Earl Warren: Number 54, United States et al, Petitioners, versus Max Powell. Mr. Segal, you may continue your argument.
Bernard G. Segal: Mr. Chief Justice, confronted by the necessity of answering what really amounts to a narrower argument on the other side in two cases so related, I'm wondering whether I might ask for three or four additional minutes beside the 30, I'm allowed.
Earl Warren: Well, I suppose so, but it means summary docketed rule Mr. Segal and if you're really tense for time you may take that much.
Bernard G. Segal: I do so only because of the --
Earl Warren: But I don't want it to be a custom just because we did it the other day with someone, I wish you wouldn't look at it from that point.
Bernard G. Segal: Oh no, I do so only because of the hour devoted to virtually the same cases on the other side.
Earl Warren: Well, they are two different cases, they are two different cases Mr. Segal and normally we expect a man to finish within his time.
Bernard G. Segal: Alright.
Earl Warren: And this has a single issue and it can well be argued in 30 minutes.
Bernard G. Segal: Fine, but I will remember to do so. Now, I will consider that. First, I should like to correct and this is one of my problems, the misapprehension created in the other argument yesterday, Mr. Chief Justice and members of the Court, that there is a simple expedient here that the government can just go to the tax court. Your Honors, will remember that, that was the answer you got form Mr. Begley when you asked the question, that simply isn't so. In the first place, the government can never go to the tax court. The tax court is not available to the government. In the second place, what would happen in the related situation, demonstrates the safeguard that Congress did place on fraud cases because what would happen is the taxpayer would got a 90-day letter. He would then come to the tax court and ask the tax court to stay the assessment. Then the government would have to raise the defense of fraud and the statute expressly says that, then the government has the burden of proving fraud and the rules say it must then set forth all the facts that constitute the fraud. Then it must improve suspicion of fraud, it must then prove fraud. So that as Your Honors can see that government even if allowed to go the tax court under those circumstances never would because it would have to show all the facts and would have a far greater burden. So that simply was on a say, with full deference an erroneous answer to the justices' question. Second I should like to point out, yesterday I said that it was not available to the government in this case, the argument on the affidavit's conclusory statement about over purchases. Since that is not the issue presented for certiorari and it wasn't the issue argued in the District Court. But there's a much more fundamental reason, I should like to refer Your Honors to that argument by the Court, because it really shows what the Courts -- what the Government's concept is of a fair hearing in this case. Because what it means is that the Court believes -- the government believes that all it has to do is file an affidavit, refuse to permit the witness to appear, and on that conclusory statement get relief. Now, Your Honors will remember that in Reisman, this Court held and the government contended the very opposite of that. It said, don't permit the government to be enjoined by the taxpayer because he has the right to a full adversary hearing. Now is that a hearing? You file an affidavit with a conclusory statement, you refuse to produce the witness, isn't cross-examination the first fundamental of a fair hearing? So I say to Your Honors that while the substance isn't available, the argument really points out, the government's view point here that what the Court is a rubber stamp. That when the government comes to the Court for enforcement all the Court can do is say, "Here's an affidavit, you don't have to produce the witness, he doesn't have to be cross-examined." And now Mr. Justice Black to relieve your mind as to the length of the hearings, may I say that I have reviewed all of the cases. In only one case did the hearing exceed a day, because all that's involved is the suspicion of fraud and therefore all that has to be done is to put the agent on and in these cases what has happened is the agent says "Here are my grounds for suspecting fraud." There is usually nothing the taxpayer can do except cross-examine him as to the honesty of whether he is giving answers that are true. On one or two occasions, there was countervailing testimony, in only one case was a day-and-a-half consumed, usually a half day is consumed in all this cases.
Arthur J. Goldberg: So how you can define [Inaudible]
Bernard G. Segal: The only issue --
Arthur J. Goldberg: [Inaudible]
Bernard G. Segal: The issue is whether the government has a reasonable basis for suspecting fraud, whether it can meet this burden relatively slight which is cast upon it. In the relatively few cases out of the 60 million taxpayers, where it wants to allege fraud, whether before it can place on the taxpayer the onus of a fraud examination, it comes into Court and says "Your Honor, we'd like our summons enforced and we'd like it enforced because we have a suspicion of fraud and the reason we suspect fraud is this” and all the cases have used that test for alternatively probable cause except Judge Browning who has used this rational judgment.
Arthur J. Goldberg: [Inaudible]
Bernard G. Segal: Oh Mr. --
Arthur J. Goldberg: [Inaudible]
Bernard G. Segal: It can look into it, but it can institute an examination and as for records just think of what that would mean. That would mean that every taxpayer would be at the mercy of every citizen.
Arthur J. Goldberg: [Inaudible]
Bernard G. Segal: The real question Mr. Justice Goldberg is whether the government has any basis to go into it. I say that a mere letter is not a basis. If the government thinks it's a basis it looks at -- it looks at the kind of house the man lives in from the outside, it tries to get such superficial evidence as it can get, but it can't act and ask the Court to enforce summons. It can issue a summons if it wants to, but if the taxpayer objects, then the Court must have a hearing and there's an obligation on what the government must show and this is what Congress intended to protect against. This is why Congress put on the government the burden of proving fraud. This is why all these cases say you must show a suspicion of fraud. It isn't automatic that the government ought to have the right to examine each citizen for fraud. It's automatic that it has the right to examine each citizen's return and we must remember that, Mr. Justice Goldberg how plenary is the authority of the government in the first three years and it uses this plenary authority. Now to please the Court, as I left the Court yesterday and this is my last point, I thought what could be said to counter the force and the specific facts of the history that I related to Your Honors yesterday of the practices and the decisions under them, certainly, it can't be said that the statute is not clear. Certainly that they're not old. Certainly it can't be said the treasury department has ever asked for an amendment or that Congress has made an amendment and I say it cannot be asserted that the Government has not used this very test and I just quote one case to Your Honors Martin against Chandis back in 1942 where the Court said, "It is appellants, that's government's, contention that the only showing required and we assume also that the only contention required is" and I quote the government's contention, “a showing of probable cause sometimes called reasonable ground for suspicion of fraud.” That's right in the decision of the Court. Therefore, the only possible confusion that might result this from language used in cases, and I discount the Second Circuit for the moment, where the holdings are contrary to some of the language. In older cases where they talk about the Fourth Amendment where the taxpayer raises the defense of fraud. In newer cases, few of them where they talk about Oklahoma Press and Morton Salt, which Your Honors will recall is a case -- are cases where there were challenges under -- constitutional challenges under Fourth and Fifth Amendment, where it was assumed that the statutory authority existed. For example, in the first part of De Masters, and that's the only one I can say to Your Honor Judge Browning's case, there is language in which he rejects probable cause as a test citing Oklahoma Press and Morton Press. But then what does he go on to do? First, he shows the difference in the authority of the commissioner in the three years and thereafter. Second, he goes on to show the -- that after the bar the burden had shifted. Third, he just demonstrates the dichotomy of 7605 (b) showing that there are two distinct prohibitions, and the first, no one necessary investigation is mandatory is the word he uses and then he establishes his test. That reminds me if Your Honors please, of Mr. Justice Jackson's favorite quotation from Byron and Julia saying, she never would consent, consented because eventually what he holds is and I quote him, "The decision to investigate a innate of that purpose, namely to ascertain whether a suspicion of fraud is present, was in fact reached as a matter of rational judgment based on the circumstances of particular case” which wipes out the language as it does in the other cases. Now, Your Honors --
Arthur J. Goldberg: [Inaudible]
Bernard G. Segal: Oh, absolutely but he couldn't -- he just be out just like that Your Honor. The authority is plenary and the Court has said again and again that's why you don't have one case. Not one reported case in which a taxpayer came in.
Arthur J. Goldberg: [Inaudible]
Bernard G. Segal: Oh, no, no. They could come before couple of a hundred District Courts. They needn't wait for this Court to decide it, just you haven't decided that these cases but they're here. Now Your Honor, I just want to finish with this, if it pleases the Court. This is one of the only two cases in the whole history of the statute where the Court is being asked to enforce a summon in which the only averment is a conclusory averment in an affidavit, the witness being refused to appear.
Justice Bernnan: [Inaudible]
Bernard G. Segal: Under those circumstances that would be adequate proof.
Justice Bernnan: That's what you said [Inaudible]
Bernard G. Segal: That is the kind of proof and it is the kind of proof which it has adduced in all of this cases and if it desires to change it, if it please the Court, it ought to go to Congress to ask the change. I thank Your Honors.
