Earl Warren: State Auditor, et al. Mr. Hubert, you may continue your argument.
Leon Hubert, Jr.: Mr. Chief Justice and may it please the Court. At the close of yesterday's session I -- I was in the course of pointing out that in my view of the matter, if the property involved in this case were furniture or TV set, we would not be here at all. The case would be controlled by Dameron versus Brodhead decided in 1952. But in this case, Mississippi claims that because the property is a house trailer that Section 2 (b) of Section 574 which appears -- the text which appears at page 34 of our brief is applicable to the case. Now that means in our view, that Mississippi claims that the house trailer is a motor vehicle because the proviso applies only to motor vehicles. It also means that Mississippi takes the view, that unless there's compliance with the proviso then the entire immunity of Section 574 is lost. That is to say that unless you register and pay licenses with your home state, you not only loose the immunity from the licenses and registration in your – in the host state but you loose also the immunity from ad valorem taxes in the host state. Now, it is semantically possible, I suppose, that the Act can be read that way. The Solicitor General in his brief takes the position that the Proviso Clause applies only to 2 (b) and therefore, he said that it's restriction only in the sense that if you do not pay licenses and so forth in your home state, that's all that you loose with respect to the host state. It is possible that the Act could be read that the way Mississippi reads it, we think not. Now, why don't we think so, for two reasons. In the first place because every time Congress has an opportunity to deal with the immunity to be given to servicemen, it has used a liberal approach towards the servicemen. For example, the original 1940 Act provided no immunity whatsoever with reference to the income of servicemen in another state when they were there on the military orders nor does it provide specifically for any protection against taxation of the movable property of servicemen in the host state. But in 1942, apparent to that problem was giving some difficulty and so Congress stepped into the breach and said that, it's [Inaudible] Mr. Dameron would not lose his immunity because of change, but the approach taken was that he would not loose his domicile. That his domicile would remain the same and it was hoped that in that way they would avoid the state taxes. Now, the 1944 Act when there was still some doubt about the question illustrates again the congressional intent to add liberality towards the servicemen because there they used the situs Test. They said that the mere fact that a man happens to be in another state, the host state, under military orders will not change the situs of his property for taxation purposes to the new state and therefore, of course, the situs would remain in the old state. The only other example of Congressional intent that we have is the Congressional Action of 1962 when there arose a question as to where the situs problem that might be when the serviceman was not in any particular state as it happened and there was a case pending in a lower courts and Congress took the view that only the home state would have any situs with respect to the taxation of property. Now this Court also, if we are going to look for the intent of Congress which I suggest is what we're doing here since impossibly is ambiguity from the standpoint of semantics, when you look at the intent of Congress, Congress always has taken the liberal view, but so has this Court, in fact, in interpreting the rights of servicemen under the Soldiers' and Sailors' Civil Relief Act. First example of that was in the Leves versus Leparoux in which there was a question as to whether or not a Florida statute to would cut off a serviceman's right to redeem his property which had been sold for taxes. It so happened that before the period of grace had run out, he was inducted in the service and of course after he was in the service of two, three months left of the good period of grace ran out. But when he --
William J. Brennan, Jr.: Mr. Hubert, is this -- the issue here is simple as -- does the statutory meaning of license for your excise, is that all we have before us?
Leon Hubert, Jr.: Well, I think so Your Honor. It's also – it goes to what Congress intended to do.
William J. Brennan, Jr.: What -- by those words?
Leon Hubert, Jr.: By those words. It seems to me that what it is sir. But in the -- turning back to the Leparoux case this Court said that it would interpret the statute with friendly eye to those who would have given up their homes and so forth to go into the service and therefore, applied and just tolled the statute. Thus, the [Inaudible] the Florida statute in that case cert to permit relief. Now in Dameron versus Brodhead which is a leading case in this field, although, it does not involve an automobile, it was urged upon this Court that the purpose of the statute was to prevent double taxation and that therefore unless double taxation appeared to be a fact in anyone of the cases that the immunity would not apply. This Court rejected that contention and said that no that Congress had chosen the broader technique of just simply saying the soldiers' domicile had not changed or the situs of his property had not changed by the reason of enforced movement. I think they said that because obviously, it would be harder to administrate -- administer a statute when a soldier might move several times in the course year and the best way to do it was to say that only at the one place, but it was a liberal interpretation in favor of the servicemen. Now, furthermore of course if Congress had intended really to say as Mississippi contends that unless you pay the licenses, fees and excises. Now, you lose also ad valorem protection or rather protection from ad valorem taxes, it seems to me that the proviso could have read precisely that way and instead of reading as it does, it would have read this way, “Provided all licenses fees, excises, and ad valorem taxes had been paid.” Now, there's no question about it and Mississippi concedes, the Attorney General does and the Supreme Court does in Mississippi, that what we have involved in this case is an ad valorem tax. It is true and it is taxed on to as commission precedent to getting a license.
William J. Brennan, Jr.: Well, do you argue Mr. Hubert that the ad valorem tax is what excluded from those, is that it?
Leon Hubert, Jr.: Yes, sir.
William J. Brennan, Jr.: Excluded from the proviso?
Leon Hubert, Jr.: That's correct and Mississippi and the Supreme Court conceded that and the Attorney General as I understand concedes it too.
Byron R. White: Well, if this was a – if these were a license fee or registration fee for a motor vehicle, you would concede Mississippi could impose it I think?
Leon Hubert, Jr.: Yes, sir. We would because we concede that Mississippi and all states have a police interest –-
Byron R. White: This is involved – this is involved in the case next, isn't it?
Leon Hubert, Jr.: This is involved I believe in the next case, yes, sir. Because we have another point in this case and if the -- in this case, we're involved here with house trip which Mississippi says with a motor vehicle. I propose to address myself to that point alone, but that's why I think the two cases were consolidated and considered --
Byron R. White: You – you just say that ad valorem tax couldn't – can't be can imposed by Mississippi on either a motor vehicle or non-motor vehicle?
Leon Hubert, Jr.: That's correct, that is correct and I think that the proviso simply is that in order, so that -- I think Congress intends that a soldier or serviceman would have to register in licenses vehicle for police purposes. We can't have automobiles running around without any kind of identification at all. I think that's exactly what they meant and no more. So they said you must pay at your home State or if your not done so then you must pay at your host state, but what pay what, only registration and license fees.
Byron R. White: On a motor vehicle?
Leon Hubert, Jr.: Only motor vehicle, precisely. Now, throughout this first part of my argument, I am conceding the purpose of argument that we had to these house trailers motor vehicle, I had propose to --
William J. Brennan, Jr.: As I understand that this house trailer was in fact not on wheels, is that right? It was on --
Leon Hubert, Jr.: It was actually on blocks. It had wheels, it had wheels.
William J. Brennan, Jr.: But it was elevated on --
Leon Hubert, Jr.: Well, I don't know if actually it has wheels with touching ground. And I certainly will say this that it could have been moved on a highway, by simply taking the blocks away and putting a power unit under it.
Byron R. White: Well, how did it get there?
Leon Hubert, Jr.: It got there in another taxable year by being towed there by a trailer.
Byron R. White: On its own wheels?
Leon Hubert, Jr.: On its own wheels. But this was not in the tax year. As a matter of fact, the house trailer Ad Valorem Tax Act which what we are dealing with came into affect on November 1, 1962 and this proceeding begun immediately thereafter. Now as I pointed out, all of the above is only assumption that the house trailer isn't motor vehicle within Section 2 of the Federal Act. We do not actually concede that. Mississippi analyzes several federal statutes because there's no definition of motor vehicle in this particular statute. It attempts to find that in other federal statutes the term motor vehicle is define as including a trailer in which to point out I've done so in my brief. I will not deliberate here that the federal statutes involved, all contemplates, it seems to me a movement along the highways. It is true that the definition is broad enough to cover our trailers, but all these trailers attached to power units. Now with every federal statute that's been cited deals with trailers in the sense that there are moving, that's particularly true for example of Dyer Act. I don't think that if a trailer would move by manpower, physical strength and not by a power unit that it would be within Dyer Act at all. So my point is that those statutes from which Mississippi attempts to keep a meaning that trailers are included within the term “motor vehicle” I do not think aid them at all on those grounds. Now turning to the general case law and we've analyzed it in our brief also, and I will not labor the cases individually here, we find that while the term motor vehicle is broader than the term automobile which literally it means “mobile by its own power” nevertheless, it's pretty clear in insurance cases and the criminal cases and then other types of cases, that a trailer standing alone is never regarded as a motor vehicle. It may well be if it's attached to power unit, but standing alone and immobile, it is never so far as I know that --
William J. Brennan, Jr.: Mr. Hubert, may I – may I just ask a question of curiosity. How much money is involved here?
