Dale M. Stucky: May it please the Court. I'd like to start this morning by examining the record to point out some of the evils and abuses in economic problems that existed that made necessary this order. Now, the history of the field is recounted in some detail in this record. I'd like to point out that portion of the record on -- from pages 357 to 360, and again from 364 to 396. Now, there are some 30 or 40 pages there of record which tell about the experiences of the small independent producers and land owners in the field and I'd like just -- to briefly explain to the Court what the situation was during that period of time. And most of what I'm talking about --
Earl Warren: Mr. Stucky -- Mr. Stucky, may I ask you this question? It -- it seems to me that the -- the question here is whether the State of Kansas has the power to do this, not whether it was desirable, not whether these people have made some -- done some wrongful things, but it's a question whether the State of Kansas vis-à-vis the -- the federal government has the right to -- to do it. Now, that's the thing that we're really interested in and not -- we can get the -- we can get the history and -- and the violations along, so forth, from -- from your briefs, but on the oral argument, we would like to hear the legal question discussed as to power and how your friend -- and particularly, how -- how you would explain the Phillips decision and the broad language that is in that decision.
Dale M. Stucky: Yes. I might -- if I may explain why, I thought these facts might be helpful to the Court. We -- we point out that this order was necessary and proper as a conservation order and to protect correlative rights. Now, really, that is admitted in the record but Judge Rolston came here and said, “We don't admit that this was necessary for -- for conservation,” although it is admitted to the record. And the Solicitor General has come here and told this Court that any proper conservation measure, the Federal Power Commission would not object to. So I thought that if we would point out that the record shows that this order was necessary to conserve gas in Kansas and was proper to protect correlative rights, and if I could describe the economic circumstances which made it necessary and imperative. The fixed price, life of lease contracts and the distress commodity created by the pipeline monopolies and the destructive competition that I could overcome the inference that this was some kind of a -- an attempt to impose state power in some area where the federal government had supreme power.
Felix Frankfurter: Are you -- does that mean -- are you implying that if you can show, that as a matter of fact, what Kansas has done here may demonstrably be a force or a pressure influence in the direction of avoiding waste that to that extent, the Phillips case is to be qualified? In other words, if assuming that the order does in fact fixed price of wellhead of gas going in interstate commerce and therefore, beyond the power of state agency under the Phillips related case, yet in those cases, it wasn't argued that although it does so, wasn't decided. It also -- the state regulation would have some influence upon conservation that that's a qualification to the doctrine laid down, the Phillips case.Is that what you're going to argue?
Dale M. Stucky: No. Your Honor, I don't believe I'm going to argue that. I -- we think the Phillips case does not apply here. I was -- I was about to recap these facts also. I don't want to -- I don't care what you call it. You can call this a price-fixing case if you want to or you can -- I -- as I prefer to call it a value attribution case. What is the important is to see how the order operates and its purpose and what it was designed to do and how the 8-cent order did what this was designed to do.
Felix Frankfurter: Suppose your commission and your Court had said, “We do not battle over language, this is the fixing of price at the wellhead, was stopped that goes into interstate commerce, but although it is such a fixing of the price, it does also have or indeed the justification for it so far as Kansas' concern is that it have the restraining influence upon waste.Suppose your Supreme Court had said that, you'd still be defending the order?
Dale M. Stucky: I work on two grounds.
Felix Frankfurter: Very well then. The question whether it's an attribution of value of price is just word? I don't mind words. That's the only thing we've got to deal within this realm, but they're empty words.
Dale M. Stucky: Well, I had hoped I could convince you otherwise, Mr. Justice Frankfurter.
Felix Frankfurter: Well, but -- but if you say you would defend it if it is a price fixing order, then if I may suggest, you got to argue on that basis.
Dale M. Stucky: All right. I will. You ask me about the Phillips case. The Phillips case has to do with the jurisdiction of the Federal Power Commission to regulate the price of gas after production and gathering has been completed. Now, the first distinction is, that it has to do with the jurisdiction of the Federal Power Commission for rate making purposes. We take the position that this has -- that this case has nothing to do with the jurisdiction of the Federal Power Commission for rate making purposes. The Federal Power Commission's jurisdiction, its rate making jurisdiction was intended to fill a gap, which existed prior to 1938 and the State have the power that we're talking about prior to 1938. And we examined cases prior to 1938 and we discussed them in our briefs and I want particular to point out -- to -- to Your Honors attention, the green brief in reply to the Federal Power Commission. In 1938, the State was doing this sort of thing and this Court has repeatedly said that -- that this -- that the Natural Gas Act did not deprive the state's other rights, of any rights which it had prior to 1938. Now, I'd also like to point out that we -- that the Federal Power Commission in acting in its rate making capacity, and the Kansas Corporation Commission are not rivals in the same field of endeavor. Ratemaking now at the wellhead in Kansas is -- is the prices are fixed by pipeline monopolies. The Federal Power Commission contends it has ratemaking jurisdiction in Kansas. Indeed it would like to have us treat this case as though it were the case is up here on certiorari, as to whether or not they have the right to fix the wellhead price and push -- and push -- and push Phillips back to the wellhead, but that's not this case. We're talking about the -- the concurrent power which existed in the states prior to 1938, to conserve gas and protect correlative rights, and the record shows that this is the only way that these matters can be handled because of the peculiar conditions in the Kansas Hugoton Field.
Felix Frankfurter: How are you -- why are you so confident that prior to 1938, Kansas would have the power to regulate the price of the wellhead of stuff coming in into interstate commerce and (Inaudible) Why are you so confident in setting that Kansas would have this power?
Dale M. Stucky: I'm confident of that because I examined the oil and gas cases. Ohio against Indiana which regulated the use -- an end use of gas, it was an end use regulation of gas if you analyze the case. The Wald case, the Wyoming case where they said you can't take gas out and use it for carbon black plants under certain circumstances, an end use of gas. The --
Felix Frankfurter: But that isn't what was done here, the Wald case is a totally different case. That was a case where our natural resource -- I forgot what the case -- Wyoming or somewhere out west.
Dale M. Stucky: Wyoming.
Felix Frankfurter: A natural resource, limited resources of a state were being used in a -- in a economically wasteful in the largest in economic. The wasteful way, namely, the manufacture of (Inaudible) and the state said, “You can't -- you can't use this natural resource of a state in that kind of a destructive way.” Now, we haven't got a case where Kansas said, “Nobody can take natural gas out of theory in the first place” and the question whether it could permit it all together. Nobody could take it out except for its most productive use that is in this case.
Dale M. Stucky: I say it is.
Felix Frankfurter: But this -- it may have this consequence, the things that are -- everything is related to everything else in this world, almost, more or less direct --
Dale M. Stucky: May I --
Felix Frankfurter: -- specific fixing of price for a fellow who's going to use it in interstate commerce or if you'll prefer, I'll take your place, an attribution of value, if you like that phrase better, it's three long words for one short on price.
Dale M. Stucky: May I -- may I tell you what the record shows about the 8-cent price? When the 8-cent order went into effect, we had a lot of carbon black plants out there in the Kansas Hugoton Field. Now, the Commission could've singled out this channel iron plant and that channel iron plant and that channel iron plant, and said, “You shut down because you're engaging in -- in a wasteful activity.”
Felix Frankfurter: The stuff could never come to the surface, is that right?
Dale M. Stucky: It could have said you can't produce gas for that purpose and Wald would have permitted it and Henderson would have permitted it and Champlin would have permitted and Ohio law and all the other cases. Now, instead of that, Kansas said, “You can't take that gas out there unless you realize 11 -- 8 cents for it, unless you treat it as though it will work, 8 cents. And if you treated as though it will work, the 8 cents, then you can use it. What happened? The record is clear. When that 8-cent order went into effect that the old channel iron factories or carbon black plants out of the Kansas Hugoton Field closed up, we have two left, one or two left, the record shows. Because they couldn't treat that gas as though it was worth 8 cents and still abide by the minimum value attribution order. The record also shows that dump gas -- or -- or a dump gas which were shipped in -- to huge industrial furnaces to burn as boiler fuel, that that was diverted, and for who's benefit? The ultimate consumer. Now, the concern of the ultimate consumer isn't all in the mind of the Solicitor General. You must recall that 48.5% of this gas that appellant producers in the Hugoton -- Kansas Hugoton Field is consumed in Kansas and consumers interest were represented in this case. I'd like to refer to the President's Materials Policy Commission Report to -- to illustrate my argument, on page 16 of volume 3 of that report, it is said there are four important challengers to our natural gas economy.” Number one, to stimulate maximum economic discovery of natural gas resources. The evidence in this case shows that that has resulted from the 8-cent order and is -- and will result from the 11-cent order. To avoid wasting the production of natural gas, the evidence shows -- that was the second point the President's Commission make. The evidence shows that the 8-cent order did this and that the 11-cent order has a tendency to do this. There's a risk that -- that's paragraph -- paragraph B. It doesn't relate to this case, but paragraph C says, “To improve the pattern of use that so relatively more gas goes to those users in which it has a special advantage and relatively last to those that could be served just as well by other fuels.” And the record shows also that this then is undisputed. There are economists -- probably one of the greatest economists in the country happens to come from Kansas. He testified as to what the result would be, and engineers who were familiar with it. Now, that's the third thing the President feel, the President's Commission. This is my way of illustrating a point. The fourth one, to lay for -- the basis for an orderly transition to other fuels at that distance with inevitable date when natural gas production falls off. Now, that also is achieved by this order. The -- this order will tend to produce substitutes for natural gas. Now, there wasn't anything said in the President's Material Policy Report about prices to domestic consumers. They're high enough now. What we're doing under this Kansas procedure is to -- is to -- the poor consumers that the Solicitor General is concerned about are large industrial plants that uses gas for boiler fuel and they can't use the gas for boiler fuel if you give it just a minimal value at the wellhead. The consumers who are deprived of this gas by this order are those inefficient uses -- users, that the President's Commission points out are wasting our natural resource and we're talking about a natural resource here that's being consumed at 500 times the rate the coal is being consumed.
