William J. Brennan, Jr.: (Inaudible)
Roger P. O'Connor: Yes Your Honor.
William J. Brennan, Jr.: (Inaudible)
Roger P. O'Connor: That's correct.
William J. Brennan, Jr.: Now all (Inaudible)
Roger P. O'Connor: That's correct.
William J. Brennan, Jr.: But no (Inaudible) enter into regularly the assessment phase (Inaudible)
Roger P. O'Connor: Only lands that come in under this Act 189.
William J. Brennan, Jr.: (Inaudible) and I gather that given (Inaudible) lease, let's say for a 20-year lease the tax (Inaudible) the City tax rate (Inaudible) $1000000, is that right?
Roger P. O'Connor: Lumped in with a whole assessment valuation.
William J. Brennan, Jr.: (Inaudible)
Roger P. O'Connor: Yes.
William J. Brennan, Jr.: Now if another 20-year lease on that property (Inaudible)
Roger P. O'Connor: Yes in proportion for the amount of property he is using.
Earl Warren: Well Mr. O'Connor do you have two rolls, do you have a personal property roll and a real property tax roll?
Roger P. O'Connor: Yes we do Mr. Justice Warren.
Earl Warren: Then how does this get on your real property roll, I notice this exhibit says City of Detroit personal property assessment roll. Now that's different, how do you put it on --
Roger P. O'Connor: It's very well taken Your Honor please --
Earl Warren: -- formally here and then put it no your real property.
Roger P. O'Connor: For lack of a better placed put it, I would, you know, as the answer. We use this and noted on this roll, leased land building Act 189 PA 1953 to distinguish the properties on this roll from properties that would be on the general personal property assessment role and subject to the general personal property assessment taxes. We merely use this form and placed on this form that notation, and that notation also was included in the bill, tax bill that was sent to the lessee so that he was -- he could not possibly under -- by any stretch of imagination conclude that this was on the personal property assessment roll subject to general personal property assessment laws, but was subject to the provisions of Act 189, which merely taxes the use.
Earl Warren: Well then is this a third kind of a roll, you have your real estate roll and you have your personal property tax roll and is this a third kind of tax roll?
Roger P. O'Connor: You might call it that Your Honor. The act was -- the act was new, and when we were starting to --
Earl Warren: Well, I am not criticizing and I am just trying to find out but what I wanted to ask you because I should maybe have understood you, but I didn't. I do want to know if these pieces of property that are on in this Exhibit 97 are included in your real property roll for the purpose of fixing your real property rate?
Roger P. O'Connor: They are Your Honor.
Earl Warren: They are, all right, that's all.
William J. Brennan, Jr.: Is this another way of getting out Mr. O'Connor let's take the first one, this Borg-Warner, if Borg-Warner owned that property instead of leasing it, but actually owned it, it would have an assessment as the owner of $352,060, wouldn't it?
Roger P. O'Connor: Right.
William J. Brennan, Jr.: And that would have a tax bill at the tax rate against the $352,000?
Roger P. O'Connor: That's correct.
William J. Brennan, Jr.: And the tax bill would be a real estate tax bill wouldn't it, if it owned the property?
Roger P. O'Connor: With this notation --
William J. Brennan, Jr.: No I am -- assuming a different case, assuming it owned the property, not leased it but owned it, is that right?
Roger P. O'Connor: That's correct Mr. Justice --
William J. Brennan, Jr.: It would get a real estate tax bill and an assessment of $352,000 at the local rate, is that so?
Roger P. O'Connor: That's correct.
William J. Brennan, Jr.: Now because it's the lessee of the property it gets what, a different kind of tax bill, a different color maybe or something?
Roger P. O'Connor: I think frankly they are using the same, same bills that they've used in connection with general personal property tax.
William J. Brennan, Jr.: Yeah so that --
Roger P. O'Connor: What this notation contained on it --
William J. Brennan, Jr.: It gets, it gets a -- whatever it maybe called it's still a tax bill and then the assessment of $352,060 at the local rates for 1954.
Roger P. O'Connor: That's correct Your Honor and of course as I have previously said the value of the United States property maybe used as a measure of the tax and the privilege under the cases that I have cited in my brief and I believe mentioned a short while ago.
Hugo L. Black: Have you cited any of the interstate commerce cases which have held that immune interstate trade can have a tax levied against it measured by the total value of the interstate trade?
Roger P. O'Connor: No Mr. Justice Black I have not, but I have cited Plummer versus Coler for example which is an inheritance or succession tax which uses the full value of the United States bonds, which were included in the estate as a measure of the tax of the inheritance or succession tax and the Court concluded -- this Court concluded that that tax was not on the bonds of the United States which are -- were exempt from taxation, but is on the privilege of inheritance or succession. Now in connection with the Home Insurance Company case, which was a New York case, that involved a franchise tax, measured by the dividends and capital stock of the corporation. Included in the capital stock of the corporation were United States bonds which of course were tax exempt. They were included as a measure, the value of those bonds along with other properties of the corporation were included as a measure of the tax on the franchise, which the Court said could be done. It was not a tax on the bonds but on the franchise, the privilege of the business of the company conducting business.
Hugo L. Black: When you challenge the tax on the basis of it being excessive by reason of the way it's measured or the only challenge to it is based on immunity?
Roger P. O'Connor: The only challenge is based on immunity.
Felix Frankfurter: Because the argument is, it's like Miller and Milwaukee, now what do you do with that?
Roger P. O'Connor: Well, Miller versus Milwaukee if Your Honor please the tax the -- Miller owned dividends in a Milwaukee corporation. The Wisconsin statute provided for a tax on everything except United States bonds. They were accepted from the privilege tax from that case in measuring the privilege tax. When the dividends were paid out to Mr. Miller, the stockholder, the Wisconsin statute further provided that he should be taxed on those dividends only to the extent of the United States bonds, the value of the United States bonds and the Court held, and rightfully so in that case if Your Honors please, that that statute was specifically aimed at the United States bonds. Now of course that case did not -- well as I recall a franchise or privilege tax. Yes the Miller case did not involve a franchise or privilege tax or but an income tax. Now Macallen versus Massachusetts which government counsel cite in their brief as controlling of the situation, the statute accepted interest from United States bonds and determined that income for purposes of measuring the franchise tax on domestic corporations. The statute was later amended to include tax exempt securities in the measure of the franchise tax. So that amendment was specifically aimed at the United States bonds. Now the Court --
Felix Frankfurter: Aren't you here specifically aiming at government derived property interest, a government derived interest?
Roger P. O'Connor: Yes.
Felix Frankfurter: Does it make it any less so that you also cover some other exemption? Does that change the character of the general proposition of Miller against Milwaukee, namely that if you want to bring that pigeon down, you can't do it, it doesn't make a difference whether you bring the pigeon down from front or back?
Roger P. O'Connor: That's correct Your Honor if the --
Felix Frankfurter: That's the argument, isn't it?
Roger P. O'Connor: If the statute is aimed at the United States bonds and is not specifically, then it's an invalid tax. Now of course in our case we contend that it is not aimed at the United States --
Felix Frankfurter: Because you also hit other pigeons.
Roger P. O'Connor: Pardon?
Felix Frankfurter: Because you also hit the exemptions of Michigan (Inaudible)
Roger P. O'Connor: That's right.
Hugo L. Black: And religious institutions.
Roger P. O'Connor: That's correct Mr. Justice Black.
Hugo L. Black: So it gets down to a question largely on that point, does it not, of whether there is a discriminatory classification?
Roger P. O'Connor: That's very true. In Carmichael versus Southern Coal & Coke Company which I've cited at page 28 of my brief and from which I quote says this in connection with the tax and classes and with reference to exemptions, there are exemptions provided in this Act, 189 which I will later discuss. Carmichael versus Southern Coal Company decided by this Court in 1937, and I quote therefrom as follows. “It is inherent in the exercise of the power to tax that a state be free to select the subjects of taxation and to grant exemptions. Neither Due Process nor Equal Protection imposes upon a state any rigid rule of equality of taxation. This Court has repeatedly held that inequalities which result from a singling out of one particular class for taxation or exemptions infringe no constitutional limitation, citing many cases. Like considerations govern exemptions from the operation of a tax imposed upon the members of the class. A legislature is not bound to tax every member of a class or not. It may make distinctions of degree, having a rational basis and when subjected to judicial scrutiny, they must be presumed to rest on that basis if there is any conceivable state of facts which would support it.
Hugo L. Black: Are there any exemptions in your statute?
Roger P. O'Connor: Pardon?
Hugo L. Black: Are there any exemptions in your statute that seek out any members of the particular class that rent tax immune property?
Roger P. O'Connor: A property of any state --
Hugo L. Black: It would include -- is that a complete classification?
Roger P. O'Connor: A property of any state supported education institution is one of the exemptions in Act 189.
Hugo L. Black: You have one.
Roger P. O'Connor: Yes, there are two others and the two are these, where the use is by way of a concession in or relative to use of a public airport, park, market, fairground or other similar property, which is available to the use of the general public and one more. In the case of federal property for which payments are made in lieu of taxes in amounts equivalent to taxes which might otherwise be a lawfully assessed. Those provisions appear I believe in Section 1 of Act 189.
