Warren E. Burger: Mr. Cross, you may proceed whenever you are ready.
Raymond Cross: Mr. Chief Justice, and may it please the Court: This case raises a unique issue. Does Public Law 280 authorize a state to absolutely bar actions against non-Indians by Indians if they arise on an Indian reservation? This matter is here on certiorari to review a decision of the North Dakota Supreme Court affirming the State District Court's dismissal of Petitioner's negligence and breach of contract action against Respondent Wold Engineering. The facts of the case are simple. Petitioner, a federally recognized Indian tribe known as the Three Affiliated Tribes, employed Wold Engineering to construct a water supply system on the Fort Berthold Indian Reservation in northwestern North Dakota. The project known as the Four Bears Water Project was intended to provide a water supply from Lake Sakakawea to a portion of the reservation population. However, after completion of the project in 1977 defects were discovered in that system that prevented the accomplishment of that objective. Despite attempts at correction by Wold Engineering of the system Petitioner, Three Tribes, commenced their negligence and breach of contract action in the State District Court for the Northwestern Judicial District of North Dakota. At trial in 1982 Wold moved to dismiss the action on the grounds that the federal law prohibited state jurisdiction over the action. The trial court agreed on the grounds that the Three Tribes failed to consent to Public Law 280 civil jurisdiction over the reservation in favor of the state and on that ground dismissed Petitioner's action. On appeal to the Supreme Court of North Dakota the State Supreme Court affirmed the dismissal construing a state statute, Chapter 2719, which is included in our appendix to our brief, as evidencing the state legislature's intent to disclaim any jurisdiction over the matter until the Indians consented to Public Law 280 jurisdiction in the civil area. The court noted in the course of its decision which is in the appendix of the petition for cert that state judicial jurisdiction had extended to these actions against non-Indians by Indians prior to the enactment in 1963 of Chapter 2719. On that basis the State Supreme Court affirmed the dismissal of the tribe's action against Wold Engineering. Only two sections of Public Law 280 are involved in this matter, Section 6 and Section 7. Under that jurisdictional classification scheme North Dakota is a so-called optional state and a disclaimer state meaning that under Section 7 it must take appropriate action to amend its state constitution to remove the federal disclaimer imposed in its admitting act, and secondly under Section 7 of Public Law 280 it must enact affirmative legislation assuming jurisdiction under Section 7.
William H. Rehnquist: Mr. Cross, I take it since you are appealing from the judgment of the highest court of the State of North Dakota it is your position that there is some federal constitutional principle or federal statute which that decision has violated.
Raymond Cross: That is right, Your Honor. We feel that the state court misconstrued Public Law 280 in holding that it prohibits state court jurisdiction over actions of this sort.
William H. Rehnquist: Well, do you think the Supreme Court of North Dakota actually read Public Law 280 to reach that result? I thought its opinion could just as well be construed to mean that the referendum in the early sixties had represented judgment by the people of South Dakota that they did not want their courts to exercise this kind of jurisdiction.
Raymond Cross: Your Honor Justice Rehnquist, the decision itself indicates plainly that the state court regarded judicial jurisdiction of the state as extending to these actions before the enactment of the state statute involved under the authority of Public Law 280. The sole source of the authority reading it either as an authorization or as compelling the state legislature to take that action is the source of that disclaimer. So taking a look at the state judicial history under the state constitution and under the course of state judicial declaration the state had judicial jurisdiction over these actions prior to that enactment. That enactment was explicitly taken under Section 7 of Public Law 280 and consequently it concerns the question of federal interpretation.
William H. Rehnquist: But up to then it is all questions of state law is it not?
Raymond Cross: That is correct, Justice Rehnquist.
Harry A. Blackmun: This case is a curious one, is it not, because here the tribe is asserting jurisdiction in the state court and usually these cases come up here in just the reverse posture.
Raymond Cross: That is correct, Justice Blackmun. It is a surprising case in the sense that the Indian people here are asserting the right as citizens the rights that they have in common with other members of the state to sue in state court. So the constitutional question that is at stake is that assume that Public Law 280 was lifted out of this context and that this action was taken solely as a matter of state law would that violate equal protection and due process rights of the Indian people involved.
Harry A. Blackmun: Was your due process argument argued below?
Raymond Cross: Yes, it was, Your Honor.
Sandra Day O'Connor: Mr. Cross, I suppose that it would not be necessary to reach that if in fact we thought that Public Law 280 was the grounds on which the North Dakota court based its holding and we could I suppose give North Dakota another look at it.
Raymond Cross: That is correct, Justice O'Connor. Our position is this is that the state statute is based on a misconstruction or on a construction of Public Law 280 and that raises a federal law question that is appropriate for resolution by this Court.
Sandra Day O'Connor: Let me ask you another question. If a state court had jurisdiction over the tribe's cause of action here what about Wold's counter claim? Would the court have jurisdiction over that as well?
Raymond Cross: Since the Plaintiff here is a tribe, the tribe according to decisions by this Court has sovereign immunity. It may be provided for in contracts that that can be waived. Of course, to the extent of a set off--
Sandra Day O'Connor: Well, do you think there would be waiver as a matter of law if the tribe decides to sue in the state court?
Raymond Cross: --Well, as a matter of law, Justice O'Connor, Wold Engineering can recover to the extent of a set off. They claim a small amount of money is due them under the contract, some $4500. That would be available to them as a set off against the tribe's claim. The question of an affirmative counter claim or claims that might arise present a tougher question.
Byron R. White: Nevertheless, to allow the set off you have to adjudicate their claim.
Raymond Cross: That is correct.
Sandra Day O'Connor: You do concede that that much could be done. On what theory? It is a waiver of sovereign immunity?
Raymond Cross: That is correct, Your Honor, to that limited extent.
Sandra Day O'Connor: Is there any jurisdictional problem of a state court asserting jurisdiction against an Indian tribe over a claim arising on the reservation?
Raymond Cross: Your Honor, based on the state court decision below they did not differentiate between claims by tribal members or claims by tribes. Based on their reading both of the state law and of Public Law 280 they did not make a distinction in that regard. If there were a distinction to be made I think that would have to be made by the court below on remand, but here in the decision they made no distinction between the rights of the tribe to sue in state court nor am I certain they could but in fact they did not. The state court decision below established a simple proposition: either the Indian tribes consent to Public Law 280 civil jurisdiction or they are barred from suing non-Indians in state court. Public Law 280 has been enacted for over 30 years now, and the decisions by this Court make clear that there is no legal or factual connection between suits against non-Indians and Public Law 280. It is possible to give quite a full account of what the meaning both in the plain terms and the legislative history of Public Law 280 is in the light of recent decisions by this Court most notably Kennerly v. District Court, Washington v. Yakima Indian Nation and Bryan v. Ithasca County.
Harry A. Blackmun: Mr. Cross, am I correct under the decision of the North Dakota Supreme Court your people have no forum whatsoever?
Raymond Cross: That is correct, Your Honor. Now in the course of those decisions that I mentioned this Court has construed the application of Public Law 280 in a variety of contexts, in cases of non-P. L. 280 in McClanahan v. Arizona State Tax Commisson, in cases where the states assumed full P.L. 280 jurisdiction in Bryan v. Ithasca County and in cases where the state has assumed partial jurisdiction in Washington v. Yakima Indian Nation. In each of those cases this Court has construed the plain terms and the legislative intent of Public Law 280 as being remedial in nature, and by this I mean that Congress intended to correct problems on the reservation both in the criminal and in the civil jurisdictions. In Bryan v. Ithasca County this Court provided that the state if they assume civil jurisdiction may adjudicate cases between Indians even as between Indians and may apply their state law to govern those actions. Consequently in this Court's decisions construing Public Law 280 there is no indication that preexisting rights of Indians were terminated, and this Court in a course of decisions over the last hundred or more years has indicated that Indians have the right to seek the aid of state courts and state statute in protecting their property against intrusion by non-Indians. Justice Lamar in Choit v. Trap at 224 U.S. 665 said that Indians' rights, their private rights, are enforced to the same extent and in the same way as other residents or citizens of the United States. That decision came in the context of Indians enforcing their federal tax exemption in state court. The power the Indian people have to sue in state court to protect their property rights has been exercised on a number of occasions, first, in a decision in 1857 Fellows v. Blacksmith 19 Howard this Court affirmed a state court order ejecting non-Indians from tribal lands. This Court likewise indicated that the states may seek the aid of state statute in New York--
William H. Rehnquist: Those were cases, were they not, where the state court had affirmatively said we have jurisdiction. We want jurisdiction. This Court upheld that exercise of jurisdiction. Here you have a different situation where I do not see those are necessarily relevant because here the state court says our law provides that in the absent of consent by the Indians under the 1968 revisions of the Public Law 280 we are not to exercise jurisdiction.
Raymond Cross: --That is correct, Justice Rehnquist. However, that decision turns on an interpretation of Public Law 280. The decision below clearly states that the Court feels that the state legislature was disclaiming jurisdiction under Public Law 280. Consequently, the question arises does Public Law 280, not state law authorize a bar against these sorts of actions? I think it is clear that in the construction of Public Law 280 this Court has said that state legislations enacted under that authority cannot be construed as termination or abrogation of preexisting rights. In Bryan v. Ithasca County this Court held that civil jurisdiction granted under statute was for a very limited purpose, and it was not intended to indicate that the state had broader authority beyond the terms of that act to tax Indian property. Consequently if there was a negative reading of Public Law 280 so that the state felt compelled to disclaim jurisdiction outside of Public Law 280 that is a matter of federal law and federal construction of the statute.
Harry A. Blackmun: What you want is to have the North Dakota Supreme Court take another look at the situation disabused of any misapprehension about 280.
