William H. Rehnquist: We'll hear argument now in Number 96-1923, Edward S. Cohen v. Hilda de la Cruz. Mr. Ayer.
Donald B. Ayer: Mr. Chief Justice, and may it please the Court: Section 523 (a)(2) of the Bankruptcy Code creates an exception to discharge for individual bankruptcies applicable to, quote, debts for money, property, services, or extensions of credit to the extent obtained by fraud. The required fraud under that section includes not only representations that are consciously false, but also reckless false statements, and the issue in this case is whether this exception reaches beyond the amounts actually obtained by the debtor to except from discharge a treble damage award ordered for reckless fraud. Where the fraud involves intentional falsehoods and results in wilful and malicious injury, the damages, punitive and otherwise, are nondischargeable under a different section, 523 (a)(6).
Anthony M. Kennedy: And you agree with that reading?
Donald B. Ayer: We do.
Anthony M. Kennedy: So then you would have a lack of parallelism between the section you're addressing here and subsections (4) and subsection (6).
Donald B. Ayer: We would Your Honor and, in fact, we think that's quite clear from the language, that the structure of the 523 sections as they work, given the literal reading of 523 (a)(2), works quite well. 523 (a)(2) is a provision which, by its terms, is directed to the actual fruits of the fraud. It's a simple, clear directive that tells people, if they commit fraud, what they get by the fraud will not be discharged.
Anthony M. Kennedy: Would that include accounting... if the defrauding party, the wrongdoer, makes profits from the property that he steals, are those profits recoverable?
Donald B. Ayer: I think they would not be, Your Honor. I think that... that the other provisions that deal with--
Anthony M. Kennedy: That's property obtained by the fraud.
Donald B. Ayer: --Well, it... I think the most reasonable interpretation is to focus upon the amounts obtained by the act of the fraud, which I would think most immediately would be the amounts obtained in the fraud. What is very--
Sandra Day O'Connor: So you think it wouldn't even include attorney's fees and costs in the very action in which the recovery is made?
Donald B. Ayer: --I think it would not, Your Honor. I think that the other provisions, the (a)(6) provision in particular, which this Court will address tomorrow in the Geiger case, is a provision which is generally applicable, essentially, among other things, to all torts, and it sets a standard which says wilful and... a debt for wilful and malicious injury. That has been interpreted reasonably, we think, to include punitive damages, to include other penalty sums, to include consequential damages, to include contractually arranged for attorney's fees, and is a reasonable and uniform way of dealing with what I'll call damages and consequential payments that are owed. Our--
Anthony M. Kennedy: Your answer to Justice O'Connor, it seems to me, follows easily from the answer you gave me. I think attorney's fees are even further removed--
Donald B. Ayer: --Right.
Anthony M. Kennedy: --under your interpretation--
Donald B. Ayer: Correct, Your Honor.
Anthony M. Kennedy: --than profits that the tortfeasor gains.
Donald B. Ayer: Correct. Now, one interesting result of our interpretation, and it actually is played out in some detail in a decision cited in the Solicitor General's brief, a Tenth Circuit case, In re Gerlach, is that actually the amount awarded under (a)(2), when you focus on the act of fraud and what is obtained, may actually exceed, in some cases, the damages that are otherwise owing, and in that sense it seems it is a very rational and sensible message to people who may commit fraud.
Speaker: Say that again.
Donald B. Ayer: Well, in the context... specifically, the context in Gerlach was a context where the operator of a business selling heavy equipment, selling John Deere tractors, initially got an extension of credit from John Deere, legitimately, but later on they got an extension of that credit by submitting false invoices to show they were doing business that they weren't doing. The Court in Gerlach said that the later extensions of credit involved the obtaining of money by fraud, and as a result the entire amount of the debt that was owed was, in fact, covered by (a)(2), even though there might in that case be no damages at all, so I... the only point I want to make is that our point is that in (a)(2) you're dealing with what was obtained. The other sections under the code, (a)(6) but also others, also (a)(4), also (a)(11), other... others deal with money that is gained by fraud, and they set up a different logic. The logic is, what did you... what the debt is for, the injury, and the injury is interpreted broadly, and--
Anthony M. Kennedy: How does Gerlach work? In other words, the Bankruptcy Code supersedes State tort law on the measure of recovery for fraud, in the John Deere case that you're describing.
Donald B. Ayer: --I think the net result is that... is that it... to whatever extent there is a debt it would be nondischargeable under (a)(2) if it is--
Anthony M. Kennedy: Ah, to the extent there is a debt.
Donald B. Ayer: --Well, there has to be a debt, obviously, but it may, in fact, be a debt that is larger than the amount that is damages as a result of the fraud. I guess that's the point that I want to make. Back briefly to the facts of this case, which I think are important. The respondents here are some of the tenants of an 18-unit apartment building that was owned by the petitioner and his father between 1985 and 1989. When their apartment rental business failed in the late eighties as a result of falling real estate values, petitioner filed bankruptcy under Chapter 7. Thereafter, the rent control administrator entered an order to the effect that there had been an overcharge of these tenants which amounted to $31,000 and the bankruptcy court held that the overcharge was nondischargeable under the (a)(2) provision. The court found further that actual fraud existed in that case on the ground that the act of charging rents was itself an implicit representation of their legality and, second, that petitioner's recklessness in failing to determine what the correct rents were was sufficient to establish an intent to deceive and, finally, the bankruptcy court held that because the overcharges amounted to fraud, treble damages were appropriate under the New Jersey consumer fraud statute and then found that that amount, indeed, also was nondischargeable. Our view is, as is apparent already, I guess, that that result is wrong. It's wrong essentially for three reasons: 1) the plain language of the statute, which talks about debts for money, property, services, extensions of credit to the extent obtained by fraud clearly doesn't include the amounts that are punitive in nature--
Sandra Day O'Connor: Well, I don't know that it's all that clear from the language. What does debt for mean? Does it mean liability on a claim for?
Donald B. Ayer: --It does, Your Honor. That's... it is defined as liability on a claim for money, property, services, et cetera.
Sandra Day O'Connor: Do you rely on the phrase, to the extent?
Donald B. Ayer: We do. We think that... there's been a discussion back and forth in this case about whether to the extent modifies money, property, services, or whether it modifies debt. I think everyone agrees... in this case, at least, agrees that it modifies money, property, services. Our difference, I think, is that... how we understand the word for. In the petitioner's view, a debt for a house, or a debt for any particular thing, is a debt for what you have to pay for that thing. It's not a debt for the act of obtaining that thing. It's a debt for the thing.
Sandra Day O'Connor: Well now, you indicate that before the 1984 amendments to the statute courts generally thought punitive damages were nondischargeable.
Donald B. Ayer: Under (a)(2)?
Speaker: Mm hmm.
Donald B. Ayer: Your Honor, what is very interesting about--
Sandra Day O'Connor: Is that right? I mean, that was the general holding of the courts.
Donald B. Ayer: --I would say that--
Sandra Day O'Connor: Well, at least that's what your brief says.
Donald B. Ayer: --That they were nondischarge... I think--
Speaker: Right.
Donald B. Ayer: --I think not, Your Honor. I think that the interpret... the language prior to 1984 was language that said, debt for obtaining money, property, et cetera, by fraud. Now, we think that's ambiguous language. There are a couple of cases, literally only a couple, that held necessarily that that language does, in fact, reach punitive amounts, and we don't think that it is illogical to reach that result, but what is important is that prior to 1984 and prior to 1978 even more so, there was... there were not occasions that came up that made courts decide this issue. The main reason is that with the presence of the (a)(6) language that talks about debts for wilful and malicious injury, with that language being there, any time conduct results in wilful and malicious injury, it doesn't matter what (a)(2) means, or what is now (a)(2) means. It doesn't matter what it means to have a debt for obtaining, and so courts in deciding these cases, as we talk in some detail about in footnotes 13 and 14 of our reply brief, of the yellow brief, the courts typically didn't focus specifically on the meaning of that prior language. They didn't have a reason to, and so it isn't possible to say here, as the Court has said in a number of cases, there was an important pre-1978, or pre-1984 bankruptcy practice that had been established. Indeed, there was no clear practice that had been established. It is not our mission here to tell you that the meaning of those words, if it mattered what the pre-'78 words meant and you didn't have (a)(6) and you had to decide, might a court decide that they in fact meant to include punitive damages. Maybe they did. It isn't clear. I would only say that, when reviewing... what you review Justice Breyer for the Court's opinion in the O'Gilvie case, which talks about, under the different statute, under the IRS statute, whether damages on account of personal injury, whether those include punitive damages, and the Court ruled that they did not, if that is an admissible result, it seems to me it's certainly admissible to conclude... one could conclude that... that a debt for obtaining money by fraud doesn't include it. Our only point is that it was ambiguous. It never got clearly resolved by the courts but in a single case that we're aware of, a Ninth Circuit case called Houtman.
Antonin Scalia: Why isn't that function of (6) still applicable? I mean, I don't understand why (6) would make the question irrelevant then and not make it irrelevant now.
Donald B. Ayer: It is still applicable, Your Honor, and I think that it is true that this case and this Court's decision in this case is only going to be determinative in the group of cases... and I debated whether to characterize it as the sliver of cases or a larger group of cases, but the group of cases that involves conduct that is fraudulent, meaning it's at least reckless, but it falls short of being wilful and malicious.
Ruth Bader Ginsburg: Then Mr. Ayer, you would concede that your argument leads to the result that is suggested in the Solicitor General's brief at page 21. That is, the bolts that were sold with fraudulent representation for $5,000 and then there's a crash of the plane--
Donald B. Ayer: Justice Ginsburg, I know your question, I think. It does lead to the result that that conduct, like other kinds of tortious conduct, will produce nondischargeability of punitive damages only where the conduct is found wilful and malicious.