Leon Hubert, Jr.: Its $36.
William J. Brennan, Jr.: $36.
Leon Hubert, Jr.: But of course, Your Honor will perceive that this case is not about $36.
William J. Brennan, Jr.: Well, I would think not. Would you mind telling me what it is about?
Leon Hubert, Jr.: It's about the principle as to whether or not Mississippi and many other states can tax this -- the motor vehicles insofar as the bizarre cases concerned and house trailers and so far as this case is concerned, all over the nation.
William J. Brennan, Jr.: And that -- like many military men have --
Leon Hubert, Jr.: Yes, sir.
William J. Brennan, Jr.: -- is that it?
Leon Hubert, Jr.: This is not within the brief but you asked me the question I should have.
William J. Brennan, Jr.: Well, I'm just curious.
Leon Hubert, Jr.: It's a tax case both of these are. Now further up, let me make one point. Mississippi itself initiated this action and characterized the whole proceeding as a house trailer proceeding. If Mississippi did not have a motor vehicle statute that would be understandable but it does and that statute has interpreted by its own Attorney General has been held to mean that as to a motor vehicle, Mississippi recognizes the situs theory of the Federal Act. Now then, why did Mississippi pass a new Act dealing with house trailers, segregating them away from motor vehicles and then providing that they shall be taxed ad valorem because it's a prerequisite to obtaining the license and omit the provision which it has in his Motor Vehicle Act that they shall be exempt? I suggest that it was done solely for the purpose of taxation ad valorem wise which could not be done under the existing Motor Vehicle Act of Mississippi. Now, I want to reserve a few moments for rebuttal so I make one final point. Mississippi Supreme Court based its opinion large in this case upon the theory that Section 574 is based upon the idea of double taxation. And that was rejected in Dameron versus Brodhead and I do not think it should be revived at this time. I will reserve a few minutes I have for rebuttal.
Earl Warren: You may. Mr. McLendon?
Martin R. McLendon: Mr. Chief Justice, associate justices, may it please the Court. Mr. Justice Brennan coming up with a total amount involved here of course the state's part is less than $2 and I feel --
William J. Brennan, Jr.: Less than $2?
Martin R. McLendon: Yes, sir. I feel very much likely just we laid – it was in a lawyer's office trying to settle the affairs of her deceased husband who is a successful businessman who have wide and extensive business interests. And after she had listened to her meticulous lawyer explain all of things that she would have to do for several hours as she finally sit back in a chair inside if I had known its going to be this much trouble, I just would rather he wouldn't have died. So that we had any idea that it was going to be this much trouble and it probably would have given them $2 to begin with. But we all know, no one knows better than this Court that principles of taxation and State Government, taxation being the very life blood of State Government, cannot be surrendered for the personal convenience of those people who happen to be charged with administering, so that at that time. This Court held as long ago as McCulloch versus Maryland that a state had a right to tax everything within its boundaries. It very recently not too recently but recently cited that that case Gray versus Medler where it even held at New York had the right to tax intangibles found in that State. And of course as this Court well knows that's held on many different occasions that exemptions and exceptions from taxation are the exception and not the rule. Taxation is the rule and exceptions and exemptions are the exception.
Abe Fortas: You say a constitutional question in this case, do you?
Martin R. McLendon: Well, I say this that two members of this present court saw a constitutional question when they dissented from the original opinion in Dameron versus Brodhead case. But I see a basic, we're not questioning the right of Congress because the majority of the Court in that case held at Congress had that right, but, we are saying that in the absence if that Federal Act if this Court is not called upon to construe Section 514, the second paragraph, the second numbered paragraph, if this Court is not called on to construe it, if it does not grant absolute immunity from taxation, the tax imposed in the case by Mississippi is a valid exercise of sovereignty to that extent we say its constitutional issue Your Honor. Now in Dameron versus Brodhead, we think the significant language insofar as this particular case is concerned is found on page 325 of the official report where the court said, “Congress had that valid right because of the military assignment.” The Court said, “What has been said in no way affects the reserved powers of the states to tax for the statute merely states that the taxable domicile of serviceman shall not be changed by a military assignment.” That the majority thought that Congress had the right to do and we are not here questioning that opinion, although, we point out that it was a close question at that time. Now, we assume that the Court has looked at by now, it's repeated several times, it's in my original opinion to the state auditor, its in the Supreme Court opinion in abbreviated form, it's in Exhibit A to both the government's amicus curiae brief and Exhibit A to the petitioner's brief. The statute in question and it says for the purposes of taxation, “The soldier may leave home and take his property within but his property never leaves home.” Now, the court below held that that was a legal fiction and in all cases by virtue of Dameron versus Brodhead in all cases, it would apply except motor vehicles. Now the Congress, I'm getting into the legislative history, although the Government says, there is no legislative history, we have a found some, the Congress added a second Section to 514 of the Soldier's and Sailor's Civil Relief Act and that second section provided that the first section would apply to personal property, including motor vehicles and it would include licenses, fees, and excise paid on those motor vehicles. The words are these, “it shall include but not be limited to.” Now, the Supreme Court of Mississippi held that the inclusion of the two grand fields of taxation that is licenses and excises and that the words not be limited to proceeding that necessarily included ad valorem. And this Court so held in Dameron versus Brodhead and said, “ad valorem was excluded.” Now, the point we are making is that provided the license, fee or excise required by the laws of the home State have been paid. Now, we get into the matter of where the registered or unregistered automobiles would be permitted to go up and down highways and streets. Now in addition, one more in legislative history if the Court please, the Congress was considering as it shown by Exhibit H to the petitioner's brief a statute that would have granted absolute immunity from taxation of all sorts to servicemen. Now that Act was submitted by the Chairman of the House Committee on Military Affairs to the Judge Advocate General's Department of the War Department and as the Secretary of War was asked, I mean, they asked for advice and recommendations. Now, those -- that advice and recommendations came back in the form of a substitute Bill which they recommended passed or be passed and Congress without changing a word or a punctuation marked passed it. So that's the law we're dealing with. Not the one that would have granted absolute immunity from taxation, but the one that the War Department drafted for the Congress and it had this proviso in it. Now, the U. S. Justice Department there are some reasoning that eludes me, could try to construe that proviso as being limited to – don't even -- trying to limit it beyond its own terms. But this Court has held in numerous occasions that proviso -- a proviso in a statute limits the affect of the enactment clause. We treat with that on page 8 of our brief and the Court held that the illogical and grammatical scope of a proviso applied to the Principle Clause, that is in this case Section 1, numbered 1. In other words, Section 2 includes by its terms and applies to motor vehicles provided the license, fee or excise required by the laws of the home state of the serviceman have been paid. Now, our view of this particular matter is not new. Mississippi's view of it is not new. In fact, in my recent opinion I relied very heavily on the Supreme Court decision of the State of Virginia. That decision you see Portsmouth had levied a license fee for this support of the City Government of Portsmouth and the serviceman attempted through the application of Section 514 of the Soldier's and Sailor's Civil Relief Act to avoid the payment of that $10 license fee. The Supreme Court of Virginia said that, Section 2 since he was registered, his automobile was registered in the State of Virginia, he was subject to that license, that $10 license that was applied by the City of Portsmouth. Now, it's been stated here that Congress amended the Act several times. This particular Act has been amended, it was amended in 1940 and that was the amendment the legislative history that I just discussed. It was amended again in 1962. Now, this Whitehead case was decided in 1961 by the highest appellate court of Virginia and the Congress, certainly the military with full knowledge of that reported opinion asked the Congress to amend Section 1 to relieve a serviceman domiciled in New Jersey from having to pay taxes because he was overseas. He had left his duty State and left his family in Virginia. The District Court held at the taxes were due. The Court of Appeals in reviewing that case observed that Congress amended Section 1 of the Act to clarify its original intent. Now, my point there is certainly the Supreme Court of Virginia's interpretation of that statute couldn't be binding on this Court, but we submit that it's persuasive. There is a Court that has delivered and looked in to this proviso and held that the serviceman had a right and he has an absolute right. He has a right that the members of this Court don't him have and that is to register the automobiles back in their home State. And our position is that that right is given him by a Congress and he can do it. And no matter where he goes in the service of this country his home state license is valid and he can successful defend a prosecution for improper driver's licenses or anything else based on Section 514 of the Soldier's and Sailor's Civil Relief Act. Our further position is that unless he himself does that, voluntarily registers in his home State, he subjects himself to the registration licensing and taxing laws of the State where he is found. And we think that's a reasonable construction to be placed on this Federal statute and we think it is a proper construction to be placed on this federal statute. We think the federal statute certainly is controlling. If it grants -- if this Court holds that it grants absolute immunity, then we're through. We don't even have to consider it further. But we submit that it does not grant absolute immunity insofar as motor vehicles are concerned. We admit that has been illustrated on a Paean or any other item of household goods, it does as interpreted by Dameron versus Brodhead grants an exception from ad valorem taxes. Now, we think that the Court's interpretation of Section 514 will be dispositive of the matter, but we do for the Court's assistance we hope, we want to discuss some Mississippi statutes. They are both set forth both of the pertinent statutes are set forth as appendix to our brief and they been referred to or eluded to in part. The Mississippi statutes are material to this case and the Court's determination of this case were two points and two points only. Alternative one, Mississippi made a good faith effort to induce this man to register his auto – his house trailer in Mississippi and that he failed and refused to do.