Raymond Cross: That is correct, Justice. In the context of the situation where the state assumes no Public Law 280 jurisdiction this Court has still recognized that the Indians have access to state courts for actions arising on reservations. In McClanahan v. Arizona State Tax Commission this Court is deciding an issue of whether the state of Arizona may tax Indian income said that Indians have access to state courts to sue non-Indians citing the case of Felix v. Patrick which is cited in our briefs. Secondly, in that same case this Court indicated that the states have a recognized interest in regulating non-Indian conduct citing Surplus Trading Co. v. Cook. Consequently it is clear that the preexisting jurisdictional rules and relationships outside of the plain terms of the act and what the intent of the act was were not disturbed. In other words, if the Indians were recognized as having access under state law to state court and if the state took the position they had the authority to regulate non-Indian conduct on reservations as North Dakota did before the enactment of Chapter 2719 under Public Law 280 it would seem that that jurisdictional relationship was not disturbed.
John Paul Stevens: Mr. Cross, may I ask a question because when one reads the North Dakota Supreme Court's opinion one might get the impression... At least I got it the first time I read it... that they were just construing their own law and they did not feel compelled to construe it the way they did by Public Law 280. Can I ask if in the briefs and argument before that court did your opponent argue that Public Law 280 required them to deny jurisdiction or did he rely on North Dakota law?
Raymond Cross: As I read the appellate record in the North Dakota Supreme Court the position taken by Respondent was that Public Law 280 authorized the state to enact Chapter 2719 and disclaim jurisdiction that it previously claimed or in the alternative that Public Law 280 was the nature of a preemptive statute which by a negative reading precluded--
John Paul Stevens: That reading would be consistent with yours, but the former reading would just merely authorize if they decided to authorize them to do it. I suppose they could have claimed they had the authority even without Public Law 280.
Raymond Cross: --That would raise a different issue. That issue would be raised in the context of a state policy barring Indians. The legal history of North Dakota that is reviewed in our brief indicates and repeated declarations of the Supreme Court that Indians along with other state citizens are entitled to sue in state court.
John Paul Stevens: That was all before 1963.
Raymond Cross: That was before 1963.
John Paul Stevens: Then they say that because of the 1963 enactment of 2719 which is a North Dakota statute everything has changed.
Raymond Cross: Our expectation is that when this issue is clarified by the Supreme Court on the construction of the Public Law 280 or the federal law issue that the prior declarations that was a matter of state constitutional law and federal constitutional rights that the Indians do have access to state courts for actions arising on reservations is the proper policy they would follow. A recent decision by the Eighth Circuit Court of Appeals entitled Poitra v. Demarrias indicates that is how the Eighth Circuit Court of Appeals viewed the repeated declarations of the state supreme court. In that context they were called on to decide whether a substantial state policy would be infringed if diversity jurisdiction was allowed in the Indian case that arose on a reservation. They found that the declarations of the state supreme court indicated no such policy.
John Paul Stevens: I am just wondering if one possible thing we should consider is perhaps sending the case back to that court and asking them the basis of their decision because if it is one basis then it presents a federal constitutional question. If it is another basis it presents a statutory question. I do not think it is as clear as you tell us to be honest with you.
Raymond Cross: That is correct, Justice. That would be one option to clarify the underlying basis of the decision. I do feel that based on the prior decisions of the State Supreme Court the Eigth Circuit Court of Appeals' decision in Poitra that it is quite clear that the sole basis for decision was federal law. I do admit that there could be some ambiguity, but I do not see it either in the record or in the state court's decision below.
William H. Rehnquist: Well, Mr. Cross, how about the statement at page 7A of the petition which is part of the opinion of the Supreme Court of North Dakota where they say that In re White Shield they are quoting from and they say "The people and the legislature of the state have taken affirmative action which amounts to a complete disclaimer of jurisdiction over civil causes of action which arise on an Indian reservation except upon acceptance by the Indian citizens of the reservation the manner provided by the legislative enactment. " They are not saying this is how we judicially decide something. They are saying this is what the legislature meant. Are you saying that the legislature enacted the law under a misapprehension of what Public Law 280 meant?
Raymond Cross: Justice Rehnquist, that action was taken under Section 7 of Public Law 280 and the action that was taken by the state legislature and embodied in the state statute was construed by the Supreme Court as being affirmatively authorized legislation under Section 7 of Public Law 280. The question then becomes as a matter of federal law is that the sort of legislation that was contemplated by Public Law 280 and the Congress that enacted it? I do not see any indication that there is an independent policy or basis for that decision.
William H. Rehnquist: Do you think anything we would say about Public Law 280 would make the Supreme Court of North Dakota feel differently about what the legislature meant by enacting a statute?
Raymond Cross: I think that if the legislature and the construction of the statute by the State Supreme Court conflicts with Public Law 280 that they would take what this Court has to say very seriously indeed.
William H. Rehnquist: You are saying it would take a new act of the legislature, not just a new decision of the Supreme Court of North Dakota?
Raymond Cross: No, I am saying, Justice Rehnquist, that the statute as construed by this Court since it is under the authority of a federal law and a function of the delegated power would take on a new aspect to that court. Thank you, Mr. Chief Justice.
Harry A. Blackmun: You are also relying on decisions of the North Dakota court subsequent to White Shield or whatever it is as far as 280 is concerned?
Raymond Cross: That is correct. There were decisions subsequent to that statute and that decision that indicated that Indians do have access to state courts for certain purposes. That is the case of White Eagle v. Dorgan, the tax case involving the authority of the state to tax certain income on reservations. Thank you, Mr. Chief Justice.
Warren E. Burger: Mr. Claiborne.
Louis F. Claiborne: Mr. Chief Justice, and may it please the Court: I perhaps most usefully could begin by addressing Justice Stevens' concern, that is, the exact basis on which to the extent that we can discern it from its opinion the North Dakota Supreme Court rested its judgment. I draw the Court's attention to the end of that opinion which is at page 10A of the petition appendix. The court is here addressing and very conscious of the constitutional problem both under the state constitution and under the federal constitution. It would arise if the state courts were closed to Indians in this discriminatory way absent special authorization by the Congress for that closure. The court concludes its opinion by saying after discussing this constitutional problem and saying that it does not stand as an impediment to their result. Quoting from this Court's opinion in the Yakima case and in the words of the North Dakota court, "Likewise the people of North Dakota and the legislature were acting under explicit authority granted by Congress in the exercise of its federal power over Indians when our constitution was amended and Chapter 2719 of the North Dakota Code was enacted. " "We, therefore, find no equal protection violation of the Constitution of either the state or the United States, and for the reasons stated we affirm the judgment of the District Court. " It seems to us plain that the North Dakota Supreme Court was resting its judgment that no constitutional violation either of its own or of the federal constitution was involved only because they construed Public Law 280 as having authorized not as Public Law 280 does authorize an assumption of new jurisdiction but a disclaimer, a repudiation of preexisting jurisdiction. If the North Dakota Supreme Court were disabused of that misreading of Public Law 280 every indication is that the court would then find that there was no justification under either its own constitution or under the federal constitution for uniquely closing the courts of the state to Indian plaintiffs whether the tribe or individual members. For that reason we suggest that the appropriate disposition is to remand the case to the North Dakota Supreme Court with a construction of Public Law 280 which we have argued.
William H. Rehnquist: Mr. Claiborne, would not our normal practice be if we agreed with you that the Supreme Court of North Dakota was wrong in saying that Section 280 had affirmatively authorized this to go on and decide for ourselves whether we thought there was a constitutional violation resulting from the Supreme Court of North Dakota? I mean we do not ordinarily remand in a situation like that I do not believe.
Louis F. Claiborne: Justice Rehnquist, we do not oppose the suggestion that if the federal constitutional question is as plain as we think it is that it would be appropriate for this Court to go ahead and decide it and accordingly to reverse the judgment without need for any further proceedings except for trial of the contract claim in the District Court of North Dakota. Our suggestion is simply that as a matter of deference to the state court this Court might think it more appropriate to afford the highest court of the state an opportunity to correct its own error without the misapprehension which led it into that error rather than a simple reversal, but it is really not for us as a mere amicus in the case to be suggesting in any strong way what the appropriate disposition is. We ourselves have no doubt that in the absence of any federal authorization for discriminating against Indian plaintiffs the federal constitution would require North Dakota to admit them to its courts. We likewise assume from what the North Dakota Supreme Court itself has said that the state constitution would require that result, and if there is a state constitutional ground it might be appropriate to afford that court an opportunity to revoke it.
Sandra Day O'Connor: How about Section 1981? Do you think that is applicable if this Court goes ahead and tries to solve the problem?
Louis F. Claiborne: It does seem to us that Section 1981 may well be applicable. However, it is fair to say that as far as I am aware that ground was not argued below, and accordingly it might be particularly inappropriate for this court to reach that question. We simply mention it as one more indication of the problem that is created by this misreading of Public Law 280. As to that it seems to us quite clear that Public Law 280 was intended in its own words under Section 6 to remove impediments to the assumption of jurisdiction, not to erect new impediments... No license is given for that... and to the assumption of jurisdiction, not a disclaimer of jurisdiction. Likewise Section 7 is clear in that it gives federal permission to states not having jurisdiction over certain categories of claims involving Indians to assume jurisdiction, not to repudiate previously existing jurisdiction. I may say that the North Dakota amendment to its constitution itself suggests no direction to the legislature of the state to repudiate any previously existing jurisdiction. On the contrary, all that happened in 1958 is that the people of that state in response to Public Law 280 and with in a way that on its face seems unobjectionable said, "We retain our disclaimer of jurisdiction over Indian lands provided, however, that the legislature may accept such jurisdiction as is delegated by act of Congress. " That in no way to us suggests any repudiation of preexisting jurisdiction, and indeed the 1963 act of the state legislature speaks of jurisdiction being extended to cases involving Indians, nothing about disclaiming or repudiating older jurisdiction. Because those statutes and constitutional amendments read in that way it is and must be inviting to the Supreme Court of North Dakota to reconstrue those statutes which are perfectly able to be read as consistent with Public Law 280 in that way once this Court has indicated that Public Law 280 did not authorize any repudiation of old jurisdiction. Of course, it is possible to argue that notwithstanding Public Law 280 the states might be free to disclaim quite independently of any federal authorization of jurisdiction over Indians, but the decisions of this Court made it clear that there is no federal obstacle to the assumption of jurisdiction over a claim by an Indian against non-Indians within the state at least in the absence of any tribal court which has asserted that jurisdiction and certainly not when the tribe itself is the plaintiff. There can be no arguable conclusion into the tribal self-government when the tribe is the plaintiff as is here. The irony of this case is that the claim of tribal self-government and infringement is made by the non-Indian defendant, not by the tribe itself. It is a case where the defendant is being more Roman than the Romans. The preexisting law before Public Law 280 in this Court and in the state courts was quite clear that states could assume jurisdiction over this sort of claim by an Indian. In the absence of any federal impediment to the assumption of that jurisdiction we as we have suggested see a serious equal protection constitutional obstacle to declining to exercise that.