Earl Warren: Well, Mr. Stucky, though those things are -- are true. If you don't have the power to fix prices on interstate commerce, are they relevant? Do they make any difference? Isn't you -- why don't you limit yourself to the legal argument as to whether your state has that right to fix prices, unless cast a burden on the interstate commerce. Now, why don't you -- why don't you stay with that.
Dale M. Stucky: I -- I will, but I honestly can't accept your -- your -- the words you used to describe the Kansas order.
Earl Warren: Well --
Dale M. Stucky: But I -- I see what --
Earl Warren: I thought you said -- I thought you said a few moments ago it didn't make any difference to you whether we call it fixing prices or whether it was attribution.
Dale M. Stucky: All right.
Earl Warren: Now, why don't you (Voice Overlap) --
Dale M. Stucky: All right. I -- I will (Voice Overlap) --
Earl Warren: -- for the purposes of argument, it is price fixing and we -- we won't hold it against you if we come to conclusion that it isn't price fixing but --
Dale M. Stucky: I don't --
Earl Warren: -- why don't you discuss that legal. I'm sure the Court would like to hear that in preference with these other things.
Dale M. Stucky: I -- I will address myself to that proposition.
Felix Frankfurter: Could you also -- could you also take into account my desire to know whether in your view, the Power Commission, the Federal Power Commission, has power to fix the price or the value of attribution, fixing what they would call price -- what do you call attribution of value, at the rate in which (Inaudible). Would the Federal Power Commission have that power?
Dale M. Stucky: No. They -- I think I can -- I can start out with answering your questions.
Felix Frankfurter: Well, that was included in Chief Justice's question.
Dale M. Stucky: Yes. I think so.
Felix Frankfurter: Namely that the whole case here, the question whether or not the Federal Power Act has supplanted the power of Kansas, assuming Kansas had such power. Now, for purposes of (Voice Overlap) I assume that it has, though I think it would -- would admirably be questionable whether under the Act or follow the decision, it didn't have that power.
Dale M. Stucky: Well, I -- I begin with -- I begin with --
Felix Frankfurter: You say the Federal Power Commission couldn't do, but they --
Dale M. Stucky: I say the Federal Power Commission cannot do this and I rely on Hope, primarily. The Federal Power Commission has no jurisdiction to use price as a conservation measure. Mr. Justice Jackson, in Hope, told West Virginia that it would have to -- it would have to look to itself --
Felix Frankfurter: Did he write the opinion?
Dale M. Stucky: In the dissent. I beg your pardon. This Court told West Virginia. This Court told West Virginia who was urging upon this Court the very considerations which we stand before the Court, urging upon it now and it told West Virginia, “We're sorry.” Conservation and protection of correlative rights is a matter for the States. You have to take care of your own problem in that area. We're just interested here in an Act which uses a conventional -- a conventional approach to ratemaking. We're just interested in that the --- the usual utility regulation and the usual utility regulation except for 7 (a), where they have the rights to issue certificates, opinions and necessity. You just decide what -- what a fair and reasonable return should be on some rate base. Now, that's an over simplification of the Hope case but I -- I believe that the Hope case held that. And the reason I mentioned Mr. Justice Jackson's dissent was, that he's so vigorously urged, that the Federal Power Commission should conserve the gas. That it should not be permitted to be used for these inferior purposes and wasteful usage. And that the Federal Power Commission should use price as a tool as he described it to conserve gas and this Court said and I believe rightly so that when the Natural Gas Act was passed in 1938, Congress was interested then in preventing these large pipeline monopolies, the holding companies based on the Federal Trade Commission's investigation. It was interested in -- in protecting the consumer from excessive rates -- excessive rates profits resulting from the interstate shipment of gas. Now, there is -- there is a conflict between this problem of -- of low rates at the consumer's end and an attempt to conserve gas by price attribution, as I like to call it and insist on calling it, at the other end. There is a kind of a conflict but there's one thing that's -- there's not -- there's any -- no question about it and that is that there is a relationship between price, value and use. And that price is a tool and a very effective tool for conservation. Now the question is, does the Federal Power Commission have the jurisdiction to use that tool or did that remain in the states in 1938? Now, there's nothing in the Act, in the history of the Act that I've been able to determine from the -- what study I was -- I've been able to have in our library particularly the opinions of this Court in the history of the Act. Nothing to indicate in the history of the Act that the Federal Power Commission was going to step in and start regulating the production of gas for the purpose of conserving it. Indeed, all of the history of this Act shows that the states were assured time and time again that this was simply a rate regulation law which was designed to step into that area where the states had been told by this Court they could not act. So in answer to Mr. Justice Frankfurter's question, it seems to me the first thing I have to do is to start with 1938 and go back, and what do I look for? I go back and I Iook for a case. I'll look for some case holding that this State of Kansas could not use the device of end use regulation or device of price as a conservation measure. Now, I have not found such a case and I'm confident that counsel had not found such a case. That power was not taken away from the State. That power existed at that time. The tool is well-known. Now if its use has been -- if its use has come late in the history of this country, I must point out to this Court that the states talked to the federal government how to regulate utilities. We had State regulation first and then the federal government put in the ICC and the FPC. Now it may seem novel that the State would use this tool as late as 1948 but price and use and conservation have -- the relationship between them have been long -- well-known for a long time. As Dr. (Inaudible) said, Alfred Marshall, one of the greatest economists in the last century pointed out that relationship. So the State has used a tool. Why? To conserve gas and protect correlative rights and there's no question in this case but what it served that purpose and it does serve that purpose. Now, I say there haven't been any cases against it. There haven't been any cases saying the states couldn't do this. Now, what did the cases say? The cases said that states could -- could regulate end use by a regulation of real property telling -- telling the states they could not produce or telling the companies they could not produce gas if they use them in certain wasteful ways, wasteful manners. Now, a certificate by the Federal Power Commission permitting someone to use it as a carbon black plant certainly wouldn't prevail in view of the doctrine before 1938. The Federal Power Commission would have to give way. That's what this Court said in the interstate case. If there was any conflict, it's not the -- it's not the Supremacy Clause that -- that the -- that the Solicitor General mentions in his -- his brief. If there's any conflict, the federal government has to give a way in this area if the order is reasonably related to conservation and protection of correlative rights and that's why it was -- that's why I wanted to point out the record to show that it was reasonably related to this question and if it is, it's not the State of Kansas that has to give a way. This Court has said that state regulation, that the federal government may regulate these rates, certain rates, unless such regulation comes in conflict with valid state regulations of production and gathering and then the federal regulation must give way. Now, that's what the law is. Now, I mentioned the Champlin Refining Company case in which -- in which -- may it please the Court, the State of Oklahoma limited the production from the wells to 6% of what they produced. Now, that wasn't price fixing but certainly limiting the production to 6% of what they will produce has a very direct affect on price and it was urged in that case whether -- that that was a violation of the Commerce Clause and this Court upheld that as a valid regulation of production in conservation of natural gas.
Justice Whiittaker: Well, that's not what this Court have found (Inaudible) It hadn't been -- you see, that's a proration order.
Dale M. Stucky: That's right, Your Honor.
Justice Whiittaker: And limiting the amount that may be taken from the depths of the earth comes at a time before it could be commerce. Of course when I use the word commerce, I'm speaking in the sense of the Commerce Clause, which means interstate commerce. In your situation here now, I'm very interested. Suppose it's true that for conservation purposes, this is a means of accomplishing the desired end. Does it not also though in your situation fix the price of gas in the challenge of commerce and I had you therefore, not the -- to conflicting principles, you therefore wouldn't be able would you to control the price of gas once in commerce even though it had this effect of conserving the gas in preventing waste.
Dale M. Stucky: I have several answers, I believe, to your question.
Justice Whiittaker: I guess it's more of a lecture than a question.
Dale M. Stucky: Let me suggest this. I have one answer. If this is a regulation -- if -- if this is a regulation of price at the -- it is at the wellhead and it's closely connected with production. Now, I had -- I stated yesterday that we don't rely on the production of gathering exemption because we think our -- our position goes behind the Natural Gas Act. But if it is, if this is price fixing at the wellhead, it's not covered by the Natural Gas Act because it's so closely related to production and gathering which -- and this -- this Federal Power Commission has no jurisdiction over the production and gathering of natural gas. It's not the Phillips case and it's not the Panoma case where the price was fixed after production and gathering had been completed. So if you tell me that this is price fixing, I say it's price fixing at the wellhead and this Court has never said the Federal Power Commission has that power. And it's price fixing for the purposes of conservation of gas and thus comes within the exemption of the Natural Gas Act. Well, I think it goes further. It existed before 1938 and it's not a regulation of a sale or a transportation. Now, I don't care what you call this order but there's a difference between regulating a sale and fixing a -- this isn't the highest price that existed in 1952 or where --
Justice Whiittaker: Does price have anything to do with it all? Isn't it just a question of power and now you got to get down to Phillips and the Panoma case? Isn't -- aren't they the cases that this Court has already settled on and you've got to show a distinction where you can have a different result?
