Earl Warren: -- Commission. Mr. Wahrenbrock.
Howard E. Wahrenbrock: May (Inaudible). I would like to address myself to a question which arouse during the argument of these two Federal Power Commission certificate cases yesterday, that I think presents a good point of departure. And that is, how does Section 7 (b) affect the Commission's certificating power? And I -- I would answer that further by saying that it makes clear that there are two questions for the Commission to answer in considering an application for a certificate limited to the term of the contract. The first question is, does public convenience and necessity require the sale? And the second question is, does public convenience and necessity permit its termination at the end of the contract? There was evidence in this Sunray case, that the Pipeline United needed the gas. Pipeline sells 1,247,000,000,000 cubic feet of gas each year. To maintain its reserves of gas, it has to acquire additional reserves each year equal in amount to that, that it sells each year. This gas involved in these contracts represents an estimated reserve of about 123,300,000,000 cubic feet and that's about one-tenth of what United needs each year, if it's to keep its reserves up to where they have been. Now, that was the nature of the evidence that was in this record as to the need for the gas, need for the sale. But what was the evidence as to the -- that the public convenience and necessity would require or permit the termination of the sale? Was there any evidence? The answer is substantially, none. The examiner described the testimony of the witnesses on that point and he summarized that in the -- in the following language, the factual accuracy of which has not been challenged. He said that it might fairly be summarized by saying that those applicants and he was referring to Sunray and another, that has not perfected a review that those applicants would prefer not to be subject to regulation. That was the sum and substance of their testimony. But the Commission instead of denying the whole package because there had not been any evidentiary showing in support of the termination of the sale, which it could have done, as Mr. Justice Whittaker pointed out in some of his questions, instead of doing that and just taking a negative attitude allowing the applicant to come back and come back and come back until they found out something that could be granted, the Commission said, “We will grant an -- an indefinite term certificate.” And it granted it. Meaning, that the applicant was free to accept it or not.Under the Commission's regulation, the applicant has a period of time within which to accept the certificate. It doesn't have to. It wasn't compelled to. And under protest, it did here, under protest, in reserving its right to question this, raise this question. It did actually accept and has -- and the sale has started, reserving its right to question. And the Commission accepted that acceptance or acquiesced in that acceptance upon the specific understanding that if the Commission's order was not set aside, Sunray could not abandon that sale at any time. It could not abandon it without complying with 7 (b). So that gas is now being sold. Sunray says that there aren't two questions. There's only one question. That question is, if we understand its argument, is the sale required by public convenience and necessity? That is, is it required for whatever term the applicant has contracted and proposes in its application? Is -- is that sale required? The Commission says that the sale which is authorized to be certificated is this -- because of 7 (b), is a -- a continuing flow, the continuing open-ended selling of the gas. That's -- that's what can be granted. That's what is applied for. That was -- is what must be considered to be applied for. That is what it will pass on, if there is anything more, if there is determination, then that must be separately passed on either -- and you can analyze it either way you want to by saying that it's an anticipation of the 7 (b) permission to terminate, or you can say that it's a condition which the Commission is authorized to impose under Section 7 (e), the terms of which provide that the Commission may impose any conditions it finds required by the public convenience and necessity. So, in the Commission's point of view, two things had to be proved, had to be shown.Only one was, it offered the kind of certificate that that permitted. Now, the question then was also asked, whether what difference it would make if the Commission's position which it here took was not affirmed, if the Commission could not do what it purported to do in these cases. And Mr. Justice Black's questions about the procedural disadvantages to rate regulation if the -- particularly, if a shorter term contract were involved and particularly if it got down to one that could be terminated on 30 days notice, the impossibility of effectively regulating rates and particularly even in middle length term contracts of using Section 5 (a) instead of 4 (d) with its more effective protection to consumers. That's -- that's a large part of our answer to the question of what difference it would make. But beyond that, even if all of the contracts continued, that were sought, brought before the Commission, continued to be 20-year term contracts, even if Mr. Richter is right in his estimate of how large a proportion of the contracts that are presently under certificate are 20-year contracts. Still, the 20-year contract presents a very serious -- further difficulty. If applicants like Sunray can obtain 20-year contracts, limited term certificates, under such circumstances or if companies like Sun in the preceding case could treat their indefinite terms certificates for 10 or 20 years as limited term certificates, it would mean that at the end of the term, they do not have to comply with 7 (b). They've already received their authorization. And if they do not have to comply with 7 (b) at that type, if they may then may automatically terminate, that means that their purchaser, their pipeline with its fixed obligations is left without that future supply of gas, what gas remains there until those reserves have been completely depleted. A natural gas is an exhaustible resource, of course. And while pipelines are growing, new discoveries of gas are not increasing as rapidly as would be necessary to maintain the ratio of reserves to net production. And a continuance of the trend of the last two or three years of new discoveries in relation to net production could make pipelines hard to fill long before the end of 20 years. If Sunray and others are free to abandon their sales such as this to United from the -- from the production properties involved here, where United has built its pipeline in to take the gas, United will have to go out into the market and compete with others for the continuation of that supply or for a substitution for that supply and compete in a market which is bound at the end of -- by -- before the end of 20 years to be a short-supply market, unless we cannot rely upon present trends. That market will include sellers who are free of federal regulation and the demand for gas will make it extremely difficult for a regulation to keep prices down. Capital type of price conditions can be imposed when the applications are brought before us. But if the sellers can sell their market elsewhere for high prices, those conditions will merely drive the gas out of the interstate market. Sunray's arguments in this case with amazing frankness tend strongly to confirm this. For Sunray frankly espouses its business interest, its legitimate business interest as it calls it, its business interest in being free at the expiration of its contract term to reconsider whether it will continue to sell its gas. It is scarcely an exaggeration to say that this is a polite way of saying it wants to be free to use its economic power to the fullest.
Charles E. Whittaker: (Inaudible)
Howard E. Wahrenbrock: Not if the Commission is wrong in the position it took here. They would be completely free if -- if Sunray can abandon at the termination of its contract, then Sunray is completely free to sell in intrastate commerce without the let or leave of the Federal Power Commission.
Charles E. Whittaker: Have you (Inaudible) the supply to resale to interstate commerce and not leave the whole of the supply?
Howard E. Wahrenbrock: It means until they can get 7 (b) permission and the two criteria, the alternative criteria for giving them 7 (b) permission to abandon -- are -- the two criteria are. First, that the available supply of gas has become depleted. And second or alternatively, that the public convenience and necessity permit the abandonment. There is nothing to prevent them under the Commission's theory from coming in a year or 20 or 50 years later in asking for permission under those circumstances, if they can make either of those showings.
Charles E. Whittaker: (Inaudible)
Howard E. Wahrenbrock: Not to sell the same gas, of course, but they could sell different quantities from the same field certainly, certainly.
Charles E. Whittaker: (Inaudible) so that once you have permitted some gas to resale in (Inaudible) if you stop it.
Howard E. Wahrenbrock: I'm -- I'm glad to understand what was -- it's -- it is the continuance of the kind of sale that is being made, the continuance of that sale in this place of -- of the -- of the gas that can be produced from the acreage that is here involved, from that acreage. This contract was to sell the gas that could be produced from that acreage. Now, I -- I don't want to be held to all of these because of the complicated definition, but whatever the definition of gas being sold, it's that sale which is committed and not whatever else they may have elsewhere.
Charles E. Whittaker: It couldn't sell from the same, say (Inaudible) the gas from (Inaudible)
Howard E. Wahrenbrock: Certainly, take the -- the simplest kind of -- of a contract that I can think of at the spur of the moment. A producer says, “I'll sell you 10,000 cubic feet of gas per day or hour,” whatever it is. That's all that's committed to interstate commerce. He can sell it to somebody else out of the same well, 10,000 cubic feet of gas per day or hour, whatever it is. Nothing to prevent. It's the gas which he has contracted to sell, that sale which is committed to the public service.
Hugo L. Black: Your idea is, as I gather, is -- is the Commission or statute --
Howard E. Wahrenbrock: That the Commission --
Hugo L. Black: -- gives the -- the statute gives that power in order to provide for stability to the interstate people who have bought the gas and then otherwise, they're likely completely cut off.
Howard E. Wahrenbrock: Exactly, exactly.
