John G. Roberts, Jr.: We'll hear argument next in Case 16-534, Rubin versus the Islamic Republic of Iran. Mr. Perlin.
Asher Perlin: Mr. Chief Justice, and may it please the Court: In 2008, Congress comprehensively overhauled the terrorism exception to foreign sovereign immunity to close gaps that had for years allowed foreign terror states to thumb their noses at U.S. judgments finding them liable for acts of terrorism while their victims were drawn into a long, bitter, and often futile search for scarce assets that would be subject to execution under the exceedingly narrow commercial exception to foreign sovereign immunity. The centerpiece of that legislation is Section 1610(g). That provision provides that American terrorism victims can execute their judgments upon the property of a foreign state that is subject -- against which a -- a judgment has been entered under 1605A, and it makes available the property of the state's agencies and instrumentalities.
Ruth Bader Ginsburg: If -- if --
John G. Roberts, Jr.: Well --
Anthony M. Kennedy: As provided in the section.
Asher Perlin: As provided in this section. The question is what that -- what that provision means. The Respondents would have the Court delete the three words between the word "execution" and the words "as provided in this section." What it actually says is that the property is subject to execution upon that judgment as provided in this section.
Ruth Bader Ginsburg: We know what -- that -- that Congress wanted to do away with what they call the Bancec factors, and this statute was written perfectly to do just that. You say it does something more.
Asher Perlin: It has to do more, Your Honor.
Ruth Bader Ginsburg: And why does it have to? What the statute did is it made more assets available because you didn't have to worry whether it was the state itself, an instrumentality of the state, an agency. The -- the property of any of those entities was available. So it swelled the assets that would be available. But it didn't say anything, not a word, about immunity.
Asher Perlin: Well, there -- there's two questions there. It doesn't say anything about immunity, but those are magic words. It does say that the property is subject to execution.
Sonia Sotomayor: Magic words under (a) and (b).
Asher Perlin: I'm sorry?
Sonia Sotomayor: In 1610 in (a) and (b), Congress knew how directly to say property is not or is subject, immune from attachment. But it used something very different here. Rather, it says that property is, quote, "subject to attachment as provided in this section." Those are two very distinct formulations.
Asher Perlin: They are different. Subsections (a) and (b) were part of the original Foreign Sovereign Immunity Act from 1976. There were other amendments since then. If you look at subsection (f)(1), which the President has waived, it says "shall be subject to execution." The -- the Terrorism Risk Insurance Act, which is codified as a note to subsection -- to Section 1610, also says shall be subject to execution to -- to execution. So the language -- when Congress sat down to write subsection (g), it was looking at the other terrorism exceptions to execution immunity that it had already passed, and those were (f) in TRIA, and it modeled (g) after -- after those sections.
Stephen G. Breyer: Can they execute, your clients, on the embassy?
Asher Perlin: So --
Stephen G. Breyer: On the uniform -- on the uniforms that the people in the embassy wear, on -- on the papers that the ambassador keeps in his desk if, in fact, you read "as provided in this section," the answer is no. If you read it to include because it has to be commercial, all right? Under your reading, where those words must mean something else, can't they do it?
Asher Perlin: They cannot.
Stephen G. Breyer: Why not?
Asher Perlin: Subsection -- Section 1609 says that Section 1610 -- execution under 1610 is subject to international agreements like the Vienna Convention which would protect diplomatic property, and Section 1611 protects military assets, certain central bank assets.
Stephen G. Breyer: Okay.
Asher Perlin: Congress, when they enacted 1610(g), they did not completely abrogate foreign sovereign immunity for terror states. They wanted to provide a remedy for the victims, they wanted to punish and deter the terror states, but at the same time, Congress recognized that Iran and North Korea, Syria, Sudan, these are sovereign states, and they're entitled to a bare minimum of sovereign immunity, and Congress retained that bare minimum by protecting quintessentially sovereign assets while making everything else subject to execution.
Samuel A. Alito, Jr.: What does "as provided in this section" mean? Am I right you think it incorporates only procedural requirements?
Asher Perlin: No, Your Honor there are a number of -- a number -- no, Your Honor. A number of --
Samuel A. Alito, Jr.: What does it -- what does it mean?
Asher Perlin: It means, as provided -- the way to read it is it refers to the judgment that's entered under 1605A. As provided in this section, it says, execution -- you can have execution upon the property -- upon that judgment as provided in this section. "As provided in this section" modifies the judgment, "upon that judgment," and it -- and it refers to the section -- Section 1605A, which is the only section mentioned in this sentence. It's referring back to the section, 1605A, that was a couple lines above in the same sentence. And what it says is that a judgment entered -- that Section 1610(g), which provides sweeping remedies for terrorism victims, is only applicable to those who hold judgments entered under the statutory cause of action of 1605A. It is not available to other plaintiffs holding terrorism judgments. It also extends -- it also extends, "as provided in the -- this section," extends the remedies. The remedies -- remember, the remedies of 1605A, capital A, are very novel, to say the least. You -- you -- you don't have a private right of action anywhere else in the Sovereign -- Foreign Sovereign Immunities Act. You don't have any other provision that allows punitive damages against a sovereign state, which is a sure sign that Congress was not concerned about affronting the dignity of terror states. They allowed punitive damages. They -- they expected those to be enforced. They allowed a pre-judgment lien of lis pendens to attach to all sovereign -- all of the state's property that is subject to execution under 1610, that -- including property of any party that the plaintiff identifies as being controlled by -- by that terror state.
John G. Roberts, Jr.: If -- if --
Samuel A. Alito, Jr.: So "as provided in this section" is really superfluous, isn't it --
Asher Perlin: It's --
Samuel A. Alito, Jr.: -- under your interpretation?
Asher Perlin: It's not. It refers -- well, it's -- it emphasizes the centrality of the 1605 judgment to this provision. And it also -- there's -- there's no other way to read it. If you read it as -- as the Respondents would, there's no -- there's no provision within 1610 that can pair with 1610. They say that it must pair with another substantive provision of 1610. But nothing works. Try to -- try to go through. It says that -- 1610(g) says that the property of a foreign state is subject to execution and the property of an agency or instrumentality. Now, if this were only a veil-piercing mechanism, as the Respondents claim, there's no reason to mention the property of the foreign state. You don't need to pierce the veil to reach the property of the -- of the judgment debtor terror state. You just go straight for that property. And if you have a judgment against the agency or instrumentality --
Sonia Sotomayor: I'm sorry. I thought that the University of Chicago had raised an interesting argument, that the definition of foreign state in the statute includes, by definition, an agency or instrumentality of a foreign state, so that the reference to foreign state that you're relying upon does include the concept of piercing the corporate veil in its very definition.
Asher Perlin: Well, that would -- that would -- that itself would abrogate Bancec, the rationale that University --
Sonia Sotomayor: Well, that -- not quite, because what -- I mean, this provision deals directly in aid of the plaintiffs in the Bancec case and in the others that had found against plaintiffs. There are at least three cases where a class of plaintiffs were found not to be in a sufficiently tied relationship to the foreign state and the plaintiffs there couldn't recover, so there was a real issue this was addressing, the fact that there were subsidiaries and agencies of foreign state who had commercial property, and it wasn't being made available to plaintiffs.