William J. Brennan, Jr.: But what does legislation entailed Mr. McLendon?
Martin R. McLendon: The registration entails filing an application furnishing with necessary information concerning year, date, and model purchase price to take care of the sales tax features and the address of the registered motor number, and things like that, in other words, regular police registration. It involves a fee varying from over a few dollars up to possibly well on trucks and other things it's quite expensive but on personal motor vehicles. In this particular case, that trailer could have been registered in Mississippi for $10 and if it had been registered in Mississippi by the payment of the fee of $10 under the first Mississippi statute that I'm going to discuss, there would have been exempt from that ad valorem tax. Now, there the serviceman had not -- by that I mean this, in Mississippi in 1958 the Constitution was amended in 1956 to authorize a special mode of assessment and levy ad valorem taxes on motor vehicles. And the Legislation 58 set up an elaborate system for assessing those things. It's something new I don't know what other states might have follow it. It sends to connote that we that we started it sales taxes in regards to the depression and now the District of Columbia has adopted it. So, it maybe a far, far reaching thing at least we thought it was a looking forward. Now my point, the -- in recognition of the Soldiers and Sailor's Civil Relief Act, Section 21 of that Act provides that any automobile operated on the streets, highways of Mississippi, so that it would be required or should, I don't know the exact word but they are there, be required to register, to pay motor road and bridge privilege license would be exempt from the ad valorem pitches of that Act. Now, this as I say Sergeant Snapp failed, declined and refuse to do a --
Earl Warren: If this was a -- if this happened to be an automobile Mr. McLendon and it had not been used on the highways throughout the taxable year, would registration have been required?
Martin R. McLendon: Your Honor, there's a possibility that it wouldn't have, no.
Earl Warren: It would not have.
Martin R. McLendon: That's right.
Earl Warren: I understood this trailer have never been on a highway in the taxable year?
Martin R. McLendon: In the taxable year, yes. It's a stated on oath that it was in was on the highway during the preceding taxable year and --
Earl Warren: Proceeding taxable year, but supposed you have an old automobile that you had for five or six years and you just decided to retire it and it was in your backyard for an entire year, would it be taxable? Would you have to register it?
Martin R. McLendon: I don't think so Your Honor.
Earl Warren: So, how do you differentiate that from a trailer that has been in place for a solid year and has not been on the highway during the taxable year?
Martin R. McLendon: Well, the differ – well, the differentiation in this case Your Honor, is that factually this particular trailer could have at anytime been driven on the highways.
Earl Warren: But I suppose an old automobile could too, but if didn't go on the highway?
Martin R. McLendon: I recognize the analogy that you're using You Honor if you – if you permit me.
Earl Warren: Yes.
Martin R. McLendon: The -- it had been used, admitted on oath. In other words, the State of Mississippi could have elected to prosecute him for having driven down the highway with this trailer without being registered, they elected to tax him instead. It had been and it could be at any time. Now, this second Mississippi statute that I'm coming to was designed to cover that particular type situation where the trailer is pulled up on a trailer house, a yard and its -- and all the members of the Court have observed the trailers have become -- I mean, its big business. People use them for home, year in, and year out. And the second ad valorem Act of law of Tax Act that this tax was levied on him was designed to cover that particular thing. In other words, it was -- if I may point out that the first Act depended entirely upon the motor vehicle registration statutes for its effectiveness and as Your Honor pointed out an old automobile or a new trailer would be exempt. The second Act was designed as the -- in the language of the layman to cover a loop hole in the law because they were 5, 6, $7,000 house trailers sitting up on parking lots. People were living in them as homes, they were never used on the highways and they were escaping all taxation.
William J. Brennan, Jr.: Well, may I get that Attorney General?
Martin R. McLendon: Yes, sir.
William J. Brennan, Jr.: Under your first Act, if -- it was not something that had to be registered as you suggested in answer to Chief Justice.
Martin R. McLendon: Well, my suggestion was -- for that -- now that is -- there is a -- my suggestion on that was that it had -- the man had been under a duty to register prior to that and if he was ever going to use it on a highway again, he was under a duty to register and that is the statute --
William J. Brennan, Jr.: Well, I thought you answer to Chief Justice said in the case of the automobile is not used and just garaged for the whole year –-
Martin R. McLendon: Exactly.
William J. Brennan, Jr.: -- that would not have to be registered?
Martin R. McLendon: Under the motor vehicle license statute.
William J. Brennan, Jr.: Well, would that – my question is would that had been taxable under the ad valorem tax law as it then stood?
Martin R. McLendon: It would have been taxable under the old archaic ad valorem tax law that was deprived, I mean derived from the tax law dealing with real property. And of course that was what the reason for the adoption of Chapter V, 88 laws of 1958 was because Mississippi found that that archaic system of back assessment was not adequate to cover highly mobile property in the nature of motor vehicle.
Earl Warren: You and counsel agreed that this trailer did not operate on the highway during the taxable year?
Martin R. McLendon: Well, there's -- we've changed a few words in our brief on it that frankly we don't know. The tax if it were paid in advance and whether did or did not, I do not know. I mean, we -- my answer to his assertion that it was not was it, it was capable of it. The Supreme Court of Mississippi held had previously used the highways when ever the need arose and that speculation as to whether it did or did not was not material because as we point out, in recognition of Section 514, Mississippi granted an ad valorem tax exemption. Now, we -- if under our view of the proper interpretation of 514 and if that is proper, Mississippi didn't have to grant that the exemption. As I say it was an inducement to get these servicemen to waive their federal right by registering in Mississippi where the automobiles were being used.
Earl Warren: Well, I would think that if – whether it used the highway or not, it was immaterial that these people who have the old automobile junkyards, where they have hundreds, and hundreds of automobiles that have been prior to years operated on the highways, but were not operating it in the current year –-
Martin R. McLendon: Yes, sir.
Earl Warren: -– would have staggering taxes to pay --
Martin R. McLendon: Well, they do.
Earl Warren: I don't suppose they pay them, do they?
Martin R. McLendon: If the assessor is properly performing his duty. The assessors has to own their personal property just like --
Earl Warren: Oh, from personal property, ad valorem, yes, but I'm talking about operating as -- a license operating as a motor vehicle.
Martin R. McLendon: No not that --
Earl Warren: It couldn't have to.
Martin R. McLendon: No, sir.
Earl Warren: Can you distinguish that then from this case?
Martin R. McLendon: My distinction on that Your Honor is that, it was capable of being moved. It had been moved and no registration fee had ever attempted to -- been purchased. As I point out in the beginning, we could own the sworn statements in this record, Mississippi has a criminal prosecution against it.
Byron R. White: Well, let's -- assuming that -- assuming this was registerable as a motor vehicle, why didn't you just collect the motor vehicle fee rather than the -- an impose a personal property tax? Is this the only device you got to collect your motor vehicle fee under the name of -- I mean you can't go recover and make the person pay his the registration fee if it's registerable?
Martin R. McLendon: Yes, we can Your Honor.
Byron R. White: Well, then why -- why go to the personal property tax if you use it -- why should you be any more able to put a personal property tax on a automobile then on a bedroom furniture?
Martin R. McLendon: Well as I say under our interpretation of the Congressional Act, we have that right. If we're wrong in that of course the Court has the final say.
Byron R. White: The failure to have -- the failure to register takes the -- takes this automobile out of the definition of property?
