Earl Warren: Number 413, North Carolina et al., petitioner versus Clifton A. Pearce. Mr. Vanore.
Andrew A. Vanore, Jr.: Mr. Chief Justice, may it please the Court. I am Andrew A. Vanore Jr., I'm a member of the staff for the Attorney General of North Carolina and I represent the petitioners, the State of North Carolina and Warden R.L. Turner in this particular case. The single issue involved in this particular case is upon retrial for the same offense which has been set aside on appeal or post-conviction proceeding due to a constitutional defect in the first trial, may the second trial court impose a harsher punishment upon the defendant. The facts briefly stated are Clifton A. Pearce, the respondent in this particular case, was initially tried at the May 1961 term of the Superior Court of Durham County, North Carolina on the capital charge of rape. Upon arraignment, the prosecuting attorney or the solicitor announced that he would not seek a verdict in excess of assault with intent to commit rape. The jury found the defendant guilty of assault with intent to commit rape and the judge imposed a sentence of 12 to 15 years upon the defendant. The defendant started serving the sentence on May 25, 1961. In 1965, the defendant filed a petition under the Post-Conviction Relief Act questioning the admissibility of a confession introduced against him in the first trial. Relief was denied by the Superior Court of Durham County on May 10, 1965 and certiorari was accepted by the Supreme Court of North Carolina which reversed the case and awarded the defendant a new trial. The defendant was released from custody upon the first sentence imposed upon him on February 2, 1966. At that particular time, he had served four years, eight months and six days flat time and six years, seven months and 16 days flat and gain time. The gain time being computed upon 150 days granted to the defendant for each year of service on the sentence. The defendant was tried the second time at the June 6, 1966 term of the Superior Court of Durham County upon an indictment charging assault with intent to commit rape. The jury found him guilty of assault with intent to commit rape and the presiding judge who specifically stated in his judgment that he was taking into consideration the fact that the defendant had served six years, seven months and 16 days flat and gain time was going to impose only a sentence of eight years upon the defendant. The judge stated in his judgment that it was his intention to impose the maximum sentence allowed by statute for the offense which is 15 years however, because of the gain time and so forth he reduced it to eight years. In March 19 --
Abe Fortas: Let's -- that -- there's a factor in this case that bothers me, if the sentence said the first time around on the first conviction was -- what was it, 12 to 15 years?
Andrew A. Vanore, Jr.: Yes sir.
Abe Fortas: Ten to 12, something like that and second time around there was eight years, right?
Andrew A. Vanore, Jr.: That's correct.
Abe Fortas: Now, do I understand that it's the rule in North Carolina that you do give prisoners on their second conviction credit for time served?
Andrew A. Vanore, Jr.: That is correct. That is the rule as --
Abe Fortas: That's the rule of law?
Andrew A. Vanore, Jr.: That is rule announced by the Supreme Court.
Abe Fortas: Does that include gain time?
Andrew A. Vanore, Jr.: That includes gain time, yes sir. All credits served --
Abe Fortas: So that the --
Andrew A. Vanore, Jr.: -- upon the board, its sentence.
Abe Fortas: Yes, so when this fellow was given eight-year sentence in the second trial if he had served the whole eight-year without any reference to additional gain time, he would've had to serve another one year and five months?
Andrew A. Vanore, Jr.: That is correct. The trial judge in taking into consideration the gain and flat time that the defendant it served, reduced it or deducted it from the maximum sentence allowed under statute, 15 years. He did not reduce it from the minimum sentence that was imposed upon the defendant at the first trial that means 12 years.
Abe Fortas: You mean the sentence here was not eight years but 15 years?
Andrew A. Vanore, Jr.: The sentence was eight years. However, the judge said, it is my intention to give you a sentence of 15 years. However, since you have served this particular flat and gain time upon the first sentence which was less than seven years, since you have served that time, I am going to deduct that time from the maximum of 15 years and impose an eight-year sentence upon you. The --
Abe Fortas: So, he got eight years?
Andrew A. Vanore, Jr.: He did in fact get eight years.
Abe Fortas: Now, if he had been given credit for the time served under the first sentence including plus gain time, he would've had only as I said before, you had only another -- what was it, year and five months served?
Andrew A. Vanore, Jr.: That is correct, assuming that the second trial judge would be prohibited from increasing his sentence upon the second trial.
Abe Fortas: Well, he would be, wouldn't he? No, no, no, --
Andrew A. Vanore, Jr.: Oh, I think --
Abe Fortas: -- I don't mean that. I don't mean he wouldn't be. No, I don't mean that he would be but I mean to say it already passed a sentence and the sentence was eight years, is that right?
Andrew A. Vanore, Jr.: That is correct.
Abe Fortas: Not 15 years but eight years?
Andrew A. Vanore, Jr.: That is correct.
Abe Fortas: Now, does the North Carolina law rule that you've just recited with respect to giving him credit the time served plus gain time applied to that eight-year sentence?
Andrew A. Vanore, Jr.: It applies to the eight-year sentence, yes but I -- perhaps I'm not making myself clear Justice Fortas.
Abe Fortas: Well, I've struggled with this on the basis of the briefs and I'm still bewildered because if I -- just looking at this thing literally this follows to you to be sprung about now.
Andrew A. Vanore, Jr.: Well, --
Abe Fortas: Isn't that right?
Andrew A. Vanore, Jr.: I don't think there's any question about it. Because of the eight-year sentence, he is going to have to serve some additional time other than he would've been required to serve under the first sentence. But the reasoning of the trial judge is that he could have in fact imposed a 15-year sentence and if you give him all credit for time served under the 15-year sentence which he is required to do by a decision of the Supreme Court --
Abe Fortas: Yes.
Andrew A. Vanore, Jr.: -- then he still in fact has left to serve seven years.
Abe Fortas: I know but my problem here is this in truth and in fact a case -- does this case really present a situation in which the second sentence was greater than the first sentence.
Andrew A. Vanore, Jr.: It does if you compute the time that he would have to serve in -- on the end of terminate sentence, the 12 to 15 years if you compute it from the lesser of the two sentences imposed from the 12-year sentence.
Abe Fortas: 12-year sentence? Now, when would he be entitled to get out --
Andrew A. Vanore, Jr.: He would be entitled --
Abe Fortas: -- including maximum gain time which is fuller -- seems steadily govern?
Andrew A. Vanore, Jr.: He would've been entitled to get out after having served eight years, five months and 22 days of actual time on the first sentence.
Abe Fortas: Alright. Now, that's --
Andrew A. Vanore, Jr.: Now there's a statute --
Abe Fortas: -- bound to be less, that's bound to be less on the time he's got to serve under his second sentence?
Andrew A. Vanore, Jr.: That is correct. If we were to assume that he would be given credit under both of these sentences, the defendant would have to serve an additional sentence of one year, 10 months and 10 days because of the new trial.
Abe Fortas: Not because of -- well, you -- I -- this is much to elaborate. I computed this yesterday on the basis of the briefs and I have very serious question in my mind as to whether we are in truth and in fact here faced with a situation in which the man would serve longer under the second sentence than to the second conviction and under the first conviction and --
Andrew A. Vanore, Jr.: Well, of course the District Court thought so and the --
Abe Fortas: District Court thought so
Andrew A. Vanore, Jr.: -- Fourth Circuit of Appeals thought so.
Abe Fortas: -- but apparently the District Court had an idea that what had happen here was a 15-year sentence but it wasn't, it was an eight-year sentence on the second conviction.
Andrew A. Vanore, Jr.: The District Court who saw the opinion based on the Fourth Circuit Court's opinion in Patton that the flat and gain time served under the original sentence would have to be deducted from the minimum of an indeterminate sentence and since it was not deducted from the 12 years but rather from the 15 years that was the infirmity that the District Court found in this particular sentence.
Thurgood Marshall: Mr. Vanore, is this man been out on bail at all?
Andrew A. Vanore, Jr.: Yes, he is out on bail now, Your Honor.
Thurgood Marshall: When did he get out on bail?
Andrew A. Vanore, Jr.: Approximately, six months ago.
Thurgood Marshall: Well, then except for that six months, he's been out on bail but for this new trial he'd be out for good.
Andrew A. Vanore, Jr.: No, I believe that he would still have to serve approximately a year-and-a-half of the second sentence.
Thurgood Marshall: He had seven-years from today?
Andrew A. Vanore, Jr.: Well, not computing the time that he's been out on bail, yes.
Thurgood Marshall: Yeah. So, he would just about be out now?
Andrew A. Vanore, Jr.: That's correct.
Thurgood Marshall: And solely because he made a mistake of going to the Court and solely because the mistake the Court gave in giving him a new trial, he's got to serve more time, isn't that it?
Andrew A. Vanore, Jr.: Well, no. I don't quite agree with you Justice Marshall. I think that here, we have two points that we must consider.
Thurgood Marshall: What I mean -- speaking for the man, I imagine a very great difficulty in seeing anything other than fact he's got to serve more time solely because he was given a new trial.
Andrew A. Vanore, Jr.: Well, I'm sure he feels that way, yes.
Thurgood Marshall: Doesn't he have a little reason to feel that way?
Andrew A. Vanore, Jr.: I do not think so based on the principle of law that I think the case brings up before this Court whether or not the Patton rule which prohibits an increase sentence or which prohibits the state from giving the man a sentence over and above the sentence that was given at the first trial. I think that the -- that question is a very basis of our system of jurisprudence and that it assumes that the trial judge, the second trial judge is going to punish this man for exercising a constitutional right of appeal.
