Douglas v. Seacoast Products, Inc. – Oral Argument – January 17, 1977

Media for Douglas v. Seacoast Products, Inc.

Audio Transcription for Opinion Announcement – May 23, 1977 in Douglas v. Seacoast Products, Inc.

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Warren E. Burger:

Mr. Moore, I think you may proceed when you’re ready.

James E. Moore:

Mr. Chief Justice, may it please the Court.

This case involves questions regarding the constitutionality of two Virginia statutes under which the State of Virginia licenses corporations for the taking of fish in its territorial waters.

The statutes are set out in the appendix beginning at page 114.

The first of these statutes is Virginia Code Section 28.1-60.

I refer to that Section 60 or the residency law.

By this statute, Virginia regulates one of its fisheries, the Chesapeake Bay and Menhaden fishery.

So this statute is limited to one fishery and one body of water in inland sea, Chesapeake Bay.

By virtue of this statute, foreign — excuse me — non-resident corporations are ineligible for licenses for the taking of Menhaden in the Chesapeake Bay fishery.

They are eligible for the taking of Menhaden in the Atlantic Coastal waters of Virginia within the three-mile territorial sea.

The appellees in this case Seacoast Products, Incorporated and its two subsidiaries, the new Smith Mill Company and second, the Oceanic Corporation.

Our corporation is located and having their principal places of business in New Jersey and New York and are not under the Virginia statute resident corporations.

They are therefore do not have licenses for the Chesapeake Bay and Menhaden fishery.

The second of these two statutes is found at page 117 in the appendix, this is titled 28.1 of Code of Virginia Section 81.1.

For ease of discussion, I’d like to refer to that as Section 81.

By the statute, Virginia provides that all of its fisheries that foreign-controlled corporations shall be ineligible for licenses for any of Virginia’s fisheries.

The test of foreign control considers various factors including the president and chief executive officer or other chief executive officer and the Board of Directors chairman, also the percentage of stockholding by United States citizens.

In essence, it requires that the control in the corporation through stockholders be in the hands of United States citizens.

The lower court upon request of the appellees held that these statutes violated certain constitutional provisions.

The — the lower court held first of all that the — the bay Menhaden residency law violated the Equal Protection Clause of the Fourteenth Amendment and thereby inform — restrained further enforcement of this Act.

The lower court held that Section 81 which bars foreign-controlled corporations from taking fish in Virginia was preempted by force of a Federal Act, the Bartlett Act.

This statute is set out on page 118 of the appendix.

I first turned to the question of preemption and we would submit of course that the lower courts holding to the effect that Section 81 by foreign-controlled corporations in Virginia’s fisheries is not preempted either by the Bartlett Act or any other federal enactment.

The lower court held of course that the Bartlett Act, 16 U.S.C., Section 108 preempted Virginia’s right to deny licenses to foreign-controlled corporations within these territorial waters under Section 81.

But the Bartlett Act, it’s clear, it applies only to United States vessels — excuse me — applies only to foreign flag vessels.

This — this Act bars foreign flag vessels from fishing within 12 miles of United States’ coast under current law.

Under the new provisions of the extended U.S. fishery zone, foreign flag vessels will be barred from fishing within 200 miles of the United States’ coast.

In any event the federal Act clearly applies only to foreign flag vessels.

The Virginia Act here clearly applies to United States flag, domestic fishing vessels, albeit operated by foreign controlled corporations.

The waters affected are Virginia’s waters and therefore the two statutes cannot possibly, as a practical matter, conflict.

James E. Moore:

The United States in this brief has agreed with our position on that and we take special note of that because the United States, of course, is responsible for enforcement of the Bartlett Act.

They find no preemptive effect or intent in the federal Bartlett Act.

Potter Stewart:

Do you think Virginia and United States have the same view as to whether these vessels are foreign vessels or domestic vessels?

James E. Moore:

For purposes of the documentation laws —

Potter Stewart:

Well, for purposes of the Bartlett Act.

James E. Moore:

For purposes of the Bartlett Act that the United States’ position would perhaps be that they are U.S. vessels, the ones operated by Seacoast in this case.

Potter Stewart:

Yes.

James E. Moore:

For purposes of Virginia’s fishery’s regulation which we contend is not reached by the documentation laws.

They are in effect foreign vessels because foreign control is in fact in —

Potter Stewart:

The United States looked at these ships as foreign vessels same as Virginia does, then the Bartlett Act would apply.

James E. Moore:

That’s correct.

Potter Stewart:

And the — the — the Virginia law might be in some trouble then?

James E. Moore:

That would be correct.

Potter Stewart:

So the United States and the Virginia have diametrically opposing views as to whether these ships are foreign vessels or not.

James E. Moore:

No, Your Honor.

I don’t think that’s exactly correct.

Potter Stewart:

Well, you say they are foreign vessels.

James E. Moore:

We say they are U.S. flag vessels operated by foreign controlled corporations.

Potter Stewart:

Yes.

James E. Moore:

And that there are reasons to believe, very strong reasons that foreign controlled corporation can operate a United States flag vessel and deplete fisheries in the same manner that the foreign flag vessels have in fact depleted our fisheries and that is a rationale which underlies Virginia’s view of the foreign control being the decisive factor in whether or not they should be allowed entry to state fisheries.

Warren E. Burger:

You’re — you’re pitching then on — on ultimate control rather than —

James E. Moore:

That’s right.

Warren E. Burger:

— than documentation.

James E. Moore:

That’s correct, Your Honor.

Our position is that the documentation laws do not take into account fisheries preservation.

They are for other purposes and therefore these statutes would have in no way conflict with federal law but in fact would supplement, provide protection to Virginia’s fisheries which is not provided by federal laws at the present time.

We’ve stated that we think the Bartlett Act itself has no preemptive effect and further the Seacoast and United States have asserted certain theories of preemption under the documentation laws and as I have just stated, our position is that the documentation laws have never been construed by this Court to affect fishing in state waters.

There’s this — a series of cases beginning with the case of Smith versus Maryland, an 1855 case, followed by Manchester versus Massachusetts.

In those two cases, federal vessel licensees claimed that their — their federal license of a fishing vessel exempted them from state fisheries laws and in both cases, the Supreme Court said fishing laws of the states are not affected, limited or preempted by force of the federal documentation of a vessel.

Byron R. White:

Does the — you mean the statute place any limitation on the disposal of the — of the catch?

James E. Moore:

No, it does not.

Byron R. White:

You can sell them anywhere they want.

James E. Moore:

That’s correct.