Byron R. White: I think your -- the governments' first point to the Court is that they -- it doesn't need to say anything other than the -- well this material -- these records are material in relevance. You don't need to say that we suspect fraud as we made the investigation and certainly don't have to show in fact. It's just to say there are no statute of limitations on fraud and we can search for fraud anytime, just like that we can search for anything else more than three years and runs to another matter and what's your answer to that anyway? I think there's no statute of limitations on fraud, why shouldn't the government be able to search for fraud anytime, just like it could search for anything else within the three years and not constructed to the Act, the word necessary doesn't make -- it doesn't mean anymore after three years in connection with fraud, does the word necessary means before the three years of everything else?
Bernard G. Segal: Oh, I think that's a very good statement Your Honor of the government's position. It flies in the face of the Congressional purpose from the beginning of our government that when fraud is alleged, the government has a special burden. There is -- are civil rules of procedure, all of the statutes, every time that fraud is alleged by the government, the burden changes. If the government --
Byron R. White: I know, but the Government hasn't alleged anything, so that we don't have to until we've searched and we can go around and search any body's records for fraud at anytime?
Bernard G. Segal: Well, they have alleged. They must allege to come in --
Byron R. White: I say they don't have to, that's the point?
Bernard G. Segal: Well, the point that I make Your Honor is it if you read these statutes and you read their purpose, if you start with 6501 which certainly as the Courts have said marks a demarcation, he can't assess after the three years unless he finds fraud. Now this --
Byron R. White: Exactly, but we can search for it.
Bernard G. Segal: Yes, he can search for it but it shifts the --
Byron R. White: Well, that's all he said, I can search for fraud anytime.
Bernard G. Segal: Yeah.
Byron R. White: And I can assess it anytime I like.
Bernard G. Segal: He can search for it, but when he asked the Court to enforce a summons, then he's got to show the Court some reason for calling on the Court under an adversary hearing in view of the inter-relation of these statutes when Congress put in the provision that there shall be no unnecessary examination, he would have to concede that an examination is unnecessary, if there's no suspicion of fraud. It has to concede that.
Byron R. White: [Inaudible]
Bernard G. Segal: Oh, well Your Honor, I --
Byron R. White: Concede that [Inaudible]
Bernard G. Segal: I don't think he doesn't concede that an examination after the three years is not unnecessary if there is not a suspicion of fraud. He says, as I understand it, that he doesn't have to disclose what his suspicion of fraud is. I don't believe the collector will ever say that he would start an examination after a three-year period unless he had the suspicion of fraud. The real issue here is, whether he can blindly assert that in spite of what this Court has said in the Reisman case as to what the hearing is for, in spite of what these statute say, whether he can say to the Court, you just enforce it on my assertion and I say to Your Honor that over the years that has not been the position the government took, it's for some reason --
Byron R. White: Well I understand that.
Bernard G. Segal: The position that take just in this two cases.
Byron R. White: I understand that, we have dealt with these case before, so I suppose we have to at least look at the statutory language.
Bernard G. Segal: Except I think it is persuasive, if it please the Court, that a whole series of treasury departments and a whole series of administrations that one interpretation of the Act which the Courts have sustained, and that another commissioner suddenly comes in and says, oh I have a different idea, I don't have to show anything, although I wouldn't bring it if I didn't have a suspicion of fraud.
Earl Warren: Very well. Mr. Terris.
Bruce J. Terris: Mr. Chief Justice may it please the Court. Let me restate what the government's position is again. We do take the position, Mr. Justice White that we do not have to suspect fraud. Now as a matter of practice, we don't do that. I indicated yesterday that we don't do random sampling. The service has never done and it wouldn't be very practical to do it.
Byron R. White: But it's certainly consistent with your position here --
Bruce J. Terris: That it could do it.
Byron R. White: To do so.
Bruce J. Terris: That's right. Except for -- it's impractical and I think it would be a burden on taxpayers and we do not do it. Now, our alternative theory is it's enough to have an affidavit saying we suspect fraud and that is of course, what is done in this case. And the problem of whether that issue is now in the case because it wasn't included in the petition I think is hardly a serious one because that exact issue was in our petition and the question in the petition is broad enough to cover it.
Potter Stewart: One thing I don't quite get about your position Mr. Terris is this. You in this case perhaps or maybe it was in the previous case you've conceded that you -- that the hearing, that when you go to the District Court there is a hearing, haven't you?
Bruce J. Terris: That's quite right Your Honor.
Potter Stewart: And I thought you had conceded that implicit in the very meaning of the word hearing is the right to cross-examine.
Bruce J. Terris: I do.
Potter Stewart: And that -- and in this case you wouldn't even put your witness on.
Bruce J. Terris: The point Your Honor, that we're trying --
Speaker: Because that isn't a issue.
Bruce J. Terris: That's right. That's -- you can cross-examine on anything that's an issue, but there -- what is not in issue is whether the government has probable cause. Now, that is an issue then Mr. Segal is quite right then the cross-examination is an order.
Potter Stewart: Yes, I don't think that I -- we need to -- I think to use the phrase probable cause maybe unfortunate because that brings all sorts of Fourth Amendment Constitution.
Bruce J. Terris: Well, he says that it's reasonable basis to suspect, I think is some -- his phrase and if that's an issue whether the government has reasonable basis to suspect then cross-examination is an order. That's our point that there's going to be a full trial if Mr. Segal is correct, that the government has to make a showing. That is the point or one of the points of our case. Now, this argument that the government is asking the Court to be a rubber stamp was made to this Court in the Oklahoma Press case. That exact issue was made, not only in constitutional terms but in statutory terms. This Court rejected it. It said there were great many issues that could be raised. The same kind of issues, the parallel issue as can be raised at the hearing on enforcement proceeding for an Internal Revenue Service summons.
Potter Stewart: It's your position that a self-serving affidavit is sufficient, that you -- that you're under no duty to put your witness on even to -- even for the purpose of his bidding cross-examiner as to whether not he is telling the truth as to the fact that he suspects fraud, is that it?
Bruce J. Terris: Well, our first position is we didn't need the affidavit.
Potter Stewart: I'm not talking about your position.
Bruce J. Terris: Our alternative position; now, Mr. Segal says that this is the first time that's occurred. It is not the first time. The Second Circuit in the Forester case upheld that position of the government. We put on an -- we gave an affidavit, the government was upheld. The Fifth Circuit did the same thing in the Globe Construction Company case. So that this is not the first time. It's at least the third time and in two previous times the government has been successful.
Arthur J. Goldberg: Who was the taxpayer there?
Bruce J. Terris: Yes, Your Honor.
Arthur J. Goldberg: How do you think about [Inaudible]
Bruce J. Terris: Well, Your Honor, I would think that the hearing would be confined to that issue unless he makes some kind of a showing through the agent or through other means, that there is --
Justice Bernnan: But you didn't produce the agent?
Bruce J. Terris: He didn't say that he wanted to prove it was a shake down.
Speaker: I would suppose the answer to that question is very settled. The taxpayer goes [Inaudible]
Bruce J. Terris: Yes.
Speaker: [Inaudible]
Bruce J. Terris: I may say in addition Your Honor that he could have called the agent. We didn't call the agent. It was -- there was no indication that the agent wouldn't have appeared if the other side had asked for him so that, that question we really don't get to that question in this case and I agree with Mr. Justice Harlan. I think that would be the procedural way that you would get to the shake down --
Justice Bernnan: But do I get you Mr. Terris that in this case, you didn't need this affidavit to get your order.
Bruce J. Terris: That's our first position. That --
Justice Bernnan: Well, I mean what -- and this -- well as I understand it your intermediate position if that's what it is, that your ability to use the affidavit or not as the commissioner decides.
Bruce J. Terris: Well, our first position is we don't need an affidavit at all. The second one, our alternative theory is we do and we have one.
Speaker: Let me ask you another question, [Inaudible]
Bruce J. Terris: Same procedure.
Speaker: [Inaudible]
Bruce J. Terris: That's right. And as --
Speaker: [Inaudible]
Bruce J. Terris: Well, not up till now we haven't had to make any kind of a showing. I think if this Court indicates that a showing is necessary in a fraud case unless it's very careful in it's opinion to --
Speaker: [Inaudible]
Bruce J. Terris: Well, the first -- our first point is that it doesn't have any separate meaning other the second part of the section.
Speaker: [Inaudible]
Bruce J. Terris: That's right Your Honor. That is the issue. Then the second sub-issue of that is what does unnecessary mean and we think Webster makes clear what it means and it doesn't mean when Mr. Segal reads into it, unreasonable. That is not what's in Webster and I assume that, that -- unless there is some gloss put on it by the legislative history that, that meaning should be followed.
Potter Stewart: Within the first three years you don't -- you're not suggesting there is any really serious problem for the government because you -- the statute says that you can summon anybody's books and records for the purpose of ascertaining the correctness of any return.