Earl Warren: Mr. Vanore, let me ask you this question. Let me take you to a situation. Now, suppose the judge of this case, in the second trial, have said that I'll give you the same sentence you were given in the first trial, subject of course to the law of the state that you're entitled to credit for the time you would serve plus the -- with the sentence you receive. That's one situation. Judge would assume, what we currently have here when the judge said that, I (Inaudible) figure out myself but the credit you were entitled to under your first sentence and what the time he served and I have no authority to give you a sentence of eight years this time. Now, I wonder which of those two situations that the man have to serve for his sentence.
Andrew A. Vanore, Jr.: He would have to serve the same amount of time under both situations. Perhaps I misunderstood your question then. Oh, he would have to serve more time under the second situation, I beg your pardon. Excuse me, yes.
Earl Warren: Well, just the question about the (Inaudible) --
Andrew A. Vanore, Jr.: So long as it comes within the statutory maximum allowed for by the statute, yes. I think that is the question whether or not a judge can give more time on the second trial.
Earl Warren: Well, that's what I want (Voice Overlap)?
Andrew A. Vanore, Jr.: Yes.
Earl Warren: Now, do you have the (Inaudible)?
Byron R. White: Does North Carolina effectuate the statute which requires credit?
Andrew A. Vanore, Jr.: By -- the judge takes in -- the second sentencing judge takes into consideration --
Byron R. White: He doesn't -- he just doesn't say, I'm going to give you 15 years without regard to the credit then leave it up to the prison authorities to say --
Andrew A. Vanore, Jr.: It's done both ways, he can --
Byron R. White: Is it done both ways?
Andrew A. Vanore, Jr.: Yes, he can say that --
Byron R. White: I want to give you 15 years and the prison authorities will credit you in the time, all that he served.
Andrew A. Vanore, Jr.: Will credit you for time served, yes or he can compute it himself as he --
Byron R. White: And here, he did it the other way?
Andrew A. Vanore, Jr.: Yes.
Byron R. White: And is it clear that he did it the other way?
Andrew A. Vanore, Jr.: I -- it's clear to me.
Byron R. White: So the prison authorities would not give him credit for any more time on his eight-year sentence?
Andrew A. Vanore, Jr.: No, they gave him credit --
Byron R. White: Do you think the judge has already given him all the credit he deserves?
Andrew A. Vanore, Jr.: Yes, yes. He gave him -- he specifically stated in giving him --
Byron R. White: So he will be in no position to claim any more credit from the prison authorities on account of the sentence that he'd already served?
Andrew A. Vanore, Jr.: That is correct because at the time the second sentencing judge imposed sentence he had before him --
Byron R. White: At least that seems to be the basis on which this case comes here?
Andrew A. Vanore, Jr.: Yes. He had before him the prison records which showed exactly how much gain and flat time this defendant had served on the first sentence.
Byron R. White: Because if he were still entitled to credit on the eight-year sentence for all the time that he had served before, there wouldn't be much left, would there?
Andrew A. Vanore, Jr.: No, that's true. If we compute it from the maximum that would be allowable under the statute, he still has approximately almost six years to serve under -- even by way of the Patton Court's reasoning, he would have an additional time to serve.
Andrew A. Vanore, Jr.: And I believe that Judge Butler points that out in his order ordering the state to resentence him or to release him and of course the state when it came on for hearing before the state judge, the judge refused to order this man resentence and Judge Butler thereupon entered an order requiring his immediate release and that is why we appealed to the Fourth Circuit Court of Appeals which in a memorandum decision based upon Patton versus North Carolina affirmed the District Court's holding.
Potter Stewart: Mr. Vanore, this second trial was held before the same judge as who would -- as had presided the first trial or not?
Andrew A. Vanore, Jr.: I don't believe so, no.
Potter Stewart: And didn't make any difference?
Andrew A. Vanore, Jr.: Well, I think that the argument might be greater if it were held before the same trial judge as was done in the Sanders case from California that the second trial judge might have more reason perhaps if we want to assume that the trial judge is going to be vindictive, that the second judge might have more reason for imposing a harsher sentence.
Potter Stewart: And in both cases, both the first trial and the second trial in this case is what I mean, the sentence was imposed by the judge not by the jury?
Andrew A. Vanore, Jr.: It is imposed by the judge in North Carolina by statute.
Potter Stewart: And he is -- the jury's function is only to find guilt or innocence?
Andrew A. Vanore, Jr.: That's correct.
Potter Stewart: And the jury nor your state has no function with respect to fixing the severity of the sentence, is that right?
Andrew A. Vanore, Jr.: Except in a capital case, the jury can return a verdict of guilty without leniency and thereupon the defendant is sentenced to death. However, they can impose leniency and the statute provides automatically for a life imprisonment.
Potter Stewart: But in this kind of a case, in this case (Voice Overlap) --
Andrew A. Vanore, Jr.: Yes, this kind of a case, the judge has the complete unfettered discretion to impose any sentence which he deems necessary under the facts. The only prohibition that is put upon the second sentencing judge is that the time served under the first sentence which was voided --
Potter Stewart: Has to be credited?
Andrew A. Vanore, Jr.: Has to be credited and the time served under the first sentence and the time imposed under the second sentence --
Potter Stewart: Cannot exceed the maximum, alright.
Andrew A. Vanore, Jr.: -- cannot exceed that maximum allowed by the statute.
Potter Stewart: The statutory maximum. Now, you have already alluded to your position which perhaps you'll amplify a little further because it's emphasized in your brief that it's improper to assume that a judge or a -- whether it be the same judge or another judge in the same court after a second trial would be vindictive and would be motivated to penalize the person for having appealed his first conviction. I understand that position. What would you say if there were proof that the second sentencing judge had been in fact vindictive? What if he had been frank enough to say, well you appealed your first conviction and we don't -- I don't think that was proper -- you what -- put the state to a great deal of expense and trouble and now the juries found you guilty all over again. And since you did appeal your first conviction I'm hereby going to sentence you to twice as long of sentence within the statutory maximum.
Andrew A. Vanore, Jr.: That would be a flagrant violation of the man's constitutional right to appeal --
Potter Stewart: Of what constitutional right?
Andrew A. Vanore, Jr.: The constitutional right to appeal without any fear of reprisal. And our Supreme Court so held in a case called State versus Patton --
Potter Stewart: And --
Andrew A. Vanore, Jr.: -- where the sentencing judge -- yes, first imposed the fine on the individual. And then the individual gave notice of appeal and the sentencing judge thereupon struck his first sentence of a fine and imposed active time. Our Supreme Court said that this was a flagrant violation of the man's constitutional right to appeal without fear of any reprisal.
Potter Stewart: Well, now how often do you think that the -- that you could educe evidence that the motivation of the second sentencing judge was a vindictive motivation of that type?
Andrew A. Vanore, Jr.: I think it would be extremely difficult to educe that type of evidence but I think --
Potter Stewart: Normally a judge would simply --
Andrew A. Vanore, Jr.: I think that we have -- yes. I think that we have to presume though since -- as I see it, our whole system is based upon the good faith of judges. We have to assume that the sentencing judge is not going to be vindictive and if he were vindictive, he could easily circumvent the rule that was applied in Patton by imposing the maximum sentence the first time around and then there would never be any question about it.
Hugo L. Black: Did your court hold that that sentence would be void unconstitutional under the state constitution or under the federal?
Andrew A. Vanore, Jr.: Under the state and federal constitution.
Potter Stewart: That's the Patton case?
Andrew A. Vanore, Jr.: Yes.
Potter Stewart: Yes.
Andrew A. Vanore, Jr.: That is -- that is not Eddie Patton that was decided by the Fourth Circuit.
Potter Stewart: A different Patton case.
Andrew A. Vanore, Jr.: It is a different Patton case.
Potter Stewart: Right.
Hugo L. Black: Oh, it is (Inaudible) void under the state law then we would reach the verdict.
Andrew A. Vanore, Jr.: Well, of course our Supreme Court has already upheld in a similar situation as is now before the court as a matter of fact in the Pearce case itself that the second sentencing judge properly within his discretion imposed the eight-year sentence. They found no violation of the man's constitutional right.
Potter Stewart: Is there any indication at all in this record as to why the second sentencing judge imposed a greater sentence?
Andrew A. Vanore, Jr.: I think the only indication is that the second sentencing judge intended to impose the maximum, the 15 years.
Potter Stewart: Yes, but we know what he did and he what intended to do and what in effect it is.
Andrew A. Vanore, Jr.: There is --
Potter Stewart: My question was, was there any indication as to why?
Andrew A. Vanore, Jr.: No, there is not.
Potter Stewart: Would you think that in the absence of any indication that this presumption of judicial good will and good faith that can prevail and there's no indication at all of any reason whatsoever to impose a harsher sentence after the second trial?
Andrew A. Vanore, Jr.: I think it should, I think the burden should be upon the defendant to show.
Potter Stewart: How could he possibly show?
Andrew A. Vanore, Jr.: Well, it depends upon the disparity between the two sentences that were imposed. Here, we're talking about a very short period of time. If the defendant --
Potter Stewart: But you concede that a greater punishment was imposed by the -- after the second trial, that's not an issue here. You concede that that --
Andrew A. Vanore, Jr.: That is correct, yes.
Potter Stewart: That's true, isn't it?
Andrew A. Vanore, Jr.: Yes, that is true. My argument would be that rather than adopt the flat prohibition set forth in Patton if the Court were not -- of the opinion that the burden is on the defendant to show abuse that the position should be if any additional evidence is shown at the second trial then the trial judge should have complete discretion in imposing a harsher sentence upon the defendant than was imposed at the first trial.
Thurgood Marshall: Mr. Vanore, did I -- isn't that true that in North Carolina once a sentence is given, this final judgment, the judge can never increase that, can he?
Andrew A. Vanore, Jr.: That is correct.
Thurgood Marshall: But if there is an appeal that comes back to him, he can increase it, is that correct?
