Earl Warren: Number 222, National Labor Relations Board, Petitioner, versus Benny Katz et al. Mr. Solicitor General.
Archibald Cox: Mr. Chief Justice, may it please the Court. This is a Labor Board case hereon certiorari to review a judgement of the Court of Appeals for the Second Circuit. The order of the Board found the respondent guilty of the unfair labor practice of refusing to bargain collectively and of interfering with the employee's rights of self-organization and collective bargaining. The order directed the respondent to cease-and-desist and also required to bargain with the union as the representative of the employees for reasonable period. The question presented in this case stated in general terms is whether it violates Section 8 (a) (1) or Section 8 (a) (5) of the National Labor Relations Act, for an employer during negotiations with a labor union chosen as their representative by a majority of the employees to take unilateral action changing the terms and conditions of employment, without notifying or consulting the Union and at a time when it goes with the Union desires to bargain on those subjects. And takes this action I should add before there was an impasse in the negotiations. The facts upon which this question is presented were all found by the trial examiner and the Board and were accepted by the Court of Appeals. Also respondent's brief sets forts quite a different version based on its reading of the evidence. The findings of the Board I think are supported by substantial evidence and in any event that question is not here. The employer manufactures metal doors and the frames and I guess the panels, things of that kind in which they are set and admittedly ships its product in interstate commerce. Among its employees, there was a group of about 50 draftsmen and technicians whom the Board found to be an appropriate bargaining unit. It's certified a labor union, Local 66 of the American Federation of Technical Engineers as the exclusive representative of the employees in that unit after an election. There was a delay in starting negotiations because the employers did not of course reply to the Union's levy. But on the 30th of August, negotiations began. It's unnecessary to describe the negotiations in any great detail because the Board's findings rested on three specific acts. It's enough to say I think that there were beginning in August and running on through October and November, for the first part of December, a series of bona fide meetings. Then there was a long interruption at the suggestion of the New York State Mediation Board and there were a series of additional bargaining meetings beginning in the end of March and running through the end of May when negotiation reached an impasse. During that time and according to the findings of both the trial examiner and the Board accepted by the Court of Appeals, there was no impasse in the negotiations. But the employer nevertheless took three steps which were found by the Board to violate Section 8 (a) (1) and (5). The first related to sick leave. This employer had had a plan for the benefit of its employees before the Union came, of granting sick leave with pay up to 10 days a year. If at the end of a calendar year, an employee hadn't used up that sick leave, he could carry it forward into -- into the next year up to a total of 20 accumulated days. If you had more than 20 days of accumulated sick leave, you began to loose it. You were paid for 50% of the excess days, but you lost the other 50% so that an employee carried forward say 30 days, he could accumulate 20. He would be paid for five and he would lose the other five. On March 11, during a recess in the negotiations, but during the general period in which negotiations were admittedly going forward and there had been no break down. The respondent made a unilateral change having the sick leave. It reduced the days of sick leave that could be carried forward. It did liberalize the -- and it reduced the days of sick leave per year, but it did liberalize up on the amounts of payment for accumulated and unused sick leave. That's -- that action was taken as I have said without any notice to the Union, without any consultation to the Union and indeed when the Union objected, the employers said there is no need for us to consult for you about this. We're denying your right to be notified or to be heard. This was one of the actions which the trail examiner and the Board found to violate Sections 8 (a) (1) and (5). Second in April, as negotiations were still in progress and according to the findings still before there was any impasse, the employer put into effect somewhat higher wage rates, more favorable wage trades perhaps I should say than had prevailed before, and is true and frequently in paying engineering employees, draftsmen and other technicians. This company had a rather broad range of wage rate rather typical event might be for an employee to be hired in comparatively untrained and unfamiliar with this employer's need, at the bottom of the scale, say around $55 or $60 a week. And as he learned the employer's needs, as he demonstrated the skill and was put on more responsible work, he might be increased. The practice had apparently been to review the status of employees and this unit every six months or so and to grant them increases up to a considerably higher level. Now what the employer did in April was to guarantee the review of wages at certain periods, was to guarantee certain step increases automatically, all of which were favorable than any offer which had previously been made to the Union. The trail examiner and Board found that this unilateral action violated the statute and was therefore an unfair labor practice. The third subject on which unilateral action taken was the so-called merit increases, that is increases given to individual employees within the wage rate. During October and again in January, this employer gave wage increases, first to roughly 30 and then in January roughly 20 of the employees without consulting the Union, knowing that the Union wished to bargain about the subject. I would emphasize that these were not just few employees. The merit increases ran to approximately 50 which were all the employees of the unit and therefore we think amounted very closely to a general wage increase during the negotiations and before an impasse was reached. The trial examiner found that each of these three instances of unilateral action was a refusal to bargain collectively and was an interference with the rate of the employees to bargain collectively. He went on and said that these instances of unilateral action demonstrated that the respondent had been marked -- merely going through the motions of collective bargaining without a genuine intention of trying to negotiate an agreement. And he rejected as I have said the notion that any impasse had been reached prior to May of this year, and held that the Act had been violated. He went on and recommended an order directing the employer to cease-and-desist from such unilateral action and to bargain with the Union which been while either as a result of the unfair labor practices or otherwise had lost the support of the majority of the employees. When the matter came before the Board, it approved for the most part the trial examiner's finding. Specifically, it found that no impasse was reached until sometime in the middle of May after these instances of unilateral action had occurred. It found that there was no misconduct on the part of the Union which was responsible for the difficulty in the negotiations as had the trial examiner. And it ruled that the unilateral action was a violation of the Act. Its finding is differed from those of the trial examiner in that it rejected specifically the trial examiner's finding that the respondent had merely been going through the motions of collective bargaining. It's said that that finding was not permissible to be made, because the complaint had not been drafted on the theory that the respondent was not acting in good faith. And it ruled that this conduct was a violation of Section 8 (a) (1) and (5), regardless of the employer's subjective state of mind. It approved on the basis of its finding the order that had been recommended by the trial examiner. The essence of the decision below which set aside the Board's order appears in Volume 2 of the record, at page 439. The Court said, at the top of the page and I think it's worth calling this Court's attention to it, where opinion for unilateral action here complained of occurring as they did during the negotiating of a collective bargaining agreement do not per se constitute a refusal to bargain collectively and per se are not violative of Section 8 (a) (5). While the subject is not generally free from doubt our conclu -- it is our conclusion that in the posture of this case, a necessary requisite of the Section 8 (a) (5) violation is a finding that the employer failed to bargain in good faith. Circuit Judge Lumbard, one of the three members of the panel, dissented from this opinion and would in substantial -- to a substantial degree have enforced the Board's order.
Felix Frankfurter: May I -- just going to ask whether you want a full enforcement, you don't -- you disagree with the qualification of Judge Lumbard?
