: Yes, I know, but you don't concede she has any right to interest.
Henry A. Hauser: --I couldn't, Your Honor, because we oppose that position, and I... but I say this, that unless the taxpayer can demonstrate a right to interest and demonstrate... or, let's say, interest may be the wrong word. Perhaps the taxpayer must demonstrate a right to the recompense or the damages for the loss of the use value of the money that's tied up during the tax proceedings. Now, that's the... that's argued in the taxpayer's brief.
William H. Rehnquist: Well, then she wouldn't... you can turn that argument on its head too, and say that if she can't demonstrate that she has a right to what she's claiming, she's not entitled to the injunction that she's claiming, not because of the anti-injunction statute, but because of a shortcoming in her pleadings.
Henry A. Hauser: We argue that too, Your Honor. We argue that the allegations that are made in the complaint are not sufficient to demonstrate a violation of her Fourteenth Amendment rights. Now--
Byron R. White: Isn't the real question, how soon should she get a hearing? And you're arguing... you certainly are arguing the merits of her case but isn't the question whether she should be able to get an earlier hearing in a federal court than she could in the state?
Henry A. Hauser: --Well, the question is whether she's entitled to an injunction in a federal court.
Byron R. White: Yes.
Henry A. Hauser: And the question in the federal court is whether... not only whether there's a plain, speedy, and efficient remedy in the state court, but also whether there's a remedy in the federal court. Now, she must of course be able to demonstrate that right, because, if in other words you--
Byron R. White: Well, is it true that in her administrative remedy, is the remedy provided by the Illinois tax statutes and refund statutes, there is no interest allowable in those, is there?
Henry A. Hauser: --Not... the way--
Byron R. White: Is that right or not?
Henry A. Hauser: --As a matter of Illinois statutory construction, that's correct, Your Honor.
Byron R. White: All right. So you rely on the availability of an adequate remedy in the state courts on 1983?
Henry A. Hauser: Or the availability in federal court of a similar damage remedy which is the predicate for our state argument. The point that's raised is that if... the question is, and I think I need to at the outset distinguish between the limitation that's contained in 1341, which is a limitation on injunctions. It creates no jurisdiction. 1341 is a limitation on the exercise of federal injunctive power, but it is a limitation which was necessitated initially by the abuse of diversity jurisdiction, where taxpayers from outside of states would tie up state taxes, like has happened in Illinois, and has happened in this case, effectively, where the taxes have been tied up now for nearly two years without even the matter being decided. But there's a further view when you have a 1983 action being made, being stated, because that's different from a diversity case. In other words, the focus in a 1341 action where diversity is involved is solely upon the state remedies, because the federal court had no right to make federal remedies for the state courts under diversity jurisdiction. But under 1341, and under the Civil Rights Act, where you have a jurisdictional predicate based on federal statute, then the question has to go back really to the historical precedent. Cases like Matthews v. Rodgers, and Great Lakes Dredge & Dock v. Huffman. And Tully v. Griffin is a situation where that question is met. And the articulation of the equity rule is that a federal court is under an equitable duty to refrain from interfering with a state's collection of its revenue except in cases where an assertive federal right might otherwise be lost. Now, the question is where--
Thurgood Marshall: Mr. Hauser, it's a little late in the argument, but how are you going to get under 1983?
Henry A. Hauser: --Well, that's my question too, Your Honor. I suggest that--
Potter Stewart: That was another question. That leads to my more threshold question, and that is this: that in the petition for certiorari you listed only one question.
Henry A. Hauser: --That's correct, Your Honor.
Potter Stewart: And the Court of Appeals for the 7th Circuit referred to that question as the sole question.
Henry A. Hauser: That's right.
Potter Stewart: I'm looking at page 2a of the certiorari petition.
Henry A. Hauser: That's correct, Your Honor.
Potter Stewart: Now, all of a sudden, on the argument, we have three questions. How'd that happen?
Henry A. Hauser: Well, here's how it happened, Your Honor. The--
Potter Stewart: One of those questions is the one to which my brother Marshall has just directed your attention.
Henry A. Hauser: --Yes. One of those has split, and the last two questions are the 1983, state 1983 and the state statutory remedy. The question about 1983 was raised before the district court.
Potter Stewart: But it's not a question, then, on which we granted certiorari, nor fairly subsumed within it, is it?
Henry A. Hauser: Well, it's not... we suggest that it is.
Potter Stewart: We granted certiorari to consider a single question and the Court of Appeals for the 7th Circuit said they had a single, and to use their word, s-o-l-e, sole question. Isn't that correct?
Henry A. Hauser: Well, that's correct, Your Honor, although I suggest that if the decision of the 7th Circuit is incorrect, then if the decision of Judge Bua in the district court was correct but for the wrong reasons, then it simply makes sense to reach that issue as a matter of judicial economy. Now, I pointed out, and I did argue and I did set out in my brief that we were raising a question that arguably might not be available below, and we did argue in our brief that we perceived the question to be subsumed within that question. So--
Potter Stewart: Then the only question presented in the certiorari petition and the only question that the Court of Appeals undertook to decide was whether or not there was a plain, speedy, and efficient remedy in the state courts. Is that correct?
Henry A. Hauser: --My response to that is that--
Potter Stewart: Isn't that correct?
Henry A. Hauser: --Well, that's the question that they decided, but--
Potter Stewart: Yes. And the only question presented on your petition for certiorari.
Henry A. Hauser: --Well, no, there's two questions. There's the--
Potter Stewart: Well, I only see one, and I'm looking at page 2 of your petition for certiorari: "Question presented". And there's only one question.
Henry A. Hauser: --That's correct, Your Honor. However, that question includes both whether the plain, speedy, and efficient remedy is included in a state 1983 action which in Illinois state--
Potter Stewart: Yes. Whether or not there was a plain, speedy, and efficient remedy in the state courts.
Henry A. Hauser: --Right.
John Paul Stevens: But your point is, your question did include two alternative state remedies, is it not?
Henry A. Hauser: Yes, it really did.
John Paul Stevens: Yes, but it didn't include the propriety of a federal 1983 action.
Henry A. Hauser: That's correct, Your Honor, although that's a fundamental question which is--
Potter Stewart: Well, that's a fundamental and quite a different question from the one embraced in your certiorari petition on which we granted.
Henry A. Hauser: --It is a different question, although I think that if there is federal jurisdiction lacking, again, the district court ruled in the favor of the County, on granting the motion to dismiss, and it doesn't seem to make a lot of sense to allow a judge to be reversed, if he was right for the wrong reason. I think that might be more the failure to articulate the reasons for a decision and it might be more appropriate to encourage district courts to articulate the reasons for their opinions.
Byron R. White: Don't you really... just like in this case, the question of the power to issue the injunction, was reached before decisions on whether the complaint stated a cause of action.
Henry A. Hauser: Well, the difficulty--
Byron R. White: Which is rather normal, isn't it?