Dale M. Stucky: I say this, you've got to go back to 1938 and you've got to see whether the State could have done this in 1938, and then you have to see whether Congress attempted to impose, to give the Federal Power Commission the right to conserve gas or the right to regulate its production or there might deregulate correlative rights. How can the Federal Power Commission go out there in the Kansas Hugoton Field and take care of these many peculiar problems that result from these price discriminations. These fixed prices imposed by these companies, and I can't describe it in general term without using that kind of language because that's exactly what happened. Now how can the Federal Power Commission go out to Kansas and adjust correlative rights when price is a necessary tool for that purpose? Congress never intended that and we regulate the severance just like we did in -- in Champlin case. But now, let's talk about price. I'd like to point out the effect. We're talking about an economic effect and it's a fair question to ask me, don't -- isn't this the same as -- doesn't this have an economic effect? And I say it has the same identical economic effect as does the severance tax at the wellhead. It's no different. The severance tax fixes the price. The minimum price that you could pay for that gas was at least to pay the tax. You'll never pay it anymore. And if --if they refuse to agree on the tax, the State would say, "Well, we're going to pretend it's worth so much and we're going to take 2% of that." Now, that affects the price just as directly as this does.
Justice Whiittaker: As a matter fact, you do not have a severance tax on gas.
Dale M. Stucky: Yes, we do.
Justice Whiittaker: Do you have?
Dale M. Stucky: Yes, we do. We do. We do in Kansas.
Justice Whiittaker: And who's it paid by? The severance tax is paid by the --
Dale M. Stucky: It's paid by the private (Voice Overlap) --
Justice Whiittaker: -- lease --
Dale M. Stucky: -- the producer of the gas and the -- the owners of the companies working -- working interstate. It's -- now there's an interesting case. There's an interesting Louisiana case that I -- that is growing on me as I thought about this case and that's the Lacoste case. Now in Louisiana, the state fixed the price on alligator hides in animals. They said how much the alligators' hides in animals would be worth and then they levied a severance tax on it. But the interesting thing about the case is -- there are a lot of severance tax cases. The interesting thing about that case was that it was for the purpose of conserving those alligator hides in animals. Now, the only thing wrong with that case is that apparently, the State had some kind of ownership in the wild -- in the wild animals. But the fact was that all of these went out of -- went out of the State and the State of Louisiana, and this is before 1938, levied a severance tax. Why? For the purpose of conserving these hides. Now that power existed prior to 1938 and the states were assured by the proponents of this bill that nothing was taken out, no power was taken away from it. Then we have the Bayside Fishery case. That was a regulation of end use for conservation purposes. It wasn't a price fixing case but it was a regulation of end use. So we have prior to 1938, paramount power. We're talking about jurisdiction. We're talking about the jurisdiction of the states in the field of conservation and protection of correlative rights. Now, the -- this Court has said that there was no intent to deprive the state of those powers and this record shows, and I'm -- I'm -- the record is well indexed and I -- I think it's very important that this Court understand what this record shows; that this is the only way to protect correlative rights out in Kansas under the peculiar circumstances existing out there. And that this -- this is a very effective way to protect the -- the natural resources from waste, particularly those lower uses that this gas was going to has one witness said you drive through the Kansas Hugoton Field and you'd never get outside the smoke.
Justice Whiittaker: Well, couldn't you do that by criminal actions?
Dale M. Stucky: You could do --
Justice Whiittaker: Or may prevent it?
Dale M. Stucky: Mr. Justice Whittaker, we could have done it perhaps other ways but we have the power and we used the most effective method that could be used.
Justice Whiittaker: But in using it, you -- you attempt to assert, it seems to me now, a state power that has been vested in the Federal Power Commission once you admit that the gas from the well goes immediately into an interstate pipeline.
Dale M. Stucky: Well, when we --
Justice Whiittaker: And the sales that you mentioned (Inaudible) eight and a half percent are not made by the producers but come out of this interstate pipeline, apparently, and are made by city service to local industries in the State, isn't that right?
Dale M. Stucky: That's right.
Justice Whiittaker: And that's all in commerce.
Dale M. Stucky: But where did the Federal Power Commission get this power?
Justice Whiittaker: Sir?
Dale M. Stucky: Where did the Federal Power Commission get this power?
Justice Whiittaker: By other power to regulate commerce. And you admit this gas goes into commerce then you admit it seems to me the basis of the government's case.
Dale M. Stucky: No, it must have gotten the power to -- power from the Natural Gas Act. And the Natural Gas Act gave the Federal Power Commission the power only over three things, as this Court had said and as I recall --
Justice Whiittaker: Well, the Natural Gas Act rest -- rest on the power to regulate commerce.
Dale M. Stucky: That's right.
Justice Whiittaker: Commerce Clause.
Dale M. Stucky: When I'm talking about this specific power, the Federal Power Commission, the regulation of transportation in -- transportation interstate commerce, the regulation of sales in interstate commerce and the regulation of natural gas companies and it -- and then it said that it shall have no power to regulate the production or the gathering of natural gas. Now, I don't care how you describe this order. A price order, you can't get away from the fact that it never goes beyond the wellhead and it has something to do with the production of -- and gathering of gas, and it was so desire. So the Federal Power Commission never got the power. It just never got the power. If -- if the power stays where -- where it always was in the states. What if -- what is happening here is if --if -- if the Federal Power Commission is right, we are creating a new gap, a new hiatus in regulation where none ever existed before.
Justice Whiittaker: Created in this case?
Dale M. Stucky: This case will create a new gap in regulation.
Justice Whiittaker: How differently from Phillips and Panoma? Didn't they -- did -- didn't they settle the same question?
Dale M. Stucky: No, they didn't. Phillips had nothing to do with the power of the state under its -- as a -- as a conservator of our resources. Phillips was a rate case and the rates were fixed after production and gathering had ended. The gas was produced, was sold to Phillips. It put it through a processing plant and then it was -- it was sold after production and gathering has ended. Now Panoma was an attempt on the part of the State of Oklahoma. As this Court said in the Panoma decision, this is an attempt on the part of Oklahoma to fix a price for gas after production and gathering has ended, and that was a case that had to do with residue gas. It was residue gas after that had been manufactured and -- and put through this plant and the residue gas, they -- they try to reach way out to residue gas and the difference as I stated yesterday between this and Panoma is that the same difference as between the Hall case and the Calvert case. Those -- the old Hall which was a -- a severance tax based on the value of the wellhead and the Calvert case which was decided the same term as Phillips where -- where Texas tried to levy what it called a "taking" tax after -- to -- to take the gas out of the state. In other words, to -- to add another tax on top of the severance tax. And the same distinction exists between this case and Panoma as existed between Hall and Calvert. One is wellhead and one is after production and gathering has ended. And they did the same thing. In the Calvert's case, they said, "Well, we -- it's just on the taking." And the inference was that the taking was from the -- from the wellhead, just a Cities Service says to this Court that because the order says, “all those who take gas, it applies to them.” Now, they don't take gas from the Hugoton Field within the meaning of the order. It's a wellhead order. It might have been construed as applying to the purchaser. But it wasn't so construed -- it wasn't so construed and it wasn't so applied. So Cities Service stands in the place of the taker in the Calvert case. And I say that a new gap exist because the Federal Power Commission has no power or authority to use a well-recognized tool price rates. Now, what does that leave us?It leaves us a hiatus. Our economists know that this is so and it'd known it a long time. They know that -- that we are wasting our gas sinfully and it's a national property. Two-tenths of 1% of our total fuel resources are gas. Only two-tenths of 1% are gas and we're using it 500 times as we are our coal. That's a record. It's a flush production fuel. Everybody knows it's a problem and the Federal Power Commission is handcuffed because it can't use this well-recognized tool to conserve gas. Now certainly when they passed the Natural Gas Act, they didn't attempt to take these pipeline companies out of the field of regulation. It was to -- designed to complement the powers of the state. So as I see this case, it's a question of whether this country can use a well-recognized principle of economics to conserve a precious natural resource or whether that tool can't be used although this Court and all courts have recognized who've discussed the problem. All courts have recognized the efficacy of the tool. Now, we have a little problem getting our point across because this is a national problem, not just a state problem, but states have solved national problems before. We have a national interest in conservation but heretofore the states have protected that national interest and I think pretty well, at -- at least this Court has thought so. And the states can be entrusted to protect national interest.They may use them on ideas once in a while. But this is not for many economists' point of view and the record will show that all of the -- all of the best talk on this matter agrees with this point of view. It admittedly achieves the purpose it was designed to achieve, conservation, protects the correlative rights. It's reasonably designed for that purpose and we believe that when this Court examines the power which the states have, 1938, examines the hiatus which -- this is the -- in which Cities Service would try to create in this area of regulation. That -- and examines all of the -- the -- the cases. We think the -- the important cases in this case are the cases having to do with conservation that existed prior to 1938. I want to deal with my time to my associate, Mr. Theis.
Frank G. Theis: Court please.
Earl Warren: Mr. Theis.