They can be shipped wherever they want, processed wherever they like.

It relates solely to the taking of fish in state waters which in several cases including Alaska versus the Arctic Bay.

This Court has said the act of taking fish as a localized activity, not involved in the stream or flow of commerce.

That position clarifies the effect of the federal documentation laws, and in fact, these laws passed under the commerce power of the Congress cannot reach the taking of fish in state waters.

They relate —

Byron R. White:

Suppose — well then — as — as suppose — as suppose that — that the United States have — would have power to — to control this matter and what do you say the — the licensing — the federal license entitled these vessels to do if anything?

James E. Moore:

The federal license was considered in Huron Portland Cement versus Detroit, and in that case, it was said that the federal vessel license is not preemptive of state fishery — state abatement of air pollution laws, the Manchester and —

Byron R. White:

Yes, but I’m just asking you, what did this —

James E. Moore:

— as a practical matter.

Byron R. White:

What did this particular license — this particular license was issued under statute which said what?

James E. Moore:

Which said that a certain vessel shall be licensed for the fisheries.

Byron R. White:

And — and if it’s a licensed — is — is this a correct statement or the correct quote, appellees’ vessels have been enrolled and licensed and are therefore, “Deemed vessels of the United States, entitled to the privileges of vessels employed in the coasting trade or fisheries.”

James E. Moore:

That’s correct, Your Honor.

That’s the language from 46 U.S.C. Section 251.

Byron R. White:

And you say that — that isn’t the federal license for fish?

James E. Moore:

That’s — that’s the license I assert gives the right to take fish in state waters and we contend of course that it does not give the right to take fish in state waters.

It’s a statute if I may pass upon the commerce power which does not reach the taking of fish.

Byron R. White:

I know but let’s assume we disagree with you on that.

James E. Moore:

Yes, sir.

Byron R. White:

Well this is — would you — would you say that — would you sat that this statute on its phase purports to give a license to fish?

James E. Moore:

No, sir.

No, Your Honor, I don’t think it does.

It is never been viewed by this Court as — as doing that in any case.

It’s been viewed as a license to navigate in Gibbons versus Ogden, but the distinction between navigation and fisheries has always been maintained.

The language —

Byron R. White:

Now, you’re talking the Commerce Clause so now, I’m talking about what does statute on this phase purports to do?

Does it purport to — whether — whether the Government (Voice Overlap) to do it or not, does the statute purport to or seem to give a right to fish?

James E. Moore:

It could in the coastal zone in which the Federal Government has exclusive authority over fisheries between the area — between three miles and 200 miles effective March 1 or three to 12 miles under present law.

Yes, it could very well because the Federal Government has exclusive fisheries control in that area.Our position would be at best.

There is a concurrent requirement of state and federal licenses and that federal licenses have never been preempted within their state waters.

William H. Rehnquist:

You — you then state, what do you mean, the three-mile inward?

James E. Moore:

Three miles inward, yes, sir.

William H. Rehnquist:

Do you suppose that after the Tidelands Act, the Submerged Lands Act, Congress could come along and say, “We’re — we’re exercising our exclusive jurisdiction to license people to drill for oil within the three-mile limit?”

James E. Moore:

I don’t think they could, Your Honor.

In — in the Submerged Lands Act, the United States confirmed the states ownership of all mineral resources, fisheries, shellfish within three miles of the United States coast in — in there inland waters.

William H. Rehnquist:

Do you think oil stands on any different footing than shellfish within those three-mile limits?

James E. Moore:

We don’t believe it does.

The Submerged Lands Act treats them equally and —

William H. Rehnquist:

And the shellfish matter doesn’t cover all fisheries?

Do you think the Submerged Lands Act reach fishery — fisheries generally?

James E. Moore:

Yes, sir.

Yes, we do.

It — it treats specifically.

Fish, shellfish of all types with no distinction being made regarding the mobility or migratory and nature of the fish.

It cedes and confirms the state’s ownership of all these mineral resources and fisheries within three miles of the United States Coast.

I’d like to read you the provision from the Submerged Lands Act if I may.

This is found at 43 United States Code Section 1311(a).

It set forth and says, “Confirmation and establishment of title and ownership of lands and resources, it is determined and cleared to be in the public interest that title to and ownership of the lands beneath navigable waters within the boundaries of the respective States, and the natural resources within such lands and waters, and the right and power to manage, administer, lease, develop and use the said lands and natural resources shall be in the states.”

Byron R. White:

Yes.

James E. Moore:

And they treat those resources equally.

Byron R. White:

Well natural resources in the — in the seabed?

James E. Moore:

And the waters, Your Honor, I believe it says as well.

Byron R. White:

Do you think they granted ownership with the waters?

James E. Moore:

I believe they did.

In fact, that was the question in natural resources that it find in the Act, Your Honor just say, “Natural resources is a subsection (e) of 1301 43 U.S.C. 1301(e) says, “Natural resources’ includes, without limiting the generality thereof, oil, gas, and all other minerals and fish, shrimp, oysters, clams, crabs, lobsters, sponges and so forth.”

So there’s unquestioned right in the states to own, manage and regulate these resources including fish, shellfish and (Inaudible)

John Paul Stevens:

Mr. Moore, I want to be sure of one thing.

John Paul Stevens:

Has Seacoast never fished at Chesapeake Bay?

James E. Moore:

They have never fished Chesapeake Bay in the past.

They — first statute, I called to your attention, Section 60 requires residency for corporations and they were barred —

John Paul Stevens:

In your — to your knowledge, have they ever complained about this?

James E. Moore:

Not until —

John Paul Stevens:

Not until the new legislations come along and now — and now they (Voice Overlap) —

James E. Moore:

That’s correct.

John Paul Stevens:

All right.

James E. Moore:

We submit then that Submerged Lands Act confirms that the documentation laws do not confer a right to fish and reach only the vessel that states have a free and clear right to license their fisheries and determine who shall take the resources within their boundaries.

An alternative theory of preemption has been offered that the fact that Seacoast vessels which they purchased from an American controlled corp — controlled corporation.

The fact that this transfer or sail was approved by the United States under a procedure of the Shipping Act Sections 9 and 37, that this in fact preempts the right of Virginia under Section 81 to bar Seacoast as a foreign controlled corporation.

It’s clear from several sources that these acts, the — the Shipping Act Sections 9 and 37 have — as their sole purpose control of the sail of vessels to foreign interest for the purpose of national defense and security, counsel for the Maritime Administration in recent hearings looking into foreign investment in American fisheries has confirmed this.

