Warren E. Burger: We'll hear arguments next in number 78 Original, State of California against Arizona and the United States. Mr. Goodman, I think you may proceed whenever you're ready.
Allan Goodman: Mr. Chief Justice, and may it please the Court. This case comes to this Court upon the State of California's motion for leave to file a complaint against the State of Arizona and against the United States. By our motion, we seek to invoke this Court's original and exclusive jurisdiction to finally determine title to sovereign lands along an 11.3 mile reach of the Colorado River. The lands in this -- an issue in this action are sovereign lands and were at the time of California's admission to the union within the bed of the Colorado River. Along the river as the Court knows there have been many accretive and avulsive changes. These river movements' generated serious confusion and controversy until 1966 when by an interstate boundary compact ratified by Congress in that year, the political boundary between the two states was set and permanently fixed forever more.
Harry A. Blackmun: Is it agreed Mr. Goodman that lands in question here are within the political boundaries of California?
Allan Goodman: Mr. Justice Blackmun some of the lands are within California entirely, some of the lands like a stride of the interstate border the 8.6 mile southern reach of the river, it has the political border running approximately through the center, but just approximately it does vary, but the political boundary will not change as a result of this litigation, it will remain the same. The problem we have here again is who owns, how much of the last riverbed does California own, how much of the last riverbed does Arizona own. The United States is a party because United States is a principle upland owner. It owns the lands adjacent to the river and as the Court knows the boundary line between the two states is the middle of the main channel, in order to fix the main channel we must also know the bank lines.
William J. Brennan, Jr.: But there's no question I gather Mr. Goodman as to the definition of the lands in dispute, is it? It's only if the ownership of those lands? You can put on a map exactly what lands you're talking about.
Allan Goodman: We have put them on generally, one of the disputes maybe over which riverbed is an issue here there were several main channels of the Colorado River at different times.
William J. Brennan, Jr.: And that have changed the boundaries of the lands and disputes?
Allan Goodman: That would make a substantial difference is to where the sovereign lands were located. As Your Honor may recall the test is one of navigability of the water course and the question now is where was that water course on the date of California's admission in 1850 and where has it moved by non-accretive changes thereafter. So California, in 1972 because of the concern over the problem of location of its sovereign lands began a study at the request of the State Legislature. Four years were spent on that study and a set of maps was prepared. During the course of the study we communicate – the Solicitor General has his maps on his desk right now, we communicated with the US Department of Interior --
William J. Brennan, Jr.: We don't have them here, do we?
Allan Goodman: They're not part of the record in the action. The exhibit to the complaint describes by meats and bounds Your Honor, those lands.
William J. Brennan, Jr.: I see, it doesn't help me too much.
Allan Goodman: It doesn't help me too much either [Attempt to Laughter] Your Honor, it requires some elaboration.
William H. Rehnquist: These are questions of title not boundary, right?
Allan Goodman: That is correct Your Honor, these are questions of title. They're -- boundary questions only if one defines a location of the State's land, it's a boundary question, this will not change the political boundary of the river.
Byron R. White: But you're asking, you want your title quited (ph)?
Allan Goodman: That's correct Mr. Justice White.
Byron R. White: Usually to acquire a title you say what property you're acquiring title to?
Allan Goodman: We have done that in the exhibit to the complaint Your Honor. We have taken as a result of the study which was done in 1970 --
Byron R. White: I know, but suppose the defendants say that you haven't described the lands correctly?
William J. Brennan, Jr.: Depending upon what you've said to me – asked me earlier as to the navigability of 1850 and so forth?
Allan Goodman: They would have to, they could then respond quite in that manner.
Byron R. White: First of all, what I mean, the question -- I suppose many questions of fact could arise in this case, it's just isn't a question of law and order?
Allan Goodman: No, it's not a question of law only Your Honor but --
Byron R. White: That's all I wanted to know --
Warren E. Burger: Your answer to the question of Mr. Justice White which was put in terms of your title and you are representing the State of California. Now, you're answering that question in terms of the Sovereign's title or the tile of some of the citizens of the Sovereign.
Allan Goodman: We're answering solely on behalf of the Sovereign, if I made or began to respond to --
Warren E. Burger: Very important difference, isn't it, that you have to keep in mind here.
Allan Goodman: Yes. These are solely Sovereign lands that --
Warren E. Burger: The Sovereign, the tile of the sovereign lands brings us probably a clear original jurisdiction case whereas the title of the individual citizen claimant brings another question, doesn't it?
Allan Goodman: Yes, it very well may Your Honor.
Lewis F. Powell, Jr.: These lands on the Arizona side, are they political boundary?
Byron R. White: No.
Allan Goodman: Some of the lands are on the Arizona side in the 2.6 mile upper reach of the river. They're entirely within the California, and the 8.6 mile lower reach as you described the political boundary. We know if I could respond your earlier question of the Court that we are in the right ballpark because we discussed with the United States and with the State of Arizona. Their claims in fact, the exhibit to the complaint here is based upon aerial surveys done by the United States government earlier so we're in the right –-
William J. Brennan, Jr.: What I was trying to get at I'm afraid I haven't understand it fully yet. Is there an agreement between you, the United States and Arizona that you can draw a map exactly what land you were talking about, title of which you want quited (ph)?
Allan Goodman: We're as far as --
William J. Brennan, Jr.: I mean just answer that yes or no.
Allan Goodman: The answer for that is no Your Honor. We've been attempting - if I could say, we know we're in the Colorado river, we presented our information to the State of Arizona and the United States and asked them to agree. They simply would not agree and that is the reason why we're before the Court today.
Thurgood Marshall: Alright, but what about this land there, do you agree to that?
Allan Goodman: They simply will not give any -- give us an answer yes or no. Arizona told us we would have to sue them in order to get a response.
Thurgood Marshall: But do you agree with that that is the map of existed?
Allan Goodman: Well, this is the map adopted by the California State Land's Commission which is the basis for the Exhibit A to our complaint.
Thurgood Marshall: So you don't mind that, do you, you agree to that then?
Allan Goodman: Yes, we're quite sure.
Thurgood Marshall: What does the government agree with that?
Allan Goodman: I don't know I'm afraid Mr. Justice Marshall that you have to ask this to the Solicitor General. I do not know whether they agree or not. They have said in their response.
Thurgood Marshall: I agree with my brothers. I have great problems in deciding when I don't know what I have. I'm going to decide a strip of land which I don't know anything about and I don't know where the land is, belongs to California?
Allan Goodman: Well, I think should the Court grant the motion and appoint a special master then the master would take it, take evidence on the subject and the lands would become fixed. We think we're in the right ballpark and the parties can agree if I make –-
Thurgood Marshall: For example, you've got a strip the land here that I can understand, but you say you don't know where the strip of land is.
Allan Goodman: No Your Honor California knows where the strip of land is.
Thurgood Marshall: You say you know where you think it is?
Allan Goodman: Well, we know where the land is. The problem is created by the meanderings of the course of the river that is the essential problem in all interstate boundary river cases, if you will, and the problem is to establish the exact perimeters of that land. This case is no different than interstate river boundary case in that respect.
William H. Rehnquist: Well, your meats and bounds description will vary from Arizona to California because they use different meridians.
Allan Goodman: We've accounted for that Your Honor in the description. It's done of the California Coordinate System with certain --
William H. Rehnquist: San Bernardino Basin Meridian.
Allan Goodman: That's exactly correct, Your Honor. There are two principle issues of a legal nature before the Court at this time. The first one is whether this case is within this Court's original and exclusive jurisdiction or whether is Arizona phrases the question may Arizona consent to an action in a District Court. The United States and California both agree on this issue that Arizona may not consent to that jurisdiction. The second issue has made the United States to be sued in this Court or is sued probably about only in the District Court. Let me turn now into the issue of original and exclusive jurisdiction or the issue of consent.
Harry A. Blackmun: Unless the presence of the United States causes the controversy really doesn't overlook?
Allan Goodman: Your Honor I don't think so, because as this Court said, albeit indicted United States versus Nevada. The presence of the United States as a party is not; would not change the essential original jurisdiction of the action. I believe the language is, at least the Court's language was that this clause - the section is construed as applicable to suits involving conflicting State claims by one State against another regardless of the presence of the United States as a party, and of course has concurrent albeit not exclusive jurisdiction actions between the State and United States. Arizona's contention however is based we submit upon a misconstruction of the term jurisdiction. As we define it, it is the authority to hear and adjudicate disputes and in this particular instance, States and the United States because of their status as parties confer that kind of jurisdiction. The answer, the basis for our contention is found in Clause 1 of Article 3 of Section 2 of the Constitution, which does confer those two types of jurisdiction.
Harry A. Blackmun: Are you suggesting that --
Byron R. White: Are you suggesting that it is because of the Constitution that Arizona and California may not litigate in the District Court even if both of them consent?
Allan Goodman: No Mr. Justice White --
Byron R. White: Is it just because of the statute of Section 1251?
Allan Goodman: I recognize that early on this Court held that the Clause 2 of Article 3 Section 2 did not preclude suits between states and lower courts, but the Congress in the first judiciary act --
Byron R. White: Yes.
Allan Goodman: Continued to this day provided that until 1948 it was, if the suit - if any State were a party after 48 if the controversy were between two states that this Court had exclusive as well as original jurisdiction. The problem with Arizona's contention is that they are confusing if you will, the question of whether a party can be served with the question of whether a Court has power to adjudicate to hear and decide the dispute.