Martin R. McLendon: No. Its -- I think it's a special mode of tax for a special item of property. I don't think it takes you -- takes it out of the definition of property, no, sir. Now, why the local sheriff assessed under this Act instead of assessing the penalties under the other statute, I -- I don't know but it did and the tax, of course, it was paid as the tax it was due under Chapter 535 laws of 1962. And now, we get into it if we have a time remain the fact that this under our view is a motor vehicle under the meaning of those two statutes. As I say the statute that granted the ad valorem tax exemption defined motor vehicle as anything driven on the highways with other than muscular power and certainly that inclusions. We take the position that he was under a duty to register that house trailer and all of the house trailer -- I mean, of course this tax but this particular one. He was under a duty to register under that statute, he didn't do it.
Byron R. White: What if – that isn't particularly at issue here, is it?
Martin R. McLendon: Only in definition, Your Honor, in taking the position now, that it is not a motor vehicle. We take the position now that a sworn statement said that those two statutes apply and therefore by the application of those two statutes and the statutory definition contained therein is bound by his own sworn statement.
Byron R. White: Question, is not whether you can make him register this house trailer but whether you can tax it as personal property?
Martin R. McLendon: That's right. And as I pointed out in the beginning of this argument Mr. Justice White, that statute is being discussed not because it has any binding of faith. We submit that this Court's interpretation of Section 514 of this Soldiers' and Sailors' Civil Relief Act will be determined. If this Court hold it, the proviso means nothing, the states will do the best they can to try to get them registered. We point out in our brief that military personnel will be free to elect whether they register the motor vehicles or not register them at all. But the -- and as I say that is only being discussed at this time to show a good faith effort on the part of Mississippi. This man had the right to register in South Carolina. There's no question about that and there's no question I don't think from South Carolina statute said there in the petitioner's brief cited and referred to in our brief that he was needed to be registered there. They came out with an argument at one time but seem to abandoned it that the -- this was when the Justice Department was still handling this case, that the federal statute placed it in South Carolina but it was physically in Mississippi. But it wouldn't liable for Mississippi tax, because it was physically in South Carolina but it was not liable for South Carolina tax, because it was still physically in Mississippi. And as I say the Supreme Court rejected that Carnival Shell Game and I think this Court certainly will too. But that man had an absolute right to register in South Carolina. We don't question that and if he had, we couldn't have done single by it. Of course, we couldn't regulate his civil conduct but we could not have required further registration. Now, we say Supreme Court said that, he failed to comply with terms that proviso and therefore Mississippi Acts of material. Now the first Mississippi statute, we discussed and offer for this Court's consideration and it's copied in full in our brief to show a good faith effort on the part of Mississippi to get it come on down to register.
Byron R. White: What --
Martin R. McLendon: Now, we gave him that opportunity and now he's asking this Court to strike down the second statute. Now, how far when Mississippi have to go, that's my question to these gentlemen representing the Judge Advocate General's office of the Airforce, how far does Mississippi have to go? Short of putting these servicemen in jail for not registering the car, that's what California did, they fined them, but how far will Mississippi have to go to induce them to register their personally owned motor vehicles and house trailers in Mississippi?
Byron R. White: Well, what do you do about other people in Mississippi if don't register their cars?
Martin R. McLendon: There are general sanctions of course in the registration statutes and the ad valorem features have penalty at all points.
Byron R. White: How much is the personal property tax did you assess?
Martin R. McLendon: In this particular case, I think total personal private tax on this particular case is $36.50.
Byron R. White: $36.50 --
Martin R. McLendon: $36 and then -- that the registration fee in that statute of $2.50. Yes, sir.
Byron R. White: What about the -- and then how much would have been cost him to register this house trailer?
Martin R. McLendon: They get it registered under the regular motor vehicle statutes and have paid a fee of $10.
Byron R. White: And that's would have to be -- don't you have a license fee in addition?
Martin R. McLendon: That is the license fee. Yes, sir.
Byron R. White: That's the -- that's the total?
Martin R. McLendon: That's the total. Whether it might be a tag fee of $2 but it was -- there's [Inaudible] and that as I say that the only reason we discuss this, we don't think its controlling certainly not on this scope but we do think it is persuasive of Mississippi's good faith to induce them to register. Now, Mr. Hubert hurled out a challenge in his last reply that we didn't in having an opportunity to answer in normal rules of this Court, a written of answer. He says that the motor vehicle registration statutes, the regular statutes, were put in this case for the first time. I want to ask him, he is got a few minutes left, what do you think I referred to on page 30 of the record when I told him that they have waived that right and what does he think the Supreme Court of Mississippi -- excuse me, I'm very sorry.
Earl Warren: Well, finish your sentence, it's alright.
Martin R. McLendon: What he thinks a Supreme Court of Mississippi said when it held on two different occasions that the man had waived his right to register under Mississippi's ordinary motor vehicle statutes because as I point it out of Chapter 588 contains no registration features. It depends entirely upon the regular motor vehicle registration statutes. Thank you for the extra minute Your Honor.
Earl Warren: Mr. Hubert?
Leon Hubert, Jr.: May it please the Court, I have all two replies. Mr. Justice Brennan asked or someone asked whether the highways we used or not, whether there was a question of fact on that point. There is not. At page 25 of the record there is the affidavit of Sergeant Snapp that he figured he never used the highways and the case crystallized the facts of the case, crystallized at that point. Now, I have -- there's nothing in the record to show that was done. Mr. Justice Brennan asked, what will it consequence? So how -- what do you have to do to register and the defendant failed say that one other things you got to do is to register is to pay the ad valorem tax. You can't register without paying ad valorem tax and that is Section 58 of the House Bill Act or 53.
Byron R. White: That's his reason in this case, is that the first or the second?
Leon Hubert, Jr.: It's the second Act.
Byron R. White: House Bill Act – That's the third Act?
Leon Hubert, Jr.: Yes, at the third carried Act under which this proceeding is brought. You cannot register without having paid ad valorem. As a matter of fact, you must register by mere possession and of course as far as that's concerned, we have to pay the two and a half, that's alright, but it's the ad valorem. We recognize that as a police control device, we must register but he couldn't register without paying ad valorem. So he paid, but under protest in order to protect his rights here and he had urged these rights --
Byron R. White: Well, what about the specific calling of ad valorem what if Mississippi has just said that this is a registration tax or a --
Leon Hubert, Jr.: No!
Byron R. White: Or a --
Leon Hubert, Jr.: The nature of tax will depend on the fight as it were of the tax and if it's based upon the value is ad valorem, no matter what they call. In other words, they can't get away from the protection intended by Congress to servicemen by labeling their own.
Byron R. White: Well, lot of the -- lot of registration taxes are out of info service are keeping that as --
Leon Hubert, Jr.: It maybe sir, but if -- if they also -- actually for the purpose of revenue, they are ad valorem, if that for the purpose of licensing views to the highway, that's a different thing. We're go along with the --
Byron R. White: Well, are you saying -- are you saying that we should treat the states' right to -- to impose an ad valorem -- ad valorem tax the same way as a registration fee?
Leon Hubert, Jr.: No, sir. I say that it should be done differently. It should -- I said that under 574, we are free from the ad valorem tax. Although as a police measure, in case this where the highways are used, we exceed to the proposition that Congress mention must pay only in the stay in host State one other two. But we do not think Congress intended to say that, if you'd simply do not register you lose all of the protection given to you. You're penalized extremely heavily. We do not think Congress meant that at all.
Earl Warren: Thank you.


Warren E. Burger: We will hear arguments next in 1181 Batterton against Francis. Mr. Rabin, I think you may proceed.