We have referred to it in our reply brief at page 11, footnote 3.

In that case — in that instance, he indicated that the sole purpose of these statutes is national defense, certainly not to preempt the right of the states license for taking a fish within their borders.

We would submit therefore that no federal enactment cited by Seacoast or the United States in any way preempts or even purports to preempt the right of the states to license fisheries.

That be the case, the remaining question is whether or not the two statutes under consideration here, license fishing in Virginia’s waters under constitution inconsistent with constitutional principles, and we submit that both statutes do.

The first statute, Section 81, is clearly a conservation of fisheries statute.

The depletion of the United States fisheries stocks by foreign fishing interest is well documented.

The findings of Congress in passage of the new federal act, public law 94265 known as the Fishery Conservation and Management Act, the — the findings of Congress in that case document the fact that foreign fishing interest, because of their self-interest in economic gain have depleted our fisheries in nearly every instance where they have been allowed to fish either outside the 12-mile limit or inside the 12-mile limit under permits and international agreements.

In those cases, they have violated agreements made enforcement impractical and in fact, this is the factor which has led the way in extending the United States fishery zone out to 200 miles.

The Virginia law is premised upon the same findings.

Virginia has suffered at the hands of foreign fishing.

The entire river herring industry in Virginia was destroyed virtually in a period of two to three years of foreign fishing, scooping up the fish as they exited Virginia’s waters to spawn and depleting entirely the stocks.

The Virginia law saw the advent of the new 200-mile law and recognized that there would be a great attempt by foreign fishing interest to avoid the new 200-mile federal law by operating United States flag vessels.

The federal law simply provides that foreign flag vessels may not enter beyond the line of 200 miles, but it does not in any way protect the states from foreign fishing interest who would set up shell corporations in any of the states including Virginia and thereby be eligible under federal law to license their vessels as domestic United States flag vessels, the same situation that pertains with Seacoast and fish with impunity in Virginia waters.

The evil has been established here that the foreign fishing practices do deplete fisheries, and in fact, Virginia laws merely supplements federal law in seeking to protect its waters from possible dangers and in fact very probable dangers of an influx of foreign investment in U.S. vessels setting up shell corporations to meet any residency requirements of the states and the complete and other destruction of our fisheries.

Seacoast has attempted to show this law as directed at them alone but in fact this law applies to all of Virginia’s fishing industry, all fisheries and foreign-controlled corporations are barred from all fishing in Virginia not simply the Menhaden Industry in which Seacoast has in fact been engaged.

And furthermore, Seacoast has presented no real competitive factor in the past as we’ve outlined in our brief.

Thirty six — pages 36 and 37 of the appendix indicate that Seacoast has done little or no fishing in recent years in Virginia so that it is very difficult to attach the motive of elimination of competition to the statute.

It’s clearly premised upon the same findings and conservation purposes as the federal act and we submit that in that light, it clearly meets the constitutional standards of the Fourteenth Amendment consistent with the holdings of McGowan versus Maryland and a series of other cases.

James E. Moore:

Turning now to the Virginia residency law, I would note first that if — if the application of Virginia’s foreign controlled corporation law barring the taking of fish in Virginia waters by foreign-controlled corporations Section 81.

If that statute is upheld in this case as applied to Seacoast, there is no need to reach the question of the validity of the second statute about which I’m ready to speak.

Section 60 would bar the nonresident corporations in Virginia’s Chesapeake Bay.

Its prescription is much more limited in effect.

This statute applies to an industry which may be helpful if we discuss something about the Menhaden industry to put this statute in perspective.

Menhaden entered the coastal waters of the United States in the early spring and began migrating up the Atlantic coast spawning in their migration.

The newly spawned fingerlings entered coastal waters primarily the Chesapeake Bay and other large embayments with estuaries which lead off as protective nurseries for these fish.

Virginia’s residency requirement under Section 60 does not apply to the three-mile Atlantic Coastal Menhaden Fishery, and therefore there’s no impediment to the migration of Menhaden.

Furthermore, the Virgina season on the taking of Menhaden in the Chesapeake Bay does not in any way interfere with the migration of mature Menhaden out of the bay during the winter months, the early — early winter months and the late fall.

When the fishing is done in Virginia in the bay by residents, it is on a relatively stabled population of fish.

The young fish are those that populate the bay and is a rather fragile resource because they are two-year old and less fish, the Manumbar or Mataura fish migrate up and down the coastal waters in the more northern section before returning and migrating south for the winter.

With that in mind, the Virginia statute is limited to the Chesapeake Bay and inland body of water and it simply provides that residents only in terms of corporate residency may take these fish.

We submit that this statute is consistent with the holding in McCready versus Virginia by this Court holding that the ownership of the inland waters and their natural resources supports the right of the state to reserve those resources for its residence.

There is no reason as a practical matter to apply different rule in this case with regards to Menhaden.

Byron R. White:

Mr. Moore —

James E. Moore:

It is —

Byron R. White:

— is there anything on the record to indicate that Virginia does reserve the Menhaden for Virginia residence?

James E. Moore:

(Inaudible)

Byron R. White:

If it does that a — a Canada resident after he gets a catch ship to Menhaden to New York or some place?

James E. Moore:

Yes, he may.

Your Honor, this statute reserves only the privilege of taking to residence and we submit that that is one of the factors which clearly indicates that it’s limited statute and is not intended to in any way infringement commerce.

Byron R. White:

Would it be any different if it were reserving the privilege of being an architect, say, to residence or privilege to the mining coal or anything else?

James E. Moore:

I — I think it is, Your Honor.

Byron R. White:

What’s the difference?

James E. Moore:

There is a very unique situation with regard to fisheries as a natural resource.

Many natural resources, in fact most natural resources, in order to take them, a — a firm must in fact establish some commitment and connection with the community, establish some economic benefit for the community in terms of employment to the mine ore or take clay or sand or gravel requires in fact some employment generated from the local community.

With fisheries, fisheries can be subject to the reaping and harvesting by other state vessels with out-of-state crews, with virtually no return for the resource to the state and the complete depletion in fact if enough non-residence fishing were done so that Virginia in fact economically would receive no benefit from a resource which the Submerged Lands Act —

Byron R. White:

The purpose then is not to preserve the Menhaden but to pre — preserve the laborer and the employment opportunities.

Is that right?

James E. Moore:

Your Honor, this statute, we feel has a conservation purpose as well.

