Warren E. Burger: We will hear arguments next in Toll against Moreno. Mr. Zarnoch, I think you may proceed when you are ready.
Robert A. Zarnoch: Mr. Chief Justice, and may it please the Court, this is the second time this case has been here, the second time this Court has been called upon to examine the constitutionality of the University of Maryland's policy of denying in-state benefits to non-immigrant aliens. The last time this case was here, it was complicated by an unresolved issue of state law and of concerns over the University's basis for treating non-immigrant aliens differently, issues that have caused this case to be certified, the question to be certified to the court of appeals of Maryland, and ultimately the case to be remanded back down to the district court. These questions are now behind us. This time around, however, the case raises additional and perhaps more significant constitutional questions evidenced, I think, by the fact that for the first time in this Court's history, all 50 states are participating here as amici and unified behind a single position, namely, urging the reversal of the Fourth Circuit's decision and overruling of Vlandis versus Kline. Of the four constitutional questions raised in this case, the foremost issue, we think, is the question of whether the University's policy denies equal protection to non-immigrant aliens. We think that if we prevail on this ground, many of the other issues in the case could quickly fall by the wayside. Now, the equal protection issue here, we think, calls into play the very rationale for labeling certain alien classifications suspect and for according them strict scrutiny, a rationale we say that focuses in on the burdens permanent resident aliens share with citizens, and which non-immigrant aliens as a class conspicuously lack. Although resident aliens may be saddled with disabilities, we suggest that non-immigrant aliens, on the other hand, are blessed with privilege. At the outset, it is important to understand what is at stake here, how many persons are affected by the University's policy, and the nature of the disadvantaged class. First, all we are talking about here is the tuition differential. At one time, the University did have a disparate charge with respect to certain fees, for example, dorm fees. That is no longer the policy of the University. Only in tuition is there a difference with respect to in-state and out-of-state students. Secondly, we are not talking about scholarships, state scholarships, that is. The state of Maryland does not deny state scholarships to non-immigrant aliens as a class, assuming they can show financial need. It is also important to note how many people are affected by the University's policy. According to the record in this case, during the years 1978 and 1979, there were anywhere from 1,000 to 1,200 permanent resident aliens attending the University of Maryland.
Speaker: Annually?
Robert A. Zarnoch: Annually. And during that period, approximately 95 percent of those permanent resident aliens qualified for the in-state... were classified in-state and received the benefit. On the other hand, there are half as many non-immigrant aliens, as few as 497, I believe, in 1978.
Speaker: In what category?
Robert A. Zarnoch: These are non-immigrant aliens who are classified as out-of-state. In terms of potential student population, the figures... the ratio is even greater. There are seven times as many permanent resident aliens in Maryland as there are non-immigrants.
Speaker: Well, the 497 non-resident aliens, fill that in a little bit. Who are the--
Robert A. Zarnoch: Exactly.
Speaker: --What is that group composed of?
Robert A. Zarnoch: Well, the class... well, it is a much smaller... it is a much smaller universe than the class of non-immigrants generally. The class of non-immigrants generally consists of diplomats, foreign visitors, foreign students, and employees of international organizations and their families, and--
Speaker: Well, do all of them have the non-immigrant G-4 visas?
Robert A. Zarnoch: --No, all of them have a non-immigrant visa, but not a G-4 visa.
Speaker: Well, this case involves only the G-4 visa people?
Robert A. Zarnoch: Well, this case involves a classification that disadvantages all non-immigrant aliens.
Speaker: I see.
Robert A. Zarnoch: All holders of those particular visas. But to answer your question, Mr. Chief Justice, all those... all those particular non-immigrant categories are not represented in the class that the University... primarily they are A visa holders and J visa holders who are foreign students or cultural exchange students. There is also the G-4 aliens, about 70 G-4 aliens roughly in that number, and diplomats.
Speaker: Let me ask you, because I am a little puzzled, you say there are 70 G-4 aliens in the class that are paying the higher tuition?
Robert A. Zarnoch: Yes, during those years in question, 1978 and 1979, roughly about 65 to 70.
Speaker: Does this case involve anything but those people?
Robert A. Zarnoch: Well, the persons who brought the challenge fall into that category. The classification challenge involves the whole category of non-immigrant aliens, and in fact both the lower court and the Fourth Circuit held that it violated... the policy violated equal protection because it disadvantaged the entire class of non-immigrant aliens.
Speaker: Do they all have the same tax exemption that the G-4 people do?
Robert A. Zarnoch: No, no.
Speaker: But then your rationale doesn't apply to them.
Robert A. Zarnoch: Well, Your Honor, they--
Speaker: I am puzzled. I don't know what... now I am really--
Robert A. Zarnoch: --Well, Your Honor, I think, you know, the focus here, the policy itself disadvantages a class, an entire class of non-immigrant aliens. Now, the rationale we have offered in justification of that policy focuses in to an extent on tax contributions of that class.
Speaker: --If I understand you correctly, your justification applies to 70 people in a class of 497.
Robert A. Zarnoch: No, Your Honor. No, it doesn't. In fact, all non-immigrant aliens are treated differently with respect to taxes other than... treated differently than citizens and resident aliens. It so happens that G-4's can point to a particular tax exemption that hurts their case, but, for example--
Speaker: Well, does the record tell us about the tax exemption of the other 427 people?
Robert A. Zarnoch: --Yes, it is basically a matter of a question of law. For example, most non-immigrant aliens, for example, are not taxed on foreign source income.
Speaker: Is this in the briefs, all this?
Robert A. Zarnoch: Yes, it is, Your Honor. Yes, it is. In terms of foreign source income, most non-immigrants do not pay taxes on foreign source income. Citizens and resident aliens do, on the other hand. There are many other categories of non-immigrants that are treated better, more advantageously with respect to taxes. For example, a foreign student from Japan who would attend the University of Maryland has a $2,000 exemption on a portion of his compensation. There are various treaties that confer a privileged tax status on various non-immigrants. There is even, for example, federal law confers a tax break on all international organization employees, not just the particular banks who are in this case. So, we contend as a general matter non-immigrant aliens are treated differently for purposes of taxation. They do not pay their full share of taxes, the class as a whole, and G-4's in particular. In terms of the legal protection question here, we say this Court's earlier decisions in terms of alienage have all focused in on a number of characteristics when it decided to accord strict scrutiny to the classification at issue. It looked at taxes. This Court has indicated a number of times that resident aliens are taxed precisely like citizens. They pay their full share of taxes. Non-immigrant aliens, as I have tried to suggest, do not. There are a number of non-immigrant aliens who are simply not here long enough to contribute much in the way of taxes or anything else in terms of the state's economy. Another--
Speaker: When you say they pay all... resident aliens pay all taxes, you mean federal and state income taxes?