Henry A. Hauser: --Well, the difficulty is that the usual way that these tax cases go is under a 1341 analysis of the federal tax injunction statute. And the other questions get subsumed, in fact, lost. And if there are underlying difficulties and those cases present important issues, then it's the underlying issues that that case is going to be cited as authority for. I think that for that reason we thought it important not to raise for the court, to give Your Honors a chance to rule on it. And we indicated that we were raising the issues that had not been particularly presented to the district court. Fundamentally, the problem that I need to return to is the relationship between 1341 and the historical overview that is set forth in Tully v. Griffin, where a federal court is said to be under an equitable duty to refrain from interfering with the state's collection of its revenues except in cases where an asserted federal right might otherwise be lost. Unless the taxpayer can demonstrate an asserted federal right, demonstrate that right, assert it, and prove it, then there ought not to be a federal injunction. If the facts and if the complaint indicates that the taxpayer will not suffer irreparable injury, that is, that the taxpayer will not suffer an injury which can't be recompensed by money... and we're talking about money here; we're not talking about the loss of the taxpayer's property. In other words, because the taxpayer had available to her the state... the damage remedy, because she was able to pay, a state refund remedy, there is no threat in this case of loss of the property. If the property isn't lost, then we're only talking about interest, and if that's the federal right that's going to be lost, then the taxpayer can certainly assert that right, that there's no threat of the loss of that federal right, then we respectfully suggest that under Tully v. Griffin there is no right to a federal injunction.
William J. Brennan, Jr.: Is a 1983 action available in state courts in this kind of tax case?
Henry A. Hauser: Well, we don't know that, Your Honor, because it's never been filed. The--
William J. Brennan, Jr.: You don't know it. I gather from your brief you question whether 1983... we've never held that a state court must entertain a 1983.
Henry A. Hauser: --That's correct.
William J. Brennan, Jr.: We've held it in Thiboutat last term that it may.
Henry A. Hauser: That it may.
William J. Brennan, Jr.: Now, if there's no requirement that... you don't know whether it will or won't, does that bear on the plaintiff's speedy and efficient remedy?
Henry A. Hauser: Yes. Well, Hillsborough v. Cromwell says that if the remedy in the state court is uncertain, then 1341 is avoided. But our argument is that the facts in Hillsborough were a situation where the uncertainty was not the result of a failure of any taxpayers to file the suit. In other words, you can't establish a state remedy, particularly a new remedy under 1983 unless some taxpayers file it. And there's never been a 1983 tax case filed in the state court, because the history has been that those get filed in the federal court. It's only after cases when people start thinking along the lines of filing 1983 cases in the state court, as occurred in Martinez, and it's occurred in Thiboutat, that you have this clash--
William J. Brennan, Jr.: My question really is, it's clear that the action is available in the federal court; no doubt about that. If it's uncertain whether it's available in the state court, then why can't the taxpayer seek an injunction in federal court with a 1983 suit?
Henry A. Hauser: --The question is, there's a failure, I think, to distinguish between injunctive relief as against damage relief. Now, Alberty was a damage case, and there's a federal case... Fulton Market, the 7th Circuit; Fulton Market v. Cullerton, which is a damage case also, which deals with allegations very similar to this case. We respectfully submit that the analysis has to be in view of the disruption that's created to a state tax system by a tax injunction, where tax machinery is disrupted, where there's an obstruction of revenue, perhaps damaging the budget, where there's a risk, of taxpayer insolvency which is shifted to the state, and where there are state law questions that need to get sorted out all along. Those are all factors which were set out in your Perez concurrence in the dissenting opinion. In that situation it's necessary to balance the damages threatened to the state, as against what we might consider the best Illinois damage remedy. And if the fact is that the taxpayer will not suffer any irreparable injury, that the taxpayer will not lose her property and must merely wait to be recompensed by damages for a claim which she must establish under Tully, because if she can't establish the claim under Tully then there's no federal right which will be lost, then we respectfully submit that the policy underlying federal tax injunctions and the limit of those federal tax limitation injunctions--
William J. Brennan, Jr.: Does this imply that were this 1983 action of the taxpayer in federal court limited to a claim of a damage remedy, you wouldn't be making this argument?
Henry A. Hauser: --I'm not sure that I understand that. If there was no--
William J. Brennan, Jr.: Well, would you be resisting the 1983 suit, seeking only damages in federal court?
Henry A. Hauser: --We resisted that in federal court and we lost in the 7th Circuit and certiorari was denied. I think with two justices dissenting from the denial. So the law as it stands... and we accept the law as it stands... is that there is a federal damage remedy that's available in the northern district of Illinois for any money damages that we felt--
Byron R. White: But it's an availability under federal law. You're in a state court but you're appealing the federal law. And do you have any authority that 1341 should be construed to include remedies in state courts under federal law as well as under state law?
Henry A. Hauser: --I think that--
Byron R. White: After all, it will be federal law, won't it?
Henry A. Hauser: --Well, the difficulty we--
Byron R. White: Well, will it or not?
Henry A. Hauser: --I think it might--
Byron R. White: If it's under 1983 it is a federal statute, it will be federal law.
Henry A. Hauser: --It will be a state determination of the federal law.
Byron R. White: Well, that the action substantively will proceed under federal law?
Henry A. Hauser: Right. That's right. And I think that supports my position, because when the Illinois courts look to the--
Byron R. White: Oh, I don't know. It's a question of construction of 1341.
Henry A. Hauser: --Well, yes--
Byron R. White: A remedy in the state courts. Does it mean under federal law as well as under state law?
Henry A. Hauser: --Well, here's what I would say to that--
Byron R. White: I know what your answer is, but... your answer is, yes.
Henry A. Hauser: --The answer is that the state court will look to federal law, much the same way that federal courts look to state law in diversity jurisdictions. You have a straight example of reverse diversity jurisdiction, and that is, I think that once Martinez is decided the way it is and once Maine v. Thiboutat is decided the way it is, that's a problem that's created. And I don't think it's a problem because if you look at the final, in the final analysis, the taxpayer indeed has a choice. The taxpayer, who is not threatened with irreparable injury, has a choice of filing either in the state court or in the federal court to recoup the damages which are monetary damages threatened by those parts of the Illinois remedy to which she objects.
William H. Rehnquist: But if the remedy you're relying on to get you out from under 1341 is a damage suit in federal court, it simply doesn't come within the language of 1341.
Henry A. Hauser: That's correct, Your Honor. And the reason why that's so is because initially 1341 was directed to diversity actions.
William H. Rehnquist: Well, however it may be, you can't invoke 1341 by saying that she has an adequate damage remedy in federal court. Because it doesn't come in under the terms of 1341.
Henry A. Hauser: But we do argue that in Tully v. Griffin, a 1341 case that under the broader view of equity law, that a federal court is under an equitable duty to refrain from interfering with a state's collection of its revenue, except in cases where a federal right may otherwise be lost, and the view is not restricted solely to the state remedy, but to the federal remedy too.
Potter Stewart: Mr. Hauser, I think my brother Rehnquist's point is that the plain language of 1341 says that a federal court does not have the power to enjoin the collection of state taxes where there is a speedy, a plain, speedy, and efficient remedy in the state courts, in the state courts.
Henry A. Hauser: That's right. My response to that is, Your Honor, that unless you distinguish between 1341 and the traditional limitations put on any federal district court in dispensing injunctions, you will end up with a plain, speedy, and efficient federal damage remedy, as we have in this case, that will--
Potter Stewart: Well, there might be reasons not to issue an injunction in various cases, depending upon--
Henry A. Hauser: --Yes.
Potter Stewart: --In any particular case, depending upon the generally applicable maximus of equity with respect to irreparable damage and no adequate remedy at law and the rest of it. But the question in this case is whether or not such an injunction is barred by 1341, and that's the only question, isn't it?
