Earl Warren: Number 43, Lester J. Albrecht, Petitioner, versus the Herald Company. Mr. Dorsey.
Gray L. Dorsey: Mr. Chief Justice, may it please the Court. This is a case of admitted resale price maintenance. The only question is, whether this resale price maintenance is unlawful under Section 1 of the Sherman Act. It involves the control of the retail price of the Globe-Democrat newspaper to home delivery customers on a suburban route in St.Louis. The petitioner, Mr. Albrecht bought this Route Number 99 in 1956. In 1961, the Globe-Democrat took the position that the home delivery carriers were not employees but were independent merchants and they took the position that they would not renew the collective bargaining agreement with the carrier's union when it expired in May of 1961. It did expire, it was not renewed. The policy statement of the newspaper expressly says that in its position, in its view, this home delivery carriers are independent merchants. They're not employees.
Hugo L. Black: Was that the newsboy? That's the newsboy?
Gray L. Dorsey: These -- Mr. Justice Black are news carriers, they are adults. Mr. Albrecht was 42 years old when he bought this route after 20 years of experience at home delivery services with a bakery and with a milk company.
Hugo L. Black: All of them?
Gray L. Dorsey: I don't know whether all of them are but in general, these are adult carriers and they're -- they have in the neighborhood about 1200 customers. They own a truck and deliver from a truck. This is not a boy on a bicycle type of case.
Hugo L. Black: We don't have them in submission.
Gray L. Dorsey: I beg Your Honor?
Hugo L. Black: We don't have them as the independent merchants here?
Gray L. Dorsey: No. No, these are adult men. They buy their papers at price of course set by the newspaper. They resale and they have to pay all their expenses out of the difference and anything that they make is -- has to come out of the difference between the price they sell at and the price that they buy.
Potter Stewart: Did they have employees or do they do all the work themselves?
Gray L. Dorsey: Mr. Albrecht is the only one of whom I know. He had employees occasionally whom he paid and his wife helped him quite often with respect to clerical manners, people calling the house in order to make changes and that sort of thing. Whenever he had employees, he paid this out of his proceeds, the difference between the prices that he paid and charged. In 1961, the Globe-Democrat having decided that it did not chose to make deliveries to employees on its some 172 routes that one of the deal of independent merchants nevertheless wanted to control the price at which the customer bought the newspaper. And the facts set forth in the amicus brief here or make clear of why that is, the charge that they are able to make for advertising depends on the size of their readership and therefore they want to keep the price down to their ultimate customer and get as much readership as possible. They -- therefore, the newspaper therefore published daily their suggested resale price in their newspaper. And in 1961, this was set at a dollar and 60 cents a month for the daily paper. Mr. Albrecht charged a dollar and 70 cents a month or 10 cents a month more for the daily paper than the suggested resale price of the Globe-Democrat to persons who did not pay in advance.If they paid in advance, he charged a dollar and 60 cents. From time to time, beginning in 1961, customers wouldn't see the suggested price in the newspaper, call into the newspaper office and make a complaint that they were charged a dollar 70 or more than the suggested resale price. And when this occurred, it was the policy of the newspaper, the circulation director, to get in touch with the carrier, with Mr. Albrecht to warn him that he was charging more than their suggested price, to tell him that they insisted that he charge the suggested price. This happened from time to time between 1961 and May 20, 1964, on at -- on two occasions in 1961 or 1962, the circulation director talked by phone with Mr. Albrecht. And in 1962, he also had Mr. Albrecht into the office and discussed it with him. Mr. Albrecht continued to charge a dollar and 70-cent price, and on May 20, 1964, the newspaper sent him a letter in which they enclosed another letter which they proposed to send to all of the people on -- within the territory of Mr. Albrecht's route. Now this letter would inform these people that they were paying more than the suggested price and would offer to have the paper delivered to them at the suggested price of a dollar and 60 cents if they chose to have this done. On May 20th, this letter was sent out to all of the people in Mr. Albrecht's route. It was followed subsequently by telephone solicitation by a circulation company mainly Circulation Sales Company, which involve quite a number of hours of calling. There were three persons employed, 13 hours a day and a director of this company estimated that they call for about two weeks. This was followed up by a door-to-door solicitation by boys who were hired by the circulation company and instructed by the Globe-Democrat.
Speaker: Could I ask you a question and I didn't find it in the briefs, maybe I missed it, is the question of the presence or absence of interstate commerce argued here?
Gray L. Dorsey: This was directed down at the trial and there's been no question of it since Your Honor.
Speaker: Well, where is the interstate commerce?
Gray L. Dorsey: The interstate commerce Your Honor is that the news comes from all over the world and is published in this newspaper and sold to the readers in Kirkwood, and this readership in Kirkwood is sold to advertisers in New York and all over the country.
Speaker: Maybe that's enough.
Gray L. Dorsey: The result of this solicitation was according to the uncontradicted testimony of Mr. Albrecht that people he'd known for 20 years would meet him on the street and refuse to speak to him, his customers call him up, cursed him, call him a cheat and a thief, people moved away from him in church and this was effective cooperation -- or was effective coercion. For a little over for about three years from 1961 to 1964, the Globe-Democrat had been trying to persuade Mr. Albrecht to charge a dollar and 60 cents instead of a dollar 70 cents and have not been able to persuade him to do so. Within about 20 days after this solicitation began, Mr. Albrecht had been subjected to this abuse, he had lost over 300 of his 1200 customers and he was forced to reduce his price to their suggested price, so you had him clubbed into compliance with their resale price maintenance so there's no question that this was effective coercion. There is absolutely no question that it was intended to have the price -- the effect of resale price maintenance. Mr. Evans, the circulation director, and Mr. Bowman, the general manger of the newspaper, both freely admitted that the only purpose of this solicitation was to enforce compliance with the resale price maintenance. Now, it was early --
William J. Brennan, Jr.: But he finally sold out, didn't he?
Gray L. Dorsey: He has sold. There was subsequent termination after a suit was filed Your Honor.
William J. Brennan, Jr.: Oh, was that it?
Gray L. Dorsey: And --
Hugo L. Black: Well, the -- there was termination because of the filing of the suit rather than the failure to bring the price down?
Gray L. Dorsey: Well, we think Your Honor it's absolutely clear that this was a part of the coercion to get him to bring the price down because --
William J. Brennan, Jr.: But shouldn't he bring it down before the suit (Voice Overlap) --
Gray L. Dorsey: He had brought it down. He had not notified them and he would not agree in the future to keep it down.
William J. Brennan, Jr.: Alright.
Gray L. Dorsey: And after the customers had been taken away from him in July, there was a conference between him and the manager of the newspaper in which they said that everything would be alright if he would only charge their price. He refused to charge their price, he then saw his attorney, filed a suit, they terminated, gave him 60 days in which to sell a route. He brought in the person who had offered him $24,000 for the route so that they could -- the newspaper could approve his credit. And at that time, in that conference in September 15 of 1964, after the suit was filed on August 20, a notice of termination went up -- August 12, suit was filed, August 20 notice of termination went out, September 15, when he came out with the pers -- in with a perspective new customer. At that time, the newspaper tried to get him to comply with their resale price, told him that the customers that had been taken away would not be returned for -- to him for sale, unless he dropped the suit. In which case, he could sell these customers as well as the other 900. And furthermore, if would agree at that time, to charge their resale price maintenance, he could come back and again operate the route. So coercion was continuing even after termination had occurred, notice of termination had occurred.
William J. Brennan, Jr.: You have already referenced to the record where it shows of -- that he actually lowered his price?
Gray L. Dorsey: I think they do Your Honor.
William J. Brennan, Jr.: (Inaudible)
Gray L. Dorsey: That's on page 45 of the record.
William J. Brennan, Jr.: Thank you very much.
Gray L. Dorsey: So we think there's no question of anything like simplicity pattern case or dark drug works outside the period of coercion. The coercion was clearly exercised after that period. In order to make delivery of -- to these customers, the newspaper did not go into the carrier business, it was there stated in their policy and in depositions, that was the position of the officers of the newspaper that they had a right to compete with a carrier who is not charging their resale price. This has not seriously been argued in this case for the very simple reason that it -- all of the facts clearly show that under the rule of good faith competition in the restatement Section 709 on the early leading case, Tuttle versus Buck, this was not good faith competition. It's absolutely clear they were never in the carrier business. They said they didn't want to be in the carrier business. When they took these 300 customers away, they didn't even assert any proprietary right over them. They didn't view them as having become their customers at all. They advertised for another carrier. They deliver to these temporarily, they gave them to him without any charge and they told him, “We don't know how long you'll have this. You can take the profit while you're delivering but, if Albrecht gets straightened up with us, you will have to give them back.” So whereas later they said, “Well, this belong to another man. If you are going to get them, you'll have to buy them back.” At the time they gave them to Kroner, this other carrier, they said it's only temporary. And if this resale price maintenance, if this -- Albrecht get straightened up with us and charges our price, you will have to give them back. So they clearly contemplated this as a major coercion at the time that it was done.
William J. Brennan, Jr.: Who are the combination Mr. -- who were in the combination?
Gray L. Dorsey: It's our view Your Honor that as a matter of law, as soon as the Globe-Democrat went beyond prior announcement and mere declination, then a combination came into effect between the Globe-Democrat and the customer, Albrecht. That whether or not, although they did entwined with him mainly circulation sales as other carrier who enabled them to withhold these customers from Albrecht in order to increase the length of time of this coercion. The customers themselves who certainly brought the coercion that whether or not, there is an unlawful combination between the Globe-Democrat and anyone or more of these persons that regardless of that, as a matter of law, as a result of the coercion by the Globe-Democrat on Albrecht. And he is then complying with that and charging their price, if that price is a result of an unlawful combination consisting of the Globe-Democrat and Albrecht.