Warren E. Burger: Mr. McCutcheon.
Hugh Mc Cutcheon: Mr. Chief Justice, and may it please the Court: May I take a moment to restate the question which I thought was today before this Court. In Petitioners' petition for a writ of certiorari the question presented was did the state trial court have jurisdiction to hear and decide a cause of action brought by a federally recognized Indian tribe against a non-Indian defendant regarding a matter arising within the exterior boundaries of the Indian reservation.
Warren E. Burger: You do not quite state the question the same way in your brief do you?
Hugh Mc Cutcheon: I am trying to point the distinction, Your Honor.
Warren E. Burger: Which question do you think is before the Court, yours or the Petitioners?
Hugh Mc Cutcheon: I think our question and this question are fairly close and are before the Court, but what has happened that I think that this question has galloped around in the various briefs. I was and possibly I should not do it... I thought I would try and bring it back to the question as it existed on the application for writ of certiorari by showing the distinction, but it is easy to find the distinction if the Court will simply recognize that in the government's brief on the certiorari application they stated the question. There are some extraneous words in it that should be stricken, but when that is done it comes basically back to the Petitioners' question, and in our brief on the same point the certiorari the question there then comes very close to what I have outlined. Then it begins to deviate, and in the Petitioners' brief on the merits the questions presented which presumptively to me mean the issues there are now three different questions set out. Number one is not in this proceeding at all in my judgment. Number two should be carved of extraneous language to bring it somewhat within the question upon which we think the writ of certiorari was granted, and number three should be also reworked because we now get into equal protection and due process clauses. Let me say this that those clauses were argued in the North Dakota Supreme Court, and the North Dakota Supreme Court did reach those issues. Then that issue, however, was not an issue in the case. So we do feel that the question should be restated, and finally in connection with the final brief served upon us which is the Petitioners' reply brief we do not agree with the statement made in the first sentence that we are in agreement with the Petitioners that there is only a sole issue.
William H. Rehnquist: Mr. Mc Cutcheon.
Hugh Mc Cutcheon: Yes, sir.
William H. Rehnquist: You feel then that the question presented for review in the petition, the one sentence thing, does not include the equal protection argument that they now advance in their brief?
Hugh Mc Cutcheon: Your Honor, that is correct. However, in all fairness it was raised in the North Dakota Supreme Court. The North Dakota Supreme Court did go to it--
William H. Rehnquist: There are two requirements for us to consider something. One is that it be passed upon by the court below and the other that it be presented in the petition for certiorari or fairly subsumed by the question.
Hugh Mc Cutcheon: --It was reached by the court below, but I believe that there has been extraneous or extra material now brought into this argument. Let us turn for a moment to some of the argument advanced by both counsel for the Petitioner and counsel for the government. The argument seems to be made that the North Dakota Supreme Court was incorrect in its conclusion and specifically that the North Dakota Supreme Court should have recognized that it had prior jurisdiction. What counsel for the Petitioners is arguing today is that 280 did not bar a prior exercise of jurisdiction by a court, but that presumes something. This Court has stated many times in these cases that the jurisdiction must be conferred by an act of Congress. Now until 280 which this Court has said in several recent cases... I believe you said it just a couple of months ago in the New Mexico v. Mescalero Apache case... that 280 was the first, not the second, but was the first grant of power of general applicability with respect to this type of a matter. Now if you said it it must be so. You have said it in other cases, and we certainly accept that and why? For one reason. We do not find that North Dakota has ever been given outside of an Indian act in the middle forties any grant of power by the Congress of the United States for our courts to assume jurisdiction. So it is not a question of the old jurisdiction because if they didn't have jurisdiction because it was not conferred upon them then there would be no prior jurisdiction that could spring back into existence or if not springing back into existence would have remained in existence. It was never there in the first instance.
Sandra Day O'Connor: Well, North Dakota certainly thought it was, did it not?
Hugh Mc Cutcheon: Yes, but North Dakota was wrong and North Dakota, the Supreme Court of North Dakota and they were wrong under the test in Williams v. Lee. Now, let's if we may go to North Dakota. A few moments ago the matter of the White Shield case was raised. I'm sorry let's go... Let me change my argument just a moment. Public Law 280, 1953. Five years later, 1958, North Dakota through its people amended its constitution pursuant to the authority granted by 280. That is the legislative history. Five years after that in 1963 North Dakota adopted the legislation through its legislature to further implement the matters and that is now found as 27-19 of the North Dakota Century Code. Five years after that Congress enacted the Indian Civil Rights Act, 1953, 1958, 1963, 1968. Now what North Dakota did because the Indians asked for it when North Dakota in 1963 adopted Chapter 27-19 of the Century Code they did what? They put in a consent clause. They said this jurisdiction which we are imposing at this time becomes effective when? Upon consent by the Indians through an election. We preceded the Indian Civil Rights Act in that respect by five years. Now go to the North Dakota cases. In 1957 there was the case of Vermillion v. Spotted Elk, and our court there held that it had jurisdiction. In that our court was in error. Our court, however, subsequently in In re White Shield said in effect we were wrong in that case, and In re White Shield our court said this and In re White Shield is in 1963. Here is what our court said, "However, by the amendment of Section 203 of the North Dakota Constitution and the passage of Chapter 244 of the session laws of 1963. " --which is now 27-29 of the Century Code... "the people and the legislature have taken affirmative action which amounts to a complete disclaimer of jurisdiction over civil causes of action which arise on an Indian reservation except upon acceptance by the Indian citizens of the reservation in the manner provided by the legislative enactment. " Then the constitutional amendment is set forth. Following In re White Shield--
Harry A. Blackmun: Do you agree with the answer given to my question to your opposing counsel that this leaves these Indians without a forum in this case?
Hugh Mc Cutcheon: --Yes, sir, I do, but I do not believe that that is discriminatory in any manner because it is my belief from the cases that I have read of this Court where this Court says that is not racial discrimination and this Court goes so far in one case... I don't recall the name of the case right at the moment... as to answer that precise question and it says "There will be times when there will not be a forum. " This Court has said that, but they said that is not an invidious discrimination. That is simply because of the situation, the circumstances surrounding this particular type of legislation with these particular people who occupy a different status from anyone else. Furthermore this Court has said--
Harry A. Blackmun: That is a good way to get rid of a law suit is it not?
Hugh Mc Cutcheon: --I'm sorry, sir?
Harry A. Blackmun: It is a good way to get rid of a law suit is it not?
Hugh Mc Cutcheon: Sir, jurisdiction can always be accepted. We have all stood ready since 1958 to have jurisdiction of our courts fully extended over the reservations. The keys to the courthouse are in the hands of the Indians at least in North Dakota. They are right there. All they must do is have an election. Now our statute does have certain provisions on an election. Those provisions are probably possibly invalid. It is not an issue in this law suit because I think Congress has said how the election shall be conducted, called and so forth so probably to that extent those election provisions of our statute would fall as procedural but the point remains the power and authority is there.
Thurgood Marshall: Does that apply to any other group of people in North Dakota?
Hugh Mc Cutcheon: No, sir.
Thurgood Marshall: Only Indians?
Hugh Mc Cutcheon: 280.
Thurgood Marshall: Only Indians?
Hugh Mc Cutcheon: Yes, sir. Then in Gourneau which was a subsequent 1973 case the North Dakota Supreme Court expressly stated they have overruled In re White Shield. The arguments have been probably quite well covered, but we must remember that 280, Public Law 280 itself, is not an act that bars jurisdiction.
William H. Rehnquist: Mr. McCutcheon, you said a moment ago that in Gourneau the Supreme Court of North Dakota stated that it had overruled White Shield. Is that what you meant?