Archibald Cox: Yes. We want a full enforcement. But we there find his reasoning is under main issue substantially correct. We think that the court below is wrong and that it misconceived the essential duties, lay down employers and to a degree labor unions also that was not involved, by Sections 8 (a) (5) and 8 (b) (3) of the National Labor Relations Act. In our view, the gist of the duty imposed on an employer by those provisions and on a union where the Union's duty to bargain collectively is involved, is to established terms and conditions of employment jointly. The whole thrust of the statute is an effort to substitute for what had previously been the employer's fight either because he took unilateral action or because of individual bargaining a regime founded on mutual consent. And any conduct which like unilateral action reject his totalling inconsistent with the notion of substituting a foundation of agreement for the employer's hipsy-dixy in fixing terms and conditions of employment is in our view a violation of the Act. The fundamental error of the Court of Appeal -- majority of the Court of Appeals I think was in a quite -- in supposing that all duties under Section 8 (a) (5) were determined simply by the employer's good faith by his subjective state of mind. That's a useful, indeed an essential test in determining whether he is just going through the motions, whether the bargaining is a sham. But the fact that is important in some instances does not make it the sole touchdown by which to measure the legality of all conduct. And I shall give the Court in the course of my argument a number of instances in which it is quite plain that the question of good faith is not involved and that an employer or indeed a labor union maybe guilty of a refusal to bargain collectively regardless of its subjective state of mind. We find support for this position which I have tried to summarize very briefly in the words of the statute, in the philosophy of collective bargaining, which some of the opinions of this Court tell us, has been incorporated into the statute and in the precedent not only of this Court, but of the Court of Appeals and of the Board, which I would -- should've supposed it settled the precise question involved here for at least 20 years. The words of the statute to which I shall direct myself first, appear conveniently at page 39 of our brief. Section 8 (a) (5), it shall be an unfair labor practice for an employer to refuse to bargain collectively with the representatives of his employees subject to the provisions of Section 9 (a), 9 (a) appears over on page 41. Representatives designated or selected for the purposes of collective bargaining by a majority of the employees in the unit appropriate for such purposes shall be the exclusive representatives of all the employees in such unit, for the purposes of collective bargain with respect to rates of pay and so forth. This principle of majority rule imposes what Justice Stone called certain negative obligation, the negative obligation to refrain from fixing terms and conditions of employment by other methods than through collective bargaining with the majority representative. Let me interpolate once again that I am speaking of the situation before an impasse is reached. Once there has been an impasse the duties of the employer and the date of the Union maybe changed. But there is the negative duty as Chief Justice Stone said to refrain from other conduct inconsistent with collective bargaining that just established by the principle of majority rule. It's a duty to refrain not only from bargaining with other unions but to refrain from bargaining with individuals and we think quite plainly also a duty to refrain from unilateral action since that attempt to fix terms and conditions of employment by a different method than the statute ordains and describes as exclusive. In addition, we think that the Section 8 (d) which defines the duty to bargain collectively gives literal support to our view. Section 8 (d) at the bottom of page 39, for the purposes of this Section to bargain collectively is the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and conferred good faith with the respect to wages, hours and other terms and conditions of employment. That -- those words to me at reasonable times in conferring good faith with respect to wages, hours and other terms and conditions of employment applies to each and every subject of collective bargaining. For example, it is well-settled that for an employer to refuse to bargain about sick leave would be an unfair labor practice even though he was bargaining incomplete good faith about each and every other subject of employment. It's equally well-settled that to refuse to bargain about bare increases even though the employer is bargaining in good faith about other subjects is an unfair labor practice. This is well-settled by decisions of this Court and others. Now, I submit too that it is equally plain that the duty to meet and confer involves meeting and conferring about what might be called temporary terms and conditions of employment. Supposed for example the Union said, but I think it is arising most naturally in a large establishment, it's going to take us six months before we can workout all the details of a contract. Meanwhile, we want a temporary sick leave arrangement, something that will operate in the interim. If the employer said, “No, I won't bargain about the temporary sick leave arrangement to operate in the interim regardless of his good faith in meeting and discussing sick leave to begin six months.” Hence, I submit that there would be a violation of the statute under the plain words of Section 8 (d). Now, if you add those two together, the duty to bargain on every subject and the duty to bargain about temporary terms and conditions of employment, it follows by inevitable logic I think that there has been a failure to bargain about sick leave, a failure to bargain about this wage increase and about the merit increases here, because the employer whether had and put something into effect without consulting the Union, which certainly a failure to meet and confirm and when he knew that the Union was seeking to bargain on this subject, there was in effect a refusal in the most literal sense of the word. Furthermore, I may point out the employer knew perfectly well in this case that he was rejecting the Union's right to participate with respect to the change in sick leave. When the Union letter -- wrote a letter protesting the change of sick leave in March, the employer replied by a letter dated March 16, 1957, which appears in Volume 1 of the record. I'm reading from page 270, “We do not feel obligated to explain the matter to you or anyone else since we are not as yet to bound to you until an agreement has been reached between us. And with the actions that you have used thus far is doubtful when such agreement will be consummated." Over toward the end of the letter, "There is no need to explain to you what we have done. We have no obligation to you.” Well, of course the statute does impose an obligation to consult with the Union about these benefits. I rested thus far on the words. We also find support for dispute and perhaps more importance support in the philosophy of collective bargaining. The philosophy of collective bargaining has always condemned unilateral action for three reasons. In the first place as I suggested at the outset, the basic postulate of collective bargaining is the right of employees to participate in decisions. This has been set forth in the literature in the field going back at least to a Dr. William (Inaudible) writing in 1920, when he spoke of collective bargaining as achieving a partnership. When we have such a partnership, he said, two equal partners then one partner cannot do anything without consulting the other. This basis was carried on through into the enactment of the statute and one finds, we've quoted some on our brief many expositions of the same period later. The second reason that the philosophy of collective bargaining has always rejected unilateral action is that unilateral action is inconsistent with the practicalities of collective bargaining. One can't build a house on shifting sands. One can't negotiate a contract if the basis, the taking off place is subject to sudden changes without notice to the other side, consider the difficulties of trying to negotiate a pension plan or health and welfare plan covering sickness, accident insurance and the like, if the employer were free following a long night of negotiation suddenly to announce the next morning, well I put a plan into effect and while we'll go on talking, we'll have to start all over again. Again of course for the employer to take unilateral action, greatly lessens the flexibility of collective bargaining and the employee's opportunities to participate. If the employer increases his unit labor cost, let's say 5 cents an hour by putting a pension plan into effect that the employee's opportunities to bargain for increase vacations or for higher wages or for some other benefit are necessarily reduced. True in theory the pension plan may be revoked. But as a practical matter, one doesn't wipe out, afraid to comply so easily. Third, unilateral action necessarily disparages the bargaining process and undermines the union. If the employer advanced the employer when he makes a unilateral change is saying to the employees, “See, this union certification makes no difference. I'm going out on in conducting myself as before.” If this happened here with the sick leave, he takes away some of the employee's benefits, this will look and often be an act of reprisal for bringing the union. If he gives more than he is ever offered the union as happened here in the case of the wage increase in April which exceeded what he had offered the union, he's in effect saying, “See, I will give you more alone than you can obtain and collective bargaining through the union.” Third, we submit that this question has been decided in the decisions of this Court. And that they did as I said earlier settled the question many years ago. The leading cases on the subject are J.I. Case Company and the Medo Photo Supply case. In the Medo Photo Supply case, there were the employees, it was rather small bargaining unit went directly to the employer after a majority had chosen a bargaining representative and indeed filed a representative who was still acting for them. And they said, “We would like you to give us directly as employees a wage increase. And if we get the wage increase, we won't want the union.” The employer replied after thinking it over, “You can do it what you like about the union, but I'm happy to give you the wage increase.” In an opinion by Justice Stone, it was held that this was a violation of the Act and I think his words are important enough to impose on the Court by reading a short passage. That it is a violation of the essential principle of collective bargaining and an infringement of the Act for the employer to disregard the bargaining representative by negotiating with individual employees whether a majority or a minority with respect to wages, hours and working conditions which recognized by this Court in the Case case. Bargaining carried on by the employer directly with the employees whether a majority or minority who had not revoked their designation of a bargaining issue would be subversive of the mode of collective bargaining which the statute has ordained such conduct is therefor an interference with the rights guaranteed by Section 8 (1) of the Act. Unilateral action I submit is exactly the same in this respect as bargaining with individual employees. Indeed, that very question came before the Court in the May Department Stores case. A case which can be distinguished because it could have gone on the ground that the employer refused even to meet and negotiate with the union. But he had taken unilateral action and it's significant that the Court dealt with the unilateral action as such, saying employer action to bring about changes in wage scales without consultation and negotiation with the certified representative of its employees cannot we think logically or realistically be distinguished from bargaining with individuals or minorities, and then went on again to interfere -- point out that this interferes with the right of self-organization. And finally the point was squarely ruled on in the Crompton-Highland Mills case a few years later where an employer had done very much with this employer here did granted a wage increased to the employees when negotiations have gotten difficult. Indeed, they'd rate something of an impasse in that case which was greater than any increase it had been willing to offer through the union. Now I said that the basic fallacy of the court below in my judgement was attempting to make the employer's state of mind that the sole test of whether what is complied with Section 8 (a) (1) and 8 (a) (5). I would like to dwell on that just a moment and to show where it seems to me that this question of subjective good faith is relevant and where it is not relevant. Section 8 (a) (5) is a short provision. I also think if the law of collective bargaining is something standing like an inverted pyramid on that various small base because this is a large, complicated body of law and it doesn't reduce itself to one simple touch of it. I should say that there were at least three groups of problems which it was important to have in mind in aligning of the decisions of this Court. The first to those cases, cases of the kind that I've been talking about that deal with the status of the union and they established one of the collective bargaining as the exclusive method of fixing terms and conditions of employment upon a foundation of mutual consent. In this area, the concept of good faith has just no -- or almost no role to play. The only case I can think of where it comes has any pertinent is where the employer when there's been no election and certification refuses to bargain on the ground that he doubts whether the union has majority. Then it is said if he's doubt, he's entertained in good faith. He's not guilty of unfair labor practice even if it happened that the Union had the majority. But in all other cases, good faith does -- doesn't have anything do with it. Suppose for example, if the employer as in the May Department Stores case, challenges the Board's determination of the appropriate unit in complete good faith. That's not a defense if he is wrong. If the employer refuses to bargain with the union -- with a particular union official on the ground that he's personally objected -- objectionable to the employer, but he's willing to bargain in good faith with other union official. That has been held to be an unfair labor practice in enforcing the negative duties. As I suggested earlier, the duty to refrain from bargaining was a minority unit, good faith has nothing to do with it. In -- if the employer bargains with individuals when there's a majority representative he violates the Act regardless of his good faith otherwise in talking to the union. Similarly, when one deals with the questions in the area which can be defined by asking a question, what are the required subjects of collective bargain? As I suggested earlier, the employer, he refuses to bargain on a statutory subject is guilty of a violation of Section 8 (a) (5) regardless of his subjective state of mind. And indeed in the Borg-Warner case, this Court held that if he insists on bargaining on something outside the statutory subject he violates Section 8 (a) (5) regardless of the good faith in which he carried on the negotiations on the other subject. So in this area I suggest on the good faith is immaterial. Now, it becomes important in a class of cases that came to the attention of lower courts into a lesser degree to this Court of very early after the enactment of the Act. Some employers would meet and confer with the union and negotiate, and negotiate, and negotiate and gradually talk the union to death. It became important to distinguish the sham from the real. Now, that is a type of problem in which an inquiry into one subjective state of mind is meaningful and the test to achieve great importance in this area. The third group of cases arose from what I conceive to be the tendency of the National Labor Relations Board and comparative to the recent years to restrict the substantive position an employer might take on statutory subjects of collective bargain. Or to attempt to regulate the way he should conduct himself in carrying on the negotiations looking to a joint determination of terms and conditions of employment. The first of those cases was the American National Insurance Company case where it was held by a majority of the Court that an employer was free in response to a union's request for an arbitration clause to bargain for managements' prerogatives to make certain decisions in the area of collective bargaining for itself. The Board held -- the Board argued that for the employer to take that position was per se an unfair labor practice. The Court responded, “No, the Board is not set up to police the substantive positions that an employer may take.” If it has accepted collective bargaining, if it is negotiating with the Union then the test with respect to its positions is whether it is acting in good faith. Now, the Insurance Agents case of which the court below seems considerably to have relied on dealt not with the substantive position but with -- if I were to put it bluntly, the weapons that the union might use in attempting to gain its bargaining demand. And the Court held that the weapons that the Union used weren't -- could not because they were contrary to traditional ways or were -- might be thought against public policy or otherwise undesirable or indefensible on the Board phrase was not a ground for per se branding a refusal to bargain collectively. The concurring opinion by Mr. Justice Frankfurter, in additioning -- the questioning some of the breadths of the majority opinion emphasizes I take it to point that while this could not be held to be per se a violation of Section 8 (a) (5), the tactics that the Union resorted to, the timing with which it resorted to such tactic might in a proper context lay the foundation for a finding that the union did not have the proper subjective state of mind. There is nothing in our position here that quarrels in any with that reasoning because --
Potter Stewart: What was the reasoning? The reasoning of the concurring opinion or of the --
Archibald Cox: Either opinion --
Potter Stewart: -- court?