Ruth Bader Ginsburg: --So that if it isn't wilful and malicious, just reckless--
Donald B. Ayer: Right.
Ruth Bader Ginsburg: --then the result is $5,000 and not what it cost to rebuild the plane.
Donald B. Ayer: That is correct.
Antonin Scalia: It is clear to you that wilful and malicious does not include reckless? Punitive damages I had always thought were only given for intentional torts, and yet they're given for recklessness.
Donald B. Ayer: Well--
Antonin Scalia: I assume they're given for recklessness because it amounts to wilful and malicious, as it does in the criminal law. You know--
Donald B. Ayer: --Well, that... I mean, that--
Antonin Scalia: --firing the rifle into the empty house. You don't know if somebody's there at all. You really don't care.
Donald B. Ayer: --I mean, that I think is some part of the question pending in the Geiger case which will be argued tomorrow, and it has been our understanding from reading the cases that we're aware of that two things are clear under the law. One is that reckless misrepresentations do come within (a)(2), that it is fraud under the Restatement and, as this Court incorporated in essence the Restatement into that--
Speaker: Sure they do.
Donald B. Ayer: --And secondly--
Antonin Scalia: So do wilful ones, though.
Donald B. Ayer: --Correct, and secondly... I mean, our best reading of the cases is that wilful and malicious requires a measure of intentionality and knowing conduct vis a vis the harm that results. Now, we could be wrong about that. It's not an issue that has been raised in this case because thus far no one has suggested that the conduct here was wilful and malicious, and I guess I would submit that that's highly unlikely, given the fact that we're dealing with implicit representations based simply on the fact that he charged a certain rent, and recklessness in failing to ascertain what they thought the legal rent was. I would think that would be hard to find wilful and malicious, but I will not attempt to define, you know, the case, the outcome of the case tomorrow.
Anthony M. Kennedy: I think you may have the better view in a close question on the reading of (a)(2), but I'm concerned about the lack of parallelism with (4) and (6), which is what we've been addressing... addressing here. If you prevail, there are going to be cases that might be classified under this section or section... the section on malicious conduct, and then we'd have to decide whether it falls under this... the--
Donald B. Ayer: Well, I mean, our understanding of the statute as it now reads is that there are several provisions that make nondischargeable various damages. We would submit that the (a)(2) provision is essentially not a damages... it doesn't deal with damages. It deals with the specific act of obtaining something by fraud and it says, no, you're going to be stuck with that if you got it by fraud. The other provisions, the (a)(4) provision relates to fraud by a fiduciary, among other things. The (a)(11) provision is a special provision enacted with regard to fraud in the context of federally insured institutions and (a)(6), dealing with wilful and malicious, as the Court suggested in footnote 2 of the Grogan decision, that might be, the Court said there... didn't try to decide the issue, but suggested that that might be a sensible place to focus the discussion of whether or not fraudulent conduct is wilful. So the lack of parallelism I would submit is the product of the fact that (a)(2) is looking at something else. (a)(2) is looking at the act, the obtaining, and saying no, you can't keep that, and the rest of it creates, you know, frankly I would say a uniform and sensible system. If the line that's to be drawn as a matter of policy is that nondischargeability comes when conduct gets bad enough that you can say it's wilful and malicious, then why should fraudulent conduct be any different than other kinds of tortious conduct? Why would you single that out? They've already singled out the act of obtaining by fraud. That's important. That's a significant thing. But why should we reach in and say... why should the court reach in and say, well, we know it only really matters when you have reckless fraud, and we know that it's going to make nondischargeable statutory treble damage awards such as in this case where somebody acts by an implicit representation based on reckless failure to determine facts. That's really... the situation of reckless fraud is the only one where this case... I think it's the only one where this case makes any difference, because when you get beyond reckless fraud and you say wilful and malicious, then you're dealing with it under (a)(6), and I--
William H. Rehnquist: --Mr. Ayer, your question presented in this case is phrased in terms of punitive damages and yet, as I read them, none of the statutory sections we're talking about refer to punitive damages.
Donald B. Ayer: --That's correct, Your Honor. We use that phrase, rightly or wrongly, as a generic reference to include not only common law punitive awards and statutory treble damage awards... is that addressing your question? We don't mean by punitives to focus only on the amount of jury awards as a punitive damage award in the conventional sense.
William H. Rehnquist: Then what do you mean by it?
Donald B. Ayer: Well, we mean to encompass awards that are in the nature of a penalty. The court below specifically assumed for purposes of this case, without deciding, that the treble damage penalty... treble damage award in this case, the trebling, was solely for punitive purposes.
William H. Rehnquist: But now, supposing in an action, an ordinary tort action for fraud, ordinary damages or benefit of the bargain damages are recovered. What would be your view as to those?
Donald B. Ayer: Well, our view would be that the (a)(2) provision should be read in accordance with its terms and that would mean that the amount that the debtor got by fraud would, in fact, go back. The benefit of the bargain damages may or may not equal that. You can conjure up all sorts of different factual--
William H. Rehnquist: They might be greater.
Donald B. Ayer: --They might be greater. As I indicated before, they might conceivably be less and I guess the affirmative point vis a vis (a)(2) is that, in doing what Congress said in this statute, they've created a very clear statement, we think, and a clear statement that is important as a... essentially a wall against fraudulent conduct. It's a directive that says, if you've got it by fraud, you don't get to keep it.
William H. Rehnquist: But it turn... the issue turns on whether there's fraud, not where there are punitive damages--
Donald B. Ayer: Correct.
Speaker: --doesn't it?
Donald B. Ayer: Correct, and nor on, indeed, whether there are damages, whether there have been found to be specific damages.
Antonin Scalia: Mr. Ayer, it seems to me you somewhat understate the consequence of the rule you're urging on us. You say it really only makes a difference when there's recklessness but not wilfulness and some kind of a punitive award, but it seems to me it also makes a difference when there isn't recklessness and the issue is whether you only get back under (a)(2) the money that the person... or whether there is covered by (a)(2) only the money that the person received, or also there is covered whatever profits are made from that money, which often happens.
Donald B. Ayer: Well, I... that--
Antonin Scalia: And frankly that's the part of your interpretation that troubles me more than the other one.
Donald B. Ayer: --Well, that is... I mean, in all honesty, Your Honor, that is a possible extension of the... of our reading of it that I will say in all honesty had not occurred to me, but it's a possibility, that in other words it is possible, perhaps, to say that you got this money by fraud and then you got profits by fraud, but... you got profits from that money and therefore all of that was obtained by fraud and I must say, I think that's... that is an interpretation which I do think could be reasonable in the context--
Anthony M. Kennedy: And that's where the distinction would be between the profits, which under this interpretation would be recoverable, and attorney's fees and costs incurred in recovering it, which is not recoverable.
Donald B. Ayer: --Right. I mean, I think that... I think that punitive damages, I think that consequential damages, I think that other damages which do not grow directly from what was obtained clearly are not encompassed within (a)(2), and that you deal with those damage issues in the context of either (a)(6) or one of the other special sort of egregious wrong provisions that are in--
Antonin Scalia: Okay. But you think that any funds that are actually received by the defendant could be regarded as obtained by the fraud.
Donald B. Ayer: --I think that's a reasonable reading, Your Honor.
Stephen G. Breyer: Is... did... am I right in thinking you've looked through the legislative history of the 1984 amendments, you've read the reports, you've looked at the floor statements, et cetera, and you couldn't find anything as to any reason why Congress made the linguistic change.
Donald B. Ayer: There is a one sentence reference that talks about the change being stylistic.
Speaker: All right.
Donald B. Ayer: Words to that--
Stephen G. Breyer: If there is no reason, then... and if the language permits, as Justice O'Connor pointed out before, why shouldn't we read this exactly the same as it's always been read in the history, i.e., liability on the claim. They're talking about a claim. In other words, they're talking about a judgment, i.e. they're talking about what is normally in a bankruptcy proceeding a piece of paper. The bankruptcy judge sits there, he says, I've a piece of paper it has a number on it. You go read the number. You ask the question, is this piece of paper in an action for fraud. It is or it isn't. If the answer's yes, you write in the number. If the answer's no, you don't. Now, I take it, if there's no intent whatsoever to make a change... and we haven't found any. They said it was stylistic... then that's the simple way that bankruptcy proceedings used to work, and what's the reason for making it more complicated now?
Donald B. Ayer: --Okay.
Antonin Scalia: In other words, we ignore the language unless there's legislative history to indicate that the language really means something.
Donald B. Ayer: Thank you, Your Honor. [Laughter]
Stephen G. Breyer: I... go back to my question.
Donald B. Ayer: Okay.
Stephen G. Breyer: If the language, as you read it, says liability on a claim, because debt is defined as liability on a claim, then we look to see whether the changes that were made in the lang... well you've heard my question.
Donald B. Ayer: Okay.
Speaker: There's no--
Donald B. Ayer: The language... there are several parts to the answer. The language says liability... if you put all the pieces together, the liability on a claim as relevant here for money to the extent obtained by fraud. That is not the same as saying liability for the act of obtaining money by fraud. That's our first point. Our second point is that--
Stephen G. Breyer: --That's... I understand. My question is, is there any reason for treating the interpretation of the present language differently from the interpretation of the prior language and--
Donald B. Ayer: --Well, except for the fact--
Stephen G. Breyer: --All right. I... now, the answer might be yes, or it might be no, but I asked about the history--
Donald B. Ayer: --Okay--
Stephen G. Breyer: --because they said it was just stylistic.
