Earl Warren: Number 761, Melvin C. Jenkins, Petitioner, versus United States. Mr. Sisk --
H. Thomas Sisk: Yes.
Earl Warren: You may proceed with your argument.
H. Thomas Sisk: Mr. Chief Justice, may it please the Court. This is a criminal case that's here on certiorari from the United States Court of Appeals from the District of Columbia. This case concerns one instruction if any a trial judge should give a jury after they announced that they're unable to reach a verdict. Petitioner's main contention is that no supplemental instruction whatsoever should be given which encourages juries to agree after they have once retook -- retired. Petitioner basis this on the premise that each individual person in a criminal trial has a constitutional right to have a jury disagree and that a supplemental instruction or an instruction given in accordance with United States versus Allen infringes on this constitutional right as its very purpose is to facilitate agreement among jurist. It applies right in the face of what petitioner contends is a constitutional right.
Speaker: Well, your position as I take it that the (Inaudible) should be overruled.
H. Thomas Sisk: That's exactly it Your Honor.
Speaker: You don't try to distinguish this charge?
H. Thomas Sisk: Well, there is two points on certiorari -- on appeal here, Your Honor. The first point is that Allen itself is unconstitutional and the discharge was made under the authority of the Allen case. And the second point is that the charge that was given even though it was made under the authority of the Allen case varied so far from the Allen case and was so coercive that it should be considered reversed below.
Speaker: (Inaudible) it was not necessary for (Inaudible)
H. Thomas Sisk: Well, I think that it would be necessary to overrule the -- well, let me rephrase that, Your Honor. I think it would desirable to overrule Allen case.
Speaker: (Inaudible)
H. Thomas Sisk: That's my personal opinion.
Speaker: (Inaudible)
H. Thomas Sisk: Yes, Your Honor.
Earl Warren: Is it necessary for him representing a client (Inaudible) is this necessary for us to overrule the Allen case in order to (Inaudible)
H. Thomas Sisk: No Your Honor.
Earl Warren: -- for him to (Inaudible)
H. Thomas Sisk: No -- to answer your question first, Your Honor, I don't believe that it's necessary to overrule Allen in order to protect my client and obtain a reversal. But I --
Earl Warren: (Inaudible)
H. Thomas Sisk: Thank you. The pertinent facts are that petitioner was charged with two offenses, one of robbery and one of assault with intent to commit robbery. The jury found the petitioner guilty of robbing a local High's Dairy store here in the District of Columbia of $38 and not guilty of the offense of assault with intent to commit robbery. The petitioner was sentenced after that to one to three years in a reformatory and he is presently incarcerated at Lorton in Virginia. Now, at the conclusion of the evidence when the jury had been deliberating for approximately two hours, the juries sent a note to the trial judge which I would like to read. The jury cannot come to a decision on both counts because of insufficient evidence. That's what the note said and that's found on page 48 of the record. The trial judge then gave a supplemental instruction to the effect that the jury must decide the case. He left no other alternative. And the instruction that the judge told the jury and I'll quote one portion of it. The judge said to jury, "You have got to reach the decision in this case.” Now the judge emphasized this point of making it necessary for the jury to reach the decision at least three or four times in an instruction that is not over a page long in the record. The entire supplemental instruction is found on page 48 and 49 and all together, it's not a page long in the record.
Speaker: But you have to (Inaudible)
H. Thomas Sisk: I believe this was at two o'clock in the afternoon. Your Honor, I'm sorry, now that I recollect, it was around four o'clock because immediately after this instruction, the judge allowed the jury to retire and go home and instructed them to convene the next morning.
Potter Stewart: You told us that the judge instructed the jury that they must reach a verdict for that (Inaudible)
H. Thomas Sisk: Yes, Your Honor.
Potter Stewart: And as I read the Government's brief they entirely agree with you that the judge's statement having -- and I'm reading now have the coercive effect you attribute to it. The judgment should be reversed and remanded for a new trial. So really what would come down to agreeing those instructions in saying that they're not -- will be the view as the interpretation you've given, isn't it?
H. Thomas Sisk: Well --
Potter Stewart: As far as the parties are concerned at least?
H. Thomas Sisk: Essentially I think that's it, Your Honor, but it becomes slightly more involved for this reason. The Government argues that this charge was not made under the authority of the Allen case. That's their main contention, they go on and their brief to say that this was just a few remarks that was made by trial judge to a jury which happened to be deadlocked.
Potter Stewart: Well, what's so -- what's the magic about the Allen case about those who had to questions this case I gather is whether or not the instructions can be fairly read as telling the jury that they -- as coercive instructions.
H. Thomas Sisk: That's correct, Your Honor.
Potter Stewart: These words are not identical with the Allen word. There's nothing magic about the Allen case, the Allan charge. This was a different charge and the question before us here is whether or not, these words were coercive. And if they were the Government agreed with you to the cause of that judgment ought to be reversed.
H. Thomas Sisk: Well, Your Honor, I think I have to disagree with you and respectfully so. The magic of the Allen charge is that there is no authority whatsoever with supplemental instructions by a trial judge to a jury that has disagreed other than made perhaps on the evidence. There's no authority for any such remarks except under the authority of the Allen case. Now we stated this in our petition for certiorari and we stated this in our brief. And the Government has not -- point it to one single case nor at one authority whereby they can say -- to say that there is some proper authority for a trial judge to make remarks to a jury after they retire. It doesn't concern the evidence. They haven't point it to one thing so the magic of the Allen case is that this charge necessarily had to be made under the authority of the Allen case.
Potter Stewart: In those exact words -- if you're right about that then this judgment also should be reversed because clearly and concededly these are not the same words as the Allen charge.
H. Thomas Sisk: That's correct, Your Honor.
Earl Warren: Mr. Sisk, well, (Inaudible) --
Potter Stewart: Understand that to be --
Arthur J. Goldberg: Is this (Inaudible)
Earl Warren: Everything that a judge might say do he not that he might (Inaudible) common practice before you come in (Inaudible) not able to agree? Now, the (Inaudible) of some kind, (Inaudible) the fact that he thinks it over some more, is that be -- would that be wrong?
H. Thomas Sisk: It wouldn't be wrong Your Honor but if it was said -- it would have to be said under the authority of the Allen. If it were said in a --
Earl Warren: But long before they ever heard of Allen, that that practice was refuted as a (Inaudible)
H. Thomas Sisk: Alright well, let me answer, Your Honor this way. If that same remark was said by a judge in the State of Arizona, then it would be reversed for error,  because the State of Arizona in a decision, State v. Thomas which is as -- was set forth in the brief has said that no supplemental instruction shall be allowed by a trial judge. They knocked down an Allen type charge, a charge fashioned exactly after Allen and they said no such charges will be tolerated in the State again.
Earl Warren: (Inaudible)
H. Thomas Sisk: Well, since it was a judge made law, I suppose the Court of Arizona felt -- I don't suppose I know exactly why they knocked it down. The State of Arizona knocked the Allen type charge down because they found that it did two things. First of all, it violated an individual's basic right to a fair trial and secondly, it was impossible to administer fairly. Each Court of Appeals, each change in personnel in the Arizona Supreme Court put different interpretations on the Allen charge. They didn't know how far to allow the trial judges to stray from the exact words of the Allen charge. They didn't -- they couldn't agree as to when the Allen charge should be given and so forth and so on. And for those reasons, the Supreme Court of Arizona completely did a way with the Allen charge.
Earl Warren: Well, are you going to tell us exactly what happened in this case and why it is coercive and why it should be reversed because of this (Inaudible)
H. Thomas Sisk: Yes, Your Honor. That was the second point that I was going to get to, but I think I might as well take that right now. The supplemental charge it was given, these are the salient portions of the charge and this was the trial judge speaking to the jury. Now, I'm not going to accept this. You've got to reach a decision in this case. You've got to weigh the evidence and reach a conclusion. This case has to be decided. And then he went on and said to the jurist that they had all the evidence that anyone could have but the purpose of jurors was to decide cases and they wouldn't be needed if there were no problems, that it was a simple case, that the jurors had decided much harder cases, that if it were open and shut, the courts would need juries, and if they were excused, some other jury would have to decide it on the same evidence which would not be very sensible. First of all --
Speaker: How much time have elapsed since (Inaudible)the jury going out in getting this charge?
H. Thomas Sisk: Two hours, Your Honor. Perhaps a couple of minutes but as to my recollection it was almost exactly two hours. Now, the petitioner maintains that this wasn't just a dis -- a digression from the Allen case but it was almost exactly contrary to the Allen case in which -- I'm sure the Court will remember, in which it was held that the jury had to be reminded that they should only reach a decision that they conscientiously do so in the charge before the Court of course, there was no such moderating reminder as they given whatsoever. Secondly, it was coercive because it ridiculed the jury members and it implied that if they had good intelligence or good sense, they wouldn't have any trouble getting together in the case -- in the suit or --
Speaker: (Inaudible)
H. Thomas Sisk: No, Your Honor. He didn't suggest that at all. As I said he ridiculed the jury by suggesting that if they had good sense they should be able to get together. Now, I'd like to refer to Powell v. United States which is a Fifth Circuit case. And there the jury was told that they shouldn't stand out and -- or they shouldn't hold out in a spirit of pure stubbornness because they ought to reach a -- ought to be able to reach a decision because they were as competent as any other jury. And in the Fifth Circuit, that case was reversed because it said that no jury should be induced to agree to a verdict by fear that a failure to do so with reflect upon his intelligence and that's the exact case here.