Asher Perlin: So the question would be to ask the Respondents why they don't mention those cases in their briefs. We have maintained, consistently, that the property of the foreign state, those words, are completely not just superfluous but misleading if there -- if this is just a veil-piercing mechanism. If it's veil-piercing mechanism --
Sonia Sotomayor: Why? It gave them what those three cases denied them. It gives other plaintiffs with similar claims a lot -- access to a lot of -- of property that they wouldn't have had under Bancec.
Asher Perlin: The provisions that allow execution upon the property of an agency or instrumentality gives access to -- to the agency or instrumentality's property.
Stephen G. Breyer: Well, give an example. I mean, there's a famous example which you probably know about, the -- the letter of Cyrus, saying to everybody throughout the Middle East that the Jews are free and they can go back to Israel, Palestine, the temple, and that letter exists and Persia -- the Persian letter, and Iran has sent it around the world. Now, in your view, they have -- and people have looked at it. And if it comes to the United States, you can seize it. Is that -- that's your view of it? Because if it is, of course, if Congress knew about it, then they -- they might have had a general idea, given the nature of the stuff in Chicago.
Asher Perlin: Well --
Stephen G. Breyer: I -- I would be surprised that they'd want to do that.
Asher Perlin: We -- you might be surprised, but Congress has addressed --
Stephen G. Breyer: Your view is, yes, you could seize it?
Asher Perlin: It would depend on -- yes, you could. It -- Congress has addressed this very question, twice, in 22 U.S.C. 2459, Congress provided a very specific and limited immunity for culturally significant objects being brought to the United -- culturally significant objects being brought to the United States for display or exhibition. There was a very specific immunity there that -- that the -- that somebody who wants to bring in that -- that property, those exhibits can apply to the State Department in advance and receive a letter immunizing those -- those assets from -- from judicial process. And -- and last year --
Ruth Bader Ginsburg: Did that -- did that exist in, what was it, 1939 --
Asher Perlin: It did not. It did not.
Ruth Bader Ginsburg: -- when Chicago got this?
Asher Perlin: But Congress could have made that provision retroactive, and it didn't. And Congress --
Ruth Bader Ginsburg: But what about the provision that Congress did enact in -- and we've been talking about (g) and so -- so this is subsection (3), refers to "nothing ... shall be construed to supersede the authority of a court to prevent ... the impairment of an interest held by a person who is not liable in the action." Why isn't the University of Chicago such a person? They're certainly not liable in the action. And they got this property when Iran was not listed as a terrorist state.
Asher Perlin: Uh-huh.
Ruth Bader Ginsburg: The Shah was in control, not the Ayatollah.
Asher Perlin: The University hasn't raised that as a defense. And because Section 1610(g)(3) refers to a -- a party with an ownership interest, not just a -- some other intangible interest -- and -- and even to the extent that they do, that doesn't mean that the Court should not be able to transfer title to a -- to whatever party would be ready to -- to pay the price. And we think it would be Iran, by the way. If -- if the Court would construe this statute as Congress, we think, as we read it, Congress would finally -- I mean Iran would finally pay attention to a judgment, and they would say, we're -- we're about to lose our -- our -- our artifacts --
Ruth Bader Ginsburg: Well, what are the terms of that? The University of Chicago has had this since 1939. Iran has never tried to take it back. What are the terms of the lease?
Asher Perlin: They have -- it's not a lease. It was a long-term loan for the -- for the study and cataloguing, publishing, photographing, cleaning, of these -- of these artifacts. And University of Chicago does not assert an ownership interest. They -- they say that they're -- in the briefs, they say they're trustees, or they were entrusted -- they don't even call themselves trustees even; they say they were entrusted with this. Every -- they use language, but they never say we have a concrete right in these -- in these assets. And if they do, the court can -- the district court, when it orders the sale, it can make accommodation for that. It can say that whoever buys it -- and we would be -- we're -- my clients would be perfectly happy if --
Ruth Bader Ginsburg: The University of Chicago --
Asher Perlin: -- these artifacts remained in the University of Chicago.
Ruth Bader Ginsburg: -- is not interested in this property for the money -- for money. It's interested in having these antiquities --
Asher Perlin: I know.
Ruth Bader Ginsburg: -- on display, to be researched, to be seen.
Asher Perlin: But it doesn't belong to them. It's not theirs. And whoever it belongs to can decide whether they're the best university to study it.
Ruth Bader Ginsburg: You're answering my question that, well, don't worry about University of Chicago, the district court can give them some money.
Asher Perlin: No, not money. Not money. The district court, if they have a -- a right, to the extent that they have a right to retain the -- the artifacts and continue their work with them, the district court can say that the sale should be conducted subject to the rights of the University of Chicago. It doesn't -- it doesn't mean that it's all --
Ruth Bader Ginsburg: But what would those rights --
Asher Perlin: -- it's not all or nothing. The property can be divided up.
Ruth Bader Ginsburg: -- be? Their rights have been from 1939 on they have this property.
Asher Perlin: Well, since 1980, they've had the property because Iran couldn't get it back, for a big part of that time. And for a big part of the time before that, every now and then, Iran was asking, when are you going to finish -- when are you going to finish studying these things. And -- and they were not very forthcoming. When this lawsuit was filed, they moved into -- they expedited their study of the assets because they realized that they might lose them. And, now, again, University of Chicago is really an amicus here. They don't -- they have no interest in these assets. They -- and to the extent that they do, the Court can protect that. It -- it can protect that interest in a -- in a sale.
John G. Roberts, Jr.: Well, assuming you're right, does that mean, if you lose here, you think Iran will be able to repatriate the assets?
Asher Perlin: Absolutely. There's nothing in their way. They did. They did. We lost -- we lost in the district court, and there was another collection of Iran -- Iran-owned assets, and on the eve of the -- the argument in the court of appeals, they were shipped back to Iran after the court had denied our -- our motion to stay, but -- but they were shipped back to Iran. And they --
Stephen G. Breyer: They have other things in the United States. I mean, it seems to me so far, that the main difference between your interpretation and the other side as a practical matter is that if you're right, that private people will be able to take cultural assets from Persia and sell them and ship them back to Iran, and if they're right, you will have to limit your recovery to commercial objects because that's what the other parts of the statute provide.
Asher Perlin: Well --
Stephen G. Breyer: Now -- now, that's not perhaps going to turn out to be relevant to the decision. I grant you that. But I -- I -- I -- it's something I'm -- I'm -- like to have in my mind.