Felix Frankfurter: Suppose Mr. O' Connor instead of this compendious provision, what's the number of this statute 104?
Roger P. O'Connor: 189.
Felix Frankfurter: 189, suppose instead of in the form -- suppose instead of in the form in which we have it, Section 1 said all leaseholds from government immune, federal government immune properties, shall be assessed on the value of the property for the privilege of having such a leasehold. Section 2, all leaseholds that were immune from taxation, because owned by the State of Michigan shall be assessed, shall be taxed to the full value of such immunized state property. Section 3, all property derived and owned by cities on lease, et cetera in Section 4, all property of charitable religious organizations enjoying immunity as such, all of the statutes are like that, four sections, putting in all the categories of property as such exempt for taxing the privilege of having a leasehold thereof. Would you be making the same argument?
Roger P. O'Connor: I would say this, if Your Honor please? As we know and as government counsel has pointed out, Section 6 of the Military Leasing Act of 1947 provides for the taxation of the lessee's interest, as far as local taxing agencies are concerned. Now, I think we would have that right regardless of that provision, but we say here, we are not taxing the lessee's interest. If we tax the lessee's interest, then we would, under the language in the Allegheny case, be required to evaluate the lessee's interest in property in accordance with regularly accepted methods of appraisal such as taking into consideration then term of the lease, the termination provisions in the lease, the amount of rent and so forth. Now we obviously didn't do that. We based this tax upon the true cash value of the property. Furthermore, if we were to tax the lessee's interest, rather than the privilege of using the property, the legislature could never have accomplished the result intended, namely to eliminate a discrimination between lessees of private and public property and put them on an equal footing for the reason that, the lessee's interest would only amount to an infinitesimal part of the money that can be received in the fashion the legislature tax provided in this Act. Now as I say the legislature could have imposed a much larger sum. The fact that it is equal to the tax on the property, does not make it a tax on the property because again as I say, a specific tax and of course a specific tax as Your Honors know is nothing but an excise tax and examples of which are occupation taxes, privilege taxes and license taxes. Those taxes were placed upon the lessee's use of the property in connection with business conducted for profit, to put the lessees on an equal basis, lessees of private or public property. For example, corporation A coming into the State of Michigan desires to lease property, defines that I have a parcel of real estate, a private person, and it finds the government has a parcel of real estate. Both parcels meet their specifications to perfection, which parcel will this corporation rent, certainly not mine because they know if they rent mine, they are going to have to pay taxes either in the amount of the rent charged or in addition to the rent charged in consideration over reduction in that rent and in that respect it's very discriminatory and it was that very thing that the legislature sought to eliminate in passing this Act. Now Flint versus Stone Tracy was a situation where the federal government sought to tax franchises of corporations in various states based upon and measured by the income of the corporation, including municipally tax exempt bonds. Now the federal government did not grant those franchises. If the federal government can do that in connection with state franchises not granted by it, then certainly the states ought to be able to tax a privilege of using which arises out of an instrument namely the lease of the federal government. The fact that the privilege of using the property is exercised within the jurisdiction of the state of Michigan is sufficient in and of itself alone to permit the state to tax, and I have covered that point in my brief wherein I say in connection with Home Insurance Company case which quotes from Savings versus (Inaudible) nothing can be more certain in legal decision and that the privileges and franchises of a private corporation of all trades and avocations by which the citizens acquire a livelihood maybe taxed by a state for the support of the state government. Authority to that affect resides in the state independent of the federal government and is wholly unaffected by the fact that the corporation or individual has or has not made an investment in federal securities. One other point I would like to raise, counsel for the government refers the Senate Committee hearings and refers to Section 6 of the Military Leasing Act, we say it does not apply because we are not taxing the lessee's interest. The Military Leasing Act does not prohibit the taxing of a privilege of using the property. There was no discussions in the Senate Committee hearings in connections with the privilege of using the property and while the army and navy as I gather from a reading of the Senate Report, were both interested in seeing that properties leased by the government for commercial purposes should be taxed in order to eliminate that discrimination that was ever present between public and private lessees, they were not able to arrive at any legal basis for doing it. As one of the senators I recall said, when it was suggested that you transfer title of the government to the lessee during the term of the lease, one of the senators said I don't think that would be constitutional because you cannot place ownership in a person that actually doesn't own the property by a congressional act, therefore they forgot it, decided to leave it to general legislation but as a last measure passed Section 6 of the Military Leasing Act which only infinitesimally helps in the situation to avoid discrimination. It doesn't, because you don't get the same results as you would from a lessee of private property. I see my time is up if Your Honors please, Mr. Street will finish.
Earl Warren: Mr. Street.
Harold M. Street: Your Honor, please the Court? I don't want labor this too long, but there are a few issues that are unique to a particular situation being Continental Motors Corporation located in Muskegon, County; and a few points that I would like to attempt to clarify. It's quite apparent from reading opposing counsel's brief that they refuse to make a distinction between a property tax and a privilege tax, refuse to concede that this might conceivably be a privilege tax rather that a property tax and treat it that way throughout in both their original brief and their reply brief. I might say our reply brief, the reply brief was only received yesterday, I will try to cover it in oral argument to save filing a reply to the reply if we can do so. I think it will clarify the picture somewhat if we point out some of the instances in which Act 189 does not apply. Post office is a prime example. It could never apply to a post office. There is so much made in the footnote of the reply brief that it might apply to the Pentagon building, that Virginia might tax the Secretary for occupying the Pentagon building. Of course that could never happen under one Act 189 and I don't think it could happen under any other the very simple reason he is not a private individual or corporation who is using the property in connection with a business conducted for profit. So the same is of course true of an army camp, marine base; any installation of a sort that's not used for profit it could never apply. Some reference has been made to forest preserves, grazing lands, I might point out too, if those are public lands, open to the public in the nature of the park and the government grants a privilege by way of a concession to someone to graze those lands, it again would not come within the Act, because of the express exception as long as that land is again open to use by the public and that's an important feature of the Act. We have a forest preserve in Michigan and perhaps we can explain this a little more clearly as to just what might happen. The (Inaudible) Forest Preserve is a short distance north of Muskegon. It is not taxable. It places some burdens upon our local government but certainly not unreasonable burdens and we don't care to tax it. But what if the government should lease that land to be timbered? We know what happens in Michigan well enough, when such leases are made, a large mill is brought in that brings in hundreds of employees and they bring their families, they must be housed, their children must be schooled, roads must be built and fire protection afforded. Then we have an entirely different situation. I say that private entrepreneur, who is harvesting the trees from that land for profit should be taxed on his privilege and this Court has held that he maybe taxed. I'd like to refer to Wilson versus Cook, where there was an Arkansas statute which imposed a privilege on anyone engaged in the business of severing from the soil for commercial purposes, natural resources including timber. Now in this particular instance, it was a forest preserve. The trees belong to the United States Government as well as the land. This man was given a contract to sever the trees. He enjoyed a privilege granted exclusively by the federal government to harvest these trees yet a severance tax imposed by the state of Arkansas was upheld by this Court on the basis of James versus Dravo and other cases. Act 189 would affect substantially the same thing in this case, if these forest preserves were leased for that purpose and it's only just that it should do so. There is some claim that Continental stands in a little different status here than Borg-Warner, because Borg-Warner is manufacturing automobile parts for profit, while Continental is confined to manufacturing tank engines for the army corps. There is some difference on the surface, there it's true. You want to keep in mind however that Continental is competition Chrysler, General Motors and Ford who also like to make engines and who are at a distinct disadvantage in competing with Continental. We don't mind that in Muskegon, but I say in the long-run anything that removes this spur of free competition is going to work detrimental to this government who may think temporarily they are getting a bargain by giving Continental the plant, rent free and tax free. Claim is also made the Continental because of this unusual situation is an agent or instrumentality of the government then they sure of course should be tax exempt. That situation I think is covered in the case cited in my brief of Henneford versus Silas Mason and I don't know if I need to elaborate it further here. That same contention was made in lower court and ultimately abandoned on appeal, but what if we did even for the sake argument concede that Continental in this particular case is an agent or instrumentality of the federal government? Does it afford an immunity under the decisions of this Court? I might point out that in United States versus California which is of course familiar to you and is included in an ALR citation on my brief. In referring to this restriction or immunity says it's equally a restriction on taxation by either of the instrumentalities of the other. The state instrumentalities supposedly enjoy the same privilege. But what have been some of the decisions? The early case of South Carolina followed up later by Ohio verus Helvering where the state owned liquor, sold it through its own dispensaries. This Court imposed a privilege tax upon the sale of that liquor and held it valid. The Court used this rather colorful language, when the state enters the marketplace seeking customers, it divests itself of its quasi-sovereignty pro tanto. Even more closely at home when the State of New York owning the Saratoga Springs attempted to sell water through its own public commission, the federal government imposed a tax of $0.02 per gallon upon the water, and this Court sustained the tax saying that it is clear that where a state engages in a business in competition with private enterprise, it enjoys no special privilege