Earl Warren: Number 41, Lovander Ladner, Petitioner, versus United States of America. Mr. Rosenwald.
Harold Rosenwald: Mr Chief Justice, may it please the Court. In this case, there was an indictment in three counts under Section 254 of former Title 18 of the United States Code. First count charged to the petitioner with conspiring with another person named Cameron to violate Section 254 by means -- by conspiring by means of deadly and dangerous weapons to assault two agents of the Alcohol Tax Unit of the Treasury Department. The second count alleged that at the same time and place, the petitioner and Cameron actually did assault one such agent named Reed and used -- assaulted him by the use of a deadly and dangerous weapon to wit, a -- a loaded shotgun. The third count charged a -- a similar assault with loaded shotgun against a second Alcohol Tax Unit agent named Frost. The second count stated that the federal agent who is the victim of the assault was seriously wounded. The third count simply alleged that the federal agent there involved was wounded. The defendant -- the petitioner rather, was arraigned, placed on trial in the District Court in Mississippi and pleaded not guilty. He was found guilty by the jury on all the three counts. And on the same day, he was sentenced to two years on the first count to be concurrent with the sentence on the second count for ten years on the second count and the ten years on the third count was sentences under the second and third count to be consecutive or a total of 20 years. There was no transcript of the evidence at the trial, whatsoever. There was no appeal taken from the conviction at that time. There is nothing of evidence in this record before the Court. There is, that crept into the record someway, an affidavit taken before a credible investigative agents, which I don't know whether it was in evidence in the trial it shouldn't have been and it was rejected by the Court of Appeals as having any value bearing on this case. In the -- after serving more than ten years, the petitioner filed a motion under Section 2255 of Title 28 to correct this sentence. This motion was filed on January 22 of 1955. A -- a motion alleged that the sentences under the -- that the offenses charged in the second and third counts were only a single offense, and therefore the sentences under those two counts should not have been consecutive. The motion doesn't clearly state but it surely implies, that at the time of the offense, the -- a gun was used but was only fired once. And apparently it is claimed that the -- this was a shotgun with pellets scattered and the one shot struck the two federal agents. The motion of the petitioner was denied by District Judge Mize on the grounds, stressed that he had a personal recollection of more than one shoppers-by although the crowd that it occurred more than ten years prior to that time. It made that there is no transcript taken. And he said that in any event, each count of the indictment alleged the separate offense meaning the second and third count alleged separate offenses because separate victims of the shot were named. He also made a statement that the motion had been denied on a prior occasion and cited as his authority to that statement, his own decision overruling such a motion filed by the petitioner's co-defendant and it's quite clear that the petitioner himself had never filed a motion to before it. The Court of Appeals for the Fifth Circuit heard the appeal that was filed by the petitioner. He proceeded in the form of progress in the Court of Appeals. And the Court of Appeals affirmed the judgment of the District Judge, rejected the recollection of the District Judge as having any bearing on the question, found no evidence in the record worthy of consideration by the Court that there was more one shot fired and treated the case on the basis that the motion of the petitioner clearly stated that one shot and one shot alone was fired and that that one shot resulted in the wounding of these two federal agents. And the Court of Appeals held that the one shot striking the two men constituted two offenses under Section 254. And this Court granted certiorari, and the case is here as we submit on that narrow question whether a single shot of a shotgun which strikes two men can constitute more than one offense under Section 254. The Government has stated the question quite differently and we are in complete disagreement with the statement of the question as it's presented. Government statement should be a shot was fired on the same day. There are two federal agents wounded on the same day or some safe language and to ignore the critical question in the case which is whether the single discharge of a shotgun can constitute more than one violation of the statute.
Speaker: They could mention the evidence where there's one shot or ten.
Harold Rosenwald: Well, Mr. Justice Harlan, I --
Speaker: I think it --
Harold Rosenwald: I think it may --
Speaker: (Inaudible)
Harold Rosenwald: -- it may make a difference --
Speaker: (Inaudible)
Harold Rosenwald: He has a repeating gun or machine gun that requires only a single impulse which Mr. Justice Frankfurter used the phrase in the recent case then it might well be that that would only constitute one offense. It's clearly versus the strongest case we can have. There is only one -- one shot -- and I would incredibly put the case on that narrow ground.
Charles E. Whittaker: And what is the shot of the shotgun?
Harold Rosenwald: I stand corrected, Mr. Justice Whittaker. One discharge of the shotgun and a number of bullets, pellets or whatever is in the -- attracted to it, using a shotgun scattered and struck two people. Now, in this case, unlike the two preceding cases, we don't know delicate problems of state and federal relations. Nor do we have is like to see the matter any constitutional questions where it come here with a simple matter construing a statute of United States Congress. The statute has two clauses. The first clause makes it an offense to forcibly resist, oppose, impede, intimidate, or interfere with certain designated federal officials referred in the prior section of the code or to assault any such official on account of his official duties. There are six things that are forbidden. The second clause of the statute proscribes the use of a deadly or dangerous weapon in the commission of any of the six forbidden acts mentioned in the first clause of the statute and prescribes a 10-year penalty for violation where the dangerous weapon is used and there are three years under the First Clause. Now, I think we can almost dispose of this case on the face of the statute itself without going beyond it or any extraneous resistance. The Government argues and the two courts below seem to hold that this case -- that this statute condemned an assault with a dangerous weapon. They completely ignored the other things forbidden by the statute. Now, we have to test that the decision of the court below against this statute as a whole, resistance opposing, impeding, suppose that the present forcefully holds the door against six federal agents who were attempting to enter a room in the performance of their duties. That this Court say or where the court below had said under those circumstances, that there were six separate violations of the statue or I suppose that instead of using a simple force in case of arms, the petitioner here could wave the clock or the butt of a gun in other words deadly or dangerous weapon, of course, make it a knife as long as it's deadly and dangerous. And he didn't point it at anybody, he didn't stab or strike anybody with this weapon, but he certainly resisted and opposed and perhaps added a few threats. And in such a case if there were ten agents, would there be ten violations of the statute? Would the man be properly sentenced for ten years for each agent who was affected by his unlawful act, perfectly willing to agree with the -- would have violated the statute for how many times. Once for each agent affected by what he did? Now in this case on the face of the statute when the petitioner held his shotgun and before he fired, he's violated the statute. He committed an assault and pointed at them, I assume they knew what was happening. But in any event, he pointed it at them, he made ready to fire, and his offenses should make this complete then and there. He violated the statute. What happened to those bullets if they hit two federal agents with a stick, of if they hadn't hit any of them, he's violated the statute. But I don't think he violated at more than once because the statute says it should be upon the use of a dangerous or deadly weapon and he used it and that he might, it seems to me clear from the face which said to himself was the unit of prosecution in this case. The use of the gun in whatever way may have been used. Consequently to, it's not material.
Felix Frankfurter: But the statute -- the statute seems to imply distributed use of the various -- some position that you may. Then -- then whoever in the commission of any of the act described therefore different acts may have different consequences or be committed in the different contexts.
Harold Rosenwald: The statute -- that that's true. The statute permits the offense to be committed even without doing anything, it does any harm. I mean --
Felix Frankfurter: So if he takes your cloth and hits successively two agents down the head, in your view, is that one act or two?
Harold Rosenwald: In my view, that's clearly two acts, whether it's two offenses depends on another question which isn't raised in the same question Mr. Justice Harlan suggested --
Felix Frankfurter: Now --
Harold Rosenwald: -- existed. Is this really one transaction or two transactions? We are -- we don't have to decide that in this case.
Felix Frankfurter: But I gathered --
Harold Rosenwald: There's only one act.
Felix Frankfurter: I gathered from your argument that since mass consequences of a single impulse or act, only is the -- a constitutional commission of only one offense as to some aspects of the various conducts proscribed by this statute. Therefore, the face of the statute indicates that a single such impulsion means -- can mean only one single offense. Wasn't that the tenor of your argument?