William H. Rehnquist: Well, what you do with 1346(f) then, it says that District Courts have exclusive jurisdiction.
Allan Goodman: Mr. Justice Rehnquist, the answer to that lies in the legislative history of Section 1346(f). When the section was enacted as part of Public Law 92-562, it began as S216. At the time of introduction, there was no word exclusive in Section 1346(f), but the justice department sent a letter which is quoted, a part of which is quoted in our brief and footnote in our motion which indicates, which says that the purpose of the addition of the term exclusive was to preclude suits in the State Courts, the United States did not want to be named as a party in State Court, but to have its claims adjudicate solely in Federal Courts. That's the only purpose for the term exclusive was to surmount the problem created, for example, or discuss, for example, in trials Charles Dowd Box Company versus Courtney, whereby State Court's have concurrent jurisdiction unless it is specifically excluded, that is a sole meaning for the term exclusive.
William H. Rehnquist: Certainly your answer doesn't comport with the use of the terms in Section 28 USC 1251 with the Judiciary Act of 1789 where the Congress said the Supreme Court shall have original and exclusive jurisdiction of where it was talking about this Court as opposed to lower Federal Courts.
Allan Goodman: I think the term exclusive are used in two different respects Mr. Justice Rehnquist, in 1346(f) the sole purpose of the term is to preclude suits in State Courts and that's worn out by the legislative history. There's nothing in the legislative history, which indicates any intention to preclude this suit from hearing cases which are within its original jurisdiction, and let me continue on that point, because it's very important for a party to construe 1346(f) as precluding a suit in this Court would be to be denying this Court jurisdiction vested in this Court by the Constitution. It has been clear since at least Marbury versus Madison that the Congress does not have the power to either increase or decrease this Court's original jurisdictions. So 1346(f) cannot be read to borrow a suit in this Court.
William H. Rehnquist: You say as a matter of prudence we ought to construe it that way even though there is some doubt in order to avoid the Constitution.
Allan Goodman: Exactly, in order to avoid the unconstitutional construction, the legislative history should be relied upon to confer to construe 1346(f) constitutionally.
Harry A. Blackmun: Mr. Goodman if we should deny leave to file. What will California do?
Allan Goodman: Mr. Justice Blackmun, I don't think we have any remedy then, we have no other form in which we can litigate both against the United States and against Arizona.
Harry A. Blackmun: Well, you certainly could sue the United States alone and California Federal Court, I take it and would Arizona commend then?
Allan Goodman: By our understanding of the jurisdiction provision Your Honor, under Article 3, we could not sue both Arizona and the United States in District Court, there is no statute --
Harry A. Blackmun: That was my question. If you sue the United States alone in California Federal Court, hasn't Arizona indicated it would commend?
Allan Goodman: It has said that it would consent, but my first argument is Your Honor that Arizona doesn't have the power to consent, because number 1, Article 3 Section 2 clauses 1 and 2 do not permit and Section 1251A1 provides this Court shall have exclusive jurisdiction in actions between the states to say, also to say --
William J. Brennan, Jr.: Well, that's an argument that there would just be no jurisdiction in the District Court though Congress has said there shall not be.
Allan Goodman: That's exactly correct Mr. Justice Brennan.
Byron R. White: Then you could also sue, could you sue Arizona alone in this Court?
Allan Goodman: We could sue if the Court granted leave Arizona alone in this Court. However, we need the United States because we cannot fix the center line of the river without knowing -- also having the bank lines to term it and the United States.
Byron R. White: Could the government commend here optionally?
Allan Goodman: Well, they have suggested as much and that would be fine with us.
William J. Brennan, Jr.: But only as the part of the land.
Allan Goodman: And that's exactly the problem Mr. Justice Brennan, because we feel the entire area has to be adjudicated.
Byron R. White: What the government says is if we take it here someday they all come in, but limited only to a given segment, is that it?
Allan Goodman: That's my understanding of this Mr. General's brief Your Honor.
Harry A. Blackmun: I think you should cover everything with simultaneous suits here and in California Federal Court.
Allan Goodman: Mr. Justice Blackmun, we would not have one judgment binding on all the parties if we try to do that and that's our problem, we had two separate judgments. The United States contention, if I could respond to that is that 2409A of Title 28 and 1346(f) constitute a waiver of sovereign immunity only as the District Court from my discussion of the problem of the legislative history in Section 1346(f), it's clear to us and we submit that the Court should so hold that 1346(f) was only intended to bar suits in State Courts. Second, we don't think the United States give sufficient way to 2409A that is the section which waives sovereign immunity, also waivers of sovereign immunity should be liberally construed. The United States construction was extremely narrow and if it's granted it would mean that there would be no form in which we could sue both the Federal Government and Arizona.
William J. Brennan, Jr.: What you would be able to do is bring in this Court both the State and United States as to all the lands and disputes.
Allan Goodman: We want to do it in one action so that we can have one enforceable judgment. We are concerned about the or if I'd submit Your Honor as a court of equity this Court has the power to combine the two defendant parties so that we have one effective degree. Otherwise again, we do not have a form and if I may Mr. Justice Brennan what is worse if this Court denies our motion and we have no and if we're left to suit against the United States in District Court and the United States then disclaims ownership under 2409A Subdivision D the District Court must then dismiss the action it specifically provides that there shall be no jurisdiction in which case California and Arizona would be coming back to this Court again and it would be clearly within the Court's original jurisdiction.
Warren E. Burger: We'll resume there at 1 o'clock, the council. Mr. Goodman you may proceed, I see you have supplied us with these maps now.
Allan Goodman: Mr. Chief Justice and may it please the Court that is correct.
William J. Brennan, Jr.: Yeah, thank you.
Allan Goodman: You're very welcome Mr. Justice Brennan.
Warren E. Burger: At some point, someone will explain the map.
Allan Goodman: Very well Your Honor, the clerk's office was kind enough to make copies of them during the lunch-recess. The Court has before it a part of the facesheet of the administrative maps and what describes on the second and larger page, the chronological history of the movements of the river prior to 1946 the upper left the Court will see the river it wasn't essentially a natural State that maybe a subject to dispute during the course of the litigation, it gradually moved to the point in the fifth map, lower right in set five, where the Court and it's difficult to see we'll see -- the Court may see the political boundary coming down from almost the center of that box in a dash line. It goes through what is described as a pilot channel, and then curves back around to the right, through the Colorado River from a main channel, that is a political boundary, roughly down the center of the pilot channel. This litigation however includes the area also north of the pilot channel, which described as Palo Verde Lagoon, that area is entirely within the State of California. The area which is below the intersection Palo Verde Lagoon and that little V to the South is the point where the sovereign land and title question describe the interstate border again.
William J. Brennan, Jr.: Now what's the segment that the government says that might be willing to consume?
Allan Goodman: Mr. Justice Brennan, it's the upper segment it's the North of -- the Court will see the pilot channel on the Palo Verde Lagoon that area to the north is a segment. Point to it on the map, so we can identify them already up above, I see it.
Allan Goodman: It's up above that right, right there. And now, the government's contention is there are pre -- there are surveys which are more than 12 years old and even if there weren't by 1346 F the government can only be a suit in the District Court. However, as I indicated before lunch to argue that means that the Congress has removed jurisdiction from this Court and that of course is contrary to Marbury v. Madison. Very briefly with respect to Arizona's contention that it can confirm jurisdiction, again that is party jurisdiction and the case is which Arizona cites to the extent that they supports it's position or party jurisdiction questions can we serve this defendant in a District Court. They do not go to the question of the power of the Court to hear and decide the case and our position is under Article 3 sec (2) that power is vested and under 1251 (a)(1) that power is vested solely in this Court.
William J. Brennan, Jr.: Do you mean this by the -- I mean you don't mean by the -- by the Constitution.
Allan Goodman: Yes in response to earlier question I answered that, I didn't mean to --
William J. Brennan, Jr.: Because Congress said that two states could litigate in the District Court, they could.
Allan Goodman: That's correct. If Congress so said, the Congress has been very specific in this case. Indeed that reading I think is borne out by this Court's opinion -- certain of the dictum, this Court's opinion in Illinois versus City of Milwaukee and other recent cases where the Court that was not considering questions between two states, with a state and instrumentalities, which the Court found to be local and not State entities, but the inverse the situation described there is the one where regional jurisdiction is exclusive because two states are parties. I think on page 93 of 406 US that statement appears.
William H. Rehnquist: Mr. Goodman, I would just love to take up the time of the rest of the Court. I've debated disqualify myself in this litigation because of the fact I was involved in a good deal of private litigation. So is this the entire Arizona, California boundary that California seeks to litigate?
Allan Goodman: In our request for continuing jurisdiction Mr. Justice Rehnquist, we do ask the Court to decide that question. We don't think however that the Court needs to decide or request on the continuing jurisdiction point at this time. I'm aware that Your Honor was involved in some litigation reported north of Needle's area --
William H. Rehnquist: Yes.
Allan Goodman: Along the border this dispute is south of blithe. The principles will be very similar that will be factual difference only I would expect. The legal principles are very important. They are important not only for the parties here, but to other states which have inter-state boundary problems resolving from River movements.