Frank G. Theis: Chief Justice, members of the Court. I might say that my first connection with this case was back in the fall of 1952, Your Honor, when I was the chief counsel for the Office of Price Stabilization in Kansas and we got a wire out there in Kansas that are office to (Inaudible) the national counsel to go up and check on what was supposed to be a regulation to the price of gas. Possibly, it might be made by the Corporation Commission in the State of Kansas. This is irrelevant. I say this merely as a -- to show you our concept to the thing. We went to Topeka. We listened in on the evidence of this case. We were convinced that it was a conservation case and not a rate case and -- and we got out of it and we had nothing to do with the -- with the matter. I don't quote that to Your Honors as authoritative but that was my introduction to this matter. And I admit that when I first heard about this case, I thought that that was -- to use the phrase there, a rather screwing device to use price as a conservation matter. However -- and Mr. Frankfurter pose this question earlier. Our Corporation Commission did hear evidence on the case and -- and I'm not going to go into the -- to the facts here because the courts already indicated that they will take them out of the record. The Court did hear evidence. They did find that this was an effective conservation tool, as Mr. Stucky has outlined very effectively to you, I think. And the -- and the Supreme Court of Kansas both in the Kansas-Nebraska case which was the 8-cent case, and our Supreme Court in this case upheld the action of the -- of the Corporation Commission as being within the Kansas statute on conservation which is Chapter 55, 701 to 713, and I think that that statute is referred to by this Court. In the case of FPC versus the Panhandle Eastern Pipeline Company is one of the traditional powers of the -- is one of the conservation statutes and one of the -- the powers of the state head prior to the enactment of the Natural Gas Act in 1938. Now, I wanted -- any power that the federal government has as -- as Justice Whittaker indicated a while ago on the federal -- on -- the Natural Gas Act was necessarily Commerce Clause of the Constitution. I want to direct my remarks for a few minutes to another aspect of it that has been touched on, but I think it is important. Mr. Stucky is -- has outlined the fact that -- it is our feeling that these powers are concurrent that the -- the State has the right to act on the conservation field, that the federal government and the FPC are -- and the FPC does not have the authority to act in the -- in the field of conservation, that they do not have the authority under inferences from the judgments of this Court, that -- that they can even use price as a tool for conservation.
Earl Warren: Mr. Theis, Mr. Stucky went into that rather thoroughly --
Frank G. Theis: Right.
Earl Warren: I -- I think he's made his point on that.
Frank G. Theis: Well, I would like -- thank you, Mr. Chief Justice. I'll not dwell on that part of it further. I would like to call the Court's attention to the fact that the green brief which Mr. Stucky indicated to the Court contains an outline we think very clearly our thinking on the proposition and -- and surely before the argument in this case, there was another green brief filed here by the attorney generals of 12 of the states and I think subsequently a white one by Illinois in which they outlined some pertinent observations we feel about the -- the powers of that state. And I would like to direct my remarks for a few moments along those lines. We're all conscious to the Tenth Amendment and I know that recent decisions of this Court in the last 20 years, shall we say, many of them have -- have brought about the many interpretations in the field of constitutional law and I am not going to stand here and -- and make any oration about states right because my political philosophy is not oriented in that matter but I do think that the -- that the Tenth Amendment, the reservation of the rights of the states at this matter deserves a consideration. I don't think that the matter of the correlative rights have been going into (Inaudible). Correlative rights, in this case, this Court has held -- the Kansas Court has held that this gas in place in the earth is real estate and they now -- it underlies the land of these landowners out in the Hugoton Field. As the record shows, there's evidence that -- that neighbors were getting different prices and so forth. I mean a return for royalty on their land. We -- we think -- and the gas was being drained from under the land of one owner out of the -- of a well on another owner's land. We think that certainly is an established right of the states to regulate rights and property. And we want to emphasize the fact that this order was directed at that along with the conservation, correlative rights and conservation, and we think that was one of the inherent reserved rights of the State of Kansas and that the Federal Power Commission as Mr. Stucky said and I'm not going to go over his argument, cannot get into that field. We think that's foreclosed by the Constitution of -- of the United States. The State of Kansas does have a severance tax. I think its 1%. Out in Kansas right now, the states -- Kansas is no different than any other states. The State and all its subdivisions, municipalities, counties, they're all placed with -- with the problem of getting enough revenue to maintain the services the state and local government should -- should perform. I suppose that -- that in this session, the legislature perhaps somebody will introduce a bill that'll raise the severance tax
Earl Warren: Is this severance tax in this -- in this case Mr.(Voice Overlap)
Frank G. Theis: Not, except as a -- as a comparison. As Mr. Stucky said, we think the same principle that would -- that would validate the severance tax -- would validate the -- the price action in this case. We think that the --
Hugo L. Black: There's nothing -- there's nothing in the federal act which attempts to say that the states are not levy of such severance tax. There is an expressed provision in the federal act that gives the federal government exclusive power to regulate sale, the interstate deprives of sales in interstate commerce. Now if -- so what you're arguing here that although it referred to sales that if you say this is not under the name of conservation; that gives you the right to regulate the price in effect that's what you're saying.
Frank G. Theis: Well, Mr. Justice Black, I -- I realize that point. I think we -- it becomes a play on words as we've -- it's been said here before. Certainly the severance tax is based on -- on a value of the gas.
Hugo L. Black: Severance tax based on the value of the gas (Inaudible) has no effort made to deprive the state of using that field to -- if it thinks it will conserve it, it conserve it.
Frank G. Theis: Well, the comparison of course was -- here was the use of value as in the Lacoste case and other cases for a different purpose to get taxes for the state instead of conservation.
Hugo L. Black: Why do you think -- we -- we said in those two cases that -- that we've held carefully the act's meaning, the state -- the Government has exclusive jurisdiction to federal power to regulate price of sale. Anything about the -- the purpose for which a State may act or anything else and how can it make any difference whether the State wants to regulate the price of sale that the Government has exclusive power for the purpose of conserving or for something else? What difference does that make? If the Government's taken over the power, why (Inaudible)?
Frank G. Theis: Well, that of course Your Honor, Mr. Justices, is one of the things to be determined in this case, I think. Well, they are not the --
Hugo L. Black: I thought we had determined that in the two cases before. We didn't say anything about argument of conservation, the right to do it or the means of conservation may hove not been major (Inaudible) But what difference does it make if federal government has exclusive power to fix the price whether the State tries to fix it for one purpose or another, can it do it?
Frank G. Theis: Well, I would agree, Your Honor, that if they -- if they collide head-on and the federal government had that authorized -- authorized power that under the Natural Gas Act, I mean -- and -- and assuming all of the things that you --
Hugo L. Black: Well, do you want us to overrule Phillips and the other case?
Frank G. Theis: We don't think that's necessary at all, Your Honor, and -- and as my colleague has said here, Phillips and Panoma are distinguished. Well, at least all we lawyers have to go on as to the words of the Court on the fact that these were struck down because they were after production and gathering had ended.
Hugo L. Black: But your Court has found in the precise words of the federal act that this was done fixing a price of this -- this gas in interstate commerce for resale in interstate commerce.
Frank G. Theis: Our Court has found that, sir.
Hugo L. Black: Yes but it was read here (Voice Overlap) --
Frank G. Theis: I went over the case this morning, Your Honor, of the -- the previous case and I read those cases and I don't believe they found exactly that, Your Honor.
Hugo L. Black: Well, if they hadn't found it -- it's a fact isn't it that this was for sale in interstate commerce or resale in interstate commerce (Voice Overlap) --
Frank G. Theis: Well, there might be some argument as to whether it was a -- it was a wholesale as they say in interstate commerce. I mean, there were certainly a transfer for consideration in the first instance after it got out of the ground. It seems to me that this -- very nearly, is like the price of eggs for instance. There's a lot of difference in the -- I mean, the first cost of eggs and -- and what they cost you when you get them at the grocery store and as it has been pointed out here, there's lots of factors that -- that affect price. The state is --
Hugo L. Black: We're not here about what the fact is -- the fact is the order of the Kansas State Commission.
Frank G. Theis: It doesn't purport however, Mr. Justice Black, to -- to regulate sales at the --
Hugo L. Black: Well, it doesn't say so.
Frank G. Theis: That's correct, and --
Hugo L. Black: It does.
Frank G. Theis: -- it may be an impediment on -- on sale and certainly, we're not denying the fact that -- that -- really, that is -- its effect was to raise the --
Hugo L. Black: You're not denying --
Frank G. Theis: -- the cost or the price of the gas.
Hugo L. Black: You're not denying the fact that that's its effect and its purpose, are you?
Frank G. Theis: Its purpose was a conservation.
Hugo L. Black: Well, I'm not talking about what they said was behind it why they wanted to do it. Its purpose was to raise the price.
Frank G. Theis: I think that's right. Let's -- I mean, we're a reasonable man and I mean that -- that was it. I mean --
Hugo L. Black: And you intended to raise it when -- when the interstate commerce didn't.
Frank G. Theis: Well, we're not willing to admit that, Your Honor, and I -- I don't think that --
Hugo L. Black: Well, are you willing to say that your statute applies only in intrastate transaction?
Frank G. Theis: No, it -- it applied very -- it applied to both of them. The point we're trying to make Your Honor was that -- less effective -- effective to gas before it got in to interstate commerce and as I understand the decision of this Court, I mean, on the Minnesota mining case and the West Virginia cases, I mean, this movement business doesn't enter to it. I mean, it hadn't got in to interstate commerce at the moment of incident to the Kansas statute.