Hugo L. Black: Well, now, that's -- that's --
Howard E. Wahrenbrock: The public has become dependent upon that supply.
Hugo L. Black: That's a good argument so far as the merits of it is concerned. I'm sure. What is the basis of it in the statute that authorize it, from your standpoint --
Howard E. Wahrenbrock: 7 -- 7 --
Hugo L. Black: (Voice Overlap)
Howard E. Wahrenbrock: -- Section 7 (b) which says that no facilities subject to the jurisdiction of the Commission or service rendered by means thereof shall be abandoned without having first obtained the Commission's permission and approval.
Hugo L. Black: And, of course, if after 10 years, the local demand should become such that they could withdraw all that was then in interstate commerce, I presume that people who had -- industries and the people who are dependent on gas, through interstate commerce, would be left with pipelines with no gas to feed the -- feed the customers.
Howard E. Wahrenbrock: Exactly. And even if gas could be bought at the same price, that would mean that the pipelines that have been laid to take that gas represent a waste investment. And that was -- the basis of Judge McLaughlin's statement in the Huber case, which we quote in our brief in which he points out the -- the losses that would be involved in that duplication of facilities and the pipeline having to go elsewhere to get a supply to continue to carry its public utility.
Hugo L. Black: Do you depend entirely on 7 (b) or do you depend at all on the general plan and purpose of the Act to provide for continuity of service at reasonable rates in the interstate commerce?
Howard E. Wahrenbrock: Well, I think that 7 (b) represents the apex of that -- the implementation of that policy. We think that policy is consistent with the policy declaration in Section 1 (a) and with the -- the provisions of Section 1 (b) which state what is subject to the Commission's jurisdiction, both of which make the regulation dependent upon and applied to the sale, for resale, for ultimate distribution to the public. It is that concept of the ultimate use that's being made of the gas that seems to inform the general provisions and the specific provision about not abandoning service.
Hugo L. Black: The same argument you're making, of course, I don't know whether it fits this statute. It's the same type of argument that has been made in connection with street railway service, bus service, railroad service and other public utility services where the -- the matter is taken over under regulations by the Government. (Voice Overlap) --
Howard E. Wahrenbrock: That -- that is what I was attempting to suggest earlier in my argument when I said it's this usual utility, public utility concept of dedication to the public service.
Felix Frankfurter: I might say I don't quite understand because the power to -- the requirement or the -- the considerations for securing an abandonment within the desired 20 years isn't shut off because they have a certificate for 20 years, is it? What's the bar --
Howard E. Wahrenbrock: If they --
Felix Frankfurter: -- the bar abandonment within 20 years if that's what the Commission thinks is desirable or publicly important although they gave it for 20 years?
Howard E. Wahrenbrock: There is nothing so --
Felix Frankfurter: The same section that you rely on allowing abandonment.
Howard E. Wahrenbrock: There is -- there is nothing in the statute which prohibits abandonment. They may still have some contractual questions.
Felix Frankfurter: That's -- that's not your concern.
Howard E. Wahrenbrock: No. That's why this issuance of a -- of a certificate does not mean that it -- so far as the Power Commission may not be abandoned. That question is not foreclosed one way or the other. Now, that question is open and remains open. The fact that the Commission has --
Felix Frankfurter: But it bears on the argument that they can grant a certificate for 20 years. If your argument is that this cuts in to the power of the -- the public interest in securing abandonment within the 20 years, I don't follow the argument, if that's your argument. That you say this all derives from the -- the Section 7 relating to abandonment. Is that right?
Howard E. Wahrenbrock: Yes, sir.
Felix Frankfurter: Well, how does it?
Howard E. Wahrenbrock: In this. That if the Commission were to grant a limited term certificate as claimed by our opponent, then that would carry with it, that's what they claimed, the -- the right to abandon without having to comply with 7 (b) at the end.
Felix Frankfurter: Well, but you don't have to yield to that argument in order to yield with the other part of the argument.
Howard E. Wahrenbrock: We -- we may not have to but we do regard, if we grant a limited term certificate, it carries with it the right to terminate. The finding is the same, we feel, in either case. If we're going to grant a limited term certificate, we have to find first that the sale is necessary. Second, that its termination is permitted by the public convenience and the necessity which to say that you've already made the finding which 7 (b) would have required in any event. So, you've already committed yourself in that (Voice Overlap) --
Felix Frankfurter: Well, I understand that -- that I quite appreciate that you may find as a fact in a particular situation, the public interest does not recommend or make desirable a 20-year certificate. I understand that, but that isn't the position of the Commission. As I understand it, your position is that you will not, as a matter of rule, grant a term firmly, unless some very special consideration is shown in a particular case or do I misconceive your argument, what you told us yesterday?
Howard E. Wahrenbrock: I tried [Laughs] -- express that in terms of -- that's been perhaps the net effect of what the Commission has been doing. But in each case, the Commission has not excluded evidence as permitted evidence that would show that the termination at the time requested, 20 years, 10 years that --
Felix Frankfurter: That if they ask of the applicant has to show.
Howard E. Wahrenbrock: That's right.
Felix Frankfurter: Now, therefore, the starting point, the -- the postulate with which the controversy begins is that you will not grant it. And that must presuppose some rule of policy by the Commission.
Howard E. Wahrenbrock: Because the burden is on the applicant who seeks an authorization, and this is a dual authorization, to make the sale and to stop the sale. The burden is on -- upon an applicant who seeks such authorization to support it to the extent of showing that the public convenience and necessity require the sale and the termination.
Felix Frankfurter: Yes, but you -- but implied in this case is a doctrine by you or a rule by the Commission that, we will not grant this application for 20 years unless you show us some special consideration. And therefore, I say --
Howard E. Wahrenbrock: I don't see --
Felix Frankfurter: -- the real question in this case, as I understand it, is whether you have the right under that statute to make such a rule when the statute doesn't make such a rule.
Howard E. Wahrenbrock: I -- I cannot accept the imputation of a -- of a doctrine or a necessity for a special showing. There's no -- there's nothing more than there is in -- in the case of any other authorization that is being sought (Voice Overlap) --
Felix Frankfurter: I didn't mean that you discriminated against the --
Howard E. Wahrenbrock: No.
Felix Frankfurter: -- particular --
Howard E. Wahrenbrock: No.
Felix Frankfurter: -- applicant --
Howard E. Wahrenbrock: No.
Felix Frankfurter: -- there was no (Voice Overlap) --
Howard E. Wahrenbrock: No, I'm -- I'm not trying to -- I'm not suggesting that.
Felix Frankfurter: All I meant to say is that as I understand this, if a commission says when a fellow applies to his certificate, show us a good reason why it should be 20 years that that presupposes a general doctrine or general rule or general practice, call it what you will, by the Commission not to grant a term certificate. How can it be not?
Howard E. Wahrenbrock: I suppose I'm missing something in the language between this because it seems to me that when the Commission recognizes that if it grants a limited term certificate now, it will be deciding now that the service may be abandoned 20 years hence. Hence, it should have the showing now, which it would otherwise get 20 years hence.
Felix Frankfurter: I don't intend to interrupt. Why does it imply that if you say the law disallows them to abandon, no matter what the term is, as the previous case indicates. No matter what the new contract is. They cannot divest themselves of the dedication which they undertook when they got a certificate.
Howard E. Wahrenbrock: They cannot divest themselves, except by a finding at the -- either at the time they want to terminate or a finding in advance if they want it now, that the public convenience and necessity will permit that abandonment. Let's -- we leave out depletion for the moment. Public convenience and necessity will permit that abandonment. If they want it --
Felix Frankfurter: The statute says they can't abandon it unless you -- their undertaking, unless you give them permission, at any time.
Howard E. Wahrenbrock: That's right but --
Felix Frankfurter: I mean it is --
Howard E. Wahrenbrock: That's right, but -- but we must give them that permission, if they showed that the public convenience and necessity permit it. And it is only that which we may -- whether we consider it then or now may use as a basis for granting that permission. If we grant it now, we grant it without having enough facts to really know if we wait and we say, “We don't have enough facts. You haven't made the showing now,” and that's what most of these cases are, you haven't made the showing, but that's -- you're still free to come in at the end of your term or anytime during your term and say, “Now, you can show it.” “All right, if you can show it then you get it.”