or immunity. And even closer to home is Allen versus University System where Georgia setup a state commission to operate the University of Georgia and Georgia Tech and they were held liable for their admission tax to the football games, though conceding that, that was a part of an educational function and that education was a proper function of the state, yet that tax was imposed and sustained. I don't believe first that Continental is an agent or instrumentality of the federal government, but if so because of its peculiar activity, I don't believe it's entitled to any immunity particularly. Now much is made here of the measure of tax. In fact it's about the only argument made against it, saying since it's measured on the basis of the value of the property, that is therefore amounts to a tax on the property itself. How could such a tax be measured and really be fair and just? It is suggested that perhaps if it were measured on something like oh we'll say in the case about the severance of trees on a board foot basis or in the Esso case where you sustained a tax of $0.06 per gallon on Esso for storing government owned gasoline, that perhaps if it were measured by gallons or something of that sort, it would be a different picture and wouldn't look like a tax on the property. But how can it be done? Acres is the only thing that might come to mind as being some standard of that sort but how would Acres apply to 3.5 acres upon which this $8 million plant rests in Muskegon County, why a tax of $10,000 per acre clearly would be reasonable? But there is for instance say 20 acre tract adjoining that's used as nothing but a testing ground, which is virtually vacant land, that land wouldn't be worth $200 an acre. And below that is a 3 acre parcel used to dump waste that's not worth $10 an acre, certainly you cannot arrive at a fair and just tax on any other basis than -- the measure that the State of Michigan sought it to imply here. Counsel's reply brief is directed at two things, the Military Leasing Act and the other. He has repeated over and over again that the uses included in the privilege I mean rather that the uses included in the lease, the privilege of uses included in the lease whether the lease be one year, five years or ten, the privilege of use is also included in ownership you want to keep in mind and it has been held that we can segregate the faggots and attach them separately. The burden of the argument there is that since the privilege of use is necessarily included within a lease or even ownership, it can never be taxed up to the same amount as a tax that might be imposed because of ownership or because of leasehold interest viewing it as a property right. Now that simply is not the case. In fact it maybe taxed far in excess of that amount. Just look at the gasoline stored by Esso Standard Oil for which they paid $0.06 a gallon for the privilege of storage. Now if Esso had owned that gasoline themselves and had it in their own tanks, they wouldn't have been subject to the tax because they would not have been engaged in the business of storing gasoline. They would have paid the regular ad valorem personal property tax by virtue of their ownership at the end of the year. What would it have amounted to, possibly 10, 15 mills. Six mills on gasoline worth possibly $0.30 or 0.35 a gallon, it's somewhere around a 150 mills. Now a man who owns furs and has them in a warehouse will pay an ad valorem personal property tax of a few mills on it each year. What if he elects to exercise his privilege which is included in his privilege of ownership of sale during a year, immediately a sales tax in Michigan of 3% or 30 mills is imposed. And his troubles are only beginning because the federal government then imposes a 10% tax which is a 100 mills because he exercised his privilege of sale which is included within his ownership, so that the tax upon a privilege may far exceed any tax that can be imposed because of ownership alone. In this instance it's merely made equal. The interesting part to me about this long reference to the Military Leasing Act lies in the debate that it is recognized that a serious injustice and inequality exists. The long years of debate that had gone on in the Senate and in Congress results really in nothing. We've labeled a mountain and come up with a mole hill here. They all say it's a serious problem. It's unjust. Something ought to be done, but what should be done? What can we do that will bring about a fair and just solution? The inference is they have virtually given up except for one thing they're going to resort to a federal dole in the payments, in what they call payments in lieu of taxes. Now some reference has been made to the fact that the school district I represent has been forced to accept some of those. It's immaterial here. It did not apply in the year 1940 – '54 and it did not receive any for that year. There has been a temporary act passed since which expires in '58 which for hire purposes will expire next year because hire tax for '57 isn't payable until '58. We may have one more year under that act but we don't know whether it would be extended or not. I think we'll all agree that this federal dole is certainly an unsatisfactory solution in any event.
Felix Frankfurter: Is this the general act that expires next year?
Harold M. Street: Yeah, it's general, quite broad in its scope at least it covers the Continental Plant.
Felix Frankfurter: Pardon me.
Harold M. Street: At least it covers the Continental Plant.
Felix Frankfurter: What is the generality?
Harold M. Street: In this particular act, as I recall, it's land that formally belonged to the Reconstruction Finance Corporation and then fell into government hand –-
Felix Frankfurter: It's all related to reconstruction finance?
Harold M. Street: This particular act, as I recall it, it applies in hire case, there are other acts that do apply but they don't apply in all instances such as here in '54 there was no applicable act. Your Honors –-
Felix Frankfurter: The presence of the applicable acts for leaseholds made today this year, are they covered by acts or are they all covered?
Harold M. Street: I only suppose – I know there's Military Leasing Act and that of course would catch a small tax with a lease of one year or returnable at will and so on. The point I want to make here – well here was the main problem, as I had pointed out, you'll notice in Senate debate. One senator said, “Well let's transfer title over to these people and with a recapture clause, that will make it taxable and that will solve our problem.” Someone pointed out the situation and it was referred to here. The government may want to reserve a large part of that plant for storage and on the lease we'll say a third. Well the lessee if he is going to get taxed on the whole property, will like that. Act 189 takes care of that, it's only the property actually used, that's made available to and actually used. Now there was inference made that perhaps in the Borg-Warner case, space used for storage was included in the assessment. If so it was by error and could have been corrected, had it been called to the attention of the assessing officers I'm sure because that portion of the plant would not be used. Another problem what confronted them, what we might refer to as white elephant plant. Here is a big plant that costs millions of dollars to bill, we want it as a standby facility, it does not have too much value for commercial use and yet if we transfer title over, it will be taxable value. That's taken care of too in this sort of situation. Let's look at Continental Plant a value of $8 million cost. It's on the assessment rolls at 3 million. Our assessor recognizes and must assess property in the state Michigan on the basis of its present market value what it will bring on the market today, which equalizes something and copes with the problem that I say cannot be solved on a federal level. Now the whole attitude seems to have been here by opposing counsel will have -- the United States Congress has coped with this matter for a great many years and has not received a – obtained a solution which they might do sometime in the future but in the meantime let's get along with this dole or something we have done everything that can be done. Now with all due respect to the United States Congress I don't believe that they have a monopoly on wisdom. I think there's a little residual of wisdom left in the Michigan state legislature. And instead of debating on ad infinitum, the Michigan legislature has done something and the unique part of it here is no one comes here and says that this act is unfair to the United States government, that it's unfair to Continental Motors or to Borg-Warner or that it is unfair to anyone else. Most of the lower courts commented on the inherent justice and desirability of the act and no one has pointed out in any inherent evil. Some comment has been made that the act is a little inartistic and not sophisticated. I think that's one of its best merits. It's a very simple act. We make use of existing machinery that's already in operation. We don't have to set up a bureau with a lot of new elaborate employees to administer this act. It's simple in its operation, it's clear, it's understand – and it's equitable in its operation. Your Honor all we ask is this Court consider that in view of the reply brief, the action taken there, that it's entirely possible that the legislature of the State of Michigan in using this residue of wisdom that's left to them have solved a problem, at least on a local level, which I submit cannot be solved on a federal level. Thank you Your Honor.
Earl Warren: Mr. Street in your time to prove Muskegon, how do you assess this property? Do you assess it as personal property or does it go on the real property roll as we were told?
Harold M. Street: This one slipped on the real property roll.
Earl Warren: Beg your pardon?
Harold M. Street: This one got on the real property roll. It was pointed this was a new Act, the assessors didn't know just what to do with it. In our township this property had been carried on the assessment roll right along you see until it was ultimately declared surplus and went through various channels and then in 1953 the year this Act became effective went to the United States as such. So the assessor already had it on his roll, so he simply went ahead and made an assessed value and set it down in this instance on the real property roll. It seems to me -- I don't see any substance to the difference, technically there probably should be a third roll setup for this type of property I believe.
Earl Warren: Thank you.
William J. Brennan, Jr.: May I ask Mr. Street. I gather in striking the tax rate, you aggregate both real property assessments and personal property tax assessments, don't you?
Harold M. Street: This Act does not apply to personal property here.
William J. Brennan, Jr.: Well no, I'm speaking generally. In striking the local tax rate, you have a uniform rate that applies both to real estate assessments and personal property tax assessments?
Harold M. Street: It's the mechanics, the way it's done in Michigan is the assessor goes out and he evaluates all the property.
William J. Brennan, Jr.: Real or personal?
Harold M. Street: Real or personal, yes and then finds out what the school must, the county must have and so on and then it decides what millage must be applied to that valuation to produce the amount of money needed, that's the mechanics of it.
William J. Brennan, Jr.: So that you have the same rate, the consequence is you get the same rate, whether the tax is on personal property or on real property.
Harold M. Street: Yes, that is correct.
William J. Brennan, Jr.: It's the same rate and then arriving at the rate you aggregate the assessments against real property and the assessments against personal property all together.
Harold M. Street: We lump them all together, yes.
William J. Brennan, Jr.: And then wipe the rates from that.
Harold M. Street: That's correct.
William J. Brennan, Jr.: So it doesn't practically make any difference whether this assessment is listed on a personal property tax roll or real estate tax roll or otherwise, does it?
Harold M. Street: Not applied (Inaudible) to go on the third tax rule, it all comes out the same place, yes.