James E. Moore:

And if we’ve set forth in our brief the reasons for that indicating that it matches and eases enforcement of certain clearly conservation or in the statutes namely Virginia’s net size regulation, Virginia’s food fish limitation.

There’s a limitation on the amount of food fish that can be taken in any Menhaden catch.

These are non-edible industrial fish and in that sense, the food fish limitation and the net size regulation are much more easily enforced against the non — against the resident who lands his fish in Virginia and the nonresident who potentially can come in, take the fish and leave virtually unenforced.

The — the peculiar nature of fishery’s resources however, I think is the important reason why residency is a matter of fact with regard to many industries without being required by law and in fact fisheries can be taken without any return to the community which the Submerged Lands Act and the case, McCready versus Virginia say the states own.

Byron R. White:

Could a state provide that nobody but resident show — pick certain agricultural products?

Sometimes in some states you know, they have workers who come in temporarily and do the picking and then leave.

Could they be prohibited from — well could they be limited to residents?

James E. Moore:

I think — I think in –in some sense, the same argument would apply if in fact the predominant practice of nonresident pickers was to come in, pick and leave without in fact any connection or economic benefit to the community.

But in fact, we would submit that that characteristic is uniquely the case with fisheries more than many other industries.

(Inaudible)

John Paul Stevens:

General Moore, I noticed that you have a string of amicus briefs from the Atlantic coast states supporting your position.

James E. Moore:

That’s correct.

John Paul Stevens:

New Jersey is absent, is there — do I imply anything from that absence?

James E. Moore:

I don’t, Your Honor.

I don’t know the — we would submit as a final thought in this matter that to the extent that McCready is in anyway questioned as a result of Toomer.

That Toomer case was a privileges and immunities case that the appellants and appellees here are not in any way — cannot in any way be viewed as citizens protected by the privileges and immunities clause and there is no authority interrogation of the McCready rule which is that the resources owned by state maybe reserved particularly fisheries because of their unique nature maybe reserved to its residents.

These corporations are foreign-controlled corporations domesticated in New York and New Jersey and in fact cannot qualify citizens.

The benefits therefore of the Toomer holding do not give them standing.

Byron R. White:

Well of course the domestication long preceded the foreign control.

James E. Moore:

That’s true.

Byron R. White:

And I — I take it on your position if foreign-controlled, domestic-controlled or about even made a balance — the balance, they transfer of the few shares would change the situation?

James E. Moore:

We view the — the foreign control as — as control — as critical.

The — the stockholders of course dictate policy and the — the line of course must be drawn at some point, but we think that the Virginia statute draws that — that line at a reasonable place.

In fac, the factors which are considered in determining corporate foreign control were opted from a federal statute which applies to the coasting trade and the licensing of vessels for that purpose.

Byron R. White:

What would you do if it were precisely 50% foreign-controlled and 50% domestic?

James E. Moore:

The rule under the Virginia statute is that 75% of —

Byron R. White:

Alright, suppose it’s 75% and 25% and under the statute, the 75% would — would meet it.

James E. Moore:

That meets — meets the test.

That’s correct.

William H. Rehnquist:

Is there a corporation organized under the laws of one of the states of the union entitled to claim under the privileges and immunities clause?

William H. Rehnquist:

Is there a holding at this point on that thing?

James E. Moore:

Not — not to my knowledge.

The corporations have never in my view, under any holding that I am aware of, been viewed as citizens under privileges and immunities clause.

William H. Rehnquist:

I take that that issue isn’t raise here, is it the P&I issue?

James E. Moore:

Not — we do not.

William H. Rehnquist:

In this case —

James E. Moore:

We do not think so in this case.

Warren E. Burger:

Very well, Mr. Moore.

James E. Moore:

Thank you.

I’d like to reserve the remainder.

Warren E. Burger:

Mr. Loflin.

John J. Loflin, Jr.:

Mr. Chief Justice, may it please the Court.

I represent the appellee and its subsidiaries of Seacoast products and the two other subsidiary corporations which as the Court may know, our domestic corporations controlled ultimately by a corporation of the United Kingdom which is itself publicly held.

Much was made in the reply brief filed here that because control of Seacoast unquestionably does rest in the hands of a foreign corporation owned by foreigners at least in large part that somehow that arrangement alone deprived us for any claim of Equal Protection of the laws.

I think the claim is spurious but I would like to know for the Court that as stated in our brief, Hanson trust is a publicly held corporation and in fact some U.S. citizens own its stock.

I do not suggest that they — there are enough few U.S. citizens to meet the test just outlined by my friend as stated in the Virginia statute.

I am not here contending we have 75% in the hand of Americans, but I just wanted the Court to know that if this is an issue, there are some Americans who have invested in this company whose rights in economic benefits would be affected by any detriment to Seacoast and in turn its parent company.

Warren E. Burger:

Your case Mr. Loflin is there were no American stockholders?

John J. Loflin, Jr.:

I think not — I think not one bit, Your Honor.

I think under the basis on which corporations are permitted to function in the states and under — in this case, under certain aspects for a tightly controlled aspects of federal law, it would be most improper and baseless to say, “Well, we have one kind of corporation which has certain benefits and privileges under the U.S. constitution.

We have other types of competing corporations engaged in the same line of business following all the same laws that have these disabilities, that — that to me has known foundation in our tradition or in our law.

Warren E. Burger:

Then for the purposes of this case, if Saudi Arabia and all of the stock of the parent corporation, all the issues would be the same in your view?

John J. Loflin, Jr.:

They would be if, Your Honor will bear in mind that to get where we are, we had to undergo the scrutiny of the Federal Government and that scrutiny has input from various interested bodies of the government including state, fisheries, maritime, NOAA, and as Mr. Moore pointed out, there are defense concepts that are built into these licensing and enrollment provision.

So, whether Saudi Arabia would be approved or not, I do not know, but if it were, then yes, my position would be the same.

I would like to outline briefly the nature of the fishery that we’re talking about, discuss the enrollment and licensing provisions which are critical here, the effect on — I consider our foreign policy and then deal in some detail in the two statutes.

We’re here talking about competing companies engaged in the Menhaden fishery.

They’re basically three companies that are somewhat similar in its basic setup to the automobile industry in this country.

By that analogy which is fairly close, our principal competitor, Zapata Haynie, is the General Motors of the Menhaden trade.

Our client would come in at the Ford level and standard products would come in at the Chrysler level.

But for all practical purposes, the Menhaden fishery really is run by these three large corporations and we compete against each other all up and down the East Coast and in the Gulf Coast states.