Hugo L. Black: If you grant them the kind of certificate -- I'm not -- I'm a little confused now by the question of Justice Frankfurter and your answer. If you -- I understood that they wanted the right or limited terms squared on the theory that when that was over with, you could not compel them to continue. They would have fully performed their agreement upon the basis on which you permitted them to have the services to make this contract temporary in nature.
Howard E. Wahrenbrock: Yes.
Hugo L. Black: Now, is it your idea that at the end of the 20 years, that they might -- what their position they are holding, might be held to be the correct one under the statute? That if you grant them that limited term right, they own this contract. And when they get through, they can say, “Well, now, we're not going to let you -- you don't have any more unless you accept the contract that if we won't pay --
Howard E. Wahrenbrock: If --
Hugo L. Black: -- as in the public interest. Is that your position?
Howard E. Wahrenbrock: -- if at the time the application were filed, they were asking for, as Sunray clearly is, a limited term certificate to expire at a given date and the Commission granted it, which it refused to do here, then at that time, that date arrived, they would be free to stop selling without getting any further permission or approval. They've already gotten that permission.
Felix Frankfurter: I don't understand that. I mean -- I don't understand that in light of your yesterday's argument.
Howard E. Wahrenbrock: Well, that's what I was trying to say, if Your Honor, please. And that's --
Felix Frankfurter: (Voice Overlap) --
Howard E. Wahrenbrock: -- the reason I came back to this question because I felt I've left that obscure and --
Felix Frankfurter: I thought -- I thought that your argument was that Section 7 involves a dedication not limited in time or not dependent on the voluntary determination of the certificate holder.
Howard E. Wahrenbrock: Yes.
Felix Frankfurter: That once he embarks upon supplying natural gas, you've got to stick to it unless the Commission, no matter his arrangement is -- what is -- either see arrangement with the producer or with the -- that he is -- he must continue in the enterprise of furnishing gas unless he gets leave of the Commission to say no.
Howard E. Wahrenbrock: Yes.
Felix Frankfurter: Is that right?
Howard E. Wahrenbrock: That's right.
Felix Frankfurter: So why doesn't that answer Justice Black's question?
Howard E. Wahrenbrock: Because --
Hugo L. Black: I assume -- maybe I -- I don't want to interrupt but I want to get counted --
Felix Frankfurter: Quite true.
Hugo L. Black: As I understand it, I don't know if there's any disagreement between you. You're taking the position that you do have the right under the public convenience and necessity clause to pass at the beginning on whether the public convenience and necessity justifies the making of the contract the -- and the service in which they are entering. Is that right?
Howard E. Wahrenbrock: Yes.
Hugo L. Black: And that when people apply on the basis of public convenience and necessity, it's up to them to show you that the public convenience and necessity requires what they ask.
Howard E. Wahrenbrock: Yes, sir.
Hugo L. Black: Then as I understand it, you are careful, at least, maybe I'm wrong, maybe that's wrong, that if having decided that the public convenience and necessity justifies you in giving them the right to operate for 20 years only that that cuts you off thereafter from your right to claim an abandon --
Howard E. Wahrenbrock: From our right --
Hugo L. Black: From -- or to prevent an abandonment.
Howard E. Wahrenbrock: Yes. It cuts us off at the end of 20 years from our power to say, “You've got to get our approval now before you can stop.” You --
Hugo L. Black: You -- you are careful that it will be held that your action then finally and irrevocably settles that -- that public necessity question so that they can quit if they want to.
Howard E. Wahrenbrock: Exactly.
Felix Frankfurter: Right.
Howard E. Wahrenbrock: Now, does that leave me [Laughs] not in the clear --
Felix Frankfurter: Well, I understand what was -- what you agreed to but it -- I must -- I must disabuse my mind of what I heard all day yesterday --
Howard E. Wahrenbrock: Well, I'm afraid from --
Felix Frankfurter: -- that --
Howard E. Wahrenbrock: -- some of your questions of opposing counsel but I -- that I created a misapprehension, and I'm sorry.
Felix Frankfurter: I thought that the statute, the statute created an obligation which is not terminable by the free act of the parties no matter what agreement they've entered into or what the terms of the certificate under which they were operating.
Howard E. Wahrenbrock: That much is true. Yes, sir. That --
Felix Frankfurter: Well, if that much is true, then they -- then they can't cut off at -- at the end of 20 years.
Howard E. Wahrenbrock: By -- they can, sir, by -- if Your Honor, please. They can do it by making and showing that the public convenience and necessity permits.
Felix Frankfurter: Well, but they can do that, they can always come to you and ask you to abandon at any time that the public convenience necessity permits or requires -- suggest or makes desirable that they should quit.
Howard E. Wahrenbrock: That's right. But without such a showing, they cannot -- never quit and yet if we had granted a limited term certificate, they could.
Felix Frankfurter: But that's where I -- all right. I've -- I've had my -- I don't seem to understand that. I do not understand why, if by statute, they must go on whether they've got 20 years or indefinite years unless you give them permission to quit.
Howard E. Wahrenbrock: Because we feel that when you have -- we have authorized a sale for 20 years and its stoppage at end of 20 years, we have thereby authorized its stoppage. And when we've authorized its stoppage, we've done just what 7 (b) would have required them to come in then, but we have freed them from the necessity of doing so.
Felix Frankfurter: Let's see if I can understand that. Does that mean that if you -- if you grant a 20-year certificate, you impliedly authorize a prospective abandonment?
Howard E. Wahrenbrock: Yes, sir.
Felix Frankfurter: Well, why that? That what is English language means to me.
Howard E. Wahrenbrock: Because that is what they explicitly asked for by the question -- by --
Felix Frankfurter: Well, that's a -- that's a -- then I have misunderstood the case and the fault is all mine. I didn't understand that they said, “You give us a 20-year certificate and by so doing, we now ask you to let us quit at the end of 20 years.”
Howard E. Wahrenbrock: May I just, if the Court please --
Earl Warren: You -- you may --
Howard E. Wahrenbrock: -- call attention to page 2 of our brief. At the bottom of the page where we quote the language from the application which Sunray filed here and should have done this earlier, obviously.
Hugo L. Black: Page 2?
Howard E. Wahrenbrock: Page 2 of our brief, on the -- the top of the page is a question presented. At the bottom of the page is a quotation from the application. The application requested a certificate authorizing the sale of gas covered by the contract, “To the extent and only to the extent that such gas is transported in interstate commerce for resale for the remainder of the term of said contract and as it may be renewed or extended. And that said certificate provide for its own expiration on the expiration of the said contract term so as to authorize applicant to seize the delivery and sale of gas thereunder at that time.”
Felix Frankfurter: Now, let me ask you this question. Suppose that last clause were omitted, would the nature of the case before us change?
Howard E. Wahrenbrock: The big thing becomes less clear until you get back to the kind of an application which was filed by Sun, in the first case, which they are now attempting to say, did ask for just what this explicitly asked for.
Felix Frankfurter: I should say -- I have a further problem with these provisions, Chief Justice's permission, that if the statute -- Section 7 reads as you read it, then I think no agreement between the Commission and parties can change the obligation of the statute.
Hugo L. Black: If that were held, that would solve your problem, as I understand it, would it not?
Howard E. Wahrenbrock: I think not, for this reason.
Hugo L. Black: Why not?
Howard E. Wahrenbrock: I suggested that the --
Hugo L. Black: Suppose it were held, as to Justice Frankfurter's suggestion, that you can't give them a certificate that deprives of the right to -- to --
Felix Frankfurter: Require abandonment.
Hugo L. Black: To prevent abandonment. Why wouldn't that get precisely what you've been arguing for although it might not reach it by the exact formula that you have devised?[Laughter]
Howard E. Wahrenbrock: Well, maybe so.[Laughs] I'm -- I'm not prepared to say so.
Hugo L. Black: It seems to me, I -- I may be wrong.
Howard E. Wahrenbrock: That may -- it -- it sounds --
Hugo L. Black: I thought that it would (Voice Overlap) --
Howard E. Wahrenbrock: -- it sounds so.
Hugo L. Black: -- between you.
Howard E. Wahrenbrock: It sounds so.[Laughs]
Hugo L. Black: Now, as I understand it, the other side do exist. They will have the right to abandon, notwithstanding number 7 under -- under an application of this kind which is approved.