William H. Rehnquist: My concern was familiarity from expert testimony as to factual matters not with the legal matter.
Allan Goodman: This case is extremely significant since Pollard's Lessee v. Hagan, it's been clear that question to the sovereign lands adjudication is appropriate for this Court's decision. In this particular case, California needs to know the location of its sovereign lands and confirm its title, so that we can one protect them from environmental degradation and two construct recreational resources, the river has become a tremendous focal point for recreation and before the State can properly respond for the need, we have to know where our title is, so that if we construct facilities we can do so.
William H. Rehnquist: Well, as the United States an indispensable party here.
Allan Goodman: How are they?
William H. Rehnquist: Are they?
Allan Goodman: Yes, Your Honor we think that we cannot litigate the question of the central line without having the United States because it is the owner of the upland.
William H. Rehnquist: And the United States position is that you shouldn't be able to get into any court.
Allan Goodman: I think the technical strict reading would be yes, they say that they would intervene in this Court.
William H. Rehnquist: But they say that they haven't given concern.
Allan Goodman: That's correct.
William H. Rehnquist: And they say that you are not subject to Arizona and you can't litigate in the District Court.
Allan Goodman: That's correct.
William H. Rehnquist: So there is no judicial.
Allan Goodman: Our position on that Your Honor was 1346 F is being read by the United States to deny the purpose.
William H. Rehnquist: I understand.
Allan Goodman: Okay. I thank the Court very much.
Warren E. Burger: Very well, Mr. Claiborne?
Louis Claiborne: Mr. Chief Justice and may it please the Court. The first question before this Court is must this case be in this Court? We very much wish we could answer that question no, partly on the ground that this Court is enough for the business, but the concern itself which is relatively minor acreage and it's not a boundary dispute it's simply a matter of title to land. And, I mean I had so does the Office of the Solicitor General have enough other business. We would welcome a ruling that accept the Arizona's argument to the affect that this litigation maybe appropriately begun in a District Court. But unfortunately, we've not found the weight of that conclusion. As this already been made clear, the obstacle is not Article III of the Constitution. It's simply the provision of the District Court sec 1251 (a) (1), which seems plainly to confine a controversy between two States to this Court alone by using the word exclusive. It's clear, of course that the importance of two States is not requiring that the case be in this Court. They must be on opposite sides; they must be adversaries that were clearly settled in the Pyramid Lake case United States versus Nevada reported in volume 412 in the United States reports. But here California and Arizona are on opposites sides of the case and so far it appears do dispute title to at least a part of the land put in question by California's complaint. It might be argued that because the United States is sought to be made a defendant, one looks not at 1252 (a)(1), but rather at 1252 (b)(2), which provides that when the United States and a State of parties the jurisdiction of this Court as many can cut. It seems to us was however that the presence or absence of the United States does not change the basic fact, which is that this is a controversy between two states. And indeed again in the Nevada case this Court adverted to the fact that the State parties there were not adverse and accordingly there wasn't exclusive jurisdiction in this Court. The Court did not notice the presence of the United States as pointed has having any bearing on it one way or the other it seems to us that was plainly right.
Warren E. Burger: The situation being Mr. Claiborne, if there were not problem between the two states which you had private action require title, private on either one side or the other, but with Federal riparian rights involved, where the Federal Government just intervene in that private action?
Louis Claiborne: Mr. Chief Justice, the private parties could by Virtue of 2409(a) sue the United States, sovereign immunity having been waived by the Congress in the appropriate District Court and there would have been no problem or whatever. In deed that would be the situation even if one State were a defendant, it's only that the two states are disputing title that presents the problem here.
Byron R. White: Would Arizona be an indispensable party if California sued the United States in the District Court, which it could?
Louis Claiborne: Mr. Justice White, I would have thought for the same reasons that the United States is an indispensable party, so would Arizona. So long as it declines to accept the Davis Lake study, which California has put before it in which it inferentially or widely disputes.
William H. Rehnquist: Mr. Claiborne, jury 2409(a) has waiving sovereign immunity only for suits in the District Court?
Louis Claiborne: 2409(a) itself, Mr. Justice Rehnquist, of course does not say that, but at the very time when that statute was written Section 1346 of the judicial court was amended by the same legislation, so as to provide that suits under 2409(a) shall be within the exclusive jurisdiction of the District Courts. 110 read exclusive that differently then in Section 1251, perfectly explained I think has correctly said that Attorney General of California that the purpose they have just came from attorney general. The purpose was to prevent the government's being sued in a State court. The question of original cases simply did not occur to the mind of Congress, it seems recently obvious. But, on the other hand, it seems hard to read the word exclusive in the same judicial code as meaning all Federal court's generally in one case and in 1251 meaning a particular Federal Court.
William H. Rehnquist: But if you read exclusive in 1346 as meaning exclusive of this Court, there are, to put mildly, grave constitutional difficulties, are they or not?
Louis Claiborne: I would have thought not Mr. Justice Rehnquist. After all, if it had not been for 2409 nothing in the Constitution waives the sovereign immunity of the United States in the case if the suit by a State, that is always been the constitutional rule that a State could not sue the United States without it's consent and that problem has been resolved over the years by the United States agreeing to be Plaintiff or agreeing to intervene. This waiver statute is constitutionally have its limited purpose of allowing suits only in the District Court. It maybe nonsense as a matter of policy, it is a matter of Constitutional Law when you are talking of --
Byron R. White: What is the basis for your saying that the United States is indispensable party in this case?
Louis Claiborne: Mr. Justice White, for the same reason that California has joined this is in the first place that the location and width of the bed which is half of which they claim in the old bed of the Colorado River affects Federal lands on either side of that area. I mean to say this it may clarify matter a little California --
Byron R. White: Why can't California and Arizona settle their dispute in litigation without having the United States around?
Louis Claiborne: Well, Mr. Justice White the first problem is where they would do that.
Byron R. White: Well, they do it here?
Louis Claiborne: The United States is willing to facilitate matters at least in part by intervening so as to make that possible. We haven't found a way of making it entirely possible without waiving a limitations defense in affect.
William H. Rehnquist: And that's why the United State submits to this North of the.
Louis Claiborne: I would make that more clear than it's just been, north of this pilot cut junction, which is the smaller distance to the North on the map, the 2.7 miles I believe it is. The United States surveyed and the survey was proved and published in 1961; that was a survey not as of that date, but survey of where the old bed had been previous to that cut that is to say 1946 and 1947. 2409 in waiving sovereign immunity has provided that the United States shall not have its title put in the issue with respect to any Federal claim more than 12 years old. If we were in the District Court, we would be invoking that statute limitation with respect to California's claim is against North of the pilot cut. We say this statute doesn't apply in the Supreme Court, but on the other hand if we are going to follow the spirits of the statute by agreeing to intervene we are also be entitled to follow the spirit of limitations provisions by invoking.
William H. Rehnquist: Do you think the -- what authority do you need to submit to an adjudication in this Court to settle this title? Does it take some conventional action?
Louis Claiborne: At least whether the matters have been litigated or not I'm not aware Mr. Justice White but it's always be fought the attorney general and solicitor general had authority to…
William H. Rehnquist: Himself to way by becoming plaintiff and to do that by intervention.
Byron R. White: Maybe becoming plaintiff, but he just, he wouldn't have authority just to not raise your sovereign immunity defense here as a party defendant.
Louis Claiborne: It might come to the same thing Mr. Justice White it's always been fought proper to do by informally --
Byron R. White: So what is the limitation that you would insist on this Court to become a third party to this case? What limitations they --
Louis Claiborne: Only that we would limit the controversy to that portion of the land South of the pilot cut that is to say the 8.6 miles as shown on this plan, on the ground that the Federal title North of that has been established by the survey. It's been unchallenged for 12 years.
Byron R. White: Or it just are there some -- are there some legal principles involved in this case or is it all just a factual fake?
Louis Claiborne: Mr. Justice White, it's difficult to know what's involved in the case at this stage of course --
Byron R. White: If it's there is a major if the major part of its legal principle would be settled by litigating the segment south of the pilot cut.
Louis Claiborne: Well, indeed, Mr. Justice White.
Byron R. White: Is that clear if you were allowed to come in only as to that lower segment what then is the status of title as to that Northern segment?
Louis Claiborne: There is -- there remains a difficulty at California --
Byron R. White: But then how are we ever going to solve the outsider with those views?
Louis Claiborne: I regret to say that the result as I see that the United States being indispensable as to whole of the area. The United States not having waived its sovereign immunity as to the Northern segment, the suit could go forward is between the two states for that Northern segment. And that's why I say that our intervention will not only limit, our participation and our title, but limit the law suit to the portion below the cut. Now if the principles of what California seeks to elaborate by the use of this action and they haven't explained what they mean by that. We for our part conceived that this whole bed having been dried by artificial creation of a cut is governed by the Rules of Revulsion that one half of it belongs to each of the two States.
Byron R. White: Whose rule State or Federal?
Louis Claiborne: I think in this instance they're common Mr. Justice White.
William H. Rehnquist: Mr. Claiborne, if you are right as the indispensable parties within the logic of your position require that we dismiss the case as between the States even though you don't make any intervention at all?
Louis Claiborne: There is precedent Mr. Justice Rehnquist for this granting leave subject to an undertaking by the United States, which I now give to intervene within a specific period of time so as to allow the suit to go forward.