John J. Loflin, Jr.:

With — with that background, I think you can better understand the motivation that really was operative in the Virginia legislature when the two Virginia-based corporations that is Zapata Haynie and standard products saw that there was an opportunity because of a change in ownership of my client’s company to get the Virginia legislature to put through a restrictive statute.

Zapata Haynie in particular sponsored that statute sent its lawyer and to testify about it, talked about the threatened — the Russian invasion of the Chesapeake Bay and in that context under emergency conditions, the statute is saying, “You must be a citizen corporation or owned by citizens” was put through.

Thurgood Marshall:

Mr. Loflin, record show how long Seacoast has been fishing in Chesapeake Bay.

John J. Loflin, Jr.:

The record shows that Seacoast through the years goes back to 1911 fishing on the East Coast and in Virginia waters, at one time, it had a Virginia sub — subsidiary which qualified as a resident so that it could fish in the Chesapeake Bay.

I can’t tell you the exact number of years.

Thurgood Marshall:

It was way back.

John J. Loflin, Jr.:

It was back some time, but I believe within the last 15 years.

But —

Thurgood Marshall:

But I thought you said a minute ago that you’ve been fishing all along and all of a sudden they decided to go against — that’s not true.

John J. Loflin, Jr.:

There are two fisheries we’re talking about.

We haven’t been fishing all along in the Chesapeake.

We have been fishing all along — along the East Coast, that is the — the ocean waters running all the way up to Cape Cod and down through Carolina and in fact in the gulf states.

Thurgood Marshall:

I misunderstood you.

I thought you said that you’d been fishing in Chesapeake Bay continuously over a long period of years and then when the corporation changed, suddenly they went after you.

John J. Loflin, Jr.:

If —

Thurgood Marshall:

So that’s not so.

John J. Loflin, Jr.:

Perhaps I was misunderstood.

As to the Chesapeake only, that aspect of it has for many, many years I think since the latter part of the 19th Century been restricted to Virginia residents in order to fish in the Chesapeake and we did fish in the Chesapeake for a time.

We had to set up a Virginia resident corporation which we did and we had a plan in Virginia at one time.

But at all of the time that I am talking about which goes back for many, many years, the vessels of Seacoast wondered as the Menhaden do from state to state in the offshore waters but within the three-mile limit.

It is in the nature of Menhaden to come into these inshore waters in the spring and summer.

They generally come into the more southern states first and gradually migrate toward the north up toward Cape Cod.

It is their characteristic and this makes some — makes the fishery commercially viable.

It is their characteristic to school up in massive schools only in this summer migratory pass and only in inshore waters.

Practically all of the Menhaden that is captured for commercial purposes is taken in closed shore.

Now, that takes care of the outlying shore — shore areas but they are important interior base and river estuaries.

Now for example, we’ve mentioned the Chesapeake but the Delaware River is important so as Long Island sounds, so as Narragansett Bay and the waters around Cape Cod.

These are all waters where the Menhaden move on their travels.

It is their nature to spawn in the open ocean, drift in towards shore when there are very tiny, almost little particles and then grow in the estuarine waters of Virginia, North Carolina, Delaware, the other shore states.

Potter Stewart:

They never get very big, do they?

John J. Loflin, Jr.:

Up to about 14 to 15 inches.

Potter Stewart:

Really?

John J. Loflin, Jr.:

And some of them will live as long as 7 to 10 years although that’s a bit unusual.

Potter Stewart:

Not if your class can help it, they will.

John J. Loflin, Jr.:

We’ve added no real limit to the fact — to the contrary, we hope they thrive to prosper, multiply and we’d continue to have a fishery to work on, but we make out living capturing Menhaden, yes.

The fishery in the Chesapeake Bay tends to be more of the younger fish since that is in effect a nursery and the record shows that one and two-year-old Menhaden are characteristic of the fish caught in that area.

Potter Stewart:

Near about this kind of size —

John J. Loflin, Jr.:

That would be about right.

Also, it should be noted I think that the entire fishery depends on their survival of a certain amount of this fish to the three-year old ranch because that’s when the females spawn for the first time.

They will spawn at age three and thereafter but not until.

Our company grew up as a domestic company.

I say our company — I think it’s been noted here that is no — no brief in the State of New Jersey for example.

Well Monmouth, New Jersey, Port Monmouth, New Jersey is our headquarters and I think it’s fair to say that the State of New Jersey has not found our presence there objectionable in any event they have not filed a brief against us here.

William H. Rehnquist:

Did your lawyer call on New Jersey Attorney General the same way your clients or your opponents, lawyers called under Virginia legislature?

John J. Loflin, Jr.:

Not to my knowledge.

I didn’t.

In any event, I would like now to address myself just — just to note on the —

Byron R. White:

Is the name used Seacoast in New Jersey.

John J. Loflin, Jr.:

The Smith Mill Company was one of the names used in New Jersey.

Byron R. White:

That’s the name, I knew it was.

John J. Loflin, Jr.:

Well, I think it was known by that name in Virginia one time also.

But Smith Mill is probably the name that — probably the older residence of the Port Monmouth area would associate with, but Seacoast is the parent corporation of Smith Mill and Oceanic.

This company has been described in the same company as foreign predators somehow ravaging the fishery and — and then disappearing to go ravage some other fishery.

Characteristics attributed to us seemed rather strange and I think totally inappropriate.

We have exactly the same interest in conserving this resource as our competitors do.

We have an enormous investment in American documented vessels.

We have shore side facilities in New York, New Jersey, Delaware, Texas, Louisiana and our competitors as noted in the brief are similarly situated.

We are located where the fish are.

There’s no question about that and we all know that this business which is basically a very sound business will be absolutely ruined if enough of the fish are not left to replenish the supply and keep it regular.

There is not one word in the record and for that matter in the briefs characterized the Menhaden as an endangered species.

John J. Loflin, Jr.:

We’re characterized as a predator company simply because apparently, we are now owned by a British parent.

John Paul Stevens:

Mr. Loflin, can I interrupt to get one historical matter straight in my mind?

As I understand it, the nonresident statute has been on the book for some time.

John J. Loflin, Jr.:

Yes, sir.

John Paul Stevens:

That is one of the two statutes that prevents you from fishing both in Chesapeake Bay and on the inland — on the — in the within three-mile — on the — on the ocean.

John J. Loflin, Jr.:

The resident statute strictly speaking just applies to the Chesapeake Bay.

John Paul Stevens:

Well, the resident statute has no application to waters — to the ocean waters?