Bruce J. Terris: That provision of the code applies to after three years Your Honor.
Potter Stewart: Yeah, but you have to prove -- you're forgetting about the Statute of Limitation?
Bruce J. Terris: But the Statute of Limitations doesn't purport to limit that provision. Section 7602 provides -- covers across the board without limitation. Now, the respondents are arguing that implicit in the Statute of Limitations is this limitation. Yet they themselves admit that Section 7605 (b) is not confined. In terms as of course it isn't to just the period after the Statute of Limitations is right.
Potter Stewart: I was simply suggesting that if you're right, if your are right about the period after three years you're certainly right about the period before three years.
Bruce J. Terris: Oh that, there's no doubt about that. If we're wrong about the period after three years, I'm suggesting there may be a problem about the period before three years.
Arthur J. Goldberg: [Inaudible]
Bruce J. Terris: That's right, Your Honor.
Arthur J. Goldberg: [Inaudible]
Bruce J. Terris: I would think that it would have the right to inquire whether this was a burdensome request, if it wasn't I think that -- in other words if the --
Arthur J. Goldberg: [Inaudible]
Bruce J. Terris: Right. Well I'm not -- I don't want to suggest a broad meaning of arbitrary because then I think what we're merely going to come up with is that now arbitrary means at least we're going to be back to the same question.
Arthur J. Goldberg: [Inaudible]
Bruce J. Terris: That's right.
Arthur J. Goldberg: [Inaudible]
Bruce J. Terris: That's right.
Arthur J. Goldberg: [Inaudible]
Bruce J. Terris: That's right.
Arthur J. Goldberg: [Inaudible]
Bruce J. Terris: No. It's quite clear that that general rule doesn't mean that you have to make a showing as respondents' arguments. That's certain, at least that much Oklahoma Press and Morton Salt and the other cases establish that. It's not abuse of process to even be doing a fishing expedition, that's what Morton Salt was. That's well beyond -- well, that's the random sampling I suppose and Morton Salt says an administrative subpoena is essentially the equivalent of a grand jury one. Now, really the only issue is whether 7605(b) cuts across that and changes the rule heretofore -- within the tax field. I think that's the burden of respondents to show that the rule has been changed.
Hugo L. Black: How long has 7605(b) been the law?
Bruce J. Terris: Since 1921, Your Honor.
Hugo L. Black: All of it?
Bruce J. Terris: That's right.
Hugo L. Black: Both parts of it?
Bruce J. Terris: That's right, Your Honor.
Hugo L. Black: Do you rely on the second part at all? I haven't heard you mention it.
Bruce J. Terris: Positively rely affirmative --
Hugo L. Black: You claimed now the secretary has the right to use it.
Bruce J. Terris: We relied in the sense that we think the only restriction on this -- for second examinations is that this kind of statutory notice be given a statutory --
Hugo L. Black: Was it be given?
Bruce J. Terris: It was given and we suggest that other than relevancy, and materiality and the various constitutional objections which are possible, that is all that is necessary. That's right Your Honor. That is the reason we believe we satisfy Section 7605 (b).
Speaker: Well you got a second [Inaudible]
Bruce J. Terris: That's right and that's the only meaning of necessary. It doesn't apply at all to first examinations.
Speaker: [Inaudible]
Bruce J. Terris: That's one of our positions. The second one --
Potter Stewart: Excuse me. If it -- and it doesn't apply to all the first examinations and doesn't apply all the second examinations once you get the certificate.
Bruce J. Terris: Once the notices are given. Our second argument is even if it does apply to first examinations and the second examinations when notice has been given, it means useless or needless which is essentially is relevancy.
Hugo L. Black: I wonder if the legislative history shows during that period since 1921, there has been any effort to change 7605 (b) in any way.
Bruce J. Terris: There's no indication that there has been any desire on anybody's part to change it. No discussion in the reenactments.
Hugo L. Black: Any suggestions in the books, the commentators, the books, text book?
Bruce J. Terris: I don't believe so Your Honor. Now, let me --
Hugo L. Black: How long has the government been using the method of having special examinations with the special attorneys from the treasury department and the Ways and Means Committee and the Finance Committee in connection with these taxes? I recall that certainly over 30 years ago that --
Bruce J. Terris: I think it's been a long time Your Honor.
Hugo L. Black: And they go into them very carefully paragraph by paragraph. It happened in the general revision in 1956, was it?
Bruce J. Terris: 1954 and 1939 and there was no --
Hugo L. Black: This remained unchanged, is it?
Bruce J. Terris: That's right Your Honor. I may say -- let me turn to this business about the change in the government's position. The fact of the matter is the government didn't have a position until very recently. There were only a half dozen cases over 30 years and the US attorneys handled them as they thought best, which meant essentially the District Court thought that so much evidence would be necessary. The US attorney tried to supply that much evidence. Now in the last few years, particularly since the First Circuit Rule came into effect this of course has started a rash of litigation. Immediately then the government sat down and said, "We've got to come up with a position". Obviously, there's going to be a lot of litigation in this subject that position is the one that we're arguing here. That's why we stood on the affidavit in this case, because we want to establish that principle. If we're going to have full trials of these cases then we're in difficulty and I think the difficulty is shown by this case.
Justice Bernnan: Well, I wonder if you're not encouraging it in light of your position in thinking that you have to have even an affidavit.
Bruce J. Terris: Well, Your Honor that isn't our position. That's our secondary position.
Justice Bernnan: I know, but what I'm suggesting is you're encouraging the litigation by -- if you're right that you don't need an affidavit, you don't need anything.
Bruce J. Terris: Yeah.
Justice Bernnan: You're entitled to an order just by going in and asking for it then why do you complicate the matter by coming in with affidavits which then create all the litigation I don't understand?
Bruce J. Terris: Well, Your Honor, I think we'd be here anyway if we could have them supply an affidavit.
Byron R. White: You'd be here all right, but I'm not sure -- I think it's very difficult to maintain the intermediate grounds either you're going one way or the other especially with your --
Bruce J. Terris: Well, I don't --
Byron R. White: Especially with 70 -- when that Paragraph B tells you in plain language, you know on the second examination all you need is a notice.
Bruce J. Terris: Well, I don't see why we can't argue alternatively Your Honor. We would win in this case on either one.
Byron R. White: You can argue any way you want to. I'm just saying it sounds very difficult to maintain the intermediate grounds, that's all.
Hugo L. Black: Well you would have to show the judge, even if you didn't have an affidavit, you'd have to show, wouldn't you, that the secretary had given notice as required by 7605(b).
Bruce J. Terris: Oh, yes. That does not -- there's no doubt about that.
Hugo L. Black: That's what you say --
Bruce J. Terris: That's what we did. That's right.
Speaker: The statute said.
Bruce J. Terris: Now, let me point to the hardship to the Government. I think this case is an excellent example. Here, the Government didn't have to show fraud when this summon was issued. We could have shown 25% under statement of income. Now, what's happened because of the delay from this litigation we can't assess for under statement of income. Now, we have to show fraud. Now, Mr. Segal can say, "Yes we've got this heavier burden. "We didn't have it originally. Well, this is a marvelous opportunity for taxpayers. Before we can really get into an investigation we're blocked at the start with a full trial, it would amount to a miniature trial, an appeal ultimately in this Court and we haven't even gotten a chance to investigate. Now, he says, well all we had to do is make some showing. What's obvious that it wasn't just some showing that was required, because he says that an anonymous letter isn't enough. In addition to that he says, "Well, Mr. Powell would have complied if there been some showing." Well that's a very curious statement, because in a different case involving one of Mr. Klein's enterprises which Mr. Segal cites in his brief, the government served a summons on Mr. Powell, he refused to comply. We went into the District Court, we produced the agent, we produced third party affidavits, we produced documentary evidence, he still didn't comply. The District Court refused to enforce the summons, not on the ground we hadn't made a showing. He said "We have. We had in negative all the other possible explanations of the conduct of Mr. Klein”. Now, these are the kinds of cases we're having and I don't think it takes any great stretch of imagination to see that this is a serious hardship from the Government which interferes with our investigations.
Tom C. Clark: I think Mr. Terris under your practice, affidavit practice, if the taxpayer requested that you produce the agent who made the affidavit, did I understand you to say that you would produce it?
Bruce J. Terris: Well Your Honor if the -- we were talking their about bad faith?
Tom C. Clark: Yes.
Bruce J. Terris: Or --
Tom C. Clark: I mean to raise permission.
Bruce J. Terris: A shake down or some kind of thing of abuse of process.
Tom C. Clark: You filed some papers that raised some issue.