Hugh Mc Cutcheon: I'm sorry. No, sir. I did make a mistake, Spotted Elk. We conclude that Vermillion which is Vermillion v. Spotted Elk no longer states the rule to be applied in determining whether state courts have jurisdiction. Now this Court has indicated as a matter of fact that the preemption doctrine applies. This Court has also stated and it was well stated in New Mexico v. Mescalero Apache that the preemption doctrine is not quite the same as a normal preemption doctrine. The normal preemption doctrine would simply be that something is supreme and there would be no alternative. This Court has extended that because it has said that there are exceptions and certain of those exceptions, for example, are tax cases. There are exceptional circumstances where the courts may have some jurisdiction. It was interesting to note that Petitioners' counsel referred to the case of something versus Dorgan. True, a North Dakota case cited in 1973. It's a tax case, but in that case our court said... and the facts were stipulated incidentally... our court said that our courts have no jurisdiction over civil causes of action with respect to the Indian reservations. Our court is now very, very consistent. This Court has not too long ago in one of the cases stated that tribal... Yes, Rice v. Rehner... that tribal sovereignty itself exists at the suffrance or pleasure of the Congress of the United States. This Court has also stated the present policy of Congress which is to try to bring the Indians... This is the policy of 280... to try to bring the Indians into the full mainstream of our society. That is one of the purposes of 280 as I understand it. Certainly the states do appear to be working for that. The mandatory states under 280 were, what, granted instant jurisdiction. The disclaimer states were required to remove an impediment to the assumption of that jurisdiction, but again assumption in that sense means exactly what the Act seems to say. It is the assumption of any jurisdiction. In North Dakota it would be the assumption of jurisdiction in the first instance. There were acts, for example, in Minnesota which I understand did grant certain jurisdiction, certain congressional acts, but none in North Dakota and in reviewing all of these cases it is necessary to draw the distinctions with respect to certain state situations. For example, Candelaria, a 1926 case, is advanced in the brief of Petitioners and the government, but go back to 1919 and look at the case of Pueblo Santa Rose which is mentioned in Candelaria and it tells you from whence came the power of those courts. The power of those state courts came from treaties with Mexico and Spain, and they were carried forward into the law and they were carried forward into the state law by act of Congress, by requirement of Congress. The same is true, for example, with some of these states, for example, in the area of Oklahoma, Arkansas and so forth. North Dakota had a territorial government. Oklahoma, some of those states did not have an organized territorial government. There were certain laws in the unorganized territory that were created by Congress, certain courts that were created by Congress, and in statehood that followed those were required to be carried forward into the state laws. We have varying situations, but in North Dakota there has never been a prior grant, a specific prior grant of authority from the Congress of the United States which wails the authority in these instances for a special people who have a different relationship than others. The test has always been as stated in Williams v. Lee whether there is any infringement upon the basic rights. North Dakota has met all requirements set forth by 280. We took those step by step. We did it by a vote of the people. We amended our constitution. We acted by our legislature and we have taken the procedural steps required by Public Law 280. In Yakima, Washington v. Yakima, the matter there was Washington having taken or having set full jurisdiction over eight subject matter areas, and the attack there was made you couldn't do it. You had to take either all or none, and this Court said no, you have the power to take the whole. You may take the lesser, and that does make logic. There have been challenges to 280, but 280 has withstood those challenges. It now requires that which we took five years before 1968 the consent of the Indians. The doctrine of conceptual clarity which existed in the days of 150 years ago in the Winchester v. Georgia case where it simply said that there was no jurisdiction there except that which was granted by Congress, and it was totally exclusive. The state might not enter. That has been modified. There are some exceptions now to that particular doctrine, and that is rather stated carefully in New Mexico v. Mescalero Apache. It basically comes back to three areas that Indian tribes have been implicitly divested of their sovereignty in certain respects by virtue of their dependent status, that under certain circumstances a state may validly assert authority over the activities of nonmembers on a reservation and that in exceptional circumstances a state may assume--
Thurgood Marshall: You emphasized dependent status.
Hugh Mc Cutcheon: --Yes.
Thurgood Marshall: How do you ever expect them to get independent status if they are free to be robbed?
Hugh Mc Cutcheon: Sir, I do not believe they are free to be robbed. I believe that they must be encouraged to seek the independent status, and I think that is the thrust of 280. At least that appears to be the congressional intent for them to seek to become or give or provide an opportunity for them to become full fledged members in this society. Perhaps the thrust of Congress is that they are not dependent members.
Thurgood Marshall: I hope you do not think my silence means I agree with you.
Hugh Mc Cutcheon: Sir, I am used to having judges disagree with me. I did not feel that you were disagreeing, Your Honor. Oh yes, one thing further with respect to this counter claim. The argument advanced in the Supreme Court by counsel for the Petitioners was in response to sharp questions by our court with respect to the counter claim was that well that could be treated as an offset against the judgment that we are going to get. Well, now wait. I seem to have remembered in all the years that I have been in and out of the court room that someplace in some book somewhere I read where a plaintiff did not recover on his suit and the defendant did recover on the counter claim. The counter claim in this instance is a meritorious claim. It is not subject to the doctrine of set off.
Byron R. White: Why not?
Hugh Mc Cutcheon: I'm sorry?
Byron R. White: Why not?
Hugh Mc Cutcheon: Because it is not yet established that the plaintiff can recover a judgment. In summation, I would point out only that 280 is an act conferring jurisdiction in the first instance original authority for jurisdiction to be exercised by the states; that North Dakota has properly followed all steps that are strictly required of our state in so doing; that we have placed all of the machinery in existence subject only to the consent of the Indians; that the judgment of the North Dakota Supreme Court should be affirmed.
Warren E. Burger: Thank you, gentlemen. The case is submitted.


Warren E. Burger: We will hear arguments next in 1481, American Motorist Insurance Company against Starnes.
Joel W. Westbrook: Mr. Chief Justice and may I please the Court. I am Joel Westbrook of San Antonio, Texas, representing the appellant, American Motorist. We are aware, may I please the Court that not very many constitutional venue of questions come to this Court. But I must say I must pass on you that it has been said that Texas probably has a furnished own appellate system, more venue appealed and all the other 49 jurisdictions combined. And I believe this case will help you see why that is. Because in Texas the venue cared a great deal more encumbrance than just where the case is going to be tried. Our client, the American Motorists, unsuccessfully challenged venue in this -- on issue of Motorists case. That brought against it in a Texas State District Court in McLennan County, Texas. The appellate then had no more success in the Appellate Court of Texas because the Texas Supreme Court had previously, in 1963 in its Commercial Insurance versus Adam’s case against virtually the same constitutional challenge and held against the challenge, and virtually the same one that we are making today.
Harry A. Blackmun: That was a Texas Supreme Court Case, was it not?
Joel W. Westbrook: Yes sir, Texas. Actually, Your Honor, the Texas procedure of refusing writ of error and choosing between two conflicting Courts of Civil Appeals’ judgments on this point and in per curiam, selecting one of them and when writ is per curiam to Texas out right, well, that is the same precedential value as a Texas Supreme Court case would have.
Harry A. Blackmun: Is it possible to say that your opponent does not rely on Adams, he does not cite it in his brief?
Joel W. Westbrook: You Honor, I felt that the Court would --
Harry A. Blackmun: (Voice Overlap)
William H. Rehnquist: Mr. Westbrook, I take it that this same plaintiff could have sued a domestic corporation in McLennan County just as you were sued in McLennan County, since this plaintiff resided in McLennan County, so that the only distinction you claim as being made between the in state and out of state corporations is the necessity with respect to a domestic corporation of having to prove a prima facie case for the cause of action?
Joel W. Westbrook: Actually, we have not approved a case by preponderance of the evidence, Your Honor. Yes, that is the difference.
William H. Rehnquist: (Inaudible) is the final judgment?
Joel W. Westbrook: I beg your pardon?
William H. Rehnquist: Do you think this is a final judgment under R. 28 U.S.C.?
Joel W. Westbrook: Yes sir. It is a final judgment.
William H. Rehnquist: What about our Langdeau case where the Court held that where a Congress conferred a right of -- limited the right to sue a Federal Bank, it would strike me that your claim here -- you are not claiming a right that Texas Law gives you to be sued in a particular county. All you really claiming is the right to be treated identically with the domestic corporation, is it not?
Joel W. Westbrook: Yes sir, that is correct.
William H. Rehnquist: Do you think that is the same as Langdeau, for finality purposes?
Joel W. Westbrook: I do not -- I do not have the familiarity with Langdeau on that point, Your Honor, but in our jurisdictional statement, the appendix B3, we cite a number of cases which, there are Texas cases of course, that do hold that they are final judgments and they are appealable in Texas and this Court did note proper jurisdiction before in an another Texas case, Exxon versus Preston and it had been briefed by the appellant.
William H. Rehnquist: All the Texas Court here did was to say that the suit could proceed against your company, did they not? I mean, that the suit is not over?
Joel W. Westbrook: That is right, yes sir.
Harry A. Blackmun: Maybe you are suggesting we should have postponed jurisdiction rather than noted it?
Joel W. Westbrook: Well, sir I can only say that in Preston versus Exxon, jurisdiction was noted. It was never heard by this Court because the plaintiff appellee --
Harry A. Blackmun: Let me follow with you with another question that Mr. Justice Rehnquist intimated? Would you explain for us just what a preliminary venue hearing amounts to in Texas as far as a domestic corporation is concerned?
Joel W. Westbrook: Yes sir. If you have a domestic corporation in Texas that challenges venue where the plaintiff had brought the action, that domestic corporation, the defendant files what is called a plea of privilege, a verified plea. The plaintiff then files what is called a controverting plea and it is set down for hearing. The defend -- a jury may be requested by the defendant. If he does, however, request a jury, the Trial Court in his discretion can try it on the merits at the same time, but of course he is running the risk that if it is -- if he is wrong then the plea of privilege will be reversed and he has to try it on the merits again. Now, the most of them tried before the judge. The judge then makes a decision either sustaining or overruling the plea of privilege. If it is sustained then the case is transferred in our case to Dallas County where the principal office was of American Motorists, it is transferred to that County unless there is an appeal from that order. If it is overruled, it has been tried in the county in which it was originally brought, unless it is an appeal in that order, but either side can appeal the ruling of the Trial Court.
Harry A. Blackmun: Do you feel that that words unequal protection as between domestic and foreign corporations?
Joel W. Westbrook: In this respect that when the domestic corporation make its challenge to the venue, the plaintiff in order to keep that case in that county, McLennan County, has to prove in addition to other factors such as his is resident there or he is an agent of that domestic corporation, resident in McLennan County. He has to prove his cause of action. Every constitute element of his cause of action has to be proven by a preponderance of the evidence. One of the -- and this is a very substantial burden that the plaintiff has to bear at this early stage in the proceedings.
Harry A. Blackmun: And you are saying he does not have to bear that with respect to a foreign corporation, and therefore, no equal protection?
Joel W. Westbrook: That is right, Your Honor. In our case, we stipulated the thing we tried on the record, we stipulated facts. We stipulated American Motorists was an Illinois Corporation, authorized to do business in Texas and doing business in Texas and that it had an agent in McLennan County, that is with it and the plaintiff relied upon Subdivision 27 of our general venue statute and that was sufficient under Subdivision 27. Had it been a domestic corporation it would not have been sufficient. He would then had to go ahead and prove his cause of action, every element of it.
Lewis F. Powell, Jr.: I hear what you say, but does it mean that you have a full-dress trial before a jury on the merits on the venue issue alone?