Speaker: (Inaudible)
H. Thomas Sisk: Now Your Honor mentioned -- Mr. Justice White mentioned a moment ago that the judge didn't make any mention as to which way they should decide this case. But I don't think it's any question for what the Allen charge is a Government weapon. I don't think if any question and I think all prosecutors will agree to this that the Allen charge favors the Government. The Government wins the vast percentage of cases that they try and it stands to reason that if this is brought out to its logical conclusion on (Inaudible) -- majority of jury members are in favor of conviction and when a -- when they are told that they should give weight to what the majority says, it -- the petitioner's way of thinking and to my way of thinking, it's nothing more than suggesting that they should reach a verdict of guilty or at least the majority verdict instead of the unanimous verdict.
Byron R. White: You don't have any statistics on what happened in Allen charge cases do you?
H. Thomas Sisk: Only from my own experience, Your Honor, from my six -- being a prosecutor for approximately six years. And I know that as the prosecutor when the Allen charge was given, I was very happy because it was more than one count. I could figure on one -- in one of them anyway. I'd like to further say that the -- that a number of cases have not even found the Allen charge necessary. And I refer this and all of these cases that have -- decided at this point or found in the brief, but I just like to run down the list of them. First of all, there is --
William J. Brennan, Jr.: Tell me Mr. Sisk, (Inaudible) dispositive or did you ever know the defendants asked for an Allen charge?
H. Thomas Sisk: Never, Your Honor, never. And in the few years that I have not been a prosecutor, I've never asked for that type of charge for the defendant.
Speaker: (Inaudible)
H. Thomas Sisk: I didn't try this case, Your Honor.
Speaker: (Inaudible)
H. Thomas Sisk: There was no objection made to it, no objection at all.
Earl Warren: The next morning this is a type (Inaudible) counsel?
H. Thomas Sisk: Well, the next morning, the trial counsel --
Earl Warren: Counteract, a counteract against instruction.
H. Thomas Sisk: Yes, the trial counsel was a man who had been appointed to this case in legal aid and I think did an excellent job but he was limited and experienced. And in the next day, he did as the instruct -- the court upon instruction not against the Allen charge but an instruction on what reasonable doubt is because he felt that the (Inaudible) -- the note that the jury had returned would call for an instruction or reasonable doubt. That was denied and the instruction that was given was here. But to go on, Your Honor asked for, is it necessary to reverse Allen in order to protect my client. And I said no, because I said that I felt that the charge that was given was so coercive, it couldn't be found in conformity with Allen. But I also say this and this was why Allan was raised Your Honor, that this -- Allen violated his constitutional rights. He had a right to have a jury disagree, that's his main point. And any infringement on that right, no matter how slight in the way of an Allen charge was a violation of his constitutional right and it's simply shouldn't (Inaudible), and that's why the Allan charge came into play here. I would like to make one more point before sitting down. There is a very interesting decision that's not in my brief, that's from the Fifth Circuit. It's entitled, Walker versus United States. It was decided February 25th, 1965 and it's appellate Number 21480. Now in that decision --
Speaker: (Inaudible)
Speaker: A Fifth Circuit dissent?
H. Thomas Sisk: The Fifth Circuit, Your Honor. In that decision, the conviction was upheld even though a complaint was made that an Allen charge was given. And just to show you how far an Allen charge can diverge, this is what they considered to be an Allen charge in the Fifth Circuit. I do want to state to the members of the jury that is -- that it is important that a jury reached a verdict if possible. The jury room is no place for pride of opinion. It is a place for an exchange of views. That's all that was said and objection was made to that. And on appeal, the conviction was sustained. But there was a dissenting opinion by Judge Brown of the Fifth Circuit, who have relied on quietly heavily in the brief and he points out that it was a judge made rule and I would like to quote from him if -- ought to be the judges who put an end to it in a quick and not too decent (Inaudible). Then he goes on to point out that -- a committee report was given at the 50th annual meeting of the American Judicature Society which was held August 14, 1963. The committee chairman at the conclusion of the report stated this, “Nor do we circulate the Allen charge to the new judges as I use to do when heading up the criminal division in the Department of Justice. Allen is dead and we do not believe in dead law.” Thank You.
Earl Warren: Mr. Heymann.
Philip B. Heymann: Mr. Chief Justice, may it please the Court. I'd like to begin by saying that, of course, our contention is that this case has nothing to do with the Allen charge. If it has to be sustained then to the Allen charge, we should lose but all you have to -- is look at the two pages, they're totally different. But I also think the Chief Justice's question led in the right direction. Of course, the charge doesn't have to be sustained under the Allen case. Judges make the law as to what it said when a jury returns and the question is, what's proper law? What was said here was not the Allen charge. Arizona didn't deny -- even Arizona didn't deny all supplemental instructions. I think Mr. Sisk was wrong about that. They -- Arizona did say that the (Inaudible) -- that the Allen charge, well, in its view technically correct was more trouble than was worth and said that their lower court should no longer use it. Finally, I'd like to begin by saying that Justice Stewart did characterize our position correctly as saying that coercion is of course bad. And the issue in this case is whether there is coercion. That's an issue that has to be resolved. Nevertheless, it does seem Mr. Sisk does return to the Allen charge and he returns to what the proper standards here are. And I would like it introduce my argument by talking for a moment about the standards which seemed to us to be rather clear. We of course agree that a jury has no duty to decide a case if that means that it has to reach a verdict even though there remains conscientious difference of view after all avenues of rational persuasion have been exhausted. They don't have to flip a coin, they don't have to fight, they don't have to compromise, and they don't have to vote with the majority. On the other hand, the jury does have a duty to exhaust all avenues, all reasonable avenues of rational persuasions and explore the areas of their differences. It's the way the jury systems always been, it's the common law system. They don't vote individually. They're putting the room together and expected to discuss the case. In line of this, it's fairly easy to say with generality where the judge should or should not say when a jury returns after a period of time which he believes is inadequate for them to have explored the issues and see what their areas of disagreement are, he should say to them that he wants him to go back longer, discuss further, remain open minded, don't be stubborn, try to persuade the subject that need persuasion through persuasion. Don't give up your conscientious views. That's what the jury system is about. Now all the Allen cases that have been cited in the brief involved four possible errors that can emerge out of the charge. Three things a judge shouldn't say as Justice White indicated, he shouldn't indicate what view of the -- what verdict he thinks would be proper in the case. Incidentally in this case there is no -- there's no basis for I believe that Judge Holtzoff indicated that. The judge shouldn't say --
Earl Warren: You -- what did you say?
Philip B. Heymann: Incidentally in this case Judge Holtzoff did not indicate that I don't believe what you -- he thought, what verdict he thought would be proper. The judge should certainly not tell the jury what he thinks would be proper in a way of a verdict.
Earl Warren: I wonder -- I wonder if I had Mr. Heymann, I wish you would address yourself to it. Now, in the charge of the jury, the Court started out by saying, “Ladies and gentlemen in the jury, what we have here is a very simple case that will not detain new law and it -- in which you should have no difficulty in reaching a prompt decision one way or the other. However, they should do in addition to that. He reviewed the (Inaudible) and told how these witnesses and each one of the robberies had identified this man and there was just this simple denial that he committed the robbery on the other side. And then he also summarized the evidence to -- by saying that a few minutes later after this happened after the robbery, Officer DeMorrow (ph) of the police department testified that he and his partner and a couple of uniformed men responded to an alarm over the radio and they planted themselves in a particular point in these across the street and observed the defendant breathing heavily, acting nervously and running and arrested him. They took him to the store. At first he refused to get out of the car. They ordered him to do it. They took him into the store and the officer testified that Mrs. Corrin and Jewel Davis (ph) identified the defendant as a man who just entered the store. Now in view of that array of witnesses against the defendant, its simple denial of the fact that he were the man -- let's start the case -- the instructions offered with little indications that he is guilty when it says what we have here is a very simple case. That should not detain new law and it -- which you should have no difficulty in reaching a conversation one way or the other.
Philip B. Heymann: Mr. --
Earl Warren: It just seems to me that that is weighing awfully heavily even before you get to the --
Philip B. Heymann: Supplemental charge --
Earl Warren: -- to the -- later instruction where he said you must arrive with a verdict in this case.
Philip B. Heymann: Mr. Chief Justice, I assumed or have no way of knowing that Judge Holtzoff meant when he said this is a simple case that it has very few witnesses. There are about three witnesses on each count. The entire original trip --
Earl Warren: They're all at one side except the defendant and (Voice Overlap) --
Philip B. Heymann: The defendant called one of their witnesses just simply to show that he couldn't identify the defendant. He called Philip Corn, the whole case reading the original transcript downstairs only takes about 45 minutes. That's some indication. I do think as you read over Judge Holtzoff's description of the evidence that the -- that you get the impression that the defendant is guilty but that may be the way the evidence came in too Mr. Chief Justice. It may not be an unfair summary by Judge Holtzoff of what came in, it may be that the evidence was fairly -- was strong in this case that the defendant was guilty.