Howard E. Wahrenbrock: Yes, sir.
Hugo L. Black: That's your -- what you believe about it.
Howard E. Wahrenbrock: That's my understanding.
Felix Frankfurter: But then that makes this a particular case. They have not raised all the general questions but most of the times, you've been talking about it.
Howard E. Wahrenbrock: Pardon?
Felix Frankfurter: Because you say that the question isn't before us, if they do not imply the -- if by granting their request you thereby give away their duty to go on at the end of 20 years if that's allowable under the statute.
Howard E. Wahrenbrock: There is -- there is nothing on the face of it that prevents that language I read to you from being analyzed as being a request now under 7 (b) for termination --
Felix Frankfurter: Yes, I understand that.
Howard E. Wahrenbrock: -- 20 years in advance. And if we did not make it explicit that we were denying it, it might be construed as being that.
Felix Frankfurter: But my suggestion is if I were on the Commission, I would say I'd grant the certificate but cut off the last clause.
Howard E. Wahrenbrock: Well, that is what we did.
Hugo L. Black: You construe it as being an application for a 20-year franchise to serve the public in interstate gas with the understanding between you and the -- and them. At the end of that time, they have no more obligation and they can quit when they get ready. Is that what you're (Voice Overlap) --
Howard E. Wahrenbrock: That's what they applied. That's what they --
Hugo L. Black: That's what they are insisting.
Howard E. Wahrenbrock: That's what they applied for and that's what we refused to gave them -- gave them and said, “You can have a certificate --
Hugo L. Black: You're claiming --
Howard E. Wahrenbrock: -- but it's an unlimited term.”
Hugo L. Black: You're claiming you don't have to give that --
Howard E. Wahrenbrock: Exactly, exactly.
Hugo L. Black: -- for whatever reason that (Voice Overlap) --
Howard E. Wahrenbrock: And by whatever rubric you describe it or whatever analysis you reach that and so.
Felix Frankfurter: Then, you haven't taken care of my -- or attend my third, my (Inaudible), namely, “Yes, I'll grant it you for 20 years but I'll cut off the provision and the certificate. At the end of 20 years, you can quit”.
Howard E. Wahrenbrock: Well --
Felix Frankfurter: You have to take care of that situation.
Howard E. Wahrenbrock: I -- I think that is another way of describing what we did do.
Felix Frankfurter: You wouldn't have to do that in the other case, would you, because they didn't apply for it? They are claiming that without a -- without that language, they're entitled to get what (Voice Overlap) --
Howard E. Wahrenbrock: That's right and we say we did not do it then, that they didn't really ask us for it there.
Felix Frankfurter: Well, then this case should be decided that by saying, the certificate, as it was asked, both for 20 years and for a committed abandonment at the end of 20 years, was properly disallowed.
Howard E. Wahrenbrock: Exactly.
Felix Frankfurter: I mean just at that? Let me --
Howard E. Wahrenbrock: Exactly, but we felt --
Felix Frankfurter: Let me take care of the situation I put to you.
Howard E. Wahrenbrock: Now, let me say this reason --
Felix Frankfurter: That's all right then.
Howard E. Wahrenbrock: -- for granting the certificate that we did. These people had gas. They wanted to sell it. It was a newly developed field. I don't know whether there might have been leakage or drainage, if they hadn't enough. So the Commission gave them what it thought it could and they went ahead and acted under it. Thank you.
Earl Warren: Very well, Mr. Wahrenbrock. Mr. Richter.
Hugo L. Black: Mr. Richter, would you mind stating at the beginning whether the position he attributes to you in connection with this application as to its effect --
Melvin Richter: Well --
Hugo L. Black: -- is correct or not?
Melvin Richter: -- our position is that we have applied for a certificate for 20 years in accordance with the terms of the contract. That under Section 7 (e) of the Natural Gas Act that the -- we have -- which provides for the -- the Commissioner to consider the whole or grant applications as a whole or in part, that the entire part of our application, the entirety of our application is for a certificate for 20 years. And that the Commission here denied such an -- such a certificate and instead gave us one of indefinite duration. We go on and say further that Section 7 (b) is inapplicable here. We have undertaken in our -- we are -- we will provide service for 20 years and we -- we concede that Section 7 (b) does apply if we wanted this service short of 20 years. But at the end of the 20 years, that is the term of which we have applied for and we are -- that's our -- our understanding is we could terminate service.
Hugo L. Black: You can quit?
Melvin Richter: We can quit.
Hugo L. Black: Go on or not if you choose.
Melvin Richter: That's right.
Felix Frankfurter: Now, suppose -- suppose the -- the last clause, that -- the one we've read, the one we've read on page 2 or 3 of his brief were out to the extent and only to the extent that (Inaudible) --
Melvin Richter: Well, that won't make -- that's just there for --
Felix Frankfurter: Now, do you --
Melvin Richter: -- repetitive language. We -- we have -- oh, I'm sorry.
Felix Frankfurter: Do you say that if you were granted a certificate for 20 years, nothing is said about expiration, but that by a force of the limitation of 20 years, you could quit at the end of 20 years and not require and it would not entail an abandonment proceeding under 7?
Melvin Richter: That's right, sir.
Felix Frankfurter: Because you say that 7, that are not made, make it a continuous duty once you've begun to go on until you get permission to stop.
Melvin Richter: That's right. That 7 (b), it's -- well, actually, a much more limited provision than Mr. Wahrenbrock would make it out to be. In this connection, I would --
Felix Frankfurter: But suppose that turns on what 7 (b) means.
Melvin Richter: That's right.
Felix Frankfurter: Suppose he is right that 7 (b) means that you can't quit, except by leave of the Commission. Suppose it means that. Then it might make a difference whether the certificate is granted, allowing quitting at the expiration of 20 years or not allowing quitting, wouldn't it?
Melvin Richter: Yes. I -- I won't -- then -- I'm sorry. I don't -- I -- I'm little lost.
Felix Frankfurter: You -- you construe 7 (b) not the way he construed it, the Commission --
Melvin Richter: That's right.
Felix Frankfurter: -- to construe it, the duty to go on no matter what the term under which you hold.
Melvin Richter: Well, we concede that we have to provide service during --
Felix Frankfurter: During the term.
Melvin Richter: -- the 20 years of the -- of the --
Felix Frankfurter: Yes, I understand.
Melvin Richter: -- certificate that we have. We can't discontinue service shy of the 20 years --
Felix Frankfurter: I understand that.
Melvin Richter: -- without getting commission approval under Section 7 (b).
Felix Frankfurter: But after 20 years, you disagree with the construction of 7 (b) by the Commission. That 7 (b) disallows abandonment by certificate holder at any time no matter what period, definite or indefinite, he's operating under, without leave of the Commission. You contest that reading of 7 (b).
Melvin Richter: Well, we say Section 7 (b) is not applicable here at all. We don't -- we're not asking for advanced authorization, as Mr. Wahrenbrock would have here to suggest, to discontinue service at the end of 20 years. We are here under Section 7 (e) of the Act. And Section -- well, that's the certificate provision, not 7 (b). 7 (b), the Commission -- I may quote from an earlier Sunray case with the Commission's own language, “Although Section 7 (b) precludes abandonment of service rendered by facility subject to the Commission's jurisdiction without compliance to procedures, they have set out.” There is nothing in that Section or its legislative history or in Section 7 (e) or 7 (c) or 7 (e) or their legislative history, to require a ruling that Section 7 (b), in anyway, restricts the power of the Commission under Section 7 (e) and 7 (c) to issue certificates of limited duration.
Felix Frankfurter: Where is that?
Melvin Richter: That's in a memorandum filed by the Commission in number 814, October 10, 1956, an earlier Sunray case.
Felix Frankfurter: You mean this is an argument they made?
Melvin Richter: It's in acquiescing --
Felix Frankfurter: But we --
Melvin Richter: Well, may I go, for a moment, back --
Felix Frankfurter: I myself take (Inaudible) what lawyers constantly do here, dig out some old brief by -- when -- an opposing side, when it suited him to make an ad hoc argument one way as against what they make now.
Melvin Richter: No.
Felix Frankfurter: I think that's, myself, very bad professional practice, if you want to know that.