Archibald Cox: -- both, both. I was referring to the concurrent opinion.
Potter Stewart: That's what I thought.
Archibald Cox: I don't think it end up a fortiori. There's no -- nothing here that quarrels to the opinion of the Court.
Potter Stewart: Well, I don't see why it's a fortiori?
Archibald Cox: Well, as long as it's -- as long as we don't quarrel with it and --
Potter Stewart: Alright.
Archibald Cox: -- understand that -- maybe I spoken too quickly. The point I would make Mr. Justice Stewart about the opinion of the Court, is that the opinion of the Court in the Insurance Agents case took specific note of this problem related it quite profitably to the problem of the bona fide recognition of the union as an equal participant in fixing terms and conditions of employment. And then in the next sentence the majority opinion says, “An employer's unilateral wage increase during the bargaining processes tends to subvert the union's position as the representative of the employee's in matters of this nature and has hence been condemned as a practice violative of this statutory provision.” And we think that that statement is amply supported by the earlier decisions of the Court. I've cited in my brief a wealth of Circuit Court opinions going back into the mid-1940's squarely holding that unilateral action under these circumstances as unfair labor practice. The Board's own opinions consistently have reached that conclusion for quite a year and we think therefore that the judge --
Potter Stewart: That is the refusal -- they are these decisions all that -- that unilateral action of this kind is a refusal to bargain?
Archibald Cox: It's a refusal to bargain and a violation of Section 8 (a) (1).
Potter Stewart: Both these --
Archibald Cox: Both.
Potter Stewart: -- decisions hold both, is that it?
Archibald Cox: They held both.
Potter Stewart: In each case that it's both, is that it?
Archibald Cox: The only qualification that I need to state to that is that there is some language in the -- I see that in Medo or May Department Stores case which does speak only of 8 (a) (1) but the ensuing concluding finding and the Board's order listed both Section and the Board has always and the Court of Appeals have always treated it as a violation of both. We would argue just to be clear on the point Justice Stewart that this unilateral wage increase of an amount greater than was offered to the union could also be sustained independently, because whether one is satisfied that this was technically a refusal to bargain, certainly it does disparage the bargaining process, does undermine the Union's position and therefore interferes with the right to bargain collectively under Section 8 (a) (1). But they've normally been lumped together as violation of both Section. I'd like to save anytime I have left Mr. Chief Justice.
Earl Warren: You may Mr. Solicitor General. Mr. Raphael.
Sidney O. Raphael: Mr. Chief Justice and members of the Court, I think I feel privileged to argue this case especially in the light of the fact that I have an umbilical tie so to speak for this case -- to this case from its very birth. We go back to the early part of the spring of 1956 just about six years ago when this case had its inception and the demands by the Union, Local 1966 for recognition. Having had a long experience in the field of Labor Relations and this employer having enjoyed for many, many years a history of bargaining with about seven or eight labor unions collective agreement, we did not resist the petition for recognition and there was a consent election. There was a certification on the early part of July by the Director of the Second Region and of course as Your Honors know on the summer, people are away on vacation and we did not readily meet, it took a few weeks. And in the interim, we received a list of demands from the Union that sounded almost as though they were ready to take over the business. And I think that you will find this in Exhibit 10 which is --
William J. Brennan, Jr.: Is that unusual?
Sidney O. Raphael: This is not unusual Judge Brennan. This happens all the time. But this -- in this case, I want to point this out particularly because I think they went a little overboard. They asked for things which I thought meant in the field of Labor Relations, they wanted a home run the first time they were up at-bat. And we have a lot of experts dealing in this case. The Union's representatives had a long field, a long background, the employer did, I did and we were all conversant with the fact that this could not be achieved by any stretch of the imagination. However, it's a usual thing as Your Honors know to ask for all you can get then you bargain it down and perhaps you settle for a lot less. So then, this Exhibit 10 which appears at pages 263 through 267 of the record, and I want to point out one thing here which is going to become significant in the later portion of my argument. And that is this --
William J. Brennan, Jr.: That's in Volume 1 of the record?
Sidney O. Raphael: Yes, I think it's in Volume 1.
William J. Brennan, Jr.: It doesn't seem to be right in those pages. 263 through 267, is it?
Sidney O. Raphael: Yes.
Sidney O. Raphael: 26 --
William J. Brennan, Jr.: Yes.
William J. Brennan, Jr.: -- 3 through 267. I'm going to advert to something which appears on pages 26 -- on page 265 known as general notes. Item one, “ No employee shall lose any benefits or suffer any reduction of salary by virtue of the signing an application of agreement.” From that moment on, we were on the horns of a dilemma for this reason. The evidence in the case disclosed and this was a rather lengthy trial. I tried this case before the Board, before trial examiner and the issue was controverted except that I would say with respect to what I am about to tell the Court now, I don't believe there was any controvertible issue and that is that this company like a lot of other prominent companies in its field, without necessity, have to have and it did have a wage and salary cut, with merit reviews, promotions, classifications, etcetera. This is especially true in the case of professional employee such as engineers, designers, draftsmen, who were within -- who were in this bargaining unit. You are unable to keep people of that caliber unless there was some sort -- sort of a progression system. Now, we had this merit review system, we have these demands and the Union says, “Do not take anything away.” So the minute we do it, we're charged with infringing upon the Union's prerogative. However, as it's pointed out in Judge Frankfurter's opinion in the Insurance Agents case and then Judge Waterman's decision in the Court of Appeals in our case, an employer was torn between two poles. He's got to bargain with the Union collectively in good faith. But by the same token, he's got a business to run and you've got to be realistic, you've got to be practical. So you're -- you're walking a tight rope which is well-oiled and greased and God know if you fall down. And this is the posture that we find the basic facts of this case to be framed. Now, far from the contention which I have heard voiced by -- by the Solicitor General that there might be an inference of sham bargaining. Your Honors I say to you, this did not happen in this case. There was long, intensive bargaining and many sessions that went on for a period for about nine months or 10 months. And every time we met, we lived up to the word of Samuel (Inaudible). We gave each and -- on each and every occasion more and more until finally in April or May 1957 and this is in the record, we gave the Union improved vacations, improved holidays or 17 and a half dollar package spread over a period of three years. We gave them progressions. Well, you mentioned it, we gave it, that was the patent of our so-called sham bargaining. And the reason I illustrate that is because it is not without reason that the Board refused to go along with the trial examiner's findings and conclusions that there was an absence of good faith or let's put it on another way that there was bad faith in the bargaining by this employer. With this finding, the Board did not go along. And it is in this general cradle, in this crucible that we must now draw the line between the former doctrines ever enunciated before the amendment of the Taft-Hartley Act in 1947 and those that follow. The decision which was cited by the Solicitor General are all decisions that were pre-Taft-Hartley, Medo, all these other cases were pre-Taft-Hartley. Section 8 (d) which was the subject matter of considerable discussion both in Congress both in the House and in the Senate and which finally there was joint conference report, both agreed. They wanted to eliminate once and for all the tenuousness of an employer's position when it came to collective bargaining. In other words, how far did you have to go? At what point could you say that there was an impasse? At which point did you give all you could possibly give? At what point was there good faith or bad faith? Did you have to come to a collective agreement in order for somebody to say to you, “You're not guilty of bad faith?” So they enacted Section 8 (d). So these decisions or these opinions which were referred to by the petitioner are in acts and as Judge Frankfurter roughly pointed out in his concurring opinion in the Insurance Agents case, there was a distinction between those cases which preceded and those which followed the amendment to the Taft-Hartley law, Section 8 (d). That leads us now to the principle facet of this case, because if we conclude as I believe we should in the face of the present decisions and the amendment of the Act Section 8 (d) then there is justification for Judge Waterman's decision, because then we cannot isolate and fractionate some -- what I would call de minimis because these little violations that were committed on this case and the overall posture of all the facts was in the nature of de minimis violations, that's exactly what it was. They were clinging to a straw in order to sustain these charges because despite what they say that we changed the sick leave and I'll assume arguendo that we did, and I might say that we did because the record abounds with evidence that this was not a change that diminished anything. This was a change to prevent the constant abuses which we had not only with the professional employees but with our white collar personnel and they numbered into the hundreds. They were simply misusing the privilege that we gave them. So we didn't take anything away, but we added an incentive to what they had in order to avoid the continuance of this general bad relation which we had.