Earl Warren: Well, I think it was very, very strong and I don't say that Judge Holtzoff misstated it in any way, saying what he want. When I say when as -- as a full misstatement of it, its only the plain denial of the defendant and he then says "Ladies and gentlemen of the grand jury, what we have here is a very simple case that should not detain new law." Which you would seem have no difficulty of reaching a verdict, it seems to me that he thrown his (Inaudible)
Philip B. Heymann: Alright, you're saying that in a very -- that in the case it's very strong for the Government, the judge perhaps should not say that it's a simple case and perhaps that's right. I -- we've concentrated the only attack in this Court, the only attack in this Court has been on the supplemental instruction and we've concentrated our attention on that.
Arthur J. Goldberg: Mr. Heymann, (Inaudible).
Philip B. Heymann: Yes, Mr. Justice Goldberg
Arthur J. Goldberg: -- the Chief Justice said, do you see a difference when a jury comes in and says, “Your Honor, we cannot agree on the evidence which is the passive quote.” But here the jury didn't say that. The jury said, "The jury cannot come to the decision on both counts because of insufficient evidence.” (Inaudible) isn't that tell you to a verdict of acquittal?
Philip B. Heymann: Well, until you said the last sentence, Justice Goldberg, I was going to be -- I was going to say I couldn't be more delighted that you asked that question. How --
Arthur J. Goldberg: What about the last sentence?
Philip B. Heymann: Well, let me work up to it and enjoy the first steps. A judge has certain obligations when the jury comes in and says the jury is divided. A jury can come in, of course, and say something else. It can say we were sitting around the conference table in the jury room. We were talking and we all agreed that we shouldn't or can't. Now, it could say either one of those two things beside this case because it's just a lousy record. Not enough evidence have been put in. There's no way to run a (Inaudible). The jury says that what the judge should say to them is you have to decide this case, individually not as a jury, and I should have added that. Individually each one of you has to vote in this case. There's no such thing as being unwilling to vote. Now --
Arthur J. Goldberg: But that isn't what they said.
Philip B. Heymann: They did say -- they said the jury cannot decide the case on either count because of insufficient evidence.
Arthur J. Goldberg: Well, what is the meaning of that? They haven't said we're divided. They came in and they said to the Court, “We can't agree to the decision in this case.” They didn't say we're differing about this, this just because of insufficient evidence.
Philip B. Heymann: Alright. Yes, Your Honor, I agree.
William J. Brennan, Jr.: Did they say on either counts (Inaudible)
Philip B. Heymann: They said on both counts --
William J. Brennan, Jr.: The jury cannot come to the decision on both counts because of insufficient evidence, that's fairly ambiguous don't you think?
Philip B. Heymann: Oh, it should be -- couldn't be more ambiguous. There was an issue in the Court of Appeals as to whether they met either of both but that couldn't be more ambiguous. But returning to insufficient evidence, I read Judge Holtzoff's charge and I will get back to whether he shouldn't have recharged on the burden of proof. I read Judge Holtzoff's charge on 48 and 49 as taken -- taking the question as Justice Goldberg took it as directed to insufficient evidence. He says, “Well you have all the evidence there is, all the evidence that anybody can have”. In other words the jury has no business asking for more evidence and they don't have any business asking for more evidence. That's what we have jurors for to decide on the evidence. If there weren't any problems, we wouldn't have a jury. Now I'm not going to accept this. You got to reach a decision in this case. Of course, every case involves a problem. He goes on and on. He tells them to go home and sleep on it.
Arthur J. Goldberg: We think proper instructions of the -- by the judge if there had to be a supplemental instruction, Mr. Heymann to be that under the instructions I have given you and the Government must prove their case beyond unreasonable doubt, if the evidence is insufficient, your -- turn me a verdict of not guilty.
William J. Brennan, Jr.: Your Honor, I certainly wish he would have given that instruction. The instruction was requested as we've pulled out of the Court of Appeals District Court files. I don't think that its error to have refused to give one -- to refuse to repeat one small part of what took the greater part of a page to give in its full form. In other words, judges don't like giving -- judges don't like repeating a small part of an instruction which requires considerable explanation. The full instruction on burden of proof was given the first time at page 44. That's only two hours before Justice Goldberg or -- well, two hours before the jury returns. You see it takes three quarters of the page from the very top of the page down to the paragraph for getting you or the sole judges.
William J. Brennan, Jr.: And he did tell them didn't he that they could find him guilty and one on the -- not guilty on the other,(Inaudible)
Philip B. Heymann: I think he -- I'm -- I seem to --
William J. Brennan, Jr.: Because it seems to me, that's the import of the petitioner expressed in their notes. Almost (Inaudible) they said they found him guilty on one but they can't find him guilty into the constitution.
Philip B. Heymann: Well the --
William J. Brennan, Jr.: (Inaudible)
Philip B. Heymann: The top of page 43, Justice Brennan --
William J. Brennan, Jr.: Which is it?
Philip B. Heymann: The top of page 43 of the record, you will bring in a separate verdict on each of the 2 counts. And in each instance, your verdict should be either guilty or not guilty. He didn't tell them that.
Speaker: He refused, it is on page 40.
William J. Brennan, Jr.: If he stopped and said that over again, we wouldn't have this here.
Philip B. Heymann: Well, perhaps not, perhaps not. Now, I don't know whether at this point to return to the aspect of the case that assumes that the jury would -- that the judge had a divided jury or to Justice Goldberg. I personally read this charge as if the jury came back and said, “We don't want to decide this case. We don't want to vote for acquittal and we don't want to vote for conviction because there's insufficient evidence.” And the judge said to them, "You have to decide it.” That's the way I read those words. Now, I wish you would have given -- I wish he would've repeated the instruction. I think the trial judge has the discretion to refuse to repeat one-fifth or one-seventh of the -- of a complete instruction.
Arthur J. Goldberg: If there's doubt about what do we -- the reaction with the jury was, how should that doubt be resolved?
Philip B. Heymann: If I would -- what the reaction of jury was on this particular --
Arthur J. Goldberg: I mean, what you were saying, if the judge was not clear in what are you saying to the jury, from a criminal trial in response to a question like this. How should the doubt be resolved up here?
Philip B. Heymann: Well, Your Honor, if the question is whether the charge was coercive in the sense that telling the jury they should compromise, flip coins, vote with the majority. I feel very convinced that it should be resolved and if there's -- and if it's doubtful whether it was coercive and let me point out that in this case, the jury came back the following morning deliberated for four hours, the long time for a 45-minute record. They asked for testimony. There's doubt after that. I think it should be resolved under Rule 30 and Rule 52 or 54. Every purpose of the requirement of an objection to instruction and a requirement of plain error is here in this phase. We can't tell what tone Judge Holtzoff used or what the atmosphere in the courtroom was. Defendant's counsel could have told. Defendant's counsel, for all we know, didn't find anything coercive, didn't object one purpose of Rule 30. Another purpose is to allow the judge to correct the charge. He could easily have corrected any suggestion that the jury was supposed to compromise. He had to add only a sentence. Of course, no one should give up a conscientious objection, the major purpose of Rule 30. Finally, there's a real possibility, a very real possibility of a tactical decision by defense counsel here. The jury had come back and said the evidence is insufficient. They didn't like the state of the evidence. We have no reason to think, although defendants don't generally ask for Allen charges that this defendant wasn't delighted to have a charge that would leave the jury to decide the case. He had no reason to think that this wasn't a calculated decision that he was delighted with. All these reasons, every reason that could possibly come up in Rule 30 in the plain error rule whether it's 52 or 54 is present here. Now, the -- its -- they're frequently present in supplemental instructions to juries and the courts have regularly relied on that and I think quite property.
Arthur J. Goldberg: But the point(Inaudible)
Philip B. Heymann: This was the legal aid counsel in the trial court and the separate counsel again in the Court of Appeals and then separate counsel here.
Arthur J. Goldberg: (Inaudible)
Philip B. Heymann: I take it legal aid counsel is appointed.
Byron R. White: But how did he (Inaudible) this case in the -- (Inaudible) on one count but on the (Inaudible)
Philip B. Heymann: We're hung on one count which -- would you give me once more, Justice White, I was --
Byron R. White: The -- we do not find him guilty on (Inaudible)
Philip B. Heymann: That's what they say.
Byron R. White: And that (Inaudible) decision on both of them, you can on one but not both.
Philip B. Heymann: Well, let me --
Byron R. White: And the -- (Inaudible) go back and try to (Inaudible)
Philip B. Heymann: Well, let me refine it a little, I'm not sure where it leads, Justice White. When they go back, they ask for evidence on count one. That's the count on which they find him guilty. So if they're saying, “We can't agree on both counts. We're hung on one count.” They must have agreed that he was innocent at count two and be hung on count one. That's the count. They go back and they think about for four hours, have the testimony read to them. Is that -- now --
Byron R. White: Well, if they decided that (Inaudible) decided to count (Inaudible) that he's innocent.
Philip B. Heymann: They've decided if this construction -- I personally in reading the record and reading the fairly -- each count has a certain number if eyewitnesses, etcetera. I would think that the best way of reading both was as to the grammatical error. I don't mean to be begging the question. They say we can't agree on both counts. I would think that the more likely the thing they meant was that we can't agree to decide this case. There are 2 counts. That's right. On both counts, we find themselves unable to deicide, they didn't say 3.
William J. Brennan, Jr.: What you mean -- in other words that they defy to that?