Melvin Richter: Well, sir, may I go into the history of this -- that case just for a moment? In that case, the -- that was the first Sunray case in which the Commission -- Sunray signed a certificate of limited duration. The Commission in that case held flatly that they had no authority to issue a certificate of unlimited -- of -- of limited duration. They said 7 (b) precluded them from doing it.Sunray took them to the Tenth Circuit and demonstrated, beyond any doubt, that the Commission had in the past been issuing certificates of limited duration. The various cases they now cite to the Court has demonstrating a consistently practice on the matter. The Tenth Circuit went ahead and held that the Commission does have authority to issue certificates of limited duration and then affirmed the Commission's order on other grounds. Sunray applied for certiorari and the document I just read from is a memorandum, submitted by the Solicitor General, acquiescing in reversal of the -- of this Tenth Circuit's opinion.
Speaker: You don't have no right to continue after the expiration of your certificate.
Melvin Richter: No. After it's -- it's a new transaction after the 20 years.
Speaker: And what if the Commission is saying in effect, as I understand it, is that in order to keep you in the business under Section 7 (b), they must give you an unlimited certificate so that they can prevent your getting out of the business --
Melvin Richter: Yes, and they --
Speaker: -- at any time in the future?
Melvin Richter: And a time that Mr. Wahrenbrock has just painted a -- a very black picture about the discoveries of gas and how at the end of the 20 years, that we are free to discontinue. There'll be -- there'll be all sorts of people without gas and how bad it'll be on the consumers. Yet at the same time, yet at the same time, as recently as last August, August 10, 1959, in the Transwestern Pipeline Company case, the Commission authorized the construction and operation of $192,000,000 project, $192,000,000 project whether the reserves at the -- the pipeline could show it only for 13 years. And yet, they're complaining here when we're willing to commit ourselves for 20 years. In another case, in the Truck Line case, issued -- an opinion issued on May 22nd, 1959. The Commission granted a certificate for an $80,000,000 project with the -- the reserves that they could show was a maximum of 13 years and a minimum of 11 and a half years. And that's not -- I -- those aren't isolated instances. On pages 26 and 27 of our brief, we have others, with the Commission and pipeline cases. Although they're complaining, they're crying here how gas is getting scarcer and how they needed an indefinite commitment from us and a 20-year commitment is not enough. They're issuing in pipeline cases, certificates where the gas supply is shown. And there's no obligation on the pipeline to get more gas. That's a voluntary matter so far as the pipeline is concerned. Well, they're issuing certificates where the gas reserves at 10, 12 years of duration. Thank you very much, sir.


Warren E. Burger: We'll hear arguments next in 70-69, United States against Orito. Mr. Greenawalt you may proceed whenever you are ready.
R. Kent Greenawalt: Mr. Chief Justice and may it please the Court. This case is on direct appeal from the District Court for the Eastern District of Wisconsin. The court dismissed an indictment charging that appellee had transported 82 reels of obscene film interstate by means of a common carrier. The court held that the relevant statutory provision, 18 U.S.C. Section 1462 is on its face constitutionally invalid because it is overbroad in forbidding the use of common carriers for the non-public transportation of obscene material The government appealed directly to this Court pursuant to the old Criminal Appeals Act. Like Reidel and Thirty-Seven Photographs and the case just argued, this case arises from an expansive interpretation of Stanley versus Georgia by the District Court. Precise issue in this case, is the constitutionality of the statute that prohibits the knowing use of a common carrier for the interstate transportation of obscene material. We believe that Reidel and Thirty-Seven Photographs have effectively settled the issues raised here. Indeed, the judge who decided this case has subsequently sustained the constitutionality of this section after those cases were handed down. That is not cited in our briefs and the citation to that case is United States versus Zacher 332 F. Supp. 833.
William J. Brennan, Jr.: 833?
R. Kent Greenawalt: 833, yes Your Honor. In trying to evade the clear import of Reidel and Thirty-Seven Photographs, appellee makes two different arguments. One is that even when transportation is for the purpose of sale, Congress cannot prohibit the use of common carriers to transport obscene materials interstate. The second argument assumes that commercial transportation maybe forbidden, but contends that the statute is invalid as it applies to non-commercial transportation and that this impermissible overbreadth renders the entire section invalid on its face. It is the government's position that the statute is constitutional in both its commercial and non-commercial applications. If however, it is considered unconstitutional in some or all non-commercial applications, it is our position that the statute should not be declared invalid on its face, but limited to its permissible application. I turn first to the argument that even transportation for sale is constitutionally protected. In Reidel, as Court refused to recognize a constitutional right to distribute or sell obscene materials and reiterated the principle of Roth that obscenity and its distribution are outside the reach of the First Amendment. In Thirty-Seven Photographs, six justices squarely held that importation of obscenity for commercial distribution is not constitutionally protected. Appellee concedes that the First Amendment would not protect the commercial distributor of obscene materials who wishes to import such materials or send them through the mails, but he argues that the same commercial distributor who wishes to transport materials in interstate commerce is constitutionally protected. Congress' plenary power to prohibit not just materials from flowing in interstate commerce, has long been a cornerstone of this Court's interpretation of the Commerce Clause. In Gibbons versus Ogden, the Court said that Congress' power over commerce among the states is vested, “as absolutely as it would be in a single government.” And in the lottery cases as well as many others, it has sustained absolute prohibitions against items of commerce judged harmful. In Hope versus United States which is cited in our briefs, where the Court sustained the White Slave Traffic Act, the Court assumed the constitutionality of these provisions and used those as a premise to reach the result in that case. Congress' powers over commerce are of course, limited by the First Amendment, but the First Amendment is also relevant to what Congress can preclude from the mails or forbid from being imported. Appellee cites a number of cases for the proposition that the government has special powers over mail because it operates the postal system. But in this First Amendment context at least, these cases have no authority after Blount versus Rizzi and Lamont versus Postmaster General. The government can no more exclude protected materials from the mail on the basis of their content, but it can exclude them from commerce. And conversely if commercial distribution of obscenity through the mails can be prohibited, so also can any sort of transportation in interstate commerce for commercial purposes. Assuming that Congress may validly prohibit the use of common carriers traveling interstate for the commercial distribution of obscene materials, the order of the District Court in this case should be reversed either if transportation for personal use may also be prohibited or if invalidity as to transportation for personal use does not require striking down the entire section. We believe the statute is constitutional in it's non-commercial as well it's the commercial applications. But I consider the overbreadth point first because we believe it's clearly controlled by Thirty-Seven Photographs. First, I would like to clear up what seems to be an issue from appellee's brief, but is not really an issue. We do contend that it is inappropriate to hold this section invalid on its face, but we do not contend that appellee lacks standing to make that claim. Appellee does have standing to make the claim that invalidity in some applications renders the section invalid for all applications, whether or not he is a commercial distributor. If on the other hand, as we contend, invalidity in some applications would not render the statute invalid as to all applications, then the District Court could determine in subsequent proceedings in this case, the purpose of the transportation here. In neither of that is this Court required to determine appellee's purpose from this record, so that really is not an issue at this point in the case. In Thirty-Seven Photographs, the same six Justices who held that importation for commercial purposes could be prohibited, also held that the District Court in that case was wrong to strike down the entire section in its application to commercial importation because importation for personal use might be constitutionally protected. Mr. Justice White's majority in plurality opinion said, “the proper approach was not to invalidate the section in its entirety, but to construe it narrowly and hold it valid in its application to Luros” and Justices Harlan and Stewart concurred on the same ground. As these opinions indicate, a holding of facial invalidity for overbreadth is not appropriate when a statute can be clearly narrowed to constitutional applications in a way that will eliminate virtually all of the possible chilling effect on protected communication.
Potter Stewart: In this case, Mr. Greenawalt all we have do far as the facts go is the indictment which appears on page 1, and 2 of the Appendix, is that right?
R. Kent Greenawalt: Yes, Your Honor.
Potter Stewart: There are no affidavits of -- ?
R. Kent Greenawalt: As to the nature of these materials.
Potter Stewart: Exactly or as to the -- not only as to the nature of the material but as to the purpose of the defendant's transportation or --
R. Kent Greenawalt: That is correct.
Potter Stewart: We have the indictment and then a motion to dismiss and that's it.