William H. Rehnquist: Well, let me ask you this supposing if the United States is sued in the Supreme Court of Los Angeles County to acquire title. Do you think the United States attorney in Los Angeles can walk into that court and say he now gives leave for the United States to be sued?
Louis Claiborne: No Mr. Justice Rehnquist I think he would properly be instructed to oppose or simply to plaintiff to make no appearance.
Warren E. Burger: Do you think the attorney general can give leave to be sued in the Supreme Court of Los Angeles County?
Louis Claiborne: I think he can by way of intervention certainly if there were jurisdiction --
Byron R. White: The State Court.
Louis Claiborne: If there were jurisdiction otherwise?
Byron R. White: Yeah, I know, but I thought what you said earlier, I forget these numbers. There isn't any jurisdiction in the State.
Louis Claiborne: Well, I'm perhaps was indulging of on assumption hypothetical that I shouldn't have the answer of course is yes Mr. Justice Brennan. There is no jurisdiction in any State Court. We say there is no jurisdiction in any court, but this Court and accordingly, of course, he should oppose and not to intervene, but it's a matter of who can waive sovereign immunity that problem doesn't arise any differently in a State Court and it does in a Federal Court and leave can be given.
Byron R. White: Really, I would take it the suit in a State Court of Attorney General went in said sure, here we are service, sue us and he got a judgment against the United States still went very good.
Louis Claiborne: It might be more respectful to the Court, Mr. Justice Brennan to appear for the purpose of opposing --
Warren E. Burger: It would good until this Court or perhaps Court of Appeals got hold of it and said there was not jurisdiction, but officially it would be a valid judgment?
Louis Claiborne: Indeed, Mr. Chief Justice and it would be wasteful of judicial resource.
Byron R. White: And suppose we have raised file subject to the United States meaning that the United States intervene within whatever reservations within that reservation.
Louis Claiborne: Safe thing to do.
Byron R. White: There was an adjudication which settled the title to some particular land say the land South of this cut, I would suppose you would think the land with the title would be settled there then.
Louis Claiborne: There is got to be a --
Byron R. White: If you intervene then submitted with respect to.
Louis Claiborne: Exactly so.
Byron R. White: Well, then what becomes of the suggestion that that title to land in a suit against the United States or involving the United States is within the exclusive jurisdiction of the District Court. Can you waive that too or --?
Louis Claiborne: Mr. Justice White I don't think 1346 therefore to be read in saying that the government's title can only be tried in a District Court. It simply that the congressional waiver of sovereign immunity is by inadvertence we assume limited to that Court.
Byron R. White: There is the exclusive jurisdiction now.
Louis Claiborne: Indeed and I can get around those words, but I don't.
Byron R. White: It certainly deprives the State Courts of jurisdiction doesn't it?
Louis Claiborne: But this would not know Mr. Justice White.
Byron R. White: You think it deprives the State Court of Jurisdiction, but not this Court to adjudicate the title to the United States.
Louis Claiborne: I don't think 1346 deprives the State Court any more than, it's only suits under 2409 that limited to the District Court. A suit in this Court is not a suit under 2409 and accordingly it may proceed in this Court as many such cases have in years before. Mr. Chief Justice perhaps because of what we said in our brief I should add this one word with respect to our conclusion our submission with respect to the disposition of the case. We had said in May that perhaps the Court order hold this motion or deny it without prejudice to re-filing. Time has passed. I'm going to say that the United States has done very little about way of attempting to investigate or negotiate a settlement. So far as I'm aware of Arizona has done no more and accordingly at this late date it would be our submission that California is entitled now to have it's title tried and we would accordingly withdraw suggestion of postponing action and urge this Court to grant the motion with the undertaking of the United States that we did intervene within 180 days so as to allow it's title South of the party cut to be the final result.
Byron R. White: Mr. Claiborne before you sit down it just one thing I did not understand. If this Court were to construe the word exclusive in 1346(f) is just for closing an action not the State courts, but not for closing an action in this Court, why would you, did you, did I correctly understand you to say that the action would not be a 2409 action and if so why wouldn't it be.
Louis Claiborne: Because an action in which the United States is plaintiff or intervener is not an action which is governed by 2409, 2409 simply waived the statute, when the United State is neither plaintiff nor intervener.
John Paul Stevens: No, but supposing United States is a defendant as I seek to name them, supposing we held it could be, why couldn't it still be a 2409 action and you still have your 12 year defense.
Louis Claiborne: Well, if the Court Mr. Justice Steven withhold that the United States can be suit in this Court of because 2409 has waived sovereignty of this Court as well as the District Court then the only thing that prevents that is the word exclusive in 1346 (f) and if we construe exclusive is just excludes State Court's jurisdiction had all the problems solved. All the problems with respect to the sovereign immunity of the United States.
Byron R. White: And also with respect to your 12 year defense, you still fit a certainty.
Louis Claiborne: I may say that we can think of no good reason while the government ought to be subject to suit on its title in a District Court and not in this Court. We cannot suppose that Congress was that solicitors of the Solicitor General. Now it may have been solicitors of this Court's burdens, but there isn't the slightest indication of that in the legislative history. We must assume that they simply overlooked that such suits bringing into play the title of the United States did occasionally when States were involved arise originally in this Court. Whether this Court is free to remedy that omission by Congress is the question.
Byron R. White: The only problem is the world exclusive in 1346 (f).
Louis Claiborne: That is entirely right.
Byron R. White: Okay.
Warren E. Burger: Mr. Goodman, excuse me, yes Mr. Kolsurd.
Russell Kolsrud: Yes Mr. Chief Justice may it please the Court. I would like to initially discuss a question and answer post by the Solicitor General which is essence of this action and that is must this case be heard only before this Court and Arizona's positions is not it must not. I think the simplest answer to this case is to recognize that 1346(f) can be read as a grant of concurrent jurisdiction by Congress to the District Courts regardless of the parties. This has been done, this sort of approach has been taken prior to 1948 when the Judicial Court stated that cases that begin in which a state was a party had be brought before the United States Supreme Court. That post quite a few problems in cases where the United States brought an action against the State and the only jurisdiction was this Court. There were many at places for example, in the Safety Appliance Act in U.S. versus California this Court stated that, that particular legislation was actually a grant of concurrent jurisdiction in actions by United States against a State, so that the District Court could in fact hear that case. The same can be done right here in this action. Any case that is brought any case with the United States has title to property that is brought by any person, the District Court should have jurisdiction to hear the case regardless who the parties are, that would be a grant of concurrent jurisdiction and would also permit this Court to allow those types of cases to go elsewhere. The actual essence of this case is whether the language in 1251(a)(1) means exactly what it says, it says that jurisdiction must be exclusive in all controversies between two or more states. This Court's original jurisdiction has been variously interpreted since 1789 of the date of the First Judiciary Act. Recently this Court has implied if not stated indicted that there is an element of discretion in the interpretation of 1251(a)(1). The most noteworthy is the recent decision in 1976 of Arizona against New Mexico. In that case this Court stated that it should interrupt 1251(a)(1) in the same manner that the Court would interrupt Article 3 Section (2) Clause (2) of the Constitution, which is the original jurisdiction, grant of power in the Constitution. Now if this is correct that means that there is some discretion in 1251(a)(1) and if that's true, then the only, the only question before the Court right now.
William H. Rehnquist: I am not clear what do you mean discretion.
Russell Kolsrud: Discretion to here I think that the word were that this Court would exercise its original jurisdiction only in appropriate cases, so the question is, is this an appropriate case?
William H. Rehnquist: But it wasn't the intimation in Arizona versus the New Mexico that it wasn't appropriate because the State really it wasn't representing its own interest, but rather the interest of a private plaintiff.
Russell Kolsrud: That was one aspect of the case, the concurring opinion of Mr. Justice Stevens indicated that, however I think the Court's primarily concern was that Arizona was actually the issues presented by Arizona were actually being tried in a separate lawsuit in New Mexico by sort of a project and other private citizens, although Arizona was not involved in that case, the issues themselves were being adjudicated in New Mexico. So it was somewhat different in that. The point is, is this an appropriate case for this Court. We think not. The nature of this case it's a quite title action. It does not involve the larger issues of jurisdiction, doesn't involve problems of a State's sovereign powers to regulate the laws within its own boundaries.
William H. Rehnquist: It doesn't call for boundary dispute.
Russell Kolsrud: It's not a boundary dispute at all as a matter of fact it's merely a question of who owns, where do you draw the lines between two land owners in California, it's factual.
Speaker: What you're saying is, California is to sue United States in the District Court.
Russell Kolsrud: We think California can and should sue both Arizona and the United States in District Court in California.
Speaker: How did you get waive or sovereign immunity on -- United States.
Russell Kolsrud: Well, sovereign immunity on part of United States has helped in waive, presume to 2409A -- Arizona.
Speaker: This thing would be sued under the 2409A.
Russell Kolsrud: Yes.
Speaker: But how about, there is also a fight between the two states, what about that dispute, why isn't that within the exclusive jurisdictional of this Court?
Russell Kolsrud: It is within the exclusive jurisdictional of this Court under 1251A1 question is, is there way to get around that and put this case.