Philip B. Heymann: I don't -- I don't mean that -- I said agree Justice Brennan. I don't mean if they're divided. What they said was we cannot decide, we cannot reach a decision on both counts because of insufficient evidence. I think Justice Goldberg is right in suggesting that they weren't really saying they were divided. They were saying they were dissatisfied with the state of the record. Now that's one question. Another question is what do they mean on both counts? I think they meant they were dissatisfied with the state of the record on both counts, not that there was one count on which they were satisfied with the state of the record and another one on which they were not.
William J. Brennan, Jr.: And when they got -- have the -- how do you instruct (Inaudible)
Philip B. Heymann: This is yes.
William J. Brennan, Jr.: They had finally decided then that the jury on the first count and they put it among (Inaudible)
Philip B. Heymann: They acquitted him on the fact --
William J. Brennan, Jr.: If they haven't actually taken any vote in instances of that kind?
Philip B. Heymann: Or if they-- if they -- perhaps they had taken it -- perhaps they had taken it both and gone back and agreed that this was still a hell of the way to run a railroad. They just didn't like it. It's hard -- this is way often the realm of speculation as to what a jury was doing. I don't want to deny that.
Earl Warren: Mr. Heymann, don't you think (Inaudible) the jury said that they were unable to decide the case because of insufficiency of the evidence. The judge says, "No, I'm not going to accept it. You have got to reach a decision for this case." Don't you think it would be unwise for us to let that stand (Inaudible)
Philip B. Heymann: Well, Your Honor, you are faced with the fact that it -- that after -- first of all that he may have been responding in light of what Justice Goldberg said that they were saying, “Individually, we don't want to vote in this case”. And at that point it's quite correct to say, “You've got to vote individually.” He may have been responding on that basis. Second of all, they did go out for four hours on a case. It's surprising that they weren't resolved after the first two hours when they came in and asked the question and they went out for twice again that much, a total of six hours on a short case. I have a hard time finding coercion. I would be inclined to say it was harmless error. If there were an objection, I find it very hard to say if there's plain error with no objection. Now, I have nothing further to say, Your Honor.
Earl Warren: (Inaudible) to submit the case among the jury that they didn't agree and they thought, didn't we have to put (Inaudible) that they're insisting that a -- and the jury must reach a decision to say, "Well, we just -- if you don't know, you just have to submit to anybody else, to somebody else and that wouldn't be sensible, wouldn't it?” Said the judge.
Philip B. Heymann: Mr. Chief Justice, it depends on what the jury -- what the question was the jury had in mind. Judge Holtzoff --
Earl Warren: Well, I know but we -- (Inaudible)
Philip B. Heymann: Yes sir.
Earl Warren: -- in the jury (Inaudible) on this language here.
Philip B. Heymann: And that -- and it could be taken the way you suggest and it could be taken innocently. And in that context, I would not find plain error and reverse without an objection, Your Honor. Defense coun -- we have no indication that defense counsel who had every reason to object found it coercive or if he -- if he wanted to object, he had every reason to object.
Earl Warren: I wonder if (Inaudible) for him about the particular time to object what the judge had said.
Philip B. Heymann: He --
Earl Warren: When the judge says, “You have to reach the verdict and would have -- it would've been wise (Inaudible) as a trial lawyer to stand up at that moment and object to it in front of the jury.
Philip B. Heymann: Mr. Chief Justice, he had overnight. The jury was dismissed at that point. He had the following morning to come in and say, “I'd like a supplement --
Earl Warren: (Inaudible) to have us remedied by asking the judge for an instruction to which the -- to state that the -- if the evidence is not sufficient, convince him beyond a reasonable doubt, that they should -- he would've -- which would've accomplished the purpose of a judgment unlike (Inaudible) The judge says, "No, I'm not gong to do it."
Philip B. Heymann: Mr. Chief Justice, the instruction he requested would not have accomplished the purpose of unifying a divided jury. Now the petitioner here is saying, there was jury divided, there was -- there were six people or 11 who said, “Guilty beyond unreasonable doubt” and a certain number who said not. Repeating the instruction on reasonable doubt would not have accomplished the purpose of eliminating whatever coercion there was in the trial courts charge to tell him -- towards telling them that they had to come to a decision. The only thing it did was tell him how to arrive at a decision if they were in doubt how to arrive. It didn't eliminate the coercion that would suggest that they should flip a coin or vote with the majority or give up conscientious beliefs.
Earl Warren: Mr. Sisk.
H. Thomas Sisk: Just a few words, Your Honor. First I'd like to say that every jury panel on the District of Columbia that every panel of prospective jury members, I guess I should say are given detailed instructions before they ever walk into the courtroom as to what the duties of the juror are. I don't know whether the District of Columbia is unique in this respect but I do know that they're all given detailed instruction as to what their duties are. So I think -- I find it rather difficult to believe that these jury members simply decided not to vote because they didn't like the way the trial had been conducted. I think they had something else on their mind and it seems that rather incredible to me that they would completely disregard all of the instructions that they've been previously given and just sat in there and decided, "Well, we don't think we're even going to vote on this case because they simply haven't done a good enough job either the defense or the Government." But the main thing that concerns me is that the Government has assumed that a trial judge just has a right to make remarks to the jury after they re -- after they retire. I don't know why they have assumed this but this is the whole picture of the argument that a trial judge does have a right to make this remarks just they point to no authority whatsoever, no authority. We have been able to find no authority other than count -- other than the Allen case and that's why we continue to say that what was said in this case was set under the authority of the Allen case and if every individual does have a right to have a jury disagree and that's what we contend in this case. That every individual has that right then no matter how slight the intrusion is, no matter how careful the trial judge is when he intrudes upon that right upon making any suggestion whatsoever that they should agree. Well, then he's violated the constitutional right and it shouldn't be allowed. Also one other thing I think would help to put this case on a better light. Mr. Heymann said that he saw no reason why the Government attorney didn't object. That there was nothing in the record to indicate why he didn't stand up and be heard at the proper time. And because of this, it might have been some tactical movement on his part. There is a stipulation between the Government and the petitioner which would permit the Court to read the entire transcript and as Mr. Heymann says at the very short transcript. And I would suggest that if the Court could look at the entire transcript, well they would have a better understanding as to why the Government, as to why the defense attorney didn't do anymore than he did. He was interrupted practically on every page of the transcript without cause. Not once but usually twice on every page of the transcript. I'd like to say that he was accused of -- he was accused of offensing with the witnesses, all of these in open Court before the jury. He was accused offensing with the witnesses failing to cooperate, not being interested in the truth, dealing with the witnesses not at arm's length, being cagey, told to be frank, stop backing -- told to be open and above board and stop acting like a poker player. Stop holding his cards so close to his chest, stop considering the trial a game. Stop trying to trap the witnesses and endeavor to be more interested in justice. Now I think that that puts it in a proper light. Perhaps that's why he didn't say anything more than what he did. Thank you.
Hugo L. Black: Could you tell me what page in the record that the --
H. Thomas Sisk: Yes sir. Yes Your Honor.
Hugo L. Black: (Inaudible) in the following morning.
H. Thomas Sisk: I'm sorry.
Hugo L. Black: That motion when he say defense made the following morning, what page -- I don't find any printed record.
H. Thomas Sisk: I don't believe it is in the printed record, Your Honor.
Hugo L. Black: (Inaudible) the cause of that, did you know?
H. Thomas Sisk: I think -- I'm guessing now, Your Honor, but I'm almost certain that's on -- well, I think it was approximately page 40 or 39 or something such as that.
Hugo L. Black: Do you know the one I'm talking about?
H. Thomas Sisk: Yes, Your Honor.
Hugo L. Black: On the burden of proof.
H. Thomas Sisk: Yes, Your Honor.
Hugo L. Black: Thank you.
Earl Warren: Mr. Sisk, this man is an indigent, I understand.
H. Thomas Sisk: Yes.
Earl Warren: And the Court has always appreciated the counsel representing the indigent defendants. We appreciate your (Inaudible) in this particular case. And Mr. Heymann, we appreciate your frankness and diligence in representing the Government in this (Inaudible)
H. Thomas Sisk: Your Honor, may I take this time to publicly thank my law partner, Mr. Cramer, his --
Earl Warren: Yes.
H. Thomas Sisk: Without --
Earl Warren: Alright.
H. Thomas Sisk: -- his help --
Earl Warren: -- please proceed.
H. Thomas Sisk: -- I wouldn't be able to do this at all.
Earl Warren: Appreciation to the both of you.
H. Thomas Sisk: Thank you, Your Honor.
Earl Warren: We'll recess.


Warren E. Burger: We’ll hear arguments next in 73-5265, Kokoszka against Belford. Mr. Adams, you may proceed whenever you’re ready.