Donald B. Ayer: --I guess I would make two points, one which I made before and that is, the prior language never needed to be and in fact I would submit, looking at our footnotes 13 and 14, never was definitively interpreted the way Your Honor has indicated, but the most important reason is that... well, I won't say the most im... I think the most important reason is the words of the statute. Beyond the words of the statute and the structure and the lack of a prior clear precedent, all of which we submit is dispositive, there is the very important fact that this whole set of provisions, 523(a), is a set of exceptions to discharge that applies only in the context of individual bankruptcies. More than 90 percent of individual bankruptcies are now consumer bankruptcies relating to consumer debts, and what we know is that Congress in 1978 was substantially concerned about the problems of the ineffectiveness of the bankruptcy process vis a vis consumer debtors, was concerned about overreaching creditors, was concerned about creditors who were aggressively asserting positions using the nondischarge provision specifically referred to by this Court in Field v. Mans, talking in terms of the financial statement provisions and the abuses by such creditors. A broad construction of these words... the case before the Court involves certain facts. It represents a relatively tiny proportion of the bankruptcy... individual bankruptcy cases in this country to which it will apply.
Sandra Day O'Connor: Mr. Ayer, (a)(4) says in effect that a discharge does not discharge a debtor from any debt for fraud while acting in a fiduciary capacity. There, there is no language about money, or property, or to the extent obtained by.
Donald B. Ayer: Correct, Your Honor.
Sandra Day O'Connor: So under (a)(4) would punitives be recoverable and attorney's fees and so forth.
Donald B. Ayer: They have been so held, Your Honor. Correct, they have.
Sandra Day O'Connor: And in the petition for certiorari filed on behalf of your client on page 9, footnote 4, it says resort to legislative history is unnecessary, given the plain language and, prior to 1984, (a)(2) barred discharge of a debt for obtaining money by fraud, which courts construed to bar discharge of both compensatory and punitive damages in fraud cases, and that's language from your petition. I took it to mean that was what the interpretation was before the amendment.
Donald B. Ayer: Well, the--
Sandra Day O'Connor: And the amendment just added to the extent.
Donald B. Ayer: --It is true... it is true that the Houtman case in the Ninth Circuit did so hold and we discuss that in our brief. It did so hold in a case that did involve reckless fraud. It did not discuss the issue, however, in any detail. There is that case that held that. There are other cases that held punitives to be nondischargeable in a situation where the court said generally either 523 (a), or we have (a)(2), (a)(4), (a)(6)--
Sandra Day O'Connor: And under (a)(4) it would all be nondischargeable and the only difference in language of the two is the to extent--
Donald B. Ayer: --No, it's--
Anthony M. Kennedy: --obtained by--
Donald B. Ayer: --The structure of (a)(2) says debt for money, property, services. It's debt for a thing versus debt for an act. (a)(4), (a)(6), (a)(9), others of the provisions, use the construction debt for wilful and malicious injury, debt for fraud by a fiduciary... that construction, and I think it's quite reasonable, has been found to result in all of the damages for that act being found nondischargeable. The construction that says debt for money, or debt for property, is a debt for the property, and that's our position.
John Paul Stevens: --Mr. Ayer, following up on Justice O'Connor's thought, is it not true... you looked at the issue much more carefully when you... before you filed your merits brief, of course, and are backing away from the footnote, but doesn't the footnote express what the treatise writers thought the law was?
Donald B. Ayer: I think that the prior version of Collier's took that position.
Speaker: Yes.
Donald B. Ayer: I think that that's true, but I also think it's true that there was virtually no authority on it. May it please the Court, I'd like to reserve the rest of my time for rebuttal.
William H. Rehnquist: Very well, Mr. Ayer. Mr. Diebold, we'll hear from you.
Gregory G. Diebold: Mr. Chief Justice, and may it please the Court: When considered in light of the history and structure of the code, the clear purpose of the phrase, to the extent obtained by fraud, is to distinguish between legally obtained property or money and fraudulently obtained money or property. In fact, the precise language that was used in the amendment was taken from a case, In re Danns, a Second Circuit case, which discussed that very issue, noted that there was a conflict in authority, and held that in a situation where a debtor obtains money through a legal credit transaction and then subsequently commits an act of fraud and then obtains additional money through a refinancing, the amount of money that gives rise to the debt is the amount obtained through fraud, but it's the debt which is nondischargeable, and the debt has been defined and is still defined by the code as the liability on a claim. The liability on a claim is the amount that you become liable for as a result of the money that you obtained by fraud.
Antonin Scalia: It depends on how you use the word claim. I mean, you can say you have a claim for money that someone owes you, using the word, the object of the claim is what you're entitled to. But you can also say you have a claim for fraud, or a claim for personal injury, and in that case you're using it to refer to the cause of action rather than what you're entitled to, and the point made by your colleague here is that this statute uses the word in different sections in different ways. In (4) and in (6) and in (9) it's a claim for death, for personal injury, a claim for wilful injury, and so forth, whereas in this it says a claim for money. That's quite different. And then it says, for money to the extent that.
Gregory G. Diebold: Well, it's--
Antonin Scalia: What's your response to that?
Gregory G. Diebold: --My response, Justice Scalia, is that it's a... what's nondischargeable is the debt. The debt is based on a claim for money to the extent that the money was obtained by fraud.
Anthony M. Kennedy: Yes, but it's very difficult to say that the punitive damages were obtained by fraud.
Gregory G. Diebold: It's difficult to say that if you concede, which we don't, that obtained is used to limit the amount of debt that you occur... incur, but what you're... what we say obtained is limiting is to explain that the fraud, that there must be fraud in connection with the money you obtained and that gives rise to the nondischargeable debt, which in this case, under New Jersey law, is three times the amount of the overcharged rents. Like in--
Stephen G. Breyer: I just want to go back to that one case you said. I mean, the odd... I think the language that gives me the most trouble from your point of view is the words, to the extent. Why did they put that in if they meant claim? You know, liability on a claim, a claim for fraud, you just say the thing that's nondischargeable is liability on a claim for a fraud. That's the end of it. Why did they put this word, to the extent?
Gregory G. Diebold: --I think they used to the extent as a way of showing that the debt was limited to the extent that you obtain money through fraud, but what is nondischargeable is that debt which arises from the obtaining--
Stephen G. Breyer: Where... is there such a thing as a claim, and the claim--
Gregory G. Diebold: --Well, the debt--
Stephen G. Breyer: --Was that the case that you just mentioned that? You have a claim for money, or a claim for property and the claim is for money, and part of the claim is for money... some of the money is obtained by fraud and some of it's not obtained by fraud. I mean, is there such an animal as that?
Gregory G. Diebold: --I think that happens all the time in the commercial world.
Speaker: How does that work?
Gregory G. Diebold: Let me use an example in the credit transaction. It very often happens that in a credit card situation you charge things, you incur bills, and then you decide you're going to file for bankruptcy, and a month before you go to the attorney and you file for bankruptcy you run up $10,000 worth of debt. Courts have held that that money is obtained by fraud, so to the extent that your credit card bill was obtained by fraud, that debt is nondischargeable, but if the State of New Jersey, as it has in this case, chooses to impose a penalty for that--
William H. Rehnquist: But you don't usually think of one obtaining a bill. I mean, you obtain property for which you get a bill. Obtain sounds like it's... you've succeeded in doing something.
Gregory G. Diebold: --That's correct, you don't obtain... you obtain money.
William H. Rehnquist: Yes.
Gregory G. Diebold: But you obtain a debt for obtaining that money which is nondischargeable. The debt here happened to be more than the money you actually obtained, three times more.
Sandra Day O'Connor: Well, let me ask you another question. Referring to this general section of (a), subsection (a). Subsection (a)(7) says that it's not dischargeable to the extent such debt is for a penalty payable to a governmental unit and is not compensation for actual pecuniary loss, other than a tax penalty. There the Congress has specified certain penalties that will be nondischargeable, those payable to the Government. Does that mean that they thought about penalties such as punitive damages that aren't payable to the Government and didn't include them anywhere?
Gregory G. Diebold: No, Justice, I don't think it--
Speaker: No?
Gregory G. Diebold: --it does. I think that first of all with (a)(7), the difference between (a)(7) and (a)(2) is that it has to be a debt owed to, or penalty owed to the Government, but there's nothing in the code itself which restricts or makes each of those sections exclusive. a non Government--
Sandra Day O'Connor: Well, at least we know from (a)(7) that Congress thought about penalties--
Gregory G. Diebold: --Exactly, and we also know--
Sandra Day O'Connor: --to the extent they're payable to the Government. Sometimes punitive damages are payable to a governmental unit. Maybe in that case it would go under (7).
Gregory G. Diebold: --That's correct. There's no requirement of fraud in (a)(7), so that the Government can recover those penalties regardless of what the reason for their imposition was. In (a)(2), of course, there's a requirement that the private party show fraud. But (a)(7) also demonstrates that Congress knew clearly how to distinguish between compensatory damages and punitive damages if they wanted to.
Stephen G. Breyer: Is this... can I just... are you finished, because I want to get my... are you finished with that response?
Gregory G. Diebold: Yes.
Stephen G. Breyer: All right. The... I want to be sure I understand this. The credit card company says Smith went bankrupt, and Smith owes me $50,000, so my claim as the credit card company is, I have a claim... I say Smith is liable on my claim for $50,000. Now, $20,000 of that he obtained by fraud, so I have a claim for 50, and that claim for 50 is fraud... is for fraud to the extent of 20,000.
Gregory G. Diebold: That's correct.
Stephen G. Breyer: And your position, your view is that that claim is a claim for fraud to the extent of $20,000, and any liability on that claim for $20,000 is liability on a claim to the extent obtained by fraud. So if liability on that portion of the claim $20,000 is $100,000 because of punitives, et cetera, the whole thing's nondischargeable.
Gregory G. Diebold: The $100,000 is nondischargeable.
Stephen G. Breyer: And the case that said all that is?
