Gonzalez v. Automatic Employees Credit Union – Oral Argument – October 21, 1974

Media for Gonzalez v. Automatic Employees Credit Union

Audio Transcription for Opinion Announcement – December 10, 1974 in Gonzalez v. Automatic Employees Credit Union

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Warren E. Burger:

We’ll hear arguments next in 73-858 Gonzalez against Automatic Employees Credit.

Mr. Latturner, you may proceed whenever you’re ready.

James O. Latturner:

Mr. Chief Justice and may it please the Court.

Mr. Gonzalez brought this action — challenge against his creditor Mercantile National Bank, challenging the constitutionality of the repossession and resale provisions of the Illinois Commercial Code, and against the Title Officer to the State of Illinois the Secretary of State challenging the constitutionality of those provisions of the Illinois Motor Vehicle Code that authorize and compel the involuntary transfer and — termination and transfer of her certificate of the title.

A three-judge court was convened and subsequently dismissed the action.

A direct appeal was then brought to this Court and this Court postponed the question of its jurisdiction pending this hearing.

Mercantile has raised two objections to this Court’s jurisdiction.

First, that a three-judge court was not properly convened under Section 2281 and second that a direct appeal does not lie pursuant to Section 1253.

Because of the nature of the jurisdictional questions, a brief review of the underlying facts and a summary of the lower courts actual holding is necessary.

Mr. Gonzalez had purchased a used automobile pursuant to a retail installment contract which was in turn assigned to Mercantile.

When Mercantile repossessed the automobile they had received an amount in excess of what was then due and owing on the contract.

Although Mr. Gonzalez had not made one payment, Mercantile had received an insurance rebate which they were required to credit to Mr. Gonzalez.

Mercantile however, credited the rebate to the final payments not to the current one and repossessed the automobile.

Upon consideration of these facts, the three-judge District Court found that Mr. Gonzalez was not in default at the time his automobile was repossessed and they thereupon dismissed the case for lack of standing.

They held that the challenged statute provide for repossession only in the event of default and since Mr. Gonzalez was not in default, Mercantile violated the statute rather than acting pursuant to it.

What had happened to Mr. Gonzalez in any state proceedings?

His car had been seized?

James O. Latturner:

His car has been seized.

There is no state proceeding following the repossession.

It is seized.

The certificate of title it transferred to — from — his name is eliminated from the certificate of title by the Secretary of State.

It is issued only in the name of the creditor.

The creditor then resells the car being able to pay a good title.

And had all these happened to Mr. Gonzalez and his automobile?

James O. Latturner:

These had all happened to Mr. Gonzalez.

And what remedies if any had he been given on the state?

James O. Latturner:

He had not been given any remedies.

He was given neither notice nor a hearing concerning the creditor’s right to possession of the automobile.

The repossession is without notice or a hearing.

The transfer of title is without a hearing.

James O. Latturner:

The resale is without a hearing.

Warren E. Burger:

Was there any other remedy available to him under state law?

James O. Latturner:

He could have sued for an injunction in state court to enjoin the resale of the automobile.

Warren E. Burger:

What about conversion?

James O. Latturner:

He would have a remedy for conversion also.

However, the claim in this case is the due process of law requires that he have a hearing before he is deprived of his property and the fact that he may have a subsequent action for damages does not affect his ability to bring this action asking for a prior due process hearing.

Warren E. Burger:

If you prevail, what relief would he now receive?

James O. Latturner:

If we prevail ultimately in the lower court upon remand here?

Warren E. Burger:

Here.

James O. Latturner:

If we prevail here, the case would be remanded to the three-judge District Court for a determination of whether the creditor’s and Secretary’s actions violate due process.

Warren E. Burger:

Then — do then what?

James O. Latturner:

If they are determined that they violate due process then they would have to be a hearing either before or concurrently with the repossession and before the certificate of title is terminated and transfer to the creditor.

Warren E. Burger:

Will you relate this for me at least to a particular automobile that he lost?

It might get him back his automobile?

James O. Latturner:

No, he has not requested the return of that particular automobile.

He is suing for future — for perspective declaratory and injunction relief against the future enforcement and execution of the challenged statutes and this future relief is very —

Warren E. Burger:

Where the proceedings under and pursuant to the statute here?

James O. Latturner:

The repossession was pursuant to Section 9503 of the Illinois Commercial Code.

The certificate of title is terminated and transferred pursuant to Section 3114 and 116 of the Illinois Motor Vehicle Code.

They were pursuant to those statutes without hearing.

When the lower court dismissed the —

Potter Stewart:

Mr. Latturner, would you straighten me out on this insurance.

The insurance payment in Mercantile received was came about because of the cancellation of the policy does not?

James O. Latturner:

Correct.

Potter Stewart:

And when that happened, is Mr. Gonzales in any way in default under his contract obligation to keep the car insured?

James O. Latturner:

I cannot remember the exact dates the insurance cancellation and the one this payment were very close together.

I believe the missed payment was — the first accident was before the missed payment and I believe the actual cancellation was after the missed payment.

They has not repossess at that time.

Potter Stewart:

Well, it must have been because there were two accidents, were there not?

James O. Latturner:

There are two accidents, yes.

Potter Stewart:

And I’m merely asking whether he was under an obligation to keep the car insured?

James O. Latturner:

He is under an obligation to keep the car insured if not the creditor is under an obligation to purchase the insurance and in this case the creditor Mercantile had not purchase the insurance.

They had also had not signed for the release of the automobile from the repair.

He was in the dispute with Mercantile over the entire question of this insurance.

The insurance have been purchase for him by the creditor.