Joel J. Rabin: Thank you, Mister Chief Justice. May it please the Court. This litigation began only six years ago and it has been before the court on two previous occasions. Despite its complex course through the Federal Judicial system, there is only one clear cut issue, now facing the court this time. And, that is whether the present version of the regulation of the Secretary of Health Education and Welfare, 45 CFR, 233-100A1 is valid under the grant of rule making authority containing Section 407A of the Social Security Act. So, what we are arguing today is an Administrative Law case. One concerning the proper scope of agency rule making. By its petition for certiorari, Maryland seeks reversal of an order by a Three-Judge District Court, affirmed by the Court of Appeals for the Fourth Circuits denying Maryland’s motion to vacate an injunction previously entered by the District Court. That denial was based on holding that the HW regulation was invalid under Section 407A. Before stating the facts, it might be helpful to briefly outline the statutory framework. The AFDC-UF Program, unlike the regular AFDC Program, authorizes benefits to two parent households, where the need or deprivation of the children in the family arise from the unemployment of the father. Program was first enacted in 1961 as the Unemployed Parent Program and covered need or deprivation arising from the unemployment of either parent. In its original form Section 407, provided for coverage of children, who are needy as a result of the unemployment of a parent “As define by the State.” In 1968, substantial amendments were made in program and the language of Section 407 was changed from unemployment as defined by the State to “Unemployment” as determined in accordance with standards prescribed by the Secretary. After passage of these amendments, HEW prescribed the predecessor version of 233-100A1, which mandated an hours work criterion for State definitions of unemployment. All persons who work less than 30 hours per week. The regulation also permitted coverage per persons who work up to 35 hours per week. That was the regulation which was in effect when this litigation began in 1971. The claimants in this case, all applied for Maryland AFDC-UF benefits, after applying for and being denied, Maryland unemployment compensation benefits. Claimant Robert Francis, a laboratory technician, was denied unemployment insurance because he was participating in a strike which resulted in a work stoppage at his plant. Claimant Edward Wright, who intervened in the Francis case, was disqualified because he was fired from his job as a carpenter for excessive absenteeism in the Maryland Unemployment Insurance Agency determined at that time, the constituted gross misconduct. Claimant Barry Bethea(ph), who files a separate action, which was consolidated with Francis case, on appeal was disqualified from unemployment conversion, when it was determined that he had voluntarily left his job as a truck driver delivery man without a good cause. All these claimants were then denied AFDC-UF benefits in Maryland pursuing to Maryland’s Social Service Regulation, 702091082, which provides that a grant may not be paid for AFDCE which it is Maryland label for AFDC-UF “To meet need due to being disqualified for unemployment insurance.” The Three Judges District Court which was convened in the Francis case determined in its first decision which we described in our brief as Francis I, that this Maryland regulation did not violate the Equal Protection Clause, as claimants had alleged, but that it did violate the predecessor version of 233-100A1. In a courts’ view, that regulation did not permits States to consider any factors other than hours worked in determining unemployment. As a result, the District Courts subsequently enjoined enforcement of the Maryland Regulation. When that injunction was appealed by the State to this court, the Solicitor General advised the Court, that HEW had always interpreted the statue and its own regulation to permit other State eligibility factors such as contained in the Maryland Rule. However, since HEW had decided to amend its regulation to expressly permit regulations such as that of Maryland, the Solicitor General recommended Summary Affirmance, and this Court took that action. Thereafter HEW did amend the regulation as the Solicitor General had indicated and the regulation now requires that States pay benefits to those persons who work less than 100 hours per month except that States are permitted to deny benefits to persons engaged in a labor dispute or engaged in conduct resulting or which would result in disqualification under the States Unemployment Compensation Laws. After that Regulation was amended in that manner; Maryland filed a motion to resolve injunction in Francis I, but the District Court in Francis II decision held that the Maryland Regulation was still invalid on the ground that the amended HEW Regulation now violated Section 407A. The decision in Francis II not to vacate the previously entered injunction was based on a theory that Section 407, relates to unemployment of a father. And a father, who was discharge of the cause is unemployed, and HEW by regulation cannot permit States to deny benefits to person who would fall within this ordinary meaning of the term. With regard to persons out of work as a result of a labor dispute, the District Court held the amended regulations do not establish any standards for the States. It did not prescribe standards as the statute provided, since it granted discretion to the States to deny such or to pay such benefits. The separate District Court decision in the Bethea case, adopted the same reasoning as the Francis II decision did with regard to misconducts. The Bethea case was the one which involved persons who had voluntarily quitted without a good cause. The Court there held as in Francis II, with regard to misconduct that such persons were in fact unemployed and under the statute, the Federal Agency had no authority to deny benefits to such persons. Court of Appeals affirmed those two District Court decisions in a Per curiam decision adopting the reasoning and conclusions and not offering any rationale of its own. As I indicated earlier, the State believes that the basic issue in this case, is of the scope of HEW’s ruling authority. We contend that the issue is not whether AFDC-UF benefit should be paid to misconducts, to strikers, or the persons who have voluntarily quit there jobs. Rather the question is, whether the statute gives HEW the authority to allow States to choose to pay such benefits. Our position stated very briefly, is that statute constitutes a very broad grant of legislative type of rule making authority, HEW and that the regulation constitutes a reasonable exercise of that authority. There obviously, can be no question that the language of the statute expressly grants about rule making authority. We believe that those statutory words fall within the label that the Professor Jaffe and Davis had devised namely, legislative type of rule making. Other commentators refer to them as prescriptive or substantive rules. And it is well established, that such rule making is to be given substantial difference by the Courts. As this Court stated in Citizens to Preserve Overton Park, the ultimate standard of review is a narrow one. The Court is not empowered to substitute its judgment for that of the agency. Thus, the HW Regulation, we contend is valid and should be upheld if it is reasonable under the statute even if the Court favors a different result. Claimants and the District Court avoided the issue of the broad scope of rule making authority containing Section 407 in two ways. First, as I indicated, they argued that the regulation was invalid because it excluded from the persons’ from programs, certain persons’ who fell within the ordinary meaning of that term. We would respectfully contend that that reasoning begs the question. The purpose of the statutory words was to give the rule making authority to HEW and for HEW to give content to the term unemployment. The term has never been self defining in the statute. It was not self defining in 1961 and it is not self defining after 1968. Reliance on a dictionary meaning cannot answer such a question as this court had so recognized in the Burns v. Alcala case which concerned the meaning of the term 'dependent child'. While the District Court and the claimants choose to rely on the dictionary meaning of the term 'unemployment', of course, they choose to ignore totally, the dictionary meaning of the words in accordance to standards prescribed by the Secretary. The District Court also avoided the question of the scope of rule making authority contained in 407 by holding with regard to persons’ who had participated in a labor dispute, that the Section mandated a uniform national definition of unemployment. Therefore, the District Court reasoned that the limited grant of discretion to the States with regard to such persons’ disqualified for participation in labor dispute was improper. I do want to mention at this point that Maryland agrees with the point raised by the Solicitor General in his memorandum, that the Court does have to get to the question of the validity of the regulation in connection with persons’ participating in a labor dispute because in Maryland, all the claimants and the Maryland rule only operates against persons’ who are disqualified for unemployment insurance. It so happened that the leading name, plaintiff was a person who was participating in a strike but he was denied benefits because under the Maryland rule, he was disqualified from unemployment insurance.
Warren E. Burger: Now, you have told us that the dictionary meaning of the word unemployment is basically, irrelevant, is that it?
Joel J. Rabin: We think it is not the test for term.
Warren E. Burger: It is not dispositive.
Joel J. Rabin: That is correct, Your Honor.
Warren E. Burger: But you would concede, I suppose that it is relevant, if it is said that in looking at the regulations, you have to, they have some rational relationship to the word unemployment.
Joel J. Rabin: That is correct, Your Honor. That is correct, and it is our contention that the HEW Regulation and the Maryland rule, they are under – are reasonable under that...
Warren E. Burger: -- in defining the word unemployment.
Joel J. Rabin: That is correct.
Warren E. Burger: But I just want to be sure you do not say that the statutory phrase is irrelevant.
Joel J. Rabin: No, we think.
Warren E. Burger: It all depends on what the regulation says.
Joel J. Rabin: And we would not contend that HEW could not look at the dictionary meaning when it --
Warren E. Burger: Well, you must not look at the ordinary meaning of the word and then defining by regulation, what it means as in giving a precise regulatory definition.