Gregory G. Diebold: In re Danns made the distinction between those. Now, in addition to that we have the--
Anthony M. Kennedy: Well, I'm not sure how Danns helps you, because in Danns it was just the first part of Justice Breyer's hypothetical, as I recall the case, the $20,000 and the $30,000, and they said that the $20,000 that was obtained by fraud, that is nondischargeable, not the 30, or am I misreading the case?
Gregory G. Diebold: --No, Your Honor is misreading... is not misreading the case, but the... Danns did not involve the imposition of a trebling punitive factor, but the... what Danns did hold is that the statutes permitted the discharge of that portion of the debt which was not obtained by fraud.
Anthony M. Kennedy: So that the debt is severable for purpose of applying the dischargeability provisions, which is what the petitioner is saying, or am I misstating?
Gregory G. Diebold: I respectfully think that Your Honor is. We both agree that the statute... I believe we both agree that the statute permits a severing of that obtained legally and that obtained by fraud. The question is, does the statute in addition prohibit the imposition of treble damages or other penalties or punitive damages based on the amount obtained by fraud, which in Your Honor's hypothetical would be the $20,000.
David H. Souter: Am I correct that in your answer to Justice Breyer's question you were assuming that debt or claim and money are synonymous, but it seems to me that under the statute they're not synonymous. There are certain debts or claims, and those debts or claims may to some extent represent money obtained, so that if you recognize the distinction between claim on the one hand and the money that may or may not be represented by that claim on the other hand, you would have to answer differently, wouldn't you?
Gregory G. Diebold: Well, I'm not sure I'm following--
David H. Souter: You would have to... you would have to say that if you recognize the distinction you simply cannot amalgamate money obtained by fraud and damages assessed with respect to that money obtained by fraud and that, it seems to me, is what you consistently do in your argument. You do identify or amalgamate those two things and yet the statute seems not to do that.
Gregory G. Diebold: --Well, except that the statute defines debt as a liability on a claim.
David H. Souter: Mm hmm.
Gregory G. Diebold: And in this case the liability on the respondent's claim was, under New Jersey law, three times the amount of the money obtained by fraud.
David H. Souter: Which means that part of the claim represents money obtained and part of the claim represents something else.
Gregory G. Diebold: Well, if I can use an example to I think answer what I believe to be Your Honor's question, let's assume that in this case the legal rent is $500 and the landlord had a good faith reasonable belief that the rent was $600, but he decided to tack on another $100 because he thought he could get away with it. What we're saying is that the amount between $500 and $600 would be fully dischargeable. The amount between $600 and $700 is the amount that he obtained by fraud but that... but the debt that that obtaining would create would be $300 under New Jersey law.
David H. Souter: But the statute does not, in terms, speak in subsection (2)(A) of debts, it speaks of money.
Gregory G. Diebold: It speaks--
David H. Souter: And the money is less, in your example, than the debt.
Gregory G. Diebold: --The statute, though, as a whole, deals with the nondischargeability of debt.
David H. Souter: Yes, but when you start talking about statutes as a whole, that means this particular language is against me, but I'm going to try to find a broader purpose. Do you concede that as long as you make the distinction between the debt or claim and the money on the other hand, recognizing that the latter may be less than the former, the language of the statute is against you?
Gregory G. Diebold: No, I don't concede that.
Antonin Scalia: Then I-- --Let me try it another way. I think I'm asking the same question. It seems to me perfectly reasonable to add on the trebling in those sections that speak of any debt for fraud, for wilful and malicious injury, when they talk about a debt for the wrongful act. Anything that you get by reason of the wrongful act, including the trebling, belongs to you. But when they're using claim in the other way, or debt in the other way... that is, a liability for a claim... and they're saying debt for money, money isn't a wrongful act. When it says debt for money to the extent that, there it seems to me not proper to add on any trebling that you get. Now, what's the response for that? You have to understand that (2) and maybe (7) are different from the other sections in that they refer to debt for what you're asking for, not for the wrongful act.
Gregory G. Diebold: I don't think it's possible to define debt in different ways depending on the subsection that you're using.
Antonin Scalia: I'm not defining debt in different ways. I'm just noting that the object of the debt is phrased differently in these different subsections. In some cases the object is the wrongful act. In other cases, it is what you are asking for by reason of the wrongful act.
Gregory G. Diebold: I think as a matter of grammar that's a possible interpretation, but to reach that conclusion, Your Honor would have to assume that in 1984 Congress intended to change what was I believe concededly the... at least the majority position that punitive damages under (a)(2) were not dischargeable.
David H. Souter: But wasn't the prior law in exactly the form that Justice Scalia used as his contrast? Wasn't the operative phrase in the prior law debt for obtaining, as opposed to debt for money obtained by? Isn't that correct?
Gregory G. Diebold: That's correct, but I think that the danger of looking at just the phrase that we're concerned about in this case is that it disregards the complete absence of any legislative history to support the position that the petitioner wishes you to adopt. I don't think that it's reasonable to assume that Congress would have decided to reduce the liability of a debtor for fraudulent conduct without at least some discussion or reference to it in the legislative history.
William H. Rehnquist: Did the pre-1984 language deal in terms of punitive damages?
Gregory G. Diebold: It didn't deal in terms of punitive damages specifically.
William H. Rehnquist: And this one doesn't either, does it?
Gregory G. Diebold: No.
Anthony M. Kennedy: Are you saying that the petitioner, Mr. Ayer, is interpreting debt differently in (2) and in (6)?
Gregory G. Diebold: Yes.
Anthony M. Kennedy: Because in (2) you look at it from the standpoint of what the debtor owns and in (4) and (6) you look at it from what the standpoint of what the creditor is owed?
Gregory G. Diebold: That's correct. That would be my position, and I think--
David H. Souter: Well, but doesn't his argument use debt in exactly the same way? Debt is used synonymously with claim, but his argument simply depends upon the fact that the statute recognizes that some debt is for money obtained and other debt is for judgments rendered. That is to say, and this is the same question, that debt means claim as further defined subsection by subsection by subsection?
Gregory G. Diebold: --I don't think that the language, the operative language in section (2) is attempting to further define debt, though. I think that even the petitioner concedes that the holding in the Levy case, which held that the phrase modified debt, is correct. I think that what Congress was intending to do, as was shown by the 1978 legislative report that's quoted at page 19 of the Solicitor General's brief, is to distinguish between how that debt was obtained. The entire structure of the... of 523 is to define or list certain types of conduct for which debts will not be dischargeable. The conduct that is non... that gives rise to a nondischargeable debt under (a)(2) is that conduct which is fraudulent. If you obtain money legally and fraudulently, then the statute allows you to separate those two situations and only the debt based on the fraudulently obtained money would be nondischargeable.
Stephen G. Breyer: And that's what In re Danns was about.
Gregory G. Diebold: Yes.
Stephen G. Breyer: And so you're saying, if you want to know why Congress used the language it did, read In re Danns and at that point you'll see what the drafter had in front of him, or whoever drafted it, and that's why they chose that language.
Gregory G. Diebold: That's right, and the very language to the extent by is in the In re Danns opinion. Our position, if I may sum up, is that there is... there is really no question, if this case were brought 20 years ago, that the punitive damages would not be discharged. Congress in 1984, throughout the little--
John Paul Stevens: Of course, they dispute that. I mean, you say there's no question, but he thinks there's a question.
Gregory G. Diebold: --Well, even this Court's opinions have talked about liabilities for fraud.
Ruth Bader Ginsburg: There was no opinion of this Court.
Gregory G. Diebold: There was no opinion directly deciding this issue prior to 1984 under the old language of the code, but there are... there were opinions of this Court that used the term liabilities for fraud.
Ruth Bader Ginsburg: Judge Greenberg said, this statute says money obtained by fraud. It doesn't say, monetary relief imposed because of fraud.
Gregory G. Diebold: Well, that's correct, and perhaps Congress could have written this a little better but the fact is, I believe, that Congress would not have changed this statute and how it operates significantly in the way that the petitioner wishes you to read it without some discussion of it. The discussion, what little there was, about consumer debt and bankruptcy show that Congress was concerned about curtailing debtor abuse. You would have to conclude, in order to rule in favor of the petitioner, that what Congress did in 1984 was stop and say, okay, but let's give a break to fraudulent debtors and reduce their liability and I don't think that under the legislative history of this statute that that's what Congress intended to do.
John Paul Stevens: Well, there isn't any legislative... may I just ask this one question. We've talked about a hypothetical in which the debt would be... Justice Breyer's $50,000, the $20,000 of it was obtained by fraud and that you're only talking about the consequence of that $20,000. Are there any real live cases out there that you can cite that present situations similar to that hypothetical? This one doesn't.
Gregory G. Diebold: Well, I can't cite actually reported cases, but I think it occurs all of the time that credit card companies seek the nondischargeability of debts which are run up, say, at the last minute, prior to filing bankruptcy.
John Paul Stevens: Oh, I understand, but they would not have added onto them any penalty, as you do here. That's the problem.
Gregory G. Diebold: Well, they may. Under New Jersey law they would, if the court determined--
John Paul Stevens: Theoretically, but I... I'm just concerned about the absence of any litigated case that presents the hypothetical that you rely on.
Gregory G. Diebold: --I'm not aware of any. Thank you.
William H. Rehnquist: Thank you, Mr. Diebold. Mr. Lamken, we'll hear from you.
Jeffrey A. Lamken: Mr. Chief Justice, and may it please the Court: For nearly a century, bankruptcy law has excluded from discharge all liabilities arising from the debtor's fraud, including consequential and, where imposed, punitive damages. Nothing in section 523(a)(2) alters that settled practice. The code defines the term, debt, as liability on a claim. Section 523 (a)(2) thus exempts from discharge liability on a claim for money or services to the extent the money or services were obtained by fraud.
Anthony M. Kennedy: Well, you don't define punitive damages as consequential damages, do you?