When the court dismissed the action for lack of standing because Mr. Gonzalez was not in default, they held that he did not have standing to adjudicate the denial of a prior hearing because if he would have had such a hearing he would have prevailed.

They held instead that only those persons who would lost a due process hearing have standing to contest the fact that they were denied such a hearing.

As noted before, Mr. Gonzalez’ automobile prior to his intervention in this action had been repossessed, title transferred and resold.

And the court thereupon held that his request for an injunction was useless and that he was not entitled to either declaratory or injunctive relief.

However, Mr. Gonzales did not request the return of that particular car.

He sued to enjoin the future enforcement of the challenged statute and it is this perspective relief that is important and necessary to Mr. Gonzalez.

The repossession entitled transfer statutes are still on the books and are still being enforced.

William H. Rehnquist:

Is he in default under any new contract?

James O. Latturner:

No, he is not.

William H. Rehnquist:

Has he bought another car?

James O. Latturner:

He has not purchase another car on credit.

With a credit record already showing one repossession, Mr. Gonzalez is particularly vulnerable to these statutes.

William H. Rehnquist:

But he is not vulnerable if he hasn’t bought a car?

James O. Latturner:

But this is part of these statutes on the presence of that and their enforcement are part of his continuing decision on whether or not to purchase a car on credit and if so whether or not he can maintain and enforce any rights that he may have against his creditor.

This is the same type of situation as present and Super Tire versus mccorkle, where the strike had ended all of the strikers went off of welfare but if there was ever another labor dispute the Super Tire Company knew that their strikers could receive public aid payment but it would have an effect upon their labor negotiations, it would have an effect upon their decisions on any negotiating session.

Mr. Gonzalez is in the same type of situation particularly since he has suffered one repossession and it is on his credit record.

This Court has recognized that there are occasions when a debtor is justified in not making the payment.

However, future creditors of Mr. Gonzalez cannot be expected to tolerate such a happening whatever the reasons.

If he moves in to the situations he would either have to concede his rights vis-à-vis his creditor or take the chance on losing his car.

If you lawsuit boils down now to the proposition that you just feel chilled if you will by the existence of this repossession statute on the books.

You run on to cases don’t you like Boyle against Landry where even where First Amendment interests were allegedly involved and even were the statute concern were criminal statutes.

The court said that just the fear of a potential application of those criminal laws in sometime in the future by the Chicago Police Department, this case came from your same circuit, was in sufficient to create a controversy.

James O. Latturner:

Its not just fear of a potential application.

Mr. Gonzalez has been directly harmed by the operation of these statutes.

It can happen again if a passed were on —

As pointed out by the three-judge District Court he has a state remedy for that harm because it was the abuse of the statute not the proper application statute, isn’t that correct?

James O. Latturner:

The entire question of a prior hearing is to avoid such an abuse.

But he doesn’t want his car back now you’ve told?

James O. Latturner:

He has been paid for it.

He has been paid for it.

James O. Latturner:

He sued instead of for an injunction —

And so now his cause of action remaining if any is controversy with the state is where the presence on the books of these statutes, isn’t that it that he fears maybe invoked in the future by some future as any of his installment contract if he sometime in the future may buy an automobile on credit?

James O. Latturner:

Having been harmed by the statute he also sued his representative of class and the enforcement and execution of the statute is still proceeding with regard to the class having been harmed by the operation of this statute Mr. Gonzalez can represent this class.

Thurgood Marshall:

What is it class?

James O. Latturner:

The class are debtors under contracts of the security interest whereby the creditor has the right to repossess pursuant to Illinois law.

If I —

Mr. Latturner, can I just tell you a second.

He’s been paid for the car?

James O. Latturner:

Yes, if I may get to that.

Mr. Gonzalez did not sue for an injunction returning that car.

He sued for damages because of that repossession.

If he would have had obtained an injunction from the court returning that car there would be no question he would have a valid claim.

Instead, he sued for damages and Mercantile has paid him damages —

Where did they sue for damages?

James O. Latturner:

In this Court.

And then in this complaint, yes it was count four.

As well as — is part of your damage claims that the car was taken without a hearing?

James O. Latturner:

Yes, that is the damage claim here.

Or he has settled with?

James O. Latturner:

He has been — they have tendered the stipulated maximum of the damage.

He has been paid pursuant to and accepted this complaint.

And he accepted it?

James O. Latturner:

Yes, he did.

In full for all of his 1983 damage?

James O. Latturner:

For the denial of the prior hearing, yes.

Warren E. Burger:

And then what’s left?

James O. Latturner:

What’s left is he has been injured by the statute.

They are still on the books.

They have a continuing effect upon his present decisions —

Warren E. Burger:

Oh!

But as Mr. Justice Stewart just pointed out and I think someone else did it was not the use of the statute but the abuse of it and misused of it.

We’re operating under the statute they’re operating outside of it.

James O. Latturner:

In Monroe versus Pape, the defendants there acted in direct violation of the statute and the question was whether when state officials operate in violation of a statute whether there is a cause of action under 1983 and the court’s holding is when they act under color of law pursuant to a statute that even there violation of it.

Warren E. Burger:

Did you sue some state official here?

James O. Latturner:

Yes, the Secretary of State.

Warren E. Burger:

He is included along with Automatic?

James O. Latturner:

He is included along with Mercantile National Bank, yes.

Warren E. Burger:

And did he pay any damages?

James O. Latturner:

No, he did not.

Warren E. Burger:

But were all the claims against all the defendants settled by your disposition, your settlement which you described?

James O. Latturner:

There were originally four defendants, pardon me, four plaintiffs in this case.

Mr. Gonzalez —

Excuse me, Mr. Latturner may I ask?