Thomas R. Adams: Mr. Chief Justice and may it please the Court. This case involves the question of interpretation of the Bankruptcy Act. The question is whether a wage earner’s postbankruptcy receipt of his tax refund check is property within the meaning of the Bankruptcy Act. The bankrupt contends that the disposition of this case should be controlled by this Court’s decision four years ago in Lines versus Frederick. In Lines, the Court analyzed the meaning of the word “property” and rejected a mechanistic accounting-type approach to defining property. For example, Lines involved the question of whether or not a bankrupt’s vacation pay was property. It was clear in Lines that the vacation pay was entirely earned and accrued at the time of the bankruptcy and it was also clear that the vacation pay was the result of labor that had been preformed in a prebankruptcy past. The facts in this case are similar. Mr. Kokoszka, the bankrupt was employed for three-and-a-half months in the year 1971. He claimed the correct number of exemptions with his employer for withholding purposes and he became entitled to a tax refund check of $251.00 because the withholding was based on the premise that he would be employed for the entire year. Thus, when Mr. Kokoszka filed his bankruptcy in 1972, his tax refund check, like the vacation pay in Lines was entirely accrued and earned at the time of bankruptcy and it was the result of prebankruptcy labor. In Lines, this Court specifically stated that the definition of property cannot be resolved by reference to such questions as the time of vesting. Instead, the Court emphasized that more traditional test, as in Segal versus Rochelle that property should be defined by reference to the purpose of the Bankruptcy Act. In this regard, the Court must analyze the relationship of the asset in question to the debtor’s fresh start and a possible entanglement of the asset in a debtor’s prebankruptcy past. Utilizing this analysis in the Lines case, certain important factors were present, which resulted in that decision and those same factors are present in this case. For example, the tax refund check does not represent an investment or savings account, or some other voluntary form of property. It is entirely the result of involuntary actions as the result of the withholding laws of the United States, as vacation pay --
Harry A. Blackmun: (Inaudible) number of exemptions as a Voluntary Act, is it not?
Thomas R. Adams: Yes, the designation of it, but he claimed the proper number of exemptions as he should do under the law, in order to approximately end up with either no tax refund check or no tax is due at the end of the year.
Harry A. Blackmun: Would the case be different in your estimation had he claimed, as he has a privilege of doing a number of exemptions that do not coincide with the facts?
Thomas R. Adams: Yes, I do think the case would be different, because in that case, for example, if he had not claimed as many exemptions as we he was entitled to, the funding question would be similar to a savings account, he would have created a greater tax refund check. Now, in the -- one of the cases that’s discussed this issue, the Cedor case, the opinion of the Judge in the Northern District of California, specifically held that because that part of the tax refund check was a result of voluntary activity, that it should be regarded as property under the Bankruptcy Act. In this case, we’re dealing with the tax refund check that was result of no particular voluntary action by the bankrupt, except that he was just complying with the tax laws. Another important aspect of this asset, an important aspect that was also present in Lines is that the tax refund check is not received until after the bankruptcy. It is a postbankruptcy event, part of the debtor’s future. Like vacation pay, it is not particularly reachable or payable to the bankrupt, until the time that it is actually received. In Mr. Kokoszka’s case, he filed his bankruptcy on January 5, 1972. He filed his income tax return in February and he received his tax refund check about two months later. Thus, vacation pay, like the tax refund check importantly is a postbankruptcy event, and part of the debtor’s future, but perhaps the most important aspect of the Lines case is that vacation pay was entirely wages. In this case, similarly the tax refund check here is derived entirely from wages. It consists entirely of wages. The bankrupt has been compelled to accept the delayed receipt of wages, which he otherwise would have received, as a result of the withholding laws of the United States. But, for the withholding laws, this money would have been available for his use and he would have used it for his support at the time of his regular pay check. The Ninth Circuit’s decision, the Cedor case and the Eighth Circuit decision, the Gehrig case focused on the practical realities of the importance of wages to a bankrupt. A bankruptcy, as we point out in our brief and as those courts referred to is frequently a last resort for a debtor. He has used up all his assets by the time he’s forced to go into bankruptcy. He depends entirely on his receipt of future wages, in order to make his fresh start. In Mr. Kokoszka’s case, he earned only $2,400.00 in 1971. At that level of earning, all of the person’s wages are necessary for items of immediate support and consumption, as this Court noted in the case of James versus Strange. Additionally, Lines was a confluence of streams of decisional law, both in the Bankruptcy Act and outside of the Bankruptcy Act. In Lines, the Court quoted and emphasized its holding in Sniadach that wages were specialized kind of property in our system. Both the Cedor Court and the Gehrig Court felt that given the specialized nature of wages and a condition of the bankrupt that to deprive the bankrupt of his tax refund check would work in equivalent hardship as to deprive him of his vacation pay. Perhaps the more so, because the debtor has already been forced to accept the delayed payment of these wages, which he needed. In any event, the contention of the bankrupt in this case is that the tax refund check is as important a part of the family budget, as vacation pay. Now, the Court below, the Second Circuit did not apply this same analysis and attempted to distinguish Lines versus Frederick in this regard, by claiming that vacation pay was a periodic wage payment, like a person’s regular pay check, whereas this is not. That Court’s distinction, we submit, is both unrealistic and not in keeping with this Court’s decision in the Lines case. It is unrealistic because a debtor needs his wages for support, whether they are paid to him on a regular basis or not, they are just as important for his fresh start. The Second Circuit’s distinction is not consistent with Lines versus Frederick, because in Lines this Court rejected focusing on technical distinctions, such as whether or not the property was paid in a periodic way or not and focused instead on a broader examination and the practical realities to the bankrupt and the relationship of the asset to the debtor’s fresh start. Another important case, cited by the Court below was Segal versus Rochelle. That brings us to the question of whether or not this asset is in some way entangled in the debtor’s prebankruptcy past. The second test, which this Court has emphasized, a bankrupt’s position in this case is that Segal versus Rochelle does not require result contrary to what the bankrupt is urging. In that case, we dealt with the business bankrupt, who is entitled to receive a loss carry back refund. As this Court noted in Lines, Segal really wasn’t a fresh start case. In Segal, a business has ceased to operate, and the job of the trustee was simply to marshal the assets for the benefit of the creditors. Also, there is not causal link to the prebankruptcy past in this case, as the Court found important in the case of Segal versus Rochelle. There, the Court noted the peculiar nature of a loss carry back refund check and found that it was the result of those very losses, which had precipitated the bankruptcy. There is no such problem here. Thus, to summarize this part of the bankrupt’s position, we contend that Lines requires the Court in examining the definition of the meaning of the word “property” focus on practical realities and to analyze the relationship of the asset to the debtor’s fresh start. Lines marked the rejection of more mechanical approach to defining property, by focusing on whether or not when it was earned, when it was accrued, whether it was a result of prebankruptcy labor. Instead, Lines focused on the relationship of the asset to the debtor’s fresh start. The fact that it was not an investment or other kind of voluntary creation that it was a postbankruptcy event and that it was inconsistent entirely of wages, which traditionally are the only means for bankrupt to achieve his fresh start. Thus in Lines, this Court held that the wages represented by vacation pay were essential to a debtor’s fresh start. Seven months later, in Perez versus Campbell, the Court also held that a debtor shouldn’t be deprived of his driver’s license because of the burden that that would place on his earnings. The position of the bankrupt in this case is that the tax refund check, being wages, the loss of a tax refund check would be as serious of a burden on a debtor’s fresh start, as the loss of vacation pay, or the loss of a driver’s license. The second issue in this case is whether or not the Federal Wage Exemption Statute, the Consumer Credit Protection Act exempts 75% of the tax refund check. The Court need not reach this issue if it rules in the bankrupt’s favor on the first question. However, we contend that the CCPA should apply by the terms of the Bankruptcy Act, by terms of the CCPA for an independent policy reason and that -- by reference to administrative materials. First the Bankruptcy Act, many exemption statutes, state exemption statutes do not ever refer to bankruptcy. They are not written particularly with bankruptcy in mind, but they apply to a person who goes bankrupt because the Bankruptcy Act requires that they apply. It specifically stated in Section 6 that the bankrupt be allowed all states and federal exemptions. The CCPA, being a partial, federal wage exemption statute should apply to bankruptcy by the requirements of the Bankruptcy Act in Section 6.
Potter Stewart: Connecticut, Connecticut, as I understand it doesn’t have any exemptions relevant to this case, is that right?
Thomas R. Adams: Essentially, that’s right Mr. Justice. There is a wage exemption statute which being smaller than the federal statute in this case was not applied.
Potter Stewart: Well, let’s assume the Federal -- let’s assume that the Court decides against you, on both on your points i.e. that (a) the plaintiff have just completed arguing that the whole businesses is exempted or (b) that 75% is exempt under the federal statute. Would there be a Connecticut statute exempting any of these?
Thomas R. Adams: To be honest, I am not sure. There is a Federal wage Exemption -- or I mean excuse Connecticut Wage Exemption Statute. It only applies to consumer credit, garnishments for consumer credits so I --
Potter Stewart: So probably not.
Thomas R. Adams: I don’t think it would apply, but that would be a question interpretation of Connecticut law, which doesn’t presently exist. In any event, it probably only protect about $65.00, if it did apply.
Potter Stewart: And then of course it would be subject to construction as to whether or not a tax refund is the equivalent of wages too?
Thomas R. Adams: There would a number of problems interpreting the Connecticut statute to get it to apply.
Potter Stewart: But in any event, unlike many States, there isn’t as you submitted a state exemption statute that cuts much significance here at all, is it?
Thomas R. Adams: That’s correct Your Honor, that’s correct. For example, in California, which is known for having liberal exemption statutes, only 50% of the earnings attributable to the last 30 days would be exempt, so a cash refund check would come to a very small percentage.
Potter Stewart: We dealt with that in Lines, you mentioned it.
Thomas R. Adams: Yes, you referred to it specifically.
Harry A. Blackmun: Mr. Adams you have cited the Eighth Circuit’s Gehrig case on the CCPA issue the Court was unanimously against you, was it not?
Thomas R. Adams: Yes, Your Honor.
