Warren E. Burger: We will hear arguments next in Cass against the United States, 73-604, Adams against the Secretary of Navy, 73-5661. Mr. Hanson.
Arthur B. Hanson: Mr. Chief Justice, distinguished Associate Justices, may it please the Court. At the outset, I would like to call the Court’s attention to the fact that we did not receive the reply brief in this matter until this past Friday. We would ask the Court’s indulgence in permitting us to file a typewritten brief in reply, if we may certainly not later at the end of this week.
Warren E. Burger: That plea will be granted Mr. Hanson, you may take even a little more time if you need it.
Arthur B. Hanson: Thank you sir. This applies of course to my Brother Dougherty who is arguing the other cases.
Warren E. Burger: Yes of course.
Arthur B. Hanson: And Your Honors, we would like to call your attention to two items. One appearing at page 20 and another, 21 of the Solicitor General’s brief. The footnote on page 20 refers to the time, that the Government filed its petition for writ of certiorari in Schmid against the United States. And it discusses the fact that this might increase the Government’s potential liability by more than $12 million if that case were not reversed. I had the pleasure of arguing Schmid in the Court of Claims and I protested vehemently at that time that this remark was placed in the Schmid petition to this court that it was outside the record. This was never raised in the court below, and the Court of Claims, it’s never been raised in the Ninth Circuit nor in the District Courts that have considered this matter and I think it is inappropriate as it be brought before the court, I would ask that it be disregarded. Truthfully, they can find out what it would cost but they never have and they never tried to put it into the record. I don’t think it should be here today. Secondly, on page 21, I would almost say the Freudian slip but I will term it inadvertence. In the middle of the page, when they quote under paragraph number two, they say, “for the purpose of this subsection” when they are trying to discuss our approach to interpreting the statute. I would urge the court to note that this was done in Schmid and it was done in the Ninth Circuit and here it is again. We have repeatedly called the government’s attention that the statute reads “for the purposes of this subsection” and that is highly important and we’re sorry that it slipped back in. Now, if I may I’ll address my remarks to the case in chief. We are here primarily on a matter involving purely a question of statutory construction, the statute involved is 10 U.S.C. 687 (a). An impertinent part, that statute involves reserve officers of all the services who have served more than their -- one might say indentured service in a sense whether they were in the draft call or whether they were called up for some other purpose, they have served more than four years. And then have extended onward their service at the request of the Government and then were discharged involuntarily before they reached a fifth year of service when the war in Vietnam was winding down and they were released just prior to the fifth year, in many instances within a few days of having completed five years of service. Now, we have cited this statute for purposes of this discussion before the court. If you see page two of our brief, we have set it forth and I think that since we’re dealing with the exact language, I would like to recite it to you in a sense. We say, “Non-Regulars: readjustment payment upon involuntary release from active duty. “Except for members covered by subsection (b), a member of the reserve -- of a reserve component or a member of the Army or the Air Force without component who is released from active duty involuntarily, or because he was not accepted for an additional tour of active duty for which he volunteered after he’d completed a tour of active duty, and who has completed immediately before his release, at least five years of continuous active duty, is entitled to a readjustment payment computed by multiplying his years of active service other than in time of war or of national emergency declared by Congress after June 28, 1962, but not more than eighteen, by two months' basic pay of the grade in which he is serving at the time of his release. For the purposes of this subsection, (1) a period of active duty is continuous, if it is not interrupted by a break in service of more than 30 days; and (2) a part of a year that is six months or more is counted as a whole year, and a part of a year that is less than six months is disregarded. Now with that statute in front of you, with nothing else before you, I think the court would reach the same conclusion that the Court of Claims did. And we urge that the court read carefully the decision Schmid. As you may recall Your Honors, you rejected the petitioners’ certiorari in Schmid by applying the two votes. Now, what has happened is that a number of officers in Schmid’s case, he had a requirement for some $13,000.00 or $14,000.00, so he had to go to the Court of Claims on the jurisdiction. Certain of the other people involved have gone to the Federal District Court as a matter of convenience because they had $10,000.00 or less dollars involved that jurisdictionally, they could use the District Court. And that’s why we are here today. Cass was one of those who had $10,000.00, some odd dollars and he waved the above $10,000.00 to come here in the District Court.
Speaker: Mr. Hanson, is this applicable to Commissioned Officers only or is it to all reservist who come within --?
Arthur B. Hanson: In this particular part of the statute --
Speaker: All these people are officers, I know.
Arthur B. Hanson: Your Honor, these are all officers but it would be my view that it’s applicable to all members of the reserve who are in there on a voluntary extension of their four-year enlistment period. And what happened in this case was that many of these people officers and men served more than the five years during the Vietnam unpleasantness which was not declared a state of emergency or a war and that’s why the terms of the statute but those have already been taken care of by recomputation. It happens that this applies only to those who had extended their service expecting to go on for as long as the government needed them and then when the government saw that situation lining down, they quickly got a number of them out before they completed the fifth year. It might interest you to know that Schmid in that case had served four years plus in a previous enlistment as an enlisted man and then came back in the Navy as an officer and served four years, six months and some odd days. So that when actually we went in for his case, we were dealing with a recomputation based on his total years of service which gave him something in excess of $13,000.00 as opposed to the smaller amounts here although he is of a similar rank.
William H. Rehnquist: Mr. Hanson?
Arthur B. Hanson: Yes.
William H. Rehnquist: What if there had been an interruption in the service in the middle of a five-year period? If they have five months, would you make the same argument?
Arthur B. Hanson: No, because the statute very clearly states that a period of active duty is continuous if it is not interrupted by a break in service of more than 30 days. But I’m glad you raised that because that again emphasizes the defining portions of the statute. The statute’s main body is defined in two areas. “For the purposes of this subsection; (1) a period of active duty is continuous, if it is not interrupted by a break in service of more than 30 days. If it had been interrupted by a break in service of more than 30 days such as the five months you raised, then he would not qualify for this statute.
William H. Rehnquist: Why couldn’t you argue under your theory that the part of the year, that’s six months or more should be counted as a full year?
Arthur B. Hanson: Because another section of the statute covers it. The other section says, “A part of a year that’s six months or more is counted as a whole year, and a part of a year that is less than six months is disregarded for -- this is for purposes of eligibility in that sense whereas if he doesn’t have unbroken active duty, if it's only broken for 30 days, he still qualifies under Section 2. But if he has a break of more than 30 days, he is disqualified and he is eliminated from it under Section 1. And what I’m suggesting to Your Honor is that you will find that you must read the statute as a whole and it is not at all unusual to qualify a statute by the language in the following part of it. Now, I will call your attention to 6330, Title 10, U.S.C 6330, which is quoted on page 11 of our brief. And that again is interesting because it is applicable to exactly the same sort of recomputation and eligibility. That applies to members of the Marine Corp and Marine Corp Reserve, they're going to be transferred to the Fleet Marine Corp Reserve. It says, “For the purposes of subsections (b) and (c), a part of a year that is six months or more is counted as a whole year and a part of a year that’s less than six months is disregarded.”
Speaker: But if this section -- if this statute read the way 6330 does, you wouldn’t have a problem would you?
Arthur B. Hanson: It does read that way Your Honor. That’s what we are saying, it reads exactly that way.
Speaker: Well it seems to me the statutes are different.
Arthur B. Hanson: They are different in one sense. But 6330 applies to someone who has served 19 years and six months so they are released at the end of 19 years and six months and this is a usual thing in the services to do and they are given credit for that remainder, they're given 19 years, six months and a day and they are then credited with 20 years of service.
Warren E. Burger: It’s a term at least.
Arthur B. Hanson: That’s right.
Warren E. Burger: Not in there is it?
Arthur B. Hanson: Sir?
Warren E. Burger: The term at least modifying five years is not in the 6330, is it?
Arthur B. Hanson: Well, no Your Honor it is not but it says, “An enlisted member of the Regular Navy or the Naval Reserve who’s completed 20 or more years of active service in the armed forces may, at his request, be transferred to the Fleet Reserve.” Then they say for the purposes of this, they left them out in 19-and-a-half years and one day.
Warren E. Burger: Well, as Mr. Justice Blackmun said, if you had that kind of a provision in 687, you would have a different --
Arthur B. Hanson: Well, possibly Your Honor. But I would suggest that when they said at least five years of continuous active duty and then they come down and tell me that for purposes of this subsection that a part of a year that’s six months or more is counted as a whole year, then he has completed at least five years of active duty.
Warren E. Burger: Well isn’t it reasonable that Congress intended to give a greater boon if you want to call it that to a man who had served five or less months or four years almost than someone who had just served four years and had been extended?
Arthur B. Hanson: No Your Honor because those people are what we call the 20-year group and they have been in for 20 years and are entitled to retire both to promotion flow and other items whereas these people are called-in in a time of emergency such as the Vietnam war. Most of these people were draftees who came in for an initial tour of four years and then they extended at the requirement of the Government and then asked to continue on and then were involuntarily retired when it seemed to be in the Government’s budgetary interest to reduce them.