Byron R. White: The fact that he actually lowered his price makes it easy to argue that.
Gray L. Dorsey: Yes it does Your Honor. It is a much more difficult case if they had coerced and he had never lowered.
Byron R. White: Do you have any cases of -- by this Court where retail -- set price maintenance that have been stricken down even though the price which is ought to be maintained is lower than the customer wants it to be?
Gray L. Dorsey: Is lower than --
Byron R. White: Well, just like -- this kind of a case. Usually the --
Gray L. Dorsey: Kiefer-Stewart was that kind of a case --
William J. Brennan, Jr.: -- the maintenance as to keep prices up rather than down.
Gray L. Dorsey: If Kiefer-Stewart was that kind of a case Your Honor, where the manufacturers after price controls, after the war went off, they want to keep the price down in order to sell more whiskey. And this Court said, it doesn't make any difference. The evil is destroying the independent judgment of the customer. It doesn't make any difference whether this time you're purportedly benefiting the consumer. It's the power that's wrong because it can be misused and it should never be there. It's a violation when it's there.
Earl Warren: We'll recess now.
Gray L. Dorsey: -- coming under Section 1 of the Sherman Act, it can generally be assumed that all parties are willing parties, and that they are in an agreement to fix price because they see it as to their advantage and that they can be counted upon to carry out the agreement so there will be this effect on the price. With respect to resale price maintenance in a situation such as this, where the seller's action is to hold down his customer's price to the disadvantage of the customer but to the advantage of the seller, then the question is extremely important what the effect of coercion is. Now in resale price maintenance cases, I think this Court has already clearly and unequivocally held that if the seller by means of coercion induces the cooperative action of third parties together with him and then brings this combination to bear against the customer in order to affect -- effect resale price maintenance, that this is a violation of Section 1. I think there's no question at that sort, the Beech-Nut case holds, there was no finding of agreements there, only that the coercion effected and arrangement that was the equivalent of an agreement. Now then I think it's absolute this Court has also absolutely clearly and unequivocally held in the Simpson case, Simpson versus Union Oil, that if the coercion of the seller, not involving third persons at all but solely against the buyer, results in the buyer signing his name to a contract even though it's against his interest and whenever he can he will not abide by it and this case came up because he didn't abide by it. But if that formality resulting from the coercion is to sign a contract, then that -- he's in violation of Section 1 of the Sherman Act. Now we have here the case that we ask the Court to hold because we think that the real protection to buyers and their exercise of independent judgment in the resale price maintenance situation is to be protected from the coercion not protected from the coercion if they happened to sign a contract. So --
Abe Fortas: May I ask you Mr. Dorsey.
Gray L. Dorsey: Yes, Your Honor.
Abe Fortas: Do you have a jury verdict against you?
Gray L. Dorsey: Yes Your Honor.
Abe Fortas: Do you object to the instructions?
Gray L. Dorsey: We have objected to the instructions in that they required the finding of common purpose to find the combination.
Abe Fortas: Well what -- how would you state your -- the legal point that you're presenting to us that the instruction, the judgment should be reversed because the instructions were faulty would concur the law?
Gray L. Dorsey: No Your Honor. We think that was -- that's true, but we ask for summary judgment and we think that we should have had it --
Abe Fortas: You mean that -- you mean the summary --
Gray L. Dorsey: -- as a matter of law.
Abe Fortas: You mean the summary -- what do you mean by that? You mean we ought to --
Gray L. Dorsey: No. I'm saying what happened below was that we asked summary judgment and we think there was error in not granting the summary judgment.
William J. Brennan, Jr.: Do you mean you asked for a directed verdict?
Gray L. Dorsey: And then we asked for a directed verdict but we asked for summary judgment before they ever went to trial. Then we asked for a directed verdict. Then we asked for judgment n.o.v. and we think --
William J. Brennan, Jr.: As a matter of law, you were entitled to a judgment n.o.v.?
Gray L. Dorsey: We think as a matter of law, we were entitled a judgment n.o.v.that from the time that these facts were in and it was admitted that these things were done, that if the language of Parke, Davis means what it says that if a seller goes beyond prior announcement and mere declination to sale, he has put together an unlawful combination. Now we think that that language --
Abe Fortas: Well, what's your really asking --
Gray L. Dorsey: I beg your pardon?
Abe Fortas: I'm sorry, what you're really asking us to do then is to rule that in any resale price fixing case, any resale price fixing case, the Court should as a matter of law take the case away from the jury except on the question of damages where there is coercion as between the defendant and his customer.
Gray L. Dorsey: If that coercion Your Honor goes beyond the very narrow permissible limits laid down in Parke, Davis namely prior announcement of price and mere declination to sell.
Abe Fortas: You're saying everything here is conceded then, all of (Voice Overlap) --
Gray L. Dorsey: It is. There's no question about --
Abe Fortas: All the facts are considered and agreed?
Gray L. Dorsey: Absolute -- well not agreed but not contested and practically all by admission by depositions.
Abe Fortas: I suppose your adversary will take the position that there is no provision here whatever that all they did was to offer Mr. Albrecht an opportunity to comply with company policy and that upon his failure to comply with the company policy, they unilaterally terminated their arrangement with him and proceeded to take other measures to satisfy the people who wanted to buy the product.
Gray L. Dorsey: If those were the facts --
Abe Fortas: That's what they -- yes, what I say, it -- won't they say that those effects and -- isn't the -- is that something that a jury might have found?
Gray L. Dorsey: Oh no, absolutely impossible. Those clearly are not the facts Your Honor. They exercised --
Abe Fortas: Well, that's as you say and they say -- let me just assume for the moment, I don't know if it's true or not.Let me assume for the moment, they say that contrary don't we usually submit that to the jury under appropriate instructions?
Gray L. Dorsey: But if there wasn't a fact -- our position is that there really is no fact question involved here, they have never disputed that. They engaged in this solicitation and that the purpose of the solicitation was to get compliance for their resale price policy. Their officers have said this.So there's no question that they did it specifically. They got these customers specifically in order to attempt to get compliance with their resale price.
Abe Fortas: Of course, just did what? So the least arguable that they could have -- Mr. Albrecht said, “I want to sell this for a dollar 70 cents” or whatever it is, and its at least arguable that the Globe-Democrat could have said, “Well, we're so sorry Mr. Albrecht, if that's what you're going to do we just wanted some -- we're just going to select somebody else to whom we'll sell the paper".
Gray L. Dorsey: Yes, they certainly could have done that. That's our position but they certainly did not do that.
Abe Fortas: And your position is --
Gray L. Dorsey: They did not compete --
Abe Fortas: -- that they did do not do that.But what they've did was to adopt various techniques for the purpose of coercing --
Gray L. Dorsey: Exactly.
Abe Fortas: -- Mr. Albrecht to resell after suggested resale price.
Gray L. Dorsey: Yes.
Abe Fortas: And I'm suggest -- is asking you this question, supposed your adversary should say, "I don't know." But suppose your adversary should've taken -- should have taken the position that there was no coercion at all that the facts are closer to what you and I just discussed to which we can -- I think you conceded would not be a violation of antitrust laws.
Gray L. Dorsey: If he had Your Honor, then of course it wouldn't -- needed to go to the jury but these were not the fact.
Abe Fortas: You're saying -- you're saying that he has -- that there's -- there has not been any bona fide contest on (Voice Overlap) --
Gray L. Dorsey: He didn't controvert --
Abe Fortas: Sir?
Gray L. Dorsey: He didn't controvert these facts at all. He put on no evidence except company policy and some statements of that kind.
Abe Fortas: Definition of facts as an illusory problem, isn't it? It seems (Voice Overlap) --
Gray L. Dorsey: Well, these facts --
Abe Fortas: -- we don't dispute the facts, but what we do dispute is the ultimate fact.
Gray L. Dorsey: Yes.
Abe Fortas: Well this was coercion.
Gray L. Dorsey: Well, and it turns on this question of combination. Does combination require a common purpose with third persons? Or can it come as a result of an antagonistic coercive relationship between the seller and the buyer, and we ask the Court to decide that it can because we think in this situation, that's the only real protection of the independent judgment of the customer but we feel that in any event whether or not the Court wishes to rule that way, that in any event there are certain -- the facts here show that there certainly is sufficient relationship between the Globe-Democrat, mainly circulation sales, the customers of Albrecht and Kroner, the other carrier so that whether this is ruled or not, there was a violation in this case.
Abe Fortas: I dislike taking more of your time but I had trouble ascertaining your precise position from your brief and I wanted to be -- to see if I'm clear about it now, you're taking two positions, two legal positions.
Gray L. Dorsey: Yes Your Honor, we are.
Abe Fortas: One is that the instruction was incorrect, that reversible error was committed in the instruction becau -- in that instruction where the Court said you've got to find a common purpose, was it?
Gray L. Dorsey: Yes.
Abe Fortas: And you're saying that that was a reversible error. And then second, you're saying that the regardless of that, the court below committed error because it should have given you a directed verdict.
Gray L. Dorsey: As a matter of law, they should have given us a direct verdict either on the view that there is a combination between Globe-Democrat and Albrecht or on the view that the facts --
Abe Fortas: Or did I miss your --
Gray L. Dorsey: -- beyond the question (Voice Overlap) --
Abe Fortas: -- did I miss it or did you or did you not present that in your brief?
Gray L. Dorsey: Yes, we did present that.
Abe Fortas: I must have missed it (Inaudible) --
Gray L. Dorsey: I beg your pardon if it wasn't clear.
Abe Fortas: I'd like to have it pointed out then.
Gray L. Dorsey: Yes.
Potter Stewart: Mr. Dorsey, may I ask on this second combination with all these others, is it your view that Parke, Davis fixed this?