Joel J. Rabin: That is correct. The legislative history with regard to Section 407, it has been said out at great length in our brief, claimants brief, the appendix and the decisions below and I will not try to repeat it. It is true that there are phrases in the committee reports that talked about a national definition of unemployment. On the other hand, it is also true that other reports talks about the statute as authorizing a national definition or in sometimes it is the same report that uses the phrase, a national definition. And it is also true that those reports at some points used the actual statutory words namely, as determined in accordance with standards prescribed by HEW. It would have been very easy for the Congress to mandate a national definition with regard to a uniform national definition. All they would have to in 1968, would have been to substitute the word 'Secretary' for the word 'State' in the statute. This fact was recognized by the District Court in its Francis I decision but and that decision points out Congress chose instead to use new words which did not mandatorily require the Secretary to require each state to adopt the same of the word, unemployment but instead merely authorize the Secretary to prescribe a national meaning if the Secretary so desires. The many statements as to the intent of the 1968 change must be considered in connection with the actual words used in the statute. This court has recognized, the most persuasive evidence for the purpose of a statute is the words by which the legislature chooses to give expression to its wishes. We think that when one considers the legislative history behind the 1968 amendments and looks at the words of the statute themselves, it is clear that Congress contemplated that the Secretary of HEW was free to allow the States limited discretion to vary the coverage in response to their different needs and policies. Thus, under the broad authority granted by the Section, the federally prescribed standards could take the form of a national definition but they could also grant the States some discretion in some specific areas as in fact the regulation has done. Assuming that to be the case, HEW's regulations still must meet the test of reasonableness under the statute or the courts must set it aside. We think, it is clear that 233-100A1 does meet that test in connection with the purposes of the AFDC-UF Program as set out a statute and the legislative history. When the program was first adopted, President Kennedy indicated that it was intended for unemployed workers and he gave the example of a person who had exhausted his unemployment compensation. We have quoted at length in our brief from the statements by Congressman Burns, one of the co-sponsors of the original legislation, which makes clear that Congress did not intend that the program provide benefits to persons who are voluntarily unemployed. And as originally adopted in 1961 and as amended in 1968, Congress made clear that the program was intended to provide assistance to persons and in connection with employment not covered by the existing Unemployment Compensation Program, that the program was not designed to substitute for that already existing nationwide program. Furthermore, as amended the program is very similar in operation on unemployment compensation and that it is an Income Maintenance Program, designed to assist those who are unemployed not as result of their own conduct. In light of the similarity of these purposes, namely the persons who are involuntarily unemployed, we think it is clearly not unreasonable to attempt by regulation or to permit by regulation, a State to harmonize the operation of these two Income Maintenance Programs. Namely, not to pay benefits under one scheme for conduct which results in a disqualification under the other. We note that the District Court in dismissing the claimants constitutional claim, recognized this harmonization purpose as a rational basis for the regulation. The court upheld the argument that the rationalization of these two programs which are both part of the scheme of cooperative Federalism described by this court in the King case established by the Social Security Act was a proper rational basis although the District Court did not necessarily agree with that basis. It is certainly not unreasonable to grant States limited discretion contained in 233-100A1. In one of the Public Assistance Programs created by the Social Security Act; when the statute permits such a grant of limited discretion. Now, the basic purpose of the statute is to extend assistance to a group of needy persons and this is true of all the public assistance programs. By making partial Federal reimbursement available to those States which need certain substitute Federal requirements. Now, unlike the other Public Assistance Programs, 24 states have not joined the AFDC-UF program. Although, as indicated in our brief, three states have joined in the last two years and one state has dropped out of the program. As shown by the Solicitor General’s memorandum, a significant number of States, nine, if you count and include Maryland, have restrictions -- actually there is more than nine because the Solicitor General classified eight states with regard to cause and eight states with regards to strikers, so the total number of states who might be interested in this type of a restriction would be greater than nine. It is difficult for Maryland to see how the prohibition against such state discretion will encourage the general purpose of the program, of the statute through state participation in this program which is designed to assist needy, laid-off workers and unemployed through no fault of their own. We think that perhaps the best proof, of the reasonableness of the grant of discretion found on the regulation is the approach taken by the Federal Government itself in connection.
Potter Stewart: It seems the statute does not introduce that element that you just mentioned, though no fault of their own. The neediest people maybe children in the homes of unemployed people who are unemployed because of fault of their own.
Joel J. Rabin: You are correct Mr. Justice Stewart that it does not use that phrase.
Potter Stewart: What?
Joel J. Rabin: The statute, but it does not, in other ways may clear that persons who through their own conduct are not active, for example, not actively seeking employment are not entitled to benefits.
Warren E. Burger: There are other forms of welfare benefits to take care of the needy children, needy people besides just the ones we are talking about here.
Joel J. Rabin: Well, that is correct, if you are talking about the medical assistance, in addressing this --
Warren E. Burger: But this is AFDC-UF?
Joel J. Rabin: Right. We think, the legislative history shows that the program was not designed to assist those who are voluntarily unemployed.
Warren E. Burger: This was designed to assist children.
Joel J. Rabin: That is correct.
Warren E. Burger: Is it not?
Joel J. Rabin: That is right. And we do not content, it is not Maryland's position that the states that have chosen not to adopt the restrictions that Maryland has chosen are doing something illegal.
Warren E. Burger: No, I understand that
Joel J. Rabin: But.Mr.
Warren E. Burger: The question is whether this regulation is permissible.
Joel J. Rabin: That is correct, and we think that, when you look at total statutory framework, there is a requirement for job registration. There is a denial of benefits for refusal to accept a suitable job offer.
Warren E. Burger: This is statutory or?
Joel J. Rabin: These are all statutory and they are contained in Section 407. We think taking those requirements with the legislative history, it seems clear that the thrust of the program was to help those who are involuntarily unemployed.
Warren E. Burger: The states are not compelled to participate in this program.
Joel J. Rabin: That is correct, Your Honor and 24 states had not participated although, a few have, because of the recent economic conditions in last few years, three have joined the program.
Warren E. Burger: So, then no states the families and the children of those families in these circumstances depend upon other.
Joel J. Rabin: That is correct, Your Honor. They receive no assistance of this type at all and it is our contention that is reasonable for the Secretary of HEW to look at what he can do to encourage those states to participate in the program in prescribing his regulations and that is we think, in fact, supports this particular regulation, which gives states the choice. It is does not mandate to make the payments and it does not prohibit that they make the payments.
Warren E. Burger: And the flexibility to permit variations from state to state were contemplated by Congress to take into account different forms of industry and occupation among other things, were they not?
Joel J. Rabin: We think so. We think that this court made clear under Dublino decision, that in connection with the welfare cases, the Welfare Programs, the Courts are to get considerable attitude to the differing state interests, so that the programs can be developed in a flexible manner to meet the needs in particular States. The Congress is clearly aware of the issue of coverage of strikers in this particular program. That is shown by colloquia between Congressman Mills and Dominic, which is cited in claimants brief, so Congress knew, when this program was originally adopted in 1961, that it was not mandating or not prohibiting, in fact the colloquia goes to the effect, the Congressman Mills indicates that if states chose, they could make the payments to strikers. We think that, as I was saying, the example by the Federal Government in connection with the state administered Unemployment Compensation Program, we think is a good example of the reasonableness of the Secretary’s Regulation. Congress has been aware for years and the Federal Agencies have been aware for years, to the fact that a few states, pay unemployment compensation benefits to strikers and many states do not pay unemployment compensation to strikers. However, with regard to that particular program, which is administered by the states and it is financed through state taxes, Congress has decided to leave that discretion to the states. We think that that approach is no less reasonable when taken by the administrator of a program who is charged with broad authority to implement and supervise the program. No less reasonable than it is, when it is taken by the Congress. Claimants contend that the HEW Regulation is invalid under the state eligibility decisions by this court in recent years in the welfare field, including the most recent formulation in Burns v. Alcala; the 1975 decision, I referred to previously concerning whether unborn children are necessarily covered under the AFDC program. However, contrary to their contention, it's our view that that decision really supports the validity of the HEW regulation. In Burns, the Court stated that a participating state may not deny aid to persons who come within the statute. In the absence of a clear intent that the Congress meant the coverage to be optional. Well, there is such an indication in this case. It is right in the statute. Congress provided that the Secretary of Health Education and Welfare had the option to extend or restrict the coverage of the statute and also to grant a limited discretion to the states. We think that even more appropriate in support of the HEW Regulation is the reasoning of the Dublino decision to which I referred to previously. We also think that the Louis v. Martin case which upheld HEW broad rule making authority with regard to the AFDC Program supports this case. We think that the decision by this Court recently enabled behind which upheld the regulation by the Secretary of Agriculture also supports the regulation. That decision cautioned the courts to defer to the informed experience and the judgment of responsible administrative agencies, even if they might favor a different result. The decision below interpret the statutory language, unemployment as determined in accordance with standards prescribed by the Secretary, which is an expressed grant of very broad rule making authority, to mandate coverage for persons’ disqualified from unemployment compensation because they were fired for misconduct or because they voluntarily quit their jobs. And also, to bar any grant of discretion to the states as to payment to the strikers. In effect, they say that HEW has no broad authority with regard to that first category. And with regard to the second category, HEW must either mandate payments on a nationwide basis or prohibit payments on a national basis. We respectfully contend that that is not a reasonable interpretation of the statutory language or of the legislature history. It is now and the Solicitor General have demonstrated the regulations which HEW has promulgated under the statutory words, we think is a reasonable regulation in the Maryland Regulation which authorizes it are valid and the decision below should be reversed. I would like to reserve the remainder of my time, thank you.