Asher Perlin: Okay. The -- the distinction under the foreign sovereign immunity -- let's put it this way. They want to cabin us into Section 1610(a)(7), which is the commercial use exception for property owned by the state. That provision, as the Seventh Circuit held, requires not just use for a commercial activity, but it has to be used by the foreign state. And a number of courts of appeal have held, as did the Seventh Circuit and this Court did not accept review of this issue, that -- that it has to be -- that the use must be by the foreign state itself, even though that's not in the -- those words are not in the statute. But a number of courts of appeal have looked at financial assets -- let's take the, you know, proceeds of a -- of a commercial transaction between a state and private parties that are proceeds that are held in an account, that are intended for the foreign state, and the courts have said that's not commercial use property. Why? Not because it's the proceeds of a commercial transaction, but because those proceeds belong -- have not yet been used by the foreign state for commercial activity. They're just sitting in the account passively waiting to be used, but they haven't been used yet, and the state can say, we're going to put it in our general account --
Sonia Sotomayor: That just seems like --
Asher Perlin: -- in the Treasury.
Sonia Sotomayor: -- an issue Congress has to address.
Asher Perlin: Well, Congress --
Sonia Sotomayor: And those courts may well be wrong. I don't know.
Asher Perlin: What I'm saying is that the practical difference between our construction and the Respondents' construction is not antiquities. It's all of these cases dealing with -- with passive bank accounts. There's another case in California where there was a judgment obtained by the Ministry of Defense of Iran against a defense contractor, and the court said the money paid by the -- by the Ministry of Defense, that's not commercial use property because it hasn't been used by Iran. There -- there's -- there are countless cases like this, and this is the body -- these are the -- these are the -- the cases that this provision is -- is -- or one group of cases this provision is intended to cover. It's not intended to cover antiquities, and I don't think there's going to be a -- a mad rush to grab antiquities.
Stephen G. Breyer: That's what you're doing yourself in this case; that's what it is, isn't it?
Asher Perlin: That's all that they've left. That's all -- this -- this proceeding below began in 2003. The -- the terror attack in this case was in 1997. My clients have been waiting 20 years to enforce their judgment against Iran. Iran does not pay judgments. You know -- you know, it's not Argentina, they can't afford to pay the judgment. They just don't. And they don't -- they don't care what the American courts say. And Congress finally said enough is enough, and -- and they said there's punitive damages and we're going to waive res judicata, we're going to waive collateral estoppel, we're going to waive statutes of limitations; you can go back and convert your old judgments into a new 1605A judgment and use -- and use that tool under 1610(g), under our provision to enforce it. Congress said enough is enough. We want these judgments enforced. And it's not about antiquities. That's -- that's -- that's what the Respondents are writing about, but they will not tell you what the -- what the property of a foreign state applies to.
Ruth Bader Ginsburg: Is there anything --
Asher Perlin: The United States doesn't --
Ruth Bader Ginsburg: Is -- is there anything in the legislative record that shows that Congress was intending to do anything other than dispense with the Bancec?
Asher Perlin: Absolutely.
Ruth Bader Ginsburg: Yes?
Asher Perlin: Yes, it says that it applies -- that the provision will apply to any property in which the foreign state has a beneficial ownership. That any property in which the foreign state has a beneficial ownership is subject to execution of that judgment. It says the -- the -- the sponsors -- the Senate sponsors said that it is intended to remove many of the barriers to execution of a judgment. And according to Respondents, it only addresses one of those barriers. It says that the -- the right to the -- to the property is subject to a simple ownership test. A simple ownership test. When you start piercing veils and layers of veils, that is not a simple ownership test. That might have been intended to be included in -- in the -- but that's not what was being addressed. And, finally, what the -- what the statute does say, the legislative history -- the House Report says that "although it subjects to execution any property in which the state has a beneficial -- beneficial interest, it does not extend to diplomatic property." So once Congress is excluding specifically that narrow class of quintessentially sovereign property, diplomatic property, you know that it's extending to -- it covers everything else. There's no reason -- if it didn't cover commercial use property or non- -- sorry, non-commercial use property, there's no reason to specifically mention diplomatic property because, obviously, that's going to be included in non-commercial. This applies to everything. Everything except diplomatic, military, and certain central bank assets. The idea that -- that Congress would be concerned with affronting the dignity of a state sponsor of terrorism and would extend protection to their non-commercial assets for that reason, to avoid an affront to their dignity, is just preposterous.
Ruth Bader Ginsburg: Do you have any other section that dispenses with the sovereign immunity then that doesn't mention -- doesn't say anything that refers to immunity?
Asher Perlin: Well, I mentioned Section 1610(f)(1). It says that the property shall be subject to execution. And the TRIA, Terrorism Risk Insurance Act, which is a note. I don't think I included it -- it was an oversight -- in the -- in the statutory appendix, but it's -- it's codified as a note to Section 1610, and that -- that provision -- these are the three terrorism provisions -- execution immunity provisions of the Foreign Sovereign Immunity Act, and not one of them uses the word immunity -- it says that we're abrogating immunity here or limiting immunity. So, again, it's not abrogating it wholesale; it's maintaining a -- a -- a skeletal remain of sovereign immunity because -- in recognition of the fact that these states are sovereign.
Samuel A. Alito, Jr.: All right. In your brief, you offered several other interpretations of the phrase "as provided in this section," interpretations that are different from the one --
Asher Perlin: Yes.
Samuel A. Alito, Jr.: -- you provided this morning. Are you disavowing those now?
Asher Perlin: I think that the best construction is that it refers to the judgment entered under 1605A. I think that those are alternative constructions that are viable and certainly more viable than the Seventh Circuit's. Again, if you sit down and try to think of cases where -- where the property of a foreign state will have applicability -- applicability under 1610(g) where it wouldn't -- where this property wouldn't be subject to execution under 1610(a)(7), right, according to the Respondents' construction, you won't find it. You will not come up with a case or you're going to have to work very, very hard and there's no reason Congress would have included -- if this were only meant to pierce a veil, Congress would have said subject to subsection (3), or paragraph (3), the property of an agency or instrumentality of a foreign state against which a judgment has been entered under 1605A is subject to execution -- to attachment and execution. It did not need to mention the property of the foreign state. Iran and the government both talk about how it had to mention the foreign state. Well, it's true, it had to mention the foreign state because a judgment was entered against the foreign state, but it does not need to single out the property of the foreign state, if all this were -- was a veil-piercing mechanism. It doesn't work. It doesn't -- you cannot pierce the veil of a company or a country to reach the property the country owns directly. Now, let me just point out that none of the other provisions of 1610 work with (g) either. (b), which the Seventh Circuit relied on -- it said this section refers to subsection -- really refers to subsections (a) and (b). Subsection (b) applies only where there's a judgment entered against the agency or instrumentality. If you have -- again, if you have a judgment against the agency or instrumentality, you don't need a veil-piercing mechanism to reach it because you go after -- you go after its property directly. (c) is -- is -- specifically mentions (a) and (b) only, that an execution referenced under (a) and (b), and it doesn't mention (g). And Congress could have amended it to include executions under (g). (d) is for prejudgment attachment where there's an express waiver of immunity. None of these provisions work. I'm going to -- I'd like to reserve the rest of my time for rebuttal, but if you -- if you sit down and try to -- they don't work. It just doesn't -- there's no way to read it according to the Seventh Circuit and -- and apply it.
John G. Roberts, Jr.: Thank you, counsel. Mr. Strauss.