Gray L. Dorsey: Yes Your Honor. In that -- the language on page 43 expressly says that. Now in your opinion where you subsequently point out but there is in the facts of Parke, Davis that show there is a going too far. There, these are in terms of Parke, Davis in relationship between Parke, Davis and the wholesalers, and the relationship between Parke, Davis in some of the retailers against other retailers. And I think that's the reason why we're here with this case. That it's a question of what the meaning of that language is. If there is a going beyond not by establishing a relationship with third parties even if that's coercively established. But if there is a going beyond by a coercive relationship with the customer, that controls his price which I read literally that language to me. And as I say, I think it's necessary to provide protection on the buyer's in this kind of situation.
William J. Brennan, Jr.: Well, do you think Parke, Davis means that whether a suggested resale price and the customer doesn't adapt to it, that all the seller can do is just cancel, period.
Gray L. Dorsey: Yes Your Honor.
William J. Brennan, Jr.: And if he says to the customer, “I want to call your attention to our suggested prices and if you don't live up to him, we're canceling you out. We just think it's only fair to tell you that.” And the customer doesn't say a word to the seller except he just lowers his price. Now, is that --
Gray L. Dorsey: This is of course, Your Honor the hard marginal case and it would simply be a question under all the equities if there was generally fair treatment whether you would view this as the reminder as being part of the prior announcement in the facts.
William J. Brennan, Jr.: So you think the seller can do something besides -- perhaps -- can do something --
Gray L. Dorsey: It may be but --
William J. Brennan, Jr.: -- just like -- just be quite and cancel out.
Gray L. Dorsey: It may be that he can do a very little bit but he has done a very great deal more than what you suggest in this case Your Honor.
Earl Warren: But suppose that in this case Globe-Democrat had said, “If you don't do it, we will do all of these things,” but didn't do it. Would that threat you enough coercion?
Gray L. Dorsey: I would have to take a look at that Your Honor when it came up. I would suppose that this might post a question of a -- an attempt to violate rather than an actual violation and you certainly would not have as clear a case as you have here where the action has been engaged been and has exercised the coercion and the effect has been had on the resale price.
Thurgood Marshall: But Mr. Dorsey, suppose Globe-Democrat did no more than to sell to these 300 customers on its own. Would that be coercive?
Gray L. Dorsey: No Your Honor, our view is that they have the right to compete but if they did not compete, they did not themselves go out into this territory and go door-to-door and try to get their own customers at a dollar and 60 cents. And they did not say to another carrier, we will sell you if you worked up a customer lives. But they went to the customers of Albrecht and they said, “He's overcharging you.”
Thurgood Marshall: Well that's what I meant, 300 customers of Albrecht. They went to 300 customers of Albrecht and said, ”We will give you the Globe-Democrat a dollar and 60 cents.”
Gray L. Dorsey: Well it clearly would not be permissible if their very purpose is to bring pressure on Albrecht in order to coerce him to comply with their resale price policy which was the case here, admittedly so. They say, “This is why we did.”
Byron R. White: It seems to me like you just come out to say that they really or maybe some breadth left in Colgate but not much.
Gray L. Dorsey: Well Your Honor, I think that the breadth left in Colgate was the breadth left in that language of Mr. Justice Brennan in the Parke, Davis opinion, that prior announcement and mere declination to sell and beyond that Colgate expires.
Abe Fortas: Well, put it very briefly and I'm trying to do it, you're making a distinction between the following. Number one --
Gray L. Dorsey: Between what, I'm sorry Your Honor.
Abe Fortas: I say you're making a distinction between these two propositions. Number one, the supplier says to his customer, “If you don't follow the suggested retail prices we will terminate our dealings with you.” We say that's lawful. Number two, the supplier says to the retail dealer either directly or by unmistakable action that we're -- we want you to continue handling our goods, we don't object to that but unless you handle that goods and at the suggested retail prices, we're just going to chip away at you, chop away at you and exert pressures on you. Which you say is unlawful.
Gray L. Dorsey: No Your Honor, we did not say that that's unlawful and the Globe-Democrat did that for three years, they tried to persuade for three years. And Mr. Albrecht was unmovable and insisted that he had the right to charge his own price. They didn't move him by persuasion and by threats, that we won't tolerate this and by statements that you must follow our price. What moved him was when they took away 300 of his customers and cost his customers to call him a cheat and a thief.
Abe Fortas: Correct.
Earl Warren: Mr. Dorsey, you may have five minutes to sum up your argument in rebuttal if you wish to do it.
Gray L. Dorsey: Thank you Your Honor.
Earl Warren: Mr. Hocker, and you may have five extra minutes if you need them for your argument.
Lon Hocker: I thank you sir. Mr. Chief Justice and may it please the Court. A fundamental question in this case was touched at by Mr. Justice Fortas a moment ago when he pointed out that this case had been tried to a jury. And this was done, not at the request of the defendant in the trial court but at the request of the plaintiff. Page 7 of the transcript you will see that in the bottom of the complaint that plaintiff said -- the plaintiff request a trial by jury of all the issues herein pleaded. Now we had a trial by jury of all the issues here and pleaded and they lost. And they took an appeal to the Court of Appeals, and he did alleged error in the trial of the case and the submission of the case in the Court of Appeals. But in this proceeding, in this certiorari, no error, not any error is alleged as a ground of reversal and no relief is prayed for except outright reversals, not remand for a new trial because of an error in the charge of the Court. The question presented appears at page 2 of the petitioner's brief and the question presented is only whether as a matter of law, a newspaper's actions of soliciting away the customers are in violation of Section 1 of the Sherman Act. Similarly, the prayer of the petition which appears at page 32 of the petitioner's brief is simply, petitioner respectfully prays the Court to reverse for decis -- reverse the decision below and direct the judgment be entered for the petitioner Albrecht on the manner of liability and the trial be had on the amount of damages resulting from the unlawful solicitations and unlawful termination. But the only question before this Court is, shall the case be remanded with instructions to the District Court to enter a judgment that this defendant has violated a criminal statute which raises before the Court a most vital constitutional question which is thoroughly briefed in the motion to dismiss. This Court has no constitutional jurisdiction to make such an order as plaintiff seeks here because the predicate of liability here is a violation of a criminal statute, a misdemeanor enacted by the Congress. And the relief sought is the punishment of the defendant, treble-damages has to be a punishment because the cons -- the bill of rights says that no fact found by a jury can be otherwise reexamined.
Abe Fortas: Well, are you going so far as to say that the constitution prohibits a United States District Court in a treble-damage case from directing a verdict?
Lon Hocker: Of guilty? Yes indeed sir.
Abe Fortas: Not of a -- not of guilty, this is a civil case.
Lon Hocker: Well, the label which is put upon it, this Court has held many times Mr. Justice Fortas, does not control the constitutional effect. And that the constitutional effect is to punish the defendant Your Honor. I know this is a noble argument, for 70 years, the statute's been on the books. But this is a case of first impression, it just never been tried out in this Court. And there are 10 reasons, 10 constitutional provisions which are violated in my view by any such direction as this.
Abe Fortas: There have been other treble-damage cases.
Lon Hocker: Why of course, yes Your Honor. But we have had a trial here and no error is raised in this Court as to an error in the trial court. And the question really presented here is whether on the record in this case, the Court shall adjudge the respondent guilty of the commission of a federal crime which is the predicate of recovery here. It has to find a violation of Section 1 of the Sherman Act but for any liability can arise Your Honors have held that treble-damages aren't punishment, punishment is protected by the bill of rights except imposition by reason of the requirements of the bill of rights. Now I have briefed this, there are 40 cases cited in the petition -- on the petition -- on the respondent's motion to dismiss and 28 cases from this Court. The constitution -- the legislative history of the enactment of this Section is also set forth in the brief. Time of course did not permit me to go into that at any length but to answer Your Honor's question, I do contend that to instruct a verdict which would have the result of imposing punishment upon the defendant for the violation of a misdemeanor statute is protected by the bill of rights. May I turn if you please to the -- what I might call the antitrust case that is before you. Mr. Dorsey is somewhat at error in the origin of this litigation. It is not true that the Globe-Democrat told the plaintiff here and others in his position that they would deal with him no longer. There was a contract between the -- a so-called union of carriers of these newspapers and the defendant and it was the union itself including Albrecht that notified the Globe-Democrat that it would no longer abide by this contract and didn't consider itself to be bound that the parties weren't going to have anything to do with the contract. Now the contract while informed, a labor contract was actually merely a matter of convenience and it reserved the right to the newspaper to set the retail price of the newspaper unilaterally. And at page 56 of the record, you will see that when the union teminated the contract relationship, the newspaper said very well, “These are the circumstances under which we will permit you to sell our newspapers in your territories.” And they're all set out and there is no doubt that they were followed in this case, they appear on pages 56 and 57 of the record. And they say that we will permit you although we can't set your territories and although we reserve the right to terminate the territorial sale of newspapers by you in this area, we recognized that people do sometimes buy and sell these routes between themselves and we will not object to someone else to whom you wish to sell it, appointing him as a news dealer in this area by reason of the fact that he is paying something for it although we do not recognize any property rights with respect to it. And we say that it is necessary to the prosecution of the newspaper enterprise that a minimum price be maintained -- a maximum price I should say be maintained. And if you violate this maximum price, we will compete with you. This is what we said. Now Albrecht paid $11,000 for this route. He was a man of little education, no business background, he had been a route salesman for a bread company and some others and had done a little farming, and he had to mortgage his house to raise the $11,000 and make some notes to the fellow that he -- from whom he bought this route, and this was his all, this route. Now Your Honor said in Parke, Davis that Mr. Dorsey is fond of reporting that we cannot go further than a mere declination to sell. Now it's a position with the respondent here that in the facts of this case, we didn't go as far as the mere refusal to sell. It -- does -- I think the wording of Mr. J -- Mr. Brennan's -- Mr. Justice Brennan's opinion as a simple refusal of sale. A simple refusal to sell in this case wouldn't have been very simple. For Albrecht, it would have been a complete wipeout of his entire investment. The mortgage on his house would have come due. And what the Globe-Democrat said, instead of saying, “Sorry, we're not going to sell you anymore,” is “We'll continue to sell you and we'll sell alongside of you as long as you insist upon setting your own price. And therefore, we will make available to the people in your territory, the newspaper at the price which we think it ought to be sold at. And we continued that way for several months, he's selling at his price and I suppose later as the record tells he reduced his price, at least he so testified but it was not until this suit was filed. This suit was filed that he was told, “Sorry, we can't continue to act as you have our dis -- to be our distributor and at the same time litigate with us. So you must choose.” But even then, we didn't give him a simple refusal to sell. Even then we said you've got 60 days to find somebody else and we'll let you sell it to somebody else and he did find somebody else.