R. Kent Greenawalt: That is right, yes sir. As far as the overbreadth point is concerned, the language of Section 1462 involved in this case is virtually indistinguishable from the language of Section 1305 (a) involved in Thirty-Seven Photographs. Section 1462 involved here forbids the use of common carriers to transport obscenity interstate without respect to purpose, just as Section 1305 (a) that provided forfeiture for importation of obscene material without respect to purpose. Section 1462 dates back to 1897 and it is the primary prohibition against interstate transport of obscene materials in the federal law. It is clear that Congress would prefer this section sustained in its valid applications rather than being declared invalid on its face. And this case does not involve the kind of interrelated set of administrative provisions such as were present in Blount versus Rizzi and Freedman versus Maryland. In those kinds of cases, the Court declines to rewrite an administrative setup that defines certain provisions constitutionally invalid, but here we have a straightforward criminal statute that can be validly applied in certain applications and plainly the lower court erred in striking down the entire section on its face. We believe the court also erred in quite a different respect by deciding that interstate transportation of obscenity for personal use could not constitutionally be proscribed. We now get back to territory that's been covered in the previous argument to some extent. Reidel and Thirty-Seven Photographs made clear as had Roth that obscenity is not protected by the First Amendment and congressional power to decide what goods may cross state lines extends to this unprotected material. What the plurality said in Thirty-Seven Photographs with respect to foreign commerce, a passage that the Solicitor General read to you in his argument, “Obscene materials may be removed from the channels of commerce even though intended solely for private use is equally true of interstate commerce.” The majority opinion in Stanley versus Georgia indicates that the government may not invade a person's home to ascertain if he possesses forbidden material.
Warren E. Burger: I take it what you are saying there that if Mr. Stanely for example wanted to give the materials involved in the Stanley case to someone else, he would be violating the statute if he sent it through the mails, but he could get in his car and drive from wherever he lived to some other place and deliver it to a friend as a gift?
R. Kent Greenawalt: Our position would be as a matter of constitutional law that, that could be forbidden. This section covers only transportation by common carrier and 1465 would be the relevant federal section for that, I think that in terms of transportation for sale or distribution, yes. Now then I suppose you have a nice statutory question as to whether if you give a book to a friend, that's distribution or not, within the terms of the statute?
Warren E. Burger: But in -- judge to that statute would it indicate that it was intended for -- to deal with the commercial distribution?
R. Kent Greenawalt: That is clear Your Honor that that was the purpose of the stature and certainly there would be a strong statutory argument that, that would not be distribution within the meaning of the statute.
Byron R. White: How about a gift to the Library of Congress?
R. Kent Greenawalt: For somebody who didn't start in the District of Columbia, well, I would think that is not distribution. It is our position that if it is obscene material and someone used a common carrier to give the material to the library of Congress then unless you read in a statutory exception for that kind of thing that could constitutionally be covered.
Thurgood Marshall: What about in Texas (Inaudible) they the bill, book across the middle of a street. You know in Texas, Arkansas and Texas, come down at the middle of the main street?
R. Kent Greenawalt: Yes, yes that's right. We would say that constitutionally it could be covered. For similar reasons that we think that if there was a town that which there maybe, in which Canada and United States would split the border, we think that that could be covered as well.
Potter Stewart: Mr. Greenawalt, earlier in your arguments you gave us a citation 332 F. Supp. 833, as I got it at least, and I set to that and I think it's not the correct citation. During the lunch period, could you check it?
R. Kent Greenawalt: Did you find it Mr. Justice Douglas?
Potter Stewart: Just tell me the once, if you could.
R. Kent Greenawalt: Yes, certainly. Well, it is our content that Stanley versus Georgia --
William O. Douglas: It's not the right citation.
Potter Stewart: No.
R. Kent Greenawalt: Alright, I am sorry I will check that -- does not require the government to stand aside for the channels of commerce are employed by individuals who are interested in constitutionally unprotected material. Moreover, the government does have a special interest in the use of common carriers which are open to the general public and closely regulated in the public interest. If persons choose to use such carriers, they must do so in ways not deemed inconsistent with the public interest. Practically, there are substantial reasons for allowing the government to forbid the use of common carriers to transport obscenity irrespective of purported purpose, reasons that we do not believe were applicable on Stanley. Each state legislature has the power to set it's on policy with respect to the sale and purchase of obscene material. One state may forbid the sale of all constitutionally unprotected material. Another may permit their sale, as Oregon has chosen to do. If the federal government is powerless to stop transportation across the state lines --
Warren E. Burger: I think we will pick up at that point after lunch. [Luncheon Break] You may continue.
R. Kent Greenawalt: Mr. Chief Justice and may it please the Court. I had mis-transcribed one of the page numbers and it's 332 F. Supp 883, instead of 833 as I have said before. I was in the middle of the argument that this statute is constitutional as it reaches non-commercial transportation and I have made the basic argument that the material is unprotected and therefore Congress can prohibit its passage in interstate commerce and I turn to some of the practical reasons that support that conclusion. And I have mentioned that state legislatures may forbid constitutionally unprotected material from being sold, but that other states may permit their sales such as Oregon has chosen to do and that if the federal government is powerless to stop transportation across the state lines, citizens of a state that forbids the purchase of pornography can circumvent that policy of that state by buying material in a more permissive jurisdiction and bringing it back to their own state. More significant perhaps in terms of actual impact on prosecutions is the fact that if only commercial transportation maybe stopped, it may sometimes be difficult to prove a commercial motive although that is the real reason for the transportation and I remind you of the Solicitor General's argument about the difficulties of drawing that particular line. Also, in this situation, a holding of constitutional protection of private transportation would cast a jeopardy, scores of convictions under 1462 where transportation was in fact for commercial purposes, but in which the jury determination of guilt of course, did not require a finding to that effect. Finally, there is the danger that materials taken by common carriers will be seen by other members of the public who maybe offended.
Potter Stewart: Just going back to your last point, you say that there have been scores of convictions under the statute?
R. Kent Greenawalt: I am informed that there are approximately 25 prosecutions a year under 1462, anything in that range.
Potter Stewart: We would be concerned here of course, of people who were serving sentences I suppose?
R. Kent Greenawalt: Yeah, and then all problems about collateral attack --
Potter Stewart: We are not talking about convictions of 30 years ago.
R. Kent Greenawalt: Well, except that the court's rule is now about mootness or rather liberal toward people that have been convicted of crimes and their ability to challenge crimes that might have adverse effects in some future proceedings.
Potter Stewart: The collateral challenge?
R. Kent Greenawalt: Yeah, even though they are out of prison.
Potter Stewart: You don't know how many -- I suppose a typical prison sentence would be like, well, what is it maximum five years?
R. Kent Greenawalt: For first offenders, there is maximum of ten years for second defender, but I would guess, as I think you are suggesting that the usual sentence is not terribly long.
Potter Stewart: I was just wandering about the practical impact of the argument?
R. Kent Greenawalt: I don't know about the average sentences, or how many people are still in jail. The wisdom of trying to stop transportation for private use may be argued well and in fact, the government does not prosecute those whom it believes are transporting for personal use. But it is our contention that there is no constitutional bar to set the prosecution because Section 1462 is patently constitutional as to use of common carriers to transport obscenity for sale and both because its coverage of transportation for personal use is also constitutional and because the proper approach, if the section is unconstitutional in some applications is to limit the section rather than invalidate it on its face, the order of the district court in this case should be reversed and the indictment should be reinstated. I would like to reserve the remainder of my time.
Warren E. Burger: Very Well, Mr. Greenawalt. Mr. Shellow.
James M. Shellow: Mr. Chief Justice, may it please the Court. My friend misconceives the thrust of our argument. We do not seek any derivative rights under Stanley. We do not seek any correlative rights under Stanley. The appellee in this case is charged with the private possessory transportation of obscene material. We assert that if Stanley holds any meaning, it says that one cannot be prosecuted for the private possession of obscene material and that's precisely what's charged in this case. The private possession of obscene material and the First and Ninth Amendment underpinnings of Stanley protect the man who is carrying the obscene or pornographic book which he is reading on an airplane just as it would protect him if he were reading it in his home provided that he doesn't read it in such a way that he exposes it to persons who don't want to see it or who would be offended by it.
Warren E. Burger: Let me see if I follow you. Suppose instead of a book it was pictures and he had a suitcase full of them on the airplane, a private possession I suppose in one sense, would you say that's protected.
James M. Shellow: Yes.