Andrew A. Vanore, Jr.: If a new trial is awarded that is correct.
Thurgood Marshall: Well, what happens to all of this judicial faith and the judging of? He couldn't do it, wouldn't he be obliged to show why on the second go around he gave more?
Andrew A. Vanore, Jr.: Well, I --
Thurgood Marshall: Because he can't give --
Andrew A. Vanore, Jr.: Of course our argument is --
Thurgood Marshall: -- that's the only way he can give more. That's the only way he can give more time.
Andrew A. Vanore, Jr.: We must assume that the trial judge had some good reason in imposing a harsher sentence.
Thurgood Marshall: Well, wouldn't it be better if he'd give his reasons?
Andrew A. Vanore, Jr.: I think definitely he should give his reasons, yes.
Thurgood Marshall: Well, then -- but I thought you said that the defendant should be given the burden of showing it --
Andrew A. Vanore, Jr.: Well, I --
Thurgood Marshall: -- he doesn't want this burden, does he? You agree with me that the judge has got a little burden?
Andrew A. Vanore, Jr.: The Supreme Court of North Carolina in a very recent decision, State versus Stafford which is cited in the State's brief stated that the burden should be upon the defendant to show abuse. However, it would be more orderly if they -- if there was evidence or if the judge stated his reasons into the record as to why an increased sentence was given. The main contention that we have here is that the flat prohibition laid down in the Patton case than you can never no matter what the evidence is at the second trial. You can never exceed the sentence imposed at the first trial. We think that that is a flagrant violation of the discretion of the trial judge to impose a proper sentence and the discretion of the state legislature to fix a punishment for a particular crime.
Thurgood Marshall: Well, what I'm saying is, if a man committed a crime and he's sentenced to five to 15 years and after that time the judge finds out from reputable sources that this is about his horrible character has ever came down the line, one. Two, if I had that information whether it was before me I would've given him 15 years. There's nothing he can do about it unless there's a new trial.
Andrew A. Vanore, Jr.: That is correct.
Thurgood Marshall: And if there's a new trial then he gets 15 years?
Andrew A. Vanore, Jr.: Of course, the defendant is the one that has to request the new trial, the state can't go in on its own initiative and --
Thurgood Marshall: Well, then the only way this man can get (Inaudible).
Andrew A. Vanore, Jr.: That is correct. I'll pay him to appeal or try to get a new trial under the Post-Conviction Hearing Act.
Hugo L. Black: Well, it takes more time, depends on the matter.
Andrew A. Vanore, Jr.: Well, I believe that I have tried to make my position clear in this particular case that the second sentencing judge deducted that gain and flat time from the maximum that he could've imposed under the offense, 15 years and not under the minimum and that was the violation which the District Court and the Fourth Circuit Court found in this particular case.
Hugo L. Black: Does the record show (Inaudible) --
Andrew A. Vanore, Jr.: It would seem that the record does show that Justice Black. As a matter of fact in the second appeal to the Supreme Court of North Carolina, the Supreme Court so stated that in their fact -- situation that the evidence was essentially the same. Of course, there --
Hugo L. Black: Does the record show that it was the same judge?
Andrew A. Vanore, Jr.: I believe it was a different judge, I think the record would show that.
Speaker: Yes.
Hugo L. Black: (Inaudible)
Andrew A. Vanore, Jr.: No, I mean -- as I recall I am fairly sure that the judge --
Speaker: (Inaudible)
Andrew A. Vanore, Jr.: If this Court has any further questions?
Earl Warren: Mr. Sitton.
Larry B. Sitton: Mr. Chief Justice, may it please the Court. My name is Larry Sitton. I'm from Greensboro, North Carolina. And I represent the respondent in this case, Clifton A. Pearce. At the outset, I might say that -- I think Mr. Vanore has made it clear that in this particular case at the second trial the judge gave Mr. Pearce credit for the time he had served under this first sentence and deducted that amount to fix the eight-year sentence and that this credit would not have been made on the second year sentence. He still had eight years to serve and in my brief that's the reason I said it out as I did. In North Carolina the computation of good conduct time, governor's time and gain time becomes very complex but if you measure the person's sentence as if he served it straight through. In other words, his minimum sentence on his first conviction was 12 years and this was in 1961. If he had served it straight through, he would've been released in 1973. The second sentence was for eight years and this was in 1966. He served it straight through he would've been release in 1974 and that's the basis of our argument that it was harsher.
Potter Stewart: Well, you're --
Abe Fortas: I beg your pardon.
Potter Stewart: Excuse me, I didn't -- there's no issue between you and your Brother at the bar that the second sentence was harsher. We're a little bit confused here on the bench because as I understand it, you don't disagree about that at all. He got a more severe sentence the second time.
Abe Fortas: Well, if I may, the appendix on page 3 sets forth the district judge -- the District Court's statement when it sentenced the man and regardless -- I think it could've been stated perhaps a bit more precisely but it appears from that what he really did was to sentence the man to time served plus gain time plus eight years --
Speaker: Oh, it'd be (Inaudible)
Abe Fortas: -- is that right? Is that right?
Larry B. Sitton: That's correct Your Honor. If you'd stated it that way, I don't think there'd be ay question.
Abe Fortas: But that's what it amounted to as you see it and as your adversary sees it, is that right?
Larry B. Sitton: That's correct.
Speaker: Oh, you turn it around (Inaudible).
Abe Fortas: Yes, the difficulty. That's right but the difficulty is he didn't say that but --
Larry B. Sitton: That's right.
Speaker: That's the --
Abe Fortas: -- in effect that's why the two of you construe.
Larry B. Sitton: That's the way we have both interpret it.
Speaker: Well, (Inaudible)
Larry B. Sitton: There's also the factor that it's harsher in terms of parole. In North Carolina, they construe the decision as meaning now, unless the judge gives -- makes an actual reference to credit for parole purposes the person has to serve the minimum period again. So that at the time Pearce was tried again, he was eligible for parole. After a second sentence he was not eligible for another two years.
Earl Warren: Let's assume this is (Inaudible). If he had said, I asked the counsel, he had just said, I wont give you the same sentence you got last time. 15 years less the time you got served plus the time you have earned. Then he would've been alright, wouldn't it?
Larry B. Sitton: No, sir, Your Honor, because his first sentence was 12 to 15 years. He would've had to do that on a 12-year basis.
Earl Warren: Well, 15 years, you'd give him the same sentence that you gave him the last time.
Larry B. Sitton: That's right. There would be no problem except for parole purposes.
Earl Warren: Plus he gets the same the way he did. This man must serve more time.
Larry B. Sitton: But he makes -- but he cast his in terms of a straight 15 years sentence.
Earl Warren: (Inaudible) what he did to, other than that to serve more time than he would have served -- just the 15-year term which he did.
Larry B. Sitton: That's correct.
Earl Warren: So all we're talking about is whether the judge can give a greater sentence on the second one than the first one.
Larry B. Sitton: That's correct.
Earl Warren: And you both agree that under this sentence that he did get in the second proceeding he must serve more time than he would in the first.
Larry B. Sitton: That's right, that it is real --
Earl Warren: (Inaudible)
Larry B. Sitton: That's right. In this -- and in this case, the decision of the District Court was affirmed by the Fourth Circuit Court of Appeals on the basis of Patton versus North Carolina. And that case, thoroughly explored the constitutional issues involved and whether you can have an increased sentence and said that an increased sentence on retrial violated three portions of the Constitution, the Due Process and Equal Protection Clauses of the Fourteenth Amendment and the Double Jeopardy Clause of the Fifth Amendment. Now, in due process, the state should not be allowed or require the defendant to waive a benefit conferred by the state in order to assert his constitutional rights. Now, the benefit is immunity from an increased sentence as already been pointed out after the term of Court has expired and the sentence has began to be served, it cannot be increased in North Carolina. Yet, the only way that this is possible is for a person to assert his right to a fair trial through some method of post-conviction review. And if he does this, if he asserts his right to a fair trial saying that there is a constitutional defect in this first trial then he runs the risk of getting an increased sentence. If he had not sought a fair trial, he would've been assured that the time he had served would be credited and that he would become eligible for parole in due course. But he didn't do this in this case. He said that there was a constitutional defect in his first trial and this was borne out by the State Supreme Court.
Thurgood Marshall: The states as I could be rectified by giving him the maximum every time.
Larry B. Sitton: That would be one way to get around this problem Your Honor, that's true.
Thurgood Marshall: That's what I understood it to say it should. He wasn't recommending it but he said that would be a way you do --
Larry B. Sitton: I think so and in North Carolina because they do have this credit rule, it would be a way to get around it but this again is -- this goes into the function of the sentencing judge.
Potter Stewart: What if instead of the judge having discretion as to the sentence to be imposed within statutory limits? What if these were a matter for the jury to determine as is in fact true in many states as you know, would the jury under your submission on the second trial have to be told that while ordinarily the statute gives the juries in our state power to impose a sentence for this type of offense anywhere from -- upon conviction of this type of offense anywhere from probation up to 20 years in the penitentiary anything in between while normally that's the power given to a jury? Yet in this case this man has been tried before and he was sentenced by a previous jury to 12 years. And therefore, you cannot in this case, if you convict this man, sentence him to more than 12 years. That would be the result I suppose of --
Larry B. Sitton: Yes, sir, I think it would.
Potter Stewart: -- your submission. Now, wouldn't that pretty well prejudice this hypothetical defendant before a jury to be -- to have the jury told that he has been convicted before and sentenced to 12 years in penitentiary for the same offense?