Bruce J. Terris: Well, Your Honor, I only want to hesitate in terms of Mr. Justice Harlan's question. I think its very possible and we -- this is hasn't been -- I don't think that thought -- certainly has been by me and I don't know what the services position would be, I don't know of any case like it, that I think we might stand on the idea that there had to be some showing before this issue could be gone into, but I'm not sure what our position would be Your Honor. There haven't been any cases that I know of. Like the closest one is Ryan in a sense, but he never actually articulated to the District Court this issue. We just sort of threw some evidence in and then stood on it.
Potter Stewart: Well, the Court of Appeals in its opinion, take them if you will, said this of course a Court is always free to ensure and investigate any question of bad faith and yeah as I understand it, you did not quarrel at all?
Bruce J. Terris: Oh, no. We don't -- the business of inquiry into good faith, we definitely accept that. The question is only the procedures. I'm told by the way we would produce the agent.
Justice Bernnan: And when you asked of me earlier Mr. Terris that this agent in this case was available to Mr. Segal?
Bruce J. Terris: That's right. There is no reason to mean he wasn't.
Justice Bernnan: Well, what did you mean by that? I understood you mean, perhaps I got it incorrectly. I understood you to mean that if he wanted the agent, he'd have to produce him as his witness.
Bruce J. Terris: That's right, Your Honor.
Justice Bernnan: That's what you meant?
Bruce J. Terris: Well, we were not going to produce him as our witness. We stood on the affidavit of our case.
Justice Bernnan: You and I going to produce him for cross-examination on the affidavit.
Bruce J. Terris: On our --
Justice Bernnan: That's -- and would have contested an application to do some or did you -- in fact you had?
Bruce J. Terris: There was no application to produce and I'm told that we wouldn't have contested it. That our practice would be to allow him to testifying. Well as his witness.
Justice Bernnan: As his witness?
Bruce J. Terris: Now, but let me be clear --
Justice Bernnan: Not available for cross-examination as yours, is that right?
Bruce J. Terris: Well, we would presume we would then get to cross-examine him like any other witness produced for fraud. But, let me be clear though about this. Our --
Arthur J. Goldberg: [Inaudible]
Bruce J. Terris: Yes. Let me be clear though about this. We would still argue that any testimony he gave on probable cause was unnecessary that we don't have to show probable cause or a reasonable basis to suspect. I want make clear that we wouldn't be giving up our legal position.
Hugo L. Black: I want to ask you just one other thing about regulation, is that what happen? But are they into regulation, if you look to see if --
Bruce J. Terris: Yes, sir. I looked --
Hugo L. Black: [Inaudible]
Bruce J. Terris: I've looked at the regulations and they are general Your Honor. They are specific regulations on reopening cases and on giving the statutory notices under Section 7605(b) and those regulations say, I don't think they are actually regulations or instructions, they state that there has to be suspicion of fraud, indication of a substantial tax liability or some other important administrative reason.
Hugo L. Black: For what?
Bruce J. Terris: For reopening a case.
Hugo L. Black: But there is nothing that's in your regulation that could have misled a taxpayer to believe that you had to do this.
Bruce J. Terris: Oh, no, no there is no -- and I as I say the Forester case and Globe Construction are quite clear than an affidavit is sufficient so he wasn't misled.


Earl Warren: Mr. Poulton, you may proceed.
Louis P. Poulton: Just before recess, I mentioned that the Machinists Union raises the defense of mootness if the Court should decide that this case is moot is not necessary for the Court to go into the second defense of the reliance upon the hot cargo clause in the Teamsters' contract. Now, as I pointed out prior to noon -- luncheon recess, on September 15th, 1954, the Machinists Union, which represented the production and maintenance employees of the American Iron and Machine Works Company, engaged in an economic dispute over the terms and conditions of the collective bargaining agreement with the employer. And as I said, during the strike, American Iron found it necessary to deliver its products to the common carrier's docks by means of its own vehicles. And the Machinists pickets follow these trucks and picket them in a u-shaped form at the common carrier's docks and only while they were at the docks. When the truck arrived, the pickets would picket and when the truck left, the pickets would leave. Now, due to this activity on the part of the Machinists, American Iron filed a charge with the regional director for the 16th Regional Board on September 24th, 1954 alleging a violation of Section 8 (b) (4) (A). Prior to the issuance of the complaint by the Board, the regional director petitioned the District Court of the Western District of Oklahoma seeking a temporary -- a preliminary injunction under Section 10 (l) of the Act. This petition was filed on October the 11th, 1954. The case was heard by Judge Wallace and it is known as Civil Case No. 6428 and is unrecorded. The case was tried and heard on October 16th, 1954, which time Judge Wallace dismissed the petition for the preliminary injunction. Now, on October the 21st, 1954, American Iron and the Machinists signed a collective bargaining agreement thereby settling the underlying dispute. This agreement contained a no-strike clause and was for the period of two years, all picketing by the Machinists ceased on October 21st, 1954. Now, two days after the underlying dispute was completely settled, the complaint was issued by the regional director. We contend that by issuing this complaint after the dispute had been settled, the regional director clearly abused his discretion since the controversy was rendered moot. Now, this Court -- first, let me say that the question of mootness is not raised in this Court for the first time. The question was originally raised before the trial examiner at the original hearing in the case. It was raised by way of a motion to dismiss on the grounds that the controversy was rendered moot. This motion was denied. It was again reinstated before the trial examiner and has been preserved all the way through to this Court. The Court of -- the Board did not precisely rule on the question of mootness but rather accepted the trial examiner's intermediate report as to this aspect. Now, the trial examiner's intermediate report merely stated this and I'd like to quote from its record, page 31, “The undersigned finds that these developments, that was the signing of the contract, had not rendered the present proceeding moot, orders dealing with unfair labor practices have preventative as well as remedial purpose in effect.” The voluntary cessation of an unfair labor practice or private agreements for their end, do not deprive the Board of its power to add the sanction of a Board order and the possibly -- possible enforcement proceedings in order to bar any recurrence of those practices. The petitioner in 324, Machinists moved the Board, reconsider their decision and order on the grounds that the controversy was rendered moot and that they had not decided that issue. This was summarily denied. Now, this Court, in United States versus W. T. Grant Company, 345 U.S. 629 at page 633, stated in a question involving a violation of the Clayton Act whether that violation had been rendered moot, and I quote, “if the moving party must satisfy the Court, a relief is needed.” The necessary determination is that there exists some cognizable danger of recurrent violation, something more than the mere possibility which serves to keep the case alive. And we contend that there was no possibility of recurrence of the violation since the contract had settled the underlying dispute. And this Court in Local 74, the United Brotherhood of Carpenters & Joiners of America versus National Labor Relations Board, 341 U.S. 707 at page 715. Now this case, I'd like to go in the facts of this case, this case involved a secondary boycott by the Carpenters Union of a renovation project. Now, the renovation project was completed. Prior to that, there was a charge filed for by the -- I think it was the employer if I'm not mistaken because of a violation of Section 8 (b) (4) (A). Now, the carpenters raised the question of mootness whether the completion of the renovation project had rendered the controversy moot. This Court stated and I quote again, “This case has not become moot by the completion of the renovation project.” The complaint was against petitioners' use of secondary pressure upon Watsons, and that was the construction project in a manner prescribed by the statute. The use of such pressure on this renovation project was merely a sample of what might be repeated elsewhere if not prohibited. And the Court went on to say, the underlying dispute between petitioners and Watsons has not shown to have been resolved. Now in this case, we contend that the underlying dispute has been completely resolved. The dispute which gave rise to the picketing of Machinists was the economic strike over the terms of the contract. That dispute had been settled prior, prior to the issuance of the complaint. Now, the Board cites various cases --
Earl Warren: Was the contract changed then, Mr. --
Louis P. Poulton: Yes, sir. The contract was completely negotiated and was a new contract, sir, for a period of two years.
Earl Warren: Without that clause? Would that same clause --
Louis P. Poulton: What clause were you referring to, sir?
Earl Warren: Well --
Louis P. Poulton: The hot cargo clause, sir?
Earl Warren: Yes.
Louis P. Poulton: Let me -- let me say this, Mr. Chief Justice, the hot cargo clause was not in the Machinists contract, sir. It was in the contract between the Teamsters and the common carriers.
Earl Warren: Yes.
Louis P. Poulton: Now, the Board cites various cases to support its theory that this controversy was not rendered moot. I merely like to point out in the cases cited by the Board, there were no factual situations where the controversy had been rendered moot prior to the settlement -- have been rendered moot by a settlement of the underlying dispute prior to the issuance of the complaint. This case, we feel, falls into the dictum in the Carpenters case and we feel the Board and the General Counsel abused its discretion by issuing a complaint two days after the underlying dispute had been settled.