Warren E. Burger: But my question is, is it not reasonable to assume that Congress was prepared -- had a different attitude toward so called 20-year people than 4-year people who might serve a little bit over?
Arthur B. Hanson: Well, I would have some question to that Mr. Chief Justice. There is a reserve officer for some 33 years and still one. I think the Congress is very concerned with the very people we’re concerned with here. And I would point out one other thing that in the court’s attempt in the Ninth Circuit to reach that conclusion, they may mention of the fact that the Senate Report involves, suggested that perhaps there was not subsidy change in that statute when it was recodified. I’d call two things to the Court’s attention, first, 6330 was passed in 1958. That was subsequent to the initial passage of 687 (a), which was passed in 1956. When they recodified these matters in 1962, some water had gone under the bridge and we believe that the Congress intended to do exactly what it did. They don’t mention the House Report. This bill had to go through both Houses. It didn’t just go through the Senate. And the fact that the Senate said, “Well we don’t think this is any substantive change,” is really immaterial to the consideration of this matter because when it was passed by both Houses, a change did appear. And the change is the one that finds 687 (a) exactly as the Court of Claims found it. And I would urge this court to pay particular attention to the language in the Court of Claims decision where they went behind the statute and stated very clearly on page three of their opinion that although we find the sections clear and unambiguous on its face and its susceptible on its face of only one interpretation. They then go on to say although we find no ambiguity in the words of the statute, we’re not precluded from examining the legislative history underlying the enactment in order to determine whether it is clear and compelling support for the interpretation. They then went on to say that after a careful --
Speaker: (Inaudible)
Arthur B. Hanson: So that after a careful review of the legislative history of Section 687 (a), then we can conclude that support which it lends to defendants position, namely the government, is not so clear and compelling as to require us to adopt an interpretation of the section inconsistent with a clear import of its terms. And I would like to add one other thing if I may --
Byron R. White: Well, now what?
Arthur B. Hanson: Excuse me. Go ahead.
Byron R. White: Under paragraph two, it says that a part of a year that’s less than six months is disregarded.
Arthur B. Hanson: Yes sir.
Byron R. White: So that would have no conceivable application to eligibility, would it?
Arthur B. Hanson: Well, it would to this extent Mr. Justice White. If the (Voice Overlap) --
Byron R. White: Well, I don’t see how it could.
Arthur B. Hanson: If the man had served four years, five months and 27 days in a leap year February, well, he certainly would have served less than six months then he would not be eligible. But if he had served four years, six months and one day, he would be eligible.
Byron R. White: Well, I know but you -- I can see how -- you might arguably say the first part of Section 2 applies that to eligibility as well as computation but the last part of it I would think would apply -- could apply only to computation. And so arguably, the whole Section 2 is a computation section.
Arthur B. Hanson: Well again, I can only state that the Court of Claims did review this with great care and they addressed that argument thoroughly. I would urge Your Honors to address it carefully and I think one of the items that persuade it and I was about to call your attention to this is the fact that this is a remedial statute. And as such, it’s our view that it must be most carefully construed in favor of the petitioners in this case.
Harry A. Blackmun: Mr. Hanson, on your view, why wouldn’t Congress had merely provided for four and a half years instead of five as the basic eligibility period and forget about subsection (2)?
Arthur B. Hanson: I’m not being fictitious when I say this Mr. Justice Blackmun. The Congress does many things that I wonder about. But it’s my view that there are many statutes which they describe in terms of this nature. They set out what a statute is and then they put a caboose on it so to speak in which they say, “For purposes of this section, we mean the following.” And that’s what we say they’ve done here and this isn’t unusual. My time is up, for that, I thank you.
Warren E. Burger: Mr. Dougherty.
William A. Dougherty: Mr. Chief Justice, may it please the Court. Might I point out in the beginning that our case is slightly different than that of Cass because we deal with three Marine Captain Aviators and the statute, we cite 6330 of Title 10, deals specifically with the Navy and the Marine Corps and specifically with Regulars and Reserves of the Navy in Marine Corps. As with Cass, we take the position of course that the statute is clear on its face. First, it sets forth a standard and the standard is, “At least five years of continuous active duty.” And then with the preface, “For the purposes, I emphasize, of this subsection,” it goes on to define specifically what the phrase continuous active duty means as was explained to Mr. Justice Rehnquist and then it specifically defines the word year. Now, what the Ninth Circuit did, I submit is it overlooked the plain meaning of the words in Section 2 defining the word year. And it took the first part of the statute, subsection (1) and then ignored (2). The statute, 10 U.S.C. 6330 uses exactly the same phraseology, the same words as does 687 (a) and specifically as I pointed out refers to Navy and Marine personnel both regular and reserve. I would also --
John Paul Stevens: You're not suggesting that 6330 covers your client because 6330 among other things applies only to enlisted personnel and also only to those who have completed 20 or more years? So what is your point that your case is different?
William A. Dougherty: My point is that 6330 allows a six months rounding figure both as to regulars and to reserves and I think that’s significant. And since we are dealing all our clients in this case are reservists, I think it’s significant and I was just about if I may call the court’s attention to a statute that no one has cited in the briefs, the Justice or the amicus curiae or anybody. And it is 10 U.S.C. 277. And its states that the laws applying to both regulars and reserves shall be administered without discrimination, (1) among regulars; (2) among reserves; and (3) between regulars and reserves. And I’m submitting that there's a different treatment of reserves in 6330 than there is in 67 (a) and that contravenes the statute that I have just cited.
Warren E. Burger: Does that help your case any Mr. Dougherty that the statute Justice Stewart just cited to you contains an expressed provision for rounding out when there's less than the full period and the statute contains no such rounding out provision?
William A. Dougherty: Mr. Chief Justice, it’s our position that the “rounding” provisions of both statutes are exactly the same. The only difference is the term at least five years as you asked earlier and in reference to 20 years.
Warren E. Burger: Well at least is -- those are two pretty important words in that statute, are they not?
William A. Dougherty: But if you take the subsection (2) as defining the word year, it says, “A period of six months or more” and it says, “For purposes of this subsection,” that means the whole subsection. It just doesn’t mean part of it. And that’s the thing the Ninth Circuit missed, I submit.
Speaker: Before 1962 to 1962, you wouldn’t have much of a case would you?
William A. Dougherty: Before 1962?
Speaker: Well before the statute was codified in to its present form?
William A. Dougherty: If you take the, it was 1016 of Title 50, that was a different statute, yes, I agree.
Speaker: But --
William A. Dougherty: That uses -- that specifically used the term for computation.
Speaker: But didn’t the reports indicate when they codified it that they didn’t intend any substantive change?
William A. Dougherty: Well only -- it depends where you look sir. The Senate says, Mr. Hanson pointed out, the Senate put it -- set it at one time but --
Speaker: But that’s the usual rule on codifications anyway, isn’t it?
William A. Dougherty: Well, Mr. Lubenity (ph), as we pointed on our brief, Mr. Lubenity's (ph) original bill in 1956 contained three things. It amended, it changed and it codified. There were three separate bills, not just one. That’s on page nine -- eight of our brief if you please. They were incorporated as Titles 1, 2 and 3 to the bill, (1) To amend Title 10; (2) To codify recent military laws; and (3) To improve the Corp. So at best, the legislative history of this statute is ambiguous. Thank you. My time is up.
Warren E. Burger: Thank you Mr. Dougherty. Mr. Patton.
William L. Patton, Jr.: Mr. Chief Justice, may it please the Court. The government’s view is that this case presents an instance where a mistake was made in the codification of the statute. Petitioners contend that the Act is clear on its face and that because it is clear, this court cannot look to either the antecedent statute or the legislative history of the 1962 codification in construing the Act. And alternatively, they argue that the legislative history supports their claim that in 1962, Congress intended to change the eligibility requirement. Our position is that the statute is not clear and that any doubt as to its meaning is dispelled by a consideration of the antecedent statute and the legislative history. And even if the statute redeemed clear on the first examination, there surely is no rule which forbids resort to aids and construction. And indeed, resort to such aids is particularly -- excuse me, particularly appropriate in the case of codified statute. Now, when we begin with subsection (a) of the Adjustment Act, we find that it deals with two subjects. First, Congress expressly fixed the eligibility requirement at five years of continuous act of service. It then provided that the amount of pay would be computed by multiplying years of service by two months basic pay. Because calculation of amount of pay rests on years of service, it was then necessary to account for fractional service. And we submit that the “rounding” provision, that part of a year which is six months or more shall be counted as a year and less than six months disregarded applies to calculation and only to calculation. We have a hypothetical in our brief, which illustrates our position clearly. If a serviceman had served four years and eight months, he would not in our view be eligible for adjustment pay. If however, he had served 13 years and four months, he would be eligible and the amount of the pay would be computed by multiplying 13 by two months of basic pay, the four months being disregarded under the “rounding” provision. If he had served 13 years and eight months, it would be calculated by multiplying two months basic pay by 14 years, the eighth months being counted as a year under the “rounding” provision. It would be possible to read the “rounding” provision to apply to its eligibility by focusing on the plural purposes. But to do so involves a number of problems. One as Mr. Justice White has pointed out that part of the “rounding” provision, which calls for disregarding less than six months, has no application. Secondly --
Potter Stewart: Well, wouldn’t that be equally true under 6330?