I had it appreciated but he had been compensated for his full damage claim.

Does that put this case in the posture of the Burney case, are you familiar with that?

James O. Latturner:

No, as a matter of fact it would put the case in the same posture if he would have gotten an injunction getting his car back.

The Burney case went through a separate proceeding, not the case of bar achieving the same result.

Of course, she got her full payment.

James O. Latturner:

She proceeded a completely separate action apart from the suit for the injunctive and declaratory relief.

This case put it in the same situation as Moore versus Ogilvie were even though the act has happened the case is not moot.

Well, if the defendant said, the minute you filed your complaint, said you’re dead right, we’ll give you everything you ask right now.

I suppose you wouldn’t be in a very good shape to litigate up to this one, would you?

James O. Latturner:

Yes, I think I would because the defendants cannot be allowed to continually pay off individual plaintiffs and particularly for plaintiffs in order to maintain an constitutional system of repossession.

Warren E. Burger:

But nobody can tell them to take this settlement?

James O. Latturner:

No, that is true.

Warren E. Burger:

And then what’s — then what’s left of your response to the question?

James O. Latturner:

The response to the question is that having been injured by the statute he can sue to enjoin its future enforcement because the presence of those laws on the books continue to affect him in his business dealings of whether or not to purchase a car on credit and if so whether or not he maintain — he can maintain his rights against his creditors.

It is in that respect no different then Super Tire versus mccorkle —

Warren E. Burger:

Let me get back to my earlier question which you have not completely answered.

James O. Latturner:

Yes.

Warren E. Burger:

When Automatic, I assume it is Automatic who paid the Mercantile — Mercantile paid the settlement, did that discharge all the defendants from all liability under 1983?

James O. Latturner:

No.

Warren E. Burger:

Under anything?

James O. Latturner:

No, (Voice Overlap) the other plaintiffs are not a party to this Court.

For example, Mr. Moe he could do the original plaintiff due to illness in his family as we took —

Warren E. Burger:

I’m talking about the people who are still here.

James O. Latturner:

Okay, Mr. Gonzalez is the only plaintiff.

Warren E. Burger:

And are all his claims against all the name of the defendants washed out?

James O. Latturner:

Only the claim for damage as the claim —

Warren E. Burger:

All the damage claims?

James O. Latturner:

Yes.

Warren E. Burger:

They are all washed out?

James O. Latturner:

Yes, I might add that this case was brought in two counts, one against the creditor and one against the Secretary of State.

The claim against the Secretary of State can stand on its own regardless of being attached to a claim against the creditor.

This is on the certificate transferred at this certificate of title.

Warren E. Burger:

Have you still had a damage claim against the Secretary of State?

James O. Latturner:

There was never damage claim against the Secretary of State.

He is a state official acting pursuant to state statutes and I believe that the damage claim would not lie on federal court under Edelman versus Jordan.

Warren E. Burger:

Would it be reasonable to assume that the settlement agreement that were signed when the check was delivered recited generally as done at all claims of every kind in nature wash out?

James O. Latturner:

It did not.

In fact —

Warren E. Burger:

But what was submitted?

James O. Latturner:

— it referred only to the count four.

It did not even refer to the count for declaratory and injunctive relief against Mercantile.

Well, may I ask was there any negotiations and connection with that settlement that you dismissed this suit?

James O. Latturner:

No, there was not.

None that was being asked for by Mercantile?

James O. Latturner:

That is correct.

They paid the full amount without —

James O. Latturner:

That is correct.

Thurgood Marshall:

What about the change in rule of the Secretary of State doing?

James O. Latturner:

The change in rule by the Secretary of State was accomplished in order to avoid the temporary restraining order in this case.

It is a mere administrative procedural change.

Thurgood Marshall:

They still in operation?

James O. Latturner:

Pardon?

They are still on operation but they can be as easily shifted back from morning after this litigation as they were instituted.

Thurgood Marshall:

Are you satisfied with them as they are now?

James O. Latturner:

No, I am not satisfied with them?

Thurgood Marshall:

Why not?

James O. Latturner:

Because under the present rules the Secretary of State has delegated what should be his duties and responsibilities to the creditor.

Thus, the notice of the proposed application for the new certificate of title is drafted and sent by the creditor.

The creditor drafts a propose affidavit of defense that may be sent back in.

The affidavit of the debtor files had they sent not to the Secretary of State but to the creditor.

The creditor then can determine whether or not it is a valid affidavit of defense and if he rejects it can then apply for a new certificate of title stating that an affidavit was not receive.

There is never any hearing or notice sent by the Secretary.

Let’s assume we decided that we thought the case was moot.

Would we — should we take action on that or should we determine whether the case is properly here in this Court at all?

James O. Latturner:

I think you have to determine whether the case is properly here first.

So that the question of whether this case was required to be heard by three-judge court and whether even it was it’s properly here are issues that are threshold issues?

James O. Latturner:

Correct.

Are you going to say something about that?

James O. Latturner:

I was getting to them.

I notice my time has expired.

I would like to — well, pardon me, let me stay with those for a moment.

Secretary — the action was brought against the State Official, the Secretary of State suing to enjoin him from the enforcement and execution of state statute of statewide application, termination, and transfer provisions to the Illinois Motor Vehicle Code pursuant to because they violate due process.

James O. Latturner:

Thus, all of the technical requirements of 2281 are met.

The only question is whether or not there is substantial constitutional question against the Secretary.

Mercantile alleges that the Secretary is not the actual means of enforcement of those statutes but that argument could not be more incorrect.

He is the only means of enforcement of those statutes.