Jeffrey A. Lamken: No, I would not define punitive damages as consequential damages.
Anthony M. Kennedy: That's the colloquy we had with Mr. Ayer, and I think he conceded that maybe some consequential damages are within (a)(2), even under his interpretation. We're talking about... consequential and punitive are quite different.
Jeffrey A. Lamken: No, Your Honor, I don't think Mr. Ayer would concede that consequential damages to the creditor are within his interpretation. His interpretation limits what is nondischargeable to the amount actually obtained by the debtor. Now, if the debtor also makes an additional profit, he was considering the possibility of including that, but the consequential damages are clearly excluded--
William H. Rehnquist: Well, I think of consequential damages in connection with contracts, in Hadley v. Baxendale, not torts. What do you mean by consequential damages?
Jeffrey A. Lamken: --Consequential damages do follow from torts. I think the example on page 21 of our brief, for example, where the defective bolts are sold to an airline with a representation that they're aircraft quality, the consequential damages would be the cost of actually replacing those bolts. That would not represent money obtained by the debtor, but it would represent consequential damages and therefore a proper recovery under--
William H. Rehnquist: Well, what's the difference between consequential damages and actual damages in your view?
Jeffrey A. Lamken: --In this case... well, consequential damages I've used rather loosely. I should apologize. Those are actual damages, but they are not restitutionary damages. They are damages that are incurred by the creditor but do not represent a gain to the debtor.
Antonin Scalia: But don't you see a difference between what you can get for a claim for fraud and what you can get on a claim for money obtained by fraud?
Jeffrey A. Lamken: Your Honor, I think the question assumes that the phrase, a claim for money obtained by fraud, means a claim to acquire or to obtain the money which was obtained by fraud. I think it's clear that Congress did not use the phrase, debt for, or claim for, in that sense. From section (a)(2)(A) itself, that refers to a claim for services obtained by fraud. It's clear that the creditor is not trying to acquire the services that were obtained by fraud. What the creditor wants is the liability that was imposed as a result and that liability can include punitive and consequential damages.
Stephen G. Breyer: That part, though, I don't think was conceded by Mr. Ayers. I don't know that they concede that even... so we go back to Danns and we say, this is all the same for the history of bankruptcy law. They've always meant the same thing. But what is that same thing, and at that point I think they have not conceded that even if you go back to 1890, that there would be liability for the punitives and--
Jeffrey A. Lamken: I don't think if you go back to 1898 it could be disputed. The 1898 act excepted from discharge judgments in actions for fraud. I don't think that the phrase, judgments in--
Stephen G. Breyer: --But has it been clearly held that if you go back, let's say, to the 1898 act or the 1978 code, et cetera, that it does include punitives? I'm not... have they conceded that? I'm not certain.
Jeffrey A. Lamken: --No. I think there's a concession in the petition, but I think the concession has been retracted. However, the cases, first the language itself, judgments in actions, is unmistakably clear. A judgment includes the consequential damages and the punitive damages. In this case, the Court's case Brown v. Felsen explains that when the change was made to... from judgments in actions to liabilities for obtaining--
Stephen G. Breyer: But you might say, liabilities for means liabilities to this person and a punitive damage award, after all, is not in respect to a liability to this person and represents a liability to the whole community for bad action deterrent. You know, that kind of argument. I'm not--
Jeffrey A. Lamken: --Right.
Stephen G. Breyer: --I'm trying to generate a little more counterargument on your part.
Jeffrey A. Lamken: I don't think that that construction of the word liability could be used, because the term debt, which is defined as liability unclaimed, has been held by this Court to include punitive damages where payable to private parties.
Sandra Day O'Connor: Well, the language of (a)(2) really does favor the petitioner. A discharge doesn't include a debt for, in this case, money to the extent obtained by fraud. It favors the position taken by the petitioner, and you ask us to look back at the older provisions for guidance, I guess.
Jeffrey A. Lamken: That's correct, Your Honor, but I would disagree that the language favors petitioner, because that is only true if you don't look at the definition of the word debt. The word debt is liability on a claim. I don't think you could be any clearer that a claim for money or property or services obtained by fraud under New Jersey law is three times the damages so imposed and therefore the claim, the liability on the claim is the full amount of the judgment that would be entered by a New Jersey court in this context. The structure of 523 (a) I believe confirms this. Section 523 (a)(6) and (a)(9) make nondischargeable liability on a claim for death or injury, or liability on a claim for wilful or malicious injury.
Anthony M. Kennedy: One of the arguments made by the respondent, and we didn't have time... I didn't have time to question him about it further, was that at the last minute, before going bankrupt, people run up a lot of bills, but that's covered by a separate section, is it not, or would subsection (c) not permit the nondischargeability under Mr. Ayer's theory for the--
Jeffrey A. Lamken: Yes, I think the run up--
Speaker: --person that runs up the debts?
Jeffrey A. Lamken: --The run up of credit card bills at the last minute has been specifically addressed. What has not been addressed, Your Honor, however, is the trans... repeated credit transactions in which some portion of credit is obtained by fraud and some portion is not. Before 1970 there was a split in the courts on whether or not the full amount of credit was nondischargeable simply because a small portion thereof had been obtained by fraud, and that's the In re Danns decision. The legislative history in 1978 shows that Congress was aware of this issue. I believe that the language added in 1984 is most reasonably read as making it unmistakably clear that there must be a parsing process to determine how much was obtained by fraud, how much was not obtained by fraud, and all of the liability on a claim for the portion that was obtained by fraud is nondischargeable, and that liability may include consequential and punitive damages.
David H. Souter: You're saying, in a word... in a short phrase, I guess, that debt for money means exactly the same thing as the old statute meant when it said debt for fraud, except that it defines the money with respect to the fraudulent means of obtaining it, by a later phrase. Is that... in one sentence, is that your argument?
Jeffrey A. Lamken: That is absolutely correct. Lawyers often refer to a claim by what caused the claim to arise, and sometimes by the result. We might speak of a claim for personal injury, the result, or we might speak of a claim for battery, what caused the injury. In the context of this statute, Congress has used those two interchangeably, as lawyers often do. Sometimes they spoke of a debt for fraud, the action that produced the injury, or a debt for wilful and malicious injury, the result. In our portion, in (a)(2), it says a debt for money, property, or services to the extent obtained by fraud, the result, but that does not alter the amount of liability, necessarily. The amount of liability is that amount which would be imposed by a State court and that amount, in this case, is three times the injury so imposed. If there are no further questions, I'll cede the remainder of my time.
William H. Rehnquist: Thank you, Mr. Lamken. Mr. Ayer, you have 2 minutes remaining. I'm sure Mr. Lamken didn't mean to cede it to you. [Laughter]
Donald B. Ayer: Thank you, Your Honor. I just want to make one point, and it relates to Justice Breyer's hypothetical about the credit card situation. I would submit that a broad reading of this provision here so as to essentially use the prior language, read broadly, as it's read in (a)(6), reading debt for obtaining money by fraud creates... that broad reading to include all essentially consequential, punitive, and other damages would create a situation where a credit card company who could come in and argue reckless fraud with regard to the $20,000 that was spent, and then can argue $30,000 more in interest at 18 percent under their contract and then can argue another $10,000 in attorney's fees, that in that circumstance they can come in and make a credible, if not a winning argument that in fact all of that is something that's entitled to nondischarge. Now, that is something that's a real life issue. I would direct the Court, if it's interested, to the 1997 National Bankruptcy Review Commission report.
Antonin Scalia: You don't want them to get the interest. You mean, all they can get is the $20,000 that the person got, and he gets it interest free, right?
Donald B. Ayer: We would submit, Your Honor, that's correct, that they get the... well, they may get a market interest. Whether they get a contractual interest rate I would submit is--
Antonin Scalia: Why even the market interest rate?
Donald B. Ayer: --Well, I'm sorry. The measure under Justice Scalia's hypothetical earlier would be the benefit that... and I think it may be correct... the benefit that was obtained by the debtor, not the amount that's contractually owed to the credit card company.
John Paul Stevens: Could I get you to comment on one question that came up in your opponent's argument? The prior law is uncertain, you say, but what about the 1898 statute? That was perfectly clear, wasn't it?
Donald B. Ayer: The 1898 statute talked about judgments.
Speaker: Right.
Donald B. Ayer: It talked about judgments, and--
John Paul Stevens: Which would necessarily include the punitive--
Donald B. Ayer: --Well, if that language were transported to today, when punitive damages is an issue, which really only started in a big way in the 1970's, that may well be where the Court would come out. The fact is, no one has come up with a case construing that language.
John Paul Stevens: --Of course, that language may be clear enough that you didn't need a case.
William H. Rehnquist: Thank you, Mr. Ayer. The case is submitted.


Earl Warren: Number 10, Alden Whitman versus United States. Mr. Van Arkel.
Gerhard P. Van Arkel: Mr. Chief Justice, may it please the Court. The petitioner was indicted on 19 counts for declining to answer certain questions of the Senate Internal Subcommittee put to him on January 6, 1956. He was tried without a jury. He was convicted on all counts. He was sentenced to a term of 6 months suspended prison sentence and a fine of $500.00. On appeal, the Court of Appeals for the District of Columbia affirmed the conviction and Your Honors granted certiorari. At the time of his appearance before the subcommittee on internal security, the petitioner appropriately raised questions concerning the authority of the subcommittee and concerning the pertinency of the questions which were asked him, objections which were renewed throughout the course of his interrogation. He answered fully all questions concerning his own acknowledged membership in the Communist Party between the years 1935 and 1948 and made it entirely clear to the committee that all of his activities have been lawful, political activities when engaged in. He declined, however, to answer any questions which sought the names of persons who have been associated with him in the Communist Party or from which their identity might readily be ascertained. At his trial, the petitioner took the stand in his own defense; he testified at some length concerning the reasons which had led him to the depths of the depression in 1935 to become a member of the Communist Party. The fact that his studies in history --
Felix Frankfurter: How old was he then?