William L. Patton, Jr.: It would be under 6330. That’s right Mr. Justice Stewart and with respect to 6330, our position is that that statute is more clear than the Adjustment Pay Act.
Potter Stewart: Well, it’s your --
William L. Patton, Jr.: And --
Potter Stewart: -- submission but I’m just asking now about this little argument you’ve made --
William L. Patton, Jr.: I agree that --
Potter Stewart: That the less than six months would have no meaning if the petitioner’s construction were accepted. But the less than six months has no meaning from the point of eligibility under 6330 even though you concede that the petitioners -- that that means commissioning that --
Speaker: It has a meaning for a computation.
William L. Patton, Jr.: It has meaning for computation, 6330.
Potter Stewart: Or so, does that for computation.
William L. Patton, Jr.: For computation, that’s right.
Potter Stewart: So the arguments -- your argument would be equally applicable to 6330.
William L. Patton, Jr.: That’s correct and Frankly, I find 6330 on the first examination is somewhat curious.
Harry A. Blackmun: But at least 6330 refers specifically to subsections (b) and (c).
William L. Patton, Jr.: That’s correct Mr. Justice Blackmun and I think --
Potter Stewart: Well, but in this case, we only have one subsection. And that’s --
William L. Patton, Jr.: That’s right.
Potter Stewart: And this statute for the purposes of this subsection, what are you going to -- you can’t say (b) and (c) here because there is no (b) and (c), there's only one.
William L. Patton, Jr.: That’s correct and I don’t suggest that this statute is a model of clarity and I do say that if 6330 were involved --
Potter Stewart: That’s where you differ from your Brothers on the other side, they say it is very clear.
William L. Patton, Jr.: That’s right Mr. Justice Stewart that’s where we disagree. And the question is whether the court can resort to aids and construction in determining what Congress intended with this provision. Now, an additional factor is that in the Adjustment Pay Act, Congress specifically required five years of continuous service for eligibility. A “rounding” provision would not be necessary for eligibility. I agree it would not be necessary in 6330 either. And since a “rounding” provision really serves only one function as a matter of necessity, we submit that the words immediately preceding it in the Adjustment Pay Act for the purposes of this section are ambiguous. And any doubt as to what Congress intended is dispelled by a consideration of the original Act and the legislative history of the 1962 codification. The adjustment pay was established in 1956 and at that time there was no ambiguity in the statute. That Act required five years continuous service and then with respect to the “rounding” provision, it expressly stated that the “rounding” provision was to be applied in computing the amounts of adjustment pay. The eligibility requirement and the restriction of the “rounding” provision to computation remained unchanged until 1962. In 1962, Congress recodified recent military pay legislation. And in the course of codification, the words preceding the “rounding” provision were changed from, “For the purposes of computing the amount of adjustment pay” to “for the purposes of this subsection.” That this change was inadvertent, is demonstrated by consideration of the legislative history. The Senate Report states that no substantive change was intended. While the Senate and House Reports purport to list all changes made in the codified legislation, the change in the “rounding” provision is not referred to. There are no debates, no hearings, indeed, no reference to changing the eligibility requirement.
William J. Brennan, Jr.: Well, let me see Mr. Patton, this is an argument I gather that based on that absence of legislative history that we ought read the changes if it weren’t made.
William L. Patton, Jr.: That’s correct Mr. Justice Brennan. I think it’s a little more than just the absence of legislative history because there isn’t affirmative statement in the Senate Report that no substantive changes were intended.
Speaker: How about the House report?
William L. Patton, Jr.: The House report does not contain that statement. Basically, the House Report simply lists the changes made.
Speaker: Including this one?
William L. Patton, Jr.: It doesn’t list this one. The reports are somewhat confused. The reports lists these changes the omission of the words “for the purposes of its surplusage” but in fact that phrase was not omitted. Now, another point is that substantive changes in military legislation are ordinarily made under the supervision of the Armed Forces committees of the Senate House. But the codification was carried out by the judiciary committee so it would’ve been most unusual for them to make substantive changes.
William H. Rehnquist: Mr. Patton, what if this 687 (a) as you showed at the top of page three of your brief where it says at least five years of continuous active duty. Supposing that said at least three years of continuous active duty, and if that -- it had gone through committee in that language passed on the floor, that language, we wouldn’t listen to you now I take it, say that what Congress really meant was the five years and that they simply made a mistake in putting in the word three.
William L. Patton, Jr.: Well, it would be a much more difficult case if that’s what happened. Appellee, that’s not presented here. I take the reason would be much more difficult is because there’s a certain specificity about numbers. That would make it difficult to argue that no change was intended. I think it unlikely that that would have escaped unnoticed. Now, I think when you consider --
Warren E. Burger: Especially when the report contained the statement that there's no substantive change, someone might ask if the difference between three and five wasn’t substantive, one would assume that someone in Congress would think about.
William L. Patton, Jr.: I would certainly hope so. I think when you consider the original Act in the legislative history, there really is no dispute that Congress did not intend to change the eligibility requirement. As I understand the petitioner’s argument from their briefs, their argument essentially is that this court can’t look at the original statute or the legislative history. But that the government must be bound by what they consider to be the plain meaning of the language. Now, in support of the plain meaning doctrine, the petitioners rely largely on older precedents of this court, many of them, 19th Century decisions. If the plain meaning was ever applied in the pristine form contended for by the petitioners, it can no longer be deemed controlling. I suggest that upon analysis, most cases, which invoke the plain meaning doctrine, do not in fact apply it. In any event as this court has said in American Trucking -- United States versus American Trucking which is cited at page 22 of our brief, when aid to construction of the meaning of words, as used in the statute is available, there certainly can be no rule of law which forbids its use, however clear the words may appear on superficial examination. Now the resort to aids and construction is particularly appropriate when codified statutes are in dispute. And at the bottom of page 22 of our brief, we’ve cited a number of decisions of this court which indicate the changes in the language and codification do not ordinarily result in changes of meaning even where a literal reading might result in a substantive change.
Thurgood Marshall: The statutes were past by both of the departments as they now exist.
William L. Patton, Jr.: That’s correct.
Thurgood Marshall: Well, let me ask you another question as to the -- the Government asked Congress to clarify --
William L. Patton, Jr.: It’s my understanding --
Thurgood Marshall: Has the Government told Congress that they made a mistake, has the Congress told them that they misstated what they meant. Has Congress asked the statute to be amended, has Congress done any of those -- I mean, has the Government done any of those things or do you want us to regard it?
William L. Patton, Jr.: It’s my understanding Mr. Justice Marshall that we have not though -- it’s our position that the court can construe the statute in accordance with what we think the Congress's purpose clearly was and then it’s not necessary to go back --
Thurgood Marshall: But where is it clearly?
William L. Patton, Jr.: Well, that rests on our position. That is the codified statute. And that this Court can look to the amnestied Act in the legislative history in construing its terms.
Thurgood Marshall: I want to clearly --
William L. Patton, Jr.: Oh! I think if you look at the original Act, which had the restriction in it, the “rounding” provision applied only to computation. And the Senate Report in the codification which states that no substantive change was intended that I think it follows that no substantive change was intended and that --
Thurgood Marshall: Because this is not in the House.
William L. Patton, Jr.: Well, the House Report is silent on this matter. There were no hearings.
Thurgood Marshall: So all you’ve got is one sentence and one report, which makes it clear?
William L. Patton, Jr.: Well, there's a complete absence of any suggestion that Congress has --
Thurgood Marshall: (Voice Overlap) make it clear.
William L. Patton, Jr.: Well, if changing --
Thurgood Marshall: You’ve taken on the burden in showing that this is clear? And I don’t think you just needed --
William L. Patton, Jr.: Well, perhaps I have misled the court. I don’t suggest that the statute is clear. I think the statute is unclear. But I think when you look at the --
Thurgood Marshall: But you said that clearly Congress intended something other than what it said.
William L. Patton, Jr.: Cause I don’t think --
Thurgood Marshall: Is that an accurate statement?
William L. Patton, Jr.: I don’t think Congress intended to change the eligibility requirement.
Thurgood Marshall: Do you say that Congress didn’t say what it said?
William L. Patton, Jr.: Well, no, I don’t say that. I mean the statute was passed. I say that the omission of the words for the purposes of computing the amount of pay was inadvertent.
Thurgood Marshall: What do you mean by inadvertent?
William L. Patton, Jr.: I think it was unintentional. There's no suggestion anywhere that the Congress intended to reduce the eligibility requirement.