Larry B. Sitton: Well, I think that the -- if there was a problem of prejudice in bringing out the first conviction I think that rule could be in such a situation that the jury would be allowed to set the sentence and then it would be reduced to bring it in line with this rule. That was the problem. I think if the jury --
Potter Stewart: The other answer I suppose would be that in the instructions, the judge could say that you're limited to sentencing him upon conviction from probation to 12 years without giving the explanation as to why, I suppose (Voice Overlap) --
Larry B. Sitton: Whether the jury sentences or the judge sentence. The risk is still the same for the defendant in asserting his constitutional right.
Potter Stewart: Well, the risk is the same for the defendant for asserting his constitutional right but if he prevails on appeal then the -- at least the conventional theory is that the original trial was wiped out and he goes to trial again and he has a very good opportunity of being acquitted.
Larry B. Sitton: That's true, Your Honor.
Potter Stewart: And your submission would result in a heads high, win tails, you lose proposition for the state, wouldn't it?
Larry B. Sitton: Well, if he was reconvicted though, if he was not acquitted, then he would still under -- even under this rule he would still go back to prison or could conceivably go back to prison to serve out what he would've had under this original sentence. He just -- not walk out because of this rule.
Potter Stewart: What if -- what if on the second trial all sorts of evidence comes in that shows that he'd be -- the crime is much more flagrant than had -- than the evidence that shown in the original trial or what if the pre-sentence investigation in the second trial shows an entirely different kind of character than the defendant had been assumed to have had on the first trial and a much, much worst on the second trial.
Larry B. Sitton: I don't think the rule should be any different, Your Honor. The simple reason that that if it's possible under any circumstance to increase the sentence because of additional evidence or because of information in the pre-sentence report, then the danger still remains that the person will be penalized for asserting his constitutional right.
Hugo L. Black: (Inaudible)
Larry B. Sitton: It's a penalty though if he has to serve an increased sentence.
Hugo L. Black: (Inaudible)
Larry B. Sitton: But if you have a different rule, Your Honor, then you restrict his right of appeal.
Hugo L. Black: (Inaudible)
Larry B. Sitton: But we -- but we submit Your Honor that it shouldn't be that way.
Hugo L. Black: Well, maybe (Inaudible)
Larry B. Sitton: Yes, I think you should because I think this is a violation of the person's due process, his right to due process.
Hugo L. Black: And under the (Inaudible)
Larry B. Sitton: I think so Your Honor.
Hugo L. Black: (Inaudible)
Larry B. Sitton: And that if a state has established a right to appeal or a method of post-conviction review then it -- once they've established it, it should not be restricted. It should be open to everyone.
Hugo L. Black: (Inaudible)
Larry B. Sitton: That's correct, Your Honor. On the equal protection argument, you come back to the same point again that the person's sentence can't be increased after he began serving. So that the only class of persons exposed to the risk of increased sentence are those who exercise their right of appeal. We submit that this is an arbitrary classification. There's no reason to believe that only the class of persons who have won a new trial should receive any harsher sentence.
Potter Stewart: Mr. Sitton, how far does your argument go and perhaps I shouldn't ask you this, you're from North Carolina, you're representing the North Carolina petitioner. And the rule is in North Carolina as a matter of state law that a person sentenced after a second conviction has to be given credit for the time served on his first conviction as a matter of state law and that the total of that prior time plus the new sentence could not exceed the statutory maximum as I understand it but now there are states where there is no such rule of state law. Would your argument be that like this case the man is convicted by a jury and sentenced by the judge to five years in the penitentiary. He serves two years of it then he gets his conviction set aside and he goes back for a new trial, he's convicted again by the jury. Now, how much time of the penitentiary can the judge sentence him, to five years?
Larry B. Sitton: No sir and under (Inaudible) --
Potter Stewart: Why not? That'd be the same sentence he got the first time --
Larry B. Sitton: Yeah, he's already spent two years of his life in prison.
Potter Stewart: -- it wouldn't be greater. So you say the constitutional -- that you say the state rule of North Carolina is also a constitutional, is also a rule required by the Federal Constitution, do you?
Larry B. Sitton: Yes sir, Your Honor.
Potter Stewart: North -- did -- North Carolina didn't say that, did it?
Larry B. Sitton: No sir.
Potter Stewart: In creating this rule.
Larry B. Sitton: The rule of credit.
Potter Stewart: The rule of credit.
Larry B. Sitton: No, this is -- this rule is of recent origin and I don't think they -- I think they did not make it on the basis of the Federal Constitution.
Potter Stewart: You said this is what we're going to require North Carolina?
Larry B. Sitton: This is fair.
Potter Stewart: This is fair in North Carolina. This is what we're going to require but what -- my question I think you understand it is, what if a state doesn't have that rule, if a man is sentenced to five years in the penitentiary though in the first conviction he gets a reversal after serving two years time. He's tried again convicted by a jury; the judge sentences him to five years in the penitentiary. You say that's not permissible either, is that right?
Larry B. Sitton: That's right, Your Honor. I think even if the state didn't have the rule as North Carolina does that it would still be unconstitutional and impermissible.
Speaker: What would you say about giving the first trial to get a fair distinction (Inaudible)?
Larry B. Sitton: This case, I don't think I would go that far. It's not in this case, of course, Your Honor. But I don't think the restraint placed on a person while he is on bail is the restraint that is placed on him while he is on custody. And I don't think the rule would go that far.
Hugo L. Black: Well, suppose he's not out on bail, he is in jail, he waits two years to be tried, does the Constitution require to get a fair trial?
Larry B. Sitton: I think by natural extension, it could, Your Honor.
William O. Douglas: In answer to Justice Black, you said this was a one of the requirements of a fair trial. I thought this was a double jeopardy case, isn't it?
Larry B. Sitton: We do raise that issue too, Your Honor, that it violates double jeopardy because it is in effect a multiple punishment.
William O. Douglas: Have we ever held that the Double Jeopardy Clause of the Fifth Amendment is applicable to the states by reason of the Fourteenth?
Larry B. Sitton: No sir, you have not. And I state in my brief that the way I understand it you have this issue before you in a case, Benton versus Maryland. And I think it's -- it has been argued once and is set for re-argument squarely presented in that case. But in this -- in Patton, when faced with this rule, the Fourth Circuit relied on the (Inaudible) case and stated that it was applicable to the states.
Potter Stewart: What case -- I was -- my question to you Mr. Sitton is going to be that even assuming -- even assuming, let's assume that the Double Jeopardy Clause of the Bill of Rights is fully applicable to the states, is there any federal case, is there any federal that says that the sentencing of a person on a second trial after he's won a new trial to a greater sentence violates the Double Jeopardy Clause?
Larry B. Sitton: No sir, there is not.
Potter Stewart: I think there was.
Byron R. White: There's a case that say it isn't though.
Larry B. Sitton: That's right, Your Honor.
Byron R. White: In this trial?
Larry B. Sitton: Well, I think --
Byron R. White: In this Court?
Larry B. Sitton: I think -- I think that those cases if we make reference to Stroud and the Murphy versus Massachusetts that was the factual reality that there was an increased sentence in both cases but I don't think that the Court face that issue. I think in both of those cases that the argument was made -- that the second trial itself was barred --
William O. Douglas: But we have held --
Larry B. Sitton: --by the Double Jeopardy Clause.
William O. Douglas: We have held that if the man on the first trial against life and on the second trial after an appeal gets death, that's double jeopardy.
Larry B. Sitton: I think that was the --
William O. Douglas: It was a federal case.
Larry B. Sitton: -- the fact in Stroud and in Stroud that was (Voice Overlap).
William O. Douglas: That was a Green case, wasn't it?
Larry B. Sitton: I think in Green, he was convicted of first degree -- he was acquitted a first degree murder, convicted of second degree murder and then a subsequent trial was convicted of first degree murder and this Court said that the conviction of second degree murder at the first trial was an implied acquittal of first degree murder and that's the basis we say that --
William O. Douglas: I thought that -- those are the semantics the judges sometime use but --
Larry B. Sitton: I think it was observed that there can be no distinction between the Stroud case and the Green case, that there is no difference --
William J. Brennan, Jr.: Stroud, you say only turn really on the old law that, perhaps still law, that a second trial after a successful appeal is not in and out of itself a violation of double jeopardy?
Larry B. Sitton: That's right, Your Honor. I think that was a sole issue that was brought forward. The constitutional arguments that were made in this case were not made in Stroud. They were made in Green to some extent and in Green it was held that person was impliedly acquitted.
William J. Brennan, Jr.: Well, if your argument had been made in Stroud, do you suppose that Stroud would have been more -- anymore successful than in Green?
Larry B. Sitton: Maybe not at that time, I hope he would --
William J. Brennan, Jr.: That -- at that time, clearly double jeopardy -- there's no suggestion of double jeopardy by the state, wasn't it?
Larry B. Sitton: That's correct.
William J. Brennan, Jr.: Wasn't that Kansas?
Larry B. Sitton: Stroud?
Speaker: Well, I think it's a -- there was a federal (Inaudible)
Larry B. Sitton: If the court have any further questions? Thank you.


Earl Warren: Number 59, United States versus First National City Bank. Mr. Oberdorfer.
Louis F. Oberdorfer: Mr. Chief Justice, may it please the Court. This case is here on a writ of certiorari to the Court of Appeals for the Second Circuit. The case involves a question, which is important for the administration and enforcement of the revenue laws as they pertain to the tax liabilities and the enforcement of the tax liabilities of non-resident aliens and foreign corporations, which by virtue of realizing income from sources within the United States bring themselves within the orbit of our substantive tax laws.
William O. Douglas: That is the taxpayers outside of United States?