Abe Fortas: Why must he choose Mr. Hocker?
Lon Hocker: I beg your pardon?
Abe Fortas: Why must he choose? You said that he's either got to litigate or be your distributor, he can't be both, he's got to choose. Now, why?
Lon Hocker: Because we said so.
Abe Fortas: I see.
Lon Hocker: No sir, this is -- there no legal reason why. We could have litigated with him of course while selling him newspapers but we have the right unilaterally to terminate and to do business with which we can if there's any breadth at all left in Colgate as the Chief Justice -- Justice White suggests and we did say, we exercised our right not to deal with you if you're going to litigate with us. But even so, we gave him 60 days to find someone to buy.
Byron R. White: But why did -- why didn't the -- why wasn't the fact that his lowering it or his raising his price to your -- lowering his price to your level sufficient for you?
Lon Hocker: It would've been sufficient to us Justice White but we never knew about it until the trial. He never told us that. As Mr. Dorsey says at the time that we cut him off and the time we discussed the sale with somebody else, he didn't -- we didn't know that he was -- reduced his price, if he'd reduced his price, well, we were quite happy.
Byron R. White: Even if he hadn't agreed to keep it there?
Lon Hocker: Oh yes, it was never -- there has never been a suggestion anywhere in this case of the requirement of an agreement by anybody. And it's specially as should in the respondent's brief, he says, “Other than the case of Albrecht, there is no evidence of any coercion of anybody.” This is a respondent's -- of the -- the petitioner himself says there. No sir, we have never agreed with anybody with respect to price and we've had simply this unilateral declaration of policy if you sell at the price of -- we're going to compete with.
Abe Fortas: Mr. Hocker, let me see if I understand your theory and let's move it over to another commodity.
Lon Hocker: Yes sir.
Abe Fortas: Let's suppose that General Motors has a distributor of its Chevrolet cars. And General Motors has a suggested retail price and General Motors says that and let -- to this distributor, unless you abide by our suggested retail -- resale price, we are going to take away your franchise and give it to somebody else. And then General Motors does that, he says “I will not agree to comply. So General Motors says, “We'll take it away.” General Motors then goes ahead and takes away his franchise and gives it to someone else. Is that -- is in your opinion, is that a violation of antitrust laws and second in your opinion, is that like this case as you see it?
Lon Hocker: Answer to the first question, yes it would be because it would involve an agreement and in the second place, it is not like this case for reasons which -- I'll interrupt myself to state if Your Honor will permit me. In the current edition of the Antitrust Law Journal, there is a debate on how to argue an antitrust case in the Supreme Court and as Your Honors may not be aware of, a Mr. Gesell says the following.
Thurgood Marshall: Mr. who?
Lon Hocker: Mr. Gesell, a member of this Court, Gerhard Gesell.
Hugo L. Black: Did he --
Lon Hocker: I --
Hugo L. Black: -- argue the Parke, Davis case?
Lon Hocker: I really don't know.
William J. Brennan, Jr.: He did?
Lon Hocker: That he -- he says, I think the second point that I would make about antitrust cases is that the Court is more interested in the economic significance of what you're talking about than about the law. I don't think they're very interested in the law because they are writing that as they go along. I'm serious about that as you probably know the Court three or four times has said that their objective is to carry out a statute designed to create a nation of small shopkeepers. There in lies a distinction --
Abe Fortas: Is that your answer to my question?
Lon Hocker: Yes sir. The answer -- I would like to expand on it if I may Mr. Justice Fortas. The shelf life of a new Chevrolet is a year. The shelf life of a newspaper is about four hours. A newspaper after four hours has gone by, is only good to start a fire with or line a garbage pale, it isn't any good as a commodity. Therefore, it has to be distributed to home delivery promptly and right now. This is the only way it can be done. Therefore, I think there's an immense difference between the system, the distribution between automobiles and newspapers which can't be reconciled by what I might call a doctrine error or approach to the statute.
Abe Fortas: I was hoping you'd give me a legal answer to my question. But your answer to my question is this which will I say, economic answer?
Lon Hocker: Yes sir. If I may develop that a little bit further, there's undoubtedly the right of the manufacturer of the newspaper to sell directly to the reader. We can with our own employees deliver the newspaper to the reader's door instead of through independent merchant as we do now and as we did in this case. And of course since three-fourths of the newspaper's revenue comes from the advertising rather than from the circulation revenue, the newspaper is going to see that the price is kept down. From the standpoint of the news dealer, he is better off to sell a hundred newspapers at a dollar and 500 newspapers at 10 cents because it's a lot less expensive to make such delivery. He said, he would do so of course if he could. This would be death to the newspaper, couldn't stand that because its (Inaudible) line rate would go to (Inaudible) and it wouldn't sell any advertising. So, if it is impossible for a newspaper to require its news dealers to maintain a certain minimum price, the only alternative for the newspapers is to wash out all such people and to wash out their investments, their $11,000 or $20,000 whatever they may be, and deliver the newspapers themselves. This is the economic consequence of this. But I think more than that, if Your Honor please the fact that there must be an immediate delivery that the economic necessity of the sale of the newspaper requires the delivery, requires a different approach to the territorial franchise as in the case of an automobile. There's no difficulty. If I'm going to pay $2-3000 for an automobile, I don't mind to be driving a hundred or 200 miles to get a better price. And an automobile in itself of course is a mobile device.So perhaps this makes a distinction between the Chevrolet case or not. But I would like to turn to a question which Mr. Justice Brennan asked Mr. Dorsey a while ago and that is, who is the combination with? Now I've never had a satisfactory answer to this either in the trial court or in the Court of Appeals or in the briefing in this Court and I should point out to Your Hnors that this case was tried, it was pre-tried and tried on an allegation that there was a conspiracy and culmination between the Globe-Democrat and persons or persons unknown. Now at the time the charge was being made up, after all the evidence was in, the plaintiff saw that it was very awkward to suppose to the jury a combination with parties unknown. So he amended his complaint at the time of the charge to say that you combined with plaintiff's customers and/or merely circulation sales which was a circulation company and/or George Kroner.
Hugo L. Black: Who is George Kroner?
Lon Hocker: George Kroner was a man who delivered the 300 newspapers which were obtained by the Globe-Democrat by competition with Albrecht. The testimony and Kroner was at -- a witness called by the petitioner not by the respondent, the testimony was that Kroner never solicited a customer of Albrecht's and had nothing to do with acquiring customers from Albrecht at all. He merely delivered the newspapers which had been obtained by the Globe-Democrat's competition.
Byron R. White: He bought and resold the paper company?
Lon Hocker: Yes sir. He bought and resold the newspapers.
Byron R. White: And set his own prices on it?
Lon Hocker: And set his own prices although as he said, I recognized the Globe-Democrat's suggested retail price and abided by it. Yes sir this is true. But in any case, there could be no clause or connection between the two things which are the subject of the complaint here and anything that Kroner did. Because the petition ends with a prayer that the only damages he wants here are those resulting from the unlawful solicitations and the unlawful terminations and Kroner's activity had nothing whatever to do either with the solicitations or with the termination. Now, I have said Your Honors that in the second point in the brief, that this and/or allegation constitutes an allegation of seven different combinations with each one of the three or with any two of the three or with all of the three, this is the allegation. He says and/or, and/or. And yet what he is complaining of here is the failure of the Court to direct a verdict on a question of liability. And I say unless he could specify to the Court on which of these claims, which of these alleged conspiracies existed as a matter of law. He's in no position to ask the Court to make an instruction of this sort, where there are alternative pleadings and of course you can have alternative pleadings and alternative submissions because the rule of law is, that a jury may select between alternatives which are well-pleaded. But this does not mean and the reason for that of course is because where alternatives exist and are supported in the record reasonable minds can differ but the predicate of a directive verdict is that reasonable minds cannot differ and therefore, where he submits a pleading and this was done not back in the pretrial days, but after trial, at the time the charge was being made up, history was that there were seven alternative combinations. Actually I think we've demonstrated in our brief that there was no combination with anybody. And this I think is the true position which the petitioner takes both in his brief and in his argument because the question presened does not predicate an agreement with anybody. The question presented on page 2 of their brief and also in the petition itself says nothing about a combination with anyone. It says, whether as a matter of law, a newspaper's actions of soliciting away the customers of one of his independent merchant carriers in order to induce him to comply with its suggested resale price and then terminating sales to him for his continued refusal to agree to comply are in violation of Section 1 of the Sherman Act. So that he would have you say that merely the combination between the coercer and the coercee constitutes a violation of Section 1 of the Sherman Act. And yet the statute itself, the wording of the statute requires that there'd be a contract, combination in the form of trust or otherwise or a conspiracy in restraint of trade. None such was pleaded.None such is showed here. The rule of law which the petitioner strives for would not require any such -- the existence of anything of this sort. So we feel Your Honors that there is no jurisdiction here to afford the relief which the plaintiff wants. And in any event, it is not available to him under the theory of the case in which it was tried below. And that lastly, the statement of law upon which he predicates his claim for relief is not in accordance either with the statute or with the decided cases. Thank you sir. Thank you.