Joel W. Westbrook: If you ask for a jury, yes. But as I said the Court has the discretion to try the case on the merits at the same time and try its plea of privilege, if he does ask for a jury.
Lewis F. Powell, Jr.: (Inaudible) does not exercise that discretion, then the plaintiff has a burden of showing about a preponderance of the evidence that he is entitle to recover on the merits?
Joel W. Westbrook: Yes sir, every element of the cause of action, except damages. Yes sir, factual damage.
Lewis F. Powell, Jr.: So you might have a week’s trial?
Joel W. Westbrook: Yes sir.
Lewis F. Powell, Jr.: But if you are a foreign corporation, you do not have that opt-in.
Joel W. Westbrook: No sir. Just that you are a foreign corporation doing business and have an agent in that county.
Lewis F. Powell, Jr.: Does the defendant put in evidence at the jury trial to controvert the evidence introduced by the plaintiff?
Joel W. Westbrook: Yes sir.
Lewis F. Powell, Jr.: So you have a full-dress trial?
Joel W. Westbrook: It could be yes, yes sir. But of course the --
John Paul Stevens: What is the normal practice? Does the judge usually have two trials or does he usually consolidate them?
Joel W. Westbrook: No sir, I would say the normal practices of the jury are not demanding. The normal practice is that the judge hears and makes the decision and normally it is not a full-dress trial.
Potter Stewart: What is it, sort of a prima facie case, and just (Inaudible) of plaintiff?
Joel W. Westbrook: No sir, it has to go beyond that. After all he wholly has prove it by preponderance of the evidence, but of course if the jury -- if the judge is the finder of facts and he finds a preponderance there, this is not likely to be upset that -- it was by preponderance of evidence.
William H. Rehnquist: Mr. Westbrook, I see from the brief that you have filed, the appendix to your brief that there are 31 Sections to the Texas Venue Code and there are obviously distinctions between foreign corporations and domestic corporations which you are asking us to focus on, but under Section 28, if your company had been of a Fire, Marine or Inland Insurance Company, it would have been subject to different regulations than being an automobile casualty company. Now, what is the standard that we are supposed to apply in terms of equal protection in determining whether these 31 different provisions for venue in different kind of suits offend the Federal Constitution?
Joel W. Westbrook: Sir, we say that the Federal Constitution has offended the Equal Protection Clause, by reason of the difference between Subdivision 23 which covers domestic corporations and Subdivision 27 which covers foreign corporations other than those specified elsewhere and this case came up under Subdivision 27. No other of the subdivisions are involved in this situation.
William H. Rehnquist: It is perfectly true, but it seems to me that any litigant in Texas, unless he happens to be a private individual sued in a particular kind of case is going to be able to make some claim that he is treated differently than either of the kind of railroad personal injury case in Section 25 or the Fire and Marine case in 28. What standard do we apply?
Joel W. Westbrook: Yes sir, as a matter of fact Subdivision 23 was before this Court 44 years ago. On the claim that corporations were discriminated against because they had to prove a cause of action and an individual did not in order to avail themselves to the privilege of transfer to county of his residence. And the standard we think is the standard that was employed, substantially employed in the Power Manufacturing versus Saunders, which this Court decide in 1927, involving an Arkansas venue statute. In that the case the Arkansas statute permitted a foreign corporation to be sued anywhere in the state, any county in the state, whereas a domestic corporations were limited to place it where they had an agency or representative and this Court in that Saunders case said that the classification was not a reasonable classification. They were not any facts related to the classification which reasonably could justify, it is to us, arbitrary.
William H. Rehnquist: Now but your case is not power, is it, because Texas requires even though a foreign corporation that it be sued only in the county where it has an agent?
Joel W. Westbrook: Or it says agent or its principal place of business or in a county where the cause of action arose. In this particular case, the cause of action arose in Tarrant County. American Motorists has its home office in Texas, in Dallas County and the plaintiff sued in McLennan County, the county of his residence.
William H. Rehnquist: And he could have sued a domestic corporation?
Joel W. Westbrook: Yes, he could have sued a domestic corporation. It is -- the Arkansas Statute in Saunders, we recognize that had a wider venue play than here. Ours is deeper because this matter of the burden that domestic -- that a plaintiff against a domestic corporation has is a valuable right. Our Courts have consistently said this is a valuable right, this has been your right and part of the reason is, I think, readily see is that if you are a domestic corporation, you get these things, one you have got a look at your adversary's tactics and his witnesses, you get, at the very least a judicial appraisal of the value of the case from the evidentiary point of view and you get an appellate appraisal, perhaps as to important procedural evidentiary matters. That is a very valuable thing that these domestic corporations have and we do not believe that there is any rational justification before having the -- this difference between domestic corporation's right to be transferred to the county of their residence and foreign corporations. Now, --
Warren E. Burger: Are you saying -- of course you are saying that it is irrational to say that a domestic corporation should be sued either (a) where the event took place or (b) at its home base when a foreign corporation is likely to have a more progressive presence in the state, is it not?
Joel W. Westbrook: Yes sir, substantially so. The domestic corporation --
Warren E. Burger: (Voice Overlap) basis for a different treatment?
Joel W. Westbrook: I beg your pardon?
Warren E. Burger: Is that a rational basis for a different treatment of the two?
Joel W. Westbrook: Your Honor, I do not believe that the sole effect and this is what was held I think in Saunders. If the sole reason for discriminating in the venue statutes is residence, if that is the sole reason that that is not sufficient to avoid confrontation with the Equal Protection Clause. As a matter of fact I think an argument made with the proposition looking for legislative intent, that is just like it may not have even intended this result. It -- what happen was and I -- before 1943 they were treated alike then in 1943, the legislature amended Subdivision 23 and created this requirement that a cause of action be proven against it, but it did not similarly do in Subdivision 27. So, you are not getting the same justice in the procedure of defending, of an insurance company defending, if you are foreign corporation that you would get if you are a domestic corporation.
John Paul Stevens: Mr. Westbrook, would you help me just a minute. Does this requirement in -- when the suit is against the domestic corporation, the requirement that he put in his prima facie case a little more, is that in the statute or is that by a judicial decision?
Joel W. Westbrook: No sir. That is by judicial interpretations. In the statute to the extent that it says cause of action, but establishing that it must prove a cause of action by preponderance of the evidence is by judicial decision.
John Paul Stevens: Your objection is the way in which the Texas Courts have construed Section 23. Has any plaintiff ever made the contention in a suit against the domestic corporation that this is an unconstitutional burden against him? Does he has a great burden if he sued a foreign corporation?
Joel W. Westbrook: Your Honor, I do not believe so.
Potter Stewart: It seems to me there is a greater burden on the plaintiff where he has to do than it is on anyone else?
Joel W. Westbrook: Yes sir.
John Paul Stevens: (Inaudible) the one that is really most excited about it.
Lewis F. Powell, Jr.: Before you carry on, what is the justification for what in effect is a mini trial on a plea of privilege where the only issue is venue -- what is the rationale? What prompted the Texas Courts to construe Section 23 in this fashion?
Joel W. Westbrook: I think partly and of course this was before summary judgment, but I think that there are distinctions still. This partly was to nip frivolous cases in the bud. If you could not show a cause of action right there at the beginning to the satisfaction of the Court or jury then you would avoid a long trial because we will transfer to another county. Under that disability, the odds are pretty good it is not going to be tried.
Lewis F. Powell, Jr.: (Inaudible) summary judgment practice in Texas?
Joel W. Westbrook: We do have summary judgment practice, sir.
Lewis F. Powell, Jr.: And this curious procedure?
Joel W. Westbrook: No sir, and I think the reason why not and why we still have so much of this is it that you get some things in plea of privilege that you do not get -- I am talking from the defense point of view that you do not get a summary judgment. As Your Honor knows, not Texas, but most states, you can beat a summary judgment motion by the defendant, just by showing there is an issue of fact, but you cannot beat a plea of privilege that way. You have to prove out your case.
Lewis F. Powell, Jr.: Yes.
William H. Rehnquist: Mr. Westbrook.
Joel W. Westbrook: Yes sir?
William H. Rehnquist: Your mini trial or whatever you want to call it, occurs in your plea of privilege cases only where the statute speaks of the cause of action having arisen in a particular place, does it not?
Joel W. Westbrook: Yes.
William H. Rehnquist: In other words, when the venue provision does not depend on where the cause of action arose then there is no mini trial?
Joel W. Westbrook: That is right. It is conceivable that you could have venue, a venue exception established without proving a cause of action, yes sir.
William H. Rehnquist: Really, did not the Texas Supreme Court just come along and read this language where the cause of action arose and say that you are in affect, if you are depending on that kind of language in a venue statute, you had to show that a cause of action did arise?
Joel W. Westbrook: Mr. Justice Rehnquist, I do not know if that was a language, but I can say that is a fair effect of it, yes sir.
John Paul Stevens: Mr. Westbrook, what are you asking the Court to do? You are asking us to send it back and require the plaintiff in order to support venue to prove a prima facie case?
Potter Stewart: No sir, we are asking this Court to declare that Subdivision 27 as it is applied in Texas, is unconstitutional because it deprives foreign corporations of the equal protection of the law.
John Paul Stevens: Then what happens to this lawsuit?
Joel W. Westbrook: Then he would --
Thurgood Marshall: (Inaudible) at all if you write 27 off the books, (Inaudible) of the book?
Joel W. Westbrook: I had, I suppose more difficult problems in that, but we would be happy with it. If you did --
Speaker: (Inaudible)
Joel W. Westbrook: This cause. Mr. Justice Keith wrote an opinion when this Court sent back Exxon versus Preston after the plaintiff withdraw brief to determine whether or not the cause was moot and I think if this Court declares Subdivision 27 is unconstitutional that it might well have the superior option of sending it back for determination by the Court of Civil Appeals of whether a cause is moot or what further proceedings should be had. I think that is Texas’ problem as to what you are doing.
William J. Brennan, Jr.: (Inaudible) one could -- your client then be sued in Dallas?