Mercantile also alleges that he is only a nominal defendant because the certificates of title and their transfer are meaningless and ministerial.

However, the State of the Illinois by another statutory provision provides for due process protection to certificates of title in all instances except when it’s terminated after repossession.

In all other instances before the Secretary of State can involuntarily terminate a certificate of title he must send notice, he must set a hearing, he must issue subpoenas, he must hold the hearing, and his decision is subject to jurisdiction review.

Can I ask you?

Could the determination that the court the District Court that was made by three-judge court?

James O. Latturner:

Yes, it was.

Could that determination with respect to standing have been made by a single judge?

James O. Latturner:

No, it could not.

You mean, couldn’t the single judge left the complaint and say to it and decide there is no standing in this case without getting to these three-judge court questions?

James O. Latturner:

Under Idlewild versus Epstein when an application for a three-judge court is made the single judge must look to see if the technical requirements are met and at the substantial constitutional question is allege —

Well what about quite technical requirements, what about that?

James O. Latturner:

State officer, state statute of statewide application.

How about a proper plaintiff?

James O. Latturner:

The questions of standing and mootness are more properly decided by three-judge courts.

In the past they have been and this Court has accepted numerous of those cases on direct appeal.

In making the determination as to standing in this case, it required an analysis of the statute by the three-judge court.

They went in reaching a standing issue into the statutory scheme itself.

It was not a cursory analysis at the very beginning.

But it didn’t require any ruling on validity?

James O. Latturner:

It did not require.

It just required the construction for the statute?

James O. Latturner:

That is correct, they did not reach —

What question was required about a three-judge court?

Why is the three-judge court required for that purpose?

James O. Latturner:

Because the three-judge — when there is an application for a three-judge court the single judge does not have power to either grant or withhold relief.

He is specifically by 2284 sub paragraph 5 cannot dismiss the action.

Warren E. Burger:

If you decide that there is no case that it’s moot, are you telling us that a single judge could not dismiss it as moot?

James O. Latturner:

If there is a substantial constitutional question, the proper procedure is to convene the three-judge court.

Warren E. Burger:

That’s not quite an answer to my question.

James O. Latturner:

Okay.

Warren E. Burger:

Do you say the single judge could not dismiss it if he decided that there was lawsuit there any longer, there was no case or controversy lives in existence so that the case was moot and dismiss?

James O. Latturner:

The —

Warren E. Burger:

It has no power are you telling us that — to do that?

James O. Latturner:

He can only decide whether or not there is a substantial constitutional question.

If he determines there is no substantial constitutional question he can dismiss the case.

If he determines there is a substantial constitutional question he must convene the three-judge court to determine all of the other issues which may result in either the granting or denial of relief.

Warren E. Burger:

Well if he decided and recited that he was holding that there was no substantial constitutional question because there was no live case or controversy and that it was moot, he’d have that power wouldn’t he?

James O. Latturner:

He would have that power if he made such a holding.

Warren E. Burger:

That comes down to a question of semantics then.

James O. Latturner:

It basically comes down to how far deeply into the statute and then to the case they have to go and many questions concerning standing or mootness go very hard.

In this case, for the mootness they went to the ultimate issue in the case whether or not an injunction should issue.

Clearly, the single judge could not dismiss on the grounds dismissed here because it involved the direct explicit denial of an injunction.

Warren E. Burger:

Very well.

Mr. Jenner.

Albert E. Jenner, Jr.:

Mr. Chief Justice and may it please the Court.

Mr. Jenner, tell me something about that settlement, how come you didn’t get one to dismiss it?

Albert E. Jenner, Jr.:

Yes.

There was a damage claim and the amount of the damage claim was out of way determined to be $750.00.

A tender was made of the $750.00.

That damage of claim was a subject of one of the counts, I’ve forgotten the number.

That count was solely of damages.

So that the issue of damages with respect to the alleged tort on the part of Mercantile in the seizing by so-called the automobile when there was no default.

That is per the pleadings there was no default and the district — the three-judge court taking the matter on the pleadings rule on the basis that there was no default so that that issue is out because that was settle perhaps.

Maybe I should have put it this way.

Practical lawyer like you how do you come settle the case full amount of the damage claim without getting the whole lawsuit?

Albert E. Jenner, Jr.:

Well, that didn’t happen at the end of that particular time but I would have done exactly what my partners did and that is because at that particular point that was the only viable issue on the case and when that was settled there was no longer any case for controversy presented here.

William J. Brennan, Jr.:

Well, when I was in practice we got rid of the lawsuit that we’re going to pay anything.

Albert E. Jenner, Jr.:

Mr. Justice Brennan that has always been my practice in 44 years but if I can’t get that kind of agreement I get the best I can get and that’s really what the answer is here.

May it please, Your Honors.

There is the threshold issue of whether this Court has jurisdiction at all which I will discuss.

That then follows whether the case is moot for which I will also discuss and also whether the plaintiff has standing.

There is a measure of confusion with respect to what the facts are here and cases are best determined on the facts and may I — and hopeful be helpful to the Court and review just for a minute of two or four or five minutes of my time as to the facts in the case.

First, this isn’t attack upon the constitutionality of Sections 503, 504 and 507 of the Uniform Commercial Code.

As this Court knows, the Illinois Uniform Commercial Code is the most pure of all the Codes in the 49 States and in the Virgin Islands, and especially 503, 504, and 507 are the original code.

This is Article IX 503, 504, 507 was reexamined by the American Law Institute and by the Uniform Law Commissioners in 1972 and the whole chapter was rewritten.