John J. Loflin, Jr.:

That’s correct.

John Paul Stevens:

Alright.

That answers my question.

John J. Loflin, Jr.:

The other statute, the alienage or citizenship statute applies to Virginia waters wherever.

In other words, the ocean and the Chesapeake Bay, but the residency statute which goes back I believe the 1890s just applies to the bay.

The only way we could comply with that statute historically was to set up a resident Virginia corporation which we did at one point.

John Paul Stevens:

Well, the language of the statute is, the waters of the Commonwealth or the waters under its joint jurisdiction and I thought that perhaps included the ocean waters which you said does not.

John J. Loflin, Jr.:

I know.

There is a further definition of the geographical nature referring to I believe Cape Henry and some other fixture that —

John Paul Stevens:

I see.

John J. Loflin, Jr.:

— further delineates the area in question, but it is — the residency statute is a Chesapeake Bay statute, the other statute will bar us entirely from any waters in Virginia.

John Paul Stevens:

The — the thing that is puzzling me is why this litigation got started if they just passed a new citizenship requirement applied only that wouldn’t have affected you if you’re — but you’re already barred because you did — you couldn’t go under the — in to the Chesapeake even before the new statute.

John J. Loflin, Jr.:

As a nonresident corporation, we could not go into the Chesapeake.

John Paul Stevens:

Right.

John J. Loflin, Jr.:

But we were fishing along the marginal waters of the coast.

John Paul Stevens:

Right, and the fact that the non-citizen — the citizenship requirement affects the marginal waters that’s why you were suddenly — your — your business situation —

John J. Loflin, Jr.:

It’s fair to say that that triggered this because that meant we were out of Virginia entirely.

Without a resident Virginia subsidiary, we were already out of the Chesapeake Bay fishery at — at that particular point.

But as —

John Paul Stevens:

And you wouldn’t have been out of the entire Virginia area if that statute applied to the ocean waters but it doesn’t.

I understand now.

John J. Loflin, Jr.:

That’s right.

Well, the — I think it’s fair to say as far as our thinking on the matter is when we found that Virginia had, in our view, suddenly adapted emergency legislation which only applied to us.

John J. Loflin, Jr.:

We thought that we should try and straighten out both statutes if we could, and so we sued challenging both of them.

The record shows, for example, that our competitors based in Virginia go out into the open waters, go into the Chesapeake and then they unload their catch wherever they wish including neighboring states such as Maryland and North Carolina.

We think we should have similar privileges.

We should come down from New Jersey, fish the coastal waters of Virginia or the inland waters, by that I mean the bay, and then take our catch back to our processing plant in Port Monmouth, New Jersey.

This is a pattern that characterizes the industry.

The — the Menhaden pay very little attention to state borders.

They just migrate as the mood takes them and the fisherman want to be where the fish are quite obviously and you can’t — for economic reasons have a plant every few miles up and down the coast.

It — it involves quite a bit of investment.

If I could turn for just a moment to the foreign policy point here, it — it would not come as a surprise to anyone here that the United States has been a great advocate of a free trade historically, we like to be free to make American investments in foreign countries and the quid pro quo is we invite foreign countries and their citizens to invest in the United States.

When a bill at the federal level was introduced, that would have had the same effect nationally as the Virginia bill has in its state which would have in effect put Seacoast entirely out of business in the Menhaden trade.

The state department came in, the treasury department came in, they criticized the bill, they pointed out it was inconsistent with the Federal Government’s position on — on free movement of investment, and that bill died.

It was after that bill died that our competitor, Zapata Haynie went into the Virgina legislature and succeeded in Richmond where they had failed in Washington.

Now, it has been pointed out in our brief that there was a hearing, a hearing significant I — I submit despite the kind of casual brushing of it away in our — upon its reply brief.

There was a hearing under the auspices of the Federal Maritime Administration conducted actually by NOAA, the National Oceanic and Atmospheric Administration.

The factors that we were told were going to be considered as a condition for our enrollment and licensing in the Menhaden fishery.

Included such matters is the conservation of the resource, the employment of U.S. citizens, the effect on competition and other social and economic factors in United States.

Now, there was a hearing and our competitors came in and tried to oppose the issuance of our license.

NOAA heard the evidence.

They satisfied themselves.

I think it’s fair to say that we were not here as a predator about to wipe out a valued and it is a valued U.S. resource and run away.

Only after that hearing, were we enrolled?

Now, let’s just pause with enrollment for a moment.

Warren E. Burger:

We will resume there at one o’clock then.

Mr. Loflin, you may pick up where you left us.

John J. Loflin, Jr.:

Mr. Chief Justice, members of the Court, the part where we adjourned for lunch, I was just going to remark briefly on the subject of enrollment and licensing, these are two quite different concepts and I wanted to highlight them briefly.

The enrollment process is the process by which a determination is made that vessels should be allowed to fly the American flag and that of course was critical here upon the transfer of control of these corporations to the UK Corporation and some trust.

It was necessary to go into this enrollment and licensing procedure.

William H. Rehnquist:

Mr. Loflin, do both enrollment and licensing come up under the same statute?

John J. Loflin, Jr.:

Yes, basically the same thing.

William H. Rehnquist:

That’s the 1793 Act?

John J. Loflin, Jr.:

I am not sure that they’re both under that same section.

William H. Rehnquist:

The old one —

John J. Loflin, Jr.:

Yes, that’s right.

The enrollment aspect as distinguished from the licensing aspect is for the purpose of determining the American character of these vessels.

Now, these — these ships are going to be plying in navigation up and down the coast and they’re going to be fishing up and down the coast and then anyone of the number of states.

To determine the American character of the vessels, there are statutory requirements that the corporate form must involve a domestic corporation.

We have in our instance the Delaware Corporation for an example or New York Corporation.

It could be any state or it could be a U.S. corporation but it must be, first of all, a domestic corporation.

In addition, the Chief Executive Officer, the Chairman of the Board of the corporation must be American citizen.

And next, as to the vessels themselves, the captain, the officers and the crew must all be American citizens.

Now, those qualifications must be met.

They have been met in this case and our 68 vessels were transferred and we’re permitted to be enrolled in the American fishery.

As a matter of fact, although this isn’t in the statute, we have approximately 450, 500 employees who work in our plants and 95% of them are American citizens as well.

William H. Rehnquist:

Well, no one is contending you didn’t comply with the federal statute, are they?

John J. Loflin, Jr.:

I — I go into it only to try and lay a foundation for claims, I will later make as to the consequences that flow from complying with the statute.