Louis F. Oberdorfer: Taxpayers and nonresident, it's a foreign corporation Omar, S.A. The question, the narrow question is the extent to which the United States District Court in the Southern District of New York, may exercise its equity power under the classic sources of equity power and the power granted by the Internal Revenue Code to assess the commissioner of internal revenue and enforcing tax liens and reducing to -- for collection the assets of a taxpayer. In the circumstances here, the Internal Revenue Service having served liens and notices of levy on several organization of brokerage houses and investment houses in banks in New York, which held assets of this foreign corporation. The Internal Revenue Service through the Department of Justice asked the District Court to assist in the enforcement of these administrative remedies available to the Internal Revenue Service and so far as we're immediately concerned here, asked the Court for a temporary injunction restraining the investment houses in New York and the banks in New York from permitting any transactions with the respect to the assets of this delinquent foreign taxpayer --
Arthur J. Goldberg: Mr. Oberdorfer.
Louis F. Oberdorfer: Yes, Your Honor?
Arthur J. Goldberg: The delinquency is in respect to those -- with respect [Inaudible]
Louis F. Oberdorfer: That's correct Your Honor. Well, it's not disputed for purposes of this proceeding. They haven't --
Arthur J. Goldberg: They didn't get – [Inaudible]
Louis F. Oberdorfer: Well, they will have an opportunity either in this proceeding or in the Tax Court proceeding, which they have instituted for adjudication of the liability if any. But for purposes of the matter as it was before the District Court, there is a liability in the amount of $19 million. The problem, if I can state the problem first, is whether or not the District Court in entering this temporary injunction, running to the banks and the investment houses, which held assets of this corporation prior to service on the taxpayer can also cover in that injunction transactions with respect to bank deposits, which are payable in the first instance to the taxpayer by the bank at a foreign branch of the bank. The bank is a single corporation. It receives deposits at many branches. These branches are not separate corporations. In the corporate sense, in no sense are they separate entities and it is our contention, if Your Honors please, that this power of the District Court under statute and under principles of equity temporarily to phrase the transactions with respect to this taxpayer by an injunction running against any stakeholder within the jurisdiction of the District Court includes the power to stop transactions anywhere under the control of the lienee, the stakeholder including transactions, which the stakeholder may claim involves some action by it or refraining from action by it outside the United States.
Speaker: Mr. Oberdorfer [Inaudible]
Louis F. Oberdorfer: In the first instance Your Honor, when the -- bear in mind that there are two layers of remedy here. They are the administrative remedies of lien and levy by which the Internal Revenue Service can normally without leave of the Court.
Speaker: [Inaudible]
Louis F. Oberdorfer: -- where there's a jeopardy assessment go in and seize bank deposits. We have -- there is in the code and we have invoked here for a number of reasons, the additional power of the Court to help the Internal Revenue Service in this collection process. In the first stage, the administrative stage, the notice of levy and notice of lien were mailed to Omar at its office in Montevideo, Uruguay. The -- they had a notice in many other ways that they were under investigation and that they know of the jeopardy assessment and of the action and as a matter of fact, they have filed a memorandum in this Court, Omar. We have not, however, until now served Omar by process of the District Court. There are a number of reasons for that, some of them good and some of them perhaps not so good. We have been in a quandary all during this litigation. As to --
Speaker: [Inaudible]
Louis F. Oberdorfer: That was one of the problems Your Honor and we were concerned about that when this decision of the Second Circuit was on the books and threatening as we think it threatens to disrupt the orderly enforcement of the tax law.
Arthur J. Goldberg: [Inaudible]
Louis F. Oberdorfer: Well Your Honor, if I may advert to those treasury regulations. One of the principle and to us as -- in the executive branch most persuasive arguments raised by the taxpayer in Court and out of Court and they've been raised both places, is that the existence of the power that is claimed by the Commissioner of the Internal Revenue here to act with respect to the deposits which -- to deposits which are payable at a foreign branch of the U.S. bank will drive away the business of the foreign branches and its in the best interest of the United States to have flourishing prosperous foreign branches. And the hard case, which was put on the basis of the situation as we originally initiated this action was a Swiss or a Romanian will be loathe to put his money in the foreign branch of the U.S. bank in Romania or Switzerland if he realizes that by doing that he is immediately subject to the vicissitudes or the whims of the Commissioner of Internal Revenue of the United States. This treasury regulation is a self-imposed, but nevertheless effective restraint on the Commissioner of Internal Revenue for bidding him to seek administratively or by judicial process any remedy with respect to a deposit in the foreign branch of a United States bank except where there is personal jurisdiction over the person, whose account is at stake or whether the deposits in that account or where the deposits in that account, the Commissioner satisfied, came to that account or were credited to that account in an effort to hinder or defeat collection of tax on income realized from sources in the United States. So, the Australian, Egyptian or Romanian who wants to bank with the United States‘ branch has never had any transactions in the United States need to have a little concern. On the other hand, there is still a very important area reserved within which we hope with the decision of this Court will be -- where would be continued -- be allowed to continue and operate.
Arthur J. Goldberg: Does this regulation apply to [Inaudible]
Louis F. Oberdorfer: It applies to this case in the sense that under that – we could proceed under that regulation in this case. It does not --
Arthur J. Goldberg: [Inaudible]
Louis F. Oberdorfer: Your Honor, the question that would be one way to perhaps to decide, I really haven't thought thought all the facets of that.
Arthur J. Goldberg: [Inaudible]
Louis F. Oberdorfer: That's correct Your Honor.
Arthur J. Goldberg: [Inaudible]
Louis F. Oberdorfer: Well, if I am -- if I understand Your Honor's question correctly, I can say that if the court -- that the court can dispose of this matter by dealing simply with the power of the District Court to issue a temporary injunction under the -- that would have been authorized so far as the commissioner is concerned by the regulation. It need not consider any other issue, but one, but as Your Honor put it to validity of the regulation.
Potter Stewart: That might not be subject to argument about whether or not the -- about whether or not the facts fit under the regulations --
Louis F. Oberdorfer: Indeed, --
Potter Stewart: – the mere allegation of the Government enough?
Louis F. Oberdorfer: There's a finding by the District Court here that it seems to us substantially to restate -- substantially to meet the conditions imposed by the regulation --
Potter Stewart: This is the deposit of a foreign branch in order in effect to evade taxation.
Louis F. Oberdorfer: There was an liquidation and the court talks about a clear present danger that the liquidation would leave the Government empty handed.
Speaker: Also, [Inaudible] yes, the this regulation is still subject to place the jurisdictional question that involved the --
Louis F. Oberdorfer: Indeed there are Your Honor.
Speaker: Now, if the regulation in itself will concur with the jurisdiction in otherwise --
Louis F. Oberdorfer: But it frames, it's like -- you could take the regulation or you could take the statement of facts.
Speaker: It's there and in the reach of --
Louis F. Oberdorfer: Either one --
Speaker: Bearing on the reach of some of the arguments that were made, is to the reach of sustaining the Government's position?
Louis F. Oberdorfer: Yes Your Honor.
William J. Brennan, Jr.: [Inaudible] The issue you want decided, could be decided in the context of the validity of the regulation?
Louis F. Oberdorfer: Well, Justice Goldberg pushed me into that corner. It can be decided in terms of the validity of the regulation, but within the scope of the regulation that is --
William J. Brennan, Jr.: The point is we can't avoid the decision that you're asking us to make, even if we limit this to the consideration of the application of the regulation.
Louis F. Oberdorfer: There's an ultimate question here of the power of the District Court to enter a temporary injunction where the defendant, the taxpayer has not yet been served.
Byron R. White: If this case remanded to the District Court to reconsider in the light of the present regulation, which I suppose it would have been if the regulation for example had wholly forbidden this kind of an order. If it were remanded now for reconsideration in light of the regulation, I suppose the same question would still persist?
Louis F. Oberdorfer: I don't think that would --
Byron R. White: Well, it would come back up on the same question.
Louis F. Oberdorfer: You wouldn't have come any closer to the answer.
Byron R. White: The only time it might not come back up, if you couldn't satisfy the terms of the regulations.
Louis F. Oberdorfer: That's correct. We believe that, as I was about to say, the regulations and the facts are the same things really. The fact is that there has been no service of process so far but --
William O. Douglas: [Inaudible]
Louis F. Oberdorfer: Yes, Your Honor. We think -- as a matter of fact, the longer we wait, the better chance we have of serving process, we think. There is under Rule 4(e) of the Federal Rules, we're authorized to invoke the New York State procedures for service of process on non-residents who had transacted business in the State. We think that by virtue of the transactions out of which this tax liability grew by virtue of the activities of the Director of the taxpayer, by virtue, if Your Honor please, of its petition to the Tax Court for the -- which is to re-determine the deficiency that's asserted here. We have the basis for service by substituted service or service by mail and by publication.
Speaker: Well, that question isn't really the force?
Louis F. Oberdorfer: It's before you only in the tangential sense, Your Honor, there are some cases --
Speaker: But I would suppose you would have some questions, which are rather [Inaudible]
Louis F. Oberdorfer: We find that we are very comforted by the recent decision of Judge McLean in the District Court holding in somewhat similar circumstances that the statute is constitutional and it's --
William O. Douglas: The reason I asked the question is I wondered what your position would be if it were clear that they never had jurisdiction over Omar and never would be able to get jurisdiction over Omar.
Louis F. Oberdorfer: Personal jurisdiction?
William O. Douglas: Yes.