Joel W. Westbrook: Your Honor, there is a question about whether --
William J. Brennan, Jr.: That is unconstitutional?
Joel W. Westbrook: I think the statute limitations on uninsured motors case is probably four years, I am not sure because of the contract aspect --
William J. Brennan, Jr.: Yes, if there is only statute limitations problem, could a new suit, if you were to prevail here and 27 was struck down, could a new suit be brought in Dallas against your client?
Joel W. Westbrook: Like we brought in Dallas or we brought in Tarrant County, if the forum where the--
William J. Brennan, Jr.: Cause of action?
Joel W. Westbrook: (Inaudible)
Speaker: (Inaudible)
Joel W. Westbrook: I am sorry Your Honor, I did not hear --
Harry A. Blackmun: You would not be content with a mere transfer of the case to Dallas or Tarrant County?
Joel W. Westbrook: I think mechanistically, I have to say yes, but of course we are hopeful that invidious discrimination will be declared unconstitutional. I do not --
Harry A. Blackmun: (Inaudible) the statute limitations on that?
Joel W. Westbrook: Yes. I think that we should make it clear to the Court because I do not see how this question was missed, but I think it was surely clear to the Court that we are talking about corporations that are authorized to do business in Texas not unauthorized because that would be an entirely different story I think. And they do have a fixed place of business in Texas. They do have a designated process agent. Now, in the Saunders case this Court decide in 1927, held that for venue purposes there is just no constitutional basis for extinguishing between a domestic and an authorized foreign corporation. I do not know what my time situation is, except I will be advised here, but I believe that it probably be appropriate if I or let that, not a distinguished associate from word go in answer to the next set of question, but before I do let me say this I -- you will pardon me personal reference, I am a family of six generations in Texas. I really feel that I am on a sound ground of saying that -- that this invidious discrimination is something more than just being inhospitable to foreign corporation. Regrettably so it is more than that. We think it does what Mr. Justice Brennan was talking about in Bowers, I believe when he spoke of the disruption of federalism and we think this kind of discrimination is disruptive of federalism. I know around the Navy Club, you know they changed the name of the room, strangers room, it has been changed to visitors room and that is somewhat more hospitable, but we do believe it is not just a question of hospitality that it is disruptive of federalism.
Warren E. Burger: Are you saying that there are -- (Voice Overlap)
W. V. Dunnam, Jr.: If it please the Court, I would like to in view of the fact apparently that Justices are not too familiar with the localized plea of privilege of venue practice in Texas, to give you actually a clearer view point of what it actually is about there. In the 20’s, this stuff about a jury trial, in the 27 years so that our practice just continuous trial practice through the years, I have yet to for the first time to ever try a plea of privilege before a jury and actually I have yet to hear one ever being tried though there instances during this history of the State where it has occurred and --
Potter Stewart: In their what, over 200 counties in Texas?
W. V. Dunnam, Jr.: Yes sir.
Potter Stewart: And, so there -- it is the least possible their practice might vary from --
W. V. Dunnam, Jr.: Well, if the lawyer or defendant demanded a jury trial then the Court would put in the trial on the merits at the same time and for that reason they never demand a jury trial because then you just try the whole case and he would not get his plea of privilege trial.
Potter Stewart: (Inaudible) demand a jury trial?
W. V. Dunnam, Jr.: Either party could demand it but --
Potter Stewart: And the plea of privilege --
W. V. Dunnam, Jr.: I do not believe either party can. I believe just the defendant. It is something -- it is about -- it is been 20 years since I have even heard that question of a jury trial brought up in the thing. Now, about the burden of proof which Justice Stewart suggested possibly was prime facie case. Technically, legally, according to decision, this preponderance of the evidence as a matter of actual truth and fact and then in factual analysis that is simply a matter prima facie proof. Actually, the way the practice goes, the man makes out a prima facie case. He does not show anything other than a prima facie case. The Trial judge, I have never known of one to decide it just on of weighing the evidence and actual facts. If he makes out a prima facie case the plea of privilege is overruled. That was a law for many, many years in the State of Texas. Then they changed it to preponderance of the evidence and of course, Trial Court is being jealous of their own jurisdiction, generally if a man filed a case in this Court, if he shows that there was a collation and his clients says the light was green for him or other, the defendant takes his stand which they never do. The defendant never puts any evidence on his own plea of privilege, only agrarians. So I do not believed in 27 years I have ever had it happen.
William J. Brennan, Jr.: (Inaudible) judge a viability, what does he do? He simply says, (Voice Overlap) carried your burden?
W. V. Dunnam, Jr.: If venue is established. Now --
William J. Brennan, Jr.: He makes no finding.
W. V. Dunnam, Jr.: No. No Your Honor.
William J. Brennan, Jr.: You make out a case of viability?
W. V. Dunnam, Jr.: He just overrules a plea of privilege. Now, Justice Rehnquist brought up the question about whether or not the -- and when Mr. Westbrook responded and it is the purpose of this -- the whole plea of privilege, the purpose and objective of the state legislature in this instance is to give our defendant an opportunity to see what cause of action is, throw out frivolous lawsuits. And of course that has no bearing on it whatsoever as to the purpose of the legislature. For the reason that Justice Rehnquist point it out are probably 50% of your grounds, your exceptions to exclusive venue in the County one's residence are based, have no relationship to cause of action. In the words, any suit involving the title to real estate or remove a clout of title, if that is the suit by its pleadings alone, that is the suit, you do not have to establish a cause of action whatsoever and cause of action has no bearing on it. If I sue John Doe from running over my dog, it really means all I have to do, he files for a plea of privilege, all I have to do is come in and prove that he lives in the County were the suit is, cause of action has nothing to do with it, whatsoever. All I have to do is establish -- that was the county of his resonance in regard to corporation, any corporation, domestic or foreign. This business of a cause of action applies as to either. Anytime you sue a corporation in the State of Texas, all you have to do to establish venue if -- in the County of your suit is to establish that the fact that your cause of action of a part thereof, it says to domestic or foreign that your cause of action or a part thereof which means if it is a contract, that the contract was entered into or performance or breach occurred here, any part of that cause of action or your damages occurred in this County or your initial negligence --
Thurgood Marshall: (Inaudible) no difference between the foreign corporations, domestic corporation on the plea of privilege?
W. V. Dunnam, Jr.: I say as to this -- this one ground of exception to venue in the county of one’s residence. That is not common. Section 23 provides as to domestic corporations, you can hold them in any county where a cause of action or a part there of arose. As to a foreign corporation the same identical provision exists. Now --
Thurgood Marshall: Is there anything about cause of action in 27?
W. V. Dunnam, Jr.: That is what I just gave Your Honor, yes sir.
Thurgood Marshall: Where (Voice Overlap) 27?
W. V. Dunnam, Jr.: Yes sir, in other words in 23 and 27, you can hold either one where identical that provision and --
Thurgood Marshall: (Inaudible)
William H. Rehnquist: (Inaudible) 41 of the appellant’s brief.
Byron R. White: And I suppose that a plaintiff who lives in that county can sue in his own county either a domestic or foreign corporation?
W. V. Dunnam, Jr.: In a --
Byron R. White: Is that right or not?
W. V. Dunnam, Jr.: That is not correct.
Byron R. White: (Inaudible)
W. V. Dunnam, Jr.: No sir. No. You cannot just establish venue in a county --
William J. Brennan, Jr.: Private corporation maybe brought in a county in which the plaintiff resided at the time the cause of action or part thereof arose?
W. V. Dunnam, Jr.: That is if, if -- of--
William J. Brennan, Jr.: (Inaudible) you read both the cause of action and the plaintiff? Which?
W. V. Dunnam, Jr.: That -- I mean that is the second --
William J. Brennan, Jr.: What 23 says?
Thurgood Marshall: (Inaudible) but it looks to me like 23 is (Voice Overlap)
W. V. Dunnam, Jr.: I am speaking of this clause. 23 and 25 have -- each one has about 3, or 4 separate clauses, that is what I am getting at. They have one in common, the cause of action or part thereof. That is setup of the separate clause as to each. Alright, now the Commercial Standard versus Adams, we agree with the rule -- the decision in that case. However, in our brief we feel that the Court there did not see it as concise as is it actually -- the actual question was. In that case they just discussed overall question proposed here by Mr. Westbrook. Simply is it an invidious discrimination to provide that you can merely -- that you can hold a domestic corporation by -- of having to prove an agency and a cause of action and then as to a foreign just an agency, but here is the way we read these two statutes. The first, 23 as to domestic corporations, we have got the common clause. We set that out of the way, that is in common, I cannot make a complaint about that. Either one can be held wherever cause of action or part arose. Alright, set that aside. Now ,let us go over to the next. Here is where Mr. Westbrook’s complain is. As to the domestic corporations the statute provides that they can be held where their principal office is. Now that means their principal office in fact are the one designated in Texas. Now, of course a -- now we are going to this next clause. A domestic, you can hold them where their principal office is; alright, a domestic corporation, their principal office is of course in the State of Texas generally. That is where their officers meet. That is where their records are kept. That is where their Directors meet. That is where their officers function, their primary functioning office in the State of Texas. There is no such thing over here to correlate as to foreign corporation. Their office is up in Detroit, Michigan maybe.
Warren E. Burger: (Inaudible) the entire State of Texas (Voice Overlap) and all the 200 counties in the entire state?
W. V. Dunnam, Jr.: (Voice Overlap) Alright and we want to treat as equally as we can possibly do consistent with the differences at reasonably equal consistent with the differences. Alright, we got the domestic where it has its principal office of business. We can not hold a foreign it is a principal place of business. It is out of State.
Byron R. White: It is is one of the alternatives in which you can sue a foreign corporations, is it not?
W. V. Dunnam, Jr.: That is one of the alternatives but --
Byron R. White: Your own statute indicates that foreign corporations may be sued where their principal office is in Texas?