Harold Rosenwald: That's the tenor of my argument, one on the face of the statute. In other words, the consequences or the effect or result of what the petitioner did has no bearing on the measurement of his crime. The crime was completed when he did the act which is forbidden and that was a use of a deadly weapon. And once he did that, we don't follow the bullets through the air to find what they struck if anything, because it's not material. This violated the statute and that's the end of it once he did that act. Since, there was, as I say, only one single act. What the -- there is such raised also in this case the question that's been before this Court several times in the last couples of years of the construction of a statute which is not clear and for this purpose I'm willing to assume for the sake of argument that the Government's position, the position of the courts below is correct. That this statute simply said whoever resorts to the dangerous weapon and we will assume that here you may take into account the consequences or at least notice it could be good (Inaudible). In such cases, similar cases, this Court has stated several times that whether or not multiple punishments were intended to the -- to be imposed or may be imposed with the consequences of a single criminal act, depends upon the intention of the Congress in adopting the statute. And in determining there the intention we look at such, helplessly find or may find in the legislative history of the statute. The logic -- logical problem is too difficult. It leads us to frequently, to an impasse. And whether one blow constitutes two more offenses under the common law, whether one shot that strikes two people is one murder or two murders is a matter that's been the subject of philosophical consideration where the courts (Inaudible) and it leads into a great quagmire of logical difficulties and fine distinctions that this Court has supported completely in such cases as Bell against United States and Prince against United States and the C.I.T. Credit Corporation case and has held that this is really a question of what Congress intended and the look -- the primary intention and if there is no clearly stated intention to impose multiple punishment for a single criminal act then we resolve the doubts in favor of the criminal defendant. Now, we have examined in our brief the legislative history of Section 254. It's interesting but not very illuminating. The statute was introduced at the request of the Department of Justice, and in 1934, there was a letter of the Attorney General to both Chairman of the House and Senate Committees and the judiciary respectively which is set forth -- and that is set forth in full in my brief. And in that letter, the Attorney General requested that the Congress adopt general legislation to protect federal agents and he cited specific statutes already in existence, one of which made it an offense to wound the federal officer. From this, we argue that the Congress said before it a suggestion at least or at least it was called to their attention that they might make an offense to wound the federal officer, and thereby, the consequences of the act condemned would be more significant than they are here but that, nevertheless, that course was empowered. There's nothing in the statute about wounding. The statute reads simply as it reads. Now, at -- there's very little more the debates in -- in the Congress are not very helpful. The -- there was a committee report referred to in my brief. It does nothing more than paraphrase the statute as it was firmly written. And I think the legislative history is -- is frankly helpful but I can't -- to say it's overwhelmingly imposed that Congress had any specific intention in the matter before the Court. Now, of course, in these cases when statutes of this kind are under consideration by the Congress, nobody really says, “Well, now suppose if somebody shoots a shotgun and hits two people with the same shot, and this have no such specific help in this case and that the same suggestion that there was no intention, at least to deal with the consequences of the condemned act. Now -- but in the Prince case, it was probably more helpful legislative history but the rule stated in both Prince and Bell is that unless the legislative history, as I read those cases, unless the legislative history shows an intention to impose multiple punishments, the Court will not impute that intention to Congress because there would be penalties are too harsh and I cited a number of cases where multiple punishments were imposed in my brief. It shows just how harsh they can, they can be terrific. I did refer in the brief to the legislative history of Section 111 of -- under the 1948 revision of the criminal statutes, Title 18, Section 254 involved in this case and Section 118 of former Title 18 were combined to form this new Section 111 of Title 18 which covers the ground at the present time. And that this Section 118 that was combined with 254 I trace back to the Criminal Code of 1909 and to the original connecting of that statute in 1905. That statute for which and was specific statute to -- to 254 and covered only employees of the Bureau of Animal Industry of the Department of Agriculture. And in its original version, that statute provided that it was an offense to discharge any deadly weapon at any officer or employee of the Bureau of Animal Industry or to use a deadly or dangerous weapon in resisting them. And the offense was clearly defined in that statute as discharging any weapon. In other words, the offense was done when the weapon was discharged, that was when the consequences were not material. I submit that that statute suddenly goes where it's about discharging a deadly weapon were dropped when the statute was included in the 1909 Criminal Code. And I suggest in my brief that the reasons for the omission is that the words were considered redundant and really covered by the words “the use of a deadly or dangerous weapon” that the two statutes Section 250 -- no that we can and therefore infer that it was understood by Congress in adopting the Criminal Code of 1909, but the statute meant what it originally said that it's the use of the weapon or the discharge of the weapon that was condemned, that the consequences were not material and you didn't look to them and this statute being combined with 254, the two of them should be construed in the same way and therefore, 254 means just what 118 meant, and the offense is simply the use of the dangerous weapon without regard to the consequences. I've been discouraged by the statements of this Court in the Prince case and in the Bell case not to refer to cases decided under other statutes and yet it seems that this is always done so I could mention just a few of them. The leading one, I think, is the Bell case in which this Court held that the transportation of two women at the same time in interstate commerce, in the same vehicle and on the same occasion for immoral purposes constituted only one violation of the Mann Act, that we don't count the number of victims of the unlawful conduct, that the deed is single and the offense is single. The Government used that the words in this statute before the Court was singular whoever assaults any person. They were just as singular in the Bell case, the words in the Mann Act, “whoever transports any woman -- any woman or girl”, it is customary in statutes to use single language of -- of -- in the singular, and that was not so controlling in the Bell case. The bank robbery cases have some relevancy, I think. This Court held in the Prince case that Congress didn't intend to make it a separate offense to enter a bank and the felonious purposes and also separate offense to consummate the purpose by robbing the bank. That was all part of the same criminal transaction and only one offense or the statute was meant to cover alternatives and view the prosecutor in Court pick the alternative. We're not dealing, of course, in anyway with the validity of the indictment here. An indictment was all right. The trial was all right. The question comes up on a matter of sentence. The prosecutor could frame his charge in a variety of ways, in the alternative in effect would provide for the exigencies of proof. But the question is how many offenses after all the evidence is in, how many offenses were committed? The bank robbery cases which have a real bearing on this case are two decisions, Lockhart against United States and Dimenza against Johnston decided by the Courts of Appeals, I think in the Sixth and Ninth Circuits. And dealing with the clause of the bank robbery statute that makes it an offense in the process of robbering -- robbing a bank to put in jeopardy the life of any person and when the bank robber robs a bank with an armed -- with -- with a deadly weapon and puts in jeopardy the life of any person, that is a 25-year offense under the bank robbery statute. But if he puts in jeopardy the life of several persons, it is not under these two cases more than one offense. Now, I think that those cases have -- have a very important bearing on the case we have here because the way the statute is written, if petitioner had merely threatened with the use of a gun several federal agents, he would have been in almost exactly the position of the man in these two cases who walked into the bank that committed a robbery and put in jeopardy the life of more than one person and that in these two were recent cases is held to constitute only a single offense.
Speaker: Would you mind reading the names of those cases?
Harold Rosenwald: Lockhart against United States, Dimenza and versus Johnston, both of which, Mr. Justice Harlan, are cited in my brief. The mail bag cases start with the important decision of Ebeling against Morgan. Ebeling against Morgan held that it was a separate offense to cut each mail bag where they were all cut at the same time under a statute making it an offense to cut any mail bag with the intention of stealing the contents. Ebeling against Morgan is a rather harsh case. There they were to be sure a successive act and the case that Mr. Justice Harlan put to me at the beginning of my argument is answered perhaps by Ebeling against Morgan answers of the day of their decision. There the man probably -- well, apparently went through the night and cut the bags immediately one after the other. And one might think that that was one criminal transaction and only one violation of the statute and which went for the authority of that case. But it is a rather an old case, and I think it's somewhat inconsistent with some of the later cases if the Court which has decided. And I would like to see it overruled. In effort to escape that case, the Court of Appeals for the Ninth Circuit in Kerr against Squier held on to another clause of the same statute and it was only one offense to steal three mail bags at the same time and made the very unconvincing distinction that you could steal three mail bags at the same time but you -- but to cut them you had to make separate motions. Well, I had seen some of these mail bags and I don't think I could let three of them at the same time. I think that would be even hard in cutting three of them. It's certainly more of muscular effort, but the case is very easily explained. Somehow, Ebeling against Morgan seems a little too tough to follow and so they made a distinction which is not very convincing. The common law doctrines are much less helpful than the cases under other federal statute because they don't help us in determining what the intention of Congress was in enacting this statute. And nevertheless, in addition to that, the common law cases were in great conflict. I do believe that the simple type of situation where a person fires a gun and strikes two persons with it, that the majority rule would hold that that is indeed two separate offenses, but there is authority tot the contrary. On the other hand, where there is negligent homicide, the automobile cases the majority rule, quite inconsistently it seems to be that, there is only one offense if someone operates an automobile with -- in a criminal way and kills more than one people that is only one offense under the majority rule. The Government has cited the minority decisions and doesn't mention the majority decisions in -- in the Government's brief.We wouldn't know if that is the minority rule. I would like to reserve the remainder of my time for rebuttal.
Earl Warren: You may (Inaudible) Mr. Sand.
Leonard B. Sand: Mr. Chief Justice, may it please the Court. Counsel for petitioner and the Government on agreement as to what constitutes the basic issue in this case and that is to discern the intent of Congress. What has Congress made the allowable unit of prosecution under this statute? This case is therefore, free of any problems of -- of constitutional law, of double jeopardy, of consecutive trials such as represented in the two preceding cases. Nor is there involved here as they were -- as there was in the Prince case decided last term whether Congress, whether earlier steps which later were consummated in a finally completed crime, are merged with that final crime. This is a punishment case. An issue now before this Court is whether Congress intended that a defendant, hereby, a single discharge of a shotgun releasing the many shotgun pellets who assaulted two federal officers and who intended two assault two federal officers on account of the performance of their official duties because the statute requires that there'd be that specific intent as to each of the federal officers assaulted whether such a defendant might be punished more severely than one who assaults only a single officer. To discern congressional intent, we begin of course with -- with the statute itself. And the reading of the statute, the Government submits, discloses that the unit protected, the individual federal officer, the basis for federal jurisdiction, the performance by that officer of his official duties and the intent of the defendant required by the statute to be a specific intent to assault that individual federal officer for a reason specified in the statute. These are all personal and individual as to each federal officer. And, therefore, as a matter of statutory construction, the assault on each officer on account of the performance of his official duties is accepted offense and the number of shots fired is immaterial. This the Government submits, appears from the language of the statute itself but if the language is ambiguous, we look to the legislative history and the Government shall attempt to show that that legislative history also reveals that the intent of Congress was to protect each and every federal officer and that therefore that is the unit of crime.
Speaker: What -- is there a record in this case?
Leonard B. Sand: The record in this case consist of -- of the -- of the --
Speaker: (Inaudible)
Leonard B. Sand: -- indictment.
Speaker: -- ( Voice Overlap) that they walked into the room and saw three federal officers and shot at them and with one bullet or whether you heard a resonance (Inaudible) shots and there has to be a the federal officer in there, there's three federal officers in there.