Felix Frankfurter: Mr. Street you said several times this can't be dealt with by Congress, it must be dealt with locally. Now if that's so that for me at least could have a very important bearing on striking the adjustment between the state and federal authority, why do you say that?
Harold M. Street: One, where the difficulty is pointed out, about the only way it could be done on a federal level would be to transfer this title back with a recapture clause.
Felix Frankfurter: But just an authorization by Congress so that each state do what Michigan tried to do would do it, wouldn't it?
Harold M. Street: If they said that -- well you would get the same result though. Then you would be -- you will say de-immunizing all of these plants. In some instances --
Felix Frankfurter: I mean it could exactly what it does about taxing bank staff, national bank staff.
Harold M. Street: Oh it could, but I don't believe it would be a satisfactory --
Felix Frankfurter: Well why not?
Harold M. Street: Well if these difficulties like your white elephant plants that they fear or a plant where the government wants to retain portions of it, well say for storage and future use. If they de-immunize the whole thing so to speak it all becomes taxable, which maybe unjust to the federal government in certain ways.
Felix Frankfurter: Why can't they make the same qualifications that you make, I don't follow?
Harold M. Street: It's possible if they would say used in connection with the business conducted for profit such portions. If it could -- federal government adopted in substance 189 they might solve it Your Honor on the same level. Thank you.
Earl Warren: Mr. Fisher.
Roger D. Fisher: Mr. Chief Justice, may it please the Court? The counsel for Muskegon Mr. Street has just agreed with us that the privilege of use is one of the bundles of rights that represent a property right. He has said that Michigan can take this one right of the property rights, the right to use and occupy, and they can tax that at the full value of the government's property. I believe in agreeing that right to use, privilege of use is one of the property rights, is the only property right that the lessee has. The extent of his right is measured by the lease. He is agreeing that the lessee's interest and the privilege of use are just the same thing, not only in substance, but analytically. There is no difference. I suggest that to my main argument that the privilege of use of lessee, the tax against property are the lessee's interest which they have. Congress, in the Military Leasing Act, said you can tax the value of the lessee's interest. We believe that certainly applies in the Borg-Warner case. The Supreme Court, this Court has for years gone through and considered the ramifications of federal immunity. It is a major substantive problem with which this Court has wrestled time and again. In no case and here I refer to Dravo, as well as the cases that followed it, in no case was it suggested that the full value of government owned property is subject to state taxation, provided the state changes the words.
Felix Frankfurter: So it all gets down then to amounts, does it, because you must accept you rely on -- you talk about Macallen, I think the light is taken out of Macallen by educational film?
Roger D. Fisher: I'll a heavier foot on Miller and Milwaukee on that. Here the -- that's not the only thing, the measure is not the only thing bad about this tax. We believe this tax is directed aimed at federal property. Now they went through and showed there were four pieces of property in Detroit that has been assessed under this statute. 98% of the valuation there listed is federally owned property. They have carried two pieces of property, one was $500 and one about $12,000.
Felix Frankfurter: That's because the facts found so, that doesn't prove sinister purpose.
Roger D. Fisher: It doesn't prove sinister purpose. It proves that the major substantive effect of this. Now the statute exempts all state aided educational institutions. They can lease out their property to the defense plant or to anyone else for profit and that lessee is not taxed. There is no tax on him, he is exempt, he gets the privilege of the state, although he is working for profit, everything else, this tax has been whittled down by the cutting out -- the major form of statement exempt institutions which do these properties, they educate large educational institutions and they -- I think the statute is very much like the one you suggested Your Honor where they said the federal property here, we will offer tax, a little state property, we get another little pigeon in this flock of ducks.
Felix Frankfurter: Well little, why do you say little? Suppose there were in Detroit religious institutions (Inaudible) like the Trinity Church in New York with vast holding and all of it exempt, would that change the legal problem?
Roger D. Fisher: It would change one aspect of the problem, it would remove the fact that this is -- we think it is directed primarily that of profit.
Felix Frankfurter: But then you must -- then it does turn or the question of directive tort is decisive and you say derived from the fact that the bulk of the property which feels this tax happens to be or is, not to put in a question begging words, is federally exempt. You prove sinister purpose, do you prove design, this record against federal property otherwise and the fact that a lot of the property is federally exempt.
Roger D. Fisher: No, that was relied upon in the Macallen case explicitly by Justice Holmes speaking for the Court saying, certainly that one can be -- is the most conspicuous instance of exemption at the present time, that statute too covered the state ones and was much less direct.
Felix Frankfurter: Well they first had a statute which tried to reach it and then it didn't and -- but I put to you --
Roger D. Fisher: The state --
Felix Frankfurter: -- I put it to you that this isn't the Miller Milwaukee.
Roger D. Fisher: No.
Felix Frankfurter: And I put it to you that Macallen really is -- is hardly breathing anymore.
Roger D. Fisher: We do not rely exclusively on that. The tax, the problem with which Congress and the Court have dealt is a major substantive problem. The burden on the locality is enormous, that burden is the same whether it's an air base, which has a lot of people going in there, whether it's a government run plant such as atomic energy plants might be run exclusively by government employees and non-taxable, the burden is the same whether a not for profit corporation moves in or whether a for profit corporation moves in. Now the weapon which Michigan is trying to deal with this substantive problem is saying that by changing six words, ten words, whatever the left statute is, by calling this a privilege tax, using a name that has been favored as a different kind of tax, we can take a property interest, the right to use this property, the lessee's property -- we can take the leasehold interest and we will say we are taxing that privilege of the lessee and then we, the whole federal immunity of government property is defeated. The substantive problem is just really it turns out they say, a matter of form. For a 100 years we thought that federal property is immune, but it turned out that states didn't know they could call a property interest a -- call a property interest a privilege and then measure the privilege by the whole property. In Allegheny they were taxing part of the property, the real estate measured by the whole property. This Court explicitly said you cannot do that. Even if you can tax the property you can tax, you cannot include in that property interest, the property interest of the United States. You cannot measure the value of --
Hugo L. Black: Do you believe that?
Roger D. Fisher: I believe the language of the court although not necessarily the holding --
Hugo L. Black: I want to reserve your point of the taxation of -- the value of the leasehold income.
Roger D. Fisher: There you are dealing not with the leased interest in the government's machinery that was reserved, but real estate tax in Allegheny was on Mesta's plant measured by -- Mesta's plant plus the government machinery. The Court said the state has made no effort to segregate Mesta's interest in taxing. The full value of the property, including the whole ownership interest as well as whatever value proper appraisal might attribute to the leasehold, was included in Mesta's assessment. It is contented the whole value of the property maybe reached since the impact of the tax is upon Mesta. We think, however, that the government's property interest are not taxable either to it or to its bailee. They then went on referring to the fact that beneficial personal use of property maybe taxed and then the next sentence said that neither he, meaning the contractor nor the government can be taxed for the government's property interest. Now I do not believe that the reasoning of that case can stand up if this statute in Michigan is upheld.
Hugo L. Black: It seems to me there's a difference I concur in result (Inaudible) the state made no effort to segregate the two, here it maybe aborted effort, but the state has made an effort to tax nothing but (Inaudible) concerned the value of the leasehold in that case. Now it has fixed the value (Inaudible) raise of tax rate and one value of property, but do you say that fixing, having one factor value of the property -- deprived it of complete validity and (Inaudible). Suppose instead of fixing it using those two factors, it simply said whereas the real estate tax without saying, real estate tax of 2% we fix the tax on leasehold interest as 10% would that been unconstitutional? Supposing now that the government was not in, is there anything wrong with that?
Roger D. Fisher: There is nothing wrong with a tax of 10% on leasehold interest as such I suppose if it is fairly applied across the board to lessees of property and it appears it does not merely meant and in substance effect and operation a way of getting the real estate tax. I think that the tax immunity of the United States in this property which is government owned is a matter of a substance. I think that there are the tax of all federally owned property was subject to normal tax could be about $2 billion a year. If this were passed out it would be a bonanza to some communities which have no real services to the federally owned property they --
Hugo L. Black: Would that affect this lease, don't you have this problem here, what you argue now seems to me would be a question of classification not the question of the other, unless we can just simply infer from the fact that this tax be levied on property leased from government, federal or state or religious, where they have religious immunity, unless we can infer from that there is an invidious purpose to tax the property of the government. I agree with you, if we look at sum, but are you saying that looking in those circumstances we must reach the conclusion that this is a tax on government property and if so what goes with the Michigan tax law insofar as the attempt to tax property leasehold value of property owned by the state and by religious institutions?
Roger D. Fisher: Well let's see if I can kind of answer that Your Honor. One argument which is this tax is plainly designed to offset tax immunity. Its conceited purpose is to offset the tax immunity of tax exempt property. The --
Felix Frankfurter: That's the goal across the board --
Roger D. Fisher: This is --
Felix Frankfurter: That's the whole board --
Roger D. Fisher: The purpose --
Felix Frankfurter: -- of all tax exempt properties.