Earl Warren: But what do you do with the language of Phillips where it says we believe that the legislative history indicates a congressional intent to give the commission jurisdiction over the rates of all wholesales of natural gas and interstate commerce whether by a pipeline company or not and whether occurring before, during or after transmission by an Interstate pipeline company. What do you do with that language?
Frank G. Theis: Mr. Chief Justice, those are -- those are broad words, I agree, and it certainly our hope and we -- we think on the -- on the basis that Mr. Stucky's outline, I'm not going to go into it again. We think that -- that it's on a sound legal foundation that the -- that we do have -- do have that power.
Earl Warren: Well, you would have a -- repudiate that language in Phillips then.
Frank G. Theis: I -- if the statement in its all of its broad implication, as broad as -- as Your Honor state, it certainly will -- might have to be qualified to some respect. Either this -- this particular situation, factually, that involves and -- that's involved in this case has never been before this Court.
Hugo L. Black: Well, suppose in that case you've said that the reason they will fix the price was to -- to -- conservation purposes. It'd been just where you are (Inaudible) --
Frank G. Theis: Possibly, except that they weren't -- they weren't -- they weren't cases with similar incidents. In that case, it was a rate case. It's involved a -- a gas company and this is a -- has an invocation with the state or one of the things that are -- one of the sovereign powers that I believe it had.
Hugo L. Black: One of the -- its invocation of its power to conserve --
Frank G. Theis: Right.
Hugo L. Black: -- by using as a means of fixing the price of gas, which is going into interstate commerce.
Frank G. Theis: As I say, our contention is that the incidents of it is -- is before it gets into interstate commerce.
Hugo L. Black: The answers --
Frank G. Theis: That --
Speaker: -- maybe there, but when it gets there --
Frank G. Theis: I agree. I agree that the effect of it was to the -- the price would be shoved down the line, the price or the cost or the value or whatever you attribute to it, but from a -- from a legal point of view and I -- I think the Supreme Court of Kansas and its order found that this attached to the -- to the gas before it got into interstate commerce. In any event, we and the State of Kansas view this and in the attorney generals of the other states view some of the implications of this case as -- as quite ominous in the -- in constitutional interpretation. Out there in Kansas, we think that this -- this case and I believe those who support it think that in this case that we're rather at the crossroads. I mean, this struck down when we think it's an entering words to strike down a lot of other legitimate activities of the -- of the state. We believe that we're on legal grounds and that Panoma and Phillips are distinguishable and as my colleague has stated in the brief adequately covered, we believe, we think there -- that the law in the case justifies the approvable of the action of the State of Kansas.
Justice Whiittaker: (Inaudible)
Frank G. Theis: Well, of course that aspect of it, I -- I suppose there wouldn't be any objection to, but I mean, certainly, that situation is not going to come about. I mean, you can't have a situation of -- of half and half as a -- as a practical consideration.
Justice Whiittaker: I think that's (Inaudible)
Frank G. Theis: Yes.
Justice Whiittaker: (Inaudible)
Frank G. Theis: They're great, Your Honor.
Earl Warren: Thank you.
Frank G. Theis: Thank you very much.


Earl Warren: Number 14 -- no Number 9 Eleazar Smith, Appellant, versus the People of the State of California.
Stanley Fleishman: Mr. Chief Justice, and members of the Court.
Earl Warren: Mr. Fleishman.
Stanley Fleishman: Thank you, Your Honor. The appellant in this case, if the Court please, was convicted and given a 30-day jail term for the possession in his bookstore of a hard covered book entitled, “Sweeter Than Life.” The facts are undisputed. There's no question, but that Mr. Smith owned the store and the book was, in fact, in the store. The courts below, if the Court please, found that the book was obscene and being obscene, there were no First Amendment constitutional questions arising out of the fact that he was being punished for the possession of a book. The courts below also took the position that the appellant had no right to introduce any evidence on the questions of "contemporary community standards" on what was being read generally, what was in bookstores generally and, what was the standards of the community concerning the discussion of sex in general and that similarly the impact of the book on average person was of no concern. The court said that if the trial court, the appellate court that is say, said that if the trial court had used a standard that was less than what this Court set forth in Roth-Alberts, it did not matter, that the States were free to set a different standard, one which would reach more books. And finally, the court held that it was proper for the municipality to take out all scienter that a bookseller could, without offending the Constitution, be found guilty even though he had not read the book and even though he had no notice of any kind that there was anything wrong with the book. My colleague, Mr. Rosenwein, will discuss all of the problems arising out of the statute in terms of the elimination of scienter, and I will discuss all of the problems concerning the book itself, that would be points two, three, and four in our brief. Our first point is that the book, “Sweeter than Life”, simply is not obscene. To put it the other way that it is not the kind of a book that the States or the Federal Government can suppress or can punish a person for the possession of it without doing serious violence to the First and the Fourteenth Amendment. Now we start, of course, with the Roth-Alberts decision and while much that the Court said there was foreshadowed by prior decisions I think there were two things that were done which were important and which afforded a great deal of protection or should have afforded a great deal of protection to all literature concerning with sex. The first thing that the Court did was to say, and for the first time I believe, that sex and obscenity were not synonymous. That sex was an important subject matter fully entitled to all of the protection that you would have if you were discussing politics, religion, or labor relations. Now this, if the Court please, was a big step forward because the --
Felix Frankfurter: You mean even up to that time it was doubtful whether any reference to relations between the sexes, any recognition of the fact that there are men and women in the world with any knowledge tells an obscene subject was theretofore to be?
Stanley Fleishman: Theretofore, Your Honor. I believe that the term, “dirt for dirt's sake” was equated by the trial court with the expression, “sex for its own sake.” That you couldn't discuss sex for its own sake, it had to be enmeshed with other things. You had to justify it. For example, in the Times Film case which Your Honors had just recently, the City of Chicago, tried to suppress the film, “Game of Love” under a stand which says that if the purpose of the book was to arouse sexual desires, it was obscene unless it had sufficient merit, unless it had compensating value.” Now in Alberts, it was put forward that we didn't have to justify the writing about sex. That sex was not obscenity. That you could talk about sex without having to say, “We want to wrap it up in another package. We didn't have to justify it. And this we think is the first important step forward and the second thing that this Court --
Felix Frankfurter: Your calling it's true, Mr. Fleishman.
Stanley Fleishman: Well, I hope it's true, Your Honor.
Felix Frankfurter: I said the falling, if that was true but this is a great big step of human emancipation.
Stanley Fleishman: Well, it depends on --
Felix Frankfurter: Don't you think the majority has such? Evidently, they almost agreed to have different thought on the subject, didn't they?
Stanley Fleishman: Well, I don't think that the Court can fairly look at the body of obscenity laws that existed before Roth-Alberts without recognizing that most courts took the position that the discussion of sex was something to be discouraged, and suspect. And that unless you could say, “Yes, it has sex but it's justifiable because of the other notions there that a person with such a book was in trouble.”
Felix Frankfurter: I wonder how much of the literature except technical scientific literature would be left in the world if that has been true.
Stanley Fleishman: Well, this was part of what our problem was in Roth-Alberts. We were saying just that Your Honor. We were saying that too many books were under two bigger clouds. But we put that to a side in any event. Now this Court did say and I think for the first time, that sex and obscenity were not synonymous and then to emphasize the First Amendment aspect involved in any writing whether it'd be it by way of novel or educational work for material dealing with sex. And the second one is to say, that no book dealing with sex could there -- hereafter, be found to be obscene unless it went beyond contemporary community standards and appealed to the prurient interest of the average normal person considering the book as a whole. And this Court again in terms of showing the narrowness of the new rule as the Court understood, it said the door could be opened only the slightest crack for any federal or state intrusion into this field. It couldn't be left ajar and then in a series of papers shortly after Roth-Alberts, this Court gave depth and width to the rulings in Roth-Alberts. There was a (Inaudible) case dealing with the magazine which was found to be obscene by the two courts below unanimously reversed by this Court. There was one magazine, a homosexual magazine vying for homosexuals. The Ninth Circuit characterized it as cheap pornography, unanimously reversed by this Court. There was the Times Film case involving the film, “Game of Love” reversed by this Court I believe 7-to-2. There was Mount case where the court below sought to have a standard which was broader than what was involved in Roth-Alberts. There the courts below said that it could have offended the sense of decency, propriety, and morality that the work was obscene. The Solicitor General confessed error and upon remand the case went back to the trial court and the material which the trial court theretofore had found was obscene, on remand he said it was not obscene under the more demanding standard of this Court in Roth-Alberts. And then finally of course there was the Kingsley case just recently decided. The short of it is, we suggest Your Honor, that there is now the kind of limitation upon suppression of this kind of speech which is measured in large measure at least by the kind of material which was presented to this Court by the Solicitor General in the Roth case what he designated as hardcore pornography. This, the Court will recall, consisted primarily of pictures. It consisted of movies, and the cheap productions which were thought to have no ideas, no ideas at all and with all the deference I think that we must recall what it was that the Court had before it there. It was a statute only on its face that was being sustained within a framework of the Solicitor General saying that we don't want to reach very much. All we do say is that we should be allowed to reach something and then giving to the Court the kind of thing that they thought should be reachable and only the kind of thing that should be reachable.
Potter Stewart: That was the Roth.
Stanley Fleishman: That was the Roth case, Your Honor.
Potter Stewart: Now of course Alberts, the Solicitor General wasn't directly concerned isn't it?
Stanley Fleishman: That is true, Your Honor.
Potter Stewart: -- in the State of California?