William J. Brennan, Jr.: Was the complaint -- was that complaint also against the Teamsters?
Louis P. Poulton: Yes, sir. It was.
William J. Brennan, Jr.: Did -- did they join your mootness contention?
Louis P. Poulton: No, sir. They did not. I'd like to explain it if I may, sir. The contract between the Teamsters contains the hot cargo clause and that was what the violation, as I understand, Section 8 (b) (4) was predicated upon against the Teamsters. That dispute had not been settled. They still had that clause in their contracts, sir. Therefore, their case would not be rendered moot and they did not raise that contention. Now, I like to now turn to the hot cargo agreement, the Machinists reliance thereupon. We, of course, will adapt the Teamsters' position that the clause is legal and enforceable by direct inducement of the secondary employees. The courts below in the Rabouin case, Crowley Milk case, and in this case itself, found that the hot cargo clause removes the elements necessary to a finding of Section 8 (b) (4) (A) against the Teamsters. Now, if the clause itself removes the elements necessary to a finding of 8 (b) (4) (A), it removes the elements not only as to the Teamsters but as to whatever union is enthusing the secondary employees. There have been three courts at the present time that have considered the precise question of whether a union which is not a party to the contract containing hot cargo clause may use the hot cargo clause as a defense, one Court being the court below in this case which by a divided decision found that the clause was not available to the Machinists Union, although Judge Washington in a dissenting opinion in that case found that the clause was available as well to the Machinists as it was to the Teamsters. And he stated it made no difference as to who was doing the enthusing, whether it was the Teamsters or the Machinists. Now, also in this case in the 10 (l) proceedings, the same precise question was before Judge Wallace. Judge Wallace summarily, I might say, denied the petitions for injunction and therefore we contend that he also found or that he found that the hot cargo clause was available to the Machinists as a defense. Now, the third court which considered the contention was the District Court in United States District Court for Southern District of New York. In Dallas versus Teamsters, Local 707 in 1205, the district judge concluded that the hot cargo clause was not a defense as to a non-contracting union. He found it on the basis that the contracting union, pursuant to the actual language of the clause, reserves the right to apply the clause. The right was reserved. Therefore, he found that until the contracting union actually exercised its rights under the clause, it was not a defense to a non-contracting union. And when I say non-contracting union, I mean a union that is not a party to the hot cargo clause. Now, that case can clearly be distinguished and I think we can -- a petitioner in 324 can cite that as authority for our case in support of our contention that we can rely upon this hot cargo clause, since the clause in the present case says that the employees shall not be allowed, shall not be allowed to handle hot goods. There is no necessity on the part of the contracting union to exercise an option. There's no option given to them. So therefore, we contend that if the same factual report, the District Court, the same clause it would have decided that the handling of struck goods was removed from the course of the secondary employee's employment and the clause was available to a non-contracting union as a defense. Now, I'd like to point out something else that the Circuit Court in this case -- first I'd like to say this, I'd say the Board did not pass on this precise question of whether the defense was available to the Machinists because they found that the defense was not available to the Teamsters union therefore, automatically they found it wasn't available to the Machinists. The Circuit Court of Appeals, as I said by divided decision, found that the clause was not available and they found it on these grounds, that the Machinists union was neither the contracting union did not hold the contract containing hot cargo clause nor where we -- third-party beneficiary. Well, we will concede in any strict contractual sense we were neither -- we cannot deny that we were not the contracting party, but in a strict contractual sense, we were not a third-party beneficiary to the hot cargo clause. However, the clause was made for the benefit of another union other than the contracting union since the clause would be valueless to the contracting union. They would have no need for the clause. It was made for the sole purpose of helping either sister locals of the Teamsters or other labor unions that were caught in the throes of a strike. In summing up, I would like to say just this that first -- our first contention is the case was rendered moot prior to the issuance of the complaint and we think the Board and General Counsel abused its discretion by issuing the complaint because of the mootness. And secondly, we would like to say that if the Teamsters conduct is permissive and the hot cargo clause is legal and enforceable by direct inducement of the secondary employees, then we feel that the clause is equally a defense to the Machinists contract. I thank you.


Warren E. Burger: We will hear arguments next in 75-1583, Morris & Woods against Gressette. Mr. Wollenberg. I think you may proceed.
Mr. J. Roger Wollenberg: Mr. Chief Justice, and may it please the court. This case has spawned procedural complexities but what is at stake here is not at all complex. Nearly four years ago, the Attorney General of the United States, objected under Section 5 of the Voting Rights Act to South Carolina Act 1205, a 1972 enactment reapportioning the South Carolina State Senate. That enactment included three aspects which have been hallmarks of discriminatory effect namely, multimember districts, numbered seats, and a majority runoff requirement. The Attorney General found that Act Number 1205 has a clear and substantial racial effect. Following the Attorney General’s objection, South Carolina never availed itself of the alternate pre-clearance procedure open to it under Section 5, namely, a declaratory action before a District Court in the District of Columbia. Instead, the state has simply continued to give effect to Act 1205 without Section 5 clearance and it is that situation for which we seek regress here. The court below having refused our request for injunctive relief against continued enforcement of the statute. Basically, as we see it, we seek compliance by South Carolina with the Voting Rights Act. Compliance which has generally been forthcoming in covered state. Indeed South Carolina itself complied with the Voting Rights Act in responding to an objection by the Attorney General to its House of Representatives apportionment plan and it enacted a new plan which ultimately met with approval. So that today the South Carolina House is apportioned in accordance with the law and today in the South Carolina House, there are a number of black members. Today in the South Carolina Senate, there are no black members. And the situation which I have described came about as a result of an error, a legal error of the Attorney General of the United States in 1972. He first declined to object to Act 1205 not because he thought the Act was valid but because he thought he was compelled to defer to a District Court judgment in South Carolina sustaining the constitutionality of Act 1205 but disclaiming any intention to pass on the validity of the act under the Voting Rights Act. Now, I have referred rather flatly to this ruling of the Attorney General as an error. I do so because it was determined to be an error in Harper against Levi because the United States has conceded the error both in this court and in the court below.
Speaker: That determination is not binding on us I suppose, is it? South Carolina was not a party to the litigation in that case.
Mr. J. Roger Wollenberg: You are speaking of Harper v. Levi.
Speaker: Right.
Mr. J. Roger Wollenberg: The determination of Harper v. Levi is not binding on this court, Your Honor, but we do suggest, in addition to arguing that the Harper v. Levi hearing was correct in determining that the limited reviewability that took place here was proper. We also argue as an alternate ground that the Harper v. Levi court having jurisdiction to enter the interlocutory orders that it issued and the Attorney General’s time to object having been told under those interlocutory orders, the objection of the Attorney General was a valid act and if it ultimately would determine that Harper v. Levi reached a wrong result, this would simply free the Attorney General to withdraw his objection but would not nullify his objection not full time on the grounds of --.
Speaker: When you say the Attorney General’s time to object was told by the court orders, actually the court orders themselves were issued after the expiration of the 60-day period, were they not? Can you answer that yes or no?
Mr. J. Roger Wollenberg: I can answer that, it is our position that they were not entered after the expiration of the 60-day period. It was the finding of the District Court in the District of Columbia that they were not entered after the expiration period. Now, I am speaking now of the preliminary order that was entered by the District Court that extended the Attorney General’s power.
Speaker: Isn’t it a fact that that order itself was entered after the expiration of 60 days, following a submission of South Carolina’s plan?
Mr. J. Roger Wollenberg: Your Honor, it is our position that it was not entered after the 60 days effectively began to run. You will remember that this court held in the Georgia case, that the Attorney General’s regulations extending the beginning of the 60-day period until he had complete information on the submission before him was a valid exercise of authority on his part. It was our contention in Harper which was agreed to by the District Court that the Attorney General’s time for acting had been extended by him in connection with requesting additional submissions up to June 19th, 1972 so that when we went before the District Court on August 10, 1972, the 60 days had not expired. We believe, if Your Honor please, that that whole 60-day question is immaterial to the issues that are before this court. But I --
Speaker: What if you wrong on that -- if you say it is immaterial, you must mean that even if you are wrong on that and the Attorney General’s 60-day period had expired before there was ever any court order, you can nonetheless (Inaudible), is that right?