Roger D. Fisher: Purpose is to remove the tax exemption of tax exempt properties. I say that Michigan has full power to remove the tax exemption of property which it makes tax exempt, but that by doing that it does not, because it decides to remove its own immunity which it creates, it might not have any tax immunity, it might decide not to have any local state laws, because it decides to remove its immunity does not give it a privilege of making an offsetting compensatory tax aimed at offsetting the federal tax immunity. And however much of Michigan's tax immunity they offset or decide to cancel out or not to cancel out, they are aiming a portion of their shot is solely for the tax exempt federal property and they can do what they want with Michigan but they cannot have a statute which grabs federal tax immune property and says, we have now got a new formula of words, it turns out we can remove this property because it is tax exempt. We can tax -- the incidence of the tax falls because the property is tax exempt.
Felix Frankfurter: That is why they are taxing.
Roger D. Fisher: That's why they are --
Felix Frankfurter: And that's why they are taxing. In order to equalize taxation of owners of property or manufacturers of property, they want to have every owner who enjoys a certain privilege, a certain source of power a part of his running expenses of the government. And they take care of all the other fellows by one form of taxation and they say you have a certain, you are given a certain power, you may have been given it by a certificate to have a water powered plant, you may have been given it because somebody left you some money and you have an estate tax or you may have been given it by the United States government and that is what we call in the law generally a license tax, a privilege tax. It isn't any to less privilege because (Inaudible) is the grant holder of the privilege and you can't cut under with reference to this particular type of privilege, the whole rate division of the tax law between taxing property because you own property and taxing -- in fact imposing a tax on a person, because all taxation falls on a person, it doesn't fall on the unanimous thing, it falls on person, because he is in possession of certain prerogative powers.
Roger D. Fisher: Your Honor the privilege here is a property interest. The particular privilege which they call a privilege is not like being a corporation. It's not like engaging in a business of storing gasoline. The particular privilege they have picked out as a privilege tax is one of the property interests in the government property. It is -- I'll come back with the Secretary of Defense. It's a different thing to tax the Pentagon. It would be something else to tax him for the privilege of using the Pentagon and I would say that that he is paid a salary to use it, he is supposed -- there is no difference in private person. He is doing government business on government property for a pay and he has the privilege of occupying that property. This is the same thing that Continental is doing in the government plant in Muskegon. They are working for pay on government property doing the government's business of building tank engines. Now if -- I agree there is a distinction between privilege and property taxes, I do not – we submit we cannot take a property interest, a right of use, an occupancy of government property and call that privilege by just calling it a privilege.
Felix Frankfurter: Mr. Fisher the Secretary of Defense or the postmaster in Detroit is an instrumentality of the government, but ever since Dravo you can no longer speak of any fellow who does work for the government of United States, an instrumentality.
Roger D. Fisher: The substantive problem, -- there are distinctions whether we paid put Oakridge on salaries or had a private contractor run it, the substantive problem is here that government plans have a major impact on local communities, a tremendous impact and there is appreciable problem. This problem is one with which Congress can deal because it alone can waive immunity of full government property where it caused an impact and of plants in which they have divided interest. It has expressly stated that the lessees maybe taxed for their interest up to the value of the leasehold interest. We believe that they can be tax no further.
Hugo L. Black: Let me ask you one other question excuse me, (Inaudible). Suppose the ones that disagree with you about this tax and think that this is a legitimate tax on a leasehold interest except your argument that we do not look into the words of the statute, we try to see just exactly how it functions, where does that put us in connection with the other two, other case if we accept the idea we do not look at labels, we do not look at names, but their taxes (Inaudible) the same preference in the State of Michigan as this one does, would it be consistent in your way of thinking on these cases to hold this tax valid and hold the others invalid?
Roger D. Fisher: Yes, I -- even if Your Honors disagree with position we have presenting in this case, in these two cases, the Continental and Borg-Warner, I would believe that as to the Michigan personal property ad valorem tax on aircraft manufacturing in process and materials, that there the tax is a -- because of the property and there is no other instance that it falls on, it's not because of the use of the property. You might say that both --
Hugo L. Black: Just doing what you admonish us not to do here looking at the words that have been used (Inaudible) practically functions?
Roger D. Fisher: The -- it's my position that you -- my position is that you should take a look at the substantive problem and deal with the fact for -- since at least for a long time this Court had held that federally owned property which is really officially owned by the United States cannot be taxed. I believe that you should say that a tax which is called a tax on that property on the first Michigan cases we were talking about the Murray case is clearly that once we find if you agree with us that the government at substantial beneficial ownership interest in those parts we have power to control over them. I think you should come to this case and say that they have taken a property interest, the right to use, which is one of the fundamental rights of the property and they have taken this property interest and said we will tax this property interest, which the occupant has by the value the entire property and that is not an appropriate measure of the privilege which these people of the use they are having of it I'd say. You are taking property interest and taxing by the whole property so I'd say that – we say that they're both bad. If you disagree in this case I think it'd be because of the line which Justice Frankfurter suggested that there is always been a distinction between a privilege tax and a property tax and it would be emphasizing the form that this is the tax on the right to use, the privilege of use and it would be because of that, that you would -- might disagree with us in this case, but if you adopt to that rule, it is because of the form of the tax it is good, you could not then say that Detroit personal property tax could be well applied to the government property. Thank you Your Honor I am sorry to --
Earl Warren: It's alright.


Warren E. Burger: We'll hear arguments next in number 1995, Breed against Jones. Mr. Iungerich, you may proceed whenever you're ready.
Russel Iungerich: Mr. Chief Justice and may it please the Court. This case is a federal habeas corpus action brought by award of the California Youth Authority who is currently in constructive custody on parole. It presents into Court in question under the Double Jeopardy Clause of the Fifth Amendment as applied to the states to the Due Process Clause of the Fourteenth Amendment and this question is whether a juvenile such as the respondent Jones is placed twice in jeopardy when the juvenile court orders his trial as an adult after an adjudication of delinquency and upon a finding that he's unfit for treatment as a juvenile. The facts in this case are not in dispute. In a petition filed in the Los Angeles County Superior Court, respondent Jones was charged with the commission of an act which if committed by an adult would have constituted a robbery under California law. At a jurisdictional or adjudicatory hearing on this petition, respondent Jones was found to have committed the robbery alleged in that petition. We submit as far as this case is concerned to the Court that we treat this particular proceeding as a trial and I don't think there is any question of our agreement between the parties on that point that the jurisdictional or adjudicatory hearing is in every sense a Court trial. After this adjudicatory or jurisdictional hearing, a second hearing was held known as the dispositional hearing and at this hearing, the juvenile court had what amounts to four choices under California law. He could place the juvenile on probation. He could commit the juvenile to a juvenile institution within the jurisdiction of the juvenile court, in other words, a county camp for juveniles on one of the other county facilities available to a juvenile. He could order a commitment to the California Youth Authority or he could do what he did in this case, exercise his power under Welfare and Institutions Code Section 707 and that is transfer the case to the adult court for trial of the juvenile as an adult.
Potter Stewart: And these four alternatives were entirely within his discretion with these?
Russel Iungerich: All four alternatives are within his discretion under California law although they occur in separate divisions of the code of the Welfare and Institutions Code.
Harry A. Blackmun: What is the age limit, 18 in California?
Russel Iungerich: It's 18 at this time, yes Your Honor. I believe it was 21 at the time the statute was amended subsequent to this particular juvenile's transfer but he was 17 at the time of his transfer.
Harry A. Blackmun: And if he chose the alternative of incarceration, how long could he imprison him, up until what age?
Russel Iungerich: Well, I believe up until age 26 depending on whether or not there is a -- ultimately a proceeding under the -- if he was committed to the Youth Authority and he was ultimately came back at age 21 and was found that he's still constituted a danger to society under the particular sections involved in the Youth Authority, he could technically be committed up until age 26, I believe at that time.
William J. Brennan, Jr.: What kind of hearing is the transfer here?
Russel Iungerich: What type of hearing is the transfer hearing? Well basically, I think that transfer hearing is set out in the case of Jimmy H. In other words, there are number of factors to be considered. The first factor, of course the factor that's expressly precluded is just taking a look at the gravity of the offense alone. California statute expressly provides that that alone is not enough for transfer. What the Judge will look at are three factors under the Jimmy H. case and those three factors are, first, he takes a look at the circumstances of the offense that is involved and the circumstances of the offense, the circumstances that surround the offense in the particular case. He also takes a look at the juvenile's prior conduct. In other words, any of his behavior pattern whether or not as in this case he had committed prior crimes that came within the juvenile court jurisdiction. In this case, respondent Jones had committed two prior armed robberies.
William J. Brennan, Jr.: Is this an adversary proceeding?
Russel Iungerich: Yes it is, Your Honor.
William J. Brennan, Jr.: Examination clause, examination witnesses?
Russel Iungerich: Yes, Your Honor. Hence, providing all the California Juvenile Court proceedings and of course that isn't the mandate of course as we would read the combination of Gault and Kent. In addition to looking at the particular circumstances of the case, of course he's going to look at the minor's degree of sophistication would be the third factor and his -- the extent of his criminal involvement in this particular case.
William J. Brennan, Jr.: Are there findings in support of the order of transfer?
Russel Iungerich: Are there findings here?
William J. Brennan, Jr.: Are there findings in these transfer proceedings?