I would like simply to outline the steps and then I will try to persuade the Court, show the Court what consequences flow from this process.

William H. Rehnquist:

It’s your half hour.

John J. Loflin, Jr.:

We’re into the enrollment phrase and let’s say it’s been determined that we are permitted to fly the American flag.

The next is licensing.

And this is critical because if a license is just a number that goes on bow of the vessel or piece of paper that says you are the Mary Jo, that would not be enough.

We have Gibbons and Ogden in the absolute parallel language explaining what a license is.

It’s a license to do something, not just tell a — a passing ma — maritime patrol boat who you are.

In Gibbons and Ogden, the boat was licensed to ply the coastal trade.

In our case, we are licensed to engage in the fisheries.

In the brief submitted amicus by the —

Incidentally, is Menhaden a form of micro?

John J. Loflin, Jr.:

No.

For purposes of licensing, you have opportunities to register in the whale fishery, the macro fishery or the cod fishery and that’s all.

So, you — you — for this purpose, or put in one or the other those categories and simply for administrative purposes, the Menhaden is treated as part of the macro fishery, but I think biologically as far as I know, there isn’t any connection or if so not a close one.

But we are registered in the — in the macro fishery because that’s the statutory format and not being whales or cod, I guess.

John J. Loflin, Jr.:

Now, what do the license do in the — in the brief submitted by the Solicitor General’s office in the Appendix 3a, they set forth the license.

And it — among other things states the following.

License is hereby granted for the said vessel to be employed in carrying on the macro fishery for one year from the date hereof and no longer.

The license must be renewed annually.

Now, we’re licensed to carry on the macro fishery in this instance the fishing for Menhaden which of course was the object of the whole thing.It is not simply to identify our vessels but to carry on that fishery.

William H. Rehnquist:

Mr. Loflin, if Congress had passed the statute authorizing it, do you think you could be licensed by a federal authority to drill for oil within the three-mile limits of Virginia without Virginia’s permission?

John J. Loflin, Jr.:

If Congress passed a statute to that effect, I think we could.

William H. Rehnquist:

Not withstanding the Submerged Lands Act.

John J. Loflin, Jr.:

Well I assume such statute would be in conflict with that or might be in conflict with it.

Absent a new statute, I think the point of that law was triggered by some problems with the oil arising out of the California cases and evidently it was — while it was — I won’t content it was confined to oil.

Certainly, the dispute over the oil rights gave rise to the statute.

I think that’s historically accurate.

But what Congress can re-express or reallocate, they can take back.

William H. Rehnquist:

Well, unless there’s any conflict between the 1953 Submerged Lands Act and the 1793 Act you’re relying on, I suppose the later statute would take precedence.

John J. Loflin, Jr.:

If there were such a conflict, yes.

And let me address myself to that now.

We’re claiming because we think it’s unavoidable that the license we obtained through the process I’ve just described entitles us to go into the various state waters and fish.

It may also entitle us, and I think it does — entitle us to fish in offshore waters beyond the state territorial limits.

Thurgood Marshall:

Suppose the State of the Commonwealth of Virginia passed the law that there shall be no fishing of this type of fish in the Chesapeake Bay by anybody.

John J. Loflin, Jr.:

As to that, I think we would have to be bound by that as well.

Let — let me explain what I mean —

Thurgood Marshall:

It’s — it’s not an absolute right.

It’s a right subject to others.

John J. Loflin, Jr.:

It — it is a right subject to certain police controls exerted by the state in the name perhaps of conservation or health or what have you.

When I say we have a right to go into the state and fish, I really mean we have the right not to be discriminated against unfairly in exercising our license.

I am not claiming here that by giving us this license, the Federal Government has wiped the books clean of every coastal states fisheries regulation.

That is not our position.

It’s —

William J. Brennan, Jr.:

It’s a license not to be discriminated again?

John J. Loflin, Jr.:

It’s — it’s a license to exercise the privileges of an American flag vessel which means you have the right to be treated the same as all other American flag vessels and that includes the right not to be discriminated against our competitors or American flag vessels.

John J. Loflin, Jr.:

We are an American flag vessel.

Now, if the State of Virginia decides as it has, for example, that there should be certain close seasons on Menhaden or that there should be certain tributaries that are off limits for fishing.

I don’t claim any right to — to run rough shot over those laws far from it.

Those laws don’t single out who is to be subject to them and who is not to be subject to them.

We are here faced not with the regulation as I see it.

We’re faced with an absolute bar.

Virginia is saying to Seacoast, “You can’t come into our waters because you’re somehow tainted by your foreign ownership.

We’re going to let your competitor’s fish.

We’re not going to put any restrictions on how much fishing they do, the size of the catch, we’re not going to require them to land their fish in Virginia, but we’re going to say to you, “You can’t come in here and fish at all.”

Thurgood Marshall:

So what are your requirements on fishing and how many, of course, Virginia, you can fish anytime.

John J. Loflin, Jr.:

My remarks would rest to how much fish you can take.

There are close seasons, and during those close seasons, the Virginia boats cannot fish and we could not fish.

There are without question, statutes in Virginia that I would recognize as bona fide conservation measures.

Close season I think is a good example and I am not claiming here that the Federal Government has preempted that, but the Federal Government has done to restate it, is giving us the privilege of being in the American fleet and that is not an empty gesture.

It entitles us to be treated legally on the same basis as all other members of the American fleet engaged in the pursuit of Menhaden.

John Paul Stevens:

You said that no state can go behind that and make inquiry into the circumstances of your ownership once you have the flag.

John J. Loflin, Jr.:

Once we have that, the state cannot make an independent judgment on that — on that subject because the — the superior right of the Federal Government is clearly at stake, particularly —

Once you have that and the federal license.

John J. Loflin, Jr.:

Once you have the federal license.

The question of our foreign ownership was displayed to the Federal Government.

The question of the impact on the registration of these vessels in the American Fishery was gone into the question of competition, employment, conservation.

Those questions were addressed by the Federal Government.

It wasn’t an empty formality that we went through.

And after that process, I say those questions are precluded to the individual states otherwise, you go through all this, you get a license that entitles you to do nothing.

It’s of any commercial value.

As a practical matter, commercial fishermen do not fish for Menhaden to any extent offshore in the federal waters.

The fish congregate in these tight schools up close to shore.

They’re in state waters and if you can’t fish of them there, you really can’t be in the Menhaden business.

Now, in — in closing, I would like to advert briefly to three recent decisions of this Court, decisions each of which came down after our — our brief was written.