Robert A. Zarnoch: --That's true, Your Honor.
Speaker: And all property taxes?
Robert A. Zarnoch: That's true, Your Honor.
Speaker: And sales taxes?
Robert A. Zarnoch: There is absolutely no... federal law draws no distinction between resident aliens and citizens. There is no difference.
Speaker: Is there any category that has access, for example, to tax-free stores equivalent to our post exchanges in other countries?
Robert A. Zarnoch: I'm not sure, Your Honor. I don't know.
Speaker: None in Maryland, at any rate?
Robert A. Zarnoch: Not as far as I know, Your Honor.
Speaker: No.
Robert A. Zarnoch: In terms of the other criteria this Court has looked at in terms of strict scrutiny, it is also emphasized that resident aliens serve in the military. I think you ought to note here that non-immigrant aliens are excluded from... were excluded when we had a draft, and presently are not subject to draft registration, so they are not obliged to serve in the military. The Court has also noted on occasions that resident aliens are required to obey all of our laws. Well, here, certain categories of non-immigrants are not completely obliged to obey all our laws. For example, diplomats are one class that because of either diplomatic immunity or statutory immunity are not fully liable for violation of certain laws, and the same is true of employees of international organizations, who by statute have a certain immunity that relieves them from the obligations of complying with all the country's laws.
Speaker: That is by federal statute, is it?
Robert A. Zarnoch: That is by federal statute.
Speaker: I take it you are going to address the pre-emption argument here, too.
Robert A. Zarnoch: I certainly will, Your Honor.
Speaker: Of course, many of the things you are talking about seem to me bear on the pre-emption question, don't they?
Robert A. Zarnoch: That is true, Your Honor.
Speaker: Yes.
Robert A. Zarnoch: Well, at your urging, I will move on to that question.
Speaker: May I ask you a question first about this class again?
Robert A. Zarnoch: Sure.
Speaker: Of these 497 people, how many of them are eligible for domicile?
Robert A. Zarnoch: Well, I think so far our court of appeals has only held that G-4 aliens are capable of acquiring--
Speaker: And you still exclude non-domiciliaries independently, regardless of whether they are--
Robert A. Zarnoch: --That is true, Your Honor. We exclude non... so we exclude citizens--
Speaker: --So we don't know how many of these 497 will be excluded from the in tuition rate because they are not eligible to be domiciled?
Robert A. Zarnoch: --Your Honor, the policy excludes them anyway. The policy doesn't look into the particular domicile of any non-immigrant. The policy simply excludes them as a class. You know, whether or not they are capable of acquiring domicile or not, because of the cost equalization rationale that we--
Speaker: Now, that is the amended policy, is it not?
Robert A. Zarnoch: --Your Honor, the policy never was amended, in terms of the operation and effect.
Speaker: Oh.
Robert A. Zarnoch: There was a resolution issued in June of 1978 that--
Speaker: But there was a time when domicile was important. That is why we sent it back, was it not?
Robert A. Zarnoch: --Your Honor, this case was argued, it was argued to the district court on the grounds that, in 1976, that is, on the grounds that G-4 aliens could not acquire a domicile--
Speaker: Yes.
Robert A. Zarnoch: --and therefore couldn't meet the test anyway. We have also argued consistently since then certainly that the policy is independently supported by a rational basis of cost equalization. In fact, the students when they were informed by the University president that they were not going to be accorded state status, were given two reasons, first, the cost equalization tax notion, and secondly the fact that they couldn't acquire domicile. Now, that issue is no longer a question. The court has... our court of appeals has held that G-4 aliens can be domiciled. The rationale on that decision doesn't say what other categories of non-immigrant aliens could or might or may not be domiciled in the state of Maryland, and we don't--
Speaker: We should judge this case as though all of the group that are involved here--
Robert A. Zarnoch: --Could be domiciled.
Speaker: --could acquire domicile.
Robert A. Zarnoch: That's true, Your Honor.
Speaker: Yes.
Robert A. Zarnoch: I think you could.
Speaker: Mr. Zarnoch, then the class includes more than the G-4 aliens.
Robert A. Zarnoch: Yes, Your Honor. I think so. I think--
Speaker: And we are dealing with all non-immigrant aliens.
Robert A. Zarnoch: --That's true, Your Honor.
Speaker: Is that right?
Robert A. Zarnoch: That's true.
Speaker: And they are all excluded from these tuition... the tuition break.
Robert A. Zarnoch: That's true, Your Honor.
Speaker: Regardless of whether they are domiciliaries.
Robert A. Zarnoch: That's true, Your Honor. The policy--
Speaker: Based on the fact that they don't pay state income tax.
Robert A. Zarnoch: --Yes. Well, Your Honor, that's true. Well, it's not just state income tax.
Speaker: Is that right?
Robert A. Zarnoch: It is just that that class, viewed... viewing the general characteristics of that class, they don't particularly contribute fully to the support of the University of Maryland, which, as we have indicated in our brief--
Speaker: Through the income tax.
Robert A. Zarnoch: --That is the chief concern, because the University--
Speaker: Because they would be paying state sales taxes if you have them or other taxes.
Robert A. Zarnoch: --Yes, that is true, Your Honor, but many of the taxes cited by the G-4's as paying, they don't particularly fund the costs of the education at the University of Maryland. For example, property taxes don't pay for... motor vehicle taxes, none of those things pay for the University education.
Speaker: In your view, does this Court have to overrule Vlandis versus Kline to uphold Maryland's scheme?
Robert A. Zarnoch: No, we have indicated in our brief at least three possible ways the Court would not have to overrule Vlandis versus Kline to uphold the policy. One would be simply to... if the Court concludes that the policy does not violate equal protection, and finds a rational basis... finds our basis for the policy rational, that is enough to survive a due process challenge. For example, in Vlandis versus Kline, this Court noted that aside from an interest in administrative certainty, there was no rational basis for Connecticut's treatment of non-residents. If, for example, if the Court does find a rational basis here, it is not invalid, even for Vlandis as it existed.