Speaker: And that's you are going to get to that I think, this your discussion, argument, is it? Yes, we have discussion and even though it is within our exclusive jurisdiction. But under Arizona and New Mexico you're suggesting we have discussion nevertheless to let the case be decided in the District Court.
Russell Kolsrud: Yes --
Speaker: Well maybe so but how about of the power of the District Court?
Russell Kolsrud: To hear the case we have controversy between two States.
Speaker: Yeah.
Russell Kolsrud: Okay, the power of the District Court, I think we have to look at the principles behind article three. The District Court has a power to adjudicate controversies between states regardless of the subject matter.
Speaker: How but the statute?
Russell Kolsrud: 1251A1, referring to. That statute.
Speaker: I think that under, as far as the Constitution is concerned Congress could let two states litigate each other in a District Court.
Russell Kolsrud: Yes.
Speaker: But how about 1251?
Russell Kolsrud: Well our argument is it is we can read the statute, we know what it says, our position is that the reasoning and the policies the principles behind the idea of a state having to be sued only in the United State Supreme Court don't apply here. Therefore we have, we would prefer everybody agrees in the District Court. California would like to be there, United States will like to be there, Arizona would like to be there. The only impairment is that language of 1251. This Court has in numerous cases, I think in the most, one of the most the reason is the Ohio versus Wyandotte Chemicals case in 401 US, now although that case involved only a dispute by the State of Ohio against citizens of another State. Nevertheless the reasoning given by this Court for declining jurisdiction is relevant to this case.
William H. Rehnquist: But there was original but not exclusive.
Russell Kolsrud: Yes that's true. But Justice Harley went through some substantial about of reasoning and policy arguments behind the Article 3 Grant of jurisdiction discussing first of all the need for discussion in this Court to decline to accept various cases within the original jurisdiction and secondly the reasons that a State as a plant has the right and authority to bring any case to the Supreme Court.
William H. Rehnquist: Due you think Wyandotte is consistent with of the subsequent opinion Illinois versus Milwaukie.
Russell Kolsrud: Well the subsequent opinion in Illinois versus Milwaukie, the result I think it is a very consisting yes. And actually some of the language in Illinois versus Milwaukie would support the idea that a state such is Arizona couldn't waive whatever protection 1251A1 is supposedly affording Arizona so that we could intervene and have the issues the adjudicated in the District Court.
Byron R. White: What body of law would govern this litigation is there any State law in it or is it all Federal.
Russell Kolsrud: The quite title action in California, that's the -- generally speaking the law of the State or the locality would be controlling as far as local -- as property law is concerned. So in California the local law of California generally would be applied.
Warren E. Burger: You mean that is between the lines or the contending private parties, what about the Victorian federal rights?
Russell Kolsrud: Well those I would think as well would be governed by local law.
Warren E. Burger: Or State law.
Russell Kolsrud: Yes State law. Although that itself is another issue, there are some problems that we have with that as well.
Warren E. Burger: If by controlling all of the state law or there is, that certainly is another reason to have some judges ruling on it, you know something about that particular state law.
Russell Kolsrud: Yeah and the judges in the District to California certainly handle quite few quite Federal actions and are quite confident to handle that sort of a problem which is one of the policy reasons under Constitution that a state should not have to go anywhere but United States Supreme Court to adjudicate whatever cases they may have and that onetime was that no other court was confident to handle the problem. In this instance I think the factual problems that we have within cases primarily factual, it can be adjudicated in District Court. Now Arizona has also we have argued that, that we can waive whatever protection there is under 1251A1. The analysis and reasons for that argument are the same as for there is -- as the reason that this Court has.
Warren E. Burger: So just jurisdiction.
Russell Kolsrud: Discretion to decline to hear the case. As a defendant the Constitution was to protect, the idea was to protect the state from compulsory process, the State's prestige dignity was such that should not be compelled to be sued anywhere but in the United State Supreme Court. Well on this instance what was actually meant to be a favor is a burden as a sovereign we should be able to submit ourselves in the jurisdiction of that Court to have the issue decide, so long as the Court has subject matter jurisdiction in this case it does.
Byron R. White: That's a problem is when -- because 1251 does talk about jurisdiction.
Russell Kolsrud: Yeah, 1251.
Byron R. White: And if it said that no District Court so however have jurisdiction of suit between two states that's really what it says.
Russell Kolsrud: That's what it says.
Byron R. White: And you wouldn't think you could concept, you can't confer jurisdiction.
Russell Kolsrud: Well we cannot confer jurisdiction we think the reasons for that are, do not apply here plus there is question whether the 1251A1 actually itself would bar the sued in District Court. If you look at the Constitution, in section 2 it states that the judicial power of the United State shall extend to first of all, all cases in law and equity arising out of the Constitution and statutes and also all cases of maritime and admiralty jurisdiction, in other words cases based upon the cause of the subject matter. Secondly Article 2 or Article 3 sections two states that judicial power extends to controversies between two or more states. And then in the next class which is the grant of original jurisdiction. The Constitution states that in all cases in which the state shall be a party, the Supreme Court shall have original jurisdiction. That can be read and reasonably read to mean that the original jurisdiction of this Court extends only to controversy between states that involve cases the subject matter of which are either under the Constitution involving questions of Federal law or the other cases maritime and admiralty. This case doesn't fall under that.
William H. Rehnquist: If your case aims against Kansas at 111 U.S. 449.
Russell Kolsrud: Yes.
William H. Rehnquist: But the language of Chief Justice rate there that the evident purpose of clause you are refereeing to was to open and keep open the highest Court of the nation for the determination in the first instance of suits involving a state or a diplomatic or commercial representative.
Russell Kolsrud: That would now be in consistent because I had stated that, I believe the idea that a, the Court should be opened to ambassadors and states that would not be foreclosed, just may not be exclusive. The exclusivity idea came from Congress in first judiciary act.
William H. Rehnquist: But don't you have to argue if the Congress was prevented from doing that by Article 3.
Russell Kolsrud: I don't understand.
William H. Rehnquist: Don't you have to argue that not that article 3 required Congress to make the jurisdiction exclusive in 1251 but then it prevented it from doing it.
Russell Kolsrud: The Congress has prevented from making an exclusive.
William H. Rehnquist: Yeah, by Article 3.
Russell Kolsrud: Yeah that could be, that has been -- that has been argued but has been rejected.
William H. Rehnquist: Well, what is your argument that the jury just made, perhaps I misunderstood.
Russell Kolsrud: My argument that I'm just making is just, this is not a case the subject matter of which arises under the Constitution. Although it's a controversy between two states it is not a case that is -- arises under the Constitution or the laws of the United States.
William H. Rehnquist: That's contrary to Ames, isn't it, where it's says keep open the highest court of the nation for determination of suits involving states.
Russell Kolsrud: Yeah, that would -- it would be contrary to Ames to the extent that it would exclude something other than a case arising under the Constitution.
John Paul Stevens: Wouldn't your argument also apply to boundary disputes?
Russell Kolsrud: Yeah, that's another problem with that argument, yeah. And the boundary dispute is, it could possibly be argued to be a case arising under the Statutes of the United States. I realize that is, it's not -- hasn't been adhered to before, but it is a sort of a problem that that has to be looked at now in this case especially.
Speaker: So the boundary disputes might arise in the statutes what the Admission Statutes or.
Russell Kolsrud: Yes, when Congress passes the Admission Statutes, so that could be read as the case under the Statutes of the United States.
Warren E. Burger: Let me just start Richard just in response to the question about the Ames case. Suppose the truck owned by the State of Arizona is going over into California as I'm sure they often do and they run off of an overcast and do a couple a thousand worth of damage to the bridge possibly any amount you want. That's a suit between two states potentially isn't it?
Russell Kolsrud: Into the accident.
Warren E. Burger: In this -- in this Court can we take that damage case in this Court under the Constitution as you see it?
Russell Kolsrud: We certainly it could because it would be a controversy between two states although the act itself it would be well under I wonder what postulated a moment ago wouldn't be, because it would not be a case of rising under the Constitution or the Laws of the United States. I realize if that argument has some problems.
Warren E. Burger: I was addressing that rather a sweeping language that seem to embrace cases simply because one state was blaming against the another without reference to any federal question or question arising under the Constitution.
Russell Kolsrud: Well, if you take the words literally controversies between the two states that would definitely be a controversy between two states. Although that the Constitution doesn't really say that either, the Constitution states that the judicial power shall extent to controversies between two states. Not all controversy between states, it doesn't exclude anybody, but it doesn't include them all either. This sort of a case ought not be here. It's a factual case, there are not critical sovereign issues and that itself could be an issue. What exactly we're talking, when we're talking about sovereign lands, here California says they are sovereign lands. Well, there is an argument that the 1966 compact had an affect on that and it may not be plus the United States is involved. And now we think under 1346 F that is a grant of concurring jurisdiction at the very least and if it is then every case, not only this one, but every case where there is a controversy between two states and the United States is defendant can go to the District Court and that will happen quite often in this litigation. And finally I would like to make one more point on this continuing jurisdiction, point that California wants this Court to take. There is no controversy right now on the remaining aspect of this rule. The only controversy there is right now is a Davis Lake study. This Court has repeatedly held that unless there is a bona fide controversy, a case, a wrong, some right that's its susceptible with judicial determination then this Court will not take jurisdiction of it because there is, it's not justiciable under the Constitution. So thank you very much.