Thurgood Marshall: Well, then you say it’s clearly, it was inadvertent?
William L. Patton, Jr.: Well, I think its clear that it was inadvertent. And I hope the court will agree with me after looking at the legislative history.
Thurgood Marshall: Completely agree with you (Inaudible)?
William L. Patton, Jr.: Well, the Court of Claims found the statute clear in its face and requiring four-and-a-half years and the Court of Appeals to the Ninth Circuit found it clear and requiring five years.
Thurgood Marshall: So you’re now telling me that the Ninth Circuit is clearly correct and the Court of Claims is clearly incorrect.
William L. Patton, Jr.: No, I’m saying --
Thurgood Marshall: Oh! I thought, just the middle.
William L. Patton, Jr.: The statute is ambiguous and I believe this court may construe it in accordance with the purposes of -- that Congress as found in the legislative history. For example, in City of Greenwood against Peacock, which involved the application of the Federal Civil Rights, removal statute, to prosecutions against private citizens, this court found that the original removal statute in the Civil Rights Act of 1866 had provided for removal of prosecutions against officers or other persons. In 1948 when Congress codified what is now Title 28 of the Code, that phrase was omitted. And relying on the legislative history, reports which stated that no substantive change was intended, this court read the statute as though that phrase had not been omitted.
Thurgood Marshall: I think it had a little more than one sentence in one report?
William L. Patton, Jr.: Well, it may have been in both the Senate and House reports but I don’t --
Thurgood Marshall: You only have one sentence.
William L. Patton, Jr.: Well, we only have one sentence of that -- affirmative sentence but we have no indication that there was any consideration given to changing the eligibility requirements.
Thurgood Marshall: That was the bill as it was written.
William L. Patton, Jr.: Well, that doesn’t suggest -- it doesn't aindicate considerations.
Thurgood Marshall: Well does that indicate that Congress doesn’t read the bill before they pass it?
William L. Patton, Jr.: I have no doubt Mr. Justice Marshall that that occurs in some cases in terms of technical language of the bill. Now, I’d just like to add finally that the construction which the government urges is supported by an established administrative construction. The regulations of the Department of Defense and the pay manuals of the services if uniformly construed the “rounding” provision as applicable only to computation. And finally, page 11 of our brief, we’ve listed a number of statutes which include the “rounding” provision and we submit that our construction is consistent with the pattern of similar legislation. Five years of continuous active service is required for eligibility. None of the petitioners in this case has served five years and therefore, we submit that the decision of the Court of Appeals for the Ninth Circuit should be affirmed.
Warren E. Burger: Thank you Mr. Patton. Mr. Dougherty, do you have anything further?
William A. Dougherty: May it please the Court Mr. Chief Justice, I’ll be brief. We submit that the best refutation for the last argument that all the services administratively construe this the same way is specious because it’s the Department of Defense order and it's axiomatic that if the Department of Defense construes the statute one way, the all four branches will routinely take the order of the Department of Defense. And secondly, we submit that the government has construed the statute or should construe this statute in the same way it is construing 6330 as it has done routinely in 6330 for the last 16 years. Also --
Potter Stewart: Well you have a different situation here Mr. Dougherty.
William A. Dougherty: Yes sir.
Potter Stewart: Up until 1962, it was very clear that this statute meant precisely what the government now says. It means up to 1962, you wouldn’t have had any case at all, would you?
William A. Dougherty: 1956 to 1962, agree.
Potter Stewart: There's none and because the statute was crystal clear that --
William A. Dougherty: It applied only to --
Potter Stewart: Then they applied only to those who had served actually five years or more.
William A. Dougherty: Yes.
Potter Stewart: And then what happened was there was recodified and there's a statement in one of the committee reports, that of the Senate that no change was intended. So it’s quite a different situation from the language of 1330 which has remained unchanged from its enactment, hasn’t it?
William A. Dougherty: Yes sir. But if I might invite the court’s attention to the fact that all these other statutes that the Government has cited with the exception of 6330 and the Coastguard statute, 42-212 have nothing to do with eligibility, its all for computation. And then these are the only two statutes that have anything to do with eligibility. And I would --
Potter Stewart: Well, but nevertheless between 1956 and 1962, it would’ve been quite clear that the statutes have a different meaning.
William A. Dougherty: Yes, I agree with that sir. But certainly, the tenor and the mood of Congress has certainly changed from 1956 to 1962, the war situation had changed --
Speaker: (Inaudible) they didn’t have any change in the -- and another report that purported to this, the changes didn’t list this one although I would assume this would be quite a substantial change if they were changing --. Particularly since the deed list one, it wasn’t made.[Laughter]
William A. Dougherty: But the best test of the statute is the statute itself and as Mr. Justice Black used to say when he talked about the First Amendment, if you take this out to the man on the street and put it in front of him, he is going to say yes. The man should get paid. Six months means what it says.[Laughter] But five years Your Honor is not -- five years is not modified by -- for the purposes of this subsection.
Speaker: Well, I know but you're still applying this six months requirement for purposes of computation.
William A. Dougherty: But if --
Speaker: Well, you’re not ignoring it.
William A. Dougherty: No but if modifying phrase for the purposes of this subsection must mean what it says that if a man apart of a year that is six months or more is considered as a whole year.
Warren E. Burger: Mr. Dougherty, before you sit down, let me express the court's appreciation for your accepting the appointment to appear in this case for Mr. Adams and his friends and for your help to them and your assistance to the court.
William A. Dougherty: They are all worthy Marines and then the light of the doer. Thank you Your Honor.
Warren E. Burger: Thank you. Case is submitted.


Earl Warren: Number 50, Eastern Railroad Presidents Conference et al., Petitioners, versus Noerr Motor Freight, Incorporated et al. Mr. Price.
Philip Price: (Inaudible) Your Honors. This case is here on petition for review of the decision of the Court of Appeals for the Third Circuit which affirmed a decision of the District Court of the Eastern District of Pennsylvania and a case arising under the Sherman Act which was tried by the District Court Judge without a jury, pursuant to agreement of the parties. With Your Honors' permission, I will divide the argument, present the opening and the closing portion of the argument will be presented by Mr. Hugh Cox following that presented by the respondents. This case was a private Sherman Act case for treble damages, brought by 40 long-haul trucking companies and their trade association, the Pennsylvania Motor Truck Association which for convenience was referred to throughout this trial as the PMTA. Against some 23 railroads and a -- an association of their presidents, those are the Eastern Railroad Presidents Conference by its initials, the ERTC and Byoir Incorporated, a public relations firm. It resulted in a finding for the plaintiff, trucking companies by the Court of damages in the sum of 18 cents each. A fine being in favor of the trade association for a sum of $650,000, the allowance of counsel fee in the sum of $200,000 and the entry of a restraining order in the form of a decree which I shall describe in detail presently. This case involves the long-haul trucking industry only. The long-haul trucking industry operates heavy trucks, large trucks which have extra loads of an excess of 18,000 pounds, gross weights in excess of 30,000 pounds. And I think it would be helpful if I refer briefly to the historical background which led up to this suit which was brought incidentally in January of 1953. Beginning on -- in 1930, the number of long-haul large trucks was relatively small, only perhaps 28,000. By 1950, that had grown to 450,000. That represented, perhaps 1% of the total number of motor vehicles which we use in the highways of the United States in that year. And approximately 5% of those that were classified as trucks, so that it was a relatively small number of vehicles when compared with the total number that we use in the highway. As those trucks grew in number, they likewise grew in size over that period of 20 years.And as they grow in size, the roads had to be increased in width. The grades have to be flattened, the foundations have to be made much more firm and sound, bridges have to strengthened and so on. The truckers as a group were actively engaged in lobbying for legislation which would enable them to carry larger weights, larger loads in their trucks and to operate larger trucks themselves because in the early days, the limitations or the size of trucks and weight of trucks was very hampering to the carriage of large volumes of freight. As the weights increased, the fees did not increase proportionately. And although the roads cost pretty much more to build and to maintain, the relative value of the cost to the trucking industry of using those roads which constituted their own right of way and which gave them the flexibility, was made their business possible, did not increase proportionately. And because of the reciprocity provisions of state laws, whereby a truck license in state A could cause all other states free of additional license fees. There were many states which these trucks could cause cost and whose roads they could use without the payment of any fees at all. A conspicuous illustration with the State of Oregon, which in the very early days and long before this campaign which I shall describe in a few moments, began, imposed a fee or fees on long-haul trucks which were based upon two factors, their weight, the weight that they carry and the distance that they carry. That's variously called under weight-distance tax or a weight -- weight-distance and ton-mile tax. But that was unusual at that time and states -- narrow states such as Indiana and New Jersey could be caused by trucks without paying anything, unless they happen to stop to buy gas or