Earl Warren: We'll recess now Mr. --


William H. Rehnquist: We'll hear argument now in No. 90-769, Renne v. Geary. Is that the way your client's name is pronounced? Wren or Rene, is it?
Dennis Aftergut: Rennie, Mr. Chief Justice.
William H. Rehnquist: Rennie?
Dennis Aftergut: Rennie.
William H. Rehnquist: Very well.
Dennis Aftergut: Mr. Chief Justice, and may it please the Court: Article II, section 6(b) of the California Constitution provides that no political party or central committee shall endorse, support, or oppose candidates in nonpartisan elections... that is, elections for judicial, school, county, or city office. At issue in this case is whether the people of California may in the nonpartisan arena restrict the speech of those parties that have chosen to accept the benefits that the State confers upon its official parties in the partisan arena. And because our argument so involves these special advantages, I begin by describing them for the Court, how parties get those advantages, and then I proceed to discuss how they justify the balance that the people of California have sought to strike between their two systems, their partisan system and their nonpartisan system.
Sandra Day O'Connor: Would you mind inserting another little item, which is to tell us how this case arises? Now, the respondents are not political parties in the State of California, are they? They're voters?
Dennis Aftergut: The respondents include some voters, Your Honor, and they include some individual members of local central committees... that is the local organ in California of the State party. But you are correct, Your Honor, the respondents are not parties themselves.
Sandra Day O'Connor: And so how do we address the question in that light? Is it an overbreadth argument of some kind? I mean, 6(b) is addressed to political parties, I thought. Isn't that right?
Dennis Aftergut: That's correct, Your Honor.
Sandra Day O'Connor: And we don't have a political party here.
Dennis Aftergut: Only as amici, Your Honor.
Sandra Day O'Connor: Yes. And so how is it that we even get to the question?
Dennis Aftergut: Well, these respondents, Your Honor, seek... the way the case arises is they had... they sought to place in the San Francisco voter pamphlet endorsements either of them or endorsements by the committees of which they were a member. And they sought to have that endorsement circulated through the government's publication, the ballot pamphlet to all voters. That's how the case arises.
William H. Rehnquist: Some of them were candidates who were being endorsed?
Dennis Aftergut: I don't believe that's correct, Your Honor, although I can't answer that question for sure.
William H. Rehnquist: Well, perhaps we should address some of these questions to your opponent as to the standing of respondents.
Dennis Aftergut: The way that the official parties in California become official parties is by choice. That is California Election Code section 9951 provides the mechanism by which a group seeks to become an official party. And I should also say that section 35 of the California Election Code defines parties as ballot-qualified parties, so that when article II, section 6(b) refers to parties, it is referring to ballot-qualified parties, that is those who have chosen to take advantage of the statutory benefits.
Byron R. White: But what kind of... how did this case get started? These... you say these respondents wanted to put their... wanted to recite in these pamphlets that there had been endorsements?
Dennis Aftergut: That's correct, Your Honor.
Byron R. White: And who... and then somebody refused?
Dennis Aftergut: Yes. The--
Byron R. White: Who refused?
Dennis Aftergut: --The San Francisco Registrar of Voters.
Byron R. White: Refused--
Dennis Aftergut: Yes.
Byron R. White: --to put them in. And then the... and then they sued, the other people sued? Is that it?
Dennis Aftergut: That's correct, Your Honor.
Byron R. White: Because they wanted to get these endorsements in the pamphlets.
Dennis Aftergut: In a pamphlet that is sent to all voters in the city, and which we contend would make a nonpartisan election partisan because these endorsements would go to every voter in the City and County of San Francisco.
Byron R. White: And the grounds for refusing by the official was that the State law forbade endorsements?
Dennis Aftergut: That the State law forbade endorsements in nonpartisan elections.
Byron R. White: Exactly.
Dennis Aftergut: Yes.
Antonin Scalia: Mr. Aftergut, could you tell me, this constitutional provision which says that no political party may endorse, support, or oppose a candidate for nonpartisan office, does... would that prevent a political party from contributing money for the candidate to promote himself? In other words, is it only addressed to an endorsement? Could the Republican Party support the candidate so long as it did not say that he is the Republican-endorsed candidate?
Dennis Aftergut: No, Your Honor.
Antonin Scalia: It could not? It cannot contribute money or do anything else to assist his campaign?
Dennis Aftergut: That's correct. Support would include that. The advantages that political parties, official political parties, ballot-qualified political parties get, parties that have chosen to become official parties, are a vast array of benefits. I want to go through them quickly for the Court so the Court understands. First, a ballot-qualified party is a party that has guaranteed access to the partisan ballot, to the Statewide ballot. Second, the State operates the primaries for those ballot-qualified parties. Third, the State assists those parties in expanding their affiliation in a very special way. The voter registration card includes a list of the ballot-qualified parties and only the ballot-qualified parties, so that a voter registering marks which party he or she wishes to affiliate with. Fourth, the parties are entitled to receive free of charge from the State a copy of the list of voter affiliation... of the registered voters and their affiliation. Fifth, the official parties may send to this, to the individuals on this list, those people that the State has helped the parties affiliate with, may send them free of charge a solicitation letter allowing the parties to collect funds from these individuals.
Antonin Scalia: What do you mean send it free of charge?
Dennis Aftergut: It is sent without expense to the party with the sample ballot and the voter pamphlet that go out.
Antonin Scalia: Oh, I see.
Dennis Aftergut: State law provides for that.
Antonin Scalia: The State pays the postage.
Dennis Aftergut: The State pays the postage. It can go out... the letter and the solicitation envelope goes out. Sixth, the State allows parties to receive a $25 tax contribution on the income tax form dedicated to that party. Seventh, the party meetings, the central committee meetings, occur in the seat of government, in the city hall, called by the clerk. This is an array of advantages that is unique in its scope. And why has California chosen to give its official parties, those that have chosen to become parties, why has California chosen to give them more advantages than any other State? The reason has to do with the nature of California itself, and has to do with the decisions of this Court in the ballot access area. California, being the largest of our States and being a State of tremendous diversity, finds a need to promote parties in order to promote stability in such a large and diverse State, in order to... parties help forge consensus among diverse groups, as this Court has recognized in the Storer case, in the Jenness case, in the American Party v. White case. And parties help prevent a balkanization of the political process so that government can operate. So California has chosen to structure its government, the people of California have chosen to structure their government in this way, strengthening the parties. But there is a danger. The danger is that California at the same time has coexisting a nonpartisan system, a strong nonpartisan system, a long tradition of nonpartisanship that goes back to the progressive era in Hiram Johnson. And that commitment to nonpartisanship in fact is stronger than any other State because California is the only State in the country which absolutely prohibits nonpartisan nomination in all local and all school--
Antonin Scalia: Prohibits partisan nomination.
Dennis Aftergut: --Excuse me, prohibits partisan nominations in all local, all city, all county, all school, all judicial elections.
Sandra Day O'Connor: Well, how does 6(b) operate? Now, for example if there were a general election coming up and there were some judicial candidates on the ballot, listed on the ballot as nonpartisan, I take it that this provision 6(b) might be said to prohibit, let's say, the Democratic Party from preparing a little card to give to registered Democrats by the precinct committeeman saying these judicial candidates are candidates that we think merit your support. Take this with you to the ballot on election day.
Dennis Aftergut: That's correct.
Sandra Day O'Connor: You could enjoin the distribution of a communication?
Dennis Aftergut: That's correct. That is the... an injunction--
Sandra Day O'Connor: That's the position you take?
Dennis Aftergut: --Yes. And that is the only sanction that exists in the State of California. In other words, there's no criminal penalty for an official party's endorsing. It's simply that some--
Sandra Day O'Connor: But you can suppress the speech?
Dennis Aftergut: --Well, the--
Sandra Day O'Connor: The political speech.
Dennis Aftergut: --The government could bring an action to enjoin that, or an individual could bring an action to enjoin that, as happened in the Unger case.