So that you have presented here a carefully thought-out and considered system with respect to the administration of motor vehicles repossessions and effort on the part of the America Law Institute and the Commissioners to prepare a — and have a system which comports as near as maybe and sensibly with due process.

Now this 503, 504, and 507, may Your Honors please is before you on applications for certiorari in several cases which Your Honors have deferred presumably awaiting the argument of this particular case.

So that the merits of the constitutionality of the self-help repossession provisions of the Uniform Commercial Code are waiting your decision as whether you will accept on certiorari the several, I think there are four maybe five that are now pending before you which you haven’t acted on.

The important here is the fact that that issue was not determined by the District Court or the three-judge court here at all.

The merits are unconstitutionality if have been unconstitutional of 503, 504, and 507 is not before the Court.

The dismissal here was on currently procedural grounds.

Now, Mr. Gonzalez purchased this Pontiac used car on the 22nd of January 1972.

He made a downpayment and then he was to pay 15 monthly installments thereafter of a $120.74 commencing on the 28th of February of the following month.

He paid that first installment.

He paid none other to this day at any time.

Now, the contract provided consistent with Sections 503, 504, and 507 that on default, the creditor was entitled to re — make repossession with or without traditional process the contract expressly so provide.

Sections 503 and 504 as has been said on all of the cases there are now pending before you on certiorari.

A pure codification of the old common law that you may enter into a contract of self-help possession upon a proper default, this contract was assigned to Mercantile by the used car dealer.

Now, Mr. Gonzalez was involved into automobile accidents one on March 26, 1972, one on April 16 1972 resulting in repairs that had to be paid of $542.68.

The insurance company only paid $322.00.

On April 18th, the insurance company in the face of two accidents —

Warren E. Burger:

We’ll resume there right after lunch, Mr. Jenner.

[Lunch Recess]

Mr. Jenner, you may resume.

Albert E. Jenner, Jr.:

Mr. Chief Justice, may it please the Court.

I wouldn’t want the members of this Court think that I was having the client pay money to settle a particular claim without some good reason.

Albert E. Jenner, Jr.:

On the 16th of August 1973, the District Court three-judge court entered and order dismissing the entire case as moot.

That decision was correct as I will, I think successfully argue.

There remain however the damage claim count four and while since the issues involving constitutionality and the injunction under the Conjunction Act were moot and the damage claim would then draw up also I was concern that that particular matter still remain at large and that this was in the nature that we knew with my distinguished and able, dedicated opponent had in mind making this a test case, that the record should be made clean.

Since he would not agree to dismiss the whole case and the payment of the $750.00, we just want to have and paid it and that at least dropped that one possible viable claim and that was the reasons.

But nevertheless, did I understand that damage settlement or damage payment was satisfaction of all kinds of damage that might have resulted to this taking?

Albert E. Jenner, Jr.:

Yes, it did.

And damage that might have resulted from taking without notice as well the cost of the car?

Albert E. Jenner, Jr.:

The alleged wrongful taking.

That does raise a Burney question, is it?

Albert E. Jenner, Jr.:

I beg your pardon?

Raises a Burney question then doesn’t it — you know the lady who had a claim which for the case brought here was fully satisfied by complete payment of Burney of Indiana?

Albert E. Jenner, Jr.:

Oh!

The Burney case, yes and I have tend to advert to that if I may in a moment or two.

May I also say if Your Honors please, I did mention that the constitutional issue is not involved here.

As the case was dismissed for mootness, I did advert to the fact that there are several petitions for certiorari pending before this Court.

In that connection, there are eight decisions of Courts of Appeal in this nation and all of which Sections 503, 504, 507 were sustained — have been sustained us to constitutionality.

Those eight cases are in Sixth Courts of Appeals, the ninth, eighth, the fifth, the third, the sixth and the second.

Five of those eight cases are pending on certiorari in this Court.

In the first of those cases that is Adams versus Southern California First National Bank.

The permanent editorial board of the Uniform Commercial Code consisting as you know of —

Are you going to argue about the three-judge court?

Albert E. Jenner, Jr.:

I’m not going to argue about the three-judge court because we did not go over nor did we contend that the three-judge court was improperly convened.

Do you think it’s essential that’s if — do you think that we should determine whether we have jurisdiction here?

Albert E. Jenner, Jr.:

Yes, and may I turn directly to that point?

Byron R. White:

(Inaudible)

Albert E. Jenner, Jr.:

Finishing if I may Mr. Justice White of the facts so we’ll have the perspective.

The Insurance Company cancelled the insurance on the 18th of April with respect to the two accidents one occurring on March and one occurring in April, and rebated $229.94 of the unearned premium.

The repairs were $542.68. Mercantile repossessed the repaired automobile on the 25th of April and paid the repairmen at that particular time, his repair bill of $542.00 so was required taking of possession.

Now, it is alleged in the complaint and since the case was disposed of on the pleadings.

It is alleged on the complaint that Mr. Gonzalez was not in default at the time of the repossession.

Albert E. Jenner, Jr.:

If you take the figures, it would appear that probably not so, that he was in fact in default but for the disposition of this case the case was taken on the plea and so it is presumed on the plaintiffs.

There’ve been no proof taken on this case at whatsoever that at the time of the repossession Mr. Gonzalez was not on default so as a — on the pleadings it was a wrongful taking.

So it was a breach of 503 and 504 because 503 and 504 permits self-help only if there is a default under the contract.

The Mercantile having repossessed under the Illinois statutes dealing with issuances of certificate of title which do not affect — those certificates do not in fact affect actual title and the statute so provides.

The certificate of title is issued for the purpose of recording for keeping track of the car from a police standpoint and that sort of thing and driver’s license and that kind of made.