oil. In which case, they would pay a small tax on the oil or gasoline purchase. But a state like Indiana or Jersey, the tax increased very largely, the size and strength of its roads and its bridges was in effect providing a free right of way for these large trucks which caused it. Unless they happened to be licensed in the State of Illinois, Indiana, Oregon, New Jersey which was obviously not very usual. So that to the extent that the legislatures of the several states could be persuaded to refrain from levying such tax as the weight-distance tax or the ton-mile tax. The public at large was paying a large portion of the cost of maintaining the rights of way of these trucking companies who were therefore heavily and largely at public expense. Studies by public officials of various states and of the United States indicate that -- that that was their conclusion. And they were urging limitations, the limitations be maintained on these hours and weight of trucks or that their fees would be increased because of the enormously increased cost of building these new roads which were required by this type of business. Thus, the right of way cost of the trucking industry was not based primarily on use or on economics but was based upon what the legislatures could be persuaded to grab or to requote. Whereas, the railroads during this period of time obviously had to pay the entire cost of maintaining their own rights of way and likewise pay it in many cases very large taxes on their terminal facilities. So that in this setting, the petitioners here and brought to on a public relations campaign which had two major themes. One was that the damage done to roads by the big trucks without of all proportion to their direct weight and that it increased in geometrical rather than arithmetical ratio when compared with the weight and size of the trucks and that those trucks do not pay their fair share of the cost of constructing or maintaining the roads. The question to this case is whether that particular public relations campaign violates the Sherman Act. The court below held that it did and it is my purpose to discuss the reasons why we consider that decision erroneous. The public relations campaign was presented in the form of speeches, press releases, articles, magazine articles and others. All of it except some films and purely technical fixes has been reproduced in two volumes of the record, this large one and volume three, the smaller. This size volume was prompted by the desire to present to Your Honors the magazine articles in the form in which they actually appeared in the magazines and this is the size of the Saturday Evening Post. All of these articles are contained in those two volumes. And therefore, the material which was presented to the public in the course of this public relations campaign is all documentary. In presenting these two themes which I have mentioned, there were only five subjects which were the subject of discussion. And each on -- in the brief at pages 6 and 7 are listed, the various exhibits by number and by page which appear in volumes 2 and 3 of the record under the category which property describes it. And those five categories are summarized as follows. One is support for or opposition to a specific legislated bills dealing with truck weights or taxes on the consideration in the various states. Two, the relationship between highway maintenance and construction costs and the increased use of heavy trucks. Three, the need for and sources of highway funds and the apportionment of taxes among highway users and the effect of heavy trucks upon existing highways and the prevalence for -- and the reasons, four, overloading of trucks. And five, highway dangers and congestion contributed to by heavy trucks. Now, all of those items, all of those topics were dealt with by various of these articles, speeches, press releases and so on. But since they are all here, all putted, there's no question in this case of the accuracy of anyone's memory. There's no question about the -- the way of oral testimony which Your Honors may see just as if it were only one article, one speech, one book, precisely what was said and how these subjects or how these two themes were presented to the public.
Speaker: Indeed.
Felix Frankfurter: Were they all --
Philip Price: It was -- I beg your pardon.
Felix Frankfurter: Were they all sponsored by the conference?
Philip Price: They maybe considered as all -- all having been sponsored by the -- by the conference or by -- by -- or by the railroads.
Felix Frankfurter: I happen to have opened this article in purpose, all the loads we're going to part on my own understanding. Was there a disclosure in the publication that they -- that these represented the views of the railroads rather than --
Philip Price: No, sir.
Felix Frankfurter: -- become disinterested experts?
Philip Price: No, sir. No, sir, there was not. This -- this campaign was conducted by what was termed in two ways for the court below. One, the third-party technique which he described in two instances, which the judge described the two instances, as what he called the big lie. What it amounted to was this that if there was material that was asked for by Senator Neuberger, for example. It was given to him and he wrote his argument. There were other articles which were written entirely by representatives insofar the public relations is concerned. Articles that appeared in the newspapers were combinations of both. They were the use of material that was made available by -- by -- or the public relations consultant.
Hugo L. Black: Were there advertisements?
Philip Price: There were two or three only. Two, I shall mention specific --
Hugo L. Black: (Voice Overlap) the editorial in the Buffalo Evening News, how does that happen to be in here?
Philip Price: May I ask the page, sir.
Hugo L. Black: Page 595 (b). I'm just turning over now and I ran up on the editorial.
Philip Price: That's an editorial in the Buffalo Evening News.
Hugo L. Black: I understand that but how does it happen to be in here?
Philip Price: That was offered as an evidence or offered in evidences as plaintiffs' Exhibit 295 (b) -- plaintiffs' Exhibit 295 (b) as an illustration of the material that was being put up as a result of the public relations campaign conducted by them.
Hugo L. Black: As a result, so that the railroads had anything to do with these editorial.
Philip Price: No, not directly. This -- this particular editorial as others were of a group, some of each were -- were prompted by the editorial writer's interest in the subject. Others were prompted by a visit from someone from Byoir asking him to discuss to this subject.
Hugo L. Black: Visit from whom?
Philip Price: Someone -- representative of Byoir, the public relations --
Hugo L. Black: You mean the --
Philip Price: -- agent.
Hugo L. Black: -- agent of the railroad?
Philip Price: Yes, who would discuss the subject with him and ask them to make comments either by editorial or -- or other ones.
Felix Frankfurter: There's a number of such --
Philip Price: A number of them --
Felix Frankfurter: There's number of such -- there is a number of such editorial comments.
Philip Price: Yes, sir, a number of editorial comments. And --
Earl Warren: Is there any evidence, they paid for those editorials?
Philip Price: No, sir. So far as -- so far as the articles were concerned --
Speaker: May I ask you what (Inaudible)
Philip Price: Senator (Inaudible)?
Speaker: Yes.
Philip Price: Yes, sir. So far as I know, Byoir had nothing, whatever to do with that particular article. The -- the -- there was some evidence if I recall correctly that Byoir offered some statistical data to the Senator after they learned he was writing the article but the article was practically finished and whether it was used or not, we don't know.
Hugo L. Black: What is this Reader's Digest article? How does it get in here? Was it -- the railroad put it in? Or --
Philip Price: The Reader's Digest is a -- may I ask the page of that, sir?
Hugo L. Black: 562 (b).
Philip Price: That is a condensation of -- I don't know, I beg your pardon. The record indicates that that was not written by or sponsored by Byoir.
Hugo L. Black: It was not what?
Philip Price: Writ -- either written or sponsored by Byoir.
Hugo L. Black: Byoir wasn't put in here though.
Philip Price: It was offered as an -- offered by the plaintiffs as an exhibit, as an indication of one of the consequences of this public relations campaign because the --
Hugo L. Black: Condensed -- condensed from Buffalo Evening News?
Philip Price: Yes, sir. There were a number of articles which were -- which were written spontaneously as a result of the interest that was generated by the campaign which Byoir was conducting. Some of the -- most of the articles in these two exhibits were -- I think you'll quite probably describe them as Byoir inspired directly or a number of them were purely spontaneous. What they were --
Charles E. Whittaker: I'm interested to know if I may ask you please?
Philip Price: Please, Your Honor.
Charles E. Whittaker: What was the basis upon which the trial court admitted this exhibit, this Reader's Digest condensation at 562 (b).
Philip Price: Because it was an article that was -- that was written by Mr. Brownell originally about overloaded trucks breaking up the highway.
Charles E. Whittaker: Was -- was that evidence of Mr. Brownell had something to do with the railroads?
Philip Price: No, sir. He was an independent writer.
Hugo L. Black: Was it the evidence that he had any -- anybody inspired it or anything of that kind?
Philip Price: Not as to this particular article. No, sir.
Hugo L. Black: Well, no. From -- by Mr. Brownell, any of them by Mr. Brownell.
Philip Price: This is the only one that I recall by Mr. Brownell.
Hugo L. Black: Only one.
Charles E. Whittaker: That's the only basis now for admissibility of this exhibit?
Philip Price: I beg your pardon.
Charles E. Whittaker: Is that the only basis claimed in the --
Philip Price: On this particular one (Voice Overlap) but the majority, the great number of them along this line, sir, were initiated by some activity on the part of Byoir. They were prompted by an offer by Byoir to independent writers for example of research, the opportunity to examine statistics which Byoir had collected. In one or two instances, Byoir wrote the article or Byoir's agent wrote the article directly. In one or two instances, Byoir's -- Byoir offered to finance the research of an independent writer to see whether he would make up his mind to write an article or not. But in general, you may say that the bulk of the material that appears in these two exhibits, these two volumes of the record, were the result of Byoir's activity in promoting this idea that the trucks damaged the highways excessively and did not pay their fair share of maintenance.
William J. Brennan, Jr.: (Inaudible)
Philip Price: Yes, sir.