Sandra Day O'Connor: And how is it you think the First Amendment would allow that?
Dennis Aftergut: For the reasons that I am saying, Your Honor, that this is an essential part of the structure of government that California has chosen. That is to say at the same--
Sandra Day O'Connor: There are other States that have nonpartisan judicial elections, and they don't purport to prevent speech by political parties.
Dennis Aftergut: --That's correct, Your Honor, and that was the point I was trying to develop in terms of a difference that exists in California. And that is to say California gives to those parties that have chosen to become official parties this vast array of benefits. And then secondly, California has this uniquely strong comprehensive commitment to nonpartisanship. And so what California is saying when it speaks to its official parties, those that have made the choice of becoming official parties, it has given to them a choice. And it has said you may have this vast array of advantages in order to assist in organizing our political system across the State. But with that vast array of benefits there is a danger. And the danger is that the State... the State by giving to parties that have chosen to take advantage of these benefits... the State itself will be weighing into the nonpartisan arena.
Sandra Day O'Connor: Well, do you think that the State in First Amendment analysis can just offer additional benefits as a sort of quid pro quo for giving up First Amendment rights?
Dennis Aftergut: Where the State has a sufficiently compelling interest and where the people of California have said this is how we wish to structure our government. We structure our government by having a strong partisan, strong party role at the State level. We need it in our State. But at the same time we have a strong nonpartisan system. And the danger is that the State has... that these benefits that the parties have chosen to take, these benefits enhance the voice, amplify the voice of parties in a way that will put them, if they may endorse, back at the center of the nonpartisan arena where nonpartisanship envisions they do not play the central part.
Anthony M. Kennedy: You describe all of the initial regulations that you'd recited as benefits. I take it parties are required by law to have the meetings that you have described; are they not?
Dennis Aftergut: Official... the answer is I believe you're correct that official parties are required, although I am not, I must say I am not certain. But the point is--
Anthony M. Kennedy: Of course it's required by law that they meet at a particular time and place as designated. So these aren't just benefits, they're regulations.
Dennis Aftergut: --But the point is that the... that may be so with respect to that particular regulation, Your Honor. But the point is that the party has the choice. The party has the choice of not accepting those benefits and of being like anybody else in the nonpartisan arena. They can speak however loudly they want in the nonpartisan arena.
Anthony M. Kennedy: They just can't have a candidate in the primary. You can't have a candidate in the primary unless you're an official political party.
Dennis Aftergut: I'm not sure I understand Your Honor's question.
Anthony M. Kennedy: Well, you're telling us that the parties voluntarily accept all of these emoluments and benefits that you have described. And I am suggesting to you that an official party must comport with this regulatory scheme or it cannot enter a primary and it cannot support a candidate in any primary. That's the definition of a party.
Dennis Aftergut: The party does not need to take advantage of these benefits, Your Honor, perhaps with the exception of the regular meetings. But the others are not regulations. The party does not have to nominate, does not have to have guaranteed access, it doesn't have to take advantage of these benefits. It has... it makes the choice--
Anthony M. Kennedy: Can the Democratic Party have primary elections and not be an official party with respect to all of the regulations that you have described?
Dennis Aftergut: --The Democratic Party can... the Democratic Party can, absolutely, get its candidate on the ballot for... I'm not sure about for a primary election, but it can definitely--
Anthony M. Kennedy: Well, that's critical, isn't it?
Dennis Aftergut: --It can get its candidate on the ballot by doing what any other group does, and that is by gathering the number of signatures that are necessary in order to get on the ballot. The Democratic Party has chosen to take advantage of these benefits, and the price for taking advantage of those benefits that California exacts in order to protect the nonpartisan structure of its government from the enhanced voice that these benefits give to parties is to say we need this restriction in order to keep parties from occupying the central place in local government and in judicial government.
William H. Rehnquist: So you say there is a way for a political party to get on the ballot without becoming an official party?
Dennis Aftergut: Absolutely, Your Honor.
William H. Rehnquist: And that's by getting signatures?
Dennis Aftergut: That's correct, Your Honor. And I can give the Court the statute. I'm not sure I have it in mind. It's--
Byron R. White: But getting it... they can get their candidate on the ballot, but it won't say that that candidate is a candidate of that particular party, will it?
Dennis Aftergut: --I'm not sure of the answer to that, Your Honor. I believe... I am really not sure of the answer to that.
Byron R. White: Well, anybody can get on the party... get on the ballot without a, if they get the number of signatures.
Dennis Aftergut: That's correct. And--
Byron R. White: So a political party doesn't get on the ballot, somebody they want on the ballot gets on the ballot. But the name of the party won't be there, will it?
Dennis Aftergut: --I'm not sure of the answer to that question, Your Honor.
Anthony M. Kennedy: You're talking about general elections, because for a primary you have to be an official party.
Dennis Aftergut: Um-hum. But the point is that the party may operate like anybody else if it... if the party chooses not to take advantage of these benefits that the State confers.
William H. Rehnquist: Well, what if you had a party... let's say it's the Surfer Party, that was just new in California.
Dennis Aftergut: Right.
William H. Rehnquist: And it had 100,000 members, and it wanted to, it did not want to go through the official party structure. Could it have a primary of its own? Supposing there were two rivals for the nomination of that party?
Dennis Aftergut: It... that party, it could choose its candidate in any way that it wished. Whether it would be, I do not believe that... if it were not an official party it would not have a State-run primary, but it could choose its candidate by--
William H. Rehnquist: It could have a convention?
Dennis Aftergut: --It could have a convention.
William H. Rehnquist: But it couldn't go into the primary election the same day the officials parties did?
Dennis Aftergut: Well, it could choose whatever day it wished, but it would not be... that would not be... they would not be a ballot-qualified party for running. They can choose their candidate however they wish. They can have a private election. They can have a--
Antonin Scalia: But the State runs and pays for the primaries of the validated parties?
Dennis Aftergut: --That's correct.
Antonin Scalia: Correct? And it mails out information to all the voters about those parties.
Dennis Aftergut: That's correct.
Antonin Scalia: And it lists those names on the ballot.
Dennis Aftergut: That's correct.
Antonin Scalia: So that in a sense those parties become part of the governmental process of election.
Dennis Aftergut: That is correct, Your Honor.
Antonin Scalia: It's part of the formal election system of California, that parties... part of the election is you have a party primary and then the formal election with the party names on it.
Dennis Aftergut: And that is the point. The point is that because, by becoming part of the State structure--
Antonin Scalia: So it's accepting the benefits. It's becoming part of the State electoral structure.
Dennis Aftergut: --By becoming part of the State structure in the Statewide context, there is the danger of... the State has an enhanced power to regulate and to protect its other structure, that is its nonpartisan structure, from parties playing the role that they were designed not to play. And that's particularly important, Your Honor, because in local elections, for example, the danger of party domination is a danger that was part of the experience of California that led to this... led to this regulation, to the whole tradition of nonpartisanship. And it exists for the reasons that Madison acknowledged, and that is that in smaller localities single parties do tend to dominate, and there is a danger from that that does not exist across broader geographic lines where there is a greater balance. And so what you have in cities like our city, San Francisco, you have a one-party majority. And you have, or you may have the reverse in Orange County. And what happens is that if the State has enhanced the voice of these particular entities, you have exactly the same problem that the people wanted to avoid when they enacted the whole tradition of nonpartisanship. And, frankly, that is what distinguishes this case, the structure... the State's structural interest. That is what distinguishes this case from the Eu case, because in the Eu case the structure of government was not involved. In fact when the government in the Eu case offered as an interest, as a compelling interest, political stability from the Storer case, the Court's response was that the State's interest in political stability does not embrace an interest in party stability, in preserving party unity. We're not trying to protect party unity. We're trying to protect our nonpartisan local and judicial governments. We're trying to protect them from the danger of the State's playing a role, weighing in on the side of the very parties that were, that the people decided were not supposed to be involved in judicial elections, and were not supposed to be involved in school elections, and were not supposed to be involved in city and county elections. That is the justification, the structure of our government.
Byron R. White: Is the State Attorney General involved in this case at all?
Dennis Aftergut: No, he is not, Your Honor. He was not sued in this case, and he has not been involved.
Byron R. White: But this is a provision of the California Constitution?
Dennis Aftergut: That is correct, Your Honor.
Byron R. White: And he doesn't have any right or duty to be informed about when some constitutional provision is at issue?
Dennis Aftergut: Your Honor, he does have a duty under the law to be informed, and we fulfilled that duty by notifying the Attorney General and--
Byron R. White: But he never took any position in the case?
Dennis Aftergut: --Whatever his reasons for not taking a position, whether they related to the fact that he is a partisan officer or was running for governor of a party, I simply cannot say. I do not know what his reasons for being here or not being here were.
Byron R. White: Thank you. Mr. Aftergut, are you going to turn from the question of the State's interest to the problem of inclusiveness before you are done?
Dennis Aftergut: Certainly.
David H. Souter: Okay.
Dennis Aftergut: The principle basically that we're advocating here, Justice Souter, is really quite a limited one. That is we do not seek to prevent endorsement support or opposition by any group other than those that have chosen to take advantage of the benefits that I have described.