It’s a ministerial act.

A repossession license was issued under the Illinois statute here again not affecting actual title.

Now, notice of the sale of the automobile use repaired used car was given to Mr. Gonzalez by registered man.

He did not act, took no action whatsoever and the automobile is then sold to a bona fide purchaser and that bona fide purchaser acquire actual title, as provided under the statute and also under the common law.

That purchase in turn sold to a second party.

Now, whether the automobile will be sold again, we don’t know but at least we know of those two sales that are all alleged in the pleadings.

Now, after all this had occurred — after all of this had occurred Mr. Gonzalez then intervene in a pending suit, the Mojica suit which is not involve here and for the first time on September 28, 1972 after all these months that time had passed he filed the intervening complaint which is a subject matter before Your Honors on this particular case.

So at that particular time, the title of the car could not be reclaimed in any form or fashion or otherwise.

No relief sought the three-judge District Court unless we urge it, no relief whatsoever could be granted to Mr. Gonzalez at the time he filed his suit that would be of any possible benefit to it.

Now, to a dedicated and able young lawyer as Mr. Latturner is with the Legal Services Group in Uptown Chicago, it appeared to him that here was a case in which issue, broad issue of the constitutionality of the Uniform Commercial Code re. self-help repossession provisions could be obtained.

And so he filed the claim with that particular time.

Now, the District Court three-judge dismissed this case because of mootness and lack of standing and that’s the first point Mr. Justice White.

Is that said mootness or just standing?

Albert E. Jenner, Jr.:

Mootness and standing, both dismissed because of mootness and lack of standing.

Having done that, it is the position –

Byron R. White:

You mean lack of a case or controversy?

Albert E. Jenner, Jr.:

Lack of a case or controversy — lack of a case or controversy, mootness and lack of standing in the sense of the absence of the right of the plaintiff to maintain the suit in his own name and the suit on behalf of the alleged class.

Now, it is our position that there is no direct appeal under the three-judge act to this Court forcing this Court to accept the case or on examination of the jurisdictional service.

Byron R. White:

Well, what — why was the three-judge court required?

Albert E. Jenner, Jr.:

Because under — one of the counts of the complaint, the Secretary of State of Illinois was made a party defendant as purely nominal party as you will notice the attorney general lawyer is not before this Court and the Secretary of State is not before this Court.

They just ignored the case.

Having the Secretary of State as a party defendant, we say nominally it is the position of counsel for Mr. Gonzalez that that involve state action to bring the case within the injunction provisions.

William H. Rehnquist:

Mr. Jenner, you say that state of the sectors it was a nominal party, do you mean by that that no relief was sought against him?

Albert E. Jenner, Jr.:

No I don’t, I mean that his function here is so peripheral that is issuing a certificate of title.

That is it is ministerial act of issuing the certificate of title when advice following a sale or repossession that the automobile has sold — been sold are now is in the good title in someone else and the statute defines it expressly that only when the Secretary of State is in fact advice the title has in fact passed, does he issue or may he issue a certificate of title.

Byron R. White:

Couldn’t a single judge make the determination of the three-judge court made no matter what other issues were down the line if the determination had made otherwise on mootness?

Albert E. Jenner, Jr.:

It’s our position that that is clearly so by the single judge here could have.

Byron R. White:

But you don’t know that at the start of the suit?

Albert E. Jenner, Jr.:

We don’t know it at the start of the suit.

Byron R. White:

But it just from the face the complaint that you had determine that this man doesn’t have standing?

Albert E. Jenner, Jr.:

That is correct Mr. Justice White and that’s what the three-judge court did in putting the single District judge, Judge Rosen.

Byron R. White:

Do you think that the single judge could have made whatever determination was made here?

Albert E. Jenner, Jr.:

I do, on the pleadings.

Byron R. White:

In which it then goes to Court of Appeals?

Albert E. Jenner, Jr.:

In which upon it goes to the Court of Appeals which is where this appeal should have gone.

Or was that (Voice Overlap)?

Albert E. Jenner, Jr.:

In this Court was a direct appeal under the three-judge court.

William O. Douglas:

That the single judge would disagree with the three-judge court and decide it was not moot and then have it back to three-judge court?

Albert E. Jenner, Jr.:

Yes if the three — Mr. Justice Douglas if this, after the convening of a three-judge court, in my judgment the single district judge could have entered and ordered dismiss on the case.

Because it’s moot?

Albert E. Jenner, Jr.:

Because it was moot.

Would suppose single judge?

Albert E. Jenner, Jr.:

We never argue that before the single judge because —

So how do we decide if you didn’t argue?

That’s why lawyers (Inaudible)

Albert E. Jenner, Jr.:

How did I what?

How could we decide if you didn’t argue?

Albert E. Jenner, Jr.:

Well, I was answering Mr. Justice White’s question in the abstract that this is my judgment but the district judge couldn’t as of his own have dismissed this case as being moot.

Warren E. Burger:

Without any argument from anyone?

Albert E. Jenner, Jr.:

Without any argument from anyone.

Well, on direct — if direct appeals are only from cases — in cases that must be tried by three-judge court.

It must be decided by three-judge not that are but must be?

Albert E. Jenner, Jr.:

Must be, that’s one point.

It must be decided by three-judge court and secondly it is our position that a direct appeal from this Court under the three-judge court act applies — does not apply what the dismissal is on procedural grounds.

Well, would this be even if in the three-judge court will properly convene that judgment they’ve entered is not directly appealed, is that your?

Albert E. Jenner, Jr.:

That is my position.

That is the direct position we are argue in this face.

Warren E. Burger:

And if they feel aggrieved.