Henry A. Hauser: Well, no. We think the question is broader because of the language in Tully v. Griffin, in Tully v. Griffin. And that's because you have the limitation of diversity jurisdiction. As you start creating more federal rights, either in federal question jurisdiction by statutes or in 1983 by expanding that jurisdiction, it's necessary to view the equitable powers of the district courts in the broader view, the one that's articulated in Tully v. Griffin, which is clearly a 1341 case.
Thurgood Marshall: Well, what case is there that fits in to say that you do have a remedy in the state courts of Illinois under 1983? What case do you have that says that?
Henry A. Hauser: I have a case, I cited it in my brief, Your Honor, Alberty v. Daniel. And Alberty v. Daniel indicates the willingness of Illinois courts to accept 1983--
Thurgood Marshall: I didn't say, willingness; I said, that says it can be done.
Henry A. Hauser: --Well, Your Honor, if Your Honor demands a case, me to demonstrate a case that's never been filed, I can't. And no taxpayer--
Thurgood Marshall: Well, isn't that what the statute requires?
Henry A. Hauser: --No, I don't think so, because I think that is--
Thurgood Marshall: Well, I think the statute requires either a case or a statute which says that the courts of Illinois are open for this point, 1983. And you don't have either.
Henry A. Hauser: --The only point I would make, Your Honor, is that as far as 1983 is concerned, the Illinois appellate court in the district in which the taxpayer's property is located has accepted jurisdiction of a 1983 action arising out of employment claims. It wasn't a tax case; but no Illinois court has ever denied a 1983 tax claim.
Thurgood Marshall: I know a lot of other things they've never denied. They've never denied an admiralty case either, have they?
Henry A. Hauser: That's correct, Your Honor.
John Paul Stevens: Mr. Hauser, just one question, if I may. This argument that you're now making really depends on our agreeing with the 7th Circuit decision in the Fulton Market case, doesn't it?
Henry A. Hauser: Yes, that's correct, Your Honor. If there's a disagreement with that, then that changes the availability of remedies altogether. Thank you very much, Your Honors.
Warren E. Burger: Mr. Fox?
James L. Fox: Mr. Chief Justice, and may it please the Court: As it has been remarked, there is one basic question before the Court today. That is, is there a plain, speedy, and efficient remedy at hand, available without doubt... Cromwell... in the courts of Illinois? Counsel has maintained in his petition for cert that, one, the present statutory remedy which returns a taxpayer's money as alleged and procedurally admitted, after about two years without interest, is adequate; it is plain, speedy, and efficient, and he merely reiterates the holdings, not the dicta but the holdings of the Supreme Court of Illinois in Lakefront, reiterated in the Clarendon decision, and in a host of other decisions in Illinois. The Illinois court has unequivocally determined that the nonpayment of interest does not render a remedy inadequate.
Warren E. Burger: Do you equate inadequate with inefficient?
James L. Fox: Yes, sir. Mr. Chief Justice, with the PS&E> ["], plain, speedy, and efficient. I believe if we go back into cases like Great Lakes and into Matthews v. Rodgers and the extensions of those, "plain, speedy, and efficient. " has been declared coterminous with or the same, has the same meaning as "adequate".
Warren E. Burger: Well, there are a great many claims against the United States in which no interest is allowed. Not in this context, but would you say that that's not an adequate remedy that might lay a foundation for some other type of relief such as equitable relief?
James L. Fox: Sir, in the context of the United States, first of all, we do have the question of the sovereign. And interest allowable against the sovereign is by statute, as witness the Internal Revenue Code.
Warren E. Burger: Well, haven't you got a sovereign here?
James L. Fox: We are not claiming, Mr. Chief Justice, that Illinois is compelled to award interest. That question is not specifically within this case. I refer, for instance, to Judge Haynsworth's remarks in the Livingston case which we have cited in our brief wherein he said South Carolina may elect to pay interest or not. It is a sovereign and it doesn't have to award interest on tax refunds. But if it does not, it then opens its door to federal jurisdiction by not providing a plain, speedy, and efficient remedy. In the 7th Circuit we had the same thing in Olin Mathieson.
William H. Rehnquist: Well, there's a certain circularity to that, though, counsel, isn't there? Because if it opens the doors to federal courts but is not required to pay interest, all you get is the same relief in federal court as you would have gotten in state court, that is, your refund without interest.
James L. Fox: No, sir, because we do not sue for a refund... 1341 is directed only to injunctive relief and this case stands on that particular proposition which we have alleged. We seek injunctive relief and we maintain that injunctive relief is the only relief which will maintain this taxpayer whole. We maintain that if we're going to keep it-- One, we have an admitted, we believe, constitutional deprivation of--
William H. Rehnquist: Now, what is that? Interest?
James L. Fox: --No, sir. The constitutional deprivation is the inequitable tax assessment we're under, under a system--
William H. Rehnquist: It's an equal protection claim?
James L. Fox: --An equal protection and due process, no matter how you call it. It's due process in this respect, that a lien for taxes affixes against a person's property on the first day of January in any particular tax year, and therefore amounts to a taking, as it were, of the taxpayer's property without due process of law, and it of course subsumes the equal protection--
Byron R. White: You're... the lack of provision for interest is simply the reason why the remedy is inadequate?
James L. Fox: --The remedy is inadequate. As I said before--
Byron R. White: And the merits of your constitutional claim are not here at all, are they?
James L. Fox: --I think they are procedurally admitted.
Potter Stewart: Yes, but the only question is, whether or not 1341 bars an injunction.
James L. Fox: Exactly.
Potter Stewart: There's no question here about whether or not, for some other reason, you may not be entitled to an injunction.
James L. Fox: That is correct. At least not in the petition for cert. This matter, by the way, came on below on a petition for a preliminary injunction, which was denied and the case dismissed under the grounds which are set forth in the Appendix by the district judge. The elementary question is not really... again, I want to emphasize that... not whether or not we have a constitutional right to interest. We are not litigating that particular question today.
William H. Rehnquist: But then, why should it be of any importance in the administration of the anti-injunction statute that a state doesn't allow interest, if you have no constitutional right to it?
James L. Fox: Because, I believe that to take a man's money today... to paraphrase Judge Learned Hand about 50 years ago in the Procter & Gamble case, to take a man's money today as a condition of his going into court and being able to sue for a refund and then two or more years later giving back that same money, is giving back less than the state took.
William H. Rehnquist: So, even though it is not a constitutional violation, it brings into play, it relieves you from the bar of 1341?
James L. Fox: Yes, sir. Now, it would be a second story if we were to go into the condition which obtains in the financial world today... and it is not without some degree of irony that the day on which this Court granted certiorari the prime rate was set at 19 percent, which is not available to the average taxpayer, of course, at prime. Now, is it... and this is a second question, or a sequel. Does it deny due process to the citizenry of Illinois merely to have a remedy which merely after an hiatus of two or more years gives back far less than the state took, meanwhile allowing the state to use that taxpayer's money to generate interest for the state which the county treasurer is allowed to do?
Warren E. Burger: Now you're talking about a Fifth Amendment taking?
James L. Fox: Yes, sir. It is not in this case and I don't mean to go far afield.
Warren E. Burger: Well, but you've said it's not in this case, but you've put it in the case.
James L. Fox: I apologize--
Speaker: All right.
James L. Fox: --because one of the justices had asked me--
Warren E. Burger: I'm not saying this critically.
James L. Fox: --I see.
Warren E. Burger: I hope it's analytically.
James L. Fox: It is.