W. V. Dunnam, Jr.: We recognize that as a possibility. A Delaware corporation may get a charter up there. It is a rarity, once in probably 10,000 corporations have all their meetings and functions right there in Texas and some states do not permit that. But that is a rarity. Actually we cannot duplicate, have a duplication, so what is the next closest thing to equality with the domestic corporation. Texas has concluded and rightly so, that domestic has its primary principal office with all of its functions there, you can hold them there. The foreign does not. What is the next closest thing for a foreign corporation? It is this, where it has an agency and representative, not just an agent or representative, but one of a fixed and a permanent nature, that is where the Texas Supreme Court has construed that provision. So --
Thurgood Marshall: (Inaudible) office in Delaware.
W. V. Dunnam, Jr.: That insurance company of course, it is a foreign insurance company, I am sure its main office is probably not in Dallas. It is in some other State.
Thurgood Marshall: The main Texans office is in Dallas?
W. V. Dunnam, Jr.: Well, the -- the record does not show that Your Honor and I -- I do not know whether that even has it. It would be a terrific element of proof to try to establish, say some insurance company in Nevada State, they have got agencies all over Texas.
Thurgood Marshall: The statutes says that only County was the principal of such company maybe situated?
W. V. Dunnam, Jr.: Alright. I will get to that Your Honor. The principal office is this. What you raise there as a primary, is this Texas statute. Avenue Insurance Company has an office in Houston. It is a foreign company. They have got a big office in Dallas. They have got one at Odessa and one at the Lubbock. Which one is the principal office? They have got an agency, a fixed permanent agency operating out of all four places and they covered large and broad areas which is there principal office.
Thurgood Marshall: But Texas can make them say which one is?
W. V. Dunnam, Jr.: If --
Thurgood Marshall: State of Texas?
W. V. Dunnam, Jr.: They would have to hold it as according actual primary office instead of their designation for this reason.
Thurgood Marshall: But did Texas say that you have to designate one office as your principal office?
W. V. Dunnam, Jr.: Alright sir and here is what would happen.
Thurgood Marshall: (Inaudible)
W. V. Dunnam, Jr.: Absolutely. And here is what would happen. It would be unfair to every litigant in Texas. I will tell you why. There are small counties in Texas where 80% of the populations are railroad employees like Palestine, Texas, that county. The railroads would all designate -- they would designate that county, though it is not their actual primary function and purpose. It could not succeed in a judgment against them. Then insurance companies would all designate Dallas, Texas, whether that was their actual main operation or not. Some companies would designate the -- some county in the remote Big Bend County where it be prohibitive for anyone to sue them, it is a far, it is the most remote area in the State of Texas, miles of -- equivalent of going to across four, five of these States up here. And the -- it would be un-functional, it would be unfair to the citizens of Texas.
Byron R. White: (Inaudible)
W. V. Dunnam, Jr.: Your Honor, what?
Byron R. White: A domestic corporation could engage in the same tactics --
W. V. Dunnam, Jr.: But Texas holds it to their principal office in fact.
Byron R. White: Well, they could hold then foreign corporation to that -- to whatever the facts show as to where their principal office is?
W. V. Dunnam, Jr.: Principal office in Black’s Dictionary is generally -
Byron R. White: What does a foreign corporation do when it qualifies in Texas, what kind of a piece of paper does it fill up?
W. V. Dunnam, Jr.: They designate an agent for service and pay a franchise tax.
Byron R. White: And the agent for service is usually the corporation --
W. V. Dunnam, Jr.: That is probably the -- generally most of them have a CT corporations in some building in Dallas, Texas. But --
Byron R. White: They do not say where their principal office is going to be in the State?
W. V. Dunnam, Jr.: I do not -- that they do not have to.
Byron R. White: Or required to --
W. V. Dunnam, Jr.: But, there would be a black pay if that determined where their principal office was.
Byron R. White: It might not determine the -- finally where it was anymore than it would be with the domestic corporation?
W. V. Dunnam, Jr.: Well, but -- it is easy to determine a domestic corporation because that is the home office of the company. Generally they have to have some home office and --
Thurgood Marshall: (Inaudible) goes down in two, three huge buildings to show it must be the home office, 130 stories high.
W. V. Dunnam, Jr.: That is right. There are some instances --
Thurgood Marshall: (Inaudible) offices.
W. V. Dunnam, Jr.: If that was --
Thurgood Marshall: But it would be hard to move them?
W. V. Dunnam, Jr.: It probably would be in that instance. But if they put one up in Dallas and two or three other places what would be the -- a similar building.
William H. Rehnquist: Well, is what you are saying that a domestic corporation’s home office has certain functions associated like -- where the like the presence of a Chief Executive Officer, the meetings of the Directors and that sort of a thing that make it much more readily identifiable factually than what might be one of several relatively equally important branch office of a foreign corporation that has its principal place of business in another State?
W. V. Dunnam, Jr.: That is exactly correct. That is why Mr. Black defines a principal office of a corporation, where they maintain their permanent records and where their principals officers are and where their Boards generally meet those, of course sometimes they have a meeting at Vegas, and stuff like this for vacation purposes. Their primary -- their primary board room and so forth and all the various aspects of the corporate function. Now, the venue -- the Texas venue statute provides a railroad can be held wherever it has a track running in Texas. The final shot of the whole thing is, as stated by this Court many times, if the classification is based on some differences that reasonably apply and are pertinent to the basis for which the classification is made then it is not arbitrary, it is violative of the Fourteenth Amendment on equal protection laws.
Potter Stewart: The case in this Court that bears on this most relevantly I suppose is the Power Company against Saunders case, is it not?
W. V. Dunnam, Jr.: That was a case, that was a case where -- they just provided a personal injury action. You can sue a foreign corporation just any place in the State. There was no -- the classification did not relate to the distinction made to the subject of the distinction of the differences and so forth. The -- in other words, that would like providing a -- well, fro instance railroad where it got a track, that has some relationship to the function, state wide function for reasonable basis of -- it is familiar with those grounds, it is functioning in them. Therefore, it is a reasonable basis to hold it there, though it may have agencies at various places, but of courses a much greater argument could be made on that. You could argue that, it is just like saying trucking line is sueable wherever there is a highway in the state, that is substantially summary. But, the --
Harry A. Blackmun: (Inaudible) point of the finality of the judgment here, I take it you are not?
W. V. Dunnam, Jr.: Well, in Texas a plea of privileges is an interlocutory ruling and the Supreme Court of the United -- of the State of Texas does not have jurisdiction of an order on a plea of privilege except in certain instances where there is a conflict of decisions or where there is a dissenting opinion on certified question because it is not, it is an interlocutory order.
Harry A. Blackmun: Are you taking that there is no jurisdiction in this Court for this review at this point. I do not read your brief that way?
W. V. Dunnam, Jr.: I have not claimed that in the brief that it is a question -- there are some serious question about it.
Harry A. Blackmun: I wonder why you did not do it?
W. V. Dunnam, Jr.: But I did not -- this is a matter -- I feel that as short as our brief is that that gets to the heart of this thing and the Texas Court has -- we would like a final decision on to by this Court.
Harry A. Blackmun: As your brief is, it seems to me it does not touch upon it and this raises -- this brings me to my other question. I take it if you are not relying on the Adam’s case. You do not cite it?
W. V. Dunnam, Jr.: Well, he cited Adam’s case enough and it attacked its rationality which we think is, is accurate. However, we feel that -- I feel -- the reason we presented this in this brief like I said, the only question actually before this Court on the Fourteenth Amendment is whether or not it is a rational distinction where you give a (Inaudible) whatever cause of action is that you take another clause, you say the domestic can be held where it has its principal office. Then in order to equalize this, they say you can hold a foreign corporation wherever it has a -- it’s a primary office or wherever it has an agency or representative and the Texas Supreme Court construes that domain a fixed permanent agency in the State of Texas and we say those are equivalents and they are as close to equivalence as anyone could actually bring about.
Thurgood Marshall: (Inaudible) interlocutory order?
W. V. Dunnam, Jr.: That is what the Supreme Court of Texas has always held that these are interlocutory orders or statutory jurisdiction.
Thurgood Marshall: Give us jurisdiction, you cannot waive jurisdiction?
W. V. Dunnam, Jr.: No, I know we cannot.
Thurgood Marshall: Case which say we have jurisdiction?
W. V. Dunnam, Jr.: None whatsoever except the fact that the reason I did not raise it, back this Court did note probable jurisdiction back in this case one time when it presented there is conflict. The Court of Civil Appeals opinion in Texas. This Court noted probable jurisdiction but --
Speaker: (Inaudible) jurisdiction.
W. V. Dunnam, Jr.: Yes sir.
Lewis F. Powell, Jr.: You defend the classification here. Would you summarize to me exactly what you think because State interest is that justifies this different treatment for a foreign corporation and a domestic corporation once venue is sought in the particular locale involved in this case. What is the State interest that your (Voice Overlap)
W. V. Dunnam, Jr.: (Voice Overlap) State interest, Your Honor. The State interest is in the Fourteenth Amendment trying to equalize it. I will say that -- that where a domestic corporation, a logical place to sue it is a place where its primary office is. I say you --
Lewis F. Powell, Jr.: Let us assume a domestic corporation and a foreign corporation both being sued in precisely the same county. As I understand it one has the privilege of the mini trials and the other does not?
W. V. Dunnam, Jr.: That is a --
Lewis F. Powell, Jr.: Is there no -- is there no situation, no county, no cause of action in which a domestic corporation does not have the mini trial when the foreign corporation was to have it. I put that badly, (Voice Overlap) do you want me to put it again?
W. V. Dunnam, Jr.: What I am trying to make -- I feel his brief misses the end of the whole thing and it might have thrown a salvo.
Lewis F. Powell, Jr.: But you do treat a foreign corporation differently under the circumstances before us here?
W. V. Dunnam, Jr.: You -- we would treat them.
Lewis F. Powell, Jr.: Answer that question please sir.
W. V. Dunnam, Jr.: We treat them differently, but as close to equally as can be possibly be done.
Lewis F. Powell, Jr.: Both to have the mini trial in the circumstances of this case?