Warren E. Burger: Very well. Mr. Brown
Christopher G. Browning, Jr.: Mr. Chief Justice, may it please the Court. This case basically involves a question, whether or not, the Secretary of HEW has followed the power that he was given by Congress in a specific statute 42 USC Section 607. The statute reads and as it is pertinent to this case, in defining who can get this certain kind of welfare benefit for families who do have children. That it must go to needy children whose “Father's unemployment as determined in accordance with standards prescribed by the Secretary and so forth and so on with other pre-conditions.” So, we are talking about unemployment in accordance with standards prescribed by the Secretary. The Secretary in attempting to define unemployment has done so in various ways. First of all, the Secretary has defined unemployment in terms of hours worked, which we have no quarrel with whatsoever. That is the most common sensible way in which to define whether or not a person is unemployed or not. There may be other ways and maybe, whether or not, he has a contractual duty or right with respect to an employer. It could also perhaps be defined with respect to the rights that he has, seniority rights perhaps to an old job, very many aspects of what an employee might have to expect in a specific case. But the Secretary of HEW has not defined the term unemployment in that way, instead the Secretary has basically defined the term, by the legal consequences of the way in which a person lost his last job. So in addition, to defining unemployment in terms of hours worked, the Secretary also allows the States at their option if they so choose the definition of unemployment which turns on two things: one, whether or not that person is eligible for unemployment insurance and secondly, whether or not that person has been involved in a labor dispute. It is our contention, Your Honors, that the latter definitions or attempted definitions by HEW are null and void as all the judges that have heard this case thus far, have found. As a prelude, I would like to say that, we agree with the state. The issue in this case is that part of the HEW regulation dealing with giving the states the power to disqualify people from AFDC-UF, this Welfare Program who have in turn been disqualified by those states for unemployment insurance. I do not think, the Solicitor General does not think and the state that has considered it does not think, that we are talking about that part of the HEW’s statute dealing with striker disqualification. The state has not acted on that basis. It merely disqualifies people who are disqualified in turn for unemployment insurance. As a consequence, I cannot see how this case or controversy before this court on that second part of the HEW’s statute dealing with striker disqualification.
Warren E. Burger: Is your quarrel with the mechanism or with the substance of it?
Christopher G. Browning, Jr.: I am not--.
Warren E. Burger: Suppose the State of Maryland had enacted its eligibility qualifications in precisely the same terms but in a separate statute or regulation. I am trying to get at just -- the focus of your objection to it.
Christopher G. Browning, Jr.: Objection to the definition itself or my objection to what is that issue on this case? I was saying that the
Warren E. Burger: The two are quite similar.
Christopher G. Browning, Jr.: Well, I do not think that issue in this case is part of the HEW regulation dealing with strikers, per se. Labor disputes per se. I think, and Maryland conceded and Solicitor General states that -- what is that issue here is that portion of the regulation, the HEW Regulation, which deals with disqualification from unemployment benefits. Now, it so happens that Maryland unlike other States, few other states in (Inaudible) tends to also disqualify strikers from unemployment insurance. So, in that sense it is relevant but it is very indirectly irrelevant. Now, the case seemingly can be resolved without specifically asking the question of whether the Secretary has the power to define unemployment in terms of people who are involved in labor disputes, who are not involved in labor disputes. It seems to be two separate different kinds of questions. I cannot see another party seem to come up with a way to see, how there can be a case of controversy with respect to the labor dispute portion. We all admit to there is with respect to the unemployment insurance disqualification, of course, I have said that along. Our major controversy, Your Honors, with the Secretary’s definition allowing states to disqualify people, if they in turn have been disqualified from employment insurance is this. The statute gives the Secretary, the power to define unemployment not the way in which you lost your last job. A person can be unemployed now, for various different reasons that brought him in to that position. Unemployment in the common sensible term means, your status right now. Do you have a job? Do not you have a job? Are you getting money? Are you not getting money?
Warren E. Burger: But the statute in question was enacted to give the Secretary authority to make rules relating to supplementing state unemployment compensation plans, was it not?
Christopher G. Browning, Jr.: Your Honor, I remember nothing in the legislative history which has that concept.
Warren E. Burger: In other words, you do not think that any of this statutory language or can be related to disqualifications in state plans by virtue of the fact that the Federal Legislation had in mind the State Plan?
Christopher G. Browning, Jr.: State Welfare plan or Unemployment Insurance.
Warren E. Burger: No, State Unemployment Compensation Plan.
Christopher G. Browning, Jr.: The Act did have in mind, the State Unemployment Compensation Plans to very large extent.
Warren E. Burger: Well, mention those.
Christopher G. Browning, Jr.: Five or six times in this specific Section of the act.
Warren E. Burger: Well, as you are aware and as I am sure your opponents are aware, that typical State Unemployment Compensation Plan provides four or five disqualifications and that serve in the kind of labor dispute type that you have been talking about.
Christopher G. Browning, Jr.: That is correct.
Warren E. Burger: Is it not at least inferable that Congress, when they used the term 'unemployment' was using it in the term, in the sense that unemployment is that term be used to be define eligibility for State Unemployment Compensation?
Christopher G. Browning, Jr.: Well, that is possible explanation. There is not one word in the legislative history that I have found.
Warren E. Burger: If that is possible explanations. It is not that enough for the Secretary to go forward on and promulgate a regulation?
Christopher G. Browning, Jr.: I do to think so, Your Honor, because it is such unusual explanation. Unemployment is the first thing that pops to my mind in trying to define an unemployed person, is not to define the legal consequences that he may be suffering from another benefit program. That does not necessarily -- let us take this case, for example, a person who is allegedly committed misconduct in the job and therefore is now out of work. The Secretary in essence is trying to make that person who has no employer, who has no money, and who is out of work, somehow not be unemployed. Seems to me, the Secretary is standing the definition on his head. Now, you can do that in certain situations, certain acts, for instance, the NLRA which has been talked about here. It defines employee in ways in which the common person would not really define employee. And there are many statutes which do that but there is no indications whatsoever in this case that the Congress intended the Secretary to come up with a term of art kind of definition, as opposed to the common sensible definition of what an unemployed person is. And indeed, if there is any hint to be had from how the Congress interrelated this program into the unemployment insurance schemes that went on in the private state, in each state, it would be I think, that it did not intend to disqualify this sub class of people. Otherwise, they would have said so.
Warren E. Burger: Why did they authorize the Secretary, then to make regulations defining the term?
Christopher G. Browning, Jr.: It is my guess, Your Honor that the primary motivation was the legislative history shows, for example, Arizona at one point in time had 16 families in this program, neighboring Utah or Colorado, I forgot which, had 1,200 or 1,600 something like that. Each state has its own different terms. Congress wanted to unify things. Legislative history is replete with comment about a national uniform standard across the Country.
Warren E. Burger: Do you mean that in an absolute sense?
Christopher G. Browning, Jr.: I am sure, not in an absolute sense but in a much better sense than what existed at that point of time.
Warren E. Burger: The Congress wanted to have it; absolutely uniform that would have done all the defining itself would it not?
Christopher G. Browning, Jr.: That would have one way of accomplish the task. My guess is this.
Warren E. Burger: But they very carefully refrained from doing that and explained that they wanted to leave the States, some flexibility?
Christopher G. Browning, Jr.: Well, not that they wanted to leave the states flexibility but they wanted to leave the definition of unemployment to the Secretary, who would be in better position to define, normally we would think, what unemployment actually means and my guess is that they would want the Secretary to define in terms of hours, as the Secretary originally did. The Secretary has come up with his new way of defining unemployment as a result of this lawsuit. This is the way to go around this, the earlier victory, plaintiffs had in this lawsuit. But my guess would be, Congress said “Secretary, you pick the hour number” And the Secretaries had two different – originally it was 30 hours a week, now it is 100 hours a month which is the cut off limit. If you work more than no AFDC, you are not unemployed. Congress most rationally could have thought, let the Secretary pick the hour amount or perhaps let the Secretary define in another ways in terms of existing contract with an employer, amount of money to person earns as opposed to amount of hours of person works. There are many other ways to do it. There is no indication in the legislative history whatsoever, that Congress contemplates the Secretary doing this. If anything, a Congressman Mills at one point in the legislative history has said in response to a question asked on the floor and Mills, of course is the sort of the father of this legislation. He said that labor -- that strikers could be given AFDC-UF benefits. If the States so desired, this was back in the days when the States had full definitional ability and Federal Government, HEW did not. Now, I think in all, but two States, strikers are ineligible for unemployment insurance. It would be very strange if Congressman Mills felt that unemployment insurance disqualificants could not get these program benefits, that he would say something like that about strikers. It is totally inconsistent. Another thing which was very inconsistent with here, is that the act mentions unemployment insurance five or six different times. There is one section of the act talks about how it interrelates with the AFDC program and for example, if you are receiving unemployment insurance, you could not get this program. Congress has recently amended that act to slightly change Glodgett v. Philbrook case, a couple of years ago, but still they talk about unemployment insurance, time and time again in the statute, but they do not say what the state is trying to get this court to say, namely, that Congress intended to those who cannot get unemployment insurance, a fortiori then could not get this Welfare Program.