Warren E. Burger: You're really raising a taking point when you make that argument, a point which you then say is not in the case.
James L. Fox: But under the circumstances of this case, where we allege, and it is admitted, there was an unconstitutional taking, we believe that a remedy which does not give back everything that is taken, making the party whole, is itself constitutionally infirm.
William H. Rehnquist: But I thought you said a minute ago that Illinois was not required to pay interest?
James L. Fox: It is not.
William H. Rehnquist: Then did I misunderstand you just now in saying that it is? I mean, what's less, less than what? You said they got back less. Why less?
James L. Fox: Why? Because let's merely assume a 12 percent inflation rate and give it back in two years, you're giving back 75 cents for the dollar you took.
William J. Brennan, Jr.: You got less because of inflation, not because you were denied interest.
James L. Fox: Because of inflation. That's one aspect, one prong. The other prong is this, as Judge Learned Hand says, that a dollar a year from now is not worth a dollar today. And if they take a dollar today, even absent inflation, and give it back a year from now without interest, they have not given me my dollar back.
Byron R. White: Well, this is still a question of the construction of 1341, isn't it?
James L. Fox: That's right. I grant you, Mr. Justice White--
Byron R. White: And so you will argue that that is not a plain, speedy, and adequate remedy, or whatever the words are.
James L. Fox: --That's what this appeal is all about.
Byron R. White: I suppose one relevant question is, what the Congress had in mind in what an inadequate remedy might be. Wasn't it, historically, the notion that interest isn't allowable against the government, absent some specific statute?
James L. Fox: That is correct. There is a... if you go down and make a tally of the states, some do, some don't. Many of the states which don't allow interest allow declaratory or injunctive relief. In fact, even in Illinois, sir, in the--
Byron R. White: Well, is there any... have you got any evidence at all, any legislative history or any other indications that Congress thought the unavailability of interest was tantamount to the lack of a speedy and adequate remedy?
James L. Fox: --No, sir, the legislative history of 1341 which I have been able to read is not indicative of that particular point. It merely recites the problem of out-of-state corporations coming in and interrupting the tax collection procedures.
Warren E. Burger: Well, what you're saying, it seems to me, is that you treat "efficient" as a synonym for "adequate". And this remedy is not efficient, that is, adequate, because it isn't speedy.
James L. Fox: Nor is it plain.
Warren E. Burger: Well, I'm not sure what plain means in this setting.
James L. Fox: I think the 7th Circuit views that... I think the 7th Circuit, Mr. Chief Justice, used the term "plain" in its decision.
Warren E. Burger: Well, I'm not sure what it means. Plain or fancy wouldn't make much difference. The important thing is whether it's speedy and whether it's adequate. And speedy and adequate are really interrelated, aren't they?
James L. Fox: I believe so; yes. I think they are subsumed, that speedy is subsumed under the word adequate, which seems to be more generic.
Warren E. Burger: If it were speedy so that you got it in 60 days, you wouldn't be making all this argument about the dollar and the inflation and the use of the money.
James L. Fox: On the other hand... I would not say that either, sir, quite; because if we're looking at a basic constitutional deprivation to begin with, somehow or other that... For instance: let us suppose that this constitutional deprivation of high taxes or high assessments were motivated by ethnic or religious or racial considerations on the part of the Assessor of Cook County, is it proper relief, is it adequate relief to say, oh, go ahead, Mr. Polish, or Mr. Irish, or Mr. Italian taxpayer, in this particular neighborhood, pay your taxes in full under protest, sue for refund, and then in 60 days you can get your money back?
William H. Rehnquist: Well, that's just what 1341 says, isn't it? You cannot enjoin in federal court the situation that you specify, if it's a tax... if it's limited to taxation.
James L. Fox: I think, Mr. Justice Rehnquist, that the fact that this insult occurs as a result of a constitutional deprivation removes so-called irreparable injury, removes this period of time, pure time. For instance... and I would refer, let's say, to the case of Henry v. Greenville Airport, which was cited in our brief, which states that when a constitutional right is invaded like this, that questions of irreparable injury and the like are not even properly considered.
William H. Rehnquist: But 1341 purports to impose a prohibition over and above the normal injunctive precautions, doesn't it?
James L. Fox: That is right. And again, however, we are in a theoretical area when we say, if the next day you could get your money back... which is absolutely impossible under the Cook County collection procedures, because you pay your taxes over a period of six months and are not able to sue until about nine months after the taxes have been paid in the first instance.
William H. Rehnquist: What would be a reasonable limit, in your mind? Presumably there isn't a jurisdiction in the country that is going to give you your taxes back on the same day you pay them under protest. Would 20 days be sufficient?
James L. Fox: I think... may I answer this in another way? I think that there is... personally, that injunctive relief should lie at either the state level to provide an adequate remedy, immediate injunction at the state level to provide an adequate remedy, or some other remedy than requiring a taxpayer, as here, to pay 3-1/2 times the just taxes merely to have the right to go in to sue to have them come back.
William H. Rehnquist: So you say the state remedy contemplated by 1341 must be injunctive in nature? That a payment under protest and ultimate refund, even in a very short period of time, isn't adequate?
James L. Fox: That's right. My own personal opinion, however, I think that if Illinois paid reasonable interest on tax refunds, commensurate with the market today, I do not think that we would be before this Court today.
Thurgood Marshall: And you didn't do it because you knew you couldn't make them pay it.
James L. Fox: We couldn't make it, we couldn't make it. I have to cite... we have been told that there is a possibility out there of a 1983 action, but we have three cases in Illinois in which the issue has been presented to the Illinois court... and the Illinois court has... with these federal equal protection due process claims, and the Illinois Supreme Court came back and said, you can test those claims by paying your taxes in full and suing out a refund, and you can get an answer to your constitutional claims. It did that in the case of La Salle National v. the County of Cook in the 57 Illinois 2d, which we have cited. It did the same thing in the case of Fulton Market Cold Storage Company at the appellate level and then at the Supreme Court level, again a case cited in our brief. And as recently as this last year in Chrysler Corporation v. Gunderson, the Illinois court, the appellate court, aware of the decision of the 7th Circuit in this case, said, furthermore, our own state Supreme Court's clear rulings in Lakefront and Lorenz, and Clarendon, stating that the remedy is adequate without interest, remain controlling precedent on us, as on all Illinois courts, unless reversed by that court or by the United States Supreme Court.
Potter Stewart: That case is not in your brief, is it, counsel?
James L. Fox: Sir?
Potter Stewart: Chrysler Corporation?
James L. Fox: It's in the response to the petition, sir.
Potter Stewart: I see. All this discussion, and I've contributed to it, talking about the specific words, has maybe taken us off of what was the genesis of the Anti-Injunction Act? Wasn't it to mandate a direction to the federal courts to keep hands off of state tax procedures? Just let the states work it out on their own?
James L. Fox: Mr. Chief Justice, the genesis of that Act was the problem encountered under 1332 jurisdiction, where foreign corporations were coming into the several states and enjoining state tax collections. That's in Senator Bone's remarks in the legislative history. I think there are... at least through that entire discussion. It is not a protection, really, as/or against citizens of the state itself bringing actions.
Warren E. Burger: Well, but the Act doesn't make any distinction, does it?
James L. Fox: No, it does not. But the genesis which you referred to is found in the problems of big interstate companies coming in, using diversity where people couldn't do it locally, and if you recall at that time, they couldn't use 1343 because this was all pre-Household v. Lynch.