Mr. J. Roger Wollenberg: Precisely, Your Honor. I was saying why the Attorney General’s action was an error and I had mentioned it was held to be an error in Harper against Levi and that the United States has now conceded both in the court below and in this court that it was an error. I also add that this court’s controlling subsequent decisions in Connor v. Waller and most recently in United States against Board of Supervisors of Warren County established, we think, that if anything, the deferral should have gone in the other direction. In other words, the District Court in South Carolina should not have been passing on the constitutional issue until the Attorney General has passed on the Section 5 of the Voting Rights issue. Now the court below never reached this question. The court below found that the Attorney General’s ruling on Act 1205 was improperly reviewed in Harper against Levi and on that premise it treated the Attorney General’s definitive objection to the statute as a nullity. I think the parties here including the United States, which is here as amicus, are in agreement that the central issue here is whether the Attorney General’s initial determination --.
John Paul Stevens: Mr. Wollenberg, can I interrupt you for just a second? Does the full text of the letter of June 30, 1972 appear in the papers before us anywhere? I know it is referred to as Exhibit 5 to the complaint but that wasn’t reprinted.
Mr. J. Roger Wollenberg: It appears on Page Appendix 47 Mr. Justice Stevens.
John Paul Stevens: Thank you very much.
Mr. J. Roger Wollenberg: As I was indicating, the central issue here is reviewability. If the limited reviewability that we are talking about here which is not reviewability on the merits, is not review of whether the Attorney General should have found the act to be objectionable or not but only review of his legal statement that he was compelled not to enter his own independent judgment. If it was reviewable as we contend, the United States agrees and as Harper and Levi squarely held, then we submit the sole basis of the decision below is destroyed. I turn now to the limited reviewability issue. Mr. Justice Rehnquist, with reference to your earlier question, the reason that we regard the 60 days as immaterial to the present case is that it is established law, we think, under the Administrative Procedure Act under this court's decision in Dunlop that and the International Harvester case which we have quoted and cited in our brief that “where there is judicial review, the statutory period which is created and imposed on an administrative agency for its action is not governing the court in engaging judicial review.” The present case is a perfect example of why that has to be necessary. If the Attorney General remains silent until 11 o’clock on the night of the 60th day, there would hardly be time for a judicial review. If there is judicial review, then the courts have uniformly held that the power exists within a reasonable time after the agency has committed the action complained of. In this case, there can be no question of laches, obviously, the case was brought very quickly either just before the expiration of the 60 days, Mr. Justice Rehnquist or immediately after depending on how you calculate the 60 days. In either event, it was brought in a timely fashion. The reviewability, we think, is essentially un-debatable. The Administrative Procedure Act was designed to fill the interstices in statutes which created review but which for some reason did not create review complete enough to deal with a critical situation. And as the court is well aware, there are three well established exceptions stated in the Administrative Procedure Act and none of them applies here. One of them is where Congress, in so many words, has precluded judicial review. Congress has simply said of this particular action there will be no judicial review. Congress knows exactly how to do that and that Congress remembered how to do it in this case, is established clearly by the fact that it used that kind of language in Section 4 but did not use it in Section 5. A second major area of exception is where the matter is committed to agency discretion. The action here of the Attorney General is not in any sense committed to agency discretion. The Attorney General’s own regulations recognized that he acts in a quasi-judicial capacity that he is in effect acting to pass on a submission of a covered state in lieu, if he finds affirmatively, in lieu of the Three-Judge Court. His own regulations state that he will apply the same standards that the court does and this court reviewed his activities in that regard, in the Georgia case and made clear its view that the Attorney General does not act on a discretionary basis. Finally, there is the recognition even by the appellees that it is well settled. I am referring to their Note 68 in their brief at Pages 37 and 38 where appellees say that the courts may determine whether an official is acting beyond the scope of his statutory authority, even in those cases where they can not review the manner in which he exercises his authority. And that, we suggest is what occurred here in substance. So in some then on the reviewability question, we submit that it is clear that Congress did not preclude judicial review. It is clear that the action involved was not committed through agency discretion. And finally, we think it is clear that there is not an adequate remedy at law. Appelles --
John Paul Stevens: Mr. Wallenberg, may I give you a hypothetical that has been troubling me, as I think about this case? Supposing the Attorney General after 30 days at run, wrote a letter saying “my office is terribly busy. These are awfully complicated matters. I don’t have a big enough staff to handle them intelligently therefore I will not issue a letter.” Could that be reviewed?
Mr. J. Roger Wollenberg: I believe, Mr. Justice Stevens, that that issue was considered in the Evers case that the District Court held that a failure to object on the ground that he was not ready to decide whether to object was not a valid ground that it was reviewable. That this court never, as a court, never reached the issue because the appeal was dismissed for failure to perfect in time or I believe --
John Paul Stevens: If that kind of a disposition would be reviewable would not that be a way in which he could get additional time to make such an announcement to have somebody bring a suit saying you should not do it on that basis, then you would have all the time in the world to study the matter, wouldn’t he?
Mr. J. Roger Wollenberg: If, Your Honor please, I think that this court upholding in Georgia, the Attorney General extending his own time beyond the 60 days literally stated in the statute in order to get the full information he needs already is a somewhat of an “open sesame” for him to extend a little.
John Paul Stevens: I see.
Mr. J. Roger Wollenberg: But I think basically, if you consider the purpose of this provision for Attorney General Approval its provision for approval of a routine statutes that do not raise serious questions, the state always has the opportunity to go to the Three-Judge District Court in the District of Columbia. So that if the Attorney General for some reason is not prepared to act promptly, the state always has the alternative remedy. And there is no suggestion, I think, that the Attorney General ever has, or ever would have used that point.
Speaker: The Attorney General is always free to simply say on the 60th day, I object because your plan does not quite convince me and has he asked for more information.
Mr. J. Roger Wollenberg: I believe that to be true, Your Honor. I think that the particular formulation in Evers suggested that he was not making the decision one way or the other on the merits which the District Court in Evers thought he should have made. I was addressing the adequacy of the remedy of law or the adequacy of other remedies. The appellees and to some degree the court below, have made a great deal of the notion that really not having the Attorney General perform his function really does not damage anyone because Section 5 has preserved the rights of plaintiffs to go to Three-Judge Districts courts in the state and pursue the matter under the Fifteenth Amendment. So the fact that the Attorney General has cleared the statute, really does not hurt anyone and these other remedies are adequate. The short answer to that, we believe to be a given rather eloquently in the Amicus brief for the United States in this court which we respectfully adopt in that respect. And I would say here only that this kind of a defense or this kind of an argument flies in the face of the whole philosophy of the Voting Rights Act, which is adopted by Congress and upheld by this Court in South Carolina against Katzenbach. The Congress of the United States did not think that the Fifteenth Amendment remedies that existed before that and still exist and were preserved in the act were adequate. That is why the Voting Rights Act. The Voting Rights Act placed the burden on covered states, required them to show that their new proposed legislation would not be discriminatory in purpose or effect and gave them an opportunity of getting that clearance either in the District of Columbia Court or with the Attorney General. If they can get it with the Attorney General without his performing his duty then we submit that that destroys basically renders nugatory, the whole essential structure of the Voting Rights Act.
Speaker: Would the plaintiffs in this case have been limited in venue to the District Court to the District of Columbia or could they have brought suit anywhere?
Mr. J. Roger Wollenberg: The plaintiffs in Harper?
Speaker: In Harper, yes.
Mr. J. Roger Wollenberg: I think it is arguable and persuasively so on the basis of legislative history as the government has indicated in its brief, amicus in this court. That under the language of Section 14(b) of the Administrative Procedure, excuse me, of the Voting Rights Act that any challenge of this sort would have to been brought in the District of Columbia.
Speaker: But of course, the Administrative Procedure Act allows you to sue the Attorney General anywhere that either a plaintiff or plaintiff reside.
Mr. J. Roger Wollenberg: Yes and I am not saying it as a closed question. I am saying that the Voting Rights Act Section 14(b) in indicating a venue directive for the District of Columbia might have been deemed to be controlling had a suit being brought to the Attorney General elsewhere despite the Administrative Procedure Act. It might have been argued under the kind of argument that prevails to some degree in the recent decision of this court in Sanders v. Califano. It might have been argued that Administrative Procedure Act does not create substantive jurisdiction and the substantive jurisdiction ordinarily would prevail had been limited by 14(b) of the Voting Rights Act. I think it is at least a grave question as to whether it could have been brought anywhere else and it seems to me that it was quite clear that it was highly appropriate to bring it here.
Speaker: Well certainly, it would be unusual if it could be brought somewhere else. Wouldn’t it? If the state is limited to the District of Columbia and yet the plaintiffs in Harper v Levi in a review of the Attorney General’s action on the Administrative Procedure Act could sue in any venue in the country.