One of these deals with commerce, it’s the Boston Stock Exchange case.

John J. Loflin, Jr.:

I’d like to quote briefly from that.

That was the case where New York, my state, adapted a taxing program that tended to favor the New York exchanges as against the regional exchanges, and this Court struck down that statute and — and said this, “As we stated at the offset, the fundamental purpose of the clause is to sure — to assure that there would be free trade among the several states.

This free trade purpose is not confined to the freedom to trade with only one state; it is a freedom to trade with any state to engage in commerce across all state boundaries.

There has been no prior occasion expressly to address the question whether a state may tax in a manner that discriminates between two types of interstate transactions in order to pay their local commercial interests over out-of-state business, but the clear import of our commerce clause cases is at such discrimination is constitutionally impermissible.”

We have here in this Virgina bar, it’s not a tax.

We admit that.

It’s much more fundamental than a tax.

It’s a complete exclusion and it was done I think without any doubt to favor local interest —

John Paul Stevens:

Why shouldn’t the federal statutes referring to a fishery or why shouldn’t the federal license be understood the meaning of license just to fish outside the three-mile limit?

John J. Loflin, Jr.:

The — the statute is parallel with the statute giving rights to navigation and all of that was explored quite extensively in Gibbons against Ogden which had to do with the boat that was going from Elizabeth, New Jersey across the harbor into New York.

These were up into state waters.

The statute clearly —

John Paul Stevens:

Do you think Gibbons was just a discrimination against Commerce case?

John J. Loflin, Jr.:

Well it was much more involved than — than that.

It — it put into juxtaposition the power of the state government and the power of the Federal Government, but so does this case.

John Paul Stevens:

Well why — why don’t you argue then that the United States could — could under his license permit these ships to go into Chesapeake Bay even if Virginia said, “Nobody may fish with — or Menhaden in Chesapeake Bay.”

John J. Loflin, Jr.:

Well, I — I choose not to press my argument that far because —

John Paul Stevens:

But you want to press Gibbons against Ogden.

John J. Loflin, Jr.:

I do want to press Gibbons against Ogden.

John Paul Stevens:

As a — as a discrimination case.

John J. Loflin, Jr.:

It is a form of discrimination.

The — a man who had what he thought was a monopoly on the coasting trade in New York waters was trying to exclude someone who had a federal license.

He was enrolled in the coasting trade under the same statute that we’re claiming our rights in the fishing trade.

And in a sense, that’s a strong discrimination.

It was a burden and it seems to me, it sets the state rights of New York or that New York thought it had against the rights of the Federal Government.

Now in closing, we have the two Equal Protection cases that have come down quite recently, Lefkowitz against CDR Enterprises on January 10th which had to deal with the exclusion of aliens in New York from works of public projects.

This Court had no trouble in guaranteeing aliens the right to work on public projects and struck that on Equal Protection grounds.

In Craig against Boren which had to do with the beer regulation, beer drinking regulations in the State of Oklahoma.

Warren E. Burger:

Weren’t familiar with those cases — (Voice Overlap) —

John J. Loflin, Jr.:

I think — I take some comfort from each of them.

Warren E. Burger:

Yes.

John J. Loflin, Jr.:

And I — I feel that the standards they have established are applicable respectively with the Equal Protection approach or the commerce clause to our situation.

I bring them up only because they were recent, they’re nowhere in our brief, but I think they’re very helpful and sustaining position.

Warren E. Burger:

Very well.

John J. Loflin, Jr.:

Thank you very much!

Warren E. Burger:

You have a few minutes left Mr. Moore.

James E. Moore:

Mr. Chief Justice, may it please the Court.

First point we would like to address is the apparent reference to Virginia Code Section 81 which has been cast in the light as if it were a statute which was specifically designed to exclude one competitor from competing with two Virginia corporations.

That fact is belied by the fact that this statue applies to every single fishery and fishing industry in Virginia.

It does not confine itself to the Menhaden fishery.

Seacoast is involved entirely in the Menhaden fishery and had it been designed to eliminate Seacoast alone, it could have swept much less broadly and achieve the same purpose.

In addition the entire fishing industry supported this law at the state legislature — legislative level, not simply the Menhaden fishers.

In addition, this particular statute —

Harry A. Blackmun:

Of Virginia fishery?

James E. Moore:

Of Virginia fishery.

Harry A. Blackmun:

Yes, but was it prompted by the Men — Menhaden situation?

James E. Moore:

No, sir.

It was prompted by the passage of a federal law which extended the two — the federal fishery zone to 200 miles.

The testimony in recent hearings before Congress referred to in our reply brief at page 27 indicates very clearly that Virginia’s fears were real.

The new law at the federal level is going to instigate a concerted effort by foreign fishing interest to get around that 200-mile limit through the use of American Shell Corporations and United States flag vessels.

Harry A. Blackmun:

In other words, the Seacoast and its competitors had nothing to do whatsoever with the new statute?

James E. Moore:

The new statute is not directed to Seacoast, it’s directed at this national problem which the federal level protection does not afford complete protection for the states nor has it been intended to.

Excuse me.

Thurgood Marshall:

And Congress could take care of that by saying that no foreign corporations could operate.

James E. Moore:

It could, Your Honor, but it has not.

Thurgood Marshall:

So I mean your dire results don’t have to happen.

James E. Moore:

If the Federal Government would act in the same way that Virginia has acted to protect its own fisheries, that’s — that’s correct.

Thurgood Marshall:

Well not same way, but some way.

James E. Moore:

Yes, that’s correct.

Warren E. Burger:

Well, that’s the way Congress acted with the 1916 amendments with the Shipping Act when the Germans were trying to buy a control of a great many American Bottoms, isn’t it?Couldn’t they do the same here?

James E. Moore:

They did in that case.

I mean the Shipping Act does to the coast was trade, that’s correct and requires 75% ownership by United States citizens.

John Paul Stevens:

Mr. Moore, do you agree with your opponent’s construction over the residency statute Section 60 applying only to — to in — inland waters and not to coastal waters?

James E. Moore:

Yes, Mr. Justice Stevens, that’s correct.

A reference in that statute to joint jurisdiction or jointly control waters is to the Potomac River which is jointly controlled by Maryland —

John Paul Stevens:

I see.

James E. Moore:

and Virginia.

And it’s not intended to go out into the three-mile belt.

The residency requirement applies only to the inland waters in the Chesapeake Bay.

Thank you.

Warren E. Burger:

Thank you gentlemen.

The case is submitted.