Leonard B. Sand: But, we -- we know from the indictment -- from the allegations of the indictment something of the facts in this case. Apparently, what happened is there was a raid on the steal by Alcohol Tax Unit officers. And some persons there were arrested and the federal officers were taking the arrested persons to some place to confine and to arraignment. And the two federal officers proceeded next to each other on the front seat of the automobile. The defendant Ladner and his co-defendant came to this point and the indictment alleges with loaded shotguns in (Inaudible) assaulted these -- these federal officers. This -- this is as -- as much of the fact as -- as we've known. The Government does not rely on the -- on the affidavit which is printed in the record in which was introduced at the first trial but was introduced apparently for purposes of teaching the witness. We -- we do not as the Court -- as the Court of Appeals have not, we do not rely on that. Realizing that -- that he must seize upon some element which will unify, what would otherwise, under accepted common law concepts, be two crimes. Petitioner seizes upon the last clause of the statute with -- which relates to the use of a -- of a deadly weapon. But clearly the purpose of that clause is merely to increase punishment. No separate crime is defined in the -- in the second clause of the -- of the statute. This is -- the provision with respect to use of a gun in this statute is exactly parallel to that in the bank robbery statute and in other statutes and it has been held and recognized by this Court and in Holiday against Johnson and other cases that that does not constitute a -- a separate crime but merely increases the punishment for the crime which is defined in the earlier provisions of the -- of the statute.
Felix Frankfurter: Well you have to -- if you don't charge that, the consequence defined by the statute doesn't follow and if you do charge it, you must prove it don't you?
Leonard B. Sand: Well, if --
Felix Frankfurter: Simply -- simply you can -- you can't -- you can't get that penalty, you can't invoke that penalty unless you make it part of the offense. That -- I don't see what -- what cash you're getting out of that argument, one way or the other.
Leonard B. Sand: Well I -- I -- it's -- it's a negative argument, Mr. Justice Frankfurter. I'm merely -- I am merely rejecting the contention that the crime is defined in this -- in the second clause.
Felix Frankfurter: Not so, which this fellow is convicted is the first and second Clause not to be sentenced upon and that's what the Government proved and that's what it stands out, doesn't it?
Leonard B. Sand: That -- that the Government proved that he assaulted federal officer on account of the performance of his official duties.
Felix Frankfurter: With a deadly weapon.
Leonard B. Sand: Each, with a deadly weapon
Felix Frankfurter: All right.
Leonard B. Sand: Each officer with that specific content. The -- the legislative history of the statute also supports this concept that the later provision is -- is but a -- a penalty provision. And the letter of the Attorney General through the Chairman of the Senate Judiciary Committee which led to the enactment of the statute which is set forth at pages 14 and 15 of petitioner's brief makes clear the purpose of Congress to protect the individual federal officers. This is not a statute such as the abstraction of --
Felix Frankfurter: Are you suggesting that they didn't want him shot wholesale?
Leonard B. Sand: Yes. That it -- it made no difference that the Federal Government whether -- whether there was one shot or two, it made a difference was -- was there a wrong directed at -- at each and every federal officer that the letter refers to the need for the protection of -- of federal officers and employees, and the likes, that several had been assaulted in the course of the year. There are statutes where -- where Congress speaks of -- of the obstruction of the mail or --or some other intangible concept of -- of that (Inaudible) This is not such a statute. This deals with -- with human beings and --and whether somebody who intends to inflict an injury on -- on more than one person can be punished more severely because of the wrong inflicted on -- on the second person.
Hugo L. Black: Suppose there were 10 officers that sometimes they go in a team and one man, (Inaudible) they were all together and he grabbed one of them and resisted him. Could he be tried then for 10 different offenses?
Leonard B. Sand: Well, if --if he resisted the -- the single officer --
Hugo L. Black: Well, when he's resist them, all -- all were together. Would he have to shake each one of them separately it says, who shall forcibly resist, oppose, impede and attempt, intimidate and all of these. Suppose he just ran from them. He'd impede them.
Leonard B. Sand: Well, I say, in the first instance, that we are not operating under those provisions of the statute. I think the problems with respect to acts of resistance, opposition and intimidation are more serious. I -- I think it's more difficult there to determine the -- the allowable unit of crime.
Hugo L. Black: But that's quickly as broad, if you will put in the test results.
Leonard B. Sand: That -- no, Mr. Justice Black. I -- perhaps I haven't misspoken myself but the -- the clause of the statute which appeared at page 2 of the Government's brief, which is involved in this case is not the first clause but appears on lines five and six of the statute, “Or shall assault him on the account of the performance of his official duties.”
Hugo L. Black: There wouldn't be any difference within and the three if -- if there's 10 officers there, your rule would apply, I suppose, just the same whether it's on a one clause or the other, wouldn't you?
Leonard B. Sand: Well, my rule would apply with this -- with this limitation. Before a jury could convict as to any particular federal officer, he would have to find that there was an act of -- of force or violence or -- or whatever it is.
Hugo L. Black: Or resistance, or opposition.
Leonard B. Sand: Yes, sir directed at that federal officer for the reason in the statute. This would then be a matter of proof for -- for the jury to determine at the trial as matter of pleading and indictment which alleged that acts of resistance as to nine or 10 or whatever the -- the number might be, would -- would be sufficient as a matter of pleading There'd be questions of -- of proof for the jury to resolve at the trial.
Hugo L. Black: But if they would get out of there, he'd certainly be found to resist them all.
Leonard B. Sand: He -- he might in the -- in the given case.
Hugo L. Black: He might not see them all but if he's trying to impede them by just --
Leonard B. Sand: He -- he might and it's perfectly reasonable for Congress to say in the case like that -- that where you're -- you're doing this wrong, it's directed at these persons the number of persons at whom you've directed the wrong is -- is a -- is a consideration in --
Hugo L. Black: I understand --
Leonard B. Sand: -- in deciding how seriously your --
Hugo L. Black: I understand that's --
Leonard B. Sand: -- you offense is.
Hugo L. Black: -- officially done. I'm just thinking about the construction of the statute. I would think if -- if we couldn't construe the (Inaudible) differently, could we?
Leonard B. Sand: I'd --I'd -- in certain cases, I think -- I think there might -- that there are differences between -- between the provisions with respect to assault as they appear in -- in the statute and with respect to -- with respect to the others. For instance, with respect to resistance, the -- the elements in the first two statutes there's a requirement that it'd be while he was engaged in the performance of his official duties, perhaps there, there's no requirement that -- that be the reason for his acts if in fact he is -- he is performing official duties. When it comes to assault, there the assault has to be on account of the performance of his official duties. He has to know that the individual he's assaulting is a federal officer and he has to -- the reason, the motive and the intent has to be to assault him for this specific reason. And so it becomes a very individualized matter and -- and the -- the -- it -- it would not be possible under the statute, I think as a matter of proof to a jury, to --magnify the -- the number of offenses beyond reason.
Earl Warren: Suppose -- suppose a fugitive ambush to whole posse of federal officers and -- and stood them up with a -- with a shotgun at the whole outset. He said, “Move around here now until I can get away.” He'd be assaulting every one of them, wouldn't he?
Leonard B. Sand: If --
Earl Warren: (Inaudible)
Leonard B. Sand: -- if he had the ability it -- it --
Earl Warren: He had a shotgun -- he had a shotgun and they would put their hands up --
Leonard B. Sand: And there not people -- there were not so many people there that he could in fact have -- have inflicted bodily injury on them all. It's a requirement of -- under the common law concepts of assault, that there'd be at least to be present there, at least the apparent is not the actual ability to -- to injure to inflict bodily injury on all those present.
Earl Warren: Where's the --
Leonard B. Sand: If I take my fist for a month.
Earl Warren: -- let's take a machine gun. That -- that --
Leonard B. Sand: Yes.
Hugo L. Black: -- do it, wouldn't he?
Leonard B. Sand: Yes -- yes it would and --
Earl Warren: Could you -- would you have as many -- as many offenses there are in the posse or if you didn't, is there any place you would have to stop --
Leonard B. Sand: Well --
Earl Warren: -- in order to make this reasonable and enforceable.
Leonard B. Sand: Well, as -- as a matter -- as I say it's a matter of pleading. I -- I think that there could be as many counts as -- as there -- as there were --
Earl Warren: So, that's what I want to know. Yes.
Leonard B. Sand: As a matter of pleading. As a matter of --
Earl Warren: You include in, a limitation on that.
Leonard B. Sand: Well, the -- the limitation arises from -- from the requirements of -- of the law of assault. And that is that -- that there must be an intent with respect to the person assaulted, must be under such circumstances as to create a reasonable apprehension upheld. And there must be the -- the apparent if not the actual ability to -- to -- to inflict the injury. If all those are present, if --if this -- this man with the machine gun could, in fact, have mowed down to -- these are colloquial expressions -- all of them that then -- then even as matter of proof. Congress had as much right to protect the tenth or the eleventh federal officer from an assault as -- as the --
William O. Douglas: What have you taken from distinguishing this case in the Bell case?
Leonard B. Sand: Well, in the -- the Bell case, the -- the Court was dealing with -- with the Mann Act. The constitutional justification of which was interstate transportation and the Court specifically noted that.
Speaker: Didn't you put anything to license? It's noted at the passing, and ended with the conclusion that the statute is ambiguous although it ought to be strictly construed. What fact is present here that isn't in the Bell case?
Leonard B. Sand: The -- the legislative history was --
Speaker: What does the legislative history show?
Leonard B. Sand: Well -- well, the legislative history shows that there was an --
Speaker: It adds anything to the statute.