David H. Souter: There's no limitation on PAC's and so on, for example, from coming out and endorsing and working for candidates?
Dennis Aftergut: I am not sure I understand what the Court means.
David H. Souter: Can a political action committee do the things which the party organization itself may not do?
Dennis Aftergut: I think the answer to that question, Your Honor, would depend upon whose political action committee that it was. If it were the--
David H. Souter: Well, what's the... what's the standard by which you determine that?
Dennis Aftergut: --Well, if this is, if what Your Honor is asking is could the Democratic Party form a PAC and do the same thing, the answer to that is no because that--
David H. Souter: Well, could I form a PAC of Democratic surfers and support a candidate?
Dennis Aftergut: --Absolutely, Your Honor, because you and your colleagues are not the beneficiaries of the State-conferred advantages that are given precisely for the purpose of enhancing your voice. So what we are proposing here is a limited principle that applies only to these particular groups that the State has put in this preferred position.
David H. Souter: So you're just saying that the only PAC that cannot support is one that would be sort of an obvious or blatant alter-ego for the party itself?
Dennis Aftergut: I couldn't have said it better myself, Your Honor. [Laughter]
David H. Souter: Okay.
Dennis Aftergut: Since I see my white light and I would like to reserve some time, let me just summarize by saying that where the State-conferred advantages meet the single-party domination that exists in so many localities is where we have the danger of officials being beholden to parties at the sponsorship of the State. And in their ordinary experience the people of California understood that it would be an absolute fiction to think that official party endorsements would not dismantle their long heritage, their long tradition of nonpartisanship. Thank you.
William H. Rehnquist: Thank you, Mr. Aftergut. Mr. Smith.
Arlo Hale Smith: Yes. Thank you, Mr. Chief Justice, and members of the Court: I think I'd like to start by saying that I think Mr. Aftergut overstates the amount of quote, choice, unquote under California law any party has on being on the ballot.
Anthony M. Kennedy: Could you begin by telling us how the case came up? 10 registered voters--
Arlo Hale Smith: Okay.
Anthony M. Kennedy: --wanted to have something in the ballot. Can you tell us what they wanted in the ballot?
Arlo Hale Smith: Here's what happened. Basically there were 10 registered voters, some of them county central committee members. The dispute was with the San Francisco Registrar of Voters, who categorically took the position that they would not print any statement by any candidate indicating a party endorsement under any circumstance.
Anthony M. Kennedy: All right. So these were candidate endorsements that a candidate is permitted by law to include in the ballot?
Arlo Hale Smith: Yes.
Anthony M. Kennedy: And the candidate wished to include a statement to the effect that he or she had been endorsed by a particular party or central committee?
Arlo Hale Smith: Basically, Your Honor, that's, that's what the dispute was about. However, there was not an actual statement that had been rejected. The Registrar had in advance just taken--
Sandra Day O'Connor: No candidate had come forward and said include this endorsement?
Arlo Hale Smith: --No. But the Registrar had in advance said--
Sandra Day O'Connor: And no political party had come forward and said include this endorsement? These are registered voters who went in and said we think you should include them--
Arlo Hale Smith: --And county committee members.
Sandra Day O'Connor: --Did they have any right to--
Arlo Hale Smith: Yes.
Sandra Day O'Connor: --to demand that certain materials be included?
Arlo Hale Smith: Yes. A number of these were county central committee members who were... county central committee members. And--
Sandra Day O'Connor: Can an-- --How did that give them any right?
Arlo Hale Smith: --County central committee members would... are by this measure prohibited from, as committee members, voting to have their committee make endorsements which the candidates could then include.
William H. Rehnquist: I thought... so the prohibition includes county committee political parties as well as--
Arlo Hale Smith: Yes.
William H. Rehnquist: --State?
Arlo Hale Smith: It includes State and county committees. It says... what it literally says is no political party or party central committee may endorse, support, or oppose a candidate for a nonpartisan office. And then... nonpartisan office is defined as local, school, or judicial office.
Anthony M. Kennedy: Was there any finding that there was an actual candidate that wanted to have this endorsement in his or her election?
Arlo Hale Smith: No.
William H. Rehnquist: Was there any indication that a party central committee wished to make an endorsement?
Arlo Hale Smith: Yes. Yes, the Republican Committee of San Francisco said it would intervene if the district court judge found that necessary to confer standing. And the--
William H. Rehnquist: But it was not a party?
Arlo Hale Smith: --No. The chairman was a party. The chairman was... the chairman was party to the action. And the chairman and some officers of the... of both county, both the Democratic and Republican Committees were parties to this action.
Antonin Scalia: I see how that would give them an interest in whether the law is valid or not, but I don't see how that gave them an interest in the act that forms the subject matter of the suit. Does anyone except the candidate have the right to demand that something be included--
Arlo Hale Smith: Yes.
Antonin Scalia: --in this mailing?
Arlo Hale Smith: Yes.
Antonin Scalia: Who has the right to include it?
Arlo Hale Smith: As long as reference is made to ballot measures, any registered voter in San Francisco could, if they pay the price, include something.
Sandra Day O'Connor: Well, this isn't a ballot measure. It's a political candidacy we're talking about.
Arlo Hale Smith: That's right.
Sandra Day O'Connor: So can any citizen come forward and demand that things be included in the pamphlet concerning a candidate? And if so, where in the record do we find that regulation or provision?
Arlo Hale Smith: You find in the San Francisco Administrative Code... you find in the San Francisco Administrative Code, San Francisco Charter of Provisions, for candidate statements and for ballot arguments. And this case involved both candidate statements and ballot arguments. The San Francisco Registrar took the position that they would never accept any candidate statement, period, if it had any party endorsement.
John Paul Stevens: May I ask you if the California constitutional provision had been written in a different way and simply said that the statements sent out by the candidate shall not include any party endorsements that might be made, would that be constitutional?
Arlo Hale Smith: Are you talking about in official election material, or are you talking about generally?
John Paul Stevens: Official election material, which is what I gather gave rise to this controversy.
Arlo Hale Smith: Your Honor, that might be a... if it was a forum-specific regulation that might be a different problem. But this--
John Paul Stevens: In other words, what I'm suggesting is perhaps even though on its face the California provision may be overly broad and unconstitutional. Maybe as applied to the specific controversy here it's a perfectly proper thing.
Arlo Hale Smith: --Well, I'm not so sure if it is, and indeed the California court of appeal recently in a case called Clark v. Burleigh in a matter involving what judicial candidates could say, actually invalidated an election code provision that limited what judicial candidates could say in their candidate statements. But whether that's--
John Paul Stevens: But it didn't invalidate the provision prohibiting them from announcing a party endorsement in their candidate statement, did it?
Arlo Hale Smith: --No.
John Paul Stevens: Which is... well-- --Mr. Smith, is at least this clear on the standing point, that the only reason the Registrar gave, even though there may have been... may have been other reasons why he might have rejected the submissions for the--
Arlo Hale Smith: The only reason was the State constitutional provision.
Antonin Scalia: --That's the only reason he gave?
Arlo Hale Smith: That's right. And the respondent... the petitioner has never argued otherwise any points.
Antonin Scalia: And as far as we know there is no other basis? There may be other bases, but we're not sure?
Arlo Hale Smith: They have never asserted any other basis. Indeed on this point they, both sides have agreed the whole time that--
Anthony M. Kennedy: Well, what submission are you... was there an actual submission made?
Arlo Hale Smith: --No. Basically the Registrar just, when asked, said that they would follow article II, section 6(b), would not allow any candidates to print any such endorsements. And the parties wanted to make endorsements and have the candidates go use the endorsements in their candidate statements.
William H. Rehnquist: Well, what are the merits, Mr. Smith?
Arlo Hale Smith: Your Honor, on the merits, I think it's hard to envision a more flagrant violation of the First Amendment. Basically, under this law voters in California have less rights than voters in the Soviet Union in the sense that the Soviet Union, you know, you have multiple-candidate elections which are not by party, to the extent they are now allowing multiple-candidate elections. Yet I am sure that if Gorbachev announced tomorrow that the Lithuanian Nationalists or the Georgia Nationalists could not endorse candidates, that President Bush and Jim Baker would be rightly protesting a violation of civil rights.
William H. Rehnquist: Well, to get a little closer to home, how do you distinguish this case from Austin v. The Michigan Chamber of Commerce?
Arlo Hale Smith: How do I distinguish it?
William H. Rehnquist: Yes.
Arlo Hale Smith: Easily. In Austin the problem was that... there's two big things. One branch is that in Austin the prohibition wasn't as broad. Basically the corporation could set up a totally controlled PAC, and... to make contributions, and the corporation could make any endorsement it wanted. The corporation could send to its shareholders or members any expression it wanted on candidates. It simply... in this case the political party cannot--
William H. Rehnquist: Well, but the Michigan statute certainly prohibited the Michigan corporation in question from expressing itself in an election, and we said it was justified because the danger of corruption and because the State had given the corporation certain benefits.