Russel Iungerich: Well, the findings are not normally formally made. In other words, in the sense of findings of fact and conclusions of lost such as you'd have on a motion for summary judgment. Basically, the report, the probation report if it's held at the end of the transfer hearing as in this case is before the judge. He has the testimony and at that point he makes his decision and he may state the factors that guide him as far as transfer. I don't think there is any express requirement in California Law that all those factors be placed on the record at the present time.
Potter Stewart: But in this case, were there findings?
Russel Iungerich: Well, I think it's quite clear in this case as far as the disposition hearing. The findings were that the primary reason that he felt that this man should be transferred was the fact that he had committed two other armed robberies. That he had been committed to juvenile institutions in both of those cases and that basically, he wasn't amenable to the juvenile court process for that reason. I think it's a clear case of non-amenability as under any standard that would be applied in that type of hearing.
William J. Brennan, Jr.: I take it if there were dispute of fact as to one of these important notes, there would be a finding?
Russel Iungerich: If there was a dispute of fact, I would assume that the judge would state his reason as to why he was finding one way or another but under the California rules as this would come up appeal of course. If there was evidence on the record that would support the ultimate result that the judge reached, then of course those implied findings would be what the California Court would rely on in that situation. I think though that basically, the point that you brought out here is one that I think is very important as far as consideration the nature of the question involved here. Basically, what double jeopardy means in this particular -- in the context of this particular case is that a hearing is foreclosed at any point except prior to the adjudicatory hearing on the question of transfer and the question that really come -- the double jeopardy issue really is determinative of as whether or not the state should be permitted the flexibility to have the hearing either before or after and I think arguments can be made for a preferential -- for a preference one way or another depending upon the individual case. I submit that where you have a serious felony as robbery or murder or rape, you have a likelihood a contest of fact and although technically we're not consider quilt or innocence at the transfer hearing. Nevertheless, the judge is going to want to know the facts involved in this -- the questions will need to go into the same question of fact that would be involved --
William J. Brennan, Jr.: -- goes to inquiries in one proceeding?
Russel Iungerich: What?
William J. Brennan, Jr.: Is there ever a combination of those inquiries in one proceeding? That is a determination of the offense and a determination of the --
Russel Iungerich: No, that has been expressly ruled out that you can't make the determination in one proceeding. What we do is we save the possibility of having three proceedings and we only have two if we permit the alternative, the disposition or alternative of allowing transfer after trial. Basically what you have if you don't have the disposition or alternative after trial, what were the advantage of the disposition or alternative if there are contested issues. As to minor's involvement in the crime, as to the circumstances surrounding his involvement in the crime. Those usually will be brought before the judge at the adjudicatory hearing and he can rely on what he learned at the adjudicatory hearing to shorten the process when it comes before him on disposition. Whereas, if you hold this hearing before, you may have actually two duplicate trials, both of which covering the same subject matter and as is conceded by all parties in this case as we agreed, it would in that situation if you hold it prior, you will require two judges because of the judge that's considering the information that comes in, in the social study which is the equivalent of the social -- of the probation report that a criminal judge would receive its sentencing. He would have many of the hearsay materials that are presented in the probation report that might influence him on the question of sentencing and its felt they should not then preside on the issue of guilt or innocence having heard that matter so you have to have two --
William J. Brennan, Jr.: -- that that disposition hearing -- the disposition to turn him over to the Youth Authority to decide and then in effect as if it were a sentence is it?
Russel Iungerich: Yes, it's in the sense I would say that that would be much, it would be tantamount to a sentence in a criminal proceeding. In other words, if he were committed to the Youth Authority or he were sent to a juvenile institution. We didn't have that in this case and I think that that's the important factor that indicates why we don't have an application -- a proper application or proper case for the application of the principle of double jeopardy in this case
Byron R. White: Is there a Supreme Court of California opinion concluding that this procedure is not a violation of the California constitutional provision against double jeopardy?
Russel Iungerich: Yes. I think quite clearly that that is the position the California Court. I don't recall whether in Bryan versus Superior Court which is the leading case. Bryan held that there is no violation of double jeopardy to allow this transfer to take place after the adjudicatory hearing, Bryan cited in our brief. I do not recall whether Bryan went off on California grounds and I don't think they did discuss the California constitution although that option was available to the court in applying -- in deciding the constitutional question before it. But basically, the rule in California today is that the hearing may be held either before or after and double jeopardy really comes down to the question, must it be limited only before under the constitutional compulsion of the Fifth Amendment as applied to the states through the Fourteenth Amendment. I submit that that question indicate -- the resolution of that question really turns on the fact that although respondent Gary Steven Jones was tried twice in this particular case and I submit that the submission on the preliminary transcript of the adult case, he was in effect tried twice and that is the equivalent of a trial under California law because the judge determined all the issues of fact based on the preliminary transcript. Nevertheless, although he was tried twice, he was not placed in jeopardy twice and I think the critical distinction here is what is the critical question is what is a jeopardy for the purposes of this case because even if jeopardy had attached to the point of transfer and even if double jeopardy applied in the extent of saying that jeopardy does attach in the juvenile court, respondent Jones was not placed twice in jeopardy under the circumstance of this case for the primary reason first that none of the policies behind neither the protections that the -- are incorporated in the double jeopardy provision were violated in this case. North Carolina versus Pierce, those protections were set out. The first was that double jeopardy protects against the second prosecution after acquittal and of course I think subsumed in that ground is also what is tantamount to acquittal, the dismissal at some point prior to acquittal where there isn't manifest necessity for the dismissal and the termination of the case. In this case, there was no acquittal. There was nothing tantamount if anything what we had here was something that was tantamount to a conviction without a sentence and there's never been a situation where the court has held that it -- where there actually has not been a termination of proceedings, that there was actually a jeopardy at a first jeopardy at that point and the commencement of a second jeopardy where you do have some sort of continuum.
William H. Rehnquist: You wouldn't dispute would you that if the juvenile judge dismissed the charges after this hearing and found them in effect not guilty but then he couldn't be tried as an adult on the same charge.
Russel Iungerich: Well, under California law of course, under Richard M. versus Superior Court, we are bound under our state law by that principle. In other words, that their jeopardy would attach and that you couldn't retry him if it had been dismissed after the -- after the adjudicatory hearing had commenced.
William H. Rehnquist: Did your court put that on the basis of the federal constitution of the Supreme Court of California?
Russel Iungerich: That I think is on the basis of both the federal and the state constitution and its clearly on the basis of the state constitution as well and it does constitute an adequate state law ground on that particular situation so we're really not concerned with that point as to whether or not double jeopardy is applicable in juvenile court proceedings per se in this case because the situation involved here is really a bent on question. We're talking about the rights of this juvenile when he gets to the point that he is actually in adult court. In other words, we're talking about --
William H. Rehnquist: My question hypothecated that he was in adult court just as he is in your actual case but the difference was that that he'd been acquitted of the juvenile charges.
Russel Iungerich: He is in adult court and he had been acquitted of the juvenile charge. In other words, what the District Attorney has done in this case is refilled against him --
William H. Rehnquist: Yes.
Russel Iungerich: -- in a subsequent case?
William H. Rehnquist: Yes.
Russel Iungerich: Well, I think that I would reserve that question until a future case because I think there may be some cases pending on this Court's docket. At this point, I would think that jeopardy at least as far as what this Court might say would have attached in the lower proceeding but I think that's a quite different case from ours because we don't have that problem here and I think the states that has statutes that permits that at least ought to be allowed to defend that in this forum without my conceding away their cases where we don't have that problem involved in California.
Byron R. White: In California -- in California if you try a juvenile in an adjudicatory hearing and he is acquitted or whatever you call that, what do you call that, dismiss or --
Russel Iungerich: It's dismissed, it would be a dismissal.
Byron R. White: Then could you bring him back and try him again for the same thing in the juvenile court?
Russel Iungerich: I -- if it's dismissed? No, under the authority of the case of Richard M. versus Superior Court.
Byron R. White: That's a constitutional rule?
Russel Iungerich: That's a constitutional rule --
Byron R. White: State plan?
Russel Iungerich: Under our state constitutional --
Byron R. White: And federal?
Russel Iungerich: And federal. It was predicated on both grounds.
Byron R. White: So it s a duo? Hold it. So there is jeopardy at -- under the California Law jeopardy attaches?
Russel Iungerich: Under California Law, jeopardy attaches and the juvenile court --
Byron R. White: And so you're argument here isn't -- that it doesn't attach?
Russel Iungerich: It isn't that it doesn't attach that even if it does attach, we don't have a violation.
Byron R. White: It's never been -- it's never been over? I mean there's never been a --
Russel Iungerich: There's never been any end to the jeopardy. There's no new jeopardy when he's transferred to the adult court.
Byron R. White: Now, the California -- now, Bryan was after Richard M.?
Russel Iungerich: Yes, yes Your Honor.
Byron R. White: So Bryan, Bryan approves this procedure but doesn't approve the retrial?
Russel Iungerich: Right, correct Your Honor.
Potter Stewart: Now, this case after he's transferred to the regular adult court, he could have been acquitted, couldn't he?