Speaker: Well, what about the back tuition? How about the refund? Don't you have to overrule Vlandis if you--
Robert A. Zarnoch: Well, Your Honor, as I am saying, if it decides, you know, as I say, and the Court can address the due process question and simply say that we have a rational basis under the policy. That is enough to meet Vlandis as modified by Salfi or whatever else. I think--
Speaker: --You mean, even on the refund?
Robert A. Zarnoch: --Well, Your Honor, I... well--
Speaker: I thought that... Didn't the Court say your former policy was invalid?
Robert A. Zarnoch: --That's true. It said--
Speaker: Under Vlandis against Kline?
Robert A. Zarnoch: --It said it was invalid from the period 1976 through 1978.
Speaker: Yes. Well, what about that period?
Robert A. Zarnoch: Your Honor, we are asking the Court to reach the due process question. The question asked by Justice O'Connor was whether you have to overrule Vlandis versus Kline to do that. We certainly are asking the Court to address that due process question. One way that we say to do it is, if you find a rational basis for the policy under equal protection, it is obviously rational under due process.
Speaker: Well, I understand that. I understand that about the prospective validity of your policy, but how about the refund for that period that the Court has already held violated Vlandis against Kline?
Robert A. Zarnoch: Your Honor, it would be... the policy has not changed in effect with respect to non-immigrant aliens. I mean, non-immigrant aliens were denied before 1978 and after 1978. If the policy was rational now, and in terms of its operation and effect, why wouldn't it have been rational since 1976? Why wouldn't the due process conclusion of the Court, even for that particular period, fall by the wayside?
Speaker: Well, then, so you do say--
Robert A. Zarnoch: I say you have to address the issue. You just don't have to overrule Vlandis versus Kline to do it. I think if you find a rational basis, you know, you have sustained the policy.
Speaker: --All right.
Robert A. Zarnoch: We have also argued a number of grounds for getting around Vlandis versus Kline, but we do ask the Court, and we... as all 50 states do, to overrule Vlandis versus Kline, because we do think the case is really a dead letter in the law. To turn to the supremacy clause for a moment, there are really two separate supremacy clause arguments. One was basically premised upon an impermissible state attempt to regulate immigration, and the lower court held the policy invalid on that ground solely because it found an invidious discrimination under the equal protection clause. No other basis was given. So, as a practical matter, if we... if that theory prevails, we should be... if the Court finds it okay under equal protection, it should find the policy okay under the supremacy clause, under that aspect of the supremacy clause. There is a second supremacy clause argument made here, and that was made as an alternate ground, and this was the one that was rejected by the lower court. That argument is made that the University... the rationale of the University's in-state policy, that rationale somehow conflicts with the rationale of the international agreements conferring a tax advantage on the bank employees. Now, the lower court rejected this purported class of rationales as too attenuated to amount to a supremacy clause violation, and we suggest that at least in this respect the lower court was right, that what the University's policy does is simply include G-4 aliens in a group of non-immigrant aliens who, for a particular reason, and it is not just, you know, this particular treaty tax exemption or a tax exemption flowing from an international agreement, for a variety of reasons do not contribute the way citizens and permanent resident aliens do to the cost of University education. We don't pick out an international agreement or a treaty. In fact, in some cases we don't even focus... you know, we don't focus in on the individual tax situation of anybody. We simply drew a line, and the G-4 aliens are on the wrong side of the line for purposes of acquiring the in-state tuition.
Speaker: May I ask one other question?
Robert A. Zarnoch: Sure.
Speaker: To what extent do you pursue the argument that you can treat these people differently? Could you deny them, say, garbage collection services, or police protection, without charging them a special fee for it, say?
Robert A. Zarnoch: Your Honor, I think in terms of the cost equalization rationale, it is particularly appropriate when you are talking about a university education that is funded by primarily tax, income tax remedies.
Speaker: So are you other state services.
Robert A. Zarnoch: But... well, most of them are... for example, police protection is funded by local property tax. The garbage collection would be, too. There really is no disability, as I understand it, from any of the... any non-immigrants from contributing their full share of property taxes. So, what I am suggesting is that the rationale, our rational basis that we are asserting here may not hold water if you are trying to justify that kind of restriction.
Speaker: You mean, because they pay property taxes--
Robert A. Zarnoch: Yes.
Speaker: --as opposed to income taxes.
Robert A. Zarnoch: Yes. For example... yes. That is right.
Speaker: Does your budget... Your University's budget is derived entirely from income tax, is it?
Robert A. Zarnoch: Well, Your Honor, it is basically from three sources. In terms of state dollars being pumped in, it is largely income tax.
Speaker: None of the property taxes go for that purpose?
Robert A. Zarnoch: No. Local property taxes pay for primary and secondary education. State property taxes pay state bond issues. So property taxes really aren't at issue.
Speaker: They also use federal funds.
Robert A. Zarnoch: Yes, we certainly do use federal funds, but the primary source of the revenues of the state are still the income tax and the general funds in the treasury.
Speaker: Counsel, the class includes more than the G-4 aliens.
Robert A. Zarnoch: That's true, Your Honor.
Speaker: And does the federal policy concerning non-liability for income tax for the G-4's extend to the other non-immigrants?
Robert A. Zarnoch: Your Honor, in terms of being treated differently for income tax purposes, yes, the federal government treats most non-immigrants differently with respect to payment of foreign source income for... payment of tax on foreign source income. The federal government doesn't tax them on that, and the state of Maryland doesn't... the state of Maryland doesn't either.
Speaker: So we should assume that everyone in the class under the federal tax structure would not be in--
Robert A. Zarnoch: Well, there may be a few, and I am going to say it is not perfect, but it doesn't have to be perfect. There may be a few classes of non-immigrants who, for example, are... don't have a tax exemption and may be classified as a resident alien for purposes of the federal income tax, which means they are treated the same. A few might be in that category, but we suggest, judging the class by its general characteristics, only a few. The majority of people don't.