Gerhard P. Van Arkel: He had just graduated from college, Justice Frankfurter, Harvard incidentally Mr. Justice.
Earl Warren: In 1935?
Gerhard P. Van Arkel: In 1935 -- well, I believe he graduated in '34 in the event he was comparatively recently out of college. He explained that his studies of history had convinced him that third parties had exercised an energizing influence in American political life. He described at some length or offered to prove his activities within the party which were the usual rather humdrum activities attending public meetings, distributing leaflets, selling copies of the Daily Worker and the rest of it. He made it clear that his membership in the party had not been clandestine, that it was known to his friends and associates, that he engaged in no conspiratorial activities and that the same was true so far he was aware of those who were associated with him in the party. Indeed there is, if the Court please, a striking parallel between the reasons for his entering the party and his activities within it and those of (Inaudible) which Your Honors held were insufficient to warn his exclusion from the bar. He also testified at length concerning his growing disinterest in the party; his eventual dissatisfaction with it and his reasons for leaving the party in 1948, some 8 years prior to the time of his interrogation by the subcommittee. He was asked at trial to state his reasons for declining to answer the questions which had been put to him and he responded as follows; I read from page 9 of our brief and I omit some portions of his answer. He said, ?I felt that by I being compelled to answer the questions which I decline to answer that I would be cast in the role of an informer. Unlike most Americans, I have been brought up to despise and deplore the tattletale, the squealer and the informer. I felt I would be violating the principles and tenets on which I have been brought up, if I were asked to assume that role. I felt that I knew that I have engaged only during the period of Communist Party membership only in lawful activity. I knew that my associates had engaged only during the period on Communist Party membership only in lawful activity. I felt that as a result of what I knew to be the case, that if I were to name names to be an informer, that the result would be terrible trouble on the shoulders and the heads of people to were as innocent as I of any wrongdoing. I was confirmed in this belief by the fact that I knew my own knowledge of people who had lost jobs, whose careers have been wrecked; whose families have been upset, whose children have been dislocated purely because I have been exposed to the committee by somebody for what in its own time had been perfectly legal activity. And I felt that it would be a mean and ignoble thing if I would be defective; an agent to bring destruction on people. I knew that of course it would be possible to save my own skin by giving the committee what it was pressing me for; namely the names of other people, but I felt that I couldn't in all conscience do this because it seemed to me that one of the great heritages and privileges that I had as a citizen in a democracy was that of personal responsibility for my acts. I felt certain as a matter of inner conscience here, that I could not disclose the names of innocent people in order to be a possible benefit to myself. I realize that as a result, I would undoubtedly have to stay on trial for contempt. The likelihood arose of going to jail which I am not anxious to do, but I'm here less anxious sir to become in my own eyes an ignominious person and I feel deeply that I would utterly lose my self-respect were I to violate the terms of my own inner integrity.?
Speaker: What was the sentence?
Gerhard P. Van Arkel: A suspended sentence of 6 months in prison with $500.00 Your Honor. Now if the Court please, I should like to leave the numerous legal issues which are raised by this case to our brief in order to discuss it solely in terms of the balancing test.
Potter Stewart: The statement that you just read was made by this petitioner at his trial?
Gerhard P. Van Arkel: At his trial Your Honor; he took the stand and testified and I read his testimony at the trial.
Felix Frankfurter: Did he take similar ground before the committee?
Gerhard P. Van Arkel: Yes, he did Your Honor. He couched it in terms of the authority of the committee and in terms of pertinency of the questions but he made it entirely clear that would and he did answer all questions except those which sought the names of his associates or information from which they could be identified and it is clear enough that this is the line which he drew at the time of his appearance --
Felix Frankfurter: I understand that. Did he state to the committee he's scrupulous against --
Gerhard P. Van Arkel: He did Your Honor --
Felix Frankfurter: -- making the line, not merely the legal grounds but the --
Gerhard P. Van Arkel: He did Your Honor; he did
Felix Frankfurter: Do we have that from the record here? Is it in this blue thing?
Gerhard P. Van Arkel: It's one in the blue thing Your Honor.
Felix Frankfurter: What appeared before the Senate Committee?
Gerhard P. Van Arkel: Oh yes Your Honor. It's summarized --
Felix Frankfurter: I'm not questioning it, I just want to look at it.
Gerhard P. Van Arkel: Yes. Your Honor will find that the language of the letter which he presented to the committee, the important sections of it are set out at page 21 of the record which you have there.
Felix Frankfurter: The blue thing.
Gerhard P. Van Arkel: That blue thing; that is right Your Honor.
Felix Frankfurter: What page is it on?
Gerhard P. Van Arkel: At page 21.
Felix Frankfurter: Thank you very much.
Gerhard P. Van Arkel: Now at the outset of applying the Barenblatt balancing test, we're faced with a serious problem which has plagued this case from its very inception and that is that to know what the subject under inquiry was. We have appended to our brief as Appendix A, a tabulation which shows what the subjects under inquiry in this case and its companion cases was asserted to be at various stages of this inquiry. And Your Honors will readily see from that the other confusion and inconsistency which has followed this issue through this case. This served to emphasize Mr. Fanelli's argument that unless the subject under inquiry is clearly stated in the indictment, the government is free at each and every stage of the case to change its position with respect to what the subject under inquiry was. For the purposes of my argument here, I will assume that the subject under inquiry was that which the government now asserts it to be, noting that they have changed their positions since they filed their brief in opposition to certiorari and I will say only that which they now define as communist activities in news media.
Speaker: Did he make a pertinency objection before?
Gerhard P. Van Arkel: He did Your Honor, not only at the outset of the hearing but repeatedly. If you'll look at page 4, page 7, Footnote 4 of our reply brief, you will find summarized there the numerous record citations to his objections on the ground of pertinency. Now, as I say, I should like to contrast the fragility of the government's interest in getting answers to the questions which you asked with the urgent and impelling reasons of personal privacy which lead the petitioner to decline to answer these questions. At the question under inquiry genuinely been the communist activities in news media. The obviously pertinent question to have asked the petitioner would have been, ?Do you have any present knowledge concerning communist activities in news media?? Since this was not a question which sought the identity of others and since the petitioner had left the Communist Party some eight years before, the answer to that question would almost certainly have been, no. Or the committee might have inquired, do you have any information about communist activities in news media since the passage of the Internal Security Act of 1950, the administration and enforcement of which it is one of the duties of the committee to investigate. Again the petitioner would almost certainly have answered that question, ?no?; and what is significant about this case is that nothing which even remotely approaches those two possibly pertinent questions were put to him. On the contrary, the committee promptly rummaged around in ancient history. The first question they asked him which he declined to answer related in 1938, 18 years prior to this inquiry, and the most recent question which he declined to answer related to 1948, 8 years before the inquiry. Now, we suggest to this temporal remoteness and which we would acquaint with these spatial remoteness on which Your Honor relied in Deutch, has in this case a certain special significance. It might properly be said I think that 1950 marks a kind of watershed in the public and official attitude toward the Communist Party. Prior to that time it was by and large regarded as another lawful political party. In that year, this Internal Security Act was adopted, in that year Your Honors has decided American Communications Association against Douds and it was in that year that Korean hostilities erupted. So we say that for the purposes of the Barenblatt balancing test, questions which relate to years prior to the 1950 must weigh much less in the scale than activities engaged in subsequent to that time. Obviously, activities engaged in during this period will have far less impact on the national security than activities engaged in since not only because they are more remote in time, but also because they differ importantly with the three. And we think it is important that all of the questions asked related to lawful political activity. Now I'm of course aware that Your Honors have held that law -- inquiry in the lawful political activities on the part of these committees is proper, but Your Honors have not held to my knowledge that this is not a relevant consideration to bear in mind for the purposes of accomplishing the balancing test in Barenblatt, that is to say obviously there is a significant difference I would suggest in the standard of pertinency which might properly be applied, in the case of the congressional committee investigating a present plot to blow up the White House and questioning of the kind here involved which seeks only information concerning remote, lawful political activity. Now, it seems to me that what I've said to this point is relevant in judging the petitioner's private interest, that is to say faced as he was with these questions, I think that he might well feel himself fortified in asserting his reasons of personal privacy by the fact that what the committees sought was remote in time, concerned lawful activity and had -- could shed little light on the national security. But the -- I cannot improve on the petitioner's own statement of the urgent, compelling personal, private reasons which led him to decline to answer these questions. I would only ask that Your Honors recall that this inquiry took place in 1956. This was at time when the country was beginning to emerge from that era of our history which for want of a better name we call McCarthyism. For months, for years prior to this hearing, the public prints have been full of innocent law abiding citizens who had been humiliated, persecuted, vilified sometimes even to the point of suicide and death because I have been revealed before one or another of these committees. The petitioner's fears that his answers to these questions might bring harm to innocent persons were not factitious or contrived notions. They were headlines of the time and I suggest to Your Honors that if under the Barenblatt balancing test, the desire of a citizen to avoid unjustified harm to innocent people is not a sufficient justification of personal privacy then none will ever be found. This moral, this epical, this humane, this disinteresting reason for declining to answer, is the most compelling reason that this Court will ever have put before it.
Felix Frankfurter: Mr. Van Arkel, suppose I agree to your last few remarks, the last statement and applied it in regards to questioning in a court of law at a trial, (Inaudible) in a trial in this Court, these questions would otherwise be relevant and suppose that dealing first by (Inaudible) ethics you just made, you came up in federal court, I would say, well the judge in his discretion ought not to rely on these questions, assume -- assuming (Inaudible) I haven't that freedom or power with reference to inquiring before a congressional committee or have I or not in order to yield to your argument say, must I conclude, that putting these questions, whatever I may think of the ethical offensiveness, putting these questions were not outside the constitutional power of Congress.