Harry A. Blackmun: And, on the other, the main issue it was two to one in your favor?
Thomas R. Adams: Was it two to one? Yes, it was two to one, that’s right, excuse me Mr. Justice. Let me just -- although the Lines issue is often thought to be the main issue in this case as Mr. Justice Blackmun just referred to it, the value to the bankrupt of the application of the 75% Federal Exemption Statute is an important right, which we are seriously urging before this Court. Well, I was saying a number of state exemptions statutes apply not because in their own terms they refer it all to application in bankruptcy or because of the Bankruptcy Act. In the CCPA, we have a slightly different statute. It should apply in a bankruptcy context not only on account of Bankruptcy Act, but on account of its own terms. Congress specifically stated that the CCPA was passed in order to achieve the uniform application of the bankruptcy loss. In this case, a uniform wage exemption statute rather than the widely varying wage exemption statutes which apply in the states. Most of the criticism in the CCPA, both by the Court below, by the Gehrig Court and by opposing counsel has been an attempt to narrow the meaning and the terms of the CCPA. The examination of that statute however shows that it is a broad statute, very broadly drafted by Congress, and additionally being a remedial statute, it is entitled to be liberally construed in favor of achieving its purposes. Thirdly, there is a policy ground for the application of the CCPA. This was noted by the District Court in the Cedor case, involving a question of fairness that creditors, the exemption should not be defeated and creditors should not be allowed to get the entire tax refund check merely because the debtor has been forced to accept the delayed receipt of that money due to the operation of the withholding laws. Finally in this regard, there are number of administrative materials, which are cited in our brief, which support our position, our interpretation of this Act and its application of this situation and those administrative materials are entitled a great weight. In conclusion, an examination of the relationship of this asset to the debtor’s fresh start in the same practical way this Court made that analysis in Lines should yield a result that a wage earner’s postbankruptcy receipt of his tax refund check is not property within the meaning of the Bankruptcy Act. As far as the Federal Wage Exemption Statute is concerned, it should apply here by the terms of the Bankruptcy Act. It should apply by the terms of the CCPA or an independent policy reason, and by reference to supporting administrative materials. Thank you.
Warren E. Burger: Very well, Mr. Adams. Mr. Civiletti.
Benjamin R. Civiletti: Mr. Chief Justice and may it please the Court. We are dealing here with a tax refund claim, which at the time of the petition in bankruptcy was fixed and certain as to amount and demandable and collectible. The argument made by the petitioner is that a wage earner’s bankrupt’s tax refund claim is not property because it is necessary to his fresh start, I think runs counter to the meaning and the purpose of the Bankruptcy Act, its historical development and interpretation, and specifically conflicts with the pertinent parts of the definitional sections of the Act, under Section 70a (5) and under Section 6 of Exemptions. Furthermore, the petitioner’s argument misinterprets, I believe, the concept of a fresh start and the rationale of the petitioner’s position would impose substantial confusion and uncertainty in the Bankruptcy Law. First, the scheme of the Bankruptcy Law generally is in two parts. First, marshaling the assets at the time of the filing of the petition, all the property of the bankrupt vest by operable with certain exceptions, which is not nonexempt, vest by operation of law in the trustee. The second part of that scheme is Section 6, the exemption part, which provides specifically that local conditions shall govern local statutes, which assets maybe maintained by the particular bankrupt in order to assure that he can survive and so that he can have at least those basic essential requirements in which he can then cause to begin his new life. The concept of a fresh start incorporates both those ideas of assets to the trustee and exemptions to the bankrupt and also, and most importantly the idea provided by Section 17 of a discharge, an effective valuable discharge to the bankrupt, so that he can begin his new economic life, free of the burden of these preexisting debts. So that the three elements, I suggest for a fresh start, are: (1) the proper discharge; (2) specified assets or items of value, which provide a base and an opportunity to start anew, provided by exemptions; and (3) the opportunity and the safeguard that future earnings and after acquired property can be used, retained, and accumulated by the bankrupt in his new economic effort. The petitioner twists and distorts the traditional concept of fresh start into the overriding proposition that the Bankruptcy Law must provide, it seems to me, a protected fund sufficient to meet the needs of the bankrupt. The primary support suggested by the petitioner in his argument and his brief, is the case of Lines v. Frederick decided in 1970. There in essence, the question was presented whether the credits are accrued or pay accrued during prebankruptcy work for vacation and layoff time periods to come about in the future, after the date of the filing of the petition in bankruptcy, were property within the meaning of the Act. This Court determined that whatever characteristics of property for other purposes that those credits are accrued pay might have or possessed, they were overshadowed in comparison to their similarity, the future earnings and the purposes of the act, as embodied in the term “fresh start.” The similarities of the accruals to future wages were one the fact that the accrued credits or pay were not payable and collectible on demand by the petitioner at the time of the filing of his petition at all, but would ordinarily be payable at the future event, vacation or layoff. In fact, the accrued pay or credits were designed and specifically tied to one of the other of those two events as a substitute payment for future period of time, which but for vacation or layoff would be working time and which the bankrupt would receive the very weekly earnings, which would be cause to sustain him. The only relation back at all of the accrued credits or the pay, the vacation pay to the prebankruptcy past was at the prior regular working period was the basis for accumulating the accrual on a percentage formula, as to hours or days and it’s equivalent in money. I believe it was one hour per month or one hour per week. It is readily apparent that here, if the facts are entirely different from those crucial determinations there which made accrued vacation pay look like and be treated the same as future wages, which indeed are protected and should be protected both by the discharge and by the concept of fresh start. One, the tax refund claim here is fixed and certain as to amount, demandable and collectible. Two, there is no design, no specification or intent to relate or identify the accumulation of periodic payments, required as withholding for expected tax liability and which constitutes a reason for the refund claim to any period of future working time or as a substitute for regular earnings as sustenance to the wage earner in the event of future loss time for layoff, vacation leaves, sick leave, or any other reason. The tax refund claim is simply not the equivalent to future wages or a substitute for future wages during the suspended working period in the future. Lastly, it seems to me that all the characteristics of the tax refund claim relate back to the prebankruptcy past, during the very accumulation of debt, which resulted in the filing of the petition of bankruptcy. In this regard, I think it is speculation to suggest, as perhaps the Eighth and Ninth Circuits have suggested, in the case of in re Gehrig and in re Cedor that the wage earner would not have used the amounts periodically withheld for the payments of debts. Certainly, they are small amounts and they would not have made a tremendous impact on the debts at the time of proceeding, but it is certain and probable that they would have been spent and they would have been spent either to reduce in part the debts or prevent the further accumulation of debt for expenses incurred at the time. And thus, it seems to me that they relate to the very part of the period, which created the debt and necessitated bankruptcy. The further argument is made by the Ninth Circuit’s adoption of this recorded opinion, in an effort to bring the tax refund closer within the Lines the Frederick case that the amount of a tax refund may be generally be said to be an amount that by reason of past experience is anticipated by the wage earner as an annual event, i.e. the vacation pay and the potential layoff, and that to deprive the wage earner of that planned on annual recurring payment cannot be said to be less severe than the deprivation of two weeks paid vacation. It seems to me that statement, that type of analogy, not only being somewhat illogical is a further distinction between the tax refund claim and accrued vacation pay or credit because in the ordinary course of events and if the taxpayer follows the withholding guidelines properly, although vacation pay is indeed paid and received in the future by a wage earner as an annual event, the minimum payment of income on taxes withheld periodically during the year and accumulated over the course of the year is not calculated, nor anticipated to be repaid as an annual event to the taxpayer, rather its intended, designed, and anticipated to be paid and retained by the Government, as the wage earner’s income tax on those earnings. It seems to me that in fact to its essence, the petitioner’s argument is that because the tax refund claim had has its origins in withheld payments from wages, the refund is wages and because the debtor has not collected the refund at the time of the filing of the petition, although he had right to do so, it is somehow future wages. The petitioner’s argument amounts to ignoring the definition of property in Section 70a (5), ignoring the definition and design of exemptions, I think ignoring the traditional concept of “fresh start” and the entire fabric of the Bankruptcy Act, in adopting a new and controlling rationale for inclusion or exclusion of items of value in the debtor’s estate. And to base that decision entirely in a wage earner’s case on a determination of the amount of a fund, free of creditors and necessary are sufficient to meet the bankrupt’s needs. I don’t think that this rationale has any place in this Court’s decision on the existing and statutory case law. If there is to be such a change and such a drastic one, then certainly the legislature and the Congress should mandate it. And, in fact the commission on the bankruptcy laws of the United States has reported to the Congress, as of July 30, 1973 proposing substantial revisions in the Bankruptcy Law and proposing that as to this particular issue, under a provision with regard to exemptions that income tax refunds, accrued vacation pay, receivables, cash and securities be considered to be exempt in the aggregate of not more than $500.00. But the standard proposed by the petitioner is unsound and its application would result, it seems to me, in severe discrimination between bankrupts. One bankrupt may indeed need $75.00 for medical treatment. The second $500.00 for his wife’s operation, and the third $2,000.00 for the tuition for his children’s education, all certainly are legitimate and valid needs. But in no sense can it be said that such a standard would achieve the purposes of the Act nor that the tax refund claim in varying amounts, which in some instances may amount to in excess of a $1,000.00 would serve these varying purposes or needs. There is a suggestion in the brief that because the amount of a tax refund in this case is small, and because administration costs and expenses are significant in some instances that very little of this amount of money will trickle down to the creditors and therefore, wouldn’t it be better to give it to the needy bankrupt. The answer to that, I think comes in different ways. One, administration costs and expenses are not necessarily evil. They are in the Act and they are in fact, under Section 64, given first priority with regard to payments from the assets accumulated. Secondly, there is no support in the record in this case that the $250.90 would be exhausted by administrative costs and expenses. And in other cases where the refund may be substantially greater, there is no suggestion that such administrative costs and expenses will even substantially beat it into the assets.