Arlo Hale Smith: --Well, I said there are two distinctions, though. One is that the Michigan statute didn't go nearly as far as this provision does, because this is an absolute prohibition and this Court's opinion, as well as concurrence by Justice Brennan, were very explicit that they were saying it was not an absolute prohibition, because the Michigan corporation could set up a wholly controlled PAC. The Michigan corporation could, to its members, send any endorsement it wanted. And the Michigan corporation could endorse all it wanted, it just was limited in direct expenditure money from the corporate treasury. The second point is what Austin and Massachusetts Citizens for Life make very clear is that the problem was not that the corporation got benefits, because there would not be necessity to exempt any corporations, including wholly political corporations. It was just mere receipt of benefits does it. The test was that it gave corporations advantage in the economic marketplace which would allow them to basically bring money over into the political marketplace. And that was the quote, corruption, unquote, that the Court was concerned about.
William H. Rehnquist: Do you think corruption is the only evil that a State may strike at under that rubric?
Arlo Hale Smith: I think corruption is the only one that has been recognized as legitimate so far, and I think that this provision is just so all encompassing. It's... it applies to all parties, major or minor, ballot qualified or nonballot qualified. It applies to all advocacy with respect to local, school, and judicial races whatsoever. The political parties--
Byron R. White: It's practiced by the official party, isn't it? I don't suppose... are the officers of the party forbidden to go out and campaign?
Arlo Hale Smith: --Well, even if they're not--
Byron R. White: Are they or not?
Arlo Hale Smith: --I believe individually they could campaign, but--
Byron R. White: But then, any organization besides the party can support these candidates, I suppose, in these nonpartisan elections, like the California Democratic Council?
Arlo Hale Smith: --Yeah, but that--
Byron R. White: That's not an official party, but--
Arlo Hale Smith: --That's true.
Byron R. White: --So all organizations other than these officially recognized parties can campaign, endorse, and give money?
Arlo Hale Smith: That's right. And that actually, though, underpoints the whole irrationality of the enactment.
Antonin Scalia: Do you think the State of California could prohibit the justices of the Supreme Court of California from endorsing as a group a candidate for governor, one candidate or another?
Arlo Hale Smith: I think, Your Honor, that the State might have greater ability to regulate the political activities of judges or judicial candidates than they could of the outside entities.
Antonin Scalia: Why is that? Because they are part of the governmental process? And aren't parties part of the governmental process, as California has set it up?
Arlo Hale Smith: Parties are part of the governmental process only insofar as they are allowed to make nominations for certain offices. And basically the, what... there is no choice. If you have 1 percent of the registration you are automatically a qualified party in California, period. All it takes is 1 percent of the registration. You know, there's no, I don't even think there's a legal way that the Democratic or Republican Party could, quote, withdraw, unquote, from, quote, accepting, unquote, the benefits that the petitioners talked about. Because basically the test under California law is if you have 1 percent you're a ballot-qualified party. And the test also is, and with respect to a question that was asked earlier, under California law independent candidates cannot use any party designation. In a case called Libertarian Party v. Eu, the California Supreme Court squarely held that about 10 years ago. So basically, if you get 1 percent registration you are on the ballot as a party that nominates by primary. You must nominate by primary under the California Constitution.
Antonin Scalia: 1 percent registration in what? I don't understand. You register in the primaries, don't you?
Arlo Hale Smith: As soon as 1 percent of the voters register say that I want... I am affiliated with this party or that party, as soon as 1 percent of the voters register a certain way, the party--
Antonin Scalia: Do they have to honestly say whether they are affiliated with one party or another?
Arlo Hale Smith: --Under California law you have to actually... under California law you have to fill out a voter registration card that says I affiliate with this party or that party or--
Antonin Scalia: Yeah, but I think it's... isn't it up to the party whether they want to be a primary party or not, whether they want to play the primary game and get on the ballot?
Arlo Hale Smith: --No, they have no choice. If 1 percent of the voters sign up--
Antonin Scalia: Yeah, but they just tell their members, don't sign up. This party does not want to be on the primary ballot. We don't want to be a primary party. Couldn't they do that, and tell their voters don't affiliate for purposes of this registration? Can't they? Are you sure that they must say I--
Arlo Hale Smith: --If--
Antonin Scalia: --All right, you've got me, I'll tell the truth. I really am a member of the... whatever... the Surfers' Party. You have to say that?
Arlo Hale Smith: --All I am telling you is that once there is 1 percent the party is on the ballot and is in the scheme. And in fact once they're on, even if they fall below 1 percent, as long as they don't fall below something like one-fifteenth of a percent and they get at least 1 percent in some Statewide election, they stay qualified under the scheme. And that's how it works in California. So there isn't this great choice, and as a practical matter I think that's just resuscitation of the old argument that if something's a privilege then you can condition speech on it. And I think this Court has in most contexts reject that... rejected that argument rather squarely. Because by the same argument, I guess, anyone who got a... you know, you have Federal law saying anyone who got a patent couldn't support any candidate for any Federal office. Or anyone who got a student loan couldn't be involved in any public political activities. So I don't think--
Antonin Scalia: We have rejected it in most contexts. The question is whether this is one of those in which we should reject it. We haven't rejected it in all. We have upheld the Hatch Act, for example.
Arlo Hale Smith: --Well, I believe that naturally, if you look at the cases coming after that, like Connick, it's clear that the rationale is the government has... that the government is supposed to have the same kind of control over its employees that a private employer might. And obviously the employment relation implies a certain degree of control that I think contributing or supporting a political organization doesn't. And MCLF is an authority on that, that a contributor or supporter can't expect to control a lot of the workings of the political organization.
William H. Rehnquist: Thank you, Mr. Smith. Mr. Chao, we'll hear now from you.
Cedric C. Chao: Mr. Chief Justice, and may it please the Court: One of the first indications that democracy was arriving in Eastern Europe last year was the formation of political parties. As the Ninth Circuit noted in its Eu decision, political parties are nothing more than voluntary associations of individuals who band together in pursuit of shared political goals. Political parties can succeed in the political marketplace only if their vision of society attracts a majority of the population. And that is why this boogie-man of the party dominance makes no sense. If voters like the message and they accept the message, then they will accept the candidates of that particular party and the programs of that particular party.
Anthony M. Kennedy: And I take it if a judge doesn't want to have an endorsement he'll say a plague on all your houses, I don't want any endorsements?
Cedric C. Chao: That's absolutely correct, Your Honor. Section 6(b)--
William H. Rehnquist: Do you think, Mr. Chao, that the Democratic Party could insist that it be able to nominate a candidate for the county board of supervisors, or whatever it is that's now nonpartisan in San Francisco?
Cedric C. Chao: --Well, under the nonpartisan nomination process the answer is no. They do not have, they do not control access to the ballot.
William H. Rehnquist: Well, would you... might not your argument lead to the conclusion that they have a constitutional right not to be excluded from competition for that office?
Cedric C. Chao: Well, that issue is not before the Court.
William H. Rehnquist: No, but I would be interested in your answer to it.
Cedric C. Chao: I think that would be difficult to say, Your Honor. I do think it would be difficult to say. I would like to--
Byron R. White: xxx offset in either way?
Cedric C. Chao: --Either way, Your Honor.
Byron R. White: So you don't think your argument... don't you think your argument here bears on that issue, though?
Cedric C. Chao: I don't believe directly so, and I don't think we're taking it that far, Your Honor. I think what is at issue squarely in this case is whether, given the fact that there are elections, whether they be partisan or nonpartisan, where the political parties have an equal right to every other entity and individual in society to speak their piece, to say this candidate is qualified, this candidate is worthy of your support, and that's really what's before us.
Byron R. White: And to contribute money?
Cedric C. Chao: As well as contribute money, support and oppose. That's correct, Your Honor.
John Paul Stevens: Do you think that the State could prohibit the candidate from including that endorsement in the statement that's sent out to voters at public expense?
Cedric C. Chao: I do not believe so, Your Honor. That is not before the Court in this case--
John Paul Stevens: Well, it's what gave rise to the lawsuit, though.
Cedric C. Chao: --That is in a different portion of this lawsuit. That's correct. Section 6(b)--
Anthony M. Kennedy: Your position is the Democratic or Republican Party cannot be prohibited from giving money to judicial candidates in California?
Cedric C. Chao: --That is correct, Your Honor, under the present... that's correct. Section 6(b) is--
Anthony M. Kennedy: Are they... I take it they're not permitted to now?
Cedric C. Chao: --Under section 6(b) they are not permitted, that is correct.
Byron R. White: And this could go for retention elections, which are the only kind of elections there are, I guess?
Cedric C. Chao: That is correct, with the exception, Your Honor, that for certain of our trial courts a challenger can take on an incumbent judge--
Byron R. White: Okay.