Speaker: --Okay, and Maryland's primary concern is the fact that these people aren't contributing--
Robert A. Zarnoch: To the cost--
Speaker: --state income taxes.
Robert A. Zarnoch: --To the costs of the education.
Speaker: And does that mean that we do have some kind of a supremacy clause problem of some significance because the policies appear to be in opposition?
Robert A. Zarnoch: Well, Your Honor, as I indicated before, that, you know, there are a few that, for example, don't have a tax break. They simply may be classified as a resident alien for income tax purposes, but--
Speaker: Okay, but you have just told us to ignore that.
Robert A. Zarnoch: --But they are still disqualified, because they are included in the broad class of non-immigrant aliens. We don't evaluate the individual tax situation of non-immigrant aliens. What we do is, we are including every member of that class. You know, they are disadvantaged by the policy, without a focus in on the particular source of their tax break, be it state law, be it federal law, be it treaty, no matter where. That is part and parcel of the general characteristics of non-immigrant aliens, and we suggest that having drawn the line there, we are not picking out, for example, a federal treaty problem or a federal tax benefit. For example, I don't know if there is any law that requires the state of Maryland to exempt foreign source income from... the payment of taxes on foreign source income. That federal law does not require a tax on that, but I don't know if there is any particular requirement that the states not tax that kind of income. But in any event, the state doesn't tax it, and that is another distinguishing characteristic of a large number of members of the class.
Speaker: General, do you have any figure on what percentage of the costs tuition is?
Robert A. Zarnoch: Well, I could give you some rough figures in terms of percentages.
Speaker: Is it in the record, or not?
Robert A. Zarnoch: No, it is not. It is not in the record. But in terms of the general funds of the... roughly the University got about $160 million in a recent year. In terms of... roughly $30 million comes in by way of tuition and fees, and that money is appropriated back to the University by our General Assembly each year.
Speaker: Do you think the total cost of... What about an undergraduate at the University of Maryland? You must have some figure as to what your cost of educating an undergraduate for--
Robert A. Zarnoch: No, I don't... I'm sorry. I don't have that, Your Honor.
Speaker: --But there is a substantial subsidy, is there?
Robert A. Zarnoch: Oh, yes, Your Honor. I mean, as I said, in terms of tuition--
Speaker: How about for out-of-state?
Robert A. Zarnoch: --Well--
Speaker: Out-of-state tuition? Would out-of-state tuition almost, or not quite--
Robert A. Zarnoch: --No, Your Honor.
Speaker: --or not even close?
Robert A. Zarnoch: Absolutely not. In terms of the tuition receipts by the University of Maryland, roughly $30 million. In terms of general funds being pumped back into the University, $160 million, five times as much.
Speaker: Yes.
Robert A. Zarnoch: It is clearly a subsidy, you know. It is tax subsidized.
Speaker: What is the tuition differential for a resident and a non-resident?
Robert A. Zarnoch: It is... it has gone up since the time of the figures stated in the Court's opinion. It is now $900 a semester, is the differential.
Speaker: What are the two figures?
Robert A. Zarnoch: The two figures, I believe, are roughly... well, in terms of yearly figures, $700 for resident and $2,500 for non-resident.
Speaker: $1,800 a year.
Robert A. Zarnoch: $1,800 a year.
Speaker: What is your income tax rate in Maryland?
Robert A. Zarnoch: The income tax rate is... it is 5 percent, roughly 5 percent over--
Speaker: So somebody earning $20,000 a year would pay $1,000 in taxes? He wouldn't pay as much as the differential, would he?
Robert A. Zarnoch: --Well, Your Honor, I think, you know, focusing in on non-immigrant aliens, and particularly the G-4's, for instance, you know, all the parents of the plaintiffs, for instance, here are professional employees of World Bank, making salaries well in excess of $20,000. Even the record indicated the salaries were in the $30,000 and $40,000 range, even when this case was argued back in 1976. So, you know, G-4's are a particularly appropriate class to contend that, you know, they are being disadvantaged with respect to an income tax contribution rationale, but, you know, the rationale goes a little further than simply contributions during the period in question. For example, if you stay in the state for a period of time, for example, an alien with a tax exemption, or a non-immigrant alien with a tax exemption, you are likely to stay here for a number of years, you know, just beyond the four years that a student might be in college. For example, the G-4 aliens here, many of them stick around until retirement age, having escaped income tax on their salaries for maybe 15, 20 years.
Speaker: Does the University derive income from the state sales tax?
Robert A. Zarnoch: Yes, the University does derive income or funds from the sales... the state sales tax, but in terms of--
Speaker: What percentage of the state's budget comes from income taxes as compared with sales taxes?
Robert A. Zarnoch: --Well, the... in terms of total, total revenues, the total revenue picture, about a quarter comes from income tax, half as much comes from the sales tax. There is twice... there is twice as many income tax... as much income tax revenue as there are sales tax revenues. The sales tax in fact is not even the second biggest item. Federal funds are the second item in terms of the top draw on the budget. Your Honor, if I may, I would like to turn to the Vlandis versus Kline question, unless there are any further questions on the other issues. We have set forth a number of reasons why we think Vlandis should be overruled, and the foremost of which is whether the Vlandis versus Kline doctrine represents a separate analysis any more. Typically, when a suit is brought challenging a state policy under the irrebuttable presumption doctrine, it also is challenged under an equal protection theory, and invariably lower courts, taking its key, I think, from both Salfi and Your Honors' opinion in Usery versus Turner Elkhorn Mining Company, have concluded that it doesn't matter if the state enactment is premised in the form of a presumption, as long as its operation and effect are permissible. For example, if under equal protection there is a rational basis that supports it, we need look no further under due process, and the lower courts, the circuit courts have simply... they treat an equal protection issue first, and then automatically it is okay under due process. So, the question is really, is there a separate analysis there any more. Also, there is a real question as to whether a court should be inquiring, demanding more than a rational basis on... as apparently was the case in Vlandis versus Kline. There is also a debate among the courts as to where the irrebuttable presumption doctrine belongs. Is it equal protection? Is it substantive due process? Is it procedural due process? And frankly, is not in sync with any of those particular theories. And lastly, I think in terms of the... it really doesn't demand the rationality of a measure any more. The way the doctrine is presently formulated, all you really need is to articulate some particular basis, an additional basis, more than one basis for your particular policy, and order them in a sufficient fashion, whether that is primary or secondary. It doesn't demand, at least in the way it is presently formulated, that a policy be rational, and we suggest that is what the Court should be looking for, and that is really the only inquiry a court should engage in when the issue is whether a due process violation has occurred. Unless there are any further questions, I would like to reserve the rest of my time for rebuttal.