Leonard B. Sand: Well, I -- I think it's consistent with the statute. I think -- I think and what it shows is that the intent was not to protect, not to protect interstate commerce which justification required (Voice Overlap) --
Felix Frankfurter: It didn't require many ladies to protect the interstate commerce or work -- many ladies required -- were involved in the protection of interstate commerce. One would be enough, isn't it?
Leonard B. Sand: Well, yes. One -- one would be enough but -- but, nevertheless, because this was the -- the basis for the statute that the Court could not say that although Congress could only pass the statute under the -- under the Commerce Clause and could only -- could only protect the interstate commerce and could not because it lacked -- there was no basis for federal jurisdiction, protect the -- the individual women involved.
Felix Frankfurter: I should think in the --
Leonard B. Sand: Disregard that.
Felix Frankfurter: There's a line of house groups. Is that a one then two, I should think that applies to the Mann Act.
Leonard B. Sand: He -- Here, the fact was for federal jurisdiction, of course, is each individual federal officer and the legislative history bears out the fact that the intent of Congress was to do just that, was to protect each -- each federal officer. The case such as the Dimenza case and the -- the other lower court case which dealt with the bank robbery and -- and jeopardizing -- putting lives in jeopardy while robbing a bank are also distinguishable even if it be conceded, argue and of those cases are properly decided because there, the unit being protected was the bank and the provision there construed was as -- as the second clause here an aggravating provision. Finally, the Government respectfully calls this Court's attention to the question presented by this case as to the availability of collateral attack if it be deemed that the number of shots fired was material. There's no allegation here if procedural unfairness or lack of jurisdiction on the part of the trial court, petitioner is saying, “I have a defense. I only fired one shot and the statute requires two. I didn't apparently raise this below. I didn't take an appeal but permit me now, on -- on collateral attack although nothing subsequent has -- has occurred to change the -- the legal issues involved to attack the judgment and to send all of them enlarged in similar cases, the Government submits that the judgment is not a sale but on collateral attack for those reasons.
Earl Warren: Mr. Rosenwald.
Harold Rosenwald: I just want to deal with the Government's last point which isn't conceded in my brief. I made a statement in the brief which is quite -- was a frivolous act. I -- we don't think that there's any validity at all. That this Section 2255 motions the Court has considered repeatedly or excessively sentences have been imposed and in all of those cases the question could have been raised on appeal. And it is the -- my brief cites a considerable number of cases both in this Court including the Prince case last term and the Bell case itself where the question of an excessive sentence was raised on a motion under 2255, (Inaudible) which was -- to reach an effort to review on habeas corpus the question whether the petitioner was guilty of the offense. There is no question of guilt or innocence involved here. We're attacking only the sentence. The petitioner was guilty, we have held question about it. That the -- the cases in my brief where the matter was raised to -- on -- on actually on habeas corpus in Morgan against Devine and Johnston against Lagomarsino, Dimenza against Johnston, Kerr against Squier, under 2255 United States against Hayman, the Prince and Bell cases and the Lockhart case and the Robinson case in the Courts of Appeas.
Earl Warren: Mr. Rosenwald, we -- well the Court thanks you for accepting this assignment and for the service you've rendered. It is a real public service.
Harold Rosenwald: It's very kind of you, Mr. Chief Justice. Thank you.
Earl Warren: Mr. Sand, of course, we -- we express our same appreciation to you for your representation of the Government.
Leonard B. Sand: (Inaudible)


William H. Rehnquist: We will hear argument first this morning in No. 87-1097, Otis R. Bowen v. Georgetown University Hospital. Mr. Lazarus, you may proceed whenever you are ready.
Richard J. Lazarus: Thank you, Mr. Chief Justice, and may it please the Court: This case concerns the authority of a Federal agency to promulgate a retroactive rule. Our position can be simply stated. A retroactive rule is generally valid unless the agency's decision to impose the rule retroactively is arbitrary and capricious. Unlike the D.C. Circuit, we do not believe that the Administrative Procedure Act bars virtually all retroactive rules regardless of their reasonableness, nor do we believe that the Medicare Act prohibits all retroactive cost limit rules in every circumstance. Instead, in our view, retroactive cost limit rules are valid in two different ways under the Medicare Act, each sufficient by itself to support the rule struck down by the lower court.
Sandra Day O'Connor: Mr. Lazarus, I guess if we were to find that the Medicare Act itself prohibits retroactive rulemaking in this instance we wouldn't have to go on and reach the APA question, would we?
Richard J. Lazarus: Technically the Court would not have to. We would urge the Court to address both questions. The Administrative Procedure Act issue is by far the more important issue decided by the lower court. The D.C. Circuit is the most important circuit for administrative law questions, and it was decided by that court, and there's no reason why the Court logically has to address one rather than the other. So the Court technically does not have to, but we would urge the Court to, and for the reasons in our brief, present, we don't absolutely think the Medicare Act itself does prohibit such rules. The retroactive rule challenged in this case--
Harry A. Blackmun: But still, the answer to Justice O'Connor's question is in the affirmative.
Richard J. Lazarus: --Yes. The Court does not have to, we would urge the Court. The retroactive rule challenged in this case finds its genesis in the 1981 determination of the Secretary to make a wholly prospective change in the Medicare Act cost limit rules. At the time relevant to this litigation, the Medicare Act allowed for reimbursement of providers of health services for the reasonable costs of their services to Medicare beneficiaries. To that end, the Act authorized the Secretary to promulgate cost limit rules based on the estimates of the costs necessary for the efficient delivery of health services. In 1981, the Secretary determined that his then-existing rule regarding wage costs promulgated in 1979 required adjustment. The database upon which that rule was based did not accurately reflect differences in wage costs in different parts of the country. As a result the rule unfairly disadvantaged certain providers in certain geographic areas. Those providers were receiving inadequate reimbursement under the Medicare Act while other providers were receiving excessive reimbursement. Because the Secretary considered the modifications necessary in the database to be of a minor technical nature, he published the final revised rule without first providing for public notice and comment. Respondents filed suit, and in 1983 a Federal district court invalidated the 1981 rule on procedural grounds.
Antonin Scalia: Mr. Lazarus, before you go further with the facts, I presume that the Secretary could have amended the rule in such a fashion as to eliminate the unfair disadvantage without eliminating what he regarded as the unfair advantage, in which case there would have been nobody to challenge the retroactive rule.
Richard J. Lazarus: The Secretary could have approached it all kinds of different ways. The question is--
Antonin Scalia: Well, I mean, you mentioned that it unfairly disadvantaged some people and unfairly advantaged others. All we're really fighting about here are the people that you assert it unfairly advantaged, because you could have taken care of the people that it unfairly disadvantaged.
Richard J. Lazarus: --Well, not actually, I think, under the way that the respondents would see the case. They would suggest that any kind of retroactivity, and if the Secretary is without authority to make any kind of retroactive changes they would have been, in other words confined to the 1979 rule, the Secretary should have assigned recoupment from the others.
Antonin Scalia: But the Secretary could have issued the rule eliminating the unfair disadvantage, not the unfair advantage, and there would have been no one to challenge it.
Richard J. Lazarus: No, it was the same rule.
Antonin Scalia: I understand it. But the Secretary could have split it in two and said--
Richard J. Lazarus: What, provided two different rules for two different... the Secretary is certainly within his discretion to announce one rule applying to the entire--
Antonin Scalia: --My point is that we don't have to find for you, in order to enable the unfair disadvantaged to be eliminated. All we're fighting about here is the unfair advantage.
Richard J. Lazarus: --Well, I think we're actually fighting about, about both, particularly to the extent that we're dealing with the broader questions of the Secretary's authority in the future to promulgate retroactive rules. If the Secretary in the future decides that he is incapable of promulgating a retroactive rule, then other providers in this case who relied justifiably on the 1979 rule would, I think, not have redress, and instead the Secretary would have had to seek recoupment against them.
Antonin Scalia: The Secretary can do all sorts of things, so long as it doesn't hurt anybody.
Richard J. Lazarus: Right. And the question still remains whether or not it's within the Secretary's discretion, I will grant you, to decide to treat them all alike, under one rule. The District Court invalidated the rule concluding, the 1981 rule, that the APA required prior notice and comment. The District Court, however, specifically declined respondents' request that it order the Secretary to reimburse them pursuant to the 1979 prior rule. The court instead remanded the matter to the Secretary for further proceedings. On remand, following a period of notice and comment, the Secretary promulgated a new rule in 1984 that was identical in substance to the 1981 rule.
John Paul Stevens: But Mr. Lazarus, didn't they also reimburse them under the 1979 rule?
Richard J. Lazarus: He did reimburse them under the 1979 rule as a matter of administrative grace. But in doing so he made it clear that that determination was subject to reopening, if he subsequently decided that the appropriate cost limit rule was one that excluded Federal wage data.
John Paul Stevens: But did he reopen the... did he recoup the money that he paid pursuant to the 1979 rule?
Richard J. Lazarus: I think he has. In fiscal intermediary's bid, subsequently--
John Paul Stevens: Oh, I thought it was for later years. I see. But all, in other words the result is just the same as if the original rule had been upheld?
Richard J. Lazarus: --A copy of the letter showing our qualification is included, appended to our reply brief, showing that we explicitly at the time they were reimbursed pursuant to the 1979 rule it was made explicit that if the Secretary subsequently determined--
John Paul Stevens: And that particular reimbursement was then recouped?
Richard J. Lazarus: --That's right. That's my understanding.
John Paul Stevens: Well, I wonder why they even reimbursed him.
Richard J. Lazarus: I think it's a matter of administrative grace to get things going. But it was not--
John Paul Stevens: As a matter of administrative grace, just lend them the money, in effect.