Earl Warren: Mr. Dorsey.
Gray L. Dorsey: Mr. Justice Fortas said, our brief, pages 13 and 32, I think that there is the answer to the question that you raised awhile ago but Mr. Hocker is correct that in our prayer we did not asked alternatively for a new trial. We didn't allege that there was error in the instructions when it went to trial. But our feeling was that a -- since all of the facts are there, there's no factual question to be decided that there would be no question sending -- there's no point in sending this back for a new trial but -- and so we asked direction that you direct that judgment be added for petitioner on the liability in the new trial solely on damages.
Hugo L. Black: Do you think if the word reasonable has anything to do with the case?
Gray L. Dorsey: Well, I don't to see at the moment how reasonable would it come in except in the kind of situation that I believe Mr. Justice White was asking me about, could they do a little something more than just terminate. I think it might very well commend it.
Hugo L. Black: What about the Standard Oil case?
Gray L. Dorsey: I beg your pardon?
Hugo L. Black: What about the Standard Oil case? It does refer to reasonableness (Voice Overlap) --
Gray L. Dorsey: Well, yes Your Honor --
Hugo L. Black: -- that somebody must decide whether they are reasonable (Inaudible).
Gray L. Dorsey: Well, I simply would be -- I think that applies in this way that it is unreasonable per se when price fixing has occurred and there's no need to inquire whether this price-fixing affected a substantial amount of the market and that's their -- I think there's no need to inquire in this case with respect to that. This matter of the unconstitutionality of the treble-damage action, I really think that there's nothing substantial there. Over a hundred years ago, this Court said that punitive damage has been a part of the Civil Law for over a hundred years at that time so that for more than 200 years, it's been accepted. It's logically somewhat anomalist but it's a good bargain to get at the expense -- slight expense of logic to get a doctrine that has been useful and has been used for over 200 years. In the House of Lords in 1964 did reconsider on the merits and decided to leave it in as a part of the Civil Law. Now, I would like to point out that Mr. Hocker is not correct that the carriers wrote -- the carrier's business manager wrote to the business manager of the newspaper, called attention of the fact that the contract expiration date was coming up on February 16 of 1954. And on February 17, wrote offering to negotiate for a new contract and that the newspaper wrote. Then shortly before that expiration date in May saying they would not negotiate because the carriers are independent merchants. Now, I think really this argument that they didn't go beyond because they were more kind to Albrecht that -- is really ridiculous. It's not a question of whether they were kind to him. It's a question of whether in the matter of coercion they went beyond announcement and declination. They clearly did go beyond even if it were disastrous for Albrecht to stand on his right, he had the right. And furthermore, it was not disastrous because it misrepresents to say that by refusing the sell to him, they wiped out his investment. They don't wipeout his investment, he owns the route. The contracts to deliver to those people in Kirkwood belong to him. He bought them from the previous man. He had the right to sell them to the next man and he did sell it. It wasn't any great act of kindness to give him 60 days to sell them. They didn't have anyone who had the right to deliver to those people and they could only agree to sell to someone who did have that right and that man could only get that right from Albrecht. Now, it's true that the newspaper has the need to control price because of their short shelf life. They certainly could do it. They could hire employees. They could plan employee's benefits. They could ensure the job security that the union contract ensures. They have been so kind to Albrecht that at the age of 50, he's out of work. He's done nothing except home delivery work for 28 years. He's 50 years old, now he's terminated, he doesn't have a job. If they want to ensure that they can charge the price, they can hire employees and deliver it. Kroner's -- was instructed at the time that he took over these 300 customers, that of course you know what our policy is, and it was clear that he understood that the condition of taking over these customers was that he would follow this resale price. So our position is Your Honor is that on the undisputed facts, that the coercion has clearly gone beyond prior announcement and mere declination to sell that the real protection of people in this situation would be for this Court unequivocally to rule that coerced this antagonistic coercive relationship between the buyer and the seller alone gives rise to an unlawful combination that that in any event if the Court chooses not to so rule, that there is the relationship between the Globe-Democrat, the customers of Albrecht, the circulation company and the other carrier, Kroner, that establishes a sufficient combination between them so that in this instance, there was a violation of the Act in any event. We feel that the only thing -- that there's no need for a new trial which should be directed on the matter of liability. Thank you.


William H. Rehnquist: We'll hear argument now in No. 91-543, New York v. United States, 91-558, the County of Allegany v. United States, 91-563, the County of Cortland v. United States. Mr. Schiff.
Peter H. Schiff: Mr. Chief Justice, and may it please the Court: The petitioners in this case challenge the constitutionality of the Low-Level Radioactive Waste Policy Amendments Act of 1985 as being in violation of the Federal system, and specifically we place our reliance on the Tenth Amendment and the Guaranty Clause. We recognize that Congress certainly has the power under the Commerce Clause to deal with the subject of the disposal of low-level radioactive waste, but it is our position that the means that it has chosen here is constitutionally defective. This act is directed solely at the states and makes the states responsible for the disposal of low-level radioactive waste that is generated within the state. It makes the states responsible for the disposition of the waste of private generators, Federal generators, as well as any that is generated by the state itself. This is a totally mandatory provision which requires the states to stay, to enter and to stay in the field of low-level, disposal of low-level radioactive waste. The mandate is made particularly effective by the so-called take title provision which specifies that if the state has not otherwise provided for the disposal of low-level radioactive waste by January 1, 1996 that the state must take title of any such waste, and if it doesn't accept possession that it becomes liable for any, to the other generators if there are any damages, direct or indirect. In other words, one way or the other the states are simply ordered by Congress to enter this activity. The statute is truly unique in the annals of American jurisprudence. We know of no other situation where the states have simply been mandated to take part in a particular activity. In the past what Congress has done, it has essentially recruited the states in one of two ways to do the regulation that the Federal Government would like to have done. It has either, as in the Hodel case involving the land mine, surface act, it gives the states an option. You regulate according to the standards set out by the Federal Government, or otherwise we, the Federal Government, will do the regulation itself. The other means that they have chosen is the Spending Clause, and to provide Federal money as an inducement for the states to do regulation in accordance with Federal standards.
Antonin Scalia: Mr. Schiff, is that all this case is about, that Congress is going to have to tie New York's continuing receipt of highway funds to its assumption of this responsibility?
Peter H. Schiff: Well, if that is legal, but it hasn't done that, Your Honor.
Antonin Scalia: It seems like a lot of trouble for very little, very little point.
Peter H. Schiff: Well, it's our position that the means that the Congress uses is a very important consideration in the constitutional structure of this, of the Government. It is our basic position that the Constitution contemplates two sets of sovereigns and that the states are intended to have the choice as to which activities they will participate in. So we think that the means that the Congress chooses is by no means a minor one. We think it is a vital one, and we think it's a serious incursion on the constitutional structure.
Sandra Day O'Connor: Mr. Schiff, do you suppose Congress could provide that a state without a site for radioactive waste, that no shipments of radioactive waste could be sent out of state?
Peter H. Schiff: Yes, we think that's perfectly acceptable. We have no problem, and we have not, have never objected to that separately. But we think that's not a, what this case is all about either.
Sandra Day O'Connor: Let me ask you another question. If we were to agree with you on the take title provision, is it severable?
Peter H. Schiff: We think not.
Sandra Day O'Connor: Why not? Don't you think Congress would probably have enacted this law absent that clause?
Peter H. Schiff: Well, as we point out in our brief, we think the legislative history, all of which really shows up in the congressional record I think on December 19 of 1985, the day that this law was passed, shows that the, we don't think it would have been passed by simply excising the take title provision. We think probably some law would have been passed, but it may have been something very different. And as we read your cases that, if it is clear, as we think it is, they wouldn't have passed the legislation by simply excising the provision. Then it's not severable, and there isn't any severability clause here.
Sandra Day O'Connor: Well, I would have thought the problems were so acute that they probably would have passed it without that clause. We don't know... that provision. We don't know exactly where it came from. It appeared rather at the last minute, didn't it?
Peter H. Schiff: Well, as we read the legislative history, it came at the instance of the governors of the so-called sited states, ones that had disposal sites, and they made it plaint that they did not think that the legislation as it stood at that point was sufficiently, it didn't have enough teeth. And they were concerned that the same thing that happened under the 1980 act would happen with respect to the 1985 act, so they said we need teeth. However, the question of, this Court will have to decide whether it is severable or not, and all I can do is I think refer the Court, in addition to what I have said here on severability, to our brief and commend that you examine that legislative history. I suppose the threshold question before the Court in light of the Garcia decision which the--
Antonin Scalia: What do we do if there's no legislative history, or we don't think any of it is very convincing? Do you have any advice for those of us who might find that to be the case?
Peter H. Schiff: --Well, I think--
Antonin Scalia: How do we decide severability? I thought we decide it on the basis of simply whether the statute works without the provision. Does it make sense.
Peter H. Schiff: --Well, I think there are two elements, Justice Scalia. If it works is the second element, but the first element is whether it's apparent that it would not have been passed without it. It may be that it would be, if one doesn't look at the legislative history in this case, you might reach the conclusion that it is severable, because I'm not sure you can tell for sure that it would not have passed. But for those of us, for those who do look at legislative history we think that the law, that it is apparent that it would not have been passed in that form by simply excising the take title provision.