Warren E. Burger: Mr. Goodman.
Allan Goodman: Mr. Chief Justice may it please the Court. Arizona speaks of the possibility that 1346 F makes 1251 A1 a grant of concurrent rather than exclusive jurisdiction and talks about the pre 1948 judicial code. We submit that the Congress's amendment of the code in 1948 makes the plain language very clear and then it's the plain language that has to control here and that's the plain language of 1251. As professor James Moore, the special consultant advisors of the 1948 code stated in his previous commentary on the judicial code, “A large of number of changes many of considerable importance, have been laid here -- have been made the code should be construed with this in mind and where plain language works to change in formal law this change should be given effect” that's at page 83. In fact what occurred in 1948 was, there was a change in the prior law, prior to 1948 the statute provided for exclusive jurisdiction where any case was a party this Court in US versus California in 297 U.S constitute that as permitting a grant of concurrent jurisdiction to lower courts, but Congress changed all that in 1948 and our submission is that that change in addition to reasons I gave during my opening preclude the construction which Arizona advances. As for whether this is an important case we submit that it is. These are indeed sovereign lands. We didn't think there was any dispute about that their lands which inured the California by virtue of its sovereignty and Arizona by virtue of its. There is no dispute about the importance of those lands that's been clear since Pollard Lessee v. Hagan, whether we want to be here or not. We understand that the Court has a tremendous appellate workload and we've read the list of cases which were cited in a concurring opinion recently this term but we regret to say that under our construction we have no choice, that's what Congress has said and there is simply no alternative. The issues are important for other states as well. The choice of law question which Mr. Justice White raised in a very intriguing one, under Nebraska vs. Iowa 406 U.S, it would appear that as to lands located within each state, the law of each state would apply. The question as to the law of the boundary between Federal and State land is particularly intriguing because as the Court knows these lands.
Byron R. White: And not by Finally --
Allan Goodman: Finally, Your Honor we think it doesn't exist after Corvallis.
Byron R. White: I know but how about Corvallis.
Allan Goodman: That's exact, thank you Honor I was just with respect to Mr. Justice Rehnquist's opinion for the Court in Corvallis, this land near to the state under the equal shooting doctrine by virtue of our sovereignty and thus it is a Constitution which should determine what rights arise and how those rights are decided as to that federal land. I think that adds to the distinction after.
Byron R. White: Do you mean the choice of Laws of Constitutional question?
Allan Goodman: That's right.
Byron R. White: But what if you decide the State Law decide to govern.
Allan Goodman: I think Mr. Justice White in this case State Law may have.
Byron R. White: Entirely, the entire controversy.
Allan Goodman: Yes, may govern the entire controversy, the question, the next question that comes is was the affect of the source of the States Law, source of the grant upon the United States contention of 1346 -- can the Congress affect or change the grant, excuse me, can a grant of -- can the inuring of the trust land in the states is superseded by a grant, by a Statute of the Congress.
Speaker: Let me ask you just before you sit down the -- suppose this Court said that well the United States doesn't want to come in here, it claim its indispensable, but we don't think it's indispensable all if California wants to go ahead against Arizona in this Court, it may, if it's wants to would you want to?
Allan Goodman: We don't think that we can get effective judicial relief in this Court under the circumstances.
Speaker: So your answer is no, you'd rather have the case you would ask the case to be dismissed as United States isn't --
Allan Goodman: We have no choice because we couldn't enforce that decree.
William J. Brennan, Jr.: That was part of this, suppose if we say yes. The fight is between the states is here what California wants to bring a suit against the United States in the District Court it's free to do that and then we, the point is the master – the District Judge is going to decide District Court case.
Allan Goodman: But Mr. Justice Ben, I can only respond with the question that is would we then have one judgment or two I think the answer is we would have two judgments.
William J. Brennan, Jr.: He would be, he would wearing a hat with a --
Warren E. Burger: Red ribbon on it.
William J. Brennan, Jr.: As a special master he would be wearing his District Court hat on the.
Allan Goodman: So they make two judgments.
William J. Brennan, Jr.: Sure, so what.
Allan Goodman: Well, if I may take the Chief Justice's analogy the judge would be wearing two ribbons and the colors would be different and the question on appeal than again…
William J. Brennan, Jr.: Just be aware, you know.
Allan Goodman: Well that was our first question.
Warren E. Burger: There is no appeal from us in the one case.
Allan Goodman: But in the second one what would it occur, I simply don't, you don't have to answer for that question I submit that the only sensible way. Thank you Your Honor it's for this Court to take this case thanks, thank you very much.
Warren E. Burger: Thank you gentlemen. The case is submitted.


Warren E. Burger: United States and the Interstate Commerce Commission against Chesapeake and Ohio. Mr. Friedman you may proceed whenever you are ready.
Daniel M. Friedman: Mr. Chief Justice and may it please the Court. The question in this case that is here on a direct appeal to the United States District Court for the Eastern District of Virginia is whether on the railroads tell the Interstate Commerce Commission, they need an increase in rates for a particular purpose. The Commission has authority of a (Inaudible) increase to tell the railroads, they have to use the money for the purpose for which they seek it. More precisely, the issue is whether in this case the railroads' representation that they need a substantial increase in rates in order to accomplish deferred maintenance and delayed capital improvements, justified the Commission when it gave this rate in telling the railroads, they had to use the additional revenues derived from the increase that were authorized for that purpose.
Harry A. Blackmun: Mr. Friedman, do we have just three railroads here --
Daniel M. Friedman: Yes, the three railroads, colloquially the Chessie System, it is the Baltimore and Ohio, the Chesapeake and Ohio and the Western Maryland railroad.
Harry A. Blackmun: Well, the others noticeable by their absence or there is a reason for this?
Daniel M. Friedman: They are indeed Mr. Justice. The reason the others are noticeable for their absence is only the Chessie system challenged the action of the Commission in this case. The other railroads all accepted the Commission’s condition that I would come to, in a moment.
Byron R. White: Well, they did not have the argument that Chessie says it has either. Well, they do not have any differed maintenance. I mean, they do not say it to anyone --
Daniel M. Friedman: No, they do not say, they do, however, a number of them are quite prosperous as well as the Chessie. That they do not make that argument and indeed it is the thrust of my submission to this Court would be that it was all the railroads, as I will come to them, there was all the railroads that came in and said we have this need for the deferred maintenance.
Byron R. White: Including the Chessie?
Daniel M. Friedman: Including the Chessie, yes Mr. Justice. Let me come right to that. The case began in April of 1974, when virtually all the railroads in this country, with one exception I believe, all of the railroads filed a petition with the Commission saying that they needed a 10% across the board increase in freight rates and among the railroads who submitted this petition was the Chessie. The Chessie, the three Chessie companies, were explicitly listed in an appendix to this petition as among those on whose behalf it was filed and Chessie's counsel Mr. Rettberg who appears here on their behalf on the brief, was one of those whose name appeared on the cover of this document of the petition and at the conclusion of it. So that the Chessie associated itself completely with all of the railroads' submissions with respect to the need for this additional revenue. Now, what did the railroads tell the Commission with respect to why they needed the revenue? The petition said, “Massive additional expenditures are required for maintenance and capital improvement,” that is at the page 107 of the appendix. There is a caption in the petition at page 109 which is called, “The Problems of the Industry,” as described by railroad Chief Executives and Operating Officers. This section contained a number of statements by various officials of the country's railroads, not officials of the Chessie, but a number of important officials, describing the extent and seriousness to the railroads of the problems of the deferred maintenance and delayed capital improvements. For example, I just give one or two illustrative statements, but there are a number of them in there, they spoke of -- one railroad spoke of the plant deterioration, decline in car fleet and increase in un-serviceable cars that have resulted from inadequate cash flow. Another spoke of years of inadequate spending on maintenance of facilities in way, another is about insufficient maintenance expenditures in the past, and there was attached to this petition, excerpts from a report that had been made, the so called “Astral Report,” dealing with the financial problems that the nation's railroads were facing. And it said that the railroad's current difficulty in needing the needs for service can be traced directly to more than a decade of inadequate earnings which have forced major cutbacks in capital spending and maintenance programs, that is at 177 of the appendix. Now, under the Interstate Commerce Act, a tariff such as this that is filed, becomes affective within 30 days, unless the Commission acts to suspend it, which as this Court is aware it can do for up to seven months. In this case, the railroads because of a claimed -- their claimed need for emergency revenues as fast as possible, asked the Commission to permit these tariffs to become effective on 10 days notice. The Commission declined to do this. It instituted an investigation into the legality of the increases and suspended the tariffs, but it authorized the carriers to themselves cancel the tariff that had been suspended and to file a new substitute tariff at no higher rates than those provided in the original tariff and now I quote the exact words of the Commission at pages 45A of the appendix to the jurisdictional statement, “subject to the following conditions.” Now, I stress the words “subject to the following conditions” because the Chessie's contention here is that the orders the Commission initially issued, requiring these conditions, were not really a condition at all. They were merely a hortatory suggestion by the Commission that it was exhorting the railroads to do this. At page 46A of the appendix to the jurisdictional statement, under these conditions listed, paragraph number three states, “Revenues generated by the increases should be expended for capital improvements and deferred maintenance of plant and equipment and the amount needed for increased material and supply cost other than fuel.” Then over at the top of page 48A of the appendix, the first sentence in the middle of it, the same thought is repeated. “The Commission intends that revenues generated by increases, authorized herein over and above the amounts for increased material and supply cost other than fuel, will be used by the respondents exclusively for reducing deferred maintenance of plant and equipment and delayed capital improvements in order that rail service to the shippers will be improved.” Then two sentences down the Commission stated, “The respondent’s failure to apply the increased revenues as heretofore specified, will result in the cancellation of this authorized increases.” The Commission made one other significant determination earlier in this order at pages 42A and 43A of the appendix to the jurisdictional statement, beginning on the last line of 42A, the Commission said, “The increase is proposed were, if permitted to become effective, generate additional revenues sufficient to enable the carriers to prevent further deterioration and improved service,” and then it said, “However, if the schedules were permitted to become effective as filed and without conditions designed to promote service improvements, the increases proposed would be unjust and unreasonable and contrary to the dictates of the National Transportation Policies.” So it was because of these reasons that the Commission imposed this condition to granting of the increase. The next day, after the Commission entered this order, all the railroads filed the new amended tariff, containing basically with one or two minor exceptions, the increases provided for in the earlier tariff and this new tariff became effective in 15 days.