Stanley Fleishman: But of course the opinion was a single opinion and applicable as to both courts.
Potter Stewart: And only one member of the Court drew a distinction.
Stanley Fleishman: That is correct. I think that at least on three occasions the Court has said that there was a single standard. That neither the Federal Government nor the State could go below this line in terms of suppression. Now we turn to the book. We turn to the book, “Sweeter than Life” and what do we find? I dare say that had this book come before the members of this Court or any tribunal, without the problems of a claim of obscenity, that this simply wouldn't have been a question about it being a protected book. There's nothing about the way it looks, feels, the way it's printed, or the way it is written which suggests that it can be obscene under the demanding standards of this book. That the book has important ideas of it, it seems to us to be beyond question. For example, it has as a suggestion, that female homosexuality is not necessarily inherited. That it is environmentally caused and that you do well to look at the attitudes of parents and friends and events to understand this. It tells us that many people who are afflicted with this aberration seek to compensate by amassing money and power and the mistaken thought that this will overcome it or at least be a deficient-compensating factor and finally the book says that revenge on society because of such an aberration is foolish. Now, I'm not saying, and I'm sure that no one here would say that this is great literature, but how many of the novels that are put out today can go under the label of great literature nor certainly can the Court sit in terms of passing literary judgment upon a work. But here we have a book which has ideas, the importance of discussing the theme of homosexuality at this time particularly, cannot be denied. In England for example, the entire sexual code is undergoing a revision and having as its purpose the making of it lawful to permit voluntary partners of adults to engage in homosexual activity without offending the criminal code. And the American Law Institute in its model code has made a similar proposal. Now if the people are to act wisely, if we are to fulfill our part in terms of informing our legislators on how we fill upon this important subject, surely the subject as such must be open. People must be allowed to pick and choose and I don't know how, a novel could be written about homosexuality which would be realistic and meaningful without depicting in some way, the fact that there are sexual relations between members of the same sex and that is, we submit all that we have here. In terms of the manner in which the sexual scenes or depictions were set forth in the book, I think that without pressing the point too much in this, as Mr. Justice Frankfurter has suggested, you wouldn't have a novel. You can't find a novel today that doesn't deal and then deal in a great deal of particularity and candidness, with sexual events. And we suggest that in terms of depiction and representation, this book, “Sweeter than Life” is pallid, that books like Lady Chatterley's Lover, to name just one although later, that these books go far beyond the book, “Sweeter than Life.” Magazines, even family magazines, Ladies' Home Journal and the Cosmopolitan, they are apparently obsessed with the feelings on the discussion of sex, to say nothing of magazines like Playboy. But all of this, if the Court please, is what we had in mind when we said that it is contemporary community standards that we must look to. We should remember that there are films on the market now which weren't on the market 10 years ago. There are films that are openly shown to everyone which would have shaken our society to its foundation, 25 years ago, but we're here, we accept it. People look at it without shame, without morbidity. They consider it candidly and being able to see films, television, plays, novels, magazines, we submit it is just unconscionable to suggest that this book is obscene within this --
Potter Stewart: By films do you mean generally released moving pictures that which meant by films?
Stanley Fleishman: Motion Pictures such as the Lady Chatterley's Lover or The Moon is Blue which was this Court's concern in the Holmby case. There's been a movement that I just said --
Potter Stewart: I just wandered what you meant by the word, films.
Stanley Fleishman: Yes. I'm talking about motion picture films generally exhibited. In terms, if the Court please, of the impact of sustaining a conviction in this case, we would like to point out that not only would this endanger literally thousands of books because if we're right, that in terms of themes, description of representations, it is not distinguishable from thousands of books, that means that if Los Angeles can convict a bookseller for the possession of “Sweeter than Life”, it can convict him for the possession of, let's say thousands of books and not just Los Angeles because if our municipality can do it, every municipality can do the same thing. And also it would re-open all of our problems of vagueness because if we say a “Sweeter than Life” can be obscene, then I decry this Court or any court to draw line that would be meaningful and understandable that would less-be-safe, kill-within-the-line and punish a person for the possession of it without killing thousands of books again, both on the vagueness point and in terms of the number that would be involved. So that our first point in this regard is that the book simply is a protected book and it does direct offense to the First and Fourteenth Amendment of the Constitution by permitting Los Angeles to punish this bookseller who is not pandering. There's no question here of any special appeal. This book was sitting in a book stock shop, in a bookshop where there were thousands of other books, we say that that does grave offense to the First and Fourteenth Amendment.
Potter Stewart: Is there anything in record that show what was the nature of thousands of other books?
Stanley Fleishman: We reach now to our second point if the Court please, and that is we did try very seriously to introduce evidence on what we deem to be a crucial issue. This Court having given us a defense, namely, that if our book does not go beyond contemporary community standards it could not be condemned, we sought to avail ourselves of that defense and we brought in expert witnesses. We brought in for example the book review critic of the Los Angeles Times who testified that he read some 30 books a week. That he was familiar with contemporary community standards and who was about to tell the Court how this book compared with the books that were on the market generally and we were cut off and the trial court took the position that the book spoke for itself. It had to be measured only by what it said. It couldn't be compared with other books and in this the trial court was affirmed by the Appellate Department. The Appellate Department went back to the old case of Wepplo which preceded Alberts and there it was said it doesn't matter if there are the same books or sexually more provocative books on the market generally in the area. Whether the book is in the library is of no concern, all of this was ruled out both on the trial court and by the appellate court. In this we say we were denied due process of law, if the Court please, because certainly if we had evidence to present on an issue and if one of the issues before the Court was, does our book go substantially beyond contemporary community standards to deny us any opportunity, not just the opportunity by one way, but to deny us all opportunities to show that our book did not go beyond contemporary community standards, to show that our book did not have a substantial tendency to corrupt or deprave, to show that our book considered as a whole could be read candidly and openly by the people. That it did not appeal to a prurient interest, it's denied to us, we suggest due process of law, and again it is denied to us free speech because unless we're given the opportunity of presenting evidence on the fact that our book does not go beyond contemporary community standards a trier of fact who may not be informed about contemporary community standards may believe that our book is not constitutionally protected and punish a person for the possession, when in fact it is a constitutionally protected book. The trier of the fact here for example, Judge Pope, apparently was particularly concerned with the plot. He was disturbed by the notion that there was a woman who left her husband to take up with another woman. This bothered him. It appears that he was not familiar with the literature in this field. It's no reflection upon and I wouldn't expect him to be as well read as a book review critic, but surely he should have known before he passed judgment that there were hundreds and hundreds of books including hundreds of novels which dealt with this theme and which dealt with this theme as candidly, as openly, and as frankly. And that without this knowledge, the judge was unable to pass intelligently upon this question and in fact reached the book which had no basis and should not have been reached.
Potter Stewart: Under the California law of the defendant could have been tried by a jury in this case, had he not waived, could he?
Stanley Fleishman: We would have had the same problem Your Honor because --
Potter Stewart: Did he wave the trial by jury?
Stanley Fleishman: We waived the trial by jury.
Potter Stewart: To which he would have had --
Stanley Fleishman: We had the right and we waived the trial by jury in that case. I might say parenthetically though, Mr. Justice Stewart, that we have a problem in this type of case. There were originally 19 counts in this case, and there were many books. And if we had tried this case to a jury, we would have been there for a year because as it is and it shows up in the record, that the trial court took the book home and he read and he reread it so that we did have the trial for jury and we're not making that point, I merely say that we sometimes buck in a situation such as we have here.
Earl Warren: Mr. Fleishman, I understood Justice Stewart asked you if there is anything in the record to indicate the character of the other books in this bookshop.
Stanley Fleishman: In this book shop, I do not believe so.
Earl Warren: Yes.
Stanley Fleishman: I had thought the question was as to the character of the books generally. No, in this bookshop there was no showing or an attempt to show that this book -- this bookshop had anything but the normal kind of books that you would find in a Brentano's or any other bookshop. There was no attempt to show that there was any catering to a special class or that there was a predominance of one kind of book over another. I do believe that it came out in the record that there were magazines such as Life, Vogue, and Cosmopolitan in the totality. He had thousands of books and magazines. It was a large bookstore. I think the police officers testified generally as to the character of the store. And it appeared to be good-sized bookshop, without any emphasis on any particular kind of material. Now the third point that we have raised and I will discuss is the standard that was utilized by the courts below. We have said that it was essentially a Butler, (Inaudible) and Patrick standard, however, you want to formulate it, but what seems clear to us is that the trial court took the position that he was essentially a thermometer. That he was there for the purpose of measuring the heat of the book. When we suggested that the test of this Court was it had to be the impact of a material on an average normal person, he said no. He said its average normal persons who determined the impact upon use in particularly susceptible persons and this came through again and again. He said for example that he was depressed by the reading of the book. We suggested that that may be, but how does that make it criminal? How does that prove that it goes beyond contemporary community standards that appeals to prurient interest and then he went off in the direction of well it depressed me because I may -- I'm vaccinated. I've lived my life and we have to think of how it would affect the young and the unprotected. And it was this in this regard, I think, that the Court, the appellate court's determination that it was free to fashion a standard, less demanding than this Court's standard in Roth-Alberts must be understood. And it was interesting in another regard where the appellate court apparently tried to read out the notion of the book having to go beyond contemporary community standards before it could be reached as an obscene book because Judge David said that if the people wanted to they could give -- they could redefine these words which are so commonly understood by the people. And by that I understood him to be saying that obscene has a meaning, an ordinary meaning and the legislature has not changed it. Our position was throughout the case that in effect this Court in Alberts had read into every obscenity statute at least the proviso that no books could be condemned as obscene if it did not go beyond contemporary community standards, if it did not appeal to prurient interest of the average person considering the work as a whole. Again it should be recalled that here the Appellate Department did not try to justify in any legal sense at least, the determination that the book was obscene. There was no discussion of the book when we suggested that the wrong test was applied. The Appellate Department said, “Well, it doesn't matter. We'll say it's obscene under any test.” And then we had the problem of the easy labeling that Mr. Justice Harlan properly warned against in terms of just giving a stamp on it. So that we in effect and in truth, in this case, find ourselves with a defendant who was given 30 days in jail for having in his possession a book which has as its major crime, the fact that it discusses a theme of lesbianism and that it does so with some degree of realism and that is all. The crucial issue here it seems to me, is not so much whether the book goes beyond contemporary community standards or at least the issue below seems to be not whether it went beyond contemporary community standards, but whether it was good, whether it was right to have this kind of discussion going on and it was because the trial court felt that it was not good, because the trial court thought it was not right, that he found it to be obscene. Whether we think it's good or bad though, of course has nothing to do with the matter. We may personally prefer one way or the other, but that is not the test and the test has to be under the appropriate test. If we were to apply this Court's ruling in Roth-Alberts it would be manifest that this book is as far away from being obscene as one could imagine and still be up before this Court at least to have with the defendant.