Byron R. White: Well, did the title provision originate in the Senate?
Peter H. Schiff: Yes. As I recall it it originated in the Senate.
Byron R. White: And your senator was all for it, I take it?
Peter H. Schiff: Senator Moynihan supported the legislation. We don't think that... well, if I may I will... that is correct, but I will discus that slightly later.
Byron R. White: That's all right. [Laughter]
Antonin Scalia: He wasn't representing the State of New York anyway, was he? [Laughter]
Peter H. Schiff: Not in a constitutional sense, Your Honor.
Antonin Scalia: He was representing the people of New York, wasn't he?
Peter H. Schiff: He was representing the people of New York and he was acting as a senator, but he was not representing the constituted government of the State of New York which has to speak through the legislature and the governor. And that is I think what this case is all about, that the, that the constitutional system does contemplate action through the state legislatures and through the state governments. We think that is what the Federal system means and that is what did not happen here. That is why we think this case is properly reviewable within the confines of the Garcia case. You will recall while the Garcia case essentially said that this Court will not normally review Tenth Amendment challenges, it did recognize that it would consider or might consider statutes that impair the constitutional structure. And we think that, contrary to the decisions below, that review of this case comfortably fits within what was left open in the Garcia case. In fact we suggest that very little else would fit in any better than the present case.
William H. Rehnquist: How exactly does this act of Congress violate the Tenth Amendment in your view?
Peter H. Schiff: Because this act regulates not so much commerce as it regulates the states. It picks out the states and simply directs the states, that you must do a particular activity. We think that is not a power... we think the decision as to whether to act with respect to engaging in a particular activity is one that is reserved to the states under the Tenth Amendment.
William H. Rehnquist: Well, how about where Congress regulates a state-owned railroad?
Peter H. Schiff: Well, this is... the difference between this case and those cases, Your Honor, is that there what Congress is doing is to regulate an activity that the state has already chosen to undertake. It could withdraw from that activity if it chose. I mean, that's the kind of case that was involved in the trilogy of Fair Labor Standards Act cases, Wertz, National League of Cities, and the Garcia case. It's also the kind of thing that was involved in South Carolina against Baker, where the Federal Government decided generally not to permit unregistered bonds if people chose to issue bonds, and, as to states, if they were tax free. But it was applying across the board generally.
William H. Rehnquist: You say the Congress just included states among the people it was regulating for carrying on a certain activity and it didn't single out states?
Peter H. Schiff: That's right. This case is in many ways analogous to an earlier New York against United States case, the one involving the taxing of the waters from Saratoga Springs that were sold by the State of New York, where the Court did say that you could tax New York if you're taxing them like everyone else, but the Court, admittedly by way of dicta, made it plain that the situation would have been very different if you're simply singling out the states and simply taxing them. And the whole Court seemed to think that that, said that that would be unconstitutional. And we think that's precisely the problem here. This is a problem in this case that was essentially left open or avoided, if I might, in FERC against Mississippi, where--
Harry A. Blackmun: Mr. Schiff, are you asking that Garcia be overruled?
Peter H. Schiff: --No, we're not.
Harry A. Blackmun: You're willing to sit on the little open door that was left there?
Peter H. Schiff: Absolutely. We think that it is a reasonable open door and what happens in some other cases we leave to another day. We think that it plainly doesn't need to be overruled.
Anthony M. Kennedy: Are you asking that FERC be overruled? I see you're about to get to that.
Peter H. Schiff: No. We think FERC is quite distinguishable. The majority of this Court in FERC made it quite clear that the state had a choice. It didn't really have to do what that act of Congress required it to do because it didn't have to regulate public utilities, while--
Byron R. White: Well, you know that it, you know that's a, just a dream world.
Peter H. Schiff: --Well, that's what some of the, that's what the dissenters indicated, and I'm not... but the fact of the matter is that the decision as it was written indicated quite plainly that that was critical to that decision.
Anthony M. Kennedy: What are the underlying values that you're trying to further by the Tenth Amendment argument that you urge upon us? Is it, is this simply just a matter of etiquette and form, the etiquette of federalism, or is there something more substantial?
Peter H. Schiff: Well, we think, Justice Kennedy, that, as Justice O'Connor's opinion recently in the Ashcroft case indicated, that the Federal system is a very significant element in the constitutional structure, so we don't think it's a matter of etiquette. We think that it is important for the states to be able to determine when to undertake activities, where to place their resources--
Anthony M. Kennedy: Is that so that the states can be held accountable to their own political constituencies for the results they reach?
Peter H. Schiff: --Absolutely.
Anthony M. Kennedy: Do you think that the state would be any less clear in the responsibility it had to its constituencies if the Federal Government had enacted the statute such as Justice O'Connor proposed earlier, that no nuclear, no nuclear waste could be shipped out of a state unless all of these conditions are met? It seems to me what the state has done here, or what the Federal Government has done here at least makes it clear who bears the responsibility for this scheme of regulation.
Peter H. Schiff: We think that, for one thing it is the question of... waste can be stored as opposed to disposed of on a short-term basis, short-term basis meaning quite a few years. That's certainly what is being done with respect to high-level radioactive waste. So it's not as if, this isn't a question of whether we have to ship it out of state or not. It's a question of whether we have to do this according to the drum beat of the Federal Government where they don't choose to do it. Actually we're subject to Federal regulation, we're being given a time table which we're not convinced is meaningful or desirable for the people of the State of New York. So in that context we think the Federal Government should be doing the regulation rather than imposing its will directly on us. And it's not a matter of shipping it out. It's a matter of how we control our own destiny. I do want to say that, perhaps in conjunction with your question, that it is argued by our opponents that this is really, was an agreement among the states, and that somehow that is the way the Federal system is supposed to operate. Now we just don't understand that here. The Constitution does provide for agreements though compacts, which again involves the formal action of various state legislatures and the executive, but you don't do agreements by having lobbying activities, even from the Governors' Association or other similar groups and say that represents a state agreement.
Anthony M. Kennedy: I suppose my problem is that it does seem to me that if the Federal Government just sat down for a bit with a pencil and paper it could devise some sort of constitutional scheme to accomplish precisely this result. So I wonder what the underlying value served, that is being served by our accepting your argument.
Peter H. Schiff: Well, Justice Kennedy, we think the Government could also probably find an appropriate means of doing it. The problem is that they didn't do it, and we think that this opens up a Pandora's box.
Sandra Day O'Connor: Well, Mr. Schiff, I suppose there's a difference between offering incentives to the states to make their own choices and simply mandating that those choices be made. Isn't that right?
Peter H. Schiff: That's precisely our position.
Sandra Day O'Connor: Now, I suppose that finding a location for radioactive waste is a little like trying to find a location for a prison. We all think we need to have these locations, but no one wants it in their state, their community, their county, their city. Isn't that right?
Peter H. Schiff: Well, as a matter of fact, Your Honor, no, it's not totally correct. I mean, it may be like--
Sandra Day O'Connor: By and large--
Peter H. Schiff: --It may be like finding a prison, except that I know our experience in New York is that there are some areas that want prisons because of the income that it--
Sandra Day O'Connor: --Well, those are pretty few and far between, and I suppose it's not very attractive to Congress to have to make that choice, and this is a rather clever way of shifting responsibility for making the choice to the states, which is politically very unattractive, I would think.
Peter H. Schiff: --Well, we agree with that position, and what's happened here is that the Congress has made the directive and all the burdens, all the accountability is shifted to the state which doesn't have the right to decide whether to do it or not.
William H. Rehnquist: Certainly it's the State of New York deciding in this case and not Allegany and Cortland Counties deciding, I guess. They might have different views.
Peter H. Schiff: Well, I think the basic decision is that of the state. That's correct. I mean--
William H. Rehnquist: There's no Tenth Amendment that protects the counties from the state.
Peter H. Schiff: --Not in this case, no. I mean, it's, the National League of Cities, you point out the Tenth Amendment did apply to counties in some respects, but I think in this case it would be the state that is being protected, and that's all that any of the petitioners have argued.
Byron R. White: Would it have made any difference to you if the Congress had said and by the way, we'll pay half the cost, that this law, that will be foisted onto the State of New York?
Peter H. Schiff: Well, if it's only, if it's foisted on, Justice White, it wouldn't make any difference. But if they give us a choice of we will pay half of this and you have an option as to whether you do it, which in the scheme that--
Byron R. White: No, they're ordering you to do it and they're saying... what if they say we'll pay the entire cost?
Peter H. Schiff: --I think our position is that as long as they mandate it without giving the legislature--
Byron R. White: So you don't think this is just, this is just a budget problem for New York?
Peter H. Schiff: --No, I don't think so. Absolutely not. And by the way, I should say that the Government somehow thinks in its brief that the Spending Clause is involved here because of the payments that go from the, some money is going from the generators and some of it goes in an escrow fund. But the statute makes it clear that's not Federal money. It's not appropriated, it's simply kept there. So I simply don't understand the argument that the Government has made that that is, the Spending Clause is involved here.
Antonin Scalia: Mr. Schiff, is the State obliged to regulate under this law? Can the State comply with this law without using any of its governmental powers?
Peter H. Schiff: No. It doesn't have to do anything necessarily in the first part of this, although the language is mandatory, but I think it could do without that. But when you get the take title provision it has no choice but this waste is given to it. Now what's extraordinary about this legislation is that the Federal Government, as to a good part of its radioactive waste, now stuff from the naval reactors and that low-level radioactive waste is not the state's responsibility, but the Federal Government has actually made the state responsible for the Federal waste. It's a truly extraordinary law.
Byron R. White: But you don't challenge it on any ground other than the Tenth Amendment, do you?