William H. Rehnquist: Of course, if one were to follow that argument, I suppose you might just as well give up the idea of having any kind of a bankrupt turnover any property?
Benjamin R. Civiletti: If you would follow the argument of the petition --
William H. Rehnquist: Yes.
Benjamin R. Civiletti: I think that is correct, especially in a wage earner’s case, because it seems to me that in one route or another, one either direct or indirect all of the property or all assets are derived from his only source, which is wages.
William H. Rehnquist: And there’s very seldom anything left for distribution to creditors in a large majority in those cases?
Benjamin R. Civiletti: That’s true. I think the Brookings study showed that in 70% of the cases, there were no asset cases at all. Third, if as the petitioner points out on page 16 of his brief, a survey indicates that the average dividend to unsecured creditors is only 7%, then that alone does not seem to me a justification to further reduce the percentage on one of the basic designs of the Act to return money to the creditors, from 7% closer to zero. Fourthly, and perhaps most importantly and I think it occurs in varying degrees, in varying in districts and jurisdictions, abandonment is available, where appropriate in such small asset cases. I think the California cases suggest that some of the referees there and the District Courts there have adopted the policy of -- if the refund claim is the only asset and it’s less than $150.00, that they would treat it as abandonment, as a no asset case and no trustee would be appointed and the $10.00 will be even saved in the cost of the bankrupt.
Potter Stewart: This varies from district to district, as a matter of sensibly of practice or policy?
Benjamin R. Civiletti: Yes, indeed it does, at least that is my understanding from review of the cases and the record.
Potter Stewart: Does the law purport to give the trustee that kind of discretion?
Benjamin R. Civiletti: It purports to, yes. (Voice Overlap) Whether or not it’s a proper exercise of the discretion or as views in those instances, where for instance the amount of the tax refund claim might be several $700.00 or $800.00, or $1,500.00, I believe in the Cedor case, the amount was about $660.00.
Potter Stewart: The statute does give the trustee what, the discretion to abandon?
Benjamin R. Civiletti: The trustee has the discretion to abandon if authorized by the referee. The referee would have to authorize the abandonment, and then the trustee, I believe, would do so without that authorization.
William H. Rehnquist: But, the trustee didn’t abandon the $660.00 in Cedor case, did he?
Potter Stewart: No.
Benjamin R. Civiletti: No.
Warren E. Burger: Does the new proposed code alter that in any way?
Benjamin R. Civiletti: The abandonment provision? I do not know Your Honor.
Byron R. White: Well, I thought in good many no assets cases no trustees were appointed at all?
Benjamin R. Civiletti: That’s true.
Byron R. White: And, the referee himself determines the no asset case and trustees were not applied. Once trustees were appointed, you do have a problem there In marshaling assets, then there must be a decision of that event. I’m not sure --
Benjamin R. Civiletti: Well, there is a decision. There are two decisions Mr. Justice White. One is if the referee finds that there is only for instance a tax refund which looks to be $150.00, he can at that point determine that, that asset should abandon the referee and not appoint a trustee and treat it as a non-asset case. The second situation is where the same -- let us take the same a $150.00 tax refund claim and perhaps some uncertainty as to other assets and then a trustee is appointed. Then, a second decision would seem to me to have to be made by the trustee initially, as to whether to pursue the tax refund claim if he determined there were no other further assets, and then have the authorization receive for such abandonment by or from the referee.
Byron R. White: So, what did the Court of Appeals suggest to the District Courts here?
Benjamin R. Civiletti: In the Second Circuit case in our case, suggested that if the needs of the bankrupt were great enough that a deprivation of the amount of the tax refund claim, $150.00, $200.00, $300.00 would amount to a substantial inequity, a severe hardship or harshness, then it could reasonably conclude that abandonment was proper.
Byron R. White: But, how about for situations, where administrative expenses would eat up any asset, including a tax refund? Wouldn’t the Court address itself to those situations?
Benjamin R. Civiletti: Yes, that was another reason, I believe, stated or expressed in a few sentences why the Court suggested that either the appointment of a trustee was unnecessary or if one had been appointed then, a very quick determination that then it was proper.
Byron R. White: So, in the Second Circuit, I take it this question about tax refund will never arise unless there’s a possibility of a distribution of creditors after administrative expenses would be paid?
Benjamin R. Civiletti: I am not certain of that, of agreement with that statement.
Warren E. Burger: We’ll resume there after lunch.[Luncheon] Mr. Civiletti, you may proceed.
Benjamin R. Civiletti: Mr. Chief Justice and may it please the Court. Mr. Justice White, I misspoke myself in answer to a question that you addressed to me prior to the noon recess with regard to abandonment in the Second Circuit’s opinion and direction to the lower courts in Kokoszka. There, they restricted the application of abandonment to the situation wherein the assets available to the trustee would be entirely consumed by the trustee’s fee and other administrative expenses. And, there was no creditor who showed other available assets, which could be reached and Judge Webster in the dissent in Gehrig took the same position, so that my --
Byron R. White: Anytime predicted administrative expenses would eat up for the assets, including the tax refund, there won’t be any trustee appointed at all.
Benjamin R. Civiletti: I would think that is a fair conclusion. My argument has proceeded along the lines that there is no legitimate distinction between the principles applicable to this case and those past cases concerning properties, Segal v. Rochelle and the antecedent cases, Legg v. St. John and in mind, the concept of “fresh start” Local Loan v. Hunt. The Segal case, I suggest was a more difficult case than the one presented here because the petitioners had filed for bankruptcy before the end of the tax year, and thus any refund was demandable nor collectible immediately nor at the time of the filing of the petition in bankruptcy, nor was the amount there of fixed, nor truly determinable with the exact certainty. Furthermore, the carry back tax loss resulted in a tax refund, which the trustee was found entitled to receive. Even though the tax was paid, it had been paid from the individual earnings of the bankrupt taxpayers. There was no suggestion in that case, in the opinion in that case by this Court that the amounts in Segal respectively of $283.00 and $1,600.00 for Gerald Segal in the carry back years of 1960 and 1959 and like amounts for Sam Segal could not have been well used by them in obtaining the necessary fresh start in their new economic life. The Court took, I suggest, pains to emphasize the lost carry back claim there was sufficiently rooted in the prebankruptcy past and so little entangle with the bankruptcy to make unencumbered fresh start that it should be regarded as the property under Section 70 (a) (5), despite the substantial differences, which I suggest make this case considerably easier in determination of the question of property. The tax refund claim is fixed and certain as to amount demandable and collectible at the time of the filing of petition and I suggest has no relationship to future wages nor after acquired property, both of which elements were certainly controlling in the Lines case and had some effect in the Segal case. A decision upholding the Second Circuit and the trustee would not only be consistent with Lines v. Frederick, but would further serve to confirm the plain meaning and intent of the principles recognized so clearly in the case, future wages and after acquired property are necessary, essential elements of the concept of a fresh start. There is no legitimate distinction, I suggest between a tax refund claim and any other moneys or funds obtained by payroll withholding from past wages pursuant to a savings plan, a Christmas club, a bond the month plan, a retail lay away plan, an educational loan repayment plan, or agreement, union dues, auto insurance, real estate tax or any other established payroll deduction, which could result in a refund or repayment from a second or third source.
William H. Rehnquist: I suppose petitioner’s argument is that most of the things you mentioned are voluntarily undertaken by the wage earner was the income tax withholding is not voluntary?
Benjamin R. Civiletti: Well, the term voluntary, I think that is true, Mr. Justice Rehnquist. I think that they would argue that that is a distinction. I suggest that number one, the meaning of voluntary varies, depending on its application and that pursuant to a loan agreement for instance, once the decision is made, then that payment or deduction from payroll might well no longer be considered to be voluntary. Similarly here, as Mr. Justice Blackmun pointed out, the voluntariness to some extent is available to the taxpayer in the manner in which he proscribes his withholding and it is adjustable during the course of the year, depending on changes and circumstances by him. Turning to the Consumer Credit Protection Act, my argument there is a very short and brief one. It is not applicable, because the tax refund claim here does not come within the definitional term of earnings in that Act. It is not compensation paid or payable for past services. It does not come within the definition of the term disposable earnings, because it is not that part of earnings remaining after deductions allowed by law. And lastly, it is not within the term the definition of garnishment, which in the language of the statute means any legal or equitable procedure through which the earnings of any individual are required to be withheld for the payment of any debt. Here, if this is property then it vests in the trustee by operation of law and it is not required to be withheld for the payment of any debt pursuant for instance, to provisions of seizure or collection under Section 70 (c) of the Bankruptcy Act. The reference in the Consumer Credit Protection Act, specific reference in that Act, Chapter 13 of the Bankruptcy Act and saying that the provisions of the Consumer Credit Protection Act do not apply to Chapter 13 arrangements was made because Chapter 13 arrangements do apply to future wages, do specifically provide for the deduction for the payment to creditors for past debts, pursuant to the plan approved by the referee, and therefore, was necessary in order to make clear that the 25% limitation would not apply to such arrangements that Chapter 13 should be specifically referred in the Consumer Credit Protection Act. Thank you.