Byron R. White: Could I ask you, if you paid the tax and sued for a refund and it was... in the state courts?
James L. Fox: Yes, sir?
Byron R. White: Or do you do it administratively? You do file it in a state court?
James L. Fox: In a state court it's the statutory procedure.
Byron R. White: And in that case you could present your federal constitutional question?
James L. Fox: Yes. And the court said that, and La Salle testified--
Byron R. White: Yes, well, all right, but now, if you won on your constitutional argument, your colleague suggested that the state would pay interest.
James L. Fox: --No, sir, because the State has unequivocally stated in all--
Byron R. White: I know, but I thought the State had said only that without adjudicating the constitutional point. Suppose the state courts had themselves decided that the assessment was unconstitutional, and that you deserved a refund. Have the state courts then said there would be no interest payable?
James L. Fox: --Yes. There is no interest payable, because the Illinois law is, no interest without a statute providing for interest, and there is no statute in Illinois.
Byron R. White: Whether or not the assessment is constitutional?
James L. Fox: That's right. Furthermore, the Illinois Legislature has had before it twice within the last four or five years bills to provide interest on tax refunds.
Byron R. White: Well, didn't you understand the State to argue to the contrary or not? Did I miss any... I must have misunderstood your colleague, here for the State?
James L. Fox: I did not understand him to say that.
Speaker: Okay. Thank you.
James L. Fox: There is no interest payable in Illinois without a statute, and there is no statute and the Illinois Legislature has turned down such a statute twice within the last three or four legislative sessions. I will not address, because of Mr. Justice Stewart's interrogation of my colleague here, the collateral issues which were raised on this particular, in the briefs, such as as the 1343 argument and the other arguments that were raised. Counsel has adverted, however, on several occasions to the question of the state remedies of 1983. There is no grounds for a state 1983 remedy. In fact in a damage action, as Mr. Justice Marshall pointed out, there just isn't any case to which you can point. There is no rule, of course, as Note 1 in Maine v. Thiboutat pointed out, that the state must hear a 1983 action, and I can think of nothing more intrusive by the federal judiciary into the state than to require the State of Illinois, let's say, first to hear that kind of 1983 action; secondly, to grant an injunction or damages; thirdly, perhaps, to grant attorneys' fees, which are not provided for under the statute, or to pay interest, or to waive its exhaustion of administrative remedies, which the State absolutely declined, the court in the State absolutely declined to do in the Fulton Market case, which we have cited, because that was taken up on a 1983 case, citing Monroe v. Pape, Damico, McNeese, and the other cases, for failure to exhaust notwithstanding a constitutional deprivation. The Supreme Court of Illinois shook its head and said, no, after the appellate court had overruled the trial court. The Supreme Court reversed and said, no, we don't have to reach that issue, the plaintiff here did not exhaust his administrative remedies, and notwithstanding any federal claims and so forth which were briefed and argued, we're not going to waive our exhaustion relief. Counsel, I think, has been most forthright in saying that he cannot speak for the Illinois court, that he cannot assure us that there would be any remedy under 1983 or any other remedy in the Illinois court. And Cromwell has been good law for years and years in the United States.
Byron R. White: If you win... if you're allowed to maintain your action in the federal court and you get an injunction, you win on your equal protection ground; you wouldn't expect to get interest?
James L. Fox: No, sir. The only possibility, Mr. Justice White, under those circumstances would be that under the rationale of Fulton Market v. Cullerton, that we might go back at a later date and sue for whatever other expenses we had. But, note, that under an injunction, under an injunction--
Byron R. White: You're asking for the injunction, and even if you ask for damages you wouldn't get interest as damages.
James L. Fox: --Well, you see, truthfully, if we got an injunction, one, we would not have to pay the unjust moiety.
Byron R. White: All right.
James L. Fox: Secondly, under 1988, we would be entitled to our client's attorneys' fees, so that the client would be made whole with an injunction. She would not have to lay out her money, and her attorneys' fees and costs would be paid.
Byron R. White: Yes.
James L. Fox: And, by the way, there is no such provision under Illinois law, allowing the so-called rule of attorneys' fees in prevailing in a case such as this. There is no interest, there are no attorneys' fees, there is nothing. Neither, as we pointed out, is there any interest even after judgment.
John Paul Stevens: Mr. Fox, if the State of Illinois amended its procedure to allow interest at something that may be less than the prime rate, provided no recovery of attorneys' fees or anything else, would it then be an adequate remedy, in your judgment?
James L. Fox: If it were... Mr. Justice Stevens, if it were reasonable interest in the line with the market. I merely point out--
John Paul Stevens: Say, it's the same provision they have, whatever the interest rate is, on judgments now? I don't know what it is.
James L. Fox: --That really does not square with reality in Illinois at the present time. On judgments against the State, it's six percent. The Internal Revenue Service under Section 482 is now talking a range of 11 to 13 percent. I think the court would then have to face a due process question in the amount of interest. If they allowed four percent or five percent in a day when we have a 15-1/2 percent prime, this is another question. I mean, I think it's a... is it reasonable?
Potter Stewart: Well, this isn't a due process question. It's a statutory question--
James L. Fox: It's a statutory, yes.
Potter Stewart: --of whether or not there exists a plain, speedy, and efficient remedy in the courts of the State.
James L. Fox: But again, and I hate to bring the question up, Mr. Justice Stewart, but is the payment... is the taking of money today and giving it back in a lesser amount sometime hence, is that itself a denial of due process?
Speaker: That's a separate question.
James L. Fox: And as I say, we'll leave that to fight for another day. Thank you.
Warren E. Burger: Thank you, gentlemen. The case is submitted.
Speaker: The honorable court is now adjourned until Wednesday next at ten o'clock.


Earl Warren: Number 157, Parden et al, Petitioner, versus Terminal Railway of the Alabama State Docks Department et al. Mr. Darby you may continue your argument.
Wills C. Darby: Mr. Chief Justice, may it please the Court. In all cases that we have found, where the question of immunity of a state from suit has been raised in the federal courts involving a private citizen, either of that particular state or of a sister state, all of these cases arise under the constitution and laws of the United States. It would actually be impossible to have the case -- it did not so arise where a citizen was involved due to the fact that there would be no diversity of citizenship between a state and any of the citizen as they state itself has been held by this Court not be a citizen. Therefore, all cases which we have cited and all the cases decided by this Court are in point insofar as the question arises out of the constitution, the laws of the United States. The -- we -- we do not think and we submit that there is nothing as well known in the law, in this country insofar as the proposition which we argued before the Court today and that is that a state can not be sued in a federal or any other court without it's consent. Some examples of the cases of this Court that show the extent of that well bounded rule, we submit are some of these. In Beers versus Arkansas, the state had enacted a law that allowed it to be sued in its own court. A suit was filed in the court, thereafter -- and after the suit was filed, the state changed this law and the court -- a court there held, the state court held that the immunity was thereby -- well, the waived ones was taken back and this Court affirms saying that the court that rather that the state had a right to change it's own law with respect to immunity even after a suit was filed as they had an unconditional right to withhold the waiver of their immunity. In the case of Ford Motor Company versus Department of Trade Real Estate of Illinois, the plea of immunity was raised for the first time in this Court that had not been raised below. The Court found that by entering into the suit and trying it on its merits below, the state did not wave its immunity due to the fact that the Attorney General of the state did not have the power to waive the immunity of the State of Illinois. In the case of Missouri versus Fitts which we submit is just as strong as the case here or at least for the appellant was a case where the state court supposedly was interfering with the jurisdiction of a federal court. And the lower federal court issued an injunction against the state from proceeding in its own courts in connection within a state. There again, this Court held that the judicial power of the United States did not extend to a suit by a citizen against the state and therefore it could not be used even to protect the judicial power of the United States. We submit that the same is true insofar as Congress is concern here.Congress does not have the power we submit to enlarge the judicial power of the United States either directly or indirectly and thereby require a state to be sued or as a condition of doing anything in the state would otherwise have the right or privilege not to do. And we submit that that is true even assuming that Congress could prohibit a state from engaging in interstate commerce by railroad. We -- we particularly urged upon the court that this Court should not determine on the record here and on the act of Congress, that Congress intended in any matter whatsoever to condition states engaging in the operation of a common carrier by rail upon it's submission to sue. That would open a door that would in fact destroy a state's immunity from suit because if Congress has a power to condition the states engaging in the operation of a common carrier by rail on the states subjecting itself to suit, certainly it would have the same power in connection with the -- with a highway. It would have the same power with the connection of the state using an instrumentality of commerce. The --
Arthur J. Goldberg: (Inaudible) constitutionally might expressly so condition?