David A. Strauss: Thank you, Mr. Chief Justice, and may it please the Court: Let me first pick up on a piece of the legislative history that my friend quoted to the Court. Senator Specter, who introduced the precursor of what became 1610(g), did say that, as -- as Mr. Perlin said, that the provision was designed to eliminate many of the barriers which are preventing U.S. citizens from collecting on court-ordered damages. He then said it does this by changing the legal standard of the Bancec doctrine. So that was the way in which this exposed more assets -- more property to execution by terrorism plaintiffs. In fact, the Petitioners' position about the construction of 1610(g) is wrong for four independently sufficient reasons. One is the language the Court has focused on, "as provided in this section." This section, is Section 1610, that is the section of which (g) is a subsection. So the phrase "as provided in this section" means the Petitioners have to satisfy the provisions of 1610, which means that only property used for commercial activity in the United States can be seized. And Petitioners, I think, have just not come up with a plausible alternative account of what "as provided in this section" means. But there's a second reason. And it has to do with the difference between subsection (g) and the provisions of subsection 1610 that really do abrogate sovereign immunity. The Foreign Sovereign Immunities Act says, in Section 1609, that the property of foreign states in the U.S. shall be immune from attachment, except as provided in 1610. Then the subsections of 1610 say in terms one after another that certain property shall not be immune. Subsection (a) says that, as does (b), as does (d), as does (e). Subsection (g) contains no such language. The relevant part of subsection (g) does not refer to immunity at all. And there's a reason for that. The reason is that (g) is about Bancec, and the Bancec doctrine is not an immunity doctrine. The Court was very explicit about that in the decision, the Bancec decision itself.
John G. Roberts, Jr.: Well, you do think -- agree with him, don't you, that the property of a foreign state in -- in (g)(1) is a -- is a strong indication at least that it is not limited to overturning the Bancec decision?
David A. Strauss: No, I -- I don't agree with that, Mr. Chief Justice. I think what's going on there is Congress wanted to make it very clear that Bancec was no longer -- no longer going to be a barrier in these cases. And so it said property of the state, property of agencies, property of instrumentalities, property of separate juridical entities, interests in separate juridical entities, all of these things are in the same basket, and all of them are subject to attachment and execution. I think that's why you have that -- that language in -- in (g)(1). It's not a --
John G. Roberts, Jr.: But Bancec wasn't about property of a foreign state. It was about the agencies, instrumentalities, et cetera.
David A. Strauss: It's -- it is -- that is -- it's right that Bancec was not about the property of a state itself, but the way the section is written, property of a state including property that is in a separate juridical entity or is an interest held directly or indirectly in a separate juridical entity, what you see in the legislative history is a lot of concern that state judgment debtors would be arranging their assets in ways that would distance themselves from ownership.
Stephen G. Breyer: Is it the case there on that particular point -- I was trying to work out that does Bancec ever apply -- could it apply to funds or -- yeah, funds of the foreign state itself? Is there anything that suggests it applies where the -- where the foreign state deposits some money in a bank? And then they argue, we -- that isn't our money, that's the bank's money, and we're just the beneficial owner of that money. And Bancec might have said, yes, that's right, it's not their money, it's an agency -- it's an agent's money.
David A. Strauss: I'll -- I'll say two things to that, Justice --
Stephen G. Breyer: What about that argument?
David A. Strauss: -- Justice Breyer. I think the Bancec criteria are not very clear. The Court deliberately left the criteria vague. And I think Congress was concerned about that situation. And I think that's why you see this language in (g)(1) that really tries to be comprehensive and cover every base. But what I think you don't get out of (g)(1) is anything about immunity because it even applies to separate juridical entities who would have no claim to --
John G. Roberts, Jr.: Well, it doesn't want them to cover everything in every case. It's titled property in certain actions. And I think the other argument on the other side is that the certain actions are, you know, the ones in -- in -- don't include the ones governing the property of the foreign state.
David A. Strauss: Well, I think the certain actions, Mr. Chief Justice, are actions to execute judgments under 1605A. This is a special provision to make it easier for terrorism plaintiffs to get assets. It doesn't apply to ordinary judgment plaintiffs. And I think that's the -- that's the property it's referring to. This is -- really was intended to make it much easier for plaintiffs who have terrorism-based judgments to get their hands on assets, but only those plaintiffs. And I think those are the actions, and that's why a judgment entered under 1605A -- but that doesn't mean that the rest of the section does not apply. In fact, it says the rest of the section does apply upon -- as -- as provided in this -- in this section.
Sonia Sotomayor: Mr. Strauss, I think you were cut off on three independent reasons. You went -- you went through one and two. What were three and four?
David A. Strauss: Two was the -- the repetition --
Sonia Sotomayor: The one you were just talking about.
David A. Strauss: Not the repetition of -- shall not be immune. The third is this: The Petitioners' position really would nullify a decision Congress made at the very same time it enacted 1610(g) in 2008. This is -- we go through this on page 25 and 26 of our brief. The -- the statute that added subsection (g) also created 1605, the cause of action that -- the remedy the Petitioners invoke. That statute then amended the FSIA to say to parties like Petitioners, who are seeking to execute a 1605A judgment, must show that the property they want to seize is used for commercial activity of the United States. That same statute said that. It said that by inserting 1605A into subsection (a), which is a subsection that requires commercial activity. So Congress did that. It created 1605 -- 1605A. It said if you have a judge -- if you are trying to execute a 1605A judgment, here is how you do it. Section -- you go to section -- subsection (a), subsection (a)(7) says you can execute a 1605A judgment, provided you can show that the property is used for commercial activity in the United States. That's what that statute does. Then the next provision -- or a few lines later in the statute, really, it's not even the next provision, sets up, enacts subsection (g). So, as Petitioners would -- would have it, Congress created this remedy, provided that if you want to execute a judgment based on this remedy, you go to subsection (a) and you show that the property you're seizing is used for commercial purpose -- commercial activity in the United States. And then immediately Congress said, oh, never mind, you don't have to show commercial activity. That's Petitioners' story. That's Petitioners' account of the significance of 1610(g). And I think that's just no way to read Congress's actions. That just does not -- is not a plausible account of what Congress might have been doing. And there's really a fourth reason as well, and it has to do with how central the commercial activity limit is to the FSIA and to foreign sovereign immunity generally. The principle at stake here is the principle that commercial property may sometimes be subject to seizure, but non-commercial property is not. And that principle is -- has the deepest roots in U.S. law and international law. It's actually anticipated by Chief Justice Marshall's opinion in the Schooner Exchange. It was the foundation of the Tate Letter, which led to the reorganization of foreign sovereign immunity doctrines. That distinction between commercial and non-commercial property is stated explicitly in the FSIA itself in Section 1602. It's central to the U.N. Convention on Immunities of States. It was the holding of a recent decision of the International Court of Justice which barred the seizure of, as it happens, a cultural center. The ICJ barred the seizure of a cultural center because the cultural center is non-commercial, and that case actually involved the victims of Nazi crimes. So this is an extremely deeply rooted principle. Now, that's not to say Congress could not abrogate it. Of course, Congress could. But the Court said, just last term, in Helmerich, the case involving the Venezuelan seizure of oil rigs, that the Court is not going to assume that Congress has made a quote, in the Court's words, "radical departure" from central principles like that one, unless Congress has made its determination very clear, and here what's really very clear is the opposite, that Congress did not intend to override sovereign immunity in Section 1610(g). If the Court has no further questions?