Warren E. Burger: Thank you, Mr. Civiletti. Mr. Adams, do you have anything further?
Thomas R. Adams: Mr. Chief Justice and may it please the Court. I would like to take a few moments to discuss some brief items in rebuttal. First, I want to object to characterization of the bankrupt’s position in this case that we’re arguing at any time of the bankrupt has some sort of needs that the Bankruptcy Act letting to keep some property or that we’re arguing that all property derived from wages is somehow not property within the meaning of the Bankruptcy Act. Now, it’s true that there is a material in our brief on the needs to the bankrupt here, but that material is there to emphasize an important point. And as this Court found in Lines versus Frederick, wages are special kind of asset in our system. The material on Mr. Kokoszka’s situation and material on his needs are there to show the importance of wages.
Byron R. White: But, what if the bankrupt has owning to him six months of unpaid wages, say his employer is in financial trouble and he just hasn’t pay them. And then, the employee goes in the bankruptcy, because he can't pay his bills either. Now, the wages owing him are property that past the trustee, I take it.
Thomas R. Adams: Well, that’s a similar example as was dealt with by the Sixth Circuit in the Vinnie case.
Byron R. White: But, the Federal law doesn’t particularly make that an exempt, that the wages are an the exempt item?
Thomas R. Adams: I think the Federal law, as far as the exemption statute is concerned, the Federal law protects wages whether they’re paid or yet payable. So, if the wages held by the employer are already been paid, they would be exempt if the employer was holding in account of wages due, so that wages were payable (Voice Overlap)
Byron R. White: They are not excluded for not -- but, because they are not property?
Thomas R. Adams: Well, I was -- excuse me I was getting to that point, I thought you’d move on to the exemption statute (Voice Overlap)
Byron R. White: They are deemed to be property, they wouldn’t be exempt, wouldn’t have to exempt them, I suppose?
Thomas R. Adams: Well, conceptually that’s true. I think the problem -- I would argue Mr. Justice White, that they would not be property under the bankruptcy.
Byron R. White: I know you do.
Thomas R. Adams: And, I think that the same reasons would apply. It was involuntarily created asset, it’s derived entirely from wages and it’s received entirely as a postbankruptcy event. In many ways --
Byron R. White: Now, you’re proposition is and my example I gave you that if a bankrupt has six months of back wages due him from his employer, he may collect them from his employer and not turn them over to the trustee?
Thomas R. Adams: I would like to point, you mean (Voice Overlap)
Byron R. White: Is that really your proposition?
Thomas R. Adams: I’d like to say it wasn’t my proposition, [Laughter Attempt] because it’s a very hard example, but I would say that --
Byron R. White: You really can't cite anything under the Bankruptcy Act that would let him keep six months worth of back wages?
Thomas R. Adams: What I would say to that point is that the bankrupt in that situation, I mean, I wouldn’t be interested in the examination of additional facts. I think you can see that, that is in a very exceptional circumstance, but (Voice Overlap)
Byron R. White: I don’t know.
Thomas R. Adams: Under the straight analysis --
Byron R. White: Wouldn’t that be so uncommon?
Thomas R. Adams: I think in my experience, as a bankruptcy attorney, I’ve never seen that (Voice Overlap)
Byron R. White: As my example is not the situation of Lines, at least in Lines the amount that was involved there, on its face was to sustain a person for a future period.
Thomas R. Adams: That’s correct.
Byron R. White: Not so in my example, when the wages were payable at the time and not so apparently in the case we have before it because the withheld wages weren’t to sustain him at all if they were to be taken away from him and pay to the Government?
Thomas R. Adams: I think the only real difference your case, Mr. Justice White, and the case of Bar is that you’ve just given me an example, where there’s potentially a very large amount of money involved, whereas typically we have a very small amount of money involved in a tax refund case. Now, I don’t think that’s a distinction.
Byron R. White: I think the State law might exempt wages up to that certain amount and so the exemption section might think that, it might think some of those wages (Inaudible).
Thomas R. Adams: Well, let me get to my point, Mr. Justice White and that is I think that the situation in the example that you have given is one where we have -- you’re talking about a fund of wages, which would have never been available in a practical sense for the creditors if they didn’t paid out --
Byron R. White: (Inaudible)
Thomas R. Adams: Well --
Byron R. White: This is what distributing in the bankruptcy (Inaudible) wages?
Thomas R. Adams: The wages, I want to speak in terms of a practical matter here, wages are 75% exempt at least, according to the Federal Stature, in order for the creditors to obtain those wages, there are number of state law, procedural safeguards, as well as federal constitutional safeguards. Now, this fund has been created, which has only increased the incredible hardships on the bankrupt. Now, I think that although what we’re talking about in your case is a substantial fund of money from the point of view of the bankrupt, it was also a substantial loss, a deprivation of wages, which he needed for his support in the past.
Byron R. White: That drove him in the bankruptcy?
Thomas R. Adams: Threw him in a bankruptcy.
William H. Rehnquist: But, surely the administration of a nationwide Bankruptcy Act can't depend on whether or not a particular asset that’s claimed to be property, is or is not “substantial?” Then we just have an endless line of cases through the Federal Courts, saying a $150.00 wasn’t substantial, but $600.00 was.
Thomas R. Adams: No, I -- Mr. Justice Rehnquist, I agree entirely on that point. I was stating that although I felt the only distinction between our case and Mr. Justice White’s example was the size. I don’t think that is a valid way to distinguish the assets within the meaning of the Bankruptcy Act. Although I would note that if the Court is concerned about the line drawing problem in this case, which is really only presented in my view by exceptional circumstances, another alternative is to apply the Federal Wage Exemption Statute to the tax refund check, which clearly does draw lines such established by Congress. I would like to go on and discuss the problem of abandonment. The Second Circuit suggested that abandonment was an alternative. I don’t think in the first place it's a practical alternative. At the time of the filing of the schedules, the referee is not going to know, especially if a tax refund check hasn’t been received yet or returned, hasn’t even been filed, whether or not they are going to be any assets in the estate. Once he appoints a trustee, he is going to feel that he’s going to have to pay that trustee, whether or not any of the assets are going to passed on to the creditors. Secondly, it's gong to resolve to non-uniform application of the Bankruptcy Laws, the material in our brief, the Stanley and Girth material supports that. Thirdly,just as a practical matter abandonment is never used or used very rarely in the administration of the bankruptcy courts. Since, that is supported also by the Stanley and Girth survey, since the Kokoszka opinion, we have done a survey of our own, which I can submit to the Court with its permission in a form of an affidavit from one of the attorneys in this case, demonstrating that in the Second Circuit since the Kokoszka’s opinion, there haven’t been any abandonments pursuant to that opinion.
Byron R. White: How about in no asset cases just a matter of pointing trustees?
Thomas R. Adams: Well, although that’s an alternative that is recognized by the -- it’s never done, it’s never done.
Byron R. White: You mean appointment -- in every case, trustees are appointed?
Thomas R. Adams: In very rare cases. The reason being that the referees don’t know whether or not to believe in the material, on the schedules or not and they want to point someone to look into it (Voice Overlapping)
Byron R. White: You mean the referees don’t know whether to believe it, so they appointed trustees?
Thomas R. Adams: Right, to look into this situation and once they do, then you’re caught up in a circle again. (Voice Overlap)
William H. Rehnquist: In the District of Arizona, where you have all sorts of no asset, wage earner cases, where there really wasn’t any doubt about the fact that there were no assets, the same was true in Colorado?
Thomas R. Adams: [Laughter]
Potter Stewart: And this, according to the materials in the brief is done right quite routinely in California apparently?
Thomas R. Adams: No, it’s a trustee is appointed in California in virtually every case.
Potter Stewart: But, then --
Thomas R. Adams: Similarly, in Connecticut, where Mr. Kokoszka come --
Potter Stewart: But, then in California, when -- how’s the abandonment is utilized apparently on tax refund claims below a certain dollar figure?
Thomas R. Adams: There are court rules, as to a $115.00 tax refund check was established in some districts in Southern California.
Potter Stewart: Right. So it isn’t apparently wholly unworkable or impractical?
Thomas R. Adams: Well, I don’t know Mr. Justice Stewart as to whether or not fees and so on had to come from some other area in the application of that rule, but I know that as a practical matter, that referees feel that they don’t -- they can't believe the bankrupt necessarily may want to appoint a trustee to see if there were other assets, savings account, that sort of thing. Finally, I just like to say that as to the Gehrig court’s analysis of the CCPA issue, they were dealing only with an analysis of the voluntary aspects of the tax refund check that had been created due to over withholding.
Warren E. Burger: Mr. Adams, I doubt that the supplemental material that you suggested would be helpful to us. We think the record is adequate as its now before us.
Thomas R. Adams: Thank you, Mr. Chief Justice.
Warren E. Burger: Mr. Civiletti, you appeared in this case at the request of the Court and invitation of the Court to file a brief amicus after we encountered a different kind of abandonment on the part of the trustee, and on behalf of the Court I thank you for your assistance to us in this matter.
Thomas R. Adams: I welcome the privilege.
Warren E. Burger: The case is submitted gentlemen.