Wills C. Darby: I do not think that Congress could constitutionally express such a condition insofar as a state is concern. And the reason for that is that a state's immunity from suit is something founded in the constitution and whether it's considered a privilege or a right. And this Court has described it as a right that Congress cannot take away a right as a condition of doing something if they -- a body would otherwise have the right to do. That leaves us to the series of cases by this Court where a state though it has the power to exclude a foreign corporation entirely from doing business within the state, the state does not have the power to require the corporation to waive a constitutional right or privilege that it might otherwise have as a condition of doing that. And this Court, in the Hanover case where it declared the first Employer's Liability Act unconstitutional based its decision in part specifically on that ground because the court found that at that time, the Act covered the employees while they were not engaged an interstate commerce. And the court said that Congress did not have the constitutional power to extend under the Commerce Clause and take away or extend itself outside of the Commerce Clause and take something away that the parties otherwise had a right to do. Here, we have a constitutional provision. Or for at least, its so interpreted and the Eleventh Amendment that adds weight to it and shows that the -- the people as well as the courts and Congress have particular said that Congress has no such power under any circumstance and the words as used by this Court, they say the whole sum of the judicial power of the cost of the state for the Federal Government does not extent to a suit by a citizen against his owns state or by a sister state. So Congress can't add to the constitution even if it desired to do so by way of --
Byron R. White: But that's just a --
Wills C. Darby: -- petition or otherwise.
Byron R. White: You have to do a little construing before you can make your statement so confidently. You have to first exclude from the judicial power vested in the federal courts the kind of cases that you are talking about.
Wills C. Darby: Well we -- we have Congress or the court has conserved most every type of case we submit. Hans versus Louisiana was a constitutional question, it was a question of the impairment of contract which goes right to the heart of the constitution. You have Ex parte New York that was an admiralty case involving the admiralty and maritime jurisdiction of the federal courts. And there again, the court held that even though at the admiralty and maritime jurisdiction, one specifically included in the constitution that it was not going to hold that the state could be sued under the admiralty and maritime jurisdiction of the federal courts. And we submit that in substance, this Court has already held that it is all inclusive. The court has not held on the question of a condition other than in the Hanover case and it was not classified as a condition there.
Byron R. White: How about the suits for the United States?
Wills C. Darby: Well, we have no question about the suits about the United States.
Byron R. White: And why -- and why -- why not?
Wills C. Darby: In United States versus Texas many, many years ago, this Court held that United States could bring a suit because the United States would not be covered in the Eleventh Amendment and it's --
Byron R. White: Because of -- because they could condition -- because they could -- they could condition entry upon the -- this was consent by the states to -- when they entered the union?
Wills C. Darby: I don't think it was based on -- I'm sure that it was consent because everything in the constitution itself would be based on consent by the states or at the time that either entered or when the constitution was written.
Byron R. White: But that assumes the constitution said something about this.
Wills C. Darby: That's true. But what the -- but you have a direct prohibition in the constitution and the Eleventh Amendment and it's been interpreted although by this Court to include any other type of suit in suits brought by a citizen against his own state. Because the court says that was unheard of in the law at the time the constitution was adopted and the court as late as 1934 in Monaco versus Mississippi. Again reiterated that that was something it was unheard of in the common law and that he did -- and that the whole sum again of the judicial power of the United States just did not extend to such a suit.
William J. Brennan, Jr.: Congress authorized a suit in the name of the United States on behalf of the employees of your -- of your railroad under the FELA?
Wills C. Darby: I -- I perhaps Congress could. We submit that Congress has nothing --
Byron R. White: Well that's true in the Safety Appliance Act. That's already been --
Wills C. Darby: In safe --
Byron R. White: That's already been decided then.
Wills C. Darby: That -- there's no question about the Safety Appliance Act with the -- in the Safety Appliance Act it specifically provides that the suit maybe maintained by the United States --
Byron R. White: Yes.
Wills C. Darby: -- for the forfeiture.
Byron R. White: Yes.
Wills C. Darby: And we have no question about the right of the United States to sue a state. No question about the fact that another state could sue a state. And I think that is definitely in our constitutional system. Otherwise, there would be no control over the states. I presume that the United States didn't have the file would go in and sue them in the court and have a judgment then they will be required to follow. But Congress here has not -- did not deem fit to bring that conclusion about. And perhaps --
Byron R. White: (Inaudible) in here technically speaking, and then you just have a defense.
Wills C. Darby: Frank -- frankly, I don't know whether this jurisdiction or not that says that the whole sum of this -- of the judicial power shall not be so construed. Now what -- whether it is actually jurisdictional or whether it is a question of a plea coming in that's an absolutely plea when you bring it in. I frankly cannot say but I realized that you cannot create jurisdiction by consent. And if that stands on the basis on the bottom that you have to say that there would be jurisdiction. We -- we would submit this before the court, it would determine that Congress here has held that the state has intended that a state could be sued under the Federal Employers' Liability Act. And there are things that should be considered and we think Congress would've have considered them and get the issue ever been brought before Congress. Insofar as the United States is concerned, you have the Federal Tort Claims Act there. Of course you have a -- Congress has held that you do not have a jury. Certainly, they would enter to the same consideration if a state was going to be subject to suit.
Byron R. White: (Inaudible) ICC?
Wills C. Darby: Yes, it does.
Byron R. White: Its certificate --
Wills C. Darby: It -- it holds a certificate, it keeps its accounting. It files reports with the ICC --
Byron R. White: You don't think the Interstate Commerce Commission have the condition to granting a certificate. But insists that the railroad answer up to -- submit itself to the same regulatory -- the regulatory scheme of the United States.
Wills C. Darby: We submit that it could not if it -- if it attempted to do so, we would probably have another case in this Court if this Court would consent to hearing the case.
Byron R. White: But it hasn't been done in this case.
Wills C. Darby: It has not been done in this case. There has been no question about it. We also pay taxes to the -- under the Carrier Act and we comply with all of the other federal regulations. We do it voluntarily we submit rather than through force. We have been called into Court for violation of the Safety Appliance Act and we defended those cases on merits.