John G. Roberts, Jr.: Thank you, counsel.
David A. Strauss: Thank you very much.
John G. Roberts, Jr.: Mr. Tripp.
Zachary D. Tripp: Mr. Chief Justice, and may it please the Court: These ancient Persian artifacts are immune from execution under 1609, and nothing in 1610(g) lifts that immunity. And if I could just make three quick points about why that's right. The first, as most of the questioning has already been focused on today, is it just can't be squared with the statutory text. The statute says that the property of these different entities is subject to execution "as provided in this section." But the way Petitioners read it, it would work exactly the same way if it said the exact opposite. If it said that the property was subject to execution, regardless of what is provided in the section, and that just can't be right. And then so, second, I think another thing that really drives home that they are misreading this law is that the way they read it, it gives with one hand what it takes away with another. So, as my brother was explaining, Congress added (g) at the same time it added (a)(7), and what (a)(7) says is that these very same people, victims of terrorism with judgments under 1605A, it says that they can execute against the property of a foreign state, but only if it's used in commercial activity. But the way they read (g), those people can defeat that limitation just by invoking a different subsection of the same statute. They can get commercial, non-commercial property, whatever, and that's just not a sensible way --
Sonia Sotomayor: Don't they --
Zachary D. Tripp: -- to draft a statute.
Sonia Sotomayor: Don't they explain (a)(7) as being present to permit state law claims based on the same actions as the federal action?
Zachary D. Tripp: So --
Sonia Sotomayor: That would render (a)(7) --
Zachary D. Tripp: So we -- we don't think that's right, and we also just don't think it really helps them.
Sonia Sotomayor: I know you're saying it, but explain to me why.
Zachary D. Tripp: Yes. So the reason it's not right, we explain this on pages 24 and 25 of our brief. It has to do with the language of 1605A itself. This is on 12A of our gray brief if you want to see it. And what 1605A says is "The Court shall hear a claim under this section if" and then the prerequisites to jurisdiction are satisfied. So we think anytime a court gets jurisdiction and enters a judgment, it's a judgment under 1605A, regardless of what cause of action they happen to invoke. I also think this doesn't really move the dial for them much because, in practice, in the mine-run application of 1605A, when somebody gets jurisdiction, they're also going to use the cause of action. As Petitioners were -- were describing, it's very powerful, it's directly on point, punitive damages, vicarious liability, and so it would still be true that, in the mine-run application of (g), they would be reading the law to give with one hand what it takes away with the other. And then the last thing I'd just like to mention here is about the United States' competing interests in this case. I mean, obviously, we have a very strong interest in combatting state-sponsored terrorism. We also have concerns in these cases about the reciprocal -- reciprocal treatment of our own property abroad. And I think, particularly in light of those concerns which are quite weighty, if Congress was really going to take the step of allowing execution against property of a cultural and historic significance to another country and its people, that would be a big deal and it would not be the kind of thing that you expect to see buried in a conforming amendment without remark.
Sonia Sotomayor: Well, how about the cases, the other cases he was talking about, the ones with proceeds in the bank from a commercial activity, et cetera? His reading would take care of those rulings, wouldn't they?
Zachary D. Tripp: I -- so I think one thing about -- the way we read the statute too, I think it does help to some extent with -- with the breadth of the using commercial activity, is that the way we read (g), once you -- if you have a judgment against the foreign state, you can pierce the veil down through to the agency or instrumentality, and then you can go after the agency or instrumentality's property under (b)(3). And (b)(3) does not require that the -- the property be used in commercial activity. It's enough that the instrumentality is engaged in commercial activity.
Sonia Sotomayor: So you think those other courts were wrong?
Zachary D. Tripp: Those other -- I believe the other decisions that he was talking about were interpreted in (a)(7), not (b)(3). And so -- but as we understand it, the statute works together with -- with all of it. It works -- 1610, you can pierce the veil and use (a), (b), the procedures in (c) would apply, (d) could apply, (f) could apply if it weren't waived. And so I think a natural way for Congress to pick up all of those -- all of those procedures was to say that the property is subject to execution as provided in this section. And so what Congress did was to tether the extent of execution under this veil-piercing provision to all the protections that are already baked in elsewhere in 1610, and those protections ensure that you can't execute against the ancient Persian artifacts like these. So, if there's no further questions, we're asking the Court to affirm.
John G. Roberts, Jr.: Thank you, counsel. Mr. Perlin, you have five minutes remaining.
Asher Perlin: The first point I want to make is that the -- the government and the University claim that our reading would render this -- would render subsections (a)(7) and (b)(3) superfluous. That's -- that's not the case. The private right of action under -- under Section 1605A(c) applies only where the plaintiffs are U.S. nationals, members of the military, or government contractors or employees. The immunity waiver that's also in 1605A, but subsection (a), so 1605A(a), applies where the claimant or the victim is a U.S. national, a member of the military, or a government employee or contractor. It's a -- it applies to a broad -- it -- the immunity waiver reaches a broader class of plaintiffs. The remedy provided under 1610(g) is limited to those who hold judgments under 1605A, and this judgment that's available under 1605A is a -- is the statutory judgment. The provisions of 1610(a)(7) and (b)(3) apply where the judgment relates to a claim for which the foreign state is not immune under 1605A, which is explicitly referring to the immunity exception and it's explicitly referring to the broader class of plaintiffs. So we don't think that -- that there's -- there is some overlap, but it does -- that does not render (a) and (b) superfluous. Second of all, (b), as Iran argues and they argued below in -- in the Bennett case, which is Case 16-334, I believe, there, there was a case where VISA had collected money for Bank Melli, a bank -- an Iranian bank, and was holding it because -- because of the sanctions. It could not return that -- it could not pay that money out. Terrorism victims came and said we want to -- we want to enforce a judgment against that money that VISA collected on behalf of Bank Melli. And VISA filed an interpleader action. Iran defended, and they said you can't -- you cannot enforce your judgment under 1610(b)(3) because that applies only where the judgment is entered against the instrument -- the agency or instrumentality, and Bank Melli -- there's no judgment here. That's what Iran -- that's what Iran's argument was. The -- and, right -- Iran continues to maintain that -- that it won't apply to (b)(3). And I think that that's -- I mean, that's -- you would have to say that -- you would have to read out of (b)(3) the limitation that you need a judgment against the agency or instrumentality for it to apply to (b)(3). Again, there's -- there's no way to read this through according to their construction, to read it through and apply it. Now, again, just to make clear the point about the "as provided" -- "upon a judgment as provided in this section," if you look at the other substantive provisions of 1610, they allow -- let's start with -- let's look at 1610(a). The opening paragraph says that the property of a foreign state "used for ... commercial activity in the United States, shall not be immune from attachment ... or from execution, upon a judgment entered by a court of the United States." Right? There's "execution, upon a judgment" and then words that modify the judgment. Same thing in subsection (b). It's the exact same structure. Subsection (f), it's not the exact same words, but it's the same structure again that -- that the property is subject to execution of any judgment relating to a claim for which the state is not immune. Again, the words following "judgment" are modifying the word "judgment," which makes sense under the last antecedent rule, and it also makes sense here because we're -- we're talking about a particular judgment. Section 1610(g) applies to -- to a particular judgment. The -- the word "execution" is separated from that phrase by a comma. The words "upon that judgment as provided in this section" do not contain a comma. Those words are meant to be read together, and the "as provided in this section" is modifying the word "judgment." The U.S. concerns about foreign -- about foreign -- foreign relations are misplaced. The explicit purpose -- one of the explicit purposes of the Foreign Sovereign Immunities Act was to remove foreign sovereign immunity decisions from the executive branch and -- and place them with the courts. And that was for two reasons. One, that -- that plaintiffs, American plaintiffs, were being treated unequally based on whatever policy consideration was relevant at the time. And, two, the government was subject to foreign pressure. So to -- to remove this pressure from the government, Congress placed this authority in the hands of the courts rather than the government.