Peter H. Schiff: Well, the Tenth Amendment, the Guaranty Clause. I mean basically we're challenging... no, that's the basis on which we're challenging, the Federal system. I mean, we're not trying to dissect the various elements of what makes up the argument that the Federal system is vital to the constitutional structure.
Byron R. White: Do you think Congress can pass a law that's generally applicable around the country that says if you're going to operate a waste disposal facility you have to do it in the way we prescribe?
Peter H. Schiff: I think it can do that. Of course, yeah. I mean, it has... and it's doing that. I mean basically it, the NRC controls the standards by which you regulate radioactive materials.
John Paul Stevens: May I just ask a small question about your argument directed at the take title provision? Is it at the specific shall take title to the waste, and it also says shall be obligated to take possession of the waste and shall be liable for damages directly or indirectly caused? Is it just the title part or do you make the same attack on all three obligations?
Peter H. Schiff: Well, it's really all three in combination.
John Paul Stevens: So it wouldn't really matter to you if you didn't have to take title?
Peter H. Schiff: I think the worst part of it is really being responsible, being liable for anything that may happen if we don't take it. This is a... our obligation in this can run for 5 centuries. I mean, we think that that is a responsibility that should remain with the generator of the radioactive waste. Now, to the extent that the state has generated some of this waste we are not saying that we're not, we wouldn't be liable, but we're saying it shouldn't be foisted on us, the rest of the liability.
John Paul Stevens: But isn't there a way you can avoid that liability?
Peter H. Schiff: I have no idea how we... well, yes, that's why we're here in Court. [Laughter]
John Paul Stevens: There's no way you can get a, set up a program that would avoid your taking--
Peter H. Schiff: Well, I suppose, sure, but, I mean, but that's again telling us we have to do something, then we would have to do the regulatory scheme that Justice Scalia was asking about. So it's one way or the other. We have been conscripted, commandeered to do the Federal Government's regulation here.
Antonin Scalia: --Taking title you say is the sanction for not regulating as the Government has told you to regulate?
Peter H. Schiff: That's right, but it's a form of regulating because once we have it eventually we would have to do something with it. And as Justice White points out, that the Government can require people who are the owners of it to deal with it, so that that puts us in that category and we can't avoid it. We are stuck.
Sandra Day O'Connor: Well, Mr. Schiff, it's a pretty clever scheme. Maybe Congress can just require the states to take over a pro rata share of the national debt they have run up.
Peter H. Schiff: Well, that was a question that we had thought about. If this starts I think it leads us down that path. It can require the state to have beds for all people of a particular illness by some date, and if they don't have it provide a suit to let people who haven't been given a bed, we'll say cancer patients, to sue the state for that. I mean, it's a radical change of the Federal structure, and we certainly hope that the Court will agree with us. If there are no further questions at this time I would like to reserve the remainder of my argument for rebuttal.
William H. Rehnquist: Very well, Mr. Schiff. Mr. Wallace.
Lawrence G. Wallace: Mr. Chief Justice, and may it please the Court: This is the second case this term, Arkansas against Oklahoma being the first, concerning Federal legislation addressed to problems arising from the transmission of pollutants across state lines. In itself the waste disposal problem Congress faced pitted states against states in a manner only Congress could resolve. The three states that had sites could not discriminate against wastes originating out-of-state, the other states lacked incentive to develop additional facilities, and the three sited states were in the unfortunate position of either having to accept waste from throughout the country or shutting down their disposal facilities and depriving the generators within their states of disposal facilities. There was also a broader national concern implicated, and that is that the problem of waste disposal must be solved if the people of this Nation are to continue to enjoy the important benefits of the technologies that generate those wastes. There are millions of residential, commercial, industrial, and institutional customers who get their energy needs from nuclear power plants licensed under Federal statute. There are--
Antonin Scalia: Mr. Wallace, that dilemma that the three states that had waste disposal facilities, that they confronted of either shutting them down so that even they couldn't use them for their own in-state waste or else having to accept waste from everywhere, Congress could have solved that problem under the Commerce Clause, I presume, couldn't it? Couldn't it have allowed those states, it could have passed a statute allowing those states to use their in-state disposal sites only for their own nuclear waste?
Lawrence G. Wallace: --We believe Congress did solve the problem under the Commerce Clause. It could have taken that route, but the studies done by the National Governors' Association and others who were expert in the field indicated that 50 separate disposal sites, one in each of the states, would have been very detrimental. It would have lost economies of scale that were important to the maintenance of these technologies.
Anthony M. Kennedy: That had 47 votes going in, I'm sure. [Laughter] Isn't it true, Mr. Wallace, or is it, that this statute is a step further than the Congress has ever gone in that it is telling a state that it must enact a certain rule?
Lawrence G. Wallace: Well, it is giving the state a choice of options because the states came to Congress and proposed that Congress solve this problem by retaining authority in the states to provide for the handling of the low-level nuclear waste.
Anthony M. Kennedy: No, but it says the state shall take title.
Lawrence G. Wallace: That is only if the state doesn't exercise any of the other options available to it, some of which involve minimal state undertaking, such as contracting with an existing disposal site in one of the compacts, or authorizing a private contractor to develop a site within the state.
Anthony M. Kennedy: But can we begin by saying that there is no direct precedent for an enactment of this kind?
Lawrence G. Wallace: I think that is true. This is a novel approach to a problem where Congress, pursuant to a unanimous request from a state organization representing the governors of all 50 states, was dividing up the responsibility for handling nuclear waste disposal, where Congress, the Federal agencies would undertake the high-level waste responsibilities and most of the responsibility for low-level waste generated by Federal generators, and the states would retain the policy-making authority with respect to the locally sensitive issue of selecting sites for disposal of the low-level nuclear waste.
Anthony M. Kennedy: Could the Federal Government command that the states take title to all illegal handguns within their borders and be responsible for the damages caused by failing to take title and possession?
Lawrence G. Wallace: I can't answer that question definitively. It certainly would go much further than what has happened here.
Anthony M. Kennedy: Generically it's the same kind of statute, isn't it?
Lawrence G. Wallace: The take title provision, which we don't believe is even ripe for decision today in the setting of this case, it may never apply to New York, it can't take effect until 1996, is only one option down the road if New York doesn't undertake any of the other options that are available here. It was added in on the face of things because all of the other disincentives would fall on the generators, and there was some fear that this might impair the availability of the technologies that are so important to the country and that an additional disincentive would be useful to insure that the states would do something on behalf of the generators within their borders.
Antonin Scalia: It's rather like saying that 30 years in prison is one of your options for embezzlement. You can either embezzle or spend 30 years in prison. The Federal Government has told the states that they can either regulate or the nuclear waste is yours. I mean, in a sense it's an option, but don't you think it's, a sanction is a more descriptive term?
Lawrence G. Wallace: Perhaps. We refer to it as a penalty in our brief. It's part of a series of incentives and disincentives that Congress placed in the '85 act after the 1980 act proved to be too toothless to get the job done. And Congress was relying primarily upon the political clout that the generators within each state would have as the burdens would fall on them to get the state to undertake the responsibilities, and this was added as a final possibility. Exactly what kind of sanction or penalty it is is really subject to much doubt, which is another reason why ripeness principles should be followed here. It is far from clear what, if any, actual enforceable liabilities, enforceable in Federal or state court, would be imposed by this, given the clear statement rule of the Atascadero case and other questions about possible implementation of this provision would arise when and if it ever comes into play. There is no indication that New York will ever actually be subject to this. It's even doubtful whether the generators, if it did kick in, would make the request that would impose this on New York because they don't like to call attention to themselves in ways that might create public controversy. There's much that is speculative and in our view premature about the complaint concerning the take title provision that New York is asking this Court to use as a vehicle for undoing this entire statutory scheme, even though it has had the benefit of the extension of time for disposing of its waste in the sited states and the payments made under this scheme for a period of many years now. And I might point out that most of the amici who are supporting New York with respect to this issue that is prematurely presented agree with us on the severability question. And if I may just say a word about severability, the answer to that seems quite clear to us for two reasons. One is that the 1985 act displaces and in terms repeals the 1980 act which would again be resurrected if the 1985 act were not severable. And it is quite apparent that Congress wanted to make improvements by adding incentives and disincentives to the 1980 act and would prefer the remainder of the 1985 act to the 1980 act, and in fact the 1985 act passed unanimously in the House initially without the take title provision which was then added in the Senate. There was never a dissenting vote recorded in any of the enactments of the entire 1985 act. And like the 1980 act which took basically the same approach, it was signed into law by a president who was himself a former governor. So the circumstances that gave rise to this enactment make it singularly implausible to think of it as an attempt to aggrandize Federal power at the expense of the states. Indeed the most basic provision of the act is the conferral of power on the states, acting through the regional compacts, to discriminate against interstate commerce which they would not be allowed to do otherwise. And other than the take title provision which is not ripe for review in our view, we believe that the provisions of which New York complains are squarely within the principle of South Dakota against Dole.
Sandra Day O'Connor: Mr. Wallace, if we disagree with you on whether the take title provision is valid and if we disagree with you and think it is indeed ripe for decision, do you think it's severable from the balance of the act?