Richard J. Lazarus: --Well it wasn't, it was basically to keep the program moving. On remand, the same rule, the 1984 rule, is identical in substance to the '81 rule. But it had an effective date when it came out in '84, more than 30 days after the date of promulgation, and it applies to cost reporting periods beginning in July 1981 and ending in October 1982, the time at which superseding statutory regulatory schemes became effective. Respondents were among the few providers to receive less reimbursement under the retroactive rule, brought suit arguing that it was invalid because of its retroactivity. The District Court agreed, narrowly concluding that the statutory interest served by retroactivity did not warrant the imposition of the burdens imposed on respondents by a retroactive rule. The D.C. Circuit affirmed, but did not so narrowly grant its decision. That court instead concluded that the Administrative Procedure Act bars virtually all retroactive rules by defining them in terms of their future effect. The court also concluded that retroactive cost limit rules were not within the Secretary's general rulemaking authority under the Medicare Act, nor the court found were such rules within the Secretary's authority under the retroactive corrective adjustment provisions of that Act, known as Clause (ii). We believe the decision of the Court of Appeals, its judgment, should be reversed for two independent reasons. First, because the 1984 rule is a valid exercise of the Secretary's general rulemaking authority under the Medicare Act, and second, because it is valid exercise for the Secretary's authority under Clause (ii), which provides and authorizes the Secretary to promulgate regulations for the making of retroactive corrective adjustments. The most important and the most sweeping aspect of the Court of Appeals decision is also that part which we believe is most clearly wrong. The Administrative Procedure Act does not bar all retroactive rules. The language upon which the Court of Appeals relies which defines a rule in terms of its future effect does not speak to the retroactivity issue at all. That language simply refers to when a rule applies, not to what transactions, whether past or present, applies. In other words, a rule is a statement of law that is not applied in the same proceeding in which it is announced. It applies in a future proceeding, for example in an adjudication. As said in our brief--
Antonin Scalia: Mr. Lazarus, when the government quotes Section 551 in its brief it unfortunately makes something of an ellipsis. It just quotes the first portion of, of Section 551(4). It leaves out the part which says, "and includes the approval or prescription, not in the future, but for the future, the approval or prescription for the future of rates, wages. " and then it goes on to say, "costs or accounting or practices bearing on any of the foregoing. " which seems to me exactly what we have here. It uses the phrase there "for the future". You make a lot in your brief of the fact that it says, in the future, in the first part. It does indeed. But the second part of 551(4) says quite clearly, for the future, prescription for the future. How does that affect your case?
Richard J. Lazarus: --I think it doesn't affect our case. That language in the second part, to the extent that it's anything different, was added pursuant to some testimony about ICC proceedings. There was a question about whether certain ICC ratemaking proceedings would constitute a rule or not. And because there was not unanimity on that question, that particular language was added. And I think more importantly, if you look at the House report--
Antonin Scalia: I don't understand the point of that comment. It only applies to ICC proceedings? Is that--
Richard J. Lazarus: --No. But let me get to the... that was just basically the origin of that language, which was dealing with a discreet problem. But apart from that, the most, I think, pertinent thing, if you look at the House report where they added the terms, future effect, the House report specifically states that it was, we think, not intended to bar the kind of rule at issue here. And the words they use in describing future effect I think equate future effect in a way which both shows that it wasn't intended to bar retroactive rules and shows that the language "for the future" doesn't mean anything different. In the House report, it's on footnote 1, I think it's cited in our brief. But let me just read you the pertinent language. It says, "the phrase "future effect" does not preclude agency's from considering. " and that's a separate question, "and so far as legally authorized from dealing with past transactions in prescribing rules for the future. "
Antonin Scalia: --But dealing with past transactions in prescribing rules for the future, that may mean from now on you will treat past transactions in this fashion. But up to now you have to have treated them the way they've been treated.
Richard J. Lazarus: We think the better reading, though--
Antonin Scalia: Well, I'm sure you do, but I don't--
Richard J. Lazarus: --And I think there are other factors in the legislative history. The fact that Congress considered bills which would have explicitly barred retroactive rules and decided not to include that language, and we have the excerpt during the legislative hearings showing that being discussed, and showing a distinction being drawn between effectiveness and retroactivity and a notion that there was a problem with barring retroactive rules, particularly a problem because of the curative nature of the rules. One could read these things, as obviously respondents do, differently. We think the better reading, and certainly a reasonable reading, is that, and it's really unreasonable, we believe, to assume to the contrary. Retroactive rules were a traditional aspect of administrative practice, rare, but appropriate in discreet circumstances, before the APA was enacted, and they have been ever since. No court until the D.C. Circuit has ever suggested that the words "future effect" has--
John Paul Stevens: --Well, has any court ever suggested that "future effect" means what you say it means?
Richard J. Lazarus: --No court... well, actually the District Court in the Southern District of Ohio. But I think there's no, it's not been litigated a lot. There is some language, however, in Justice Harlan's opinion in Wyman-Gordon where he, I think, adopts precisely our view of it. Now, there was a dissenting opinion but it was not a matter which was being disputed with the majority at all. On that part of the case I think he was in virtual agreement. He draws both the distinctions that we're drawing, both future effect referring to future effectiveness and a rule being something that is applied in a different proceeding in which--
John Paul Stevens: Well, aren't the words completely redundant under your view? Won't every... every rule will have future effect, couldn't avoid it.
Richard J. Lazarus: --But that's the purpose of the definition provision in the <APA> [= APA]. It wasn't designed to prohibit certain kinds of rules. It was designed to describe generally what rules are. So there's nothing illogical or anomalous about the notion that most, that rules generally have future effect. The provision just wasn't intended to say, certain kinds of rules are fine, certain kinds of rules aren't fine. It was designed to generally describe what a rule is, to codify and confirm what had been administrative practice. When the words, Justice Scalia, "future effect" were added in the House, when it was proposed over in the Senate, the Senate didn't consider it to have made any kind of significant substantive change.
Antonin Scalia: If that's what future effect means, that is it has some effect in the future though it also has effect in the past, how do you distinguish a rule from an adjudication? Doesn't an adjudication have a future effect? Isn't an agency under, under our decisions disabled from going back on prior adjudications unreasonably? Isn't that arbitrary or capricious action? Doesn't in that sense an adjudication have a future effect? So, it has a future effect and it has a past effect. You tell us rules are the same. They have some future effect, but they also have past effect.
Richard J. Lazarus: Well they only... they have, they have an ongoing future effect in terms of effectiveness, while adjudication is different. But I think it's more important to realize that there are many different ways, as this Court has realized, to distinguish rulemaking adjudication, each one has its exceptions. There is no real bright line rule. But I think that the most significant one, and the one that is relevant for this case is the notion that a rule is not applied in the same proceeding which is then announced, while an adjudication is. And that's the handle which Justice Harlan also focused on in Wyman-Gordon. As set out more fully in our brief, both the language, both the structure and legislative history support our view. There are two places in the legislative history that we believe discuss directly the retroactivity issue, both the House report and the Attorney General's Manual on Administrative Procedure, each of which we believe is consistent with our view. The Attorney General's Manual on page 37.
Sandra Day O'Connor: Well, Mr. Lazarus, it seems that you're arguing that the APA allows retroactive rulemaking any time it isn't, in your view, arbitrary and capricious.
Richard J. Lazarus: That's right. And it certainly--
Sandra Day O'Connor: Well, that just seems to make retroactive rulemaking totally available.
Richard J. Lazarus: --Well no, we don't think it will be totally available. In fact, as we've seen, no court has before held it was barred, and they are rare. It's rarely done, because on fairness, which is typically associated with retroactive rules, makes the arbitrary and capricious standard a very significant hurdle for the Secretary to overcome. And all we're asking in this case is an opportunity to show the Court of Appeals that this rule is not arbitrary and capricious.
Sandra Day O'Connor: Well, the facts of this case don't lend themselves readily to supporting the rule, even under your view. Do they?
Richard J. Lazarus: Well, we think that--
Sandra Day O'Connor: I mean, to avoid the effect of failing to, to apply with the APA in the first instance?
Richard J. Lazarus: --No, we think that this is a very good case for the arbitrary and capricious standard, because the respondents incurred all of their costs prior to the time at which the 1981 was first invalidated on procedural grounds. Therefore, the rule that they had to rely on was the '81 rule. In fact, if the Secretary had not promulgated a retroactive rule, it would have had many of the same problems of unfairness, because all those other providers who relied on the 1981 rule, to their advantage--
Antonin Scalia: Well, Congress could have done it. Congress could have pulled his coal out of the fire, if, if that was a problem. And in that... you make a lot in your brief about, well, it's so necessary, just as it's necessary for Congress to legislate retroactively now and then. But if Congress can't legislate retroactively there's no remedy. There is a remedy here. If the Secretary can't issue a retroactive rule he can go to Congress and say, enact a retroactive statute, can't he?
Richard J. Lazarus: --That's true.
Antonin Scalia: So the situation is quite different from the legislative situation.