John G. Roberts, Jr.: Thank you, counsel.
Asher Perlin: Your Honor.
John G. Roberts, Jr.: The case is submitted.


S. Ashley Guthrie: If the Court please. Before passing on to what I think, possibly, more important part of the case, I might -- I might say something as to what was said about the interstate rate. The only interstate rate involved in this case were rates to Walworth and Zenda, Wisconsin which were the tail end of the west suburban -- of the north suburban line of the Milwaukee road out of Chicago. The -- there was no independent evidence of any kind as to the interstate rate to Zenda and Walworth. The rates were fixed on that line to correspond with the intervening intrastate rates as fixed. There was no special attention directed to it. As a matter of fact, there's one train, it goes out through them. One suburban train needs to -- goes out, one comes in. That's all the service they have each day. The complaint interstate -- the Illinois Commerce Commission which joined in the complaint and of course is interested primarily in interstate rates and the petition was based on Section 13 (4) directed intrastate rates. They prepared the complaint for the rate, the entire order will be set aside. Obviously, if the intrastate rates -- the order as to intrastate rate is set aside, there's nothing for the order to the two little Wisconsin villages to stand on. There -- there's a -- if -- if the Court, the District Court couldn't set aside, the order is to -- as to intrastate rates, they say the order shall remain in effect as standard state rates. Compared that to the interstate rate, the interstate rates necessarily fall and follows at a District Court an enjoining enforcement of the Interstate Commerce Commission's order into the whole order. Any other decree wouldn't have any consistency or any common sense in it. The -- that's their -- a very minor part of this case that I thought I would say that at the start of my argument.
Felix Frankfurter: Well, suppose the other way around is true to, isn't it?
S. Ashley Guthrie: What's that? Excuse me, Justice.
Felix Frankfurter: (Voice Overlap) --
S. Ashley Guthrie: I didn't understand you.
Felix Frankfurter: I mean, if the intrastate order stand, I suppose, or am I wrong about that.
S. Ashley Guthrie: The intrastate order stands and the interstate order rather stand.
Felix Frankfurter: Pardon me?
S. Ashley Guthrie: If the intrastate order stand and --
Felix Frankfurter: As to interstate, that's all I --
S. Ashley Guthrie: Yes, certainly. The --
Hugo L. Black: What state would (Inaudible)
S. Ashley Guthrie: The -- the case involves a 13 (4) case and they just -- they're just the tail end and it deserve no separate consideration and the District Court would have been -- well, they would have been idiotic for the District Court to give them any separate consideration on the record before it. There was nothing -- nothing we had read about them.
Hugo L. Black: I don't quite understand what you said there, you talk a little fast.
S. Ashley Guthrie: Excuse me.
Hugo L. Black: You -- are you saying that if the intrastate wage, if the court below should sustain on the section on the intrastate rates, it would be compelled to sustain it on what it did to the interstate rate?
S. Ashley Guthrie: I could say that consistency and common sense would require it, yes. There was no separate evidence. The intra -- there was nothing -- no, no separate consideration to the interstate rates. They were fixed.
Hugo L. Black: Suppose they were not.
S. Ashley Guthrie: They were fixed to -- to conform --
Hugo L. Black: (Voice Overlap) -- why -- why couldn't we consider the power of difference in reference to the two?
S. Ashley Guthrie: The power is different.
Hugo L. Black: Yes.
S. Ashley Guthrie: The power is different but the District Court reviewed the entire order of the Interstate Commerce Commission and if the -- the District Court held that there was no -- that the intrastate rate shouldn't be fixed in the -- necessarily, the interstate rates, Mr. Justice Black, that depend on it have nothing to stand on.
Hugo L. Black: Well, are the find -- do you consider the findings required are the same for setting aside an order relating to interstate rates and for setting aside an order relating to intrastate rates?
S. Ashley Guthrie: Not necessarily but in this particular case, all the findings have to do with the intrastate rates and the interstate rates are fixed to correspond and said so.
Hugo L. Black: But if you could put that in the brief so that I could even then derive an act of (Voice Overlap) --
S. Ashley Guthrie: Well, it is in our brief.
Hugo L. Black: -- on that. I think you are wrong.