If the plaintiff feels aggrieved, he can go to the Court of Appeals and —

Albert E. Jenner, Jr.:

That’s correct, Your Honor.

Warren E. Burger:

If they agree with him and then they send it back and direct the convening of the three-judge court?

Albert E. Jenner, Jr.:

That is correct.

As long as the three-judge court will convene, it looked at all and said, well this is a frivolous constitutional question that the federal district court has no jurisdiction dismissed, that goes to Court of Appeals.

Albert E. Jenner, Jr.:

That goes to the Court of Appeals.

It is not as my lawyer the opponent argues in his brief taking the statute literal.

The statute does say and appeal from a disposal maybe taken directly to this Court.

Thurgood Marshall:

Why what is it moot before the one-judge court?

Albert E. Jenner, Jr.:

It was —

Thurgood Marshall:

In the additional pleadings he hadn’t maintained yet, you haven’t paid the damage claim.

Albert E. Jenner, Jr.:

That is correct Mr. Justice Marshall.

Thurgood Marshall:

He didn’t have his car his car.

His was gone and even without his car?

Albert E. Jenner, Jr.:

That’s right.

The title had passed so that no relief in connection of that car could be obtained.

Thurgood Marshall:

How is it moot then?

Albert E. Jenner, Jr.:

The damage claim is not a three-judge court claim.

It is only ancillary to —

Thurgood Marshall:

Beyond the thought was to enjoin you from the procedure that you took in seizing his car and you had seized it and under his pleading he had seized it without justification.

How is it moot?

Albert E. Jenner, Jr.:

Mr. Justice Marshall, the complaint was filed after the automobile had been seized, repossessed after it had been sold twice so that the car could not be, there was no possibility of Mr. Gonzalez again obtaining his automobile.

Thurgood Marshall:

That was in your pleading?

Albert E. Jenner, Jr.:

That was in the plaintiffs’ pleading.

The pleading here to which on which the dismissal was made was the plaintiffs’ pleading.

It was all laid out in the complaint as I have stated these facts to you.

Thurgood Marshall:

That the car had been twice sold instead?

Albert E. Jenner, Jr.:

Yes and notice of the first sale have been given to Mr. Gonzalez as required by statute.

So he knew that the car was about to be sold to someone who would buy it as a bona fide purchaser, acquired actual title which could not be deface right here or anyone else.

Thurgood Marshall:

And what did you file in response thereto?

Albert E. Jenner, Jr.:

We filed an answer to the complaint and then moot to dismiss.

Thurgood Marshall:

And what did you allege in your answer?

Albert E. Jenner, Jr.:

We allege in the answer these facts that I have related to you and alleged also that the complaint failed the state the cause of action upon which any relief could be granted.

Thurgood Marshall:

And on your motion to dismiss that you asked that it be dismiss because it was moot?

Albert E. Jenner, Jr.:

Because of mootness, because of lack of standing.

Thurgood Marshall:

Before the single judge?

Albert E. Jenner, Jr.:

No, before the three-judge court.

Thurgood Marshall:

I was back to that.

You didn’t — you filed nothing before it went to the three-judge court?

Albert E. Jenner, Jr.:

That is correct Mr. Justice Marshall.

Thurgood Marshall:

That’s the report I want.

You didn’t file this Court suggestion the mootness in court.

He did not of course.

Albert E. Jenner, Jr.:

Would you forgive my inattentiveness, may I ask —

Thurgood Marshall:

Why is that?

You of course you didn’t file anything but you could have filed a suggestion to mootness, couldn’t you?

Albert E. Jenner, Jr.:

Yes, Your Honor I should say this that the three-judge court was convened before I was retained in this case and when I came into the case with the three-judge court already in existence wishing to get the case to dismiss because what I thought was mootness and lack of standing I did not attack the three-judge court though I think in the first instance that I have been entered at the first since I would have moot the district judge to dismiss the case for mootness and lack of standing.

But in any event, the three-judge court act that provides Court of Appeals for this Court on dismissal while it appears on its face to enable an appealed directly to this Court on any dismissal as this Court has said that statute is to be strictly construed because it’s a technical statute and that in substance what that’s appeal provision provides is that if the decision goes to the issue of constitutionality of a state statute on the state act.

Then of course it comes in those spirit and purpose of the three-judge court act and of the appeal provisions of that act and a direct appeal of this Court is entirely proper but where the case is dismissed not involving the merits whatsoever which is true here.

Then under Your Honors interpretation of that the Phillips case and others cited in the brief, that appeal goes to the Court of Appeals and not to the United State Supreme Court to burden this Court with appeals involving truly procedural matters.

A lot of time Mr. Jenner we spent on deciding whether or not the case should be here or shouldn’t?

Albert E. Jenner, Jr.:

I quite agree with you, I don’t know what the status of the repeal of the three-judge court.

That sort is in the Congress, I do know that the bar very much favors the repeal of that statute and I was hoping like the court could have acted on that but this present Congress but I don’t know whether that’s a fact or not.

Let’s hope it will in the American Lawyers suit (Inaudible) and others have urged American Bar versus on the repeal on that three-judge court act.

Now, I turn to mootness inquiry of Mr. Justice Marshall and others.

What’s left here?

The automobile has been repossessed on the face of the pleading that was repossessed in violation of the statute which authorizes self-help repossession only if there was a default.

Albert E. Jenner, Jr.:

Notice of the sale was given to Mr. Gonzalez he took no action.

The title sale was held and title passed so that that the time he filed his suit three and half months later there was nothing in this case and so far is any relief could be granted to him.

He couldn’t get his automobile back.