Warren E. Burger: Very well. Mr. Bieke?
James R. Bieke: Mr. Chief Justice, and may it please the Court, there can be no question that the University's policy establishes a classification based on alienage, for on its face it allows citizens and immigrant aliens who are domiciled in Maryland to obtain but it totally excludes all non-immigrant aliens from doing so even if they are likewise domiciled in Maryland, and it is equally clear that this policy, this classification treats unequally only the non-immigrants who can be and are domiciled in Maryland. Contrary to what the Assistant Attorney General said, this is not at all non-immigrants. This Court's opinion in the Alkins case held specifically that most non-immigrants, and it listed a number of the visa categories, were precluded by the terms of their visas under the federal law from establishing domicile in this country. Obviously, these people are not discriminated against by the University's policy, because even if they were treated like citizens and immigrants, they would fail to qualify. The only non-immigrants treated unequally by the policy are those such as G-4's and a few other categories who are capable of being domiciled in Maryland under state and federal law.
Speaker: Were the named parties to this case all G-4's?
James R. Bieke: Yes, indeed, Your Honor.
Speaker: Was there any objection from either party when the district court certified a broader class than G-4?
James R. Bieke: No, the class certified, Your Honor, consisted only of G-4's.
Speaker: So that the only issue we have before us then is G-4's?
James R. Bieke: Yes, Your Honor. In fact... but I was trying to make a different point. That's true. The only issue involved in this case is G-4's. That's the class we represent, the only class certified by the district court. And the--
Speaker: So you disagree with the Attorney General's characterization of the class.
James R. Bieke: --Yes, Your Honor, and that would be... it is made clear by the fact that most non-immigrants aren't hurt by the policy. All we are--
Speaker: Well, Mr. Bieke, I am not sure your colleague said the class before the Court. He said the class to which the University's policy applies.
James R. Bieke: --That's true.
Speaker: You don't disagree with him on that, do you?
James R. Bieke: Your Honor--
Speaker: I mean, on its face, it applies to all non-immigrant aliens, whether they are discriminated against or not.
James R. Bieke: --On its face, it applies to all non-immigrants, but all non-immigrants are not treated unequally by the policy.
Speaker: I said whether or not. That's true.
James R. Bieke: Right.
Speaker: Right.
James R. Bieke: That is true. The--
Speaker: Putting it a little differently, if you win this case, only a handful of people will get a benefit, namely, the G-4's and two or three others. Is that right?
James R. Bieke: --That's correct.
Speaker: The rest of this 497 will still be ineligible for the lower rate because they are not eligible to be domiciled?
James R. Bieke: That's correct.
Speaker: Yes.
James R. Bieke: Now, this--
Speaker: Can you tell us how many people, then, you say are in the category which will be affected by this Court's determination?
James R. Bieke: --Mr. Zarnoch correctly said that in the years around 1978, 1979, there were around 70 G-4's at the University. The only other non-immigrant categories that we believe are capable of establishing domicile in this country are E's, who are treaty traders, and I's, who are foreign media representatives. There is no indication that... we don't know how many of those were at the University, but not very many. Most of them were... are people who are students who come to this country solely to go to school, and this Court in Elkins made clear that those people cannot be domiciled in this country.
Speaker: So we are really dealing only with about 70 people?
James R. Bieke: Yes, Your Honor.
Speaker: In some of the--
James R. Bieke: Per year.
Speaker: --All right. Some of the amicus briefs indicate that in fact the difference of the tuition is being paid by the companies that employ these people, and the students who are constituting the class are not out of pocket anything. If that be the case, how do they have standing?
James R. Bieke: That is not the case, Your Honor. We of course represent G-4, all G-4 visa holders, and these are employees of different kinds of organizations, so it is a different question for different organizations. For the Interamerican Development Bank, their policy is to reimburse their employees one-half the tuition and fees up to $3,500, so obviously if they pay a higher rate they pay half of the higher rate. And for the World Bank, they do have a reimbursement policy that is in the Joint Appendix, but that policy was adopted after the district court issued its initial decision and stay, and for the purpose of... the period of the stay, for the purpose of this litigation. At the time the class was certified, the G-4 people themselves had paid the difference, and so at the time the class was certified, they represented the class, and they had been harmed. And there are a number of organizations, and we don't know... have no reason to believe that they have any policy of reimbursement, the other... the people for the other organizations. Now, the University's policy here, as I said, treats the non-immigrants who are domiciled in Maryland differently from citizens and immigrants domiciled, because they are the only ones, the non-immigrants are the only ones who are excluded from in-state status without reference to their domicile. This is a classification that is based on their alienage, or more specifically, on their immigration or visa status, which is something that has been set by Congress. In fact, the University's main justification for this discriminatory treatment, which is that they are exempt from taxes on their salaries, is also something based on a federally granted right. In our view, this discriminatory treatment violates both the equal protection clause and the supremacy clause. For equal protection purposes, the classification made by the universities under the Nyquist case, one based on alienage because it is directed at aliens and harms only aliens, and we believe that this classification should be subject to the same strict scrutiny that the Court has applied to other classifications based on alienage. The reason why strict scrutiny has been established as a protective measure is that aliens are a prime example of a discreet and insular minority who have no voice in the political process and may be discriminated against by the majority unless specially protected by the courts.
Speaker: How about welfare payments? Would they be eligible for welfare?
James R. Bieke: Yes, Your Honor, I believe they are.