S. Ashley Guthrie: Well, it is in our brief, Your Honor. The -- the only ground upon which the interstate rates were fixed at all was to be -- to correspond with the intrastate rates. And they said the intrastate -- it says in the -- the interstate rate should be raised accordingly. Now, if you take off the intrastate rates, what is left for the interstate rates to depend upon, are you going to have a different rate of fare to Zenda than you are to the -- to the next station inside which is in Illinois. I would think that would follow and I -- I would respectfully suggest that -- that's what I think here. Now, I believe that I will say a little more on the question of the jurisdiction -- conflicting jurisdictions if you please, or coordinate jurisdictions of the State and the Federal Commission over intrastate rates. The -- there's no question -- it has never been questioned by the courts and I might refer to the North Carolina case, stating it very well, as to the paramount authority of the interstate -- of the State Commission -- state authorities, let me put it that way. I don't care to get the commission in yet, the state authority over intrastate rates. The statute where the State Commission gets its authority is the state statute and of course it's different in the federal statute. But when it comes to fixing rates, when you'll -- adequate revenue, intrastate rates, the paramount authority is in the State Commission. And Sections 13 (4) -- 13 (3) and 13 (4) -- 13 (3), refers to -- whenever at any investigation under the provisions of this part and so forth, there -- shall brought an issue, any rate, fare, charge, classification, regulation or practice, made or imposed by authority of any state -- in the next -- made or imposed by authority of any state. And then in the next Section, 13 (4) it says, whenever in any such investigation, the Commission after a full hearing finds that such rate, fare, charge, classification or regulation, using the same words, passing down a little, results in any undue, unreasonable or unjust discrimination against interstate or foreign commerce then the Interstate Commission can remedy the -- the discrimination. But it does have to be a rate fixed by the State which causes undue, unjust, and unreasonable discrimination against interstate commerce. Now, that doesn't mean always that it has to be fixed by a State Commission. For example, in my own state in Illinois, the carrier post a rate and if the commission -- neither the Commission nor anyone interested objects to that rate, goes into effect. And that's a rate by -- fixed by state authority under the state law.And there is no question in my mind that you could file a petition in the -- under Section 13 (4) in the -- before the Interstate Commerce Commission to remove a discrimination if there was a discrimination caused by such rate. There was the case in the Florida state -- in the Florida case. That was a court -- was careful to find that the rate there had been fixed by state authority although there has been no hearing before the Commission. It was a case where the -- under the state law, the rates became effective without a hearing as it does in most states where no hearing is demanded. But that isn't the case we have in front of us. In the case here, there was a hearing before the interstate -- the Illinois Commerce Commission. And where a hearing is demanded under the Illinois law, there can be no rate fixed by state authority under Section 13 (3) until that hearing has had. We don't have to take a hypothetical case where a rate is fixed by state authority without a hearing before the Commission. In this particular case, there was a hearing before the Commission. Furthermore, the action before the Interstate Commerce Commission was brought by the Milwaukee Road. It wasn't an independent investigation. It wasn't brought on behalf of the public or some suffering shipper, it was filed by the Milwaukee Road for -- for increased rates and the basis of the -- the -- the cause of action, if you want to call it that, as stated in the petition before the Interstate Commerce Commission was that the Illinois Commission had acted unfairly. The Milwaukee Road sets up and it filed a petition in 1952 and that after extensive hearings, for -- extending for a year or more, the Illinois Commission after holding it under advisement for a considerable period, denied it. They denied the increase. Now, the case is this -- expressly based on a contention that the Illinois Commission, which admittedly has primary jurisdiction over interstate rate had acted unfairly in fixing those rates. Now --
Felix Frankfurter: By unfairly, in any more meant then that the disallowance of a rate, resulting in the maintenance of an existing rate, operated and it is claimed in violation of 13 (3) -- a violation of 13 (4), does mean any more than that?
S. Ashley Guthrie: I want to make -- give you a fair answer and I'll try. If there has been a real fixing of the rate by state authority, fairly fixed and that causes -- fairly presented, I'm -- I mean, net causes, undue, unjust or unreasonable discrimination against interstate commerce, I think the Interstate Commission can act under Section 13 (4). But it must be a rate fixed by state authority and I believe, Your Honor, that when you say a rate fixed by state authority, you must mean a rate fixed by state authority on the basis -- on the same accounting theory upon which they asked the Interstate Commerce Commission to fix the rate. Otherwise, the proceeding before the -- before the state becomes a farce.
Felix Frankfurter: Will it -- whether it becomes a farce or not, the fact is, I quite agree with your starting point that the fixing of intrastate rates as such is for the State, the Interstate Commerce Commission has no power to fix an intrastate rate as such. It merely as the power to deal with the relationship, the bearing of an intrastate rate either specific or what we call discrimination against commerce. What I want to know is what difference does it make? What the proceeding is? What your local law is? What steps are taken or not taken? There is a rate which as a matter of Illinois law is the lawful rate within Illinois. And that's the result of the proceeding in 1952 before your Commission, isn't that true?
S. Ashley Guthrie: Yes.
Felix Frankfurter: So all you have is a rate, there it is, by law. Whether that is -- whether as you indicate. It goes into effect if nobody objects automatically or whether it goes into effect at a certain period or it is contested and then it is -- it is the legal rate. There is a state rate which the Interstate Commerce Commission has no power to touch as such --
S. Ashley Guthrie: That's -- that's right, Your Honor.
Felix Frankfurter: (Voice Overlap)
S. Ashley Guthrie: We are -- I'm with -- with certainty, yes, sir.
Felix Frankfurter: All right. Now what -- what difference does it make how the law of the state expresses itself in saying, this is the state, this is the rate within Illinois which Illinois and Illinois alone has the power to fix.
S. Ashley Guthrie: Well, I would like -- well, I'll answer first and then I'll -- I'll put -- read -- put in further what I was going to refer to. I believe that when you say that a rate is fixed by state authority, and in this case, it must be admitted that the state authority was the Commission. So we don't have to say what it has to be nor what it was. In this case the only (Voice Overlap) --
Felix Frankfurter: I suppose -- I don't know your law but I suppose it's illegal to carry freight or passengers in Illinois without a rate being on file or being authenticated --
S. Ashley Guthrie: Oh, yes.
Felix Frankfurter: -- by law.
S. Ashley Guthrie: Yes. And -- and if the -- the Commission or anybody else questions it then there's a hearing and there were extensive hearings here. And by the way, just exactly as a result of those hearings the Milwaukee Road dieselized its suburban service as a saving. Well, we quarrel as to what it was. They -- they say it was 800 and something and we say it was in approximate -- under -- (Inaudible) it was a million. Anyway, it is a very large saving to a great advantage of the railroad and the traveling public. And as they know very well that the interim, before the decision was while they were putting in effect that dieselization, the president of the road in his testimony -- at the opening of the case said they had -- had no diesels in their suburban service nor did they intend to put any on. So that they -- and that was a testimony on July 24 -- no, that was the testimony in the 1950 -- the first hearing in 1952. I think its October. The -- so the -- the State -- the supervision of these things by the State is very, very useful. They're very close to it. And it's -- it's a jurisdiction that should be jealously protected. I don't mean that -- that if they put a rate in and it's manifestly unfair that it should stand. But I say that they must be allowed to proceed -- they must have a fair chance to fix their rate on -- on the theory of accounting that is presented to the -- to the Commission. I'm going to read a little from the District Court's opinion because I think it's pretty good. First, I'm going to call your attention to the fact and I think it's already been called attention to that in the report of the Interstate Commerce Commission, the -- as Your Honors said, at least it gave a slap on the wrist to the railroad for not having it -- presented it, of the $306,000 deficit out-of-pocket, I should say, deficit, that the Interstate Commerce Commission found, $260,000 is in the items that were not presented to the Illinois Commission. And to make certain other adjustments which I shan't go into because I haven't time, they're in the brief. I don't believe there is any deficit but that's a -- that's a question of -- some question of -- of a quarrel about accounting theories. But the District Court said, after quoting from the North Carolina case, showing that the State has paramount authority over intrastate rates and that authority must be jealously guarded, I'm paraphrasing which words to that effect, the District Court said, "Where a railroad seeks the fixing of higher intrastate rates by the Interstate Commission after failing in such endeavor before a State Commission, Section 13 (4) does not contemplate that the State Commission is to be considered only as a way station in a journey to the Interstate Commission." In the instant case, justification of the exercise of the federal power to nullify state rates does not purely appear from the record before us.And as you will remember in the North Carolina case, it said it had to -- it -- that it had to appear clearly and -- and with a cert -- with certainty and clarity before the Interstate Commerce Commission should intervene. And I'm going to put --
Felix Frankfurter: Mr. Guthrie, can I ask you without implying that it is the same but may I ask you whether the railroad could in the first instance without going before your Commerce Commission at all have gone under 13 (3) and (4) to the Interstate Commerce Commission.