Gerhard P. Van Arkel: Your Honor --
Felix Frankfurter: Have I put my problem --
Gerhard P. Van Arkel: I trust, I understand that Your Honor and I can only say that as counsel, I feel bound by the previous announcements of this Court which it seems to me have clearly phrased this problem in terms of accomplishing a balancing between the public interest that was to be served; the national security, if that was affected; and the individual's reason for asserting his personal privacy. Now, this it seems to me, if this is the true test of Mrs. Barenblatt, as I read it, then Your Honor I think it becomes impossible to generalize to without knowing all the facts which surround the case that Your Honor puts.
Felix Frankfurter: Well the case that I put to you namely reviewing a conviction in a District Court affirmed by the Court of Appeals also involves the (Voice Overlap) but what I am putting you it's a different kind of value in reviewing the conduct ex-trial of a federal district judge for a suit affirmed by Court of Appeals, I can say that a judge who has large dis -- considerable discretion at least an undefined amount of discretion in conducting a trial in which evidence though relevant admissible ought not in fairness because of the motion that it arouses, the misguidance it gives to the jury et cetera, et cetera, as a matter of discretion, you should have shut that out, but what I want to know is when it comes to dealing with the thing kind of questions or in pursuit for the same questions before a committee of Congress, I have that much that kind of freedom in balancing, do I?
Gerhard P. Van Arkel: I suggest to Your Honor that you have and I suggest that you have this discretion by a commitment from the Congress. The Congress which as the discussion this morning brought out might have punished directly for contempt has entrusted that power to the federal judiciary and then doing so the Congress has imposed certain restraints on itself which are expressed in the statute. The committee must be authorized, the questions must be pertinent. There is, Your Honor, no question of limiting the Congress in its power of investigation. Obviously, the Congress does not want unauthorized investigations going on. The Congress does not want impertinent questions asked and it said so in statute.
Felix Frankfurter: But do you go with me in the distinction that I -- that I indicated this morning; namely, you go with me with the distinction or do you say rather that you take the distinction that in my question I rejected, namely, if Mr. Whitman have been brought before the bar -- was it the House or the Senate?
Gerhard P. Van Arkel: Yes, Senate Committee, Your Honor.
Felix Frankfurter: If Whitman has been brought before the bar of the Senate, on a report by the Chairman of the particular committee that found him in contempt and the Senate had then exercising its power, implied powers to be in contempt before the Senate, itself dealt with this problem and gave the man the same sentence, it was authorized to give the same sentence $500.00 and six months and then he sought out habeas corpus, your argument implies that it would have been my duty, assuming you're advising me, it would have been my duty if it is my duty to reverse this, it would have been my duty to say habeas corpus proper. Is that right?
Gerhard P. Van Arkel: Your Honor, I suggest that there's an important distinction to be drawn here.
Felix Frankfurter: Please draw it.
Gerhard P. Van Arkel: In the case -- in the Kilbourn against Thompson situation where you were dealing with habeas corpus, you are dealing with a particular exercise of congressional discretion in the particular manner and I assume that Your Honors would respect that exercise of discretion. In this case, you are dealing with a prosecution brought under a statute which the Congress has adopted in which the Congress has fixed the standards to be applied by the federal judiciary, where the discretion is were not to be exercised by the Congress, but under the very terms of itself, is to be exercised by the federal judiciary.
Felix Frankfurter: But I suggested to you our reviewing power overruling in the District Court will not require disagreement on the score of the provision of the Constitution, but namely they go out power as supervisors of the lower federal courts. And I further suggest to you, or rather recall to you, that which I have no doubt you know, that in the MacCracken case, it was made specifically clear by Mr. Justice Brandeis writing for an unanimous court that the reason for the 1857 Act under which this prosecution is brought, it didn't have to do with any of these things, the reason was in order to permit heavier sentences by virtue of the fact that the power of a congressional committee would expire at the end of the session and therefore the punishments would terminate at the end of the session. And the reason for the Act of 1857 was not an alleviating reason at all, it was an enforcing reason
Gerhard P. Van Arkel: Well, Your Honor it seems to me there is no inconsistency between those two that Congress might well have felt that it was proper where a person had been genuinely guilty of contempt of Congress that he be given a sentence which would not expire at the end of the congressional term and the Congress, at the same time to say, that we will setup certain restraints on our own action to be enforced through the federal judiciary for our own self protection, namely, we do not wish to have unauthorized committees going around holding hearings. We do not wish to have congressmen or senators asking impertinent questions. We ask the aid of the federal judiciary in imposing on ourselves these limitations for the best of possible reasons. Now, I think that there's no inconsistency, Your Honor, between those two and to suggest that the Congress was doing nothing but being blind to the interest of the citizen in this case in adopting the statute, I think carries it much too far. I think the Congress can be credited with the same interest in protecting the constitutional rights of the citizen as this Court is and there is no reason why the Congress cannot seek the aid of the judiciary precisely in protecting the constitutional rights.
Felix Frankfurter: I don't want to take your time, but the MacCracken case also makes clear that the same restriction against abuse of constitutional rights limits Congress. It said it is protected if you have either as in Kilburn and Thompson was found that Congress had no duty and no power or in the later case that it has exceeded it, so that -- but that's --
Gerhard P. Van Arkel: Well, Your Honor, just have one observation to that question and that is that the Congress has the greatest practical difficulty in enforcing these restraints on itself. This is a large body. All kinds of committee sit in all kinds of capacities. These are legal problems. They are constitutional problems and I suggest the to you that nothing is more probable than that the Congress specifically desire the aid and counsel of the judiciary in protecting the constitutional rights of the citizen and that it is wrong to suppose that these limitations are limitations which the judiciary puts on the investigating rights of Congress that they are in effect restraints which the Congress has been put on itself and which it seeks the aid of the federal courts and administer. If Your Honors please, the inquisition has always had an insatiable appetite for names whether it be Torquemada or Titus Oates, Cotton Mather or Savannah Rolla or Lavrenti Beria or Heinrich Himmler, there is an impelling necessity to seek ever longer lists of names because only in this way can may color the pretense that there is a monstrous conspiracy against the state of which they and they alone are the true defendants. As this lust for names increases, all forms of due process are forgotten. All questions of guilt or innocence become irrelevant. All questions of humanity or decent treatment of one citizen by another disappear until finally the child informs on its parents, the student on its professors, the wife on her husband and finally the guilty and the innocent alike walk to the state or the scaffold or to the tumbrel or to the death chamber. And it precisely at this point that the citizen standing up and saying, I acknowledge my responsibility for my acts. I will answer for myself and what you wish to know of me you shall learn, but I will not become an accomplice in your desire. It is at this point that the dramatic clash between the felt needs of the inquisition and the ethical, the moral, the religious impulse of the citizen rise to their dramatic climax. And it is precisely at that point that the determination must be made as it has always been made whether or not the net of suspicion shall be thrown ever wider, drawing in successively larger numbers of the innocent with the guilty or whether or not the line of inquiry shall be held within the bounds of a civilized and orderly society. I urge that Your Honors draw that line in this case by reversing the judgment below. Thank you.
Earl Warren: Mr. Doolittle.
J. William Doolittle, Jr.: Mr. Chief Justice, may it please the Court. The petitioner in this case has raised a substantial number of issues for consideration by the Court, some of them presenting very broad constitutional questions. However, it is not necessary for the Court to reach all of these questions and particularly the constitutional questions in order to decide this case completely. The petitioner was convicted on 19 counts; not all of the questions that he raises go to all of the counts since he was given a general sentence and a fine at all 19 counts it was less than the maximum authorized by 2 U.S.C. 192, for any one count, the judgment below must be affirmed if any one of the counts is valid. Under the circumstances of course, it is only proper that we consider or at least that we begin our consideration with the count or counts as to which the petitioner raises the fewest questions. Therefore, while the government does contend that all of the counts are valid but except for counts 3, 4 and 5, as to which we agree that the questions were in fact answered, I should like to focus at the outset of --
Hugo L. Black: Do you agree -- do you agree that he was indicted?
J. William Doolittle, Jr.: I'm sorry sir
Hugo L. Black: Do you agree that he was indicted for refusing to answer three questions to be answered?
J. William Doolittle, Jr.: Yes sir. I should like to focus at the outset of my argument on count 7. Mr. Whitman had testified that he was connected with a communist unit in the New York Herald Tribune and that appears on page 1742 to 43 of the hearings and he declined to name, he then declined to name any persons who were members of that unit when he was a member and that is the basis for count 6. Then he was asked the question on which count 7 is based. ?Now the members that you're associated with in the cell, do you know whether any of them are still employed by the Herald Tribune?? Now, let us first put to one side to the moment, the questions that that -- the issues that that question does not raise? First, that question does not involve petitioners and the amicus contention that the first amendment protects a witness from having to disclose the names of persons with whom he has associated. The question called for no names and considering the size of the staff of the New York Herald Tribune which petitioner indicated in the hearings was a couple of, a couple of hundred perhaps exclusive of mechanical, that's at 1742 of the hearings and further since he had disclosed to the committee any of the names of the people in the unit he had been with in 1948, we submit that there is no way in which an answer to the question would have identified the names of any of petitioner's former associates. Secondly, the question does not involve the problem of remoteness in time that that petitioner has argued. It concerned the persons employed by the New York Herald Tribune at the time of the hearings, that is in 1956. Now, of course it was linked with the petitioner since his last activities had been in that cell in 1948, but I would like to emphasize in connection with the petitioner's argument on this point of remoteness that while there may have been what he describes to be a high, a watermark in 1950, that this makes it all the more important for the committees investigating this problem to able to look at information prior to 1950 because this watermark will also determine the time when by and large it became more and more difficult to find anything out of the party's activities and only by developing the background prior to the time that the party, excuse me, what more and more underground that the committees were able to develop any information at all. Thirdly, assuming that the question under inquiry was communist infiltration into the press and I shall go into that question in a moment, this question clearly does not involve a pertinency problem since it was plainly pertinent on its face to an inquiry and to communist infiltration in mass communications media and more particularly in the press. The answer to the question would have contributed importantly to the subcommittee's knowledge as to the extent of communist infiltration into the newspapers in New York and might well provide a foundation for asking other questions that that petitioner may well have been willing to answer. For example, if his answer had been in the affirmative, there were still some people in the New York Herald Tribune who had been a member of that cell; questions such as how many of them, what their functions had been in the party, questions such as that might have been asked that is I say petitioner may have been willing to answer and that the amicus for example at page 12 its brief suggest what probably be appropriate since the committee did have a valid interest in determining the extent or at least the numerical extent of infiltration into mass media. Now, petitioner does raise a number of other contentions that if sustained by this Court will invalidate the petitioner's conviction on all counts including count 7 which I have been focusing and I'd like to take up these questions. Broadly speaking, they relate the definition of the subject under inquiry, the pertinence of individual questions to that subject, the authority of the subcommittee to conduct the inquiry, the extent to which petitioner was informed of these matters and certain questions relating to the form of the indictment. I shall discuss each of these in turn and then with anytime remaining, I shall attempt to cover the points that go to the other counts in the indictment.