Earl Warren: Mr. Rosenwein.
Sam Rosenwein: Mr. Chief Justice, may it please the Court. The other aspect of the case is the exclusion of all scienter requirements from the ordinance. The court below held that this statute was to be equated with those public welfare offenses which exclude all requirements of the intent or scienter and punish proprietors or individuals who have violated the law without regard to any question of intent. These public welfare offenses the court referred to dealt with the sale of adulterated food, the sale of dangerous weapons, the abatement of some public nuisances, the sale of narcotics, and so forth. After having reviewed those cases, the Court said, “And so with books.” And so the Court held that the -- a proprietor of a bookshop could properly be convicted for possessing an obscene book even if he had no knowledge of the contents or the character of the book. The Court said, “Unless some higher court told it otherwise, they would not permit the proprietor of a bookshop with impunity to adopt that poetic phrase, ‘where ignorance is bliss, it's folly to be wise'.” Now our position with respect to this statute or at least the issues presented are that the statute thus construed and applied tends directly to abridge, to invade the areas of speech and press that it creates as to an innocent person again those indefinite standards of criminality which were mooted in Alberts and Roth and bring all of the problems back once again.
William J. Brennan, Jr.: What was the other (Inaudible) criminality of the decision (Inaudible)
Sam Rosenwein: Guilty knowledge.
William J. Brennan, Jr.: Guilty knowledge of what?
Sam Rosenwein: Knowledge that the book is obscene. He would have of course first shown to have had knowledge of the contents and from that, inferences might be drawn, or proof would have to be made. At least, he would have to have the opportunity to say, “I was honestly ignorant of the contents and I did know that it was obscene.” That is what the Court ruled out, scienter is guilty knowledge.
William J. Brennan, Jr.: Is the minimum at least as much taken through the reference?
Sam Rosenwein: No. They're not required to under the statute. Under the statute the Court has held --
William J. Brennan, Jr.: No, I mean what I'm trying to -- what you think the State should have to prove?
Sam Rosenwein: I would say as a minimum they would of course have to prove that he had knowledge of the contents of the book.
William J. Brennan, Jr.: In other words that he had read it.
Sam Rosenwein: Had read it. Well as to that, I would say they sometimes prove that knowledge of contents or character more sometimes by admission and sometimes by conversations and things of that kind do occur but I think generally speaking that he had read the contents of the book.
Speaker: You were required two things actually, weren't you? Knowledge of the contents of the book and further knowledge that based on his knowledge of the contents, the book was obscene and that he knew it.
Sam Rosenwein: That is right Your Honor. Now of course it's up to the State, one State have a provision for scienter, I would say in the event the burdens of proof were shifted, presumptions, rebuttable presumptions created that would be of course a different problem from a constitutional viewpoint. But when the State says we're not going to permit you to even testify as to whether or not you are honestly ignorant, then we're not going to require of any proof of any kind. In other words you're the absolute guarantor of the sexual purity of the book.
William J. Brennan, Jr.: Well there's a record here, it seems he had no knowledge whatever of the contents, what is the record –-
Sam Rosenwein: The record he -- they prove nothing. They just put in the book. He took the stand and testified he's a man of 72 years of age. That he had not read this book. He hadn't read it for sometime as a matter of fact and he was in the business of buying books. He ordered generally from New York, from the east of circulars, new books, publishers, very often sent to him without an order if publishers do that. They just send books out and did what the normal bookseller does.
Potter Stewart: Under your view a man who couldn't read could sell anything with impunity is that right?
Sam Rosenwein: Well, no, that isn't quite accurate Your Honor. I mean there are different ways of proving guilty knowledge. I would say also and we would ready to concede that if there was a reckless disregard of the facts which a person should have known in some way I would say that that too might be included in the area of scienter. I thought the Court's reference to a rule of conduct where ignorance is bliss, was really dealing with the person who was guilty, in other words, recklessly disregarding the facts. That isn't the situation that we're posing here. We're dealing with a situation where the person admittedly is innocent. He has no intent. He just doesn't have knowledge of the contents of the book. He's in business of buying books, selling them and he has thousands of books in his shelf.
William J. Brennan, Jr.: How do you raise that issue?
Sam Rosenwein: Of -- by motions, demurrers and so forth and all the way up to statement on appeal. This is the law. I don't think there's any jurisdiction in the law.
William J. Brennan, Jr.: The right to a federal question.
Sam Rosenwein: Oh yes all the way through. Now it's -- the first problem you have when you deal with an innocent proprietor of a bookshop is this. If you're going to ask him, if you say to him, “Regardless of all the reasonable precautions you take, regardless of how much good faith you take in trying to determine, to get rid of and not have any hardcore pornography or obscenity in your shop, no matter what you do, nevertheless you will be guilty.“ The inevitable tendency of that kind of a direction is to stop the flow of books because the books are either going to save himself -- I better get out of this business entirely, or else I had better get as far as away from books dealing with sex as I possibly can. It, of course, becomes an awful weapon in the hands of police officials and of private censorial groups whom now can say to him, “Either this book gets off, or you'll be spending in jail once a week at least.” Moreover, he's not in a position. He's the weakest in the whole hierarchy of people involved in the circulation of the press to defend the book. He can't afford to take anyone particular book on. And as a matter of fact this Court's decisions in virtually all areas of speech, press and assembly whenever appeal sanctions have been visited on an innocent person whether it was enjoining an alleged subversive organization that he knew nothing about, the inevitable tendency in all these cases is to immediately frighten people away from joining, immediately frighten them away from getting books, from speaking. And so in this case, too, there can be no doubt that this would be the inevitable result because he cannot. It is an absolute impossibility to read every single book and then having read the book to say, “Does this individual book appeal to the prurient interest of the average person measured by contemporary community standards considering the dominant theme of the book taken as a whole?” You have to do that as to every book. And if, as a matter of fact the test in the state court is perhaps not the same and there has been some differences as to whether it is or not, he must then say, “to be on the safe side, does the book taken as whole and measured by the average person and applying contemporary community standards, have a substantial tendency to corrupt and deprave him by arousing lascivious thoughts and lustful desires? I don't think I have to press the point that no bookseller can possibly assume that burden, no person could.
Potter Stewart: Now this what we have here is an ordinance of the municipality of Los Angeles?
Sam Rosenwein: That is right.
Potter Stewart: Alright. This California State statute is differently worded and does require scienter, is that it?
Sam Rosenwein: That is right.
Potter Stewart: But it doesn't require, does it, that the State prove all these things you're telling me?
Sam Rosenwein: I think what Wepplo has decided that we've never been happy about it. I would like someday to talk it over again with the Court, but what it did say was this, “The statute requires a proof of lewd intent.” Now that maybe a little difficult to prove, but it, like everything else, is not entirely impossible. For example, if the cover of the book has a suggestive picture and a suggestive title, well that might at least make out a prima facie case which would then put the owners, the defendant to read by it and in the fact they -- they suggested that lewd intent should be true. There is no doubt California has had this, a provision for over a hundred years and prosecuted these obscenity cases. I don't have to tell your Court to say, “It's sometimes successful because only two years ago Alberts was affirmed.” That was a 311 State conviction. Now --
Potter Stewart: Would it be enough -- would it be enough under the State's statute if the seller or the bookseller was put on notice that there was a claim by the prosecuting officials that the book was obscene?
Sam Rosenwein: Well, I imagine that under Wepplo it probably would be considered fairly well along the line and approved. We would argue I think that would. I think that to be candid I would I say I think it's not enough to just say, “I think the book is obscene without something more to indicate a real knowledge and a real guilty knowledge of as for example, supposing the man said he was astonished in the light of that it's being published today to have the police officer or the police chief say so.” But I think this would create questions of fact at a trial and the jury to properly determine whether or not scienter was there. That's all that it amounts to.
Potter Stewart: In other words under the state statute it would be incumbent on the prosecuting officials to give notice to the bookseller that this book of Mr. Smith in our judgment is obscene and unless you get it off your shelf we'll have to prosecute you.