W. V. Dunnam, Jr.: We do not allow the domestic corporation to have the -- the mini trial on a cause of action. Where we allege -- it is a primary office is Dallas County and we sue him in Dallas County. Primary office in fact, all we have to do is prove its primary office in Dallas County. Alright. As to a domestic it has no primary office, generally. So the nearest the thing to it -- without a -- it just prove that it has a fixed, permanent agency in that county. That is what a foreign corporation will have in place of its primary voting office and so forth and officers. A fixed, a permanent place of business and we prove that -- not just it has some agent living down there, but it has a fixed agency of a permanent nature in that County. Did we not have established it? There is no mini trial required as to them. There was no mini trial required as to the domestic corporation as to cause of action. That is the thing. That is our position. These are the two pluralities. In other words, he has tried to take this other additional ground of venue which the domestic corporation as his Honor Justice Stewart pointed out a while ago the domestic corporation in this additional ground over here, he is talking about where you have to prove a cause of action. That is an additional ground to hold a domestic corporation. In addition to these deals it goes on to provide that you can hold a domestic corporation where it -- or where the plaintiff resides and it holds that you could have to hold a foreign corporation where the plaintiff resides you have also got to prove that the cause of action occurred where the plaintiff resided or that the cause of that -- or you could hold him in the nearest county of which he has an agent to where the plaintiff lives. That is initial ground, additional ground of that you have got to prove additional burden to the hold a foreign corporation that you do not have to place on a domestic corporation.
Warren E. Burger: But you have not been in your -- that is in the terms of the Powers case, but essentially are you not arguing that the position of Justice Holmes and Brandeis is the -- it justifies whatever discrimination difference in treatment is accorded here by Texas to foreign and domestic corporation?
W. V. Dunnam, Jr.: I think they were correct in their dissent, but I do not think that case is anywhere informed. That did not -- there was no distinction made there. There is no -- it is just wherever, wherever you want to sue a foreign corporation does not relate to where they have an operation going there, a fixed permanent operation or primary office or anything, just sue him anywhere.
Warren E. Burger: The reasoning of Justice Holmes and Brandeis is (Voice Overlap)
W. V. Dunnam, Jr.: There reasoning is accurate, but I do not think there would be needed in this case because this is a -- we have Texas in this case all of the -- all they have done is provided, going further and place additional grounds, you can hold a domestic just, but to hold a foreign corporation in addition to proving the plaintiff as there you have got to prove a cause of action there to and as to domestic just prove the plaintiff if he object and then the pluralities are up here higher.
Lewis F. Powell, Jr.: You have not told me what interest that says, what does that do for the benefit of the State of Texas?
W. V. Dunnam, Jr.: Alright. Well, of course it is the interest of the State to be -- that any person, form of corporation is functioning within his borders, have some means of access to the Courts to write and redress the wrong. And -- so everyone should be suable in some county and it is the interest of the State to do it with reason provided for some protection to the person sued that he might be in an area where he is not a total foreigner, where they cannot harass him by filing the suit over into Big Bend County, on a man in Dallas, but likewise it is the interest of the State that litigants have a reasonable opportunity to present their case to a forum within some reasonable relationship to the functioning company involved and where as long as they restrict it to a domestic -- no way I can think up or you could treat them more equally. If you are going to let a domestic corporation be sued wherever its principal office is, without regard to where the wrong occurred or claim wronged or anything of that nature, then the only way you could closely relate up a foreign corporation to the same category would be to provide as Texas has done that it can be held wherever -- it has a fixed agency and representative. And then those are equivalents as close as it could be possibly set -- be set out. And we think that it is reasonable, it is rational, it is the only way you could equivalently treat them. If you provide that foreign corporation can be sued where its principal place of business is and that if -- and a foreign or domestic corporation likewise did not provide that foreign could be sued where it had an actual permanent fixed place of business in Texas then you would be treating the domestic corporation, you can hold them wherever there principal place of office, businesses, but you could not touch the foreign corporation where its principal was and you could not touch him any place else though they have got their actual prime of fixed place right there in Texas and --
Thurgood Marshall: (Inaudible) the same statute for both?
W. V. Dunnam, Jr.: They had what, Your Honor?
Thurgood Marshall: The same statute for the both domestic it was exactly the same, domestic and foreign?
W. V. Dunnam, Jr.: I believe that is correct. But --
Thurgood Marshall: Why did you change it?
W. V. Dunnam, Jr.: Well, I guess they want to treat foreign corporations on an equal -- as far as possible with the domestic and you do not have to prove a cause of action to hold a foreign corporation where its office is and likewise you should not have to prove one to hold a -- I mean, the domestic corporation where its office is and where a foreign corporation its office in Texas, you ought not to have a proof of cause of action to wholly limit that.
Thurgood Marshall: (Inaudible) I appreciate that.
Potter Stewart: I did not quite understand your answer to my Brother Marshall. You conceded in response to his question that up until sometime in the 1940’s, domestic corporations and foreign corporations were treated precisely alike under the same statute and as I understood you, in any civil why do they -- why do think the legislature changed it and your answer was, in order to treat them alike. It does not -- I missed something there.
W. V. Dunnam, Jr.: Well. You could hold either one of them where a cause of action occurred, and you could hold either one of them where the plaintiff resides plus you got to prove a little more on the foreign and you could hold the local or wherever their principal office is, but the foreign does not have any office you could hold the in until they initiated that in actual practice, for truth and practice. There is at out--of--state, they got -- they might have to or three huge offices, the very places in Texas, you cannot differentiate which is the biggest and which is the volume or otherwise.
Warren E. Burger: Do you have anything further Mr. Dunnam.
Joel W. Westbrook: Very limited Mr. Chief Justice. I would remark that in response to Mr. Justice Powell’s question as to whether a corporation were treated differently, foreign and domestic, I understood counsel to say that they were treated differently, but attempted to make it as equal as possible and I would really rather thought that the concept of separate but equal had been a long and since dissipated. It must be kept in mind that the plaintiff has the right to choose initially, not only the forum, but the exception. He could pick four or five of them if you wanted to and he did in this case, he picked two, Subdivision 23 and Subdivision 27. But in actual trial -- plea of privilege, he elected to stand only on 27. Why? Because if he had tried to stand on 23, he would have had to prove the cause of action, it is his choice. I do feel that, it will be useful to say and to establish although I do not see it on one of Justice’s remark, the statute itself refers to a principal office in a State and that is a question of fact. In this case it was asserted in a verified plea that it was Dallas. That was not consequent. It would have been no problem, would be no problem, if the Court ruled the other way, we are going to Dallas. I do feel that it might be desirable and if the Court would give us leave to furnish the Court with a brief on the jurisdictional question which several of the Justices asked.
Potter Stewart: As to whether or not that our Court has jurisdiction which depends upon whether or not this is the final judgment of the Court of Civil Appeals of Texas?
Joel W. Westbrook: Yes, that is right.
Potter Stewart: I would be interested in it.
Joel W. Westbrook: Before closing finally your Honor,we believe that the Exxon case --
Potter Stewart: How did the Exxon case, was it in the same procedural posture as this one?
Joel W. Westbrook: Substantially, yes sir. It was a venue of question and it came up here, proper jurisdiction was voted.
Potter Stewart: That actually it was in the same procedural posture?
Joel W. Westbrook: Yes sir.
Potter Stewart: Because the Arkansas case, Power Company case did not -- that was a final judgment for the plaintiff after a trial.
Joel W. Westbrook: Yes sir, that is right, but Exxon, Exxon likewise was the question where the plea of privilege was overruled.
William H. Rehnquist: Exxon was never argued here though, was it not?
Joel W. Westbrook: No sir. The appellant filed his brief --
Potter Stewart: Proper jurisdiction was noted.
Joel W. Westbrook: Probable jurisdiction was noted. Appellant filed his brief and I do not think, the question was briefed beyond what is just ordinary is and then the plaintiff withdrew. I have got the exact language that he used and this Court then sent it back to the Courts of Appeal in Texas for determination on whether or not it was moot. That Court determined it was moot and transferred to Harris County from Belmont where it was originally filed.
Harry A. Blackmun: We transferred it then, we did not dismiss it?
Joel W. Westbrook: No sir, did not dismiss it. Mr. Justice Keith in that case actually got it back, struggled with that problem quite a bit and wrote an opinion on it. It was a problem for him ,but that is what he did. We would feel that since Wheeling versus Glander came after Saunders, Power versus Saunders, and after Bain Peanut which expressed the philosophy of Mr. Justice Holmes, who had previously dissented. And that case by the way, the Bain Peanut case which came after Saunders, I do not believe Mr. Justice Holmes discussed Saunders at all in that opinion. But Wheeling came still further and while it was not a venue case, I think that it has a very considerable philosophical core and that is the statement that is made in there. That once -- once a foreign corporation has come into a State and it becomes domesticated and let me say that this insurance corporation, it comes fully under the insurance code just as all other, all other insurance companies, domestic or foreign in Texas, but once a State has chosen to domesticate foreign corporations, this is in Wheeling versus Glander, 571 of 337 U.S, the adopted corporations are entitled to equal protection with the States’ own corporate progeny and this was attached case and they said at least to the extent that having the same tax basis, but we believe the basic philosophy of that statement does govern. Thank you.
Potter Stewart: (Inaudible) possibility of filing a written document directed to the issue of our jurisdiction. Do you have any views on it orally beyond those you have given us? Have you (Voice Overlap)
Joel W. Westbrook: I do not I believe I gave a helpful oral argument on it, Your Honor.
Speaker: (Inaudible)
Joel W. Westbrook: I can refer to in Texas cases on its being a final judgment for purposes of appeal, but I do not have in mind Supreme Court cases of the United States.
Potter Stewart: I would be interested in --
Joel W. Westbrook: If the Court will grant us leave we will undertake --
Warren E. Burger: (Inaudible) a week and you will let your friend respond if he --
Joel W. Westbrook: Yes sir.
Warren E. Burger: -- desires to do so. Thank you Mr. Westbrook.
Joel W. Westbrook: Thank you.