Warren E. Burger: 500 of those pictures?
James M. Shellow: Yes, if he had 500 pictures in his luggage on an airplane.
Warren E. Burger: All the same pictures.
James M. Shellow: Well, the only -- I submit that the only inference that can be drawn from 500 pictures all the same, if he is going to go into the business and do something with these pictures and if this Court wishes to draw the line and say that 1462 applies only to commercial transportation, then I should think it would be a fairly easy matter of proof that in fact, this was a commercial venture. If however he has one picture, or ten pictures and he has them in his pocket on the airplane, then he is protected. If he has one picture or ten pictures in his luggage on the airplane, I submit this is protected under the direct folding of Stanley. Stanley doesn't have to be extended. Stanley was not actually viewing obscene film at the time the officers arrived with a search warrant, Stanley was merely possessing them with the intent at some future date to view them, just as the man on the airplane, whether in his pocket or in his luggage is possessing the material with an intent at some future time to privately enjoy his collection of erotica. Similarly it's no extension of Stanley to protect the possession in his suitcase on the airplane. He is on the airplane, the suitcase is on the airplane, this is as protected as it would be, as if it were in Stanley's house or in the traveler's pocket. As we move to a more attenuated examples, I think, Stanley still confers direct protection. The man who moves from a residence in California to a residence in Wisconsin and shifts by common carrier, his collection of pornography where he is the shipper and the consignee, he is protected, the shipment is protected. This is a private use in a private setting. It's as protected as if he stayed in his residence in California and the man who takes the magazine to his hunting lodge in another state by common carrier. Each of these are examples of private possessory transportation. The key isn't the possession. There is no distribution of it and we submit it that that's precisely the interdiction of 1462. 1462 permits such persons to be prosecuted and flies directly in the mandate of family. We assert that to the extent that Stanley or some of the opinions in Stanley would, we found these two opinions, Stanley would have found Stanley's right on a Fourth Amendment claim as my friend has asserted that it might be, to that extent our interstate traveler is protected as well. In Katz this Court said that the Fourth Amendment protects people not places. In Mancoosi (ph) this Court said that the Fourth Amendment protects places where the individual has a reasonable expectation and he will be free from governmental intrusion. And we submit that each of these considerations applies to the man who has a pornographic picture in his pocket, the film in his luggage as he travels from one state to another.
William H. Rehnquist: Mr. Shellow.
James M. Shellow: Yes, Mr. Justice Rehnquist.
William H. Rehnquist: Would it be fair to say that the position you are now taking is inconsistent with the language earlier mentioned by Justice Marshall in the prior case from the plurality opinion in the Thirty-Seven Photographs case?
James M. Shellow: I don't think so. I view Thirty-Seven Photographs not only as pure private possessory transportation, but as a case in which Mr. Luros asked the affirmative assistance of the government in bringing this material into the country, and perhaps the distinction can be drawn between he who imports privately and seeks to have some government customs agent authorize his importation than the man who seeks nothing from the government and merely seeks to go to his hunting lodge in Utah. That is how I will distinguish it, that is how I believe it doesn't conflict with Thirty-Seven Photographs with the plurality opinion. We then come to the question, can this Court narrowly construe Section 1462 so that the statute and the ambit of the statute applies only to commercial -- to the distributive process, and I am not certain whether the Court would approach it from the point of view of the commercial aspects or the distributive aspects. Certainly, one wouldn't be prosecuted who brought in his luggage from Milwaukee to Washington the exhibits which form the basis of his argument and yet that is of course within the ambit of 1462 as well. We start I think in looking as to whether or not this Court can construe the statute narrowly to exclude private possessory transportation at the words of the statute. The words of the statute clearly do not have any reference to commercial or distributive for functions unlike Section 1465. We look to the words of the statute and we remember the recent words of Mr. Justice Stewart in Camp versus Sorana (ph) in which he stated the principle of strict construction of criminal statutes demands that some determinant limit be established based upon the actual words of the statute and there are no determinant limits that can be placed upon the actual words of this statute. This statute would not require construction, it would require rewriting. What this Court would be doing would be adding an additional element to the offense which was enacted by Congress in Section 1462 of Title 18. The distinctions of course between what the appellee asserts you cannot do in this case and you did do in Thirty-Seven Photographs. Alright, but number one, Thirty-Seven Photographs is not a criminal proceeding, it's a civil forfeiture proceeding. Secondly, you don't have the same kind of severability clause to work with. The severability clause which applies to Title 19 permits the Court to severe out unconstitutional applications. The severability clause which is appended to Title 18 as we recite in our yellow brief does not permit the severing out of unconstitutional applications. It's a different kind of severability. Perhaps more important is the matter that we touched on tangentially in our brief and now I would like to elaborate on it in more detail. The Court will recall that in its opinion in Blount versus Rizzi, the issue was raised as to whether or not the legislation there could not be saved by a construction which would provide for judicial review and this Court noted that that was what the Post Master sought. He sought to avoid precisely that, and so the court wasn't free to impose a constitutional meaning on the section there involved. In this case, this isn't a case in which Congress in Section 1462 never considered the commercial applications of it. When this statute was first enacted in 1897, the final clause which prohibits one who takes from a common carrier obscene material, was limited to commercial distribution and it was in that statute that it said whoever takes from a common carrier with the intent to sell, distribute, or circulate. That was the way the Act was in 1897, that was the way it was reenacted in 1905, and when it went into the 1907, 1908, 1909 general revision of the penal laws, the joint committee, the joint committee of the Senate and House which reported it out, reported it out changed from the earlier statute in two material respects. The first respect, the committee added to the first clause, the importation clause that it must be for the purpose of disposing of the material. That importation would not be unlawful unless it was for the purpose of disposing, and retained in the final clause this with intent to sell, distribute, or circulate. When it came to the floor and was reported out on the floor of the house, Congressman Houston amended the Senate proposal, the joint proposal by striking both of those provisions and 1462 for practical purposes appears now at least as far as this aspect is concerned as it was amended by Congressman Houston of Tennessee. But Congress on at least three occasions and probably four if you consider the predecessor bill that was passed by the Senate and not by the House, on four occasions has addressed itself to whether this statute should be limited to commercial activity and on at least three occasions, and it said no. So I think that in the face of that kind of legislative history, we can't distort the language of a statute, we can't add an additional element to this offense. We can't indict individuals or offenses which were not enacted by the Congress. The construction which would narrow 1462 to commercial applications would pose all sorts of problems of truth. As the Solicitor General pointed out in his previous argument, as my friend pointed out in this argument, to limit the construction would impose an unreasonable burden on the government in how you go about proving that it was for commercial purposes and will the self-proving declarations of defendants be sufficient to defeat a prosecution further, should this Court then enact some sort of presumption as appears in 1465 to make proof easier. 1465 is of interest by its terms would apply also to transportation by common carriers. The legislative history of 1465 suggests that it was to fill the loophole and to permit prosecution of private carriers, but certainly nothing in the language of the statute is that restrictive. So would this Court then enact a presumption so that if you had five or more copies of a magazine or two copies of one magazine and three of another, then this is presumptive evidence for the commercial purpose. Also, I submit that the statutes which are enacted, most of the statutes, which are enacted which prohibit some form of transportation of something around the country from one state to another.
Warren E. Burger: Can you think of any statute Mr. Shellow that permits a jury to draw inferences of the kind that are involved in drawing inferences about commercial purposes from the numbers of more carriers?
James M. Shellow: Oh certainly, I think that 1465 if they don't have the requisite number to permit the instruction on the presumption then I think the jury can be instructed, you may consider, although you do not need to the number of magazines possessed by this defendant.
Warren E. Burger: Then maybe I misunderstood you. I thought you were suggesting that it imposed an impossible or a great unrealistic burden to let a jury decide the issues like that.
James M. Shellow: It poses problems. I don't know, I guess, perhaps that was a little straw, but for example in the post Leary cases that without the presumption of unlawful importation and knowledge thereof, the prosecutions have been few and far between and I would submit that it's a difficult proof, it's not impossible.
Harry A. Blackmun: Mr. Shellow.
James M. Shellow: Yes sir.
Harry A. Blackmun: Your opposition referred to this recent case by Judge Gordon, I haven't read it, do you have any comment on changing his position?