Cedric C. Chao: --And in fact that did happen in November 1990. Section 6(b) is quite dangerous. In California there are 19,279 elective offices. Of those offices, only 179 are partisan. What section 6(b) then does is it says that political parties may be silenced on the issue of political candidates in over 99 percent of elective offices in California, which goes to one of the major reasons for the existence of political parties, namely the ability to evaluate candidates for public office and to decide whether they are worthy of support or not. Section 6(b) is equally an egregious burden on the right of the voters and of party members to receive information in elections. And, as this Court has held repeatedly, one of the purposes of the First Amendments in the political marketplace is to ensure that voters receive as much information as possible in order to intelligently exercise the right of franchise. Just two terms ago--
Antonin Scalia: I mean, on the information point, do you agree with the answer that your opponent gave with regard to what is prohibited by this law? That is to say the political party is not only prohibited from saying the Republican Party endorses so and so, but it cannot even put out a brochure at its expense describing what a terrific candidate this is? It cannot even spend any money to circulate information on this person's behalf, information apart from the party endorsement?
Cedric C. Chao: --The statute reads not only endorse, Your Honor, but also support and oppose. And I do not quarrel with my opponent's interpretation of support to--
Antonin Scalia: It doesn't mean officially support necessarily? It means contribute anything to his support?
Cedric C. Chao: --We do not quarrel with that interpretation, Your Honor, and that is one of the reasons why we think the statute is, the burden of the statute is very, very broad. The... just two terms ago in Eu, it was held that the First Amendment protects the rights of political parties to endorse candidates to speak on candidates running in party primaries. I submit that is difficult to see how the rationale of Eu does not apply with equal force to nonpartisan elections. I would like to address... I think there is a very fundamental misconception, a very fundamental confusion in the compelling argument put forth by the petitioner. Their primary compelling interest, they assert, is the impartial administration of government, and they found that on the Letter Carriers decision. But I submit that he is... that petitioner has confused two very distinct concepts. On the one hand, as Letter Carriers spoke, there is an interest in the impartial execution of the laws, which meant the execution and enforcement of laws without bias or favoritism toward any party or member. In a local context that would mean whether I supported the winning or losing candidate for mayor, I have an equal expectation that my garbage will be picked up once a week just like everybody else. The concept that they tried to throw in to bring into Letter Carriers rationale is impartial policy making. They would have... they argue that there's only one right way to run a city or a county. And they also argue that parties, based on evidence of 100 years ago, are these engines of evil, and therefore parties are driven to pressure the local official to act in a way to decide a policy that is not the right way. I submit that their syllogism is fatally incorrect. There is not one right way to run a city or a county. There are many ways to run a county--
Anthony M. Kennedy: Well, are you saying that there is no State interest in having what are called nonpartisan offices?
Cedric C. Chao: --There is no compelling interest in having a nonpartisan office. A nonpartisan, the nonpartisan method of putting candidates on the ballot is merely one vehicle. They... California has chosen on a nonpartisan nomination process. Other States have done that and other States have chosen a partisan method of putting both judicial office holders and other office holders on the ballots. Nonpartisanship--
Anthony M. Kennedy: I'm not quite sure I understand. So there is no governmental interest in having nonpartisan judicial elections?
Cedric C. Chao: --I would submit that is correct. There is... California is free to determine that we will put judges on the ballot on a nonpartisan basis. But I would submit that the nonpartisan election by its, in and of itself, is not a compelling interest in the First Amendment structure.
Anthony M. Kennedy: Well, what do you mean that California has an interest in putting them on the ballot on a nonpartisan basis? How can they have that interest if on the other hand the candidate has the right to identify... does a, let me put it this way, does a judicial candidate have a constitutional right to identify his party, say I am a Republican or I am a Democrat?
Cedric C. Chao: On the ballot, Your Honor?
Anthony M. Kennedy: Yes.
Cedric C. Chao: I would, I would say yes, Your Honor.
Anthony M. Kennedy: So that's your submission to this Court?
Cedric C. Chao: Yes, Your Honor. If I could return to Letter Carriers for just a short minute, Los Angeles County has a population of approaching 9 million people. It is larger than the population, it has a population larger than that of 42 other States in this country. The leaders of Los Angeles County and all the other cities and counties of this, of our State, face very controversial, very difficult policy choices every day. And there is no one right way to make those choices. The elections of the leaders of these cities and counties necessarily will involve discussions about both the voters' views and the candidates' views of these policy choices. It is expected, the voters expect that there will be discussions, or how else will they make a decision on who to, with respect to who to vote for. In these discussions political parties historically in our country have played a very important role, and we submit that section 6(b), by taking away that role, does great disservice to the First Amendments. Petitioner ignores the fact that in Brown v. Hartlage it was recognized that candidate commitments enhance the accountability of government officials to the people that they represent, and assist the voters in predicting the effect of that votes. This Court also held in Brown v. Hartlage that some promises are universally acknowledged as legitimate, indeed indispensable to decision making in a democracy. If in my remaining time I could speak very briefly to the issue of judicial elections, States throughout our Nation employ many different methods of selecting and retaining judges. Every method has its advantages, and of course plenty disadvantages. California has opted for a system where we have retention elections, and in some cases contested elections. The necessary result of that selection is that there will be discussion about judges, discussion of their records, discussion of their qualifications. The asserted threat to judicial independence, of which petitioners speak of, is attributable not to the fact that political parties may participate in that process, but rather to the underlying decision to subject judges to elections in the first place. Perhaps the most dramatic episode of the asserted threat to judicial independence was in 1986 retention elections in which three justices of our supreme court were defeated. $7 million were raised by various special interest groups to defeat those justices, and it was, there were commercials, there were discussions focused on their views on the record, and specifically on the death penalty. Voters cast those three justices out of office and, as Justice Groton wrote in adjudicature article, the polls indicated that the basis for casting those three justices out was not integrity or competence, but rather their death penalty position. I raise this issue because political parties in 1986 did not play a role in those elections, and that illustrates the gross under-inclusiveness of this statute. Petitioner also ignores the fact that both Bridges v. California and Craig v. Harney teach that we should presume that judges are able to withstand criticism and are able to withstand pressures in elections. Even the California Judges' Association, which adopted the California Judicial Code, has the same presumption. In the Judicial Code it states, and I quote, "judges should be unswayed by partisan interests, public clamor, or fear of criticism. " end quotes. I submit that to assume that judges are not persons of fortitude, able and willing to withstand the pressure of the electoral marketplace, is to do them a great disservice. In closing I would submit to this Court that First Amendment jurisprudence teaches us that the free flow of information, particularly with respect to candidacies, particularly with respect to governmental affairs, is essential to our democracy and must be protected. I submit that it would be wrong as a matter of law and as a matter of public policy to silence political parties on the very issue that they were formed to address. I would request that the Ninth Circuit's decision be affirmed. Thank you.
William H. Rehnquist: Thank you, Mr. Chao. Mr. Aftergut, do you have rebuttal? You have 4 minutes remaining.
Dennis Aftergut: I do, Mr. Chief Justice. First a couple of very quick just factual points. Justice Stevens, it was this part of the case which arose in the context of a... of an endorsement that was sought to be placed inside the voter pamphlet, as the third cause of action states. And I don't remember which Justice asked the question about whether this was, 6(b) was the only basis for taking that endorsement out, but California Elections Code section... now I seem to have lost it, 10,012, states that the... a candidate statement shall not include the party affiliation of the candidate or membership of activity in partisan and political organizations.
John Paul Stevens: And that provision is not challenged in this case?
Dennis Aftergut: That's correct, Your Honor. The point that was made about the Democratic Party, if it collects 1 percent of the vote, the State makes the party remain an official party, I submit is an absurd proposition. If the party does not wish to be an official party and participate in the primary system, it can collect 10 percent of the vote, the State does not force it to participate in the party system. There was a question about corruption being the only justification. Corruption has not been the only justification for upholding State regulations of First Amendment rights. The ballot access case is Jenness, Storer, and so forth, American Party v. Texas, v. White. Those are cases which deal with what is at issue here, a State's structuring of its electoral system. And what those cases recognize is that when the First Amendment, when the associational rights and the rights of political groups to communicate with their members, when the First Amendment interests meet the practical realities of structuring a governmental system, the Court looks at the structural system with greater deference and tends to uphold those unless they are arbitrary or unreasonable. And that's basically what all of the arguments of, my opponents ignore is the structural interest that section 6(b) serves. And as an example, Mr. Chao says that it's, he's very hard pressed to distinguish this case from Eu, that is Eu doesn't refer to nonpartisanship or partisanship. But if the Court looks at how Eu justified, how it rejected the compelling interest that the State offered, the Court rejected the Attorney General of California's reliance on Storer for the proposition that the measure there promoted political stability. The Court said this measure only promotes party stability, not political stability. And what the Court said is that Storer does not stand for the proposition that a State may enact election laws to mitigate intra-party factionalism during a primary campaign. And the Court said preserving party unity during a primary is not a compelling State interest. We're not trying to preserve party unity. We're trying to preserve California's system of nonpartisanship. And basically the danger here that we seek to avoid is that parties that have chosen to accept State conferred benefits have an enhanced voice. The State weighs in. And particularly where those... where that advantages converges in single party localities, they... parties can skew the debate. It's not that parties have an equal voice. Parties have an advantage by the State.
William H. Rehnquist: Thank you, Mr. Aftergut. The case is submitted.
Speaker: The honorable court is now adjourned until tomorrow at ten o'clock.