William J. Brennan, Jr.: (Inaudible)
Philip Price: Yes, sir. That was paid for by the railroads (Inaudible) The Pennsylvania --
William J. Brennan, Jr.: (Inaudible)
Philip Price: That's right. The Pennsylvania State Association of Township Supervisors was an organization of supervisors in Pennsylvania which for a long time has been fighting increase weights in trucks because of the damage it did --
William J. Brennan, Jr.: (Inaudible)
Philip Price: Oh, yes. It's an association of the supervisors of the townships of Pennsylvania who had a direct interest in the cost of maintaining roads and the cost of maintaining bridges. And therefore, for a number of years, they had been imposed to increase truck weights and decrease truck fee.
William J. Brennan, Jr.: (Inaudible)
Philip Price: That's right.
William J. Brennan, Jr.: (Inaudible)
Philip Price: Oh no, no.
William J. Brennan, Jr.: (Inaudible)
Philip Price: Oh, no and that's all. No, sir. That had been in existence for a long time. And if Your Honor will turn back one page, you will see another advertisement. You can't satisfy Rhode Island. That likewise was paid for by the railroads but put out in the name of the township supervisors which asked for the opportunity to publish that information.
John M. Harlan II: Is there --
Philip Price: Now, contrast it --
John M. Harlan II: Is there any charge and stuff that furnished Byoir was false?
Philip Price: The charge of falsity was made by the respondent's only in respect of the concealment of the source. There was no attempt to show that (Voice Overlap) --
John M. Harlan II: So a permanent misrepresentation of fact?
Philip Price: Yes, sir, of the source, but not as to misinterpretation of the facts which appeared either in the articles or in the advertisement's or otherwise. There was a considerable differences of opinion as to the extent to which roads were damaged by trucks. And that argument went on extensively. But so far as statistical data is concerned, there was no attempt to show by any evidence that anything contained in the petitioner's material was not accurate. In fact, the only effort to show facts was rejected by the Court on the ground that there was no substantial dispute about the facts and that he heard enough of it and would not allow any evidence on that subject.
Hugo L. Black: May I ask you -- I'm looking into your questions presented. I do not see any question presented with reference to the violation of the freedom of the press or freedom of speech.
Philip Price: The question is raised by the first -- by the interpretation of the Sherman Act. Our contention --
Hugo L. Black: You don't refer to it.
Philip Price: No, sir. Our contention is this, that the Sherman Act is not violated by this particular public relations campaign. The court below held it was that it -- that the Sherman Act prohibited this kind of campaign, so that the only question that was raised there was whether the campaign itself was in violation of the terms for Sherman Act. Now, if Your Honors conclude that it doesn't violate the terms of the Sherman Act, it isn't prohibited by that statute, there isn't any constitutional question involved. However, if it should be considered that the statute might be extended that far, then, a constitutional question is raised.
Hugo L. Black: It's not raised in your petition, in your questions presented as I see -- that I see. I do see that you referred to it in the statutes involved.
Philip Price: Yes, sir. It's in the statutes involved, at the bottom of the page. We referred in the First Amendment as having been raised by this. It comes up only if Your Honors should consider that there might have been a violation of the Sherman Act by this particular public relations campaign. Then, if you get to that point that constitutional question would be raised but it isn't in the first instance.
Felix Frankfurter: You're so confident that this wouldn't reach the constitutional question.
Philip Price: No, sir. I can't -- I can't say that but I will say that I think that a reasonable interpretation of the Sherman Act would lead you very far and short of the constitutional questions.
John M. Harlan II: Well, I suppose if the -- your position is, is it not? That in construing the reach of the Sherman Act, the so-called First Amendment question is a relevant consideration in terms we do not -- we -- whether the Sherman Act reaches this kind of things.
Philip Price: Not essentially because the Sherman Act is designed to prevent private agreements producing restraints or monopoly. Whereas, the only --
Hugo L. Black: This was a private agreement (Voice Overlap) --
Philip Price: -- thrust of this campaign.
Hugo L. Black: This appears to have been a private agreement (Inaudible)
Philip Price: Oh, no. The consequence -- oh, that undoubtedly. The consequence of the agreement was not any restraint. There couldn't have been any restraint in the absence of legislative action because the thrust of this public relations campaign was not to restrict the truckers in any way or to create any private restraint in the operation of the truck business. It could only have been restrained by acts of the legislature in imposing the type of taxes which had been in existence in the State of Oregon and which the railroads urged -- should be adopted in other states. That's the only restraint and therefore, the legislative action which might have produced a mis -- restraint or a monopoly is not the kind of restraint or monopoly which was prohibited by the Sherman Act. That is our fundamental position and we say that the Sherman Act should be construed not as the court below did but construed not to apply to this type of public relations campaign because it was directed to legislation.
Felix Frankfurter: I was going to ask, Mr. Price, whether in this long -- in this fully old decree with regards fully -- quickly (Inaudible) whether you include -- whether you imprint the decision of this Court in National (Inaudible) 294 U.S. in which this Court took a half of the burden which trucks cast upon road in passing on the validity of imposing great cost in the railroad.
Philip Price: No, sir. We did not think --
Felix Frankfurter: (Voice Overlap) I have nothing to do with that decision (Inaudible)
Philip Price: Yeah. No, that -- that decision was not printed among the documents. May I illustrate by references to two or three of these documents, the type of a post that was made in the course of this campaign. For example, the first one -- the first article, (Inaudible) the first one in this document, was described by the court below as damming the truckers. It was referred to in the section of the opinion of the court below which has headed a campaign of vilification. It is classified by the court below as a means of providing the base of a permit arousing the resentment of the general public. And yet, if Your Honors will look at the article, it is a discussion of the transportation industry with particular reference to the dangers of socialism which had been incurred by England in their nationalization of the railroads. Another article was called, "history, trucks and money," which was described by the court below as skillfully designed to arouse the farmers in opposition to legis -- opposition to the trucks. But the truly legislative thrust of that article is illustrated best by the last paragraph which reads, "So if you are interested in your roads as every farmer must be, you will demand that your state legislature pass effective legislation for limiting the weight of the big trucks from enforcing the limitations or for making them pay taxes toward upkeep of the roads based on a weight they carry and the distance they travel." And again, in the article, "Who shall pay for our roads?" The -- written by Senator Nuebaker -- Nueberger. The last three lines of that was, "Wouldn't it be better to defeat the lobby wherever it appears and enact the weight-distance tax in every state, so that all of these articles, all of these materials was directed toward the achievement of legislation. And for that reason, we say that the Sherman Act could imply to it that the Sherman Act does not purport to -- to regulate the legislation which may create restraints or which may create monopoly.
Felix Frankfurter: Is lobby --
Philip Price: That's the only type --
Felix Frankfurter: Is lobby a neutral term or that depend on whether theoretic as to whom it applies?
Philip Price: Lobby? I would say no. That's neutral.
Felix Frankfurter: Neutral.
Earl Warren: Mr. Price, in your various case, does it make any difference whether these statements are true or false?
Philip Price: There was no evidence that any of them were false in this case. But I would say that the -- that the proposition of the applicability or non-applicability of the Sherman Act to this type of campaign would not be dependent upon the truth or falsity of (Inaudible). Your Honor will remember there's a one time people went to jail for asserting that the world was round and the question of truth or falsity frequently becomes one of debate or opinion. And particularly in a -- in a field such as this where it is a matter of great divergence of opinion, the extent to which trucks do damage roads in the extent to which they should made in favor of -- favor of and that's the only question that was raised here by this campaign.
Earl Warren: The only reason I asked was because you mentioned that part of judges' decision where he referred to the big lie. He also said in that same paragraph, speaking of the -- what he found was a conspiracy to this end by or assuredly chose the obvious shortcomings of the trucking industry and by use of dramatic segments of truth, distorted them into complete falsehoods while Byoir chose the appellation of third-party technique for its act -- activities, I prefer to treat the whole procedure in its true light which is the technique of the big lie. Now, my -- my question was directed to -- to whether in -- in your opinion if it makes any difference whether that is the fact that there isn't a fact.
Philip Price: No. I would say not in this -- in the posture of this case.
Earl Warren: It makes no difference.
Philip Price: Not -- not so far as the applicability of the Sherman Act's concerned over the Constitution.
Earl Warren: Yes.