Speaker: Medicare and Medicaid, all the--
James R. Bieke: Medicare, there is a federal statute that precludes... that draws a distinction that excludes not only non-immigrants but some permanent resident aliens, some immigrants, and that was upheld in Mathews versus Diaz on the specific ground that the federal government has power to distinguish among aliens that the states don't have. But the non-immigrants here, that is, the rationale of strict scrutiny that I said applies equally to non-immigrants living in this country, residing this country, as it does to immigrants. The University would have you apply to this classification, which is concededly based on alienage and singles out a class of aliens for discriminatory treatment the same lenient rational basis standard that has been applied in the economic area to classifications which don't discriminate against any particular class that has been the object of heightened judicial solicitude, but that is inconsistent with the Court's whole history of concern for aliens, and also, I should say... I will get to this later... with the principles under the supremacy clause. Now, Mr. Zarnoch makes a point of the fact that this Court has sometimes in prior opinions referred to certain attributes of immigrant aliens. Generally speaking, however, those references were made in the context of applying strict scrutiny, not in determining whether strict scrutiny should be applied, but in any case. But in any case, the non-immigrants who are disadvantaged, the non-immigrants who are treated unequally by this policy, as I said, are those who are domiciled in the state, and these are not very different from immigrant aliens. They live in the state for many years. They must obey all their laws, all the state's laws, and I might say, incidentally, they do not have diplomatic immunity, as Mr. Zarnoch implied. They are assimilated into their communities. They participate in their communities, and they pay all taxes except those on which they have a specific exemption established by international agreement, over which they have no control, and these taxes include not only sales taxes and property taxes, but income taxes on all other income except those salaries. If their spouses work, full income taxes on their spouses' salaries. If they get any other income from investments and so on, they pay full income taxes on that. These people have made the state their home. That is the meaning of domicile. They are not going to return to some foreign country some time. They live here, and they intend to live here permanently. And at least when the state is treating such a class of its own domiciliaries differently from its other domiciliaries, solely on the ground that they are a particular kind of alien, that classification should be subject to the same scrutiny that this Court has applied to classifications harming immigrant aliens. Now, the University makes a great deal of the fact that these people don't pay the full range of taxes, but as I said, that is not a reason for lowering--
Speaker: --Counsel--
James R. Bieke: --Sorry.
Speaker: --if we were to determine that the non-immigrant aliens were not entitled to strict scrutiny, would you concede that the Maryland policy would meet the rational basis test?
James R. Bieke: No, Your Honor. The... Even if the Court would decide that strict scrutiny did not apply, nevertheless there is no getting around the fact that this is a classification which singles out aliens for discriminatory treatment, and shouldn't be subject to the same rational basis test that has been applied to, say, social security classifications. At least some form of heightened scrutiny should be required, and we don't think that could be met.
Speaker: No, but get back to my question. Assume for purposes of answering this question only that we do not apply any kind of heightened scrutiny to this class. Then how do you have your rational basis?
James R. Bieke: Well, there is one other thing I have to say.
Speaker: And do you have to rely on Vlandis versus Kline to do that?
James R. Bieke: No. We can rely on the supremacy clause. Even if the Court should decide--
Speaker: Well, that is a whole different--
James R. Bieke: --It is a whole different thing. Yes. But it requires that there... when there is a classification, a discrimination against aliens who are lawfully admitted to this country when the state is imposing discriminatory burdens on them, the supremacy clause, too, requires something more than rational basis, but... and we have argued in our brief that even apart from all of that, even apart from any strict scrutiny or any heightened scrutiny, and apart from the supremacy clause, the classification is not rational. Now, that is a hard argument, and we don't think we would have to reach it, because of all the reasons I gave for why the scrutiny should be stronger. But still, it is not rational. In fact, these people do pay all taxes except those on which they have the exemption. They pay sales taxes, property taxes, and income taxes on any other income, and over the course of the years, then, they may have made substantial contributions to that state.
Speaker: --What if the federal government as a matter of statutory law provided that G-4's should not have to pay any federal or state taxes, and the University of Maryland accordingly adopted the policy it has? Would you say that that policy couldn't survive rational scrutiny, rational basis?
James R. Bieke: If the federal government's policy was, they didn't have to pay any taxes?
Speaker: Yes.
James R. Bieke: Well, that would be harder for a rational basis. It would be better for the supremacy clause.
Speaker: Yes. I am just asking about rational basis.
James R. Bieke: That would be a... it is not our case. It would be a harder question. But there is still the fact that the University does not apply this cost equalization tax payment justification to citizens and immigrants. There is still that aspect of irrationality, and there are a number--
Speaker: Well, but they presumably pay some taxes. Your people have a very good deal in that regard.
James R. Bieke: --Not all of them. There can be... there are a number of sources of state income that go to citizens or immigrants on which... which are exempt from state taxes. For example, immigrant visa holders working for these same international organizations, and there are hundreds of them, are likewise exempt from taxes on their salaries, and yet they are entitled to in-state status upon a showing of domicile.
Speaker: Are the immigrant visa holders exempt by virtue of the place where they work?
James R. Bieke: By virtue of the international agreements establishing the organizations for which they work. That's right.
Speaker: Mr. Bieke, which... is the supremacy issue here? It is, isn't it?
James R. Bieke: Yes, indeed.
Speaker: Which... if you were going to win, which ground would you prefer?
James R. Bieke: Your Honor, I think that they are both entirely sufficient to win.
Speaker: Yes, I think they may be sufficient, but there are certainly different consequences, I suppose.
James R. Bieke: There are some different consequences.
Speaker: So I ask you again, which would you prefer?
James R. Bieke: I think that I can only say that I--
Speaker: Which is better? Which is best for your clients?
James R. Bieke: --They both have exactly the same results. Our clients who are... as I say, all we are seeking here is equal treatment with citizens and immigrants.
Speaker: Well, suppose we decide on the supremacy clause basis, and then Congress, instead of saying the aliens should be exempt from further taxes, say that, and furthermore, the states may charge non-immigrants out-of-state tuition?
James R. Bieke: If Congress said that, then we would... the supremacy clause ground would be gone, of course.
Speaker: Yes, and so... but if we decide it on equal protection grounds, like you suggest, Congress couldn't say that.
James R. Bieke: Congress could not say that, but Congress could say that they could no longer... they could reach the same result by saying that they could change the domicile point and say that we are now going to treat them just like most non-immigrants, say they can't be domiciled.
Speaker: Well, I know, but Congress couldn't... Congress then, they might say, get rid of the supremacy clause, but they couldn't get rid of the equal protection problem.
James R. Bieke: Yes, they could, in the way I said. The supremacy clause only requires that people be equally treated. Most non-immigrants are not being treated unequally by this because they can't be domiciled here under federal law. Congress could say that these non-immigrants--
Speaker: Well, that is--
James R. Bieke: --could not be domiciled here under federal law either.