Richard J. Lazarus: But we believe that Congress, when it delegates general rulemaking authority to an agency, it includes the authority in discreet circumstances to deal with, to impose retroactive rules, knowing that the kinds of concerns that one has with retroactivity can be addressed through the arbitrary and capricious review. In the general rulemaking provision of the Medicare Act, Congress gave the Secretary full power to promulgate rules. We think that it's essentially full legislative power, which would include in certain very discreet circumstances retroactive rules. We're not saying that all retroactive rules are valid. We're not saying that all retroactive cost limit rules are valid. All we're asking for is an opportunity to show that in this case the types of unfairness concerns are not really implicated, and that this rule is for that reason not arbitrary and capricious. Respondents notably do not rely heavily on the Court of Appeals' construction of the Administrative Procedure Act, but instead rely principally on the argument that the Medicare Act, wholly apart from the Administrative Procedure Act, bars retroactive cost limit rules. The problem with their analysis is twofold. First, we don't believe that anything in the language of the statute states that cost limit rules must be prospective, and second, the legislative history upon which they rely does not speak to the type of retroactive rule at issue in this case, which is merely curative in nature. The statutory language, which is in Section 1395x(v)(1)(A), reproduced on pages 2 and 3 of our brief, does not have any kind of a hint of a prospectivity requirement. It states broadly that the Secretary may promulgate cost limit rules based on estimates of the costs necessary in the efficient delivery of health services. The language is straightforward, it's unambiguous, and there's no prospectivity requirement. Respondents' only meaningful answer to the statutory language are statements in the legislative history that say that cost limit rules would operate prospectively. In our view, those statements reflect Congress' understanding that cost limit rules generally in practice would operate prospectively, which is in fact what they do in practice. But we think those statements fall far short of suggesting that Congress decided and considered the possibility of retroactive rules being appropriate in certain confined circumstances. Indeed, the very reasons that Congress gives for generally favoring prospective rules we believe are the reasons it is most unlikely that Congress intended to bar all retroactive rules. Congress was concerned about providers incurring costs before they knew the substance of the cost limit rule. In this case respondents incurred all of their costs before the 1981 rule was invalidated. In fact, as I mentioned earlier, for this reason if the Secretary had not promulgated a retroactive rule, the very concerns expressed by Congress would have been realized, because other providers relied to their advantage on the substance of the 1981 rule in incurring their costs. This is not a rule that the Secretary promulgated to, despite its unfairness. The retroactive rule was promulgated in order to avoid unfairness. More hospitals benefit from the retroactive rule than are burdened. In over 234 areas the wage indices went up. In 67 areas the wage indices went down. The Federal government may end up paying more money out under the retroactive rule than they would have under a prospective rule. The government is not... in other words, this is not a case where we're just trying to promulgate a retroactive rule to save the Federal face. It's a case where the retroactive rule is justified for two other compelling reasons. One, to ensure adequate reimbursement for other providers who were receiving too little reimbursement under the Medicare Act, and second, to prevent a windfall by a few providers who were seeking to recover reimbursement for inefficient costs at the expense of other providers.
John Paul Stevens: Mr. Lazarus, does the record tell us what you're telling us about the fact the rule actually caused the government to give more money away?
Richard J. Lazarus: No. I said it's theoretically possible.
John Paul Stevens: Oh, it's theoretically possible.
Richard J. Lazarus: We don't, we don't, we don't have-- --Kind of an unusual, somewhat inconsistent with the normal practice. But it is in that it was 234 areas that wage indices went up. And if you look at the administrative record, I think six hospitals out of eight total commented in favor of excluding the Federal wage data in this, in this rule.
Antonin Scalia: There's no question that under the, under the provision of, of the subject legislation, the Secretary could have recomputed for each of those individual hospitals the charges and found that the regulations didn't provide a fair return in this situation. There's no doubt he could have done that.
Richard J. Lazarus: It's within the Secretary's discretion.
Antonin Scalia: Both sides acknowledge that.
Richard J. Lazarus: That's right. The question is whether, how much further the Secretary can go, whether the Secretary can approach these things in what we believe is an efficient manner, and that is in a systemic basis correcting the rule itself, rather than being forced to go through numerous and we believe duplicative and wasteful case by case review. If there are no further questions--
Antonin Scalia: Are you going to address the point of what regulation takes over, if the agency cannot issue a new one retroactively?
Richard J. Lazarus: --Our dispute with the Court of Appeals on that, on that question is the following. The Court of Appeals has stated that the invalidation of the 1981 rule necessarily had the effect of reinstating the 1979 rule, so as to preclude the Secretary from on remand promulgating a new rule. We believe that as a general rule a court's authority to issue a remedy is confined to the nature of the agency's error. Now that may have the result, Justice Scalia, that may have the result of leaving the only valid agency action remaining to be a prior agency rule. But that does not preclude the agency on remand from determining in the first instance what law should apply, perhaps by subsequently promulgating a retroactive rule, perhaps by immediately promulgating on an interim basis a rule.
Antonin Scalia: Well, leaving aside your retroactive argument, which just gets us back into the main problem, I had always thought that a rule could only be amended by a rule. You can't change a rule by an adjudication. And if you haven't amended the rule by another valid rule, it isn't a matter of reinstating the prior regulation. The prior regulation subsists. Isn't that simply the state of the law?
Richard J. Lazarus: But the question is whether it has the effect of them precluding the agency ultimately on remand from deciding what rule of law should apply. And this court's decision, Burlington Northern, made quite clear that the court could not ultimately decide what law should apply as of the future. But the court's decision may have the effect of leaving the only valid agency action remaining to be some prior agency decision. But it doesn't preclude the agency ultimately from deciding what the law should be. And it's that aspect--
Antonin Scalia: Although the agency can only decide one thing, it may be.
Richard J. Lazarus: --Well, that's where, of course, we disagree. We think the agency can decide--
Antonin Scalia: Does this argument of yours hinge upon your retroactivity argument? If we reject your retroactivity argument then can we safely assume that the prior rule was the rule that had to be applied?
Richard J. Lazarus: --Again, it would depend on the nature... in some instances, for instance, the court's decision would only suggest that the substance of the new rule was valid, and it might not, it might only question the agency's determination that a substance of a new rule was valid itself. It might not question the agency's determination that the old rule was invalid, in which case it wouldn't necessarily leave the prior agency action intact, and for that reason I think undermines why it's important that the agency should be able to decide on remand, because in the absence of that there would essentially be absence of power of retroactivity, there would be virtually no, no law to apply.
Harry A. Blackmun: Mr. Lazarus, in your reply brief, you have as an appendix a letter dated January 31, 1984. Is that part of the record in this case?
Richard J. Lazarus: It's my understanding that it is not formally part of the record. If there are no further questions I would like to reserve my remaining time for rebuttal.
William H. Rehnquist: Very well. We will hear now from you, Mr. Sutter.
Ronald N. Sutter: Mr. Chief Justice, and may it please the court: At issue is the validity of the Secretary's 1984 retroactive wage index rule. That rule is identical with the Secretary's 1981 wage index rule. We successfully challenged the 1981 rule in the DCHA case. The Secretary did not appeal. The Secretary paid us in accordance with our claims, he paid us under the pre-existing rule. But that did not end the matter. The Secretary proceeded to promulgate his retroactive rule. He applied that rule to take back the monies that he had previously paid as a result of DCHA. He stated in his re-opening notices that his retroactive rule had reversed DCHA. The Secretary's 1984 rule is totally devoid of future effect. It was promulgated on November 26th, 1984, and applied in 1985, but applied only to the past. It applies exclusively to the period July 1, 1981 through September 30, 1982, a period that had long since been completed even when the Secretary issued his retroactive 1984 rule. We contend that the Secretary's rule is invalid on 4 discreet grounds. First, the Medicare statute bars the Secretary from issuing a retroactive cost limit rule. Second, the APA bars the Secretary from issuing a rule with primary retroactive effect. Third, this rule does not pass muster under the Chenery balancing test. And finally, setting aside retroactivity altogether, this rule is arbitrary and capricious, even under the standards normally applied to the prospective rules.
Byron R. White: Well what if, what if the Secretary had promulgated a rule applicable to this past period which, which was aimed at refunding to people who had paid on what the Secretary now thought was an improper basis?
Ronald N. Sutter: Well, I don't know--
Byron R. White: Would that be--
Ronald N. Sutter: --Justice White--
Byron R. White: --Now, what you're really saying is that this rule that he promulgated isn't a rule at all under the definition.
Ronald N. Sutter: --It is not a rule.
Byron R. White: And so, and so the rule that I just described would not be a rule.
Ronald N. Sutter: I think that's correct, Justice White, but I think, as Justice Judge Oberdorfer stated in his case below, it is well established administrative law that an agency may always waive application of a rule when in individual circumstances he thinks justice so requires.
Byron R. White: Well, that may be so. But--
Ronald N. Sutter: It would simply be a matter--
Byron R. White: --He couldn't do it by rule.
Ronald N. Sutter: --Well, it would be a matter of waiving his past rule. That's right. It wouldn't be a rule. That's correct. I, when I stated our four grounds I used the word APA. In our view it is absolutely clear that the Medicare statute precludes the Secretary from issuing a retroactive cost limit rule. The governing statutory provision, Section 223(b) of the 1972 amendment, uses words that import prospectivity, and I think that is specifically confirmed by the legislative history. Both the House and Senate reports expressly state that the limits must be exercised on a prospective rather than retrospective basis. The Secretary's regulations state that the limits will be imposed prospectively, and the prospectivity requirement is also confirmed by all of the Secretary's prior schedules and by his own administrative decision-making. What the Secretary has done here marks a radical departure from 12 years of consistent agency construction. We reminded the Secretary of this fact in our public comments, but the Secretary did not respond. There is nothing in the record to reconcile what the Secretary has done here with the statutory language or the legislative history or the Secretary's own regulations or the statements in the prior schedules or the Secretary's own prior decision-making. There is simply no explanation to reconcile.
Antonin Scalia: Mr. Sutter, let me come back to the problem of the Secretary revising the regulation in order to give more money to some people. I suppose even if, even if it was an improper revision of the regulation retroactively, there'd be nobody to challenge it, so he could do it with impunity.