Speaker: Well, that is your overstating. Not that Congress intended that those who do not get unemployment insurance could not get this welfare, but whether or not a state was permitted to so determine?
Christopher G. Browning, Jr.: I think that is correct.
Speaker: Whether they are -- more accurately whether the Secretary was --
Christopher G. Browning, Jr.: Whether the Secretary is permitted to give to the State
Speaker: Put in a definition that would permit the States that their option to --.
Christopher G. Browning, Jr.: That is correct; I see nothing in the legislative history which points in that direction. Another thing which points against that direction is this very significant concern, if you acquainted yourself with legislative history, you would see its various parts --legislative history almost says nothing in this case but one thing that it does say is that we want uniform national definitions set by the Secretary. We want the Secretary to say what you can do States and what you cannot do. What the Secretary has done in this case in essence to say that if you want to, you do not have to but if you want to, you can disqualify people who cannot get unemployment insurance. Now, each state has its own different system of unemployment insurance. This book, a publication by the US Department of Labor talks about all the differences in all of the state programs on unemployment insurance. If the state is correct and the Secretary probably can allow states to exclude people who cannot get unemployment insurance compensation. You are going to have a different AFDC-UF program in every single state, almost by definition. We think that would be the case because each state has different unemployment insurance system. And then also, the states do not necessarily have to disqualify people who cannot get unemployment insurance. The Secretary gives them the option of doing that or not doing that. It is sort of confusing, the secretary is allowing us to define these people as unemployed, if we want to or as not unemployed, if a state, for instance, does not want to. It cannot have it both ways. Its got to be one way, its got to be the other way. I think that is one of the problems. If the Secretary would not be in as much danger in terms of invalidity of the regulation, if he had said it has to be this ,states you do this, you do this, you do this, and you do this and that is what you have to do. Secretary of for various reasons, I think tried to play both ways and a person in this category, these people in this class, they are unemployed or they are unemployed, But they cannot be both ways. Another aspect of which, I think, makes it very, I think it is reasonable to assume, that the kind of people who get AFDC-UF, this class of people here, are in many ways very different from the class of people who get unemployment insurance. And as a consequence, it is not at all unusual for Congress to allow the children of these parents to get this kind of benefit, whereas they will allow the states to disqualify their parents from getting unemployment insurance. Now, there are two different kinds of programs, they are very much interrelated, but this Welfare Program primarily is for children. You cannot get this kind of welfare, unless you have a child. On the other hand, unemployment insurance is for parents. It is fact that you have children, do not have children really makes very little difference as to what kind of benefit amount you can get. Unemployment insurance is for parents, AFDC is for children basically. Unemployment insurance gives money based upon employers’ contributions, welfare. AFDC gives it based upon tax revenues. I can very well see, a rational Congress saying “If this man committed misconduct, his employer should not have to pay his keep on employment insurance, for 13 weeks or 26 weeks or whatever, after he has been kicked off the job.” That makes sense. Welfare Program, that is for children, incidentally, also Welfare Programs have very few fault concepts in them. Normally speaking, we do not try to blame the child for something his father did. It maybe, that the fathers in this case are bad fathers, because they did not handle their work job in a correct fashion. But typically, the Welfare Programs in this Country and the Federal Programs specifically have not been concerned with fault in that sense. Unemployment Insurance programs have that --
Potter Stewart: Well, is it not true that unemployment insurance programs are not based upon proof of need.
Christopher G. Browning, Jr.: That is correct.
Potter Stewart: The person is eligible, if he is unemployed, no matter if he has some million dollars in stock market.
Christopher G. Browning, Jr.: That is absolutely correct.
Potter Stewart: Because Welfare Programs are based upon need, alone upon need.
Christopher G. Browning, Jr.: That is true, that is true, Mr. Justice Stewart.
Warren E. Burger: Did not we hold in the Java (ph) case that it is a partial substitute for the earnings that have determined in --.
Christopher G. Browning, Jr.: In essence, that is what it is. And in the typical case somebody gets laid off their job, there is a 30 day waiting period in this case incidentally. You have to wait 30 days before you can apply to this program and most states also require you to go to the unemployment line first to get unemployment compensation. Once you have gotten that, you can come back try to get AFDC, if you are eligible for it. There are similar programs but they have significant differences.
Warren E. Burger: But there are limitations even on the unemployment insurance, are there not?
Christopher G. Browning, Jr.: There are time limitations.
Warren E. Burger: You must accept, you must report regularly. You must accept employment if it meets the standards.
Christopher G. Browning, Jr.: That is correct. And those limitations on unemployment insurance are the same in this program also. The men in this class have to report regularly, have to take jobs if they are offered jobs, and have to in essence, be willing to work. It is a little bit of legislative history that says “This is not for the involuntarily unemployed.” I think, the brief points it out quite clearly that in essence what they are saying is “You cannot reject a job, a bona fide job offer and still stay in this program. If you reject it, there is a 30 day disqualification period. So, if one of the fathers in this case, Mr. Francis, the striker, for example, if he rejected another job that the state offered him, he will be disqualified from receiving, having his children receive these benefits for 30 days.
Speaker: But not after that.
Christopher G. Browning, Jr.: But not after that, unless he rejects another one.
Speaker: Unless he does it again
Christopher G. Browning, Jr.: Unless, he does it again. Some argument was made in essence by, I think, the Chamber of Commerce that somebody who is on strike, is in essence rejecting a job. Well, he may -- let us, even assume that he did reject a job but there is a 30 day waiting period anyway. So there will be an overlap between the disqualification period and 30 day wait. If there are no further questions, I have nothing further to suggest.
Warren E. Burger: Very well.
Christopher G. Browning, Jr.: Thank you.
Warren E. Burger: Do you have anything further Mr. Rabin?
Joel J. Rabin: Just a few remarks, Mr. Chief Justice. I should point out to the court that although Solicitor General is correct that the Maryland rule operate on the basis of disqualification of unemployment insurance, it is also true that the reasoning that applies to that part of the regulation would probably have an impact as to the validity of the second part of the HEW Regulation and the disqualification, namely participation in labor dispute, and in fact, if the Court upheld the HEW Regulation, that, I think would dispose of the issue entirely. There was a pending regulation by HEW, which in light of the Lower Court’s decision proposed mandating payments to persons’ who are disqualified for unemployment compensation, except those persons’ who were participating in a labor dispute but the Secretary chose to hold up action on that regulation pending the outcome of this case. I do want to indicate my agreement with major trust of Justice Rehnquist’s question and point out that in the legislative history, it is quite clear that Congress was thinking about the unemployment compensation scheme because in fact, President Kennedy in his statement proposing the program, used as an example, a person who had exhausted his unemployment compensation benefits. It is true that there are certain differences between these two types of programs but it is also true that programs are very interrelated and there is substantial overlap. For example, there is a substantial work experience requirement in the AFDC-UF Program, which in most cases, under many State Laws would make the person eligible for unemployment insurance. It is also true that in many states including Maryland, the benefits to receive unemployment compensation are affected by the number of children in your family. There is what is called a dependency allowance, so I do not think that you can say that the programs are unrelated or that they are totally different. There are both Income Maintenance Programs designed to assist persons’ who had a substantial connection with the work force and who are now unemployed and it is our contention that their major thrust is to assist those person’s who are unemployed as a result to no fault of their own, involuntarily unemployed as the Java (Ph) decision itself pointed out. Therefore, we contend, it is reasonable to permit the states to do in this similar program, what the states have already done in the other program, namely, had decided not to encourage or not to at least pay benefits to certain persons for conduct which they considered operates contrary to the basic thrust of the program. I also want to mention, and I think that the word of art is a good phrase that is used by my colleague, which is exactly what the Congress had in mind when they passed the Statute. That was why they gave legislative type of rule making authority to the Secretary. In fact, the rule making authority given to the Secretary in Section 407, it is my understanding, is much broader than the authority that the National Labor Relations Board has under the National Labor Relations Act to define employees. But the opinions of this court made clear that the he does have broad authority to define the word 'employee' in that scheme and we think that with a much more direct grant of authority in this case, the agency would have even greater authority and even greater difference should be paid to his judgment unless, it is arbitrary and capricious, and beyond the bounds of the regulation. I have no further remarks unless there are any questions, thank you very much.
Warren E. Burger: Thank you gentlemen. The case is submitted.