Speaker: --Yes. Yes.
James R. Bieke: They haven't done that, and they haven't done anything like what you suggest for supremacy clause.
Speaker: Yes.
James R. Bieke: I think that both--
Speaker: Well, of course, there are 50 states in here.
James R. Bieke: --Yes, there are.
Speaker: Fifty states, and this judgment is going to control not just the few handful of people that you suggest who live in Maryland, but all over the country, I suppose.
James R. Bieke: This judgment is going to control only those non-immigrants who are capable--
Speaker: Yes, yes.
James R. Bieke: --of being domiciled in this country--
Speaker: Yes, but there are more--
James R. Bieke: --and there aren't very many of them. There... most of the G-4's live in... around Washington and New York, because that is where the international organizations are. There aren't a lot of people throughout the country and the states.
Speaker: --Well, there are going to be more than live in Maryland, though.
James R. Bieke: Yes, that's true.
Speaker: Yes.
James R. Bieke: Now, let me--
Speaker: This will embrace all of the UN personnel and the subsidiary agencies, will it not?
James R. Bieke: --Yes. Yes, Your Honor, and they live mostly around New York. Now, let me address the supremacy clause issue. Under this Court's decisions in the cases of Takahashi, Graham against Richardson, DeCanas against Bica, it is established that it is up to the federal government to decide the terms and conditions upon which aliens will be admitted to this country and will reside in this country, and once it has done so, the states may not impose additional discriminatory burdens on them... excuse me... not contemplated by Congress, and they especially may not do so on account of their immigration status assigned by Congress. Here, Congress has assigned the various classes of immigrants and non-immigrants, and has decided on the restrictions applicable to them, and as this Court held in Flkins, Congress has deliberately decided that the G-4 visa holders and a few other categories are entitled to be domiciled in this country, unlike most non-immigrants. In this situation, the states may not rely on their immigration status to impose 45 restrictions not imposed on other domiciliaries of the state. To do that is to impose on their residents in this country discriminatory burdens not contemplated by Congress. This may be justified, but only in the most exceptional circumstances, such as, for example, where the state is regulating in the area of traditional state sovereignty, defining qualifications for voting or for holding elective offices. There that... there may be a good reason for what the state has done, but nothing like that is involved here. Here, Congress has decided that these non-immigrants can be domiciled here, as a matter of federal immigration law. And but for their status under the federal immigration law, they would be entitled to these benefits. In this situation, the state cannot on account of their immigration status deny them the benefits that it grants to all other domiciliaries. That is inconsistent with Congress's decision in admitting them. That is an encroachment on the exclusive federal authority over immigration, and is in violation of the supremacy clause.
Speaker: I don't know that I follow that argument completely. I mean, isn't the state entitled to take the factual situation which confronts it as 46 brought about by the Act of Congress and deal with that accordingly?
James R. Bieke: Certainly there are situations in which the state may rely on the federal decision. For example, here, the federal decision is that most categories of non-immigrants can't be domiciled in this country, and there is nothing wrong with the states relying on that to exclude them from in-state status, assuming that citizens and immigrants were treated on the basis of domicile, but here, the only difference between these non-immigrants and immigrants is their immigration status, and--
Speaker: Well, also the fact they don't pay state income tax, I take it.
James R. Bieke: --Your Honor, that is true, but that is also based on a federally granted right.
Speaker: Right, and the state isn't trying to collect state income tax. It is just saying that for people who don't pay state income tax, we are going to treat them differently than people who do. That doesn't strike me as anything very arbitrary.
James R. Bieke: That... well, it is not... it is not saying that completely. That is, it is not applying that cost equalization justification to immigrants and citizens. As I said, some immigrants and citizens are 47 exempt from taxes, and yet the University is allowing them to obtain in-state status upon a showing of domicile. The real crucial difference between these people, non-immigrants domiciled in the state and immigrants domiciled in the state, and citizens, is their immigration, their visa status, and that, the University cannot rely on because it is imposing additional discriminatory burdens not contemplated by Congress. But even if the University says no, that is not why we are treating them differently, we are treating them differently because they don't pay taxes, that is no good either. That is a violation of the supremacy clause as well, because for most G-4's, those employed by the organizations listed in our Addendum A to our brief, they have been granted by the international agreements which have established them--
Speaker: What if Maryland were to conduct a lottery, and the only way you could get into the lottery was by filing a receipt for your income tax return last year, so that in effect the lottery was limited to people who paid Maryland income tax. Now, these people obviously couldn't participate in the lottery. Would you--
James R. Bieke: --Most of them could if they... because most of them pay income tax, on other than their salary.
Speaker: --Well, take the example of those few who don't pay an income tax on their salary, or whose salary is their only income, so that they would be disqualified. Would you say that the lottery violates the supremacy clause?
James R. Bieke: Well, I don't know. That would be an interesting question. The principle... but the principle is... I would have to think about that for a minute. Let me... The principle is that the state, even... there need not be a direct conflict between the language of the policy and the language of the international agreements. It is established that the state may not penalize them on account of something granted by... an exemption granted by federal law, and I think they might have an argument in that case. Certainly they have an argument here that the objective of the international agreements is that these people are supposed to have an income tax exemption, and that carries with it the implication that they are not to be penalized by the state, not to be subjected to burdens by the state on account of their federally granted income tax exemption.
Speaker: Mr. Bieke, until now, at least, this Court has not applied a supremacy clause analysis to cases involving aliens, has it?
James R. Bieke: Oh, yes, Your Honor, in many cases, starting with--
Speaker: Relying on the supremacy ground, in your view?
James R. Bieke: --The Graham against Richardson relied on both grounds. The Takahashi case also both grounds.
Speaker: There is some language in it to that effect, but do you think we can really say they were based on that argument?
James R. Bieke: Well, they were... certainly appeared to be independent grounds, and the DeCanas case, DeCanas against Bica, was a case that upheld a classification that harmed illegal aliens, but that case made clear the principles, and that was only a supremacy clause case, and said specifically that it is up to Congress to decide the conditions on which aliens will be admitted to this country, and that states may not impose additional discriminatory burdens not contemplated by Congress, and we believe that principle applies here.