Philip Price: What the -- what the Court said in that particular instance must be read in the light of an examination of these documents such as the articles to which I've referred because in the Court's mind, anything that was presented from the railroad's point of view in which not -- did not at the same time present the countervailing point of view of the truckers, was slanted, was a misrepresentation, was propaganda and was a part of this big lie concept. In other words, in the absence of complete objectivity, the presentation of both sides of the picture at the same time, there was this unfortunate atmosphere which the Court described as the big lie. Now I should like in my remaining few minutes to refer to the decree because that illustrates more clearly the consequences which this Court gets as a visual by virtue of holding that the Sherman Act is violated by a public relations campaign of this sort. The Court entered a decree which restrains the railroads from -- in concert, combining to do anything which would restrict to prevent the existence, growth, development or expansion of the trucking industry by any of these --
Speaker: (Inaudible)
Philip Price: That's on page 164 of volume 4 of the record. One, seeking to create resentment or hostility to plaintiffs in the minds of the general public. In other words, if we do anything which would the lead the public to think any less of the truckers or the trucking industry, that would violate this decree. Two, seeking to create resentment or hostility to plaintiffs in the minds of those persons who utilize or may utilize the services of plaintiffs' trucks and in such a manner as to interfere with business relations between the shippers and the plaintiffs. Now, there was no evidence in this case of any interference with the business relations or between the truckers, the plaintiffs and their -- and their shipment. The only evidence that was presented was -- of damage was that by virtue of the veto of the Pennsylvania Legislature known as SB 615, The Big Truck Bill in Pennsylvania. The plaintiffs were unable -- the respondents were unable to carry as much freight as otherwise they would have been able to do. And the stipulation was entered into which agreed that the only damage they suffered in this case was that caused by the failure or by the veto by the government of that particular piece of legislation. So that --
John M. Harlan II: Was there any opposite number to this or was there any counter -- counter advertising going on --
Philip Price: Oh, yes.
John M. Harlan II: -- on behalf of the trucking company?
Philip Price: Oh, yes. Yes, sir. And Judge Biggs refers to it at some detail in his dissenting opinion in the court below. There was a comparable campaign going on and being conducted by the truckers. That was the basis of the contention in the counterclaim but it is not raised in this field. Third, seeking to create resentment or hostility to plaintiffs in the minds of legislators, law enforcement officers, or other public officials or members of any branch of government. In other words, under the terms of this decree, it would be violated if we should go to the legislature and ask them for any of this legislation which was sought in the course of this public relations campaign. Four, publishing or causing the publication or dissemination of false, defamatory or derogatory material with regard to the plaintiffs or their business, so that if anything that might be considered later on to be offensive or derogatory of the plaintiff is published, it violates this decree.
Earl Warren: Suppose that -- suppose that section had just said, "Publishing or causing what publication or dissemination of false material." What the --
Philip Price: That would not be justified by anything in the Sherman Act. There is nothing in the Sherman Act which purports to deal with truth or falsity and there is nothing in any other statutes that I know of that would allow a decree under the Sherman Act to prohibit the dissemination of false material. If false material is published, it may give rise to rights or obligations under other laws or other situations but not so far as the Sherman Act is concerned.
Earl Warren: But even though there was a -- in your opinion, even though there was a conspiracy to publish and disseminate false material for the purpose of -- of injuring their business, truckers' business. It would not be a violation of the Sherman Act.
Philip Price: It would not be a violation of the Sherman Act if the purpose was to injure the business through the adoption of legislation. It might be if it were for the purpose of injuring the business through depriving them of business which they otherwise might have by defamatory statements such as -- such as those which would criticize the means or ability of truckers to do their transportation work. But that isn't in this case. And the only thing we have here is a legislative consequence produced by an appeal to the legislature. Now, instead --
Earl Warren: Well, how would we know -- how would we know that an article passed in the Reader's Digest which reaches perhaps 30 million people, would not have some adverse effect on their business other than legislative.
Philip Price: It might have but before there could be any recovery under the Sherman Act, that would have to be shown as a fact unlike a conspiracy which is attacked with the criminal side of the Sherman Act. You don't have to show consequences whereas under the civil side, it is necessary to show as a matter of fact that that did in -- in fact produce some damage. Now, there was no evidence of that here, no attempt to -- no attempt to offer any such evidence and the stipulation entered into expressly stated that the only damage suffered by any of these trucking plaintiffs was due to the veto by Governor (Inaudible) of this SB 615 legislation. This legislative approach is entirely consistent with the attitude taken by the respondents themselves during the trial. Their proposition was very simply stated and it was stuck to and with no departure. It was simply this. The petitioners have combined for the purpose of inducing the legislatures of the various states to enact legislation which will be economically harmful to the truckers, ergo, the Sherman Act is violated. Now, we say that can't be so under the American Banana case and other cases where a legislation is ipso facto, lawful and therefore the -- a conspiracy or agreement to achieve legislation can't be unlawful and not only couldn't be prohibited by the Sherman Act, what has never been attempted to be prohibited by the Sherman Act. One more word before I close on the subject of damages. With reference to the damage by the -- to the individual trucking companies themselves, the court below held quite properly that to the extent they were damaged by the veto, they could not be recover. That legislative action or governmental action of that character did not give rise to the compensable damages under the Sherman Act. Therefore, they could not recover but the court awarded them 18 cents anyhow. I submit the that was a voluntary act which was unjustified. Insofar as the PMTA, the train association is concerned, that didn't suffer any damage at all as a result of this activity directed against the long-haul trucking industry. The association is not a trucker. And obviously, under the trade association, it may not recover damages on behalf of its members. The trucking association spent money which was given to it. If it hadn't been given to it, it wouldn't have spent it. And it suffered no damage whatever because the amount that was allowed on the court below was not the amount that was contributed to it by the trucking members but the amount or some of the amounts that it spent. Now, if it had been allowed to recover for the amounts contributed by the train company members that would've violated the terms and stipulation and would have given it a reward which the stipulation excluded, but since it's only trade association and since it wasn't damaged at all in itself as a result of anything done by the petitioners in this case, we say that it was not entitled to recover any damages to fight it, and for that reason, the judgment should be reversed.
Earl Warren: Mr. Khon.
Harold E. Kohn: Mr. Chief Justice and may it please the Court. If Your honors will turn to page 202 of the record which is in volume 4, I want to refer briefly to the way in which many of the these articles which were referred to by the Court were tied in and shown to have emanated from the defendants here even though there is nothing in the article that would give anyone the slightest inkling that that was the fact and then I want to proceed with the argument as I planned it. For example, if you look at the first letter which appears at 202, Exhibit E148, this is a Carl Byoir interoffice memorandum. The enclosed (Inaudible) has passed the Board of Census on ER-TC and now we are ready to decide which magazine should perpetrate it upon the defenseless public. Cole is convinced that can be slicked into a slick mag, advertisers be damned since it really doesn't take any round housewife at the truckers. I'm inclined to agree that it could hit a good general circulation magazine. If you could get a nimble from some such, I could I think convert it to the appropriate style or get sex into the lead or whatever is needed. But then you get paid to what -- you get paid to worry about these things, so I'll accept your decision then you can convince Cole, he was one of the chiefs on the Byoir account. Let's look at the next one. Another nomination from the magazine department that ace ghost writer, James Miller, from one slight clipping in a manner toward Wisconsin Time developed a 1500 word-story, ‘History, Trucks and Money' which appeared in the April issue of the Grange. This article was important to the ER-TC course because it reached the group -- the account was mostly concerned about the farmer. Then the next arti -- the next letter, Railroad Vice President Mr. Petch (ph) of the Pennsylvania, this happened to stumble across and presented to Milton Eisenhower, then the President of the Pennsylvania State College. The article I think is --
Speaker: (Inaudible)
Harold E. Kohn: Pardon.
Speaker: (Inaudible)
Harold E. Kohn: It was the -- what -- you knew where this letter goes to.
Speaker: (Inaudible)
Harold E. Kohn: The article.
Speaker: (Inaudible)
Harold E. Kohn: That's right. The article was ghost written for the Grange by the railroads who paid for it but it nowhere know that. It looks like it emanated from somebody who was a member of Grange or writers Grange sympathizer actually --
Speaker: (Inaudible)
Harold E. Kohn: Oh no, no, no. This letter was sent with a copy of this article to Milton Eisenhower, obviously to influence his opinion as if it emanated from somebody who was totally (Inaudible). The article that one of the members of the Court referred to, I think in the Buffalo Evening News. If you look at in the fourth paragraph of that article, you'll see that -- this is at page 595 (b) of the record. You'll see reference to a Griffinhagen report to the citizens' public expenditure survey which shows certain things with regard to trial. That survey was paid for by the railroads through Byoir who arranged it. They reactivated -- this was -- was a dead organization, then the report having been made, they circulated to all the newspapers not as coming from the railroads but its coming from something which purports to be an independent research organization. And just example, the other day when the -- the radiant heat case was being argued. If the American Gas Association had been able to setup some organization called the consumers research -- the consumers investigation division and had paid for and made all the studies and then sent various public utilities or the Public Utility Commission under the guise of being independent citizens or independent research organization reports, you know how the situation (Voice Overlap) --
John M. Harlan II: Supposing -- supposing all of these had been done directly by the railroads over their own name. What would you say to that?
Harold E. Kohn: I should say first that that would have to be a different case, an entirely different case.