Byron R. White: You mean, you wouldn't have to get a certificate to the ICC (Inaudible)
Wills C. Darby: Oh, we submit -- I -- I think we would have to -- have to have a certificate from the ICC. But if the ICC refused a certificate on the basis of -- of the state consenting to be sued, we would come into Court on the basis that that was beyond the powers of the ICC. But that is another point in connection with that question we submit and that is it. If -- if Alabama is to be subjected to sue in connection with the operation of the railroad, it should first have forewarning that that is going to be true because it might be very well that the state would decide that it didn't care to engage in the business of interstate commerce by rail if that would subject it to sue. Now, that's one reason we say that there's been no waiver here. We've got no opportunity not to engage in it knowing what might happen to us.
Byron R. White: (Inaudible) of the grievance settled this by the Adjustment Board or not?
Wills C. Darby: We -- we bargained with our unions. We have always settled our disputes with them without having a decision to run it by the Board. I would -- that that's as far as we've had to go so far. If the question came, I'm sure that we do go. We have been to Chicago and had cases submitted to the Board. Fortunately, the union decided after we arrived in Chicago that perhaps we were right and they withdrew the grievances.But we didn't put up any fight about going. Nor did we allege that they did not have jurisdiction.
Byron R. White: Who went -- who went to the Board (Inaudible) the states? The union or you?
Wills C. Darby: The union went to the board in four more cases. We have also been to the board insofar as they -- a reopen of the contract. That would be the National Mediation Board as distinguished from the Railroad Adjustment Board. But we've also invoked their services.
William J. Brennan, Jr.: Could you tell me just briefly something of the state remedy where these injured employees you mentioned yesterday, there is a state remedy, is there?
Wills C. Darby: That is correct.
William J. Brennan, Jr.: And what -- what makes it sure that liability without fault (Inaudible)
Wills C. Darby: It is a work that the -- Alabama Supreme Court has described it as a Workmen's Compensation Act for state employees and it is liability without fault. It would -- it goes before what's known as the State Board of Adjustment. And the State Board of Adjustment as a -- was a statutory rule largely that it awards to employees in substance would be in the same amount as would be awarded for the same type of injury if they were a private employee.
William J. Brennan, Jr.: You mean, employee has to prove only that he was injured in the course of the employment?
Wills C. Darby: That would be the only proof required there.
William J. Brennan, Jr.: And nothing in the way of negligence or fault or otherwise?
Wills C. Darby: Nothing -- no question of negligence or fault. It is in substance the same thing that the United States has established for its own employees.
William J. Brennan, Jr.: But if I (Inaudible) -- except I gather from what you said that the schedule of award is the same schedule that would define private employment.
Wills C. Darby: That's correct. The -- the Private Act and something is made of that in our opponent's brief, they say that the Private Act says that it does not apply to persons engaged in interstate commerce which is true. But, it does not affect the remedy insofar as the state employee is concerned because there again, the Act does not apply to the -- to the state employee but the -- the remedy is set up through the Board of Adjustment and the amount is determined by those schedules. And of course they change from time to time always up.
Byron R. White: But this is an administrative remedy.
Wills C. Darby: It is an administrative remedy.
Byron R. White: And is it subject to court review?
Wills C. Darby: It is not subject to court review. Our cases have been brought --attempting court review but they have not had any success so -- so to speak.
Byron R. White: This is different from Workmen's Compensation.
Wills C. Darby: Well no -- Workmen's Compensation Act, yes it is different. The amount of the award is the same as the Workmen's Compensation Act. Its probably subject to about the same review as an employee of the Federal Government who is injured and seeks compensation under the Federal Employees' Compensation Act.
Arthur J. Goldberg: (Inaudible)
Wills C. Darby: That is the way we understand it and from the decision of this Court in the (Inaudible) case that it would not apply. Now, actually whether the Federal Government runs any railroads or not, I don't know. I know that they do have railroad engines and they run them on their arsenals and things of that type but whether or not they would be considered a common carrier that is taking good from other persons, we don't know. Thank you.
Earl Warren: Mr. Rives.
Al G. Rives: Mr. Chief Justice, may it please the Court. With reference to the matter that Mr. Justice White was discussing with Mr. Darby about this remedy under the State Board of Adjustment, that -- that Act says that the rules of Chapter 5 of Title 26 of the Court of Alabama as to liability are to be filed in claims for personal injury or death of the employees of the State of Alabama or of any of its agencies, commissions, boards, institutions or departments. And then Section 26 says that -- shall not -- that's the Workmen's Compensation Act, shall not be construed or held to apply to any common carrier doing an interstate business while engaged in interstate commerce. So they say that they are providing a remedy for the petitioners under the State Board of Adjustment Act which puts liability on the basis of liability under the Workmen's Compensation Act and the Workmen's Compensation Act specifically excludes coverage to employees of common carriers engaged in state commerce. So we're at their mercy, we have no means of review in any court as he admits.
Arthur J. Goldberg: (Inaudible)
Al G. Rives: I -- I understand that they voluntarily will pay him according to the schedule under Workmen's Compensation Act. And I think the maximum that can be recovered in any kind of a case under that Act is about $90, some odd $100. But, we take this position that -- that these petitioners are under the Federal Employers' Liability Act. And -- and this method of -- of compensating these employees is in violation of the Federal Employers' Liability Act. Section 55 of FELA says, “Any contract, rule, regulation or device whatsoever the purpose of which would be to enable any common carrier to exempt itself from any liability pleaded by the chapter, shall to that extent be void." So -- so this -- this scheme or method that they have devised is absolutely void according to the FELA. Now --
Hugo L. Black: (Inaudible) as though it said that a railroad operated by state when the railroad is up -- for coming here is operated by a state, an injured person shall be allowed to sue the state under this --
Al G. Rives: Yes sir.
Hugo L. Black: -- law?
Al G. Rives: Yes sir. That's our contention, Mr. Justice Black. And referring to Article III of the Constitution --
Hugo L. Black: Would you think that violated the Eleventh Amendment?
Al G. Rives: No, sir. I'll go into that. Referring to Article III of the constitution, the Eleventh Amendment in Hans versus Louisiana, your petitions raised jurisdiction of their case under FELA in the United States District Court on that portion of Article III of the Constitution that extends its judicial power to cases arising under the lowest of the United States. Your petitioners did not base jurisdiction on that portion of Article III that extends judicial power to controversies between a state and citizens of another state. Now, the Eleventh Amendment does not add to or take from the jurisdiction of Article III of the Constitution that extends the judicial power to cases arising under the laws of the United States. It merely undertakes to grant immunity to a state in a case of a citizen of one state suing another state. The Eleventh Amendment does not express it, gives such immunity to the state in a suit commenced by -- against the state by its own citizen. But, the State of Alabama cites Hans versus Louisiana. Well, Hans was a resident or citizen of state of Louisiana. And he brought suit against his own state. It was -- it was on some coupon bonds that -- that's been issued by the State of Louisiana. He -- he sought jurisdiction of the United States Court on the basis that his case arose out of the law of the United States. Because he was going to -- in -- in prosecuting his case, he was going to rely on that part of the constitution about the impairment of contracts to support his case. Of course Hans, this case did not involve a -- a case arising out of the laws of the United States or the Constitution of the United States. That provision in the constitution was never to be used by Hans in support of his cause of action. And that's -- should've the State of Louisiana invoke its con -- its immunity and -- and Hans won. There was no side question involved in Hans.
Arthur J. Goldberg: (Inaudible)
Al G. Rives: Well, I think our position would be much weaker.