Sam Rosenwein: It isn't incumbent on them to do it that way.
Potter Stewart: But that's enough, is it not, or is it, to give him knowledge -- guilty knowledge of the same thing.
Sam Rosenwein: Under Wepplo that might be enough. Now the second point that we raise beside the invasion of the First Amendment rights or invasion of the free speech in the assembly is the fact that we have the problems once again that were up in the Alberts and Roth. Now in Alberts and Roth, you were dealing in both cases with situations involving scienter. The instructions had to be given to that effect in the federal court. We were up from the State of California Court on lewd intent. I don't believe that there was any opinion that didn't refer to the fact that this was catering, disseminating, pandering, forcing this material is out for, material on uninvited -- on people who hadn't asked for it much to their -- almost like an assault. When Justice Brennan wrote his decision which he cited a number of decisions that dealt with the problem of vagueness, the argument was made that the statute was vague as defined and cited a whole group of decisions to show that was not so after the definition. Every one of those dealt with the intentional wrong-doing. The man who knows what he is doing. And as to such a person, he cannot be heard to claim that the statute is too indefinite and too vague, but what happens when you apply such a statute, construe and apply it to a person who's honestly ignorant of the facts? Well in such a case, what you're doing is setting up a standard that for a criminal statute, it seems to us, makes it once again too vague, too unfair. He doesn't know what is or what is not the line? It's all right to say to one who doesn't know, who's in the business, who's catering, trying to exploit that prurient interest to say to him, “Well never you mind the innocent person you would always know what obscenity means.” But once you begin to construe and apply it to an innocent person, I think you will then reach that vagueness. And it is not a problem that has really been settled and I'm talking of the indefiniteness but only recently, the Nebraska Supreme Court invalidated its own obscenity statute under its own constitution after it had been asked to put the interest of the Alberts' definition, this Court's definition on its statute and after putting that impress on said, “We regret it still remains vague under our Constitution” and invalidated its own law. Certainly then as to an innocent person, we would assert that the statute -- the ordinance here is also constitutionally in front. Now, if it be a question of balancing, if it could be said that well even so with all the inroads, nevertheless the State has an interest, a legitimate interest in protecting the public morals, I would, without attempting to cavil as to whether that is so or not safe, that in this case under this situation, it might be argued that it fairly minimal because as I said before, this is not the thrust, this is not the unwanted material. This isn't even a newspaper on in front of your house everyday which you are always compelled to read. This is a book shelf where people don't have to go in if they don't want to. Therefore, the extent of corruption of public morals from an obscene book from an ordinary bookshop would seem to be fairly minimal. But admitting that there is some state interest, I would like to point out besides this definite, it seems to us inroads of the constitutional protection, the unreasonableness of the thing, the -- the harshness and the oppressiveness of the thing that -- that seems to us outweighs whatever alleged State interest there may be. In the first place, from the very nature of things, if this is a policing problem, let us say, the State – the municipality must say to it's a bookseller's, look here, we want some help on this question of obscenity. Now if few people will make a good faith effort, if you will honestly try to get rid of your obscene books, we won't prosecute you. But here the State says, “We don't care how much you try to get rid of obscene books no matter how much good faith you use, we going to treat you the same as any lawbreaker.” Now that doesn't help to fight the problem. It seems to us it drives them in the opposite direction and that doesn't seem to be a very reasonable thing to do. Now if there's been an equation with public welfare offenses, but when I go in to buy a piece of meat, a pound of meat, I have no idea whether it's tainted or not and I go home and jot it down and I'm absolutely helpless. The public is helpless in those cases. We have tons of books. We've entirely different situations. When I go into a book, I don't rely on the books though. I don't think very many people do. And if I may browse, I make my own decision. I take the book home. I may read part of it and discard it. I'm not helpless with respect to these books -- book proprietor. I make my own determinations and the equation to other public welfare offenses which do not involve the important basic societal interest like free speech, it seem to us to be somewhat arbitrary. Moreover, there's a stigma to be called a smut dealer, a merchant in obscenity and to have this put on an innocent man, seems to me to be a savage, immoral thing to do, under the guise of protecting public morals. It's something you can't eliminate. And as to difficulties approved, I would like to say this that since specially decision in this Court, that Connecticut, North Carolina, Wisconsin, and many a number of other states has all put in requirements of a lewd intent, of guilty -- of guilty knowledge of scienter and have written, by the way the Supreme Court of Connecticut has just said that this they found a salutary provision in marking the line between due process, the procedural due process and substantive due process. The American Law Institute rejects any notion of a conclusive -- conclusive presumption of this kind. California has followed it. In Ireland we called attention to a very recent decision in which this Court's decisions in Alberts and Roth were all reviewed and special emphasis was placed on, in freeing a person charged with exhibiting an obscene and indecent show which was the Rose Tattoo by the American dramatist Tennessee Williams was placed on the intent, on the failure of any proof of intent as saving freedom of the press and speech. It's there under a fairly different constitution which permits more inroads to speak than here.
Potter Stewart: So the Connecticut decision you would agree.
Sam Rosenwein: Yes it is. It's the State against Sule and I think it's on page 34 of course, in the index as well. And we point out in our brief finally that in California, the State has had this rule of proof of lewd intent for a hundred years and had no difficulty and as a matter of fact in many other areas in the field of bigamy, even with possession of narcotics. Under the State California Supreme Court rules, you have to prove possession of knowledge of the narcotic character and then there has been no difficulty in proving it in those cases. Nobody is an absolute guarantor and it seems to us that frankly on a case-to-case basis, there's no more difficulty in proving knowledge or a state of mind which is being proved everyday as we know, then perhaps approving the receiving stolen goods and knowing that the goods were stolen. There are problems but they are met every day and there will be no reason why on the case by case basis, it could not be just as successful. And finally, if it's immoral books they want, if it's personal wrongdoers that they want, they should go after them and not make statutes so wide as to encompass absolutely innocent persons and create dangers for the exercise of press and certainly we reserve the rest of our time --
Speaker: (Inaudible)
Sam Rosenwein: I wouldn't know off-hand. I thought they have enough - I really don't know, (Inaudible)
Speaker: (Inaudible)
Sam Rosenwein: Oh but it's not in the record. It's not in the record. There is and we designate if he had asked a running with the law before but at the same time one or more (Inaudible) I would like to say this, Your Honor that in Los Angeles perhaps dealt with that periodically it seems to be every three or four years the police go through the department stores and make arrests for reasons that seems to take up but I think if you were to look into the history of Los Angeles see that every three years there's a number of arrests made and there are a number of cases as to why (Inaudible) I don't know, but on this record and this may not (Inaudible). Nothing is available, there's no record, no offense or felony was sitting over the (Inaudible)
Earl Warren: Mr. Arnebergh.
Roger Arnebergh: Mr. Chief Justice and members of this Court, if it please the Court. First of all I should reply to one or two points that have been made here. It's stated that the ordinance would result in closing many bookstores. I would like to mention and the record shows the court's taking judicial knowledge over these municipal courts. That this ordinance has been on our books in Los Angeles since 1939 and it has not been amended in any respect that affects this, and we still have the great many bookstores in Los Angeles. With respect to the types of books that were sold, --
Potter Stewart: May I ask you this?
Roger Arnebergh: Yes.
Potter Stewart: In this case, did the prosecuting officials had an option to proceed under the ordinance or under the state statute?
Roger Arnebergh: Yes, Your Honor. We have an option. That was one of the points that is involved in the State is whether we should prosecute under state law or a municipal order -- ordinance and it was held at -- we have the right to prosecute under either as our municipal ordinance is more restricted than the state law which under our California Constitution within a chartered city we have the right to do. With respect to the type of books, I would like to state first this bookstore did have all types of books, but the significant thing is that as shown on pages 35 and 36 of the transcript of record this particular book and others -- well this particular book was segregated in a section that juveniles were not allowed to enter and that the first duty of one of his clerks was to keep juveniles away from this particular section.
Earl Warren: You cite that as there's being an inference against the --
Roger Arnebergh: No, I'm merely --
Earl Warren: -- (Inaudible) in his favor.
Roger Arnebergh: I merely cited it in answer to a question that was asked and Justice Stewart asked of counsel.
Earl Warren: I see.
Potter Stewart: You don't differ on your construction of the ordinance, don't you?
Earl Warren: No sir.
Potter Stewart: You concede that it does not require any knowledge of the contents of the book.
Earl Warren: Yes, we concede that very specifically. That is the -- that is the primary distinction between a state law and our ordinances. We very definitely recognize that. And the dissent was based upon that distinction and the dissenting judge as did all the judges specifically found that the book was obscene, but the dissent was based on the fact that we could not make a more restrictive law than the state law and the majority held to the contrary and of course that is binding and it's been a question of state law. Now directing our question to this distinction, between the state law and our ordinance, the question that's definitely presented is guilty knowledge, a specific intent, a necessary element of a law prohibiting the sale of an obscene book. Now, it's well established that the State may, in the exercise of its police power, provide that he who shall do a prohibited act, so do it at his peril and that good faith or ignorance is not a defense. That's the first time that was specifically before this Court I believe as in the case Shevon versus Carpenter, a Minnesota case and I think these cases are pretty well cited in our brief and in the opinion of the Court. It's been reaffirmed by this Court in many, many instances. It's been argued here that the buyer may select the book himself and therefore he is under no hazard, but of course we also have laws prohibiting the sale of narcotics to a willing buyer.