Ronald N. Sutter: I, I think--
Antonin Scalia: But if he wanted to be technically correct, I suppose he could, what, present a, in an appropriations bill a little, a little line that says--
Ronald N. Sutter: --That, that would certainly be a possibility, Justice Scalia.
Antonin Scalia: --What, what opposition would that likely confront in Congress, if the Secretary's in favor of it?
Ronald N. Sutter: I don't think it would incur any opposition.
Speaker: It doesn't seem so to me either.
Ronald N. Sutter: Also, in response to the government's point about how, if the Secretary didn't act he would have to recoup from other hospitals, I think that's absolutely incorrect. DCHA was not a class action suit. It involved only a limited number of hospitals. It did not require any action, either favorable or unfavorable against hospitals that were not participating. And indeed the Secretary published his 1984 rule after settling virtually all cost reports in the country. He did not pay those other hospitals under the wage index which included Federal government hospital data. He continued to use the 1981 wage index rule for those other hospitals. And in other circumstances he has clearly taken the position that he's not required to recoup in circumstances similar to these, we have cited that in the last paragraph of our footnote 36, which contains those references. And Judge Oberdorfer in his decision in this case, at pages 38 and 39 of the petition appendix, explains, provides further reasons why there, why recoupment would not be required from other hospitals. So I think there's simply no merit at all to that, to the suggestion from the Secretary on that point. The Secretary now relies on, although he did not rely on during the rulemaking, the retroactive corrective adjustment provision, which dates from the original 1965 legislation. He argues that that provision confers on him the authority to issue retroactive rules, including retroactive cost limit rules.
William H. Rehnquist: Which section is this, Mr. Sutter?
Ronald N. Sutter: This is, Mr. Chief Justice, you will find this in our appendix at page 4, before you get to number 5, the public law, it's maybe, oh, about eight or nine pages down from the top there's a little two i s, the language that begins, "provide with the making of suitable retroactive corrective adjustments. " That is the language that the Secretary is now relying on.
William H. Rehnquist: And that's a part of Section 1861.
Ronald N. Sutter: That is part of 1861(v)(1)(A). That's correct. We believe that the Secretary's reliance on that provision is clearly misplaced for several reasons. First, it subverts Congressional intent. When Congress enacted Section 223(b) of the 1972 amendments, it made as clear as it possibly could that cost limits are to apply only on a prospective basis. That clear expression of Congressional intent must prevail, however the retroactive provision is construed in other circumstances.
William H. Rehnquist: And then for that you rely on the phrase, to be recognized as reasonable, in another part of 1861?
Ronald N. Sutter: That is the statutory language. That's correct. And I rely on the specific words in both the House and Senate report, which state that the limits must be exercised on a prospective rather than retrospective basis. Section 223(b) would trump the retroactive provision here. But, the second point that may be even more significant is, the interpretation which the Secretary is advancing here is post hoc interpretation conflicts with his own regulations. His regulations have never construed the retroactive provision as conferring on him the authority to issue retroactive rules. His regulations have always construed that provision as a year-end accounting reconciliation process.
Anthony M. Kennedy: Did he use the retroactivity section to promulgate regulations on depreciation recapture at one time early in the act?
Ronald N. Sutter: He did not. Justice Kennedy, he did not. I have recently reviewed both the proposed rule and the final rule in the preamble. He did not rely on the provision in promulgating those rules. And that was a rule involving secondary retroactivity, not primary retroactivity.
Anthony M. Kennedy: Did he cite the statutory authority for those recapture regulation... or the recapture rules?
Ronald N. Sutter: Well at the end, I mean, he always has a little section which, which cites the authority. I'm sure he included, I didn't specifically look at this. I'm sure he included Section 1861(v). But there's nothing in the preamble which would suggest that he thought he was acting pursuant to some kind of special delegation of retroactive rulemaking authority, as there was not in the preamble here. And I might also note that the Secretary could not in good faith have done that in the 1984 preamble, because at the same time that he was publishing this rule he was arguing in court that the retroactive provision means exactly what his regulations say it means. And for evidence of that you can look at the 9th Circuit's decision in Regents of the University of California, which is reported as 771 F. 2d. And if you read that opinion, 1985 decision, a year after this rule was promulgated, he stated there that this provision, the retroactive provision, means exactly what he says in his regulation, it's a year-end balancing process. What the Secretary has done here, this post-hoc construction, which he cannot cite any authority for in his brief, marks a radical departure from 22 years of consistent agency construction. That's been the Secretary's interpretation in his regulation since 1966, and it's still there today. Third, I think the Secretary's interpretation, his post hoc construction, is not a possible reading of that language anyway. The language refers to a process of retroactive adjustments where a provider's aggregate reimbursement for a period proves to be excessive. It focuses on actual evidence regarding the aggregate reimbursement of a provider. And I can't imagine any language more foreign than this to the notion of issuing retroactive rules of general application.
Antonin Scalia: It would also be strange to say that the regulations shall provide for the issuance of regulations, that's rather a strange--
Ronald N. Sutter: That is correct, yes. That's correct. I'd now like to consider the APA. There are two relevant statutory provisions, 5 USC Section 551(4) and 5 USC Section 553(d). Section 551(4) defines a rule as something having, among other things, future effect, and states it includes the prescription for the future of certain matters, matters that would be encompassed within this case. I think Justice Scalia was entirely correct in pointing out that there's a big difference between in the future and for the future. It is certainly correct that if an agency publishes a rule in 1984, applies it in 1985, to recoup from 1981, the Secretary is acting in the future, at least from a 1984 vantage point. But he is not acting for the future.
William H. Rehnquist: --Well, do you think the definition of rules set out in that definitional section of the APA is kind of the be-all and end-all, that it meant to just describe the full length and breadth of anything that a rule could do?
Ronald N. Sutter: I don't think it's the be-all and the end-all. But I think the significance is illustrated when you look at the legislative history and you also look at 5 USC Section 553(d), which generally prescribes a 30-day delayed effective date. I think it's important to look at those two together. And I think the legislative history does confirm a plain meaning construction. The legislative history states, and this is in the legislative history volume at page 254, that rules formally prescribe a course of conduct for the future rather than pronounce past or existing rights or liabilities.
Sandra Day O'Connor: Well, Mr. Sutter, do you take the position today then that no retroactive rulemaking is allowed under the APA?
Ronald N. Sutter: No, Justice O'Connor, we do not. We--
Sandra Day O'Connor: Well, what defines the exceptions then, and how do you derive those from the plain language?
Ronald N. Sutter: --Let me give you an example. Justice Frankfurter stated in the Addison case that law should avoid retroactivity as much as possible. And I think the thing to focus on is whether it is possible to avoid retroactivity. I think there may be some instances in which it will not be possible to avoid even primary retroactivity. Suppose, for instance, that a statute requires that a certain benefit be in effect as of a certain date in accordance with regulations issued by the Secretary, the clear Congressional intent that the Secretary have regulations in place as of a certain date, and the Secretary simply doesn't do so. In that case I concede that it would be possible to allow him to issue them retroactively. I see that as simply a case of the more specific prevailing over the general, the specific intent of Congress that these regulations be in place as of a certain date prevailing over the general rule in the APA. I see it as a general rule in the APA. I believe that's also how the D.C. Circuit saw it.
William H. Rehnquist: Well, what if Congress provided that the Secretary of Energy shall by such and such a date issue regulations prohibiting anyone from charging more than 80 cents a gallon for gasoline, and the Secretary does not promulgate those regulations by that date, he promulgates them 20 days later, but he includes in that rule a statement that they shall be effective from the date that Congress said the regulation should be in place, is that okay?
Ronald N. Sutter: Yes, it is. Because I see Congress' more specific intent controlling in that case.
Byron R. White: Well, why, why should the rule be different if the Secretary, he doesn't fail to issue a regulation but he issues one that is invalid procedurally?
Ronald N. Sutter: I'm sorry. That is... I didn't hear what you said. Procedurally--
Byron R. White: Suppose he doesn't fail to issue a regulation but he issues a regulation that is invalid because of procedural omissions?
Ronald N. Sutter: --Right.
Byron R. White: So in, in, in short there is no regulation in place. Why can't he then issue a retroactive regulation?
Ronald N. Sutter: I think that if, if there was a clear Congressional mandate that the regulation be in effect as of a certain date, he could.
Byron R. White: Well, there's certainly authority for him to have the regulation in effect.
Ronald N. Sutter: If there's just authority I'm not sure that he can. Let me take, let me take our situation here.
Byron R. White: You, you must be sure that he cannot to win here, I suppose.
Ronald N. Sutter: Well, there are two reasons that he cannot here. One is, he had a pre-existing rule. If this rule is of no effect, it leaves in place what was there before. That's one reason. The cost limits would not, I think, in any event allow the Secretary to act retroactively, not only because Congress said they had to be prospective, but also because Congress has never mandated that there be cost limits. The Congress authorized the Secretary to issue cost limits. It did not require him to do so. And in the 16 years since Section 223(b) was enacted, for seven of those 16 years there have been no cost limits, and there haven't been any since 1983.
Antonin Scalia: Mr. Sutter, depending on what the procedural deficiency is, there's also some room for courts of appeals to remand to the agency without setting aside the rule, isn't there? I mean, frequently when what is lacking is a sufficiently precise statement of basis and purpose, the Court of Appeals will simply remand for a more precise statement.
Ronald N. Sutter: That is correct.
Antonin Scalia: Considering the rulemaking as still being preceding and not yet, not yet terminated.
Ronald N. Sutter: Justice Scalia, that's absolutely correct.