Arthur J. Goldberg: (Inaudible)
Al G. Rives: Well, unless we go back to the matter of the State of Alabama when it accepted the Commerce Clause of the constitution completely surrendered its sovereign immunity insofar, that it related to the power of the Congress to regulate interstate commerce. And as we say, that power not only gives the Congress the power to -- to create a legal right but also it gives to Congress the power to create a legal remedy.
Arthur J. Goldberg: (Inaudible)
Al G. Rives: I think that's a matter of -- of immunity rather than -- than jurisdiction or of power. It seems to me like we -- we -- and -- I might say this Your Honor that -- that Hans versus Louisiana and none of the cases following Hans versus Louisiana, involved a case where the cause of action was created by the Congress under power that was delegated to the Congress by the states under the Commerce Clause. And -- and we claim that that's the difference between Hans versus Louisiana and our case and that our -- and that -- and the judicial power to our case comes in the first part of Article III that gives judicial power to a -- a case arising under the law of the United States.
William O. Douglas: (Inaudible)
Al G. Rives: Well, I think that -- that any rights that the State of Alabama would have under the Eleventh Amendment that you've mentioned, it -- it might be called constitutional immunity. But if it is Constitutional Immunity, Mr. Justice Douglas, in Petty, he said this, that when -- when the Court in 1793 held that a state could be sued in the federal court by citizen of another state citing Chisholm versus Georgia. The Eleventh Amendment was passed precluding it. But, this is an immunity which a state may waive. Now, we say this, that if -- if there is any immunity by virtue of the Eleventh Amendment, it could either be surrendered or waived. It's not dealing with a matter of jurisdiction. It's dealing with a manner of immunity. Now, as I say, we -- we contend that the State of Alabama did voluntarily surrender that sovereign immunity that it had from suit in accepting the Commerce Clause. But if it didn't surrender it at the time the State of Alabama accepted the Commerce Clause, then it surrendered it or it waived it later. When a few years ago the State of Alabama adopted an amendment to its own Constitution which authorized the State of Alabama to engage in this type of business and under that Constitutional Amendment, it delegated to the legislature of the State of Alabama the power and the authority to enact appropriate laws for the state to engage in this business and this -- and -- and the people of Alabama by Constitutional Amendment authorized this business. And then -- but they turned it over to the legislature by the amend -- on -- by the Constitutional Amendment. They gave all these power to the legislature then the legislature proceeds to enact statutes that says that the state will operate these -- these facilities through a States Docks Department. And if they do, it should be their duty to negotiate these working agreements on the Railway Labor Act, and that the legislative act says, "And operate this railroad as though it were an ordinary common carriage." Now, we submit that that action of the people of the State of Alabama who delegated it by Constitutional Amendment to the legislature and constituted it either a surrender of sovereignty and supported this manner of -- of interstate commerce. Or if they didn't surrender it, they certainly waived it and then we add on couple of the Constitutional Amendment and the Legislative enact the conduct of the State of Alabama under the Constitutional Amendment and the legislative enactment and what did they do? They -- here are the things they did. They operated the railroad as authorized as a common carriage in the interstate commerce. They actually entered into agreements under the Railway Labor Acts. They did all of these things that Mr. Darby as a representative of the State of Alabama admits even going to the National Railroad Adjustment Board with their grievances. Complying with the regulations of the Interstate Commerce Commission imposed written working conditions in the form of -- of a writing relating to the -- the conditions under which the employees would divulge information relating to -- to cases under the Federal Employees Liability Act. And suits -- all of these things may it please the Court we contend, constitute either a surrender of their sovereignty or their sovereign right of immunity as to --
William J. Brennan, Jr.: (Inaudible)
Al G. Rives: -- yes sir.
William J. Brennan, Jr.: (Inaudible) as I gather, there are other states that operate railroads, I know that California does.
Al G. Rives: Your Honor --
William J. Brennan, Jr.: What -- what have they done about it?
Al G. Rives: Here is what -- they -- the only thing that -- all I know is that -- that this Court and all the courts that had anything to do whether have held this state owned railroad in California under the Federal Safety Appliance Act, the Railway Labor Act and the Court of Appeals of California has held that railroad liable under the Federal Employer's Liability Act. Now, that is the only case --
William J. Brennan, Jr.: That's a state court (Inaudible) --
Al G. Rives: That's -- that's a state appellate court.
William J. Brennan, Jr.: Yes.
Al G. Rives: Now then Louisiana has held that railroad terminal is operated by the City of New Orleans. And the court of Louisiana has held that -- that there under the FELA and the one in Charleston, South --
Hugo L. Black: On what theory (Inaudible)
Al G. Rives: I -- as I recall, on the basis that they engaged in a -- in a -- as a common carrier by railroad interstate commerce they therefore subjected themselves to the FELA. I'm -- I'm not too sure about that but I -- I know that's true of the California case and I think it's true of Lou --
William J. Brennan, Jr.: (Inaudible) statutes, I mean statutory or constitutional provisions in those states which expressly consent the suit under the FELA?
Al G. Rives: I'm not prepared to answer that, Your Honor. You mean of about --
William J. Brennan, Jr.: I'm -- I'm thinking of California Railway (Voice Overlap) --
Al G. Rives: Well, California pleaded -- pleaded that they had no right to -- they had not consented to be sued, or couldn't be sued. They erased all of these things that the State of Alabama has raised it.
Tom C. Clark: Did California court (Inaudible)
Al G. Rives: Yes, sir. That was Maurice versus State.
Byron R. White: What's that? Is that citation in your brief?
Al G. Rives: Yes, sir, it's in our brief. It --
Hugo L. Black: Do you -- do you think if Congress had passed a law which forbids a state to run a common carrier in interstate commerce?
Al G. Rives: I can't answer that, Your Honor.
Hugo L. Black: As I understand your argument, it boils down on the waiver, maybe I was wrong with that, that it's this. Congress passed a law within his power saying if railroads engaged in interstate commerce be operated in certain way and subject to certain suits in courts and that thereafter, the State of Alabama knowing of this law which was the supreme law of the land and suppose it could be, even now, it may not be a good argument. But knowing of this law, it bought a railroad, took a railroad over and decided to run it, the state. And you're saying by that action, it -- which in whole that it waived this right, sovereign immunity or to be sued in the courts because it went into that business knowing and under the supreme law of the United States, it did said that there must be liability.
Al G. Rives: Yes sir.
Hugo L. Black: And that the argument -- and that here if there is not liability on waiver, the Act cannot be carried out at all.
Al G. Rives: That's right.
Hugo L. Black: That's -- (Voice Overlap) --
Al G. Rives: Except that -- unless they surrendered it when they accepted the Commerce Clause.
Hugo L. Black: I believe Judge Brown said that they admit it. What you have here was a case of liability without a remedy.
Al G. Rives: He said what -- what this case presents is a situation (Inaudible) would have a strange annulment -- anomaly of -- of clear legal right with any -- not any effectual means of enforcement.
Hugo L. Black: And what we have is a situation where Congress passed the law, attempted to fix liability on all common carriers without stating whether the state cannot. A state goes into that business.
Al G. Rives: That's right.
Hugo L. Black: Our question is whether by that we can say that it waived its right not to be sued under the Eleventh Amendment.
Al G. Rives: Well, we think they surrendered their sovereign right of immunity and they also waived it under the facts and authorities that we cited in our brief Mr. Justice Black.