Potter Stewart: Does your argument apply some kind of estoppel argument? The real question is, is the statutory authority of the Commission to do, what it did, is it not?
Daniel M. Friedman: That is correct, Mr. Justice. We are not suggesting that the railroads are estopped. What we are suggesting is that since, if the Chessie, in fact, did not have any deferred maintenance or delayed capital improvements, at that point it could have refused to accept this increase itself because of these conditions. What we are saying is that Chessie fully participated with all the other railroads and that the Commission was justified in these circumstances as I would come to in a moment in imposing this condition upon all of the railroads.
Potter Stewart: Well, is it not the only real question here, the statutory authority of the Commission to do this --
Daniel M. Friedman: Yes, that is the question and that is --
Potter Stewart: I mean, whether it was justified is a matter of rough justice or is really not the question at all?
Daniel M. Friedman: That is what -- the only thing the Court of Appeals, District Court decided in this case was that the Commission had no authority to do this.
Potter Stewart: And that is the only issue here?
Daniel M. Friedman: That is right and we suggest in our a briefs that if the court agrees with us on that, it would be appropriate to remand the case to the District Court to pass upon Chessie’s attacks on the application of this condition to it. It suggests it is in somewhat different position.
John Paul Stevens: Mr. Friedman let me just follow that up for a moment. Would the case be any different, if all of the railroads except Chessie said, “We want to spend the money on the deferred maintenance” and Chessie from the outset said, “We do not need the money for that purpose, but we think rates are to be uniformed and if you do not give us the increase, that will be a weakening of the rate structure all over the country because you did made that point in your own brief,” would the case be different, if that is the way it had been presented?
Daniel M. Friedman: I think it would be Mr. Justice for a couple of reasons. First, if the Chessie had made that submission, the Commission might not have granted the Chessie the increase. It might have decided that in the particular circumstances of this case, it would be appropriate to treat the Chessie different. We do not know. We do not know, but they might not have done it, but if -- I think, it will be a much more difficult case, if the Chessie said that and the Commission said, “Never mind, we think the rates have to be uniform throughout,” but I think, that would be a more difficult case because let me make something right at the outset. We make no claim, contrary to what the District Court suggested that the Commission has any general authority, any general authority to tell the railroads how to spend their money, that is is what we think the Commission is doing in this case. In this case what the Commission did, was it said that to the extent these increased rates exceed, increases in cost which the Commission subsequently said came to 3%, to the extent the increase here exceeded the additional cost, it would be unjust and unreasonable, unless the carriers applied the increases for the purposes for which they said they needed them, and that is to improve service, to improve service by using the funds for correcting their maintenance deficiencies and their defects in capital improvements, that is our basic petition. Now, let me just briefly elude to three other orders that the Commission entered in this case which kind of fill out the details of it. In the subsequent order they defined what they meant by capital deferred maintenance and delayed capital improvements. Then they subsequently, in August of 1974, denied a petition for reconsideration by the Chessie which proposed that the order be amended to provide that if any carrier had no deferred maintenance or delayed improvements, it could use the funds for any valid corporate purposes. And at page 88 of the appendix to the jurisdictional statement, the Commission explained why? It said that it is consistently expressed its full intention that the authorized increases over and above increased costs shall be used by the respondents exclusively for reducing the deferred maintenance of plant and equipment and delayed capital improvements, in order that rail service to the shippers will be improved. It pointed out at pages 81-82 that the petition and the verified statements filed in this case as it said are replete with references to the need for revenues, to provide funds for great, but unspecified amounts of deferred maintenance and capital improvements. It also pointed out at page 81A that its decision how to apply the funds which the Commission had required be segregated that the decision on how to apply them to what particular items that deferred maintenance or delayed capital improvements and to determine the extent to which these were necessary, was a decision left to the railroads. The Commission, in other words, is not telling them how to apply it or to what. It just tells them they had to apply it, as they said, they were going to do. And finally in October when some of the railroads came in and stated that they really could not use these funds for that purpose, the Commission said, “Well, any railroad that cannot apply all of the increase under this order for deferred maintenance or delayed capital improvements, may with the permission of the Commission, expend it for new and additional capital improvements.” Under that provision, a number of railroads have been authorized by the Commission to expend the funds generated by this increase to new capital improvements where they convinced the Commission that they had no deferred or delayed maintenance or capital improvements and all that. I think, it is somewhat significant that although Chessie keeps telling us now that it has no deferred maintenance or delayed capital improvements, it has never sought the permission or authorization of the Commission to expend the funds challenged under this order which is known in railroad jargon as Ex Parte 305. The Three-Judge District Court, in setting aside the Commission's order, said two things before it came to its actual decision. It said first of all that it had no doubt that Chessie’s facilities require additional maintenance and improvement, that is at page 15A of the appendix to the jurisdictional statement. It pointed out that over a 10-year period from 1964-1973, the number of annual derailments of these carriers had increased to a 176% from 87-240. The court also described the Commission’s action and I quote again from page 22A as, “A well intentioned effort to cope with the vexatious deterioration of track and equipment that saps the ability of the nation's railroads to serve the public adequately.” However, relying on decisions of this Court, two old decisions, which it saw as establishing the proposition that the Commission has no general power to control the railroad's expenditures, it said that the Congress had not authorized the Commission to control the carrier's expenditure of funds as a condition to withholding the suspension of rates. Now, as I have said previously, we think the District Court misunderstood in the case and approached it incorrectly. The Commission is not attempting here to tell the railroads how could they ought to expend their funds, generally. All it is saying to the railroads is that when they told the Commission that they need additional funds for a particular purpose in order to provide adequate service, the Commission can say to them, “Yes, if that is what you need the funds for, you may have those funds, provided you do with them what you have told us you intend to do it with them.”
Warren E. Burger: Suppose there had been any attached, any explicit limitation, Mr. Friedman, in the past has the Commission ever exercised any kind of authority by implication where a request was made for increased rates for a specific purpose?
Daniel M. Friedman: No, Mr. Chief Justice, not to my knowledge, but let me point out something in this case. That there are some evidence in the record at page 54A, a dissenting opinion of Commissioner O’Neil at one stage of the proceedings, in which, he points out that in the past, the Commission had given a large number of increases to the carriers and that although they admonished the carriers to use this money to improve their service, the carriers had not done it. In addition to that, we have in this case, protests by shippers in which they said that there have been a lot of these increases and the railroads were always making these promises, you should protect the shippers by doing something to make sure that the railroads carry out their commitments. I refer to pages 213 of the appendix where the National Industrial Traffic League, probably the leading organization of shippers in this country, urged the Commission to that and also at 215 and 221, where two large shippers made this point.
Warren E. Burger: What were your first page citations?
Daniel M. Friedman: The first page is 213, Mr. Chief Justice, then 215, and 221. Now, as I have mentioned, the Commission had stated that if the increased rates in this case were not applied with conditions designed to promote service improvements, it would be contrary to the National Transportation Policy. The National Transportation Policy which is a prelude or preface to the statute itself and was created and enacted in 1940, directs that all provisions of the Act be administered with a view to carrying out that policy and one element of that policy listed is the promotion and preservation of safe, adequate and efficient service. Now, it seems to us that an essential and important element of safe, adequate, and efficient service is to ensure that the carriers do provide adequate maintenance of their plant and equipment and to make the necessary capital investments in order to haul the shipper's goods. We find this authority of the Commission to impose this Commission in the broad contours of Section 15a (2) of the Act, which directs the Commission in exercising its power to prescribe just and reasonable rates to consider the need in the public interest of adequate and efficient railway transportation service at the lowest cost consistent with the furnishing of that service.
Byron R. White: Suppose 15a (2) had been amended so that it clearly forbade this power? You would not think this condition would be valid then --?
Daniel M. Friedman: Not if it clearly forbade it Mr. Justice, because if it clearly forbade it, it seems to us --
Byron R. White: No, but this was a prior act of the Commission?
Daniel M. Friedman: Oh! I am sorry, I do not think if the statute were amended to change it, so after this order, I do not think that would invalidate this order.
Byron R. White: Are you relying on 15a (2) as it read there at the time?