Speaker: Has the Court applied, in your view, heightened scrutiny to cases of non-immigrant 50 aliens?
James R. Bieke: No, the cases in fact that this Court has decided to date have all applied strict scrutiny, but none have involved only non-immigrants.
Speaker: Right.
James R. Bieke: They have involved either all aliens or permanent resident aliens. But as I said, these people are not very different from permanent resident aliens.
Speaker: I suppose your position would be the same with respect to a non-resident hunting license, for example.
James R. Bieke: It would depend on--
Speaker: Suppose they charge $50 to go duck hunting in Maryland, but $100 for non-residents.
James R. Bieke: --That would be okay, if they treated citizens and immigrants the same as non-immigrants.
Speaker: No, citizen, $50, your category, your class of people $100.
James R. Bieke: Citizens of the United States resident in Virginia pay $50, and so do immigrants. Non-immigrants resident of Virginia, even if domiciled there, pay $100. I think that there would be a strong argument in that case that they would not be treating them equally. It would depend on the justification in that case. If it was that they didn't pay taxes, we would have a problem. Now, there is a case--
Speaker: What if Maryland had a rule that people who don't pay the income tax shall pay a slightly higher property tax?
James R. Bieke: --I think that would be penalizing them on account of something granted by the federal government. Now, there is a good case not cited in our brief on this point, a case called Perez against Campbell. It is in 402 of the United States Reports. That case involved the Federal Bankruptcy Act, which allowed people to obtain full discharges in bankruptcy, and the Court, there held that it was a violation of the supremacy clause for the state to have a statute which required suspension of their driver's licenses for non-payment of judgments arising from auto accidents, even when there had been a discharge in bankruptcy, and the reason was that that penalized them on account of something granted by federal law.
Speaker: You mean, penalized them as compared with other people.
James R. Bieke: Yes, indeed, penalized them as compared to other people.
Speaker: So you don't... if Maryland said, well, we will just start taxing these people on their foreign source income?
James R. Bieke: That wouldn't be... that wouldn't be penalizing them if that was true of other people as well.
Speaker: Well, I know, but wouldn't... say they just, people who are not, who are exempt from federal income tax, we are going to start charging, taxing their foreign source income.
James R. Bieke: I think that it would be... if they were being treated differently than citizens and immigrants, and on account of the fact that they had a federal tax exemption, then that would not be something that would be consistent with the federal tax exemption. Congress--
Speaker: But if they taxed the foreign source income of all aliens. Of course, they do tax foreign source income of citizens now, I suppose.
James R. Bieke: --They do in most situations.
Speaker: Yes. But if they taxed the foreign source income of all aliens, you wouldn't have much of a beef.
James R. Bieke: Well, they might have a classification there that would be treating all aliens differently, which we know is subject to strict 53 scrutiny. But the--
Speaker: As compared to whom?
James R. Bieke: --As compared to citizens.
Speaker: Well, they are getting a--
James R. Bieke: If citizens were being taxed--
Speaker: --We are going to... well, citizens do pay taxes.
James R. Bieke: --Well, then, they would not--
Speaker: On foreign source income.
James R. Bieke: --Then we would have no beef.
Speaker: Yes.
James R. Bieke: Now, it is not... we don't know exactly which ground the university ultimately relies on. It appears to say that these G-4 visa holders domiciled in Maryland are treated differently from other domiciliaries because of their immigration status. It not that it just appears to be so. That is what the policy says. The only difference between them is their immigration status, and that is something that is treating them differently on account of their visa status, which is assigned by Congress, and that they can't do. They cannot impose discriminatory burdens on them on account of that. And if their reliance is on the tax ground, the fact that they don't pay full taxes on the salaries, then that must fall, too, for the 54 same reason. They are being penalized on account of their tax exemption. Here, the University's discriminatory treatment of G-4 visa holders who are domiciled in Maryland is inconsistent with the federal judgment that they are entitled both to be domiciled in this country and to have a tax exemption. All we are seeking, in other words, is equal treatment with citizens and immigrants, and the University's failure to provide that violates the equal protection clause and the supremacy clause. Thank you.
Robert A. Zarnoch: Your Honor, I will just be very, very brief. First--
Warren E. Burger: You have four minutes remaining.
Robert A. Zarnoch: --Four minutes, Your Honor? Your Honor, in terms of the assertion that most spouses of G-4 aliens pay some tax, the record... the only record references to the actual payment of tax would show that two out of the three parents of the named plaintiffs do not have spouses earning income tax. The record would rebut that contention. Your Honor, in terms of the class affected, the question here that we are only dealing with a small number of non-immigrant aliens, first, diplomats, A visa holders, aren't any different than G visa holders. There are 72 of them at the University of Maryland during the period in question. So you would add another 72 on. There are additional classes that really aren't terribly different than G-4's in terms of not having a federal disability. Moreover, the question of whether any of the categories of non-immigrant aliens can be domiciled in Maryland is a question for the Maryland courts to decide, as this Court indicated itself in Elkins versus Moreno the first time this case was here. The courts across the country differ widely on visa categories, whether they are able to acquire domicile in a jurisdiction for a particular purpose. There is absolutely no consistency, no guarantee that the court of appeals wouldn't find every category of non-immigrant capable of being domiciled in the state of Maryland. Moreover, the class struck down by the Fourth Circuit and by the lower court included all non-immigrant aliens. If you judge the class--
Speaker: Well, but the part of the submission here is that... on the supremacy clause ground is that Maryland may not deny them domicile.
Robert A. Zarnoch: --Your Honor, if all Maryland does is--
Speaker: I mean, isn't that their submission, part of it?
Robert A. Zarnoch: --May not deny them domicile?
Speaker: Yes. The federal government--
Robert A. Zarnoch: Well--
Speaker: --The federal government says they may be domiciled in this country.
Robert A. Zarnoch: --But in terms of their... their position is they can't be denied the benefit, rather than domicile. But even if you assume all categories of non-immigrant aliens can be domiciled here, you know, we suggest that the cost equalization rationale cuts across that line. We don't pick out G-4 aliens, their treaty benefits. We focus on simply the status of being non-immigrant, and we think that is justifiable. Thank you, Your Honor.
Speaker: May I ask one--
Warren E. Burger: Thank you, gentlemen. The case is submitted.