Louis F. Oberdorfer: We have -- that's our second position Your Honor. Our position is in two phases. Our first position is that we're entitled to the relief we ask pending personal service on Omar. Our second position assumes as Your Honor's question does, if we may not be able to serve Omar, in which event, we claim that the Court had jurisdiction to enter this order quasi in rem. The obligation of the Bank to Omar is a debt, which is owed to the bank -- the bank -- is owed by the bank, the bank is in New York. Therefore, under the concepts that were in Harris against Balk and all those cases that there is a reice in New York with respect to which we have jurisdiction and just to pursue that for a moment, because I'm a little out of my order. We claim, this is a pointed issue between us and the bank, it is also the place where we parted company with the Court of Appeals. It's our contention that if we reach the in rem question that this debt is a reice in New York, even though by contract, the deposit is -- the taxpayer Omar, is only entitled the payment in the first instance as a technical and legal manner in Montevideo. New York Court say that, makes lascivious of the debt Montevideo, not New York, therefore, there's nothing in New York to form the basis for in rem, quasi in rem jurisdiction. We say that that obligation to pay in Montevideo is a condition to the debt, but it doesn't destroy the debt in New York, because the corporation is in New York. Further that we could meet that condition if we had to, we could send somebody down to Montevideo and make the demand and he'd probably get the money, if he didn't then we could sue in New York.
Arthur J. Goldberg: [Inaudible]
Louis F. Oberdorfer: This is --
Arthur J. Goldberg: [Inaudible]
Louis F. Oberdorfer: We've considered this in our brief, Your Honor, and this would be a troublesome question if we had the quasi in rem remedy only, but we do deal with it and we think that the double liability question has -- first of all, it's premature and we think that when and if courts must finally get to it. They will find that it isn't -- that it's a red herring. The double liability question was anticipated by the District Court in a sense when he in framing his order said, “If anybody thinks that compliance with this order will violate foreign law, please come in and tell me” and the bank didn't come in and tell him that there was any double liability.
Arthur J. Goldberg: [Inaudible]
Louis F. Oberdorfer: Yes. But I suppose Your Honors are not supposed to have heard that, because they didn't say it on the record in the District Court. In any event, we further contend, although this is the frontier you might say that even though, there are these line of cases, we lost one in Canada fairly recently saying that, the courts of one nation will not enforce the tax judgments of another nation, where the judgment is rendered in one jurisdiction and then is followed into the next jurisdiction for collection. We think that, that is different from the case where we have already collected, the bank won't have a double liability unless and until it pays us. In that event, we contend and some of the material that was included in the brief of the bank at least with respect to Uruguay suggests that, if the judgment of the District Court were pleaded in Uruguay as a defense by the bank, it would be a good defense in a claim of double liability. And beyond that Your Honor, there is this McGrath against City Service case, which suggests that if the bank is driven to the wall on this and is ultimately trapped into this double liability, there is a basis for claiming that they have a right for a just compensation for an unlawful taking and can sue in the Court of Claims on account of it. We think that's a long way off.
Arthur J. Goldberg: [Inaudible]
Louis F. Oberdorfer: Sorry?
Arthur J. Goldberg: [Inaudible]
Louis F. Oberdorfer: Well, there is this -- I just referred to McGrath against City Service, we might resist that when the time comes, but as of the moment that seems to be the law, it is the decision of this Court.
Arthur J. Goldberg: [Inaudible]
Louis F. Oberdorfer: Well, we would -- well, whether we resist the claim or not, they would ultimately be disposed of in this Court. And we don't think -- we think that the double liability problem, particularly at the temporary injunction stage is premature and insubstantial.
Speaker: [Inaudible]
Louis F. Oberdorfer: I'm sorry sir? How long?
Speaker: How long would temporary be then? Supposing it was decided you couldn't get jurisdiction? Could you just hang on to this money?
Louis F. Oberdorfer: If it was decided that we could get personal jurisdiction, we would attempt to enforce the lien on the basis of quasi in rem jurisdiction and as I have suggested earlier, this is complex but feasible. Either the Vice Counsel or the Counsel in Montevideo or a revenue agent, or a receiver or an agent of a receiver would presumably present himself to the bank and demand the payment. So far as the ultimate legal question is concerned, Your Honors, we believe that the decision of the Court of Appeals is damaging, it's disabling to the Internal Revenue Service, because it wipes out at any basis for invoking a remedy to sort of hold the forth in the interim between the administrative action and under the administrative process and the effort to get personal jurisdiction over the defendant, who may not just be a nonresident alien or a foreign corporation. We sometimes have trouble serving process, I'm sure it's an ancient problem of tax collector serving process on people right here in the United States. There's nothing -- there is this hiatus, which the order of the District Court helped discover, it's not perfect, but it gives us an opportunity to find out where everything is and figure out how to serve process and generally to proceed at it in a more business-like way. I would like to reserve a few moments for rebuttal. Mr. Chief Justice.
Earl Warren: Mr. Harfield?
Henry Harfield: Mr. Chief Justice, may it please the Court. In my judgment, the real and only issue that's presented here is one of fairness. This is an appeal from an injunction and the respondent is not and at no time has been appealing on the basis that the Court had no power to issue that injunction. We have based our appeal on the ground that it was an abusive discretion, that it was an inequitable thing to do and so far, the Court of Appeals has agreed with that. Now, this is a rather broad statement and I've got to support it by reference to the facts. Let me point out first of all, that the respondent in this case is not the taxpayer. The respondent has been conducting its business and is in no way delinquent in taxes. So, we have here a restraint, which is imposed on a third party, not on the ultimate defendant. This is in effect, a garnishment proceeding and the respondent bank is in the position entirely of a third party stakeholder. Furthermore, we are talking here about an action, which has as its only purpose the acquisition, the taking of property. This is a physical action. Mr. Justice Harlan said we're talking in effect about a sequestration of property and the property in question is the property of Omar, not of this respondent. Now, the property that we're talking about is not the property in the United States. This is so, by definition. The Court below did not refer, my learned adversary has repeatedly in the briefs and here again, today did not refer to accounts or property, which is collectible in the first instance abroad. It referred to deposits and to property which collectible only abroad, only abroad. So, what we're dealing with here is a situation in which the property that the Government seeks to get and it is property that they want, is property which lies outside the jurisdiction of the United States and this must be so, because there is no issue as to any property in the United States.
Byron R. White: [Inaudible]
Henry Harfield: No, sir. It's -- it's a --
Byron R. White: [Inaudible]
Henry Harfield: No, Mr. Justice White, I suggest that it's a good deal more than a local ruling.
Byron R. White: [Inaudible]
Henry Harfield: The Court of Appeals relied on the New York Rule, which expresses what I believe is a necessary conclusion, if you examine the nature of this property. The property that we're talking about is a bank deposit, which is a contract. It's not -- it might be better for us if it were simply a physical deposit.
Byron R. White: But did the Court of Appeals rely on anything other than the --
Henry Harfield: Yes, my point sir, is that the Court of Appeals in relying on New York Law was going beyond that. It relied not only as it said on the New York Law as such but on the New York Law as a statement of an absolutely sound principle and the principle is not that this is a legal technicality, but that the branch of the bank doing business abroad is --
Byron R. White: These sorts of rules isn't designed to deal with foreign deposits as against domestic deposits, but in fact, this is much -- that rule would be imposed if the bank is across the street?
Henry Harfield: It probably would --
Byron R. White: [Inaudible] --
Henry Harfield: That is --
Byron R. White: Do you suggest the results in this case ought to be the same as the branch that you are talking about was it in this country?
Henry Harfield: No. I would not for this reason. Quite clearly, the New York Rule would suggest the same results.
Byron R. White: Yes.
Henry Harfield: But I'm not suggesting nor do I think it necessary that be the case, because if the branch were across the street, then the order of this Court would protect the respondent, because it would protect the respondent even if the branch were in a different state, because we --
Byron R. White: [Inaudible] the Court wouldn't present him there?
Henry Harfield: Well, I do.
Byron R. White: Because of the foreign law?
Henry Harfield: Yes, Your Honor and as Your Honor is well aware, the foreign law is for the Court to determine. Now, we have put forward here a series of opinions, which we have necessarily selected at random, because we can't go around the world and provide unanimity on this and they apparently are now challenged. But if they are challenged, then under the well accepted rule, I think we should presume that the foreign law corresponds to our own and our own law is very clear that if the Government of far office stand and a Court there were to make an order in that country of far office stand purporting to restrain the First National City Bank here in New York from paying its deposit, which I had made with it, that our Courts would not pay any attention to that. So, I don't have to depend on what maybe an inaccuracy proof of the foreign law. I can rely on our own principles and similarly, I think for that reason, we can rely not just on the New York Rule, but on the fundamental proposition, which is that a bank deposit is localized. In the case we are talking about here, this was a Uruguayan Corporation, which made a local deposit precisely as the same as if it had gone to one of its local banks and in local currency. We're not talking about the same kind of money. We're not talking about the same place, we are not talking about the same area of judicial protection.
Arthur J. Goldberg: [Inaudible]
Henry Harfield: I'm inclined to --
Arthur J. Goldberg: [Inaudible]
Henry Harfield: Sorry.
Arthur J. Goldberg: [Inaudible]
Henry Harfield: That is correct.
Arthur J. Goldberg: [Inaudible]
Henry Harfield: Well, I should like to abide by the regulation on that, but I can't. I think that the regulation would be as Mr. Justice White said just as much subject to challenge. The question is when does the money --
Arthur J. Goldberg: [Inaudible]
Henry Harfield: Both, both because once the money is outside the jurisdiction of the Court and deposited, then the taint of its birth, so to speak, the fact that it was spirited out in an effort to avoid taxes, doesn't affect its status in the foreign country. Therefore, neither on the score of jurisdiction nor on the score of fairness, in other words, if the jurisdiction I think is clear, if it is out the country, it's out the country just the same as if it were a physical object. On the question of fairness, it doesn't make any difference as to the bank's liability in the foreign country whether the money came out wrongfully or rightly. So, I stay on both points in that respect.