James M. Shellow: Yes. First, it's an interesting case. The indictment in Zacher is identical to the indictment in this case, that is that both Zacher and Orito were charged with the same transportation at the same time and the same place. It appears they were both on the same airplane, it's difficult to determinate whose luggage it was, that appears to be the case. As far as Judge Gordon's opinion is concerned, Judge Gordon misses the thrust of our argument and to be perfectly fair, this argument was never made to Judge Gordon, this concept of possessory transportation, it wasn't necessary. It wasn't necessary that it'd be elaborated in the detail in which I presented to you for it was not necessary that he thread his way to Reidel and Luros, Reidel and Thirty-Seven Photographs. I think that Judge Gordon misconceives the thrust of our argument, although we did not argue Zacher. He misconceives the thrust of in it that we are not asking that this Court or that court extend Stanley one iota. Zacher and Orito were engaged in a private possessory transportation, and Stanley protects those who privately possess. Neither of them were distributing, no inference of distributing can be drawn. Their activity is protected by the First and Ninth Amendments. As we thread our way through Reidel and Thirty-Seven Photographs, we note, but do not rely upon the fact that those who ship or carry on common carriers in interstate commerce obscene material do not seek the affirmative intervention of our government for their enterprise, for their private enjoyment of obscenity. It maybe that the government and this Court can hold that if you wish to enjoy obscenity in the privacy of your home or the privacy of your railroad car, that's alright, but don't ask us to help you with it. That is don't seek the affirmative assistance of the government in permitting you to enjoy your sordid reading habits. I submit that on that basis some distinction can be drawn between Reidel, Thirty-Seven Photographs, Gable versus Jenkins which in a sense there the defendants -- plaintiffs in that case, there they sought the two acquired derivative rights. They sought to take Stanley and say that because Stanley has the right to read, we have the right to sell to him, because Stanley has the right to possess, we have the right to deliver. The court made short script to that argument. I don't think that the opinion, this one sentence opinion in Gable versus Jenkins poses any problems to us for we do not seek any derivative benefits. We place ourselves squarely within Stanley, we claim that those who possess obscene material as long as they possess it in a way in which it is unlikely that it will be exposed to unwilling adults or exposed to children or placed in front of an unwilling public, as they long as they privately possess it in an area in which there is reasonable expectation of privacy, then they are protected. They are protected by the Ninth Amendment and by the First Amendment and to the extent that Stanley is the Fourth Amendment question by the Fourth Amendment as well.
Warren E. Burger: Do you suggest that Stanley would have been decided in the same way if Mr. Stanley have had 100 or 200 copies of whatever it was involved there.
James M. Shellow: We submit that if Stanley had 100 or 200 copies and he was prosecuted under the Georgia statute that makes it unlawful to possess for purposes of sale, that the prosecution could not have been blocked by the Stanley opinion, that is the Stanley opinion does not expend to those who possess for purposes of sale and it more than extends to those who possess for purposes of distribution, leaving aside for the moment the thorny question of what this does this Court do about private distribution. The issue of, may I send my obscene book by common carrier to the library of Congress, may I bring with me in my luggage the obscene exhibits before I argue to this Court. Leaving aside that thorny question Stanley does not reach the commercial distributor, Stanley does not reach the one who has not yet engaged in his commercial distribution, but is possessing repertory to that distribution. So I find that as no problem. What I find is the basic problem here is that 1462 extends to purely private possessory transportation and the statute from its legislative history, from the words that are used, from the fact that it was amended at the same time, that 1465 was enacted that Congress was perfectly aware of the problems of private possessory transportation. That the statute can't be construed such as to emasculate the clear congressional intent that it was intended to apply to what this court has held to be protected. I submit that when there is a statute in which the intent of the framers clearly and unequivocally demonstrate that the statute is intended to impose criminal sanctions upon protected conduct, and the statute cannot be permitted to stand. Thank you very much. Mr. Shellow, Mr. Greenawalt, you have little time left.
R. Kent Greenawalt: Mr. Chief Justice and may it please the Court. I have only a few very brief comments. I don't think this issue was raised by this case, but I think that what may seem to be the troublesome hypothetical of someone who carries in his pocket one obscene book, there is I think a question as to whether the statute that covers that person. The language in the statute reported in the 1955 revision I believe was deposit with the common carrier and the change in language was designed to extend the venue of provision so that people could be prosecuted at jurisdictions which they travel through as well as the place that they had put the materials on the carriers. So I think there might be an argument that use of a common carrier doesn't cover that situation. I don't say that; that's right, and we don't think --
Thurgood Marshall: Mr. Greenawalt what if he sent a box of 25 or 100 books all different and all obscene and sealed and sent by common carrier to his country home?
R. Kent Greenawalt: That -- and assuming that it's in another state, the country home, that is clearly covered by the statute and we think that the statute is constitutional in that application. We go back to our original argument on that point, and this possible distinction I am suggesting, we don't suggest it in constitutional intervention.
Thurgood Marshall: Suppose the owner -- the sole owner of the moving carrier, ships by his company the same way, the statue would cover, wouldn't it?
R. Kent Greenawalt: Well, if the owner of a common -- I mean if a guy drives his own bus whether that's still a common carrier, I am not sure, so there would be that question as to whether it's a common carrier we are putting. If the owner of the railroad gets on his own train, then that's covered.
Thurgood Marshall: No, no, you can't get out that easy. This one has -- it should (Inaudible) from the interstate commerce commission. The Stanley Transportation Company and they ship a box of 100 of the same, his own books that nobody has ever seen, but him to his country home which is 16 inches on the other side of the state line, he has violated this test.
R. Kent Greenawalt: If that's still a common carrier, yes, he has and I think it would be, no.
Byron R. White: And you would think the statute would cover a situation where a man calls out to a bookstore and says please send me over -- please mail to me a copy of so and so and it's mailed to him?
R. Kent Greenawalt: There is a separate provision for mail. I mean, if its' set by -- that's 1461.
Byron R. White: So you don't think that would be constitutional?
R. Kent Greenawalt: Oh absolutely, I mean Reidel makes that clear I should think.
Byron R. White: Well, Reidel was going (Inaudible).
R. Kent Greenawalt: Oh well, yes we do think that if there is not a right to sell, there is also not a right to buy.
Byron R. White: So that --
R. Kent Greenawalt: We think that prosecution could be brought against the purchaser.
Byron R. White: So you say that the statute wouldn't be invalidated by Stanley if it authorized seizure of an allegedly obscene material in the mail is addressed to a user and would have Stanley rights if he ever got it inside his house?
R. Kent Greenawalt: That is correct. In other words, if you set off a book company asking them to send you something, and it was sent to you, we don't think there would been a constitutional bar to constitute the purchaser as well the seller. On the severability point, I'd like to suggest the language of United States versus Jackson 390 US 570, in an opinion by Mr. Justice Stewart, at footnote on page 585, he says -- the Court said, whatever relevance in such an explicit clause may have in creating a presumption of severability, the ultimate determination of severability will rarely turn the presence or absence of such a clause. We think it's clear that whatever this specific language of the severability provision, basically the question is trying to ascertain congressional intent as to what --the remainder of the statute preserved or not. Finally, as to the legislative history that's been suggested there seems to me the major defect with the argument as has been made is that the conclusion doesn't follow up on the premise. It is clearly true that Congress does mean to cover non-commercial transportation, but it does not follow from that; but if it has to have only commercial transportation or nothing at all, that it would choose nothing at all and that really is the question here on the overbreadth point. I might mention that because I think in the sense this supports another point we were making that this provision, well first of all, the original 1897 statute did not, if you deposited the material in the common carrier, there was no requirement of wanting to sell it or distribute it, it was only the person who took the material from the common carrier that had the limit that my brother has mentioned. So that is relevant to receiver, not to the person who deposited the material. Secondly, in 1909 when this change was made, a similar change was made as to Section 1461 and the congressional record in the House indicates that the reason that the change was made was because it was very difficult to prove the element that was required in showing the purpose of a person who was receiving the material from the common carrier. So that the words were eliminated to eliminate a difficult element of proof and I think that supports our argument that to draw that constitutional distinction does create a difficult element of proof which Congress has not wished to impose and which is not required by any of this Court's decision. Thank you.
Warren E. Burger: Thank you Mr. Greenawalt. The case is submitted.