Antonin Scalia: That happens quite often, doesn't it?
Ronald N. Sutter: Yes... well, I don't know if often, but it does happen. And in DCHA, the Secretary did expressly ask that Judge Oberdorfer stay his decision so that the Secretary could take further action, and Judge Oberdorfer declined to do that. But he did cite several of the sort of cases that you're referring to, and he distinguished those and said, no, that that remedy would clearly be inapplicable here. One of the points I think is important is that if the Secretary disagreed with Judge Oberdorfer at that point in DCHA, he should have appealed. That was his appropriate remedy, because Judge Oberdorfer, I think, clearly indicated that these corrective procedures would not be appropriate here.
Anthony M. Kennedy: If you prevail in this case, what about those hospitals that have been benefited under the invalid rule? Is the Secretary entitled to recoup from them now?
Ronald N. Sutter: No. He couldn't even recoup from them now, because the three-year re-opening period is over.
Anthony M. Kennedy: Well, let's assume there were no statute of limitations or re-opening period.
Ronald N. Sutter: I, I don't think so because DCHA was not a class action, involved only a few hospitals, and did not require him to do anything with respect to other hospitals, certainly did not require him to do anything with hospitals--
Anthony M. Kennedy: Well, if the, if the Court invalidates the rule, and forgetting the statute of limitations for a moment, isn't the Secretary entitled to go back and recoup the amounts that were paid in excess under the invalid rule?
Ronald N. Sutter: --The Secretary has taken the position in other contexts that that would be unfair for him to do that, and he wouldn't do that. And we, we have citations in the last paragraph of our footnote 36 where he's taken that position elsewhere. And again I think Judge Oberdorfer in his decision below at pages 38 through 39 offers several reasons why the Secretary would not be required to do so. The cost limits, under the cost limits he's always had authorities to grant exceptions, and there's a big exceptions process, and his authority to grant exceptions will be found in the legislative history. Also there's the general principle of administrative law that an agency may waive application of a rule where--
William H. Rehnquist: The Secretary doesn't want to waive it. So what if the Secretary, after Judge Oberdorfer's decision, had sued some of the hospitals who had benefited from the regulation saying, we now think, we have a court decision saying this is invalid, we want to get our money back from you. Now, presumably the hospitals would have a right to litigate that question, because they're not bound by DCHA. But supposing that the other court agreed with Judge Oberdorfer, that this regulation was invalid, can't the Secretary then get the money back?
Ronald N. Sutter: --Well, perhaps. I think you would have a balancing test involved there, and there would be questions of fairness.
William H. Rehnquist: Balancing--
Ronald N. Sutter: Well, the sort of balancing test that you would have under Chenery. What are the ill effects of the retroactivity?
Antonin Scalia: --Why, why, would that be so unfair, to get the money back?
Ronald N. Sutter: Well, it might--
Antonin Scalia: They, they, they would not have relied on anything, the Secretary's ruling came after they had made their plans about how much they had to charge for medical services anyway, right? It didn't affect their primary conduct. They were just given out of the blue money that they thought they weren't going to get.
Ronald N. Sutter: --Well, the 1981 rule might have affected their conduct.
Speaker: Might have affected their primary conduct?
Ronald N. Sutter: It was issued on June 30, 1981 to be effective the following day. So it's conceivable that it might have had some effect.
Antonin Scalia: I thought you said it affected only past conduct.
Ronald N. Sutter: The 1984 rule affects only past conduct.
Speaker: Yes.
Ronald N. Sutter: The 1984 rule was promulgated on November 26th, 1984, to go back to 1981--
Antonin Scalia: But that's what we're talking about.
Ronald N. Sutter: --Yes.
Antonin Scalia: That's what we're talking about throwing away. That would not have affected--
Ronald N. Sutter: Oh, it would have no effect on, on other hospitals.
Antonin Scalia: --On, it would not have affected their primary conduct at all, they would have gotten a windfall, and the Secretary would be taking back their windfall.
Ronald N. Sutter: That's correct. The 1984 rule could not have affected--
Antonin Scalia: I know it's hard for you to be hardhearted to hospitals, but it seems to have been a windfall.
Ronald N. Sutter: --It is tough. I would like to briefly discuss 5 USC Section 553(d), that establishes a 30-day delayed effective date. This rule here applies back to July 1, 1981, thus despite what the Secretary may say it has an effective date of July 1, 1981. And yet 553(d) precludes a retroactive effective date. Section 553(d) is very similar to a statute which this Court addressed in the case of United States v. Baltimore & Ohio Railroad Company, which we've cited in our brief. That case involved a statute that precluded certain orders... let me rephrase that. It established a 30-day delayed effective date for certain orders of the ICC. And all members of this Court, including the dissent in that case, agreed on one thing, that is that the statute precluded the <ICC> [= ICC] from applying these rules retroactively. The language of that statute in 553(d) are very close, and I think merit very close review. I would like to briefly address the Secretary's curative rulemaking argument. We believe that the, the Secretary's attempted curing is something that cannot be done because of the very nature of the problem here. The Secretary has missed a very important deadline established by Congress, one that reflects important values. From a procedural point of view he was certainly entitled to repeal his, or his 1979 rule and put in effect a new rule. But to do that validly he had to publish a final rule by June 1, 1981 under Section 553(d), and he had to have completed the procedures mandated by the APA by that date. He had to publish a proposed notice, solicit comments, respond to the comments and publish a basis and purpose statement. He didn't do that. In fact he didn't even start those procedures by June 1, 1981. And there's nothing that the Secretary can do in 1984 to complete those procedures by June 1, 1981. That's simply axiomatic. Also, the Secretary at bottom is asking this Court to reward him for his illegal conduct. If the Secretary had acted legally on June 30, 1981, when he published the 1981 rule, he could not have given his new rule an effective date of July 1, 1981. There's no reason why the Secretary should be in a better position today because he acted illegally rather than legally on that date. To allow that would truly be to trivialize and make a mockery of the APA. As far as our third and fourth contentions go, we believe that we would be entitled to a judgment, to favorable judgment under any balancing test, as Judge Oberdorfer expressly found. Judge Oberdorfer applied the balancing test, and the ill effects of the Secretary's rule have been very substantial. He has applied this rule to reverse a final court judgment. He has in effect substituted retroactive rulemaking for the normal appeals process. He has applied this rule to recoup from already settled cost reports. In this case he applied it to recoup Medicare reimbursement for a, a, for costs incurred four years previously, but presumably under the Secretary's view it could have been six, seven, eight years previously. It would be very hard to draw the limit. And as for the merits, well we have made our case in our brief at some length, and I think we have demonstrated that in issuing this rule the Secretary failed to consider relevant factors and drew conclusions contrary to the evidence. And in his brief, the Secretary loosely throws around the windfalls, the word "windfalls", but you will note that he has made no response to our showing. He says, that should be remanded to the Court of Appeals. But you might want to look at his last briefs before the Court of Appeals because he essentially made no showing on the merits there. If the Secretary had a case to make on the merits, he would make it. He has not made it. I can tell you as someone who has read every page of the record at least four or five times, the Secretary cannot make a case on the merits. The rulemaking in this case was truly pro forma, as Judge Oberdorfer found in his decision. We respectfully submit that the decision of the Court of Appeals was correct and should be affirmed for any or all of the four reasons that we have discussed today. Thank you.
William H. Rehnquist: Thank you, Mr. Sutter. Mr. Lazarus, you have two minutes remaining.
Richard J. Lazarus: Thank you, Mr. Chief Justice. I have just a few points in rebuttal. First, the District Court did not order the Secretary to reimburse him pursuant to the 1979 rule. The court found only one error in the 1981 rule, the lack of notice and comment, and specifically declined to order the Secretary to reimburse him pursuant to the 1979 rule. If you look at Oberdorfer's opinion, at page 62(a) in the appendix--
Antonin Scalia: Only one error, that's all. He just didn't go through the rulemaking proceeding, is the only thing he did wrong.
Richard J. Lazarus: --It was an, it was an error which required... the Secretary promulgated a new rule. But it was not one, which Judge Oberdorfer correctly recognized, which mandated that he order reimbursement pursuant to the 1979 rule. And in his opinion he explained why. He said, it is clear that to invalidate the 1981 wage index rule and enjoin defendants, the Secretary, from retroactively applying any new schedule that excludes Federal wage data might well permit claims to recover a larger amount of Medicare reimbursement than they would under the present 1981 schedule. He recognized that for that reason it would be appropriate, and he didn't do so. Second, the respondents concede, I believe, that the APA does not bar retroactive rules in all circumstances, that in narrow circumstances it is appropriate. It depends on whether they're necessary to serve Congressional intent.
Antonin Scalia: But if the statute reads the way you say, why do you have to narrow it to circumstances? You're not reading the statute to say you can only do curative rulemaking. You're saying you can do, you can make rules retroactive generally.
Richard J. Lazarus: But there--
Antonin Scalia: I presume the rules would be the same as for retroactive adjudication. We've had some, some cases about when you can't change the law after the fact too promptly, probably be the same for rulemaking, wouldn't it?
Richard J. Lazarus: --The same concerns, though, whether or not the retroactive rule is essentially necessary under Congressional intent is precisely the test that we suggest would be appropriate under arbitrary and capricious review. And we believe here that the statutory interests being served are the need to ensure the providers are not reimbursed for costs they inefficiently incurred. They can't have it both ways. Either it prohibits it or it doesn't. And we believe it doesn't, that the test about whether Congress, that needs require should be addressed during arbitrary and capricious. Thank you.
William H. Rehnquist: Thank you, Mr. Lazarus. The case is submitted.