Arthur J. Goldberg: [Inaudible]
Henry Harfield: That is my point and I'm not saying, Your Honor, that if the bank had participated in the removal of funds as a conspirator, there would not have a liability for that and then it would not be -- not entitled to the protection of equity, but my point is, that if the bank is used as a conduit to move the funds out of the country then the fact that once they have been moved out. They are deposited with the bank there, so as to give in the bank an absolute liability in that country, not subject to the defense that our Courts have ordered otherwise then you have the same problem with double liability and that is the basic problem of fairness, the inability of the Court to protect the bank when it orders it to do something abroad.
Arthur J. Goldberg: [Inaudible]
Henry Harfield: I don't have any --
Arthur J. Goldberg: [Inaudible]
Henry Harfield: I don't have any published figures that I'm aware off, but I can say this with respect to the First National City Bank itself, that unless I'm wrong about one-third of its overall assets, business and alike is in its foreign or overseas division. That would bring it in that bank to several billion dollars. Now, that's pretty rough and I don't mean it as a representation but --
Byron R. White: Well, it could be an overseas division, it could include deposits by the American companies who have been subject to --
Henry Harfield: This is entirely possible, but I'm talking about the amount of foreign currencies, which the American banks accumulate so to speak by going out and doing business in the foreign country subject to those laws. What they are doing instead of sending money out of the United States to conduct their business they go out with a relatively, in some instances with no capital, and collect the local funds, which are then available for loans and hopefully received as deposits from American Companies.
Byron R. White: But I feel that if the Internal Revenue Service proceeds against the main office of the branch to sequester or to enjoin the paying out of funds that the bank may have in anyone of its hundred branches in this country.
Henry Harfield: Yes.
Byron R. White: If you say that's part of an injunction that is justified, I mean that the Court would have power to enter it, I think if you would say that this is the -- that the main office is an appropriate place to latch on to whatever kind of property this is and wherever it maybe located.
Henry Harfield: Well, I think that is so, I would not myself regard --
Byron R. White: If that is so then, the only difference is this case is that the depositor happens to be or that the branch happens to be located abroad and you have just the extra problem of double liability.
Henry Harfield: Well, it's double liability. It's a question of multiple currencies --
Byron R. White: But it doesn't have anything to do with where property is located or what kind of a debt it is or anything like that?
Henry Harfield: Yes, I think --
Byron R. White: Well, it couldn't have?
Henry Harfield: Well, I think it does, because as I was about to say --
Byron R. White: Otherwise, this Court could never do it in the case if the branch is in this country?
Henry Harfield: Yes, Your Honor. In the case of branches in the Courts -- of branches in this country as I was about to say, I don't think it's appropriate to serve it solely on the head office, but this is something that the banks have got to live with and that they can live with, because we're talking about --
Byron R. White: But not before it has any power to do it?
Henry Harfield: Well, at this point, once again, I'm basing my argument Your Honor on the fact that it is inequitable for the Court to attempt to extend its power beyond its borders, not on the question of power. There is no doubt --
Byron R. White: So, it's an equity question?
Henry Harfield: It's an equity question. There is no doubt that the Court has the power to order this bank to do anything regardless of the consequences. There is no doubt that it has the power to order the bank to violate a foreign law. It has exercised self-restrain in that, but that's not an abdication of power, so I stay with that point. This is a question essentially of fairness and the difference between the various branches in the United States and the branches overseas, is that the branches in the United States are dealing with the same currency and when an order is made the order protects the bank at all of those branches. This is not the case where the branch and where the relationship exists outside the United States under the laws of a totally different sovereign.
Earl Warren: [Inaudible]
Henry Harfield: I'm not sure that my client would let me be here. I would want to be here, Your Honor, because the question is one of protection. The jurisdiction which it would get would be entirely in personam and I'm not sure that it could protect us even then.[Luncheon Recess]
Earl Warren: Mr. Harfield, you may continue your argument.
Henry Harfield: Mr. Chief Justice, thank you, may it please the Court, I would like to devote myself presently to the question of the in rem jurisdiction or a lack of it, but before doing, I'd like to revert to the question, which the Chief Justice put just before the recess as to whether we would be here if there were jurisdiction over Omar. And my answer to that was that, I would hope that we would be, because the jurisdiction over Omar the in personam jurisdiction would at the most be a rather tenuous one. Now quite clearly, if Omar were a party to this proceeding and could be effectively hobbled as far as any reprisals against the bank overseas were concerned, the practical risk of multiple liability would to that extent be lessened. But the difficultly is that as I see it here, if there is to be in personam jurisdiction over Omar, it is purely a conceptual jurisdiction. This is a Uruguayan Corporation, which is not doing business in the United States to the extent that there's anything that can bite down on here. And even if our Courts were to assert the right to pronounce a judgment in personam against Omar, I'm far from satisfied that this would effectively prevent him or if from taking reprisals in Courts of other countries, which would not regard the order of this Court as a defense to that action. Consequently, I feel that the absence of Omar as a party to this action, while it aggravates the situation is not the sole determinative factor. I'd to talk for just a moment about the question of the jurisdiction. Yes sir?
Arthur J. Goldberg: [Inaudible]
Henry Harfield: Yes. I might as well take that at this point. The District Court provided in the order that if in consequence of this order, the bank were put in violation of foreign law, then the bank might come back and apply [Inaudible] for relief. Now, there are two obvious problems about that, which leaves the bank in an extremely unenviable position. One is, that it is impossible to anticipate what the law of every country that the bank does business in is going to be in every particular. The record will indicate that the bank has 74 branches in 28 countries. In each instance, the branch being approved by an agency of this Government.
Byron R. White: Mr. Harfield, [Inaudible]
Henry Harfield: The new regulation as I read it Mr. Justice White provides that the commissioner before he applies to the Court must in his own mind determine that there is jurisdiction or if there is not in his judgment personal jurisdiction, then he must determine that there has been a removal of property. But --
Byron R. White: [Inaudible]
Henry Harfield: Well, there is another provision of the regulation, which says that the hence forward was not the case here. The Commissioner is to specify in serving liens, the general area of the world where he hopes that there will be some money. In other words, he has to make an affirmative showing and point to the bank --
Byron R. White: [Inaudible]
Henry Harfield: I just don't know. The --
Byron R. White: Anyway, [Inaudible]
Henry Harfield: Well, returning that point, if the service is made broadside, the problem which the bank faces is that it is going to have to determine at its peril whether or not there is a violation of law in any country where there may possibly be property of the taxpayer, the alleged taxpayer. Now, we have seen very clearly on this argument that the determination as to whether there is a violation of foreign law is something which is not accepted just on the bank's say so. And the consequence is that the provision of the order doesn't afford any very real protection. Moreover, in the case of a bank account, a bank overseas as here, accepts money on deposit subject to the absolute obligation under the law to repay a like kind and amount of currency on demand. Now, if that is the law of the place where the bank branch is situated and the branch in reliance on the order here says, “no, we won't pay,” that becomes an instant violation, which can't be cured. If the bank comes back afterwards having then proved to the District Court that it is in trouble and then comes back and says, “I'm sorry, we were guilty of conversion or I'm sorry we were guilty of slandering your credit by refusing to pay your checks” or as in Brazil, where a failure to pay where there is funds on deposit is an act of insolvency. The curative effect comes too late and this, if I may dwell on that just for a moment, there is very definitely on the temporary aspect of this injunction. The fact that this is a temporary injunction doesn't relieve the bank in any respect. It maybe temporary, but it's long enough to create the damage, it's like a temporary cessation of oxygen, which beyond a point is not wholesome.
Hugo L. Black: Why is that the case [Inaudible]
Henry Harfield: Because in this case Your Honor, the bank is subject abroad at the place where the property is payable or returnable to an obligation of repayment, which is immediate and if the bank in reliance or in compliance with the order of the Court breaches that obligation, then the moment of breach fixes its liability and the fact that this is only a temporary injunction, doesn't relieve it.
Hugo L. Black: Fixed its liability for what, it's already reliable for the funds?
Henry Harfield: That's right. And if in reliance on in compliance upon the temporary restraint, it refuses to pay the funds, then its liability to the person who is entitled to demand them is complete and perfect and it is liable.
Hugo L. Black: But is it any more than it was before?
Henry Harfield: It is a different kind of liability, let me make this as the illustration --
Hugo L. Black: Well, I'm getting at it is what's the damage?
Henry Harfield: The damage maybe the amount of money, it will certainly be the amount of money plus interest for the delay and it may very possibly be for consequential damages. As in the event of -- as I mentioned, in Brazil, if a bank refuses to pay the check of its depositor even though in reliance on the temporary injunction of a Court outside Brazil, that is an act of insolvency and the customer may not only recover back the amount that he has drawn, but he may actually have the bank put into jail and this is a worse situation, obviously where it's an American Bank, which is trying to do business as a guest in the foreign countries.
Hugo L. Black: Does it appear which kind of account is it kept in the bank then?