John M. Harlan II: Well, I'm trying to see what have been that --
Harold E. Kohn: And secondly, I think that if the railroad did this all over their own name for the purpose as this Court found of putting the truckers out of business and monopolizing that business for themselves, then that would have been in our opinion, a violation of antitrust laws for two reasons. One, this material was highly defamatory. It obviously created a -- an adverse impression not only in the minds of the legislatures but the minds of our public, the minds of our customers, the minds of anybody else to whom it -- it came across. So that I think for that reason, it would've been just it if they had decided to organize a boycott or just as if they'd gone to a lot of people and tell them not to do a business with it. In a moment, I'll elude to the fact that it's a word that I struggle with. It's one of -- one of the new word that I don't like but the corporate image is extremely important and I have a collection of essay here by people in the public relations and advertising department who point out that your public image is very important in selling your product. The customer frequently doesn't realize why he has an adverse reaction when he sees you or when he sees your product or when he sees your service. Also, the -- these public relations studies indicate that the public image of the industry is important with regard to every man in the industry. So I say sir, first, I think it's just as if they set out to boycott the trucks even if they publish this in their own name.
Felix Frankfurter: Does that mean --
Harold E. Kohn: Sir.
Felix Frankfurter: (Voice Overlap) if I understand you on that point that the railroad -- the service credited in the legislative eyes of the state candidly did this instead of -- to Madison Avenue that the problem wouldn't be in a -- serious to you as this one, is that it?
Harold E. Kohn: I think the source is -- as this Court said, I think in the Hazel-Atlas Glass case, truth needs to disguise. Everybody is influenced by the source of the material. If you know that I have a frankly antagonistic competitive position, you weigh differently what I say than if it comes from an ostensible third party who has no motive whatsoever and no acts to grind. The first thing they ask any witness in any case is who is he? What's his bias? What's his motive? And the railroads themselves, I mean anybody would -- would react that way. And time again we see throughout all of the legislator patterns of Congress and elsewhere that it's important in matters of this kind, we have economic struggle, economic content to -- to reveal who is the source of the information just yesterday. In the New York -- I'll come back sir in a moment if I may continue to answer your question. Just yesterday, in the New York Times, in the matter of the C&O, the Chesapeake & Ohio acquisition of the Baltimore and Ohio. There was run an ad in which they stressed that Standard and Poor had run and a study which indicated that it was a good idea for B&O share owners to accept the C&O offer. It starts out, Standard and Poor recommends. Now, that's of a great deal of weight because people think that Standard and Poor, and as far as I know, they are completely independent of C&O so that you can really say that this is what an independent third party statute. Now suppose that it were found out that C&O had been paid by stand -- or Standard and Poor had been paid by C&O. Or suppose we found that C&O had actually written this through some public relations counsel and planted it with Standard and Poor. Obviously, it's not worth what its worth if it really emanates from Standard and Poor. So I think sir --
Earl Warren: May I ask you -- may I ask you this question. Supposed it's all true, suppose every -- it's just a converse on what I asked Mr. Price. Suppose everything it said in this article is true when the mere fact that it was done by indirection be a violation of the law?
Harold E. Kohn: Once again sir, I think we're now -- one removed or actually two removed from our case.In other words --
Earl Warren: Well, it maybe a lot removed but I just --
Harold E. Kohn: It (Voice Overlap) it's coming out as I assume, Mr. Justice Harlan says in the name of the railroad. Secondly, it's -- it's all true. That's obviously in my opinion, a much more difficult case but it's not this case as I show from the finding. My own opinion is actually, that under the Sherman Act which says that every combination only subject to the rule of reason which were decided -- which was passed out incidentally in two cases which held the particular conspiracy to be unreasonable.
Felix Frankfurter: That makes every, every, doesn't it? The rule of reading makes every, every, doesn't it?
Harold E. Kohn: (Inaudible) -- every conspiracy for the purpose of monopolizing or putting somebody out of business even though it uses means which are not otherwise illegal. As these people say themselves in their brief, the test of what is illegal under the Sherman Act is found in the Sherman Act itself and you don't need to go to another act and find if something is illegal under that other act. So that I think even there, if the purpose was shown as it was here out of their own mouth and incidentally, this is not just a documentary case, we have thousands of pages of testimony and a lot of these came out of the mouth of witnesses called by us for cross-examination, witness after witness, each putting in his little piece that made the entire mosaic. I'd say in that case, if they prove -- if we could prove the intent and obviously, it would be much more difficult to prove the intent in that case. Then I think too, you would have a violation of the Sherman Act where the purpose was as it was undoubtedly proved here to make trucking more expensive. So that people who now are willing to pay a certain additional expense for flexibility, would be unwilling to pay that additional expense and would comeback to the railroad. I'd say that you would have had a conspiracy regardless of the means carried out for making a competitors business more costly, more expensive and thereby taking people -- compelling people really who wanted to do business with them, to stop doing business with them because it's too expensive for them to do so.
Hugo L. Black: May I ask you --
Harold E. Kohn: Well, that's -- that's a rather long-winded answer to your question, sir but I think it's a difficult question as I say removed from this case. If I wanted, I have a relevantly complete answer.
Hugo L. Black: I want to ask you one that's also removed from it but not totally removed. Suppose the railroads get together and said, we want to put these truckers out of business. The way to put them out of business is have Congress pass a law which abolishes to appeal certain law, takes away their right to use the road. They -- that's all they do. They write letters and write letters and write letters and write letters to congressmen and senators. That's all they ever do and that's what they agreed to do. They want to put them out of business that way. Would that violate the antitrust law?
Harold E. Kohn: No, as I say -- as you say sir, once again, it's removed. I think that if Congress would say -- assuming for other reasons it's constitutional which I think it's not now, I'll tell you why in a moment. If Congress should do that then I think Congress pro tanto would've amended, repealed or done something to the Sherman Act so you wouldn't have the Sherman Act problem. In other words, Congress can say that a certain business is -- we'll assume constitutionally for the moment. It can say that a certain business is illegal. Now, if that's all that happen, they would be saying the trucking is no longer under the protection of the Sherman Act.
Hugo L. Black: Well, they want to put them under a law that's so heavy, they just can't compete with the (Inaudible).
Harold E. Kohn: As long as --
Hugo L. Black: Agreed to it and that's what they are doing. They only means by which they proposed to accomplish it, is by writing senators and congressmen.
Harold E. Kohn: Well, I think if Congress does it as we think --
Hugo L. Black: I'm not talking about Congress doing it. Let's say Congress didn't do it.
Harold E. Kohn: Oh I see.
Hugo L. Black: (Voice Overlap) to do it and they write these letters. It only means they're going to take to put them out of business is by writing letters to Congress -- congressmen and senators.
Harold E. Kohn: And they do it openly in their own name and they only state (Voice Overlap) --
Hugo L. Black: Well, I don't care what -- would -- would it make any difference whether they did it openly or not?
Harold E. Kohn: Well, I think that the matter of pressing legislation and free speech and all that sort of things, comes into this case if it comes in at -- at all, only as a constitutional right which makes a part of the Sherman Act really unconstitutional. I say there is nothing in the Constitution which protects the right by falsification to obtain legislation anymore than there's anything in the Constitution which protects you from being prosecuted for libel which is also a speech --
Hugo L. Black: Well, you would say then that --
Harold E. Kohn: -- by which protects you from obscenity, assuming it be determined that it is obscenity.
Hugo L. Black: You would say then that the campaigning that we had a few years ago where people just went out and got fictitious names and sent them into Congress and so forth is not protected.
Harold E. Kohn: Just that -- well, it depends upon who is doing it and why he is doing it, sir.
Hugo L. Black: He does it because he wants to get certain legislation.
Harold E. Kohn: Just the other day, I think it was Senator (Voice Overlap) --
Hugo L. Black: It's a nice question but it's --
Harold E. Kohn: Senator Dodd.
Hugo L. Black: -- almost related to your question here.
Harold E. Kohn: On a radio program, I -- I'll have it -- well, I guess its right in front of me. Senator Dodd on a radio program just November 23rd said, "If we are to preserve this precious right of petition, it seems to me that any legislature were -- legislator weren't dissolved. But I want to know who is behind the petition before it gets any weight. To establish what's in my mind, let me cite this kind of comparison. Suppose the petroleum industry organized a petition asking Congress to pass certain legislation which really would benefit them greatly at the expense of other elements for our society. Don't you think it would be important to me as United States Senator to know that the big oil companies were behind this and it's their employees and people who own stock in their companies got other people to sign it? Well I think so and I think that any petition involved in it, the obligation to any petition has involved in it. The obligation to make people who wrote it, who's behind it, who got it signed or asked people to sign it. So I think that is a -- a very important element which cannot be divorced from this case before we get onto a case which may sometimes come before you where you have a pure legislative campaign honestly and openly putting forth only truth to an appropriate legislative body. But as the findings of fact in this case made clear, you do not have such a legislative campaign in this case. You -- first of all, quite clearly have a public relations campaign which was intended to injure us in every possible and conceivable way whether or not there'd be legislation. I'll read that finding to you tomorrow morning.
Felix Frankfurter: In applying your argument, you reject the notion that public relations counsel is part of the American way of life.
Harold E. Kohn: The public relations counsel is definitely part of the American way of life but he must conduct himself like an American, open.