S. Ashley Guthrie: Not unless it had some rate that was approved by state authority to which it --
Felix Frankfurter: But you had a rate. There must be (Voice Overlap) --
S. Ashley Guthrie: But there was a -- there was a prior -- there was a prior rate. It's possible if they could. I would -- I'm -- I have to answer your question this way. There was an unreasonable interval between the posting of their other rate in the present day -- I think they will have to go to the State Commission first.
Felix Frankfurter: You, yourself suggested as I understood you that you don't need affirmative approval by the State Commission for a rate under certain circumstances, is that right in Illinois?
S. Ashley Guthrie: Well, silence isn't -- is -- is --
Felix Frankfurter: Well --
S. Ashley Guthrie: -- is an approval.
Felix Frankfurter: Anyhow, but there --
S. Ashley Guthrie: Yes.
Felix Frankfurter: There must be a rate.
S. Ashley Guthrie: Yes.
Felix Frankfurter: And what I'm asking is --
S. Ashley Guthrie: There must be a rate prescribed by state authority.
Felix Frankfurter: Yes.What I'm asking is whether -- no matter how the rate came into being under your local procedure, whether -- without going to the Commerce Commission of Illinois at all, the railroad could have gone to the -- via the Washington Interstate Commerce Commission.
S. Ashley Guthrie: If the rate had been fixed within a reasonable time, prior time they went, I don't think they could get a rate that's 15 years old and go to the Commerce Commission without first forcing them (Voice Overlap) --
Felix Frankfurter: There must be some legal rate enforced in Illinois whether -- whenever it could fix.
S. Ashley Guthrie: Well, I believe that the law is a science, I have -- as I have been told, science of reason as well as logic. And that if an unreasonable time has elapsed since the State posted a rate that they'd have to post a new one. But then again I say, Your Honors, the question is really not involved because they did go to the Congress.
Felix Frankfurter: Yes. I understand that. I -- that's why I said it, I don't mean to be --
S. Ashley Guthrie: Yes.
Felix Frankfurter: -- to say it did.
S. Ashley Guthrie: Now, the -- actually, they did get a raise in 1951 to -- just before they filed this 1952 petition. They got a raise, substantially what they asked. So it isn't -- so that I don't want the Court to think that they have been entirely mistreated. The -- now, if the Court please, just a word on the question of the evidence of discrimination, this -- the Interstate Commission does not have authority to fix an intrastate rate merely on the fact that it is not compensatory or does not yield sufficient revenue. That's what the State Commission does. I don't mean to say that the -- they can't be fixed on that way but the State -- the State Commission is the -- is the place to fix that kind of a rate in the absence of discrimination. Congress has elected to say there has to be discrimination. That's what it says in the statute. And I suppose discrimination must be taken in its ordinary English sense and I think I'll risk referring to the definition in Webster's Dictionary was used in this sense, discrimination, "A distinction, as in treatment, especially an unfair or injurious distinction specifically arbitrary imposition of unequal tariffs for substantially the same service. A difference in treatment made between persons, localities or classes of traffic in respect to substantially the same service". There has to be some evidence of -- of discrimination of a different treatment of the interstate traffic and service from what -- on what is given to interstate traffic and service. The -- in the Burlington case, C, B & Q case, Wisconsin against C, B & Q has been referred to which -- as Mr. Justice Frankfurter said is the initial case under Section 13 (4). In that case, the Court held that Section 15 (a) which had been enacted also in 1920 but somewhat amended since, which ensures to railroads an adequate return does not apply to intrastate traffic. It does say there's a dovetail relationship. And this is what the dovetail relationship was. There -- as I said, if -- if there is inequality between disparity, is the word they used, disparity between the interstate and in -- and intrastate rates that -- that the Interstate Commission can make up that disparity. And in that particular case, there has been a raise in interstate rates and the decision was that the in -- intrastate rates could be raised accordingly. The -- there is -- there's no -- no authority for the proposition that the mere insufficiency of revenue to meet expense gives the Interstate Commerce Commission jurisdiction. That's just the jurisdiction of the inter -- of the -- that the Illinois Commission has -- that the State Commission has. That's why they -- when you say they have paramount authority, that's what you mean. If they have authority to consider whether the rate is sufficiently compensatory to the railroad and -- and the -- I was anxious and under our law, they're required to fix so there should be a fair return. The -- if Congress thinks that there -- there should be more supervision and if they can do it within the Constitution, they could pass another Act. But I was talking about the Act we have. There's no evidence in this case, and no finding as -- as to what would be a fair proportionate revenue contribution. And the Illinois Central case has been referred to. Well, in that case, they found the value of the property in -- in the suburb -- in the suburban service, the value of the property in the other service, the ratio of the return from one and the ratio of the return to other in order to -- to determine whether the rates they fixed for suburban service were sufficient. And by the way, in the -- in the first Illinois Central case, in 101 F. 2d., the -- they didn't raise the round trip or single fare -- fares because they were already up to the interstate rates. In the later proceeding, we just decided last March, they did raise them but in that -- it was joined that -- they said they should be raised but they entered no order because that was the proceeding which the Illinois Commerce Commission took part and entered the order. The -- now, the case is not decided wholly on the -- on the question that I raised. They're very important, very interesting and I think that the decision of the District Court if -- if the -- as I say, if the -- if the states are really -- if it mean anything when they say the state court -- the commission has jurisdiction, the decision of the District Court is 100% right on that point and should not be overturned. And I'm -- I base that on -- as I say, on the facts not on a theory as to whether they could have gone without -- without going to the Commission but they went to them. Now, that -- I mean, it's five minutes, I guess. The --
Earl Warren: You have five minutes left in your time.
S. Ashley Guthrie: The Court -- the District Court found that the rates it has fixed, I don't mean the District Court, excuse me. The Commerce Commission found that the rates it has fixed were just and reasonable. That -- just and reasonable for the future. That finding, the District Court held, had no support in the evidence. The only support for it as appears from the report of the Interstate Commerce Commission was that the rates it has fixed for the same as those of the North Western Railway. We have in our brief, set forth the colloquy where the witness -- between the examiner and the witness about the North Western and the net result of it is that he said -- have too much pressure that there was a similarity in the -- in the suburban areas served. Actually, the North Western rates were fixed on a -- an operation of 72 steam locomotives and only 3 diesel locomotives. Whereas the -- Milwaukee has -- was entirely -- is entirely dieselized. The -- there's no similarity in operation. There's never -- no foundation for the findings they're just and reasonable. Thus, the Interstate Commerce Commission when it fixed the North Western rates, 288 ICC 115 said, the above analysis, that is the analysis on which the Commission's order was based, relates to an existing suburban operation for the year 1951. It obviously doesn't know how to contemplate the cost of some other suburban operation that it might be encountered with diesel engines, gallery type cars and bud cars. I respectfully submit that the -- the decision of the District Court was correct and should be affirmed. Thank you.