Henry Harfield: There is no indication in this record Your Honor as to the nature of any particular accounts. The allegations of the Internal Revenue Service on this were that there were transactions here, which gave rise to expectation that there were some kind of accounts or some kind of property at some of the foreign branches of the bank. And subsequently, after the appeal below the attorneys who represented Omar in the Tax Court wrote a letter in which they said that, at the time of service, there was a current account, one current account in Uruguayan Pesos and an amount due in U.S. Dollars, the total aggregating about the equivalent of $2,000 in Uruguay and they said that, that was all that there was, but we don't know. The problem that is faced and this comes back to the question of the so-called New York rule, the problem of jurisdiction in rem or quasi in rem is this, that we are dealing here with a practical separation of function. The bank, although it is a single corporate entity, operates overseas within the context of the laws of the various foreign countries and the consequence is that the foreign branch of the bank as a practical matter is exactly the same and in exactly the same posture as it were a bank, which were organized and existing under the laws of that country, as if it were a foreign bank. When a foreign individual or person or a friendly alien as American in that country, deals with that bank, he deals with it subject to the laws of that country and entirely under the same conditions as if it were a bank in that country. The result of this is that there is not and never has been any property in any real sense in New York. There is no real tangible property here. The only property that exists is a right on the part of the depositor, a contract right and that right has no existence except at the place where it was made and in accordance with the laws of the country under which it was made. The consequence of that is that, it is not only unreasonable in fact, but unnecessary in law to create the fiction that because the bank is a single corporate entity. It is liable for every deposit at every place where it does business. The result of that in turn is that the banks contract with its depositor is simply to repay a like kind and amount of the currency it has received at the place it has received it in accordance with the law of that contract, the foreign law of that contract. And therefore, neither the depositor nor anyone claiming through him can demand at a different area in a different currency, what the bank has contracted to give it back to him at a particular place and in a particular currency. Referring to our brief, we have pointed out and I think with justice that, just as the bank cannot be expected to respond in London and pay Sterling in respect of an account, which was opened by someone in Rupees in India, neither could the bank having accepted dollars at an account in New York City hope to discharge its liability to its depositor by tendering him Rupees in India or Sterling in London. There is a localization, an unnecessary localization of international branch accounts. In consequence of this, the New York Courts have recognized consistently that the account in a foreign branch is not property within the jurisdiction, is not to be treated as property and that neither the depositor nor anyone claiming through him is entitled to leap the barrier to anticipate or alter the obligation and make the demand and be paid in New York. Now, the --
Byron R. White: [Inaudible]
Henry Harfield: MIt's a different question and yet the thing that runs through it becomes a nominator of it is that if the bank cannot be obliged and should not be obliged to payout and dispose of the money abroad by reason of a pressure put on its head office then the lesser restraint is equally objectionable, because it doesn't really make any difference whether you call this an injunction or a lien or a levy, in every instance it is an effort by pushing on the bank here to passing on the property there.
Arthur J. Goldberg: [Inaudible]
Henry Harfield: Well, assuming those and of course I do, assuming the accuracy of those, --
Arthur J. Goldberg: [Inaudible]
Henry Harfield: Assuming the accuracy of --
Arthur J. Goldberg: [Inaudible]
Henry Harfield: That there was a danger, a continuing danger that the funds were being taken out of the country.
Arthur J. Goldberg: [Inaudible]
Henry Harfield: Well, I think that the -- and I do have a concern in the Government's ability to collect these and I think that the government has demonstrated that it has an ample opportunity to do this, ample power to do it. In this case, the record indicates that there was here in New York, a combination of securities and accounts payable at Lazard and Lehman Brothers, which were caught. Now, there is no issue as to anything that is here. The only problem is when do you catch it and the point that I'm trying to make and it does leave the Government in perhaps less than the condition they would like, but I think not less than in the condition they are entitled to under law, that once the property has been moved out of the jurisdiction, then the motive for moving it out, should not affect the depository where it ends up, because if this property were moved out the United States and wound up in the foreign branch of a British Bank or a Swiss Bank, the fact that it had come out by stealth and conspiracy still would not mean that it was not beyond the jurisdiction. I think if I may take that as the basis of summing up on this. The situation is that we have here a claim by the Government for property. The property is unquestionably situated outside the United States, outside the jurisdiction of the Court. Indeed, the complaint and the action asks as the ultimate relief that the property which is beyond the jurisdiction be returned to the jurisdiction. This is a requirement which is beyond the capacity of this respondent bank to do. The property is outside the jurisdiction and they can return the property only at the risk of penalty to themselves at the place where they have received and/or return of the property. The injunction or order of the District Court whether temporary or otherwise cannot protect them against that liability. There is no propriety in my submission for either the District Court or at its -- at the Government's instance the District Court to attempt to reach beyond the borders for property, which it can't in fact control. There is a way to do it. The whole trend has been in the collection of tightly extraterritorial collection of taxes to negotiate treaties with the foreign countries. And then the government can proceed in an orderly fashion through the techniques of diplomatic and judicial assistance to do this without punishing not the taxpayer, but one of its own citizens. And this, it seems to me, brings us back to the fact that the Court below properly vacated this injunction, because it is not an instrument of equity. It was wrong, it was unfair.
Byron R. White: [Inaudible]
Henry Harfield: I think it would necessarily cover that, because in the case of the American Company, there is the power to reach that company and direct that company.
Byron R. White: [Inaudible]
Henry Harfield: The argument, that's right. The argument I'm making is that, if I maybe permitted to say so, the Government is kicking the wrong dog here.
Byron R. White: [Inaudible]
Henry Harfield: I would say that --
Byron R. White: [Inaudible]
Henry Harfield: It should be entered against the company, that is correct Your Honor.
Byron R. White: [Inaudible]
Henry Harfield: Well, if it were entered against the company that would control it and would leave the bank protected.
Byron R. White: [Inaudible]
Henry Harfield: It would have to sue for not having done that.
Byron R. White: Mr. Oberdorfer.
Louis F. Oberdorfer: Mr. Chief Justice, we are of course sensitive to the fact that this is a proceeding in equity and Mr. Harfield framed the question in terms of equity. The equities include as Justice Goldberg has pointed out, the fact that the taxpayer here was embarked on a conscious effort in the nature of a transaction in fraud of creditors, the creditor being the United States to get his funds out of the United States before they could be used to apply to a tax liability with the respect to which a taxpayer hadn't filed any returns, much less paid the tax. The bank suggests that its foreign branch, although it operates abroad with the protection and the prestige backed by the sovereignty of the United States, should be a kind of privilege sanctuary into which as I understand it, a United States taxpayer can protect his funds from application to satisfy his United States tax liabilities. Even though he's been served personally and even though as I understand in response to the questions from Justice White, he is the United States Corporation, not just a foreign corporation nor a United States individual. So far as the law is concerned, the question then is whether in those circumstances the bank should be exposed to some imaginary unproved, problematical, doubtful, possibly nonexistent double liability. If in those circumstances, a Court of the United States entered an order against the bank directing it to hold on to funds in Uruguay and after that order it had been entered, this taxpayer who is described in the record and I've described sued in Uruguay, sued the United States bank for some kind of tort or breach of contract, the damages of which can't even be defined and by some quirk of Uruguayan law, the bank in spite of the defense by -- of the solemn judgment of the United States Court, in spite of the equities, the bank were held liable in Uruguay in that action. Now, not only is that we think a far fetched unlikely academic guess, something that this Court should not rely on in making a decision, but the bank attached to its brief in chief and in an appendix on Page 1(a), reports that it asked the Uruguayan Counsel what would happen, if the bank in Uruguay refused to pay under circumstances not as egregious as the equities in this case? And on Page 9(a) of the Appendix, there is included a letter from Uruguayan Counsel to whom the bank addressed its inquiry, the letter saying that injunction order issued by U.S. Court is not applicable in Uruguay that means this isn't a defense in Uruguay, unless the injunction is properly submitted and approved by the Supreme Court of Uruguay following the legal requisites required by Uruguayan Law. In other words, the suggestion is that if you come down to the ultimate essence of this double liability issue and the bank vigorously defends itself in Uruguay as it would and can, as its defended itself here, the Uruguayan Court would not hold the bank liable. Thank you.
Potter Stewart: Mr. Oberdorfer it seems if this was a Court of equity, I suppose the Court could have attached any conditions of -- reasonable conditions which it chose to the issuance of its restraining order or injunction.
Louis F. Oberdorfer: It's correct, Your Honor.
Potter Stewart: Do you suppose it could have gone so far as to provide that, if you the government wants this injunction, you shall be required to hold the bank harmless and indemnified for any possible double liability?
Louis F. Oberdorfer: There would be a precedent for that, Your Honor, at least the legal basis for that kind of condition in this McGrath against City Service case decided by this Court. We think that that the bank would have to make a better showing and we think it can make it, but this double liability before --
Potter Stewart: Well, if there is --
Louis F. Oberdorfer: But if the Court entered an order like that, it certainly would have the power to in a proceeding inequity, we would oppose it.
Potter Stewart: But you could just say, if you want your injunction, those are the conditions to go with it?
Louis F. Oberdorfer: Indeed so.
Potter Stewart: And if as you were arguing the risk is very slight, that wouldn't be much of a very onerous condition?
Louis F. Oberdorfer: That cuts both ways. It might cause the bank to resist less vigorously than it might otherwise resist it, if it were put upon in Uruguay.
Hugo L. Black: [Inaudible] with reference to the location of our banks in the that country?
Louis F. Oberdorfer: Not to my knowledge, Your Honor.
Byron R. White: Mr. Oberdorfer, do you have any doubt or – what is the situation of this litigation in regard to the new regulation? This is a pending case that isn't over? The bank came in and said, the Commissioner must comply with the new regulation, at this point would he do so or not?
Louis F. Oberdorfer: We think that -- I haven't thought this through, we think he's -- that he's complied with the regulations.
Byron R. White: Well, that isn't my question. I mean, does he have to?
Louis F. Oberdorfer: Well, he didn't at the time this action was brought, because there weren't any such regulations, on remand probably so, probably so, probably so.
Byron R. White: Probably he would have to comply with it and do you have any argument with the Mr. Harfield's statement that the United States Courts here regularly refused to recognize orders of Foreign Courts similar to this one?
Louis F. Oberdorfer: I don't know that they do. I was trying to project what would happen if the high --
Byron R. White: But he says that -- he makes the assertion that the domestic policy of the Court says that if a Foreign Court entered an order like this, it wouldn't get to first base in one of our Courts here?
Louis F. Oberdorfer: I don't know such cases. Thank you sir.