Russel Iungerich: Yes Your Honor. He will have a second opportunity really in this case. What we have is a situation where the juvenile is given an opportunity for two adjudications beyond a reasonable doubt and two opportunities for acquittal and the state loses the conviction in effect that they obtained in juvenile court and has put at risk again in adult court of obtaining another conviction by the standard beyond a reasonable doubt. The difference between the proceedings of course and the reason why we have to conduct a second adult trial is that all of the basic rights that are recorded to an adult criminal defendant have not been incorporated into the juvenile court process, particularly under McKeiver, the right of jury trial and in order to accord the juvenile that those rights before he is actually convicted in adult court, we have to give him the second adult trial as California views the Constitution. But I think the important point here is that in analyzing the protections of the Constitution that we have no -- of double jeopardy and the protections that it gives, really, what we have here is a situation where if any of the protections that are mentioned in North Carolina versus Pearce apply, it would have to be the protection against a second conviction. But I think that basically the language, the understanding of that I have of the protection against a second conviction is this, that you actually have to have two separate and distinct risks of punishment and in this case there is one risk of punishment throughout. When the petition was filed in juvenile court proceedings, at the very beginning of this case in California, the petition -- the respondent was under -- on notice that the possibility of transfer and the possibility of an adult criminal sentence was in that case and until he was actually committed to the facilities of the juvenile court that risk did not depart the case, all at the point that the case is transferred, the only thing that departs the case is not the higher risk of punishment that's involved in the adult criminal proceedings but the lesser punishments that would be involved or the lesser disposition of being kept in juvenile court. Its really what you might say is the converse of the Green situation in Green versus United States where there in the initial case there was a verdict of guilty with regard to second-degree murder which meant an implicit acquittal of first-degree murder. There after the state tried to retry Green for first-degree murder unless held that there was some type of implicit acquittal, you could not be retried under the Double Jeopardy Clause for the higher crime. We have a converse situation here that the higher penalty never departed the situation. There is no new risk of punishment involved because the same risk carried on throughout.
Byron R. White: But there's a different consequence of conviction other than punishment?
Russel Iungerich: Certainly, there is a different consequence to the conviction --
William J. Brennan, Jr.: Namely? Custody will be different?
Russel Iungerich: The custody will be different -- well, it can be the same as in this case because what actually happened was the adult court decided to use the facilities again of the California Youth Authority and its possible to both juvenile court and adult court may use that commitment to --
William J. Brennan, Jr.: That's looking backward. That's looking backwards. They could have put him somewhere else.
Russel Iungerich: They certainly. They could have put him on a state prison.
William J. Brennan, Jr.: And now we've got a conviction as he would not have had as the case ended in the dual process --
Russel Iungerich: Certainly, but I think that that is basically a question of policy for the state courts to determine. After all, a --
Byron R. White: But this is a matter of fact, it is different.
Russel Iungerich: It is --
Byron R. White: It has different consequence.
Russel Iungerich: It has different consequences.
Byron R. White: -- may affect lots of things.
Russel Iungerich: And there are certainly collateral consequences that are involved that with a criminal conviction that are not involved --
Byron R. White: And also he can't be tried twice?
Russel Iungerich: He has been tried twice.
Byron R. White: Do you both agree that that the adjudication is a trial?
Russel Iungerich: That is correct.
Byron R. White: And you're suggestion is that unless there's double punishment --
Russel Iungerich: Not double punishment.
Byron R. White: Well, exposure --
Russel Iungerich: Mr. Justice White, he has to be exposed at two different times to separate indistinct possibilities of punishment.
Byron R. White: So you say just the fact that he's tried twice --
Russel Iungerich: Is not enough.
Byron R. White: Is not enough so that on your theory, I take it that the state should always be able to appeal as long as it agreed not to punish him any more than the sentence that was imposed the first time?
Russel Iungerich: I do not think we're settled with that type of an argument Your Honor. I would not make that and take that position. I don't think that the idea of continuing jeopardy could be extended. In other words, we've made a policy decision I think and our constitutional law in this country that after a man has been acquitted, he cannot be tried again. We do not have an acquittal in this situation, however, when we need to have that type of finality. What we're really talking about is a separate type of court system which is a juvenile court system which is basically making a determination whether or not this juvenile should actually not be treated as an adult and because of its nature of his crime and his prior background, they feel that in order to rehabilitate him, he actually needs to be exposed to the criminal process because they have exhausted their facilities. We have I think quite different policy considerations here than would be involved in a situation where you have a case where a man has been acquitted at a previous time.
Byron R. White: Assume, he went through the juvenile procedure and the entire juvenile procedure was exhausted, when he became what, 21 in your state?
Russel Iungerich: Yes.
Byron R. White: 21. Well, at that time you decide that we just have failed with this young man so we're going to now try him as an adult.
Russel Iungerich: Well, frankly that's not our case. I -- we're not advocating that position. We're advocating only at the disposition --
Byron R. White: I'm not sure there's difference though in that.
Russel Iungerich: Well, at that point, I don't think -- I think that there's a different question, of course, as to whether or not when they make a final -- I would say under my theory where you have a separate risk of punishment, you have two separate and distinct jeopardy at that point because you haven't had the lower -- you have actually committed the man to the juvenile institution, if you've made a mistake, I think the policy of finality which is inherent in the juvenile -- in the Double Jeopardy Clause should apply at that point and say, well, we can't sentence the man a second time and I think --
Byron R. White: Once it's gone through the dispositional hearing that that should terminate the initial difference.
Russel Iungerich: What?
Byron R. White: Once you've gone through the dispositional stage --
Russel Iungerich: Yes.
Byron R. White: -- which you -- after adjudication --
Russel Iungerich: The only exception I think that there might be for that is there is the tentative commitment to the Youth Authority where the man may be referred back to the court. In other words, it's really an extension of the disposition hearing. At that point, in California, the Youth Authority makes an evaluation of the man and they decide, well, they don't feel they can treat him and they can send him back to juvenile court at that point very much similar to diagnostic studies that aid the court in sentencing.
William J. Brennan, Jr.: At that's -- at that's the point to transfer him under your law?
Russel Iungerich: Under that at that point, Bryan says we can transfer him under our law.
Warren E. Burger: You made a point in your brief I belief that if you do not prevail, this will compel the juvenile courts to superimpose on the present procedural structure, a preliminary hearing of some kind in every case that will overburden an already overburdened court but isn't it possible, that is the point you make us --
Russel Iungerich: Yes, Your Honor.
Warren E. Burger: Isn't it possible recently to identify in advance the cases which might be borderline adult cases and --
Russel Iungerich: Well, --
Warren E. Burger: -- the preliminary treatment only to those cases?
Russel Iungerich: Well, I don't think it is clearly a case that you can identify, you'd possibly identify them but you have to have --
Warren E. Burger: Well, you know the man is right but before he begins any proceeding, you know what his prior record is, don't you?
Russel Iungerich: Yes, the probation department undoubtedly would have his prior record.
Warren E. Burger: And you know the nature of the crime or criminal conduct that he's charged with?
Russel Iungerich: Yes Your Honor. Well,
Warren E. Burger: And do you tell me that you couldn't identify in very large percentage of the cases.
Russel Iungerich: Well, the problem is not identifying. I think you can possibly spot the transfer case and specially where you got a murder or a robbery, usually the gravity of the offense even tells you something about that although we're not suppose to transfer on that basis. We're talking about those that this -- any attorney where to sought, when he comes in to transfer hearing, he's going to want to fully trash out all of the issues as to why his client should not be transferred and if he does that, what we're getting off is really two trials and I think that that's the important point to make that there are situations where the juvenile court judge should have the discretion to hear the adjudication phase first and then make his decision on transfer afterward to avoid two duplicate trials before two different judges because what we're doing by applying double jeopardy in this case to cut off transfer as a dispositional alternative will in effect take that discretion away from the judge so that he can maintain his calendar and take those cases where he thinks that he's going to have two contested hearings and may have a situation involving two full trials before two different judges and try them at one proceeding.
Warren E. Burger: What is the percentage -- what's the percentage of cases that are transferred for adult trial, did you know?
Russel Iungerich: The percentage, it is less than 10% and I -- the exact figure at this point, I don't know because our figures are -- the last figures we had available of course are 1972 figures and the Bureau of Criminal Identification in California hasn't come up with its reports for 73 yet but at that point it was less than 10%. The point is, with those cases though is that the ones that are considered for transfer and we don't know how many, first of all, there are no statistics on the number of waiver hearings that are actually held in California. Where transfer is rejected and of course those are the cases that are really going to cause the bottleneck for the juvenile court because where transfer is rejected that's the situation where we're going to have the second trial situation in the juvenile court and actually the problem created for the juvenile court calendar. I think there's no question, the both sides on this case agree on the fact that the juvenile courts already have overcrowded dockets and by adding this particular -- taking out this possibility of giving the flexibility to actually avoid two duplicate trials in this circumstance may really cut in to their discretion and actually lead to more congestion on their calendars. I think that as well as the indication that there is no violation of the principles of double jeopardy, I think as well the continuing jeopardy exception would give us an additional peg on which to decide that this case does not violate the double jeopardy provision of the Constitution. In Price versus Georgia, this held that its prior cases had formulated a concept of continuing jeopardy's -- jeopardy where criminal proceedings against the accused have not run their full course and I think in this case, the proceedings against this individual did not run their full course until he actually went to adult court and there was a determination and an ultimate disposition. Unlike any other care, there is a link between these two proceedings and the link is the judicial transfer. It's not a transfer that the prosecution can unilaterally determine as for example, filing a new case against this man after the juvenile court has taken him into its own facilities.