Hugo L. Black: Are you going to discuss the question of balancing that you would put on each side of the scale?
J. William Doolittle, Jr.: I hope I can get to that point sir.
Hugo L. Black: I didn't understand you to list that --
J. William Doolittle, Jr.: Well that's implicit -- implicit basically in the First Amendment contention.
Hugo L. Black: Well, I don't know if it is implicit in any that you add --
J. William Doolittle, Jr.: I'm sorry sir
Hugo L. Black: I don't know the simplicity on any of those you're suggesting.
J. William Doolittle, Jr.: Well I'm -- what I'm
Hugo L. Black: I suppose --
J. William Doolittle, Jr.: What I'm going to do Mr. Justice is to take up the points that must be reached in order to decide this case.
Hugo L. Black: Must not you -- must you not reach that one?
J. William Doolittle, Jr.: Well, in the context in which it has been raised, we submit that you need not sir because the First Amendment point that he makes that is as to whether or not the individual has to disclose names of other persons are not raised by all of the counts in the indictment and I am taking up at this point, one of the counts that did not involve that point. I do hope --
Hugo L. Black: Whether it does or not, you would have to meet the question of balancing, would you not?
J. William Doolittle, Jr.: Not in the context in which he has raised it, sir.
Hugo L. Black: But you'd have to meet it if you want to convict him on one of these, would you not, that he has raised the question in the First Amendment.
J. William Doolittle, Jr.: Yes Mr. Justice Black. We will contend as I will spell out that on the basis of the circumstances of this case, the balance is clearly drawn in favor of the witness' having to answer but I certainly course to the extent of that as necessarily in the case of course. I submit that an objective reading of this record will leave no doubt as to the subject under inquiry by the Senate Internal Security Subcommittee at the hearings at which petitioner appeared. The subcommittee had for some 11 months, been conducting hearings on strategy and tactics of world communism. Within that basic framework that on the basis of testimony given by one Winston Burdett who was a newspaper man and broadcaster, the subcommittee undertook to focus more particularly on communist infiltration into news media. It held 3 days of hearings in January on 1956 at which 18 witnesses appeared; 17 of whom where then or recently have been employed as newsmen and other of whom was a film exhibitor. At the outset of the hearings on January 4th, the Chairman of the subcommittee announced that the hearings about to commence stemmed from Burdett's testimony. That the investigation of communist affiliations that resulted from that testimony disclosed, ?Many who were or are members of the press? and that ?the international communist conspiracy has as one of its primary aims the influencing of public opinion thus carrying on a psychological warfare against the United States and its institutions from inside by methods of penetration.? Then Senator Hennings said in a statement whose primary purpose was to disavow any attack on the free press to that, ?The committee is interested in the extent and nature of so-called communist infiltration if such exists into any news dispensing agency.? The Chairman expressed his agreement with Senator Hennings' statement in its entirety and also disavowed any attack on the free press. On January 6th, the 3rd day of the hearings and the day on which petitioner appeared, the proceeding is opened with a reading of a telegram from a New York newspaper in which the newspaper stated its agreement with the subcommittee's efforts to uncover communist infiltration wherever found and the Chairman responded by reaffirming the subcommittee's purpose to follow up the information concerning infiltration of persons identified as communists into news agencies. In a course of some remarks by Senator Hennings on that day he said, ?I think no one will quarrel with nor take issue with the fact that this committee has the right to inquire into all efforts or indeed all consummations of efforts of the Communist Party to infiltrate newspapers or other media of communications?. The subcommittee then called Robert Shelton, the petitioner in number 9; who is employed as a copyreader with the New York Times. Shelton was questioned primarily on whether or not he had any communist affiliations and about communist infiltration in the typographical union. The next witness was petitioner, and petitioner concedes that he was present at the beginning of the session that day incidentally. By and large, the questioning of petitioner, himself, developed the character and duration of his employment by various newspapers, by TASS the Soviet news agency and by various communist front organizations, the nature and activities of the communist units to which the petitioner has been exposed and more particularly of the newspaper cells of the Communist Party to which he belonged and that the relationship of his party membership to his employment with these various newspapers. One cannot read the testimony of this petitioner and that of the other witnesses in this set of hearings all of whom were in the communications field and all but one of whom were newsmen without becoming convinced that the hearings were in point of fact concerned with precisely what the Chairman announced would be the subject under the inquiry, the strategy and tactics of the communism that's reflected in communist infiltration into news media. At petitioner's trial, the government established that this was the subject under inquiry by introducing the transcript of the hearings into evidence. In addition, the subcommittee counsel testified that, ?In these particular hearings, we were in an area within the broad area of tactics and strategy within the narrower area of infiltration of mass communications,? that's at page 31 of the joint appendix And that the investigation was, ?Into the strategy and tactics of world communism of which this mass communications was an offshoot and apportion,? that's on page 37 of the joint appendix. Now, there were references as counsel points out on his brief in the testimony of the subcommittee counsel, references to the investigation of communist activities generally but it is clear from the context of those remarks that he was referring to the basic investigation of which these 3-day set of hearings was but a part. And similar statements by the Assistant United States Attorney are plain and can be explained in the same way where the rest of the transcript indicates clearly that he understood the subject under inquiry to be what I have said that it is. For example, at page 34 of the joint appendix, he said, ?You were indeed though inquiring were you not into mass communications infiltration by communists?? And at page 37, his question was in this particular investigation in mass communications and generally in the tactics and strategy of world communism, was that commenced before or after the passage of the rule in 1955?
Speaker: Do you take issue with Mr. Van Arkel statement would be made an adequate objection on the pertinency?
J. William Doolittle, Jr.: We do, Your Honor and I'll get to that in just a moment. Contrary to the representations that petitioner has made in this appendix to his brief, the Court of Appeals did identify and affirm the subject under inquiry to be precisely as I have described it. The court by specific reference and that's at page 2 of the printed record found the subject under inquiry to be the same as it had found in the Shelton case. In the Shelton case, its statement was, ?the broad subject matter of Communist Party infiltration and subversion and narrower subject of efforts to influence American public opinion and the specific effort to use the press to implement these objectives; that's at page 238 in the Shelton record. And then in its opinion in this case, the court below went on to find that certain other questions including count 7 which I have been discussing, ?were clearly pertinent to an investigation of subversive activities as manifested by the organization of members of the press into Communist Party cells in the period following World War II? and that's at page 3 of the record. I submit that there is no basis for any doubt as to the subject that the subcommittee had under inquiry when it was questioning petitioner nor as the Court of Appeals found is there any possible doubt as to the pertinency of some at least of the questions petitioner refused to answer, the first eight of which were pertinent on their face to the subject of communist infiltration into news media. Now, petitioner contends that even if the subject under inquiry was as I have described it, he was not apprised to the subject or on the pertinency of the questions to that subject. In the first place, this contention is not open to the petitioner since he did not raise the issue of pertinency or the scope of the subject under inquiry at the hearing when the subcommittee could have corrected any deficiency in this regard that might have existed. The general objection that the petitioner made to the authority of the subcommittee appears at page 1733 of the hearings and we submit that it is significantly less precise then the one that was involved in the Barenblatt case in which this Court held was insufficient to raise the question of pertinency. All the statement that petitioner had in the hearings did was to raise in a general way the First Amendment point that counsel has argued here and that is that he was not obligated by the First Amendment to answer questions concerning other persons, but the -- as an objection to pertinency, we feel certain that under both Barenblatt and Deutch it was completely inadequate to express that point. In any event, however, petitioner was plainly apprised both of the nature of the subject matter and of the pertinency of the questions to subject matter. He was present at the start of the hearings on January 6th when he heard both the Chairman and Senator Hennings to make statements I've already referred to identifying the subject under inquiry as communist infiltration into news media. He heard the witness ahead of him, a newsman, questioned on this subject. His own prepared statement, the one I referred to at page 1733 in the hearings reflects his understanding that infiltration of the press was the subject under inquiry. He ascribed the investigation as being, ?with reference to the beliefs, associations and activities of individuals, who are or have been connected with newspapers. Here as in Barenblatt and -- and precisely the same reasons as in Barenblatt, the witness was plainly aware of the subject under inquiry and since a number of the questions including that involved in count 7, were pertinent on their face to the question of communist infiltration into the press, petitioner must be held to have been aware of their pertinency.
Earl Warren: We'll recess now Mr. --