Lawrence G. Wallace: We do indeed, for the reasons I stated a few moments ago, that otherwise the 1980 act, which Congress and the National Governors' Association all had found unsatisfactory, would be resurrected to replace the improvements that were enacted in the '85 act. And the House itself had unanimously passed the '85 act without the take title provision. So there seems little doubt about what the proper resolution of that is if... Congress of course could amend either, but there's no reason to think it would prefer to start with the '80 act rather than the remainder of the '85 act. But we think that the constitutional power of Congress was adequate to the task in the manner Congress went about this, that the commerce power, as augmented by the necessary and proper clause, allowed Congress here to enact this measured series of incentives and disincentives to redress the inequities that had occurred among the states and to provide assurance not only that those inequities would not reoccur as they had after the 1980 enactment, but that the serious threat that they posed to important national concerns would not be threatened again because of failure to provide sufficient incentives in honoring the states' request that they be allowed to exercise the regulatory authority here. We think it would be singularly inappropriate to adopt in judicial hindsight some kind of a least restrictive alternative approach to adjudging Federal legislation of this kind. I mean, what may seem a reasonable way of adding something to the deal, such as otherwise you'll lose your highway money so you should go along with these provisions at that possible expense, may well have been a deal breaker. Enormous effort went into negotiating and enacting this legislation.
Anthony M. Kennedy: By deal breaker you mean the enactment would not have succeeded if they had not used this particular device?
Lawrence G. Wallace: Well, what--
Anthony M. Kennedy: Because if that's the import of your question, then this case does have great significance, doesn't it?
Lawrence G. Wallace: --Well, what I am suggesting is that what was acceptable to the parties who over a period of years negotiated a compromise between the sited and the unsited states and what... is not always apparent in hindsight to someone who didn't participate in those negotiations. All the states are treated equally under this legislation, and all had a vigorous voice in the Congress. This is very unlike cases dealing with insular minorities or cases dealing with state discrimination against out-of-state commercial ventures.
Anthony M. Kennedy: It's like the poor. They all have an equal right to be disappointed.
Lawrence G. Wallace: Well, it's very different from the state discrimination against interstate commerce cases, where somebody who is not a vigorous participant in the state's political processes is affected by what the state has done in a way that discriminates against interstate commerce. It's in settings of that kind that the Court has said that the judiciary in hindsight is to see whether a less restrictive approach would have been equally effective.
Antonin Scalia: I think what you're saying, Mr. Wallace, is that we really don't know whether this deal would have been put together without this provision, and therefore if we find it invalid I guess the only fair thing to do is to find the whole statute invalid. That seems to contradict an early point you made, though.
Lawrence G. Wallace: I'm not saying that it's not, I'm not saying that it's not severable. This--
Antonin Scalia: I don't think you can make both arguments then, though. I mean, either, you know, either it wasn't an essential part of the whole deal and therefore is not severable, or it was, in which case the argument you're now making is valid.
Lawrence G. Wallace: --The argument I'm making is that this additional disincentive was within the legislative power of Congress to enact because it made a judgment about what would be an appropriate grouping of incentives and disincentives. And what might not be necessary and proper in some other settings, given the magnitude of the legitimate Federal concerns at stake here and the unanimous requests of the states that the decision-making authority be reposed in the states, this was a necessary and proper exercise of the commerce power to see to it that this state against state dispute was equitably resolved and would no longer threaten the availability of the important medical research and energy technologies that are vital to the people of this Nation. That is our submission, if there are no further questions.
William H. Rehnquist: Thank you, Mr. Wallace. Mr. Collins, we'll hear from you.
William B. Collins: Mr. Chief Justice, and may it please the Court: I'd like to begin by framing this case from the point of view of the three sovereign states I represent and then, because there were several questions about the implications of overruling Garcia, I'd like to address the point that even if this Court, that this case does not hinge on a broad interpretation of Garcia. Like New York, the sovereign States of Washington, South Carolina, and Nevada have a strong interest in state sovereignty and in the Tenth Amendment, but this case is unlike any of the other Tenth Amendment cases that have come before this Court. One of the obvious differences is this does not pit Federal power against state power. Indeed South Carolina, Nevada, and Washington intervened in this case to support this action. And when you have looked at the amicus briefs you have seen that--
William H. Rehnquist: Isn't what you mean, Mr. Collins, that as a matter of arguments before this Court the states are not all on one side, not that the statute doesn't pit Federal power against state power?
William B. Collins: --Well, indeed, Your Honor. But my point is that I think if you look at National League of Cities, Garcia, Hodel, you would not find states here advocating that the statute was valid. That difference in opinion doesn't mean that it's valid, but it's an indication that this is a different kind of case.
Antonin Scalia: That's just, that was just a regrettable consequence of human selfishness. All states were losers in Garcia. They all had to pay the higher salaries. Here some states are losers and some states are winners. It's not at all surprising that the winners are going to come in and say leave everything alone.
William B. Collins: That's exactly right, Justice Scalia, and that's why this is a different kind of case. New York--
Anthony M. Kennedy: I think it is somewhat surprising that the State of Washington and South Carolina and Nevada are arguing that the Federal Government has the right to direct them to enact a law and direct them to take a governmental action without conditioning it the way it's often, the way it's usually done.
William B. Collins: --Well, first, Justice--
Anthony M. Kennedy: I think that's very surprising.
William B. Collins: --Well, I don't think it's surprising at all. This case involves an inherent classic kind of interstate conflict between the states. Some states, like New York, generate a lot of nuclear, low-level nuclear waste. They don't want to store it in New York. Other states, like Washington, South Carolina, and Nevada, have tried to deal with that problem. We have sites in our states to take care of this waste. But as a result of the dormant Commerce Clause and this Court's decision in Philadelphia v. New Jersey we have no option but to take waste from all the other states that choose to send it to us, or, or close down the site. Now this conflict is exactly the thing that separates this case from the other kinds of cases where, as Justice Scalia said, all the states are losers. In this case states that try to be responsible in dealing with their waste are losers and the other states can take advantage of them.
Sandra Day O'Connor: Well, Mr. Collins, I just don't see any way to draw the line that you would have us draw on behalf of those three states. I can't believe that the State of Washington or South Carolina or Nevada would be in here arguing that Congress would have the right to shift off part of the national debt or shift off all medical costs by congressional feat to the states, or any other of the potential schemes that this would open up. I can't believe you'd be here making that argument. Would you?
William B. Collins: No. Indeed we would not. And we're not--
Sandra Day O'Connor: Well then how do you justify it here, because it's a principle we have to deal with, not some individual scheme?
William B. Collins: --That's right. And I think that this law meets the kind of principles that, the narrow kinds of exceptions where the Federal Government can make a statement to the states and involve them in a Federal-state cooperative program. And the point I want to emphasize is that even, this case does not hinge on a broad reading of your decision in Garcia. I think that even if we analyze this in light of the dissenting opinions in Garcia that this particular enactment would be valid. And let me do that. There are basically two dissenting opinions in Garcia. One was authored by Justice Powell, and Justice Powell focused on the fourth National League of Cities test to look to see whether the Federal interest is demonstrably greater and state compliance is essential. Now I submit in this case the Federal interest is demonstrably great, simply because nuclear, the nuclear waste area is something that the Federal Government has been involved in, and it's a problem that must be solved. Justice Kennedy's handgun example, people certainly differ about whether handguns are a problem or whether they should be regulated. But no one here is saying that we don't need to safely dispose of nuclear waste.
Sandra Day O'Connor: Well, and I suppose everyone would agree that we need to solve the problem of medical care of the indigent and we need to solve crime and we need to solve prison space, and so forth and so on.
William B. Collins: But it's a unique concern of the Federal Government, Justice O'Connor. The second point that I would say why there is a Federal interest is that this case involves a central concern of the Commerce Clause, and that was something that Justice Powell focused on. This is not a case where the Federal Government through the Commerce Clause power has the ability to have a wide reach and deal with other kinds of things. This goes to the heart of the Commerce Clause because of the dispute between the states. When one state acts to have a site, then other states are relieved of the responsibility, and that inherent conflict, I think, means that the, it is a central concern that the Federal Government in those limited states can make a kind of command to the states. Also I think state compliance is essential simply because you have to do something with this waste. It needs to be dealt with.
Antonin Scalia: Isn't there a fundamental difference between this case and Garcia in that when this statute says each state shall be responsible for providing for the disposal of waste, it doesn't limit it to waste generated by the state itself. It means all waste in the state, and therefore this statute cannot be complied with by the state without the state using its sovereign powers. The Federal Government is directing the state how to exercise its sovereign powers.
William B. Collins: It's directing the state to take responsibility, Justice Scalia.
Antonin Scalia: Well, you can put it that way if you like, but it can't take responsibility for somebody else's waste without exercising its sovereign powers. And that was not Garcia.
William B. Collins: That's what I'm saying. I'm not claiming that this... I'm talking about... I agree.
Antonin Scalia: I'm saying it's worse than Garcia in that respect, not better.
William B. Collins: The states are not, are given maximum amount of flexibility to decide how to do this. There are nine compacts that have been formed. The states have a wide option. The last point I'd like to make before I take my seat is just to concur with counsel for the Government that if the Court finds the so-called take title provision invalid, that it is clearly severable from the remainder of the act. There is no severability clause, but there is a presumption in favor of severability. It passed the House unanimously, and in fact the act would operate just fine without the so-called take title provision because this act gives part of the power of, the Federal power to the states so that the states actually have the ability when acting within a compact to exclude waste that is generated from outside the compact region. And that is why we would say that this does not, is not detrimental to the state power. In fact states have a lot of autonomy. They have choices about how to deal with it, albeit with the take title provision they must be responsible. They have a wide range of options of how to deal with the waste. They can enter into compacts, they can contract with compacts. One compact can contract with another compact. The only thing that they are prohibited from doing under the take title provision is simply ignoring the problem. So we would request that this Court affirm the judgment below or, if the Court finds that the take title provision is invalid, the Court should sever that provision and sustain the remainder of the law which we think is an excellent example of the partnership between the Federal Government and the state government.
William H. Rehnquist: Thank you, Mr. Collins. Mr. Schiff, you have 3 minutes remaining.
Peter H. Schiff: I have nothing further absent questions from the Court, Your Honor.
William H. Rehnquist: Very well. The case is submitted.