Mr. J. Roger Wollenberg: Well, Your Honor, the symmetry argument that has been made in the court below and the appellees, I think does not fit this statutory scheme. It is not a symmetrical statute. The complainants are not passing laws, the states are. The covered states have been found to be in a special category which requires them to go through procedures before they can create a valid law and they are given choices of procedure that they can go directly to the District Court in the District of Columbia or they can come to the Attorney General. And in view of the fact of Section 5 explicitly preserves the right of plaintiffs to bring Three-Judge District Court actions which would be in the state where you get jurisdiction of the state. And indeed, the very case that you have now before you is such a case. The South Carolina having elected to treat Harper v. Levi as nullity and having continued to enforce the statute which we say has not been cleared. Plaintiffs follow the only remedy available to them which was to bring a suit in a Three-Judge District Court of South Carolina.
Speaker: And I take it, you say that a state law would not be in effect during this review period.
Mr. J. Roger Wollenberg: Well, Your Honor, I think that the question of whether the law would go into effect in the review period might depend on the procedures along the way. I can conceive that --
Speaker: In any event, any court, I take it you say, could extend the time of the Attorney General. And any time they extended the time it just has not expired and the law has not gone into effect.
Mr. J. Roger Wollenberg: Well I think, Your Honor, that a court with jurisdiction and assuming of course that the action is brought promptly because I can not conceive that someone could come along years later and attempt to stop enforcement. But any court which had jurisdiction and which issued an order extending the Attorney General's time for objection, I think would properly toll the enforceability of the statute. There was no effort made in the Harper case to stop the pending election. The statute has in fact been enforced by South Carolina, first in the 1972 Senate elections and then in the 1976.
Speaker: But if the Attorney General says that “I don’t want any more time, I am not going to object.” May court with jurisdiction as you say, extend his time at the suit of some private party.
Mr. J. Roger Wollenberg: We think, Your Honor, that if there is judicial review that it is clear that there has to be a power in the court to grant effective relief.
Speaker: So your answer is yes, that the state law would not be in effect throughout this review period on appeal maybe to this court.
Mr. J. Roger Wollenberg: I think, Your Honor, that I hedged the answer before by saying that it would depend on the procedure if no stay of the act was asked and if the act had gone into effect before the court issued the order extending the time for objection then I assume that the act would stay in effect until the litigation was resolved or until a state order was issued. If the objection was told while the 60-day period had not been completed, as we contend was the case here, then we would agree that properly the act should not have been given effect during that period.
Speaker: If the state chooses to go to the Three-Judge Court in the District of Columbia, what about intervention by private parties?
Mr. J. Roger Wollenberg: I assume that interested private parties --
Speaker: But do you know? Has there been a law on it or not?
Mr. J. Roger Wollenberg: Yes, I am informed that there has been intervention of private parties permitted, for example, in the Richmond case.
Speaker: When the states sues, the state just --who is the defendant in that suit?
Mr. J. Roger Wollenberg: United States is the defendant.
Speaker: Not the Attorney General? Just the United States?
Mr. J. Roger Wollenberg: Right. The Attorney General’s role is the special role created by the statute in what we think were intended to be routine and easy cases where the state is saved the difficulty and burden of going through a whole court procedure.
Speaker: Your interest in the case, I take it, is you think the standards of the Voting Rights Act are considerably different than the constitutional standard?
Mr. J. Roger Wollenberg: We think that there are certain clear differences. Perhaps the most significant difference is the burden of proof. A state is required to come forward and to establish that its law will not be discriminatory in purpose or effect. In a Fifteenth Amendment Case, the plaintiffs have the burden of coming forward and establishing violation of at least effect and possibly also purpose. And that difference in burden of proof is a very, very major difference.
Speaker: There was the difference in the substantive standard also, isn’t there?
Mr. J. Roger Wollenberg: I beg your pardon.
Speaker: Isn’t there a difference also in the substantive standard? Doesn’t the Beers case indicate that?
Mr. J. Roger Wollenberg: I think that it does Your Honor. Yes. I think that the Voting Rights Act has part of Congress power --
Speaker: It is more difficult than no matter who has the burden of proof. The standard of the Voting Rights Act has more stringent standard than that of either the Fourteenth or Fifteen Amendment, isn’t it?
Mr. J. Roger Wollenberg: I believe that it is and I believe that in upholding that act that this court has clearly recognized, that Congress had power to implement the Fifteenth amendment by going somewhat beyond. I should like, if I may, preserve the rest of time for reply.
Warren E. Burger: Mr. Turner.
Turner: Mr. Chief Justice, and may it please the court. We believe that the petitioners should prevail in this case because the Attorney General’s objection to Act 1205 reapportioning the South Carolina State Senate was a valid objection under the Voting Rights Act. Although, the Attorney General initially determined himself to be without authority to express his independent view that this act deluded minority voting rights because of the decision of a three-judge reapportionment court in the Twiggs case. The matter was promptly brought to the attention of the District Court for the District of Columbia which ordered the Attorney General to use his own discretion and he did so. Subsequent decisions of this court confirm that the District of Columbia Courts in Harper were right and that the Attorney General’s deferral policy was wrong. The fundamental question here then is whether the Attorney General's mistake of law was properly and legally corrected by the Harper Courts. If so, the objection stands and Act 1205 may not be implemented legally under the act. If not, the court below was right, and its judgment should be affirmed. In the limited time available, I would like to address the following issues: First, whether the Voting Rights Act contemplates an independent review by the Attorney General of submitted legislative changes. Secondly, whether the Voting Rights Act properly construed permits the traditional remedy in the nature of mandamus to compel the exercise of administrative discretion. And third, whether relief, such as that granted by the Harper court would be disruptive to the administration of the act. The independent review is contemplated by the act we argue because it is inherent in the statutory scheme which congress has provided us. The Attorney General is a substitute or a surrogate for a declaratory judgment proceeding. It is a quick 60-day review but it is a review on the merits. Whether the change is discriminatory, is the issue for the Attorney General. Certainly, Congress believed and had the right to believe that the Attorney General would do some reviewing and not merely look at it or decide that he was not going to review anything. He was, after all, given the job to be a surrogate for the District Court of the District of Columbia.
Warren E. Burger: What do you have to say Mr. Turner about the argument advanced by your friends on the other side of the table? At Page 27 of their briefs, that one of your predecessors testified before the Congress, I assume the Judiciary Committee, asking for an amendment, first, to give more time to the Attorney General under Section 5 and the second, to provide for a judicial review. The Congress declined that invitation.
Turner: There are two comments there, Mr. Chief Justice. First, the proposal was for review on the merit. Here we are talking about a much more limited kind of review, so I don’t think the two proposals are parallel. And secondly, Congress rejected it. So it was not passed that the Attorney General’s decision on the merits should be reviewed. And I again stress, it is not what we are talking about in this case, we are talking about very limited mandamus type review in the District Court of the District of Columbia.
Warren E. Burger: If I understand it, the essence of your argument is that it is reviewable because it was an erroneous determination. Does that not have something to do with the merits?
Turner: It has in this sense, Your Honor, that as we advised this court in the Georgia litigation, if you recall that and Footnote 6 in that opinion sets forth how the Attorney General and the courts were trying to accommodate at the intersection of reapportionment litigation and Section 5 litigation. And one of the policies that we expressed at that time was one of deferral. In our brief in that case, we indicated that that policy of deferral was under attack on the Harper litigation. Since then the Harper litigation has decided that that policy was wrong and we were ordered to stop it and this court confirmed that judgment in Connor versus Waller and we now accept it. We have always thought this multimember system was dilutive in abridge minority voting rights. We did not express that opinion solely out of deference to the three-judge court in the Twiggs litigation. That deference turned out that we were not only wrong, we were dead wrong. The deference should have gone the other way and in Waller, this court said that district Courts in that situation should defer to the Attorney General until his determination has been made. So that it is a basic mistake of law to defer, I think, Mr. Justice that we are talking about here and not review of particular decisions made by the Attorney General. The record here indicates that this is the only case in which the Attorney General followed this policy of deferral. On page 31 of the Appendix, the position of the Chief of the Voting Section of the Civil Rights Division established that this Harper case or this South Carolina Act 1205 is the only one in which that deferral policy, a very short lived policy was followed. So the case is one of a kind. The Voting Rights Act --
Warren E. Burger: Makes one wonder, why we granted certiorari?