Daniel M. Friedman: At the time, yes. We do not think the amendments to this statute have changed the Commission’s power in this respect, but this order was entered under the old Section, and the new statute --
Byron R. White: Now, why should not the new statute control? Let us suppose 15a (2) had been amended to forbid this. Now, why would not the ordinary rule apply that the -- the law as it now is applies? Why would not it invalidate an existing order that -- just said that the Interstate Commerce Commission have no power to direct the railroads to use money for maintenance. Would you think this order would stand?
Daniel M. Friedman: That would be a difficult question, Mr. Justice, I think. But that is not of course --
Byron R. White: 15a (2) does not apply anymore in this situation, does it?
Daniel M. Friedman: Well, there is a substitute provision. There is a substitute provision which applies in the future.
Byron R. White: And you think that that is even stronger?
Daniel M. Friedman: I do not know. I would not say it is necessarily --
Byron R. White: Well, that is what about your brief says?
Daniel M. Friedman: Yes, it certainly does and I would also suggest something else Mr. Justice, that I think that when people come before a regulatory agency and say they want the regulatory agency to authorize and to give them authority to do something for a particular purpose, when the agency gives them that authority, it has inherent power to condition it and say, “Yes, you can do it, but you have to do for the purpose which led us to give you the authority.” That it seems to us is an inherent power of the administrative agencies, that when they are asked to do something, it seems to us that they should be able to tell the parties, “Yes, we are going to do what you have asked us to do and we are in turn going to require you to fulfill your commitment to us that that is the reason you want it.” The whole history which we have traced in our brief of the amendments, of the Interstate Commerce Act, beginning with the Transportation Act of 1940 and some of this Court’s decision in the interim, indicate a history on the part of Congress which is attempting to strengthen the hand of the Commission, in trying to enable the railroads to provide better services, It started, originally as a mere rate making function and now it has been developed and developed to the point that there is a duty on the Commission, we think, to try to foster a sound, efficient and economical transportation system.
Byron R. White: Now this is the first case in which the Commission has attempted to exercise its power?
Daniel M. Friedman: Yes, this is.
Byron R. White: And, indeed, before this time it had disavowed, I take it?
Daniel M. Friedman: No, Mr. Justice, it had disavowed the power, it had disavowed the authority to directly tell the railroads how to spend their money, to tell them to in one famous case, this Court said they could not tell the railroads to buy tank cars, in another case it said it had no power to tell the railroads to build a terminal at Los Angeles, but there has never been a case in which the Commission was asked to give a rate increase for a particular purpose, where it had to face up to this problem. This -- in one sense this is the first time that the Commission has ever directly attempted to do this, but I suggest this is the first time really that the problem has ever been before the Commission and I think, it did it in this case because of its experience in a number of other cases that after the railroads have said they needed the additional funds to improve service. It turned out that the service was not improved at all. The deferred maintenance, the delayed capital improvements kept getting worse and worse and that is why, we think, the Commission had to step in this case, and we think that within the broad authority of the Commission to support and further efficient and effective transportation, the Commission had the power in this case to tell all other railroads including Chessie which joined in this application that that they had to use the money for the purposes for which they said they needed it.
John Paul Stevens: Mr. Friedman, if the maintenance situation got much, much worse and there were thousands derailments a year, would it ever reach a point where the Commission would have statutory authority, entirely apart form rate increases, to tell the railroads to do something about it?
Daniel M. Friedman: I do not know. I could not answer that. I suppose if it got at some point, they have some safety authority and perhaps, they might be able to require the Commission to do.
John Paul Stevens: There is no authority, just because the trains are dirty and slow, and poor service, generally. There is no separate statutory authority to --
Daniel M. Friedman: Not as far as I know. There is -- I know the Commission has some authority. I do not know the precise details to do safety inspections, and if I suppose the rails got to the point that it was dangerous to run the trains over them, I am sure the Commission would have some authority to correct that.
Warren E. Burger: Very well Mr. Friedman. Mr. Morris.
Doyle S. Morris: Mr. Chief Justice and may it please the Court. We have finally established that yes, this was the very first time in 80 plus years of history and secondly, I would submit that, Mr. Justice White put his finger on the entire case when he asked, well, suppose 15a (2) had been changed to make this unlawful. The fact is that 15a (2) has quite recently in the Rail Revitalization Act for 1976, been made by the Congress of the United States completely inapplicable to the railroads. Now, the result of that is of crucial importance because it is not barely 15a (2) on which the Commission and the government has relied as a source of their claimed implication of power, was a reason --
Warren E. Burger: Ordinarily when a carrier comes in and asks for rate increase what is the justification for the rate increase, that is tendered in the first instance?
Doyle S. Morris: We make every possible justification where the merits of case would sustain. Let me tell you --
Warren E. Burger: Usually increased cost, is it not a primary factor?
Doyle S. Morris: That is one.
Warren E. Burger: But is it not, would you say it is not primary?
Doyle S. Morris: It is not exclusively, but --
Warren E. Burger: Primary?
Doyle S. Morris: It could be a primary case.
Warren E. Burger: What are the reasons?
Doyle S. Morris: We advanced in this case and we freely admit, with parties to this application. Further we have dwelled upon the low level of earnings in this industry, terribly depressed and the result of that we pointed out, was yes. That had resulted in the deferral of the maintenance, yes, that had resulted in the deferral of the improvements --
Warren E. Burger: In capital, it would be one reason, would it not?
Doyle S. Morris: It certainly would, it would indeed and we also point it to a number of things in support of the application. Increased cost of operations, increased cost of borrowing money as Your Honor has just suggested. Do they to expand and grow, under the general burden of inflation. A broad variety of grounds asserted and supported this application. Again, in response to Mr. Justice White's question, the cases of this Court teaches that a change in the law maybe relied upon by an appellant in support of this judgment. We are obviously entitled to rely on the new section 15a (4), the new rule of rate making which Congress has substituted for the old rule of rate making, in support of our judgment and this Court would have to observe the new rule even if we did not talk about it, it is the law of the land today.
Byron R. White: Well then, it said the ICC could expressly do this, so you would not be here?
Doyle S. Morris: Would not be here and one of the reasons I am here, and the main reason is because never in the history of rate making power from its very inception in 1906 in the Hepburn Act has the rate making power ever extended to anything beyond the fixing of the rate. It has never before this order of 1974 been attempted to be applied to the control, of the use of the revenues after they were collected.
Warren E. Burger: If the the railroad does not make out it's -- if the carrier does not make out of its case for the need then the rate increase should not be allowed?
Doyle S. Morris: The case of need was made, Your Honor.
Warren E. Burger: Well, I say, hypothetical if, are you saying that the only power of the Commission has is to grant to not grant approval?
Doyle S. Morris: It can fix the rate. That is its part, exactly. It cannot tell us what to do with the money when collected.
William H. Rehnquist: Well, what if six months after the rate increase is granted, the Commission discovers that all of your testimony about needing it for a particular purpose is false, does it have any remedy?
Doyle S. Morris: Yes, it does.
William H. Rehnquist: What is it?
Doyle S. Morris: The Commission has kept control over this entire proceeding. The Commission could pull the string on this rate increase today, Your Honor. It has kept control over it. It has required the reports and I --
William H. Rehnquist: It could rescind the rate increase then?
Doyle S. Morris: It could declare that it was unjust and unreasonable. Now, I do not suggest for a minute that that would be appropriate step, but it has that power in the naked raw sense which required reports of carriers as their investments and, how they have used the funds?
Byron R. White: Well, what if the Commission decided that every railroad there in the country needed it extremely badly except the Chessie and that Chessie really did not have any differed maintenance, just like it now says, could it canceled it with respect to the Chessie?
Doyle S. Morris: Well, I do not believe Mr. Justice White, there is a practical model and the practical application of the Act that in most terms, I do not believe the Commission would consider doing that for the obvious reasons described in the government’s brief. That would mean dislocations in the rate structure and we will get out of the business and the poor roads would be poorer. So, I would like to dwell --
Byron R. White: But you think, you did not -- you still did not answer the question, I take it?
Doyle S. Morris: Perhaps, I did not get the thrust of our question.
Byron R. White: I asked about the power?
Doyle S. Morris: The Commission would have the power, if it felt that Chessie was not entitled to the money and had not made a showing --
Byron R. White: So at the outset if the Chessie -- if the Commission looked over the papers that were submitted to determine, it may increase and it thought that the Chessie really did not need it for the purpose that where that was asserted, it could have allowed the rate for everyone except the Chessie, would it had the power to?
Doyle S. Morris: In theory, yes.
Byron R. White: Okay.
Doyle S. Morris: Now, what does the new rule of rate making tell the Commission to do? The rule of rate making is addressed exclusively to the point that the Commission should establish adequate revenue levels, and for what purposes, among others, to assure a flow of net income and depreciation, to provide the carriers with ability to invest in prudent, prudent capital improvements, not deferred or delayed capital improvements. Moreover, it instructs the Commission, gives the Commission, the affirmative duty to be sure that adequate levels of revenue are established so as to cover quote “total operating expenses,” mere suggestion it would be limited to any particular type of operating expense, such as deferred maintenance. I think, the case can be stated lest by giving here an illustration of what has really happened. As counsel for the government told you, the carriers are --
Warren E. Burger: We will resume there the first thing in the morning. Thank you, Morris.