William H. Rehnquist: But isn't it the one that commences that the initiative of the defendant either, the way it did in Price or in Green.
Russel Iungerich: I -- it doesn't commence that the initiative of the defendant I would submit that as the footnote in Green, I mean in Price indicates that actually you have an amalgam of interest in the double jeopardy cases but I don't think that's its ever been a preeminent type of thing where you require a waiver other than I think the retrial cases. Even the retrial cases, I don't think uniformly go off on the question of waiver and indeed I think Green rejected the waiver theory in its analysis. So that I think that it depends on the particular case as to which one of those interests, lack of finality or limited waiver or the interest of society, which one of those is actually applied in the case. What I would submit is continuing jeopardy is not a principle that can be solely limited to the retrial case. The genius of our common law is that we can apply a principle in one area over to a situation in another area where substantially the same policy considerations are valid. And I think that's the situation we have here with continuing jeopardy because the proceedings did not run there full course until we have this adult proceedings against Mr. Jones in this case.
Harry A. Blackmun: In the capital punishment days in California, you had a bifurcated trial system, didn't you?
Russel Iungerich: Yes, Your Honor.
Harry A. Blackmun: Do you still have that in some cases?
Russel Iungerich: Under the new death penalty statutes in California, I --
Harry A. Blackmun: Not at all, do you have it -- do you have --
Russel Iungerich: I don't, I think that was the exclusive -- what we do at bifurcated trials in the insanity area. In other words, in insanity, you will have a separate trial on your plea of not guilty by reason of insanity as separate trial, so Your Honor --
Harry A. Blackmun: -- we head up here McGautha against California, --
Russel Iungerich: Yes, Your Honor.
Harry A. Blackmun: -- the death penalty case. Was ever a claim made that that was double jeopardy?
Russel Iungerich: To hold two trials --
Harry A. Blackmun: Yes.
Russel Iungerich: -- in that situation?
Harry A. Blackmun: Yes. And put the defendant through the trial --
Russel Iungerich: I don't ever recall that there was although I -- there has been some District Court attacks that a fifth penalty trial or something like that constitute a double jeopardy. But --
Harry A. Blackmun: -- join a parallel in this case to that kind of a system?
Russel Iungerich: I don't think so. I think that that system is not quite the same situation as we have here because we're not talking about -- well, it may well be because you have a conviction and then a sentence and the jeopardy doesn't run, you have two trials in that situation. It may be a close parallel but I really haven't considered that as a possibility because of the uniqueness of the death penalty situation. Thank you.
Warren E. Burger: Very well. Mr. Walker.
Robert L. Walker: Mr. Chief Justice and may it please the Court. I would like initially to respond just briefly to a couple of questions that you asked my adversary. First of all, Mr. Justice -- Mr. Chief Justice, in an answer to your question about how many transfers there are actually are in California of the latest statistics from 1972, shall ask if they're available indicate that there are approximately -- there are exactly 509 transfers out of 50,000 delinquency cases so only 1% of the cases result in transfer to adult court. Secondly, I would resist the characterization of the fitness hearing in California as a duplicate trial. The cases in the statutes are quite clear in pointing out that a fitness hearing has nothing to do with the minor's guilt or innocence. Under California law, you're merely attempting to determine first whether the minor is over the age of 16. Secondly, whether the minor is charged with a criminal law violation, and thirdly, whether the minor would be amenable to the treatment programs or training facilities available to the juvenile court. In fact, the statute says that a minor cannot be waived on the basis of his guilt or innocence of the crime. It's not a sole criterion and cannot be used as a criterion for waiver.
William H. Rehnquist: Is that kind of evidence admissible at the fitness hearing?
Robert L. Walker: At the fitness hearing, there is evidence about -- is admitted sometimes about the nature of the offense. Commonly, what happens is that the police reports are maybe introduced into evidence because there are no hearsay is admissible to fitness hearing. So that evidence is admissible but it's admitted solely for the purpose of determining whether the minor is amenable to the juvenile court facilities.
William H. Rehnquist: Can counsel for the juvenile then offer evidence of mitigating circumstances?
Robert L. Walker: He may well offer evidence of mitigating circumstances, Yes Your Honor.
Warren E. Burger: Do you suggest that the preliminary inquiry could not even hear about the nature of the crime and --
Robert L. Walker: No, certainly not. The nature of a crime is relevant but relevant only to the statutory criterion of amenability. Naturally, if they're dealing with a minor who is charged with a murder or a rape, that's a -- those are relevant facts for the Court would take into consideration.
Potter Stewart: I thought the -- we were told that the case of Jimmy H. in the California Court said that there were three criteria that the Court should consider in dealing with this ultimate statutory standard of amenability and one was the serious of -- seriousness of the offense, two, was the previous record and three was just basic amenability to juvenile corrective procedures. Did I mistook -- did I misunderstand?
Robert L. Walker: That's an incorrect characterization of the case in my point of view Your Honor. The Supreme Court of California said in Jimmy H. that the only evidence that must be considered by the Court at the fitness hearing is a probation report containing the minor's previous record. There were a number of other factors including expert testimony, details about the nature of offense, but those the Court said are relevant only to question of amenability. I think it's quite clear in the decision.
Potter Stewart: The ultimate statutory standard is amenability?
Robert L. Walker: Correct. Now, this minor has been placed --
Lewis F. Powell, Jr.: Mr. Walker.
Robert L. Walker: Yes, Your Honor.
Lewis F. Powell, Jr.: Before you go on, do I understand your position to be that at the fitness hearing or the transfer hearing that no evidence may be introduced as to quilt or innocence?
Robert L. Walker: No. There may be some evidence of the nature of the crime which may also bear upon the minor's guilt or innocence. That evidence will be taken into consideration by the Court solely in connection with the statutory standard of amenability. There is a requirement in California law that if a minor is transferred, he must be given a preliminary hearing within 10 days so the minor would be entitled to that procedural protection under California statutory law.
Lewis F. Powell, Jr.: The minor is entitled to counsel at the transfer hearing?
Robert L. Walker: Yes, he is.
Lewis F. Powell, Jr.: And suppose counsel insists on putting an evidence of the minor's innocence, is he entitled to do it?
Robert L. Walker: I'm not sure it has ever come up in a case. I suppose in most cases the court would hear although technically perhaps it might be considered almost irrelevant. This minor has been placed in jeopardy in two quite different respects. First of all, he's been tried twice, the very same offense and this -- there's no dispute about and our basic position is and I think this is confirmed by numerous opinions of this Court that a Double Jeopardy Clause protects a defendant and let us not forget that this is a convicted defendant, a minor who's been convicted of a felony, although the Double Jeopardy Clause protects the defendant against possibility of two prosecutions for the same offense. Quite irrespective of the penalties that might be opposed, he suffered the anxiety, the insecurity, the expense, etcetera of two trials for the very same crime. Secondly, he was exposed to a considerably more severe penalty at the conclusion of his felony trial. The maximum penalty that could be imposed by the juvenile court in this case was to commit the minor to the California Youth Authority until age 21. The maximum penalty that he faced in his adult trial on the other hand was a mandatory sentence of from five years to life imprisonment. So he is certainly in a position of having faced a very severe jeopardy in terms of the penalty that could be imposed by the adult court. Now, in this case, the adult court shows to commit him to the California Youth Authority and it's quite incorrect to believe that that means that he has the same sentence as an adult that he would have had as a juvenile. As a juvenile, he could only be held by the Youth Authority until age 21, as a convicted felon, he may be held by the Youth Authority until age 25. At present time, the minor is on parole, from the Youth Authority, he is 22 and a half years of age. If indeed he had been sent there by the Youth Authority, he would already be free, excuse me, by the juvenile court, he would be free of the juvenile court's jurisdiction. There's another aspect in which he's been exposed not only to a more severe punishment but in fact a double punishment and that is, he has been held in juvenile hall for approximately three extra weeks as a result of his totally unnecessary jurisdictional hearing in juvenile court. Under California Law, he will receive no credit and has received no credit towards his commitment in the Youth Authority. So, we have three different respects in which this minor has been placed in jeopardy. Mr. Justice Rehnquist, you asked the question of my colleague over here before about whether a minor could be transferred after an acquittal. I think that that question is open under California law but I would point out that there's nothing in the transfer statute that precludes that. And as far as I know, there is no California case that is directly on point.
William H. Rehnquist: I suppose it wouldn't be technically a transfer as a part of the juvenile process, it would be the District Attorney filing de novo in the Superior Court.
Robert L. Walker: Probably.
William H. Rehnquist: Richard M.
Robert L. Walker: Richard M. was a case where the minor obtained an acquittal in juvenile court and they attempted to retry him in juvenile court.
William J. Brennan, Jr.: And that was double jeopardy?
Robert L. Walker: That was double jeopardy under both the federal and state constitutions. I would point out that --
Warren E. Burger: We'll resume about the point in the morning.
Robert L. Walker: Thank you, Your Honor.