Turner: I think, its importance and I am not in a position to know why you accepted the appeal. But I think it is important to establish whether or not there is this limited kind of mandamus or arbitrary and capricious review potential over the Attorney General’s administration of this Act. The Harper suit was based on 28 USC 1361 that was recited in the complaint and then recited in the Court of Appeals opinion that very unequivocally gives the District Court’s jurisdiction to compel the performance of official duties owed to the plaintiffs. This kind of action has been described and recognized in this courts opinions as “the familiar rule that a court may exercise its equity powers or equivalent mandamus powers to compel courts boards or officers to act in a manner with respect to which they may have jurisdiction or authority”, although, to address your concern Mr. Chief Justice, the court will not assume control or guide the exercise of that authority. That is out of Virginian Railway Company in 300 U.S. This kind of review is explicitly recognized in the Administrative procedures Act, Section 7061 which says that the reviewing court shall compel agency action unlawfully withheld and courts require, as you know, convincing evidence before that kind of review is withheld. So unless the Voting Rights Act precludes such relief that this rule ought to control this case, in our review and to address the venue question, I think 14(b), suggests strongly that this District of Columbia Court was the only proper venue. But we have found nothing in either the terms of the act or its purpose with the legislative history that indicates a view that congress intended to foreclose this kind of limited review. It is true that a great amount of discretion is vested in the Attorney General. The distinction is that the mandamus compels him to exercise it and does not tell him how.
Speaker: Do you think Mr. Turner that if the state submits a plan to the Attorney General, he rejects or objects to it in 60 days and the state does not bring any suit in the District Court, it just kind of accepts the Attorney General’s rejection, that private plaintiffs in the state could bring in action to review the Attorney Generals objection under the Administrative Procedure Act?
Turner: I know of no precise authority or precedent on that Mr. Justice. The nearest, there has been was an attempt by New York legislators to come to Washington and seek relief from an objection, the Attorney General had entered and the District Court of the District of Columbia, in that case, indicated that they had no standing to seek such relief. That is as close as the hypothetically posed, I think, has been addressed.
Speaker: Mr. Turner, does the statute require the Attorney General to give a statement of reasons for either an objection or a non-objection? I know, he does this as a matter of policy.
Turner: He does as a matter of policy. He has announced that policy in the guidelines the statute does not require.
Speaker: If he should change that policy would you say that the existence to review would compel him to adapt the policy?
Turner: I think it probably would. I am thinking of the Bachowski type litigation where and certainly under the Freedom of Information Act, this kind of information underlying administrative rulings are available to the public and would regardless of whether the Attorney General announced or did not announce this --
Speaker: If in his letter that he did write here instead of saying he was constrained to follow the Three-Judge Court, if instead of that, he said, I think as a matter of discretion, a sound policy to do the same thing the District Court did. Would that have been reviewable?
Turner: If that was his independent judgment that is what we are talking about here because we have --.
Speaker: Your position depended on a reading of that letter that he felt legally bound to follow that.
Turner: Well that is correct and he recalled that Act 1205 was preceded by Act 932. Act 932 has the same features as Act 1205. Act 932, the Attorney General objected to because there was no intervening court decision. When there was a court decision, and we had gone down to South Carolina at the court’s invitation and told them of our view and told them of the basis for the objection and the court rejected our views and said that there was not any Fifteenth Amendment violation there. So we were right at the intersection that I was trying to describe to the Chief Justice where we had to decide whether to follow the court or to try to overrule the court and we decided to try to follow it. Later under this court’s rules, the precedents and who is to differ to whom has been made quite clear. We have no interest in pursuing the matter.
Speaker: May I repeat the question, I thought Mr. Justice Stevens was asking? Let us assume that the Attorney General had written a letter within the 60-day period in which in substance he said “I think the reapportionment plan fully comports with the law. You have my authority to proceed with it. Is your contention that there would still be review by these parties under the APA?
Turner: No, sir.
Speaker: Your answer would be the same, if the Attorney General did nothing within the 60 days?
Turner: If he did nothing within the 60 days, it depends why he did nothing.
Speaker: Well, suppose he just said nothing. He would just let the 60 days go by like an ordinary statute of limitations.
Turner: The whole administrative practice under this is to say something. So it is very hard for me to cope with the question that says the Attorney General stands mute. We have a whole section that analyzes each one of these things as they come in and reaches a determination on it. If it fell in somebody’s waste basket, on the first day, that the submission came in and was never picked up and the 60 days expired it might be a more understandable hypothetical for us. In that situation, I think mandamus would lie because the Attorney General had not done the kind of independent review that congress envisioned in the statute. And I hope that that --
Speaker: Take another hypothetical. Suppose, the Attorney General had ruled in favor of the Harper plaintiffs originally within the 60-day period? I agree that the state of South Carolina would have had no remedy other than as prescribed by the Act to come before a Three-Judge Court in the district. Let us assume that say a state senator in South Carolina who would lose his seat decided that the Attorney General had made a gross error of law. Would he have the same right that Mr. Harper had to institute an action under the Administrative Procedure Act challenging the Attorney General’s decision on a legal ground?
Turner: It seems to me that if the objection was made for a very fundamentally wrong reason, as we have in this case, where the Attorney General mistakenly thought himself without authority to rule. If somehow, a basic mistake such as that resulted in an objection and the person injured by the Attorney General’s failure to do his duty, I think would have the same kind of limited restricted review that we are talking about in this case.
Speaker: Would that right be limited by any period of limitations? Could it have been brought a year later?
Turner: I think the normal rule of laches has to apply here and I can not probe the outer limits of that because this was filed within 30 days of even the day the 60 days expired that expired.
Speaker: Mr. Turner can I just ask one more question because Mr. Justice Powell followed up on a thought that I had; you answered him by saying if the letter by the Attorney General said I am not going to object because I find that the plan is lawful on all respects that would not be reviewable, I understood you to say. What if they made a clearer law and he was wrong? Somebody came and said that legally your answer is just dead wrong just as it was here. Why would that be different?
Turner: It is different because of the distinction that we see in the cases dealing with mandamus, where they say the issue is whether the discretion has been exercised.
Speaker: but the question whether it is lawful or unlawful is not a question of discretion, is it?
Turner: No, that is what we are saying. This is a threshold kind of thing. The Attorney General said I have no discretion to review this in effect because the record --.
Speaker: But what if he says I have discretion to review it. I have reviewed it and find it is lawful.
Turner: Then I think that is the discretion that Congress gave him and it ought to sustain.
Speaker: Even though he has made a plainly erroneous ruling of law?
Turner: If that was shown I still think that in that case Congress has presumed the Attorney General is going to exercise his discretion, he will exercise it correctly and in those few cases where he does not exercise it correctly the constitutional litigation is the proper remedy.
Warren E. Burger: Very well Mr. Turner.
Turner: Thank you.
Warren E. Burger: Mr. Bell. Will you please like to tell us what you are going to tell us tomorrow morning.
Randall T. Bell: It looks as though, I will have to save most of my argument until then Mr. Chief Justice and if it pleases the court, I think perhaps in the short time I have allotted. I am sorry. Perhaps I misunderstood you. Do you wish me to proceed for five minutes?
Warren E. Burger: Yes.
Randall T. Bell: Perhaps that time could be most properly used answering some questions that have been posed while they are fresh in the minds of the court. We find it very puzzling that the United States is taking some of the positions it has taken here this afternoon because the opposite positions are being taken in other litigation at this time or have been taken since the Harper case was decided. For example, the question of whether a mistake of law is reviewable was presented in a case called Harris against the United States, here in the District of Columbia District Court. That case is reported in 415 Federal Supplement and the Attorney General in that case, which is a post Waller case, took exactly the opposite position. Several questions were raised as to whether he has committed fundamental errors of law. Among the allegations with it, he had addressed himself to the question of the one person one vote standard in a Section 5 review. It was claimed that Section 5 does not authorize him to get into the one person one vote standard.
Potter Stewart: We think the case involved of the threshold question of the reviewability of his failure to object.
Randall T. Bell: It involved the question of his withdrawing an objection and the basic claim being made by the plaintiffs, Mr. Justice Stewart, was that he had withdrawn an objection with no new evidence being placed before him.
Potter Stewart: Was there any question as to whether that was reviewable?
Randall T. Bell: Yes. That was the threshold question which was presented. The Attorney General said no, this is not reviewable. The position we are taking in this case, the court found against him in part citing Harper against Levi and for him in parts. But we see no distinction between the questions raised in Harris and the kind of question that was raised in Harper against Levi. We do see an inconsistency of position. Now I also understood Mr. Turner to say that if an objection is fundamentally wrong, an objection of the opposite case from Harper v. Levi where the Attorney General said no objection. But if an objection is fundamentally wrong I understood him to say that yes, in that case private parties could seek review of that. Now of course the same judge that ruled against the Attorney General on that issue in Harper v. Levi found the other way when that question was presented in Griffith. But beyond that in a case called Robinson v. Potenger, we find that the Attorney General took the opposite position on that as well. There are some officials in Montgomery, Alabama were again raising some of these questions. He said in that case we cannot even be made parties to this suit. That is how immune we are from court review, much less getting into these questions of law.
Warren E. Burger: We will resume there at 10 o’clock tomorrow morning.