He couldn’t obtain a declaratory judgment because the declaratory judgment act says expressly in case of a controversy.

You may apply for the declaratory judgment.

There’s not controversy here between Mr. Gonzalez and anybody else because he can’t get any relief.

But that doesn’t think the three-judge court didn’t act on the basis the car have been sold and he then that he had settles that he did it here?

Albert E. Jenner, Jr.:

Well, the settlement issue —

Byron R. White:

And if this Court decided — three-judge decided because there was a damage remedy under the statute that he couldn’t ask for an injunction?

Albert E. Jenner, Jr.:

Three-judge court decided if I may Mr. Justice White, at the time of the three-judge court entered its order on August 16, 1973 the damage claimed called for still viable except that if the case was to be dismissed on other ground that is grounds given the three-judge court act viability, then the damage claim would fall with the other counts.

That isn’t what the three-judge court decided?

The three-judge court decided to stand because he said that he wasn’t in default in which you got the other remedy under that statute namely then?

Albert E. Jenner, Jr.:

That’s correct.

And so there couldn’t be any so-called constitutional claim resulting in an injunction.

No standing to ask for that kind of relief.

You’re not arguing that here, your not sustaining that for reason I take it?

Would you really try to do that?

Albert E. Jenner, Jr.:

Really if I could sustain that position.

Do you think they were right on that basis?

Albert E. Jenner, Jr.:

I certainly do.

Before any settlement of the damage claim?

Albert E. Jenner, Jr.:

Yes, sir.

That just because there is a damage remedy under the statute for an improper or wrongful taking, that there is no standing to bring this three-judge court action and ask for injunction having and ask the statute to return in (Voice Overlap).

Albert E. Jenner, Jr.:

I do more certainly urge that position.

Well isn’t that not position contrary to the — what this Court did and the three-judge court did in the Fuentes against Shevin at least with the respect that Pennsylvania plaintiffs?

Albert E. Jenner, Jr.:

No, I think not and before this, there was state action.

In this case there is no state action.

Well that’s a different question.

(Voice Overlap) I’m talking about —

Albert E. Jenner, Jr.:

I don’t think that I am in consistent with Your Honors’ decision.

Assume it’s a court’s decision?

Albert E. Jenner, Jr.:

Yes of course Your Honor.

Your Honors’ opinion and the court’s opinion.

In Fuentes as this Court held particularly with respect to the Pennsylvania plaintiffs, I don’t have it too clearly in mind but I seem to remember that there was a nomination that based on a part of the woman plaintiff that they’re going to wrongful taking there but that didn’t stop the three-judge court from allowing her to attack the constitutionality and the basic repossession statutes, in order to stop this Court from reviewing it.

They might mistaken, is there a difference, maybe there is?

Albert E. Jenner, Jr.:

There is this difference that in Fuentes, the issues viable for the three-judge court remain viable but here that’s not so.

Is it because that’s have since?

Albert E. Jenner, Jr.:

Well, because before the suit was filed.

In Fuentes, the suit was – the litigation commenced very quickly.

Contemporaneously with the issuance of a writ of Replevin in each of those two cases.

But here when this suit was commenced the title had — the properly had been repossessed, had been sold unnoticed and title had passed —

But no settlement?

Albert E. Jenner, Jr.:

But no settlement of the damage claim, that is correct.

That was settled on December 28, 1973.

The report said.

Of course, he has a damage remedy under the statute there’s nothing for us to decide here.

He has no standing in this suit which is (Inaudible).

I suppose Mr. Jenner even if hard as you try you can’t persuade us that they were right and adequate.

I gather you’re here in a position where you can defend this judgment since you are the respondent or appellate in any ground that’s available to you and that was suppose to judgment settlement intervening today —

Albert E. Jenner, Jr.:

Oh!

Here we have one as in Burney and —

You don’t have to fight too hard to defend what they did below.

Albert E. Jenner, Jr.:

This issue was not to be decided this Court on the record as it now as before this Court.

Warren E. Burger:

I take it that’s why you said you had three bullets in your gun standing jurisdiction, first standing, and mootness?

Albert E. Jenner, Jr.:

That is correct Your Honor.

Thank you.

Warren E. Burger:

Mr. Latturner.

James O. Latturner:

First counsel indicates this is my case and that Mr. Gonzalez’ case that is totally incorrect.

I have been indicated this morning the interest that Mr. Gonzalez has in the resolution of the question presented here.

That resolution is important enough for him that he has personally born across at this appeal.

James O. Latturner:

This is his case I am representing him as his attorney.

Secondly, Mr. Brennan referred to the time spent — Mr. Justice Brennan referred to the time spent on jurisdictional questions.

Since 1960, this Court has taken on direct appeal nine cases in the same procedural posture as this Court is this case.

A three-judge District Court has been properly convened and has dismissed the case without going to the ultimate issue.

Overruling that well-established rule is not going to lessen the burdens on this Court its going to increase it.

You were going to be face with a proliferation of the cases having to do what this Court’s jurisdiction.

The direct appeal rule in this instance is one of the few areas and the three-judge court litigation practice which is well settled.

It should stay that way.

Overruling it would create additional confusion and new burdens for both courts and litigants alike.

Potter Stewart:

Well, what you’re talking about now goes to the jurisdiction of this Court to hear this directly appeal.

There was a lawsuit brought attacking the constitutionality of state statute.

Three-judge court was convened.

The court declined to issue the prayer for injunction and dismissed the case.

You say that falls squarely within the statute which gives which authorizes a direct appeal to this Court.

James O. Latturner:

That is correct.

Potter Stewart:

And that many cases so hold none you say.

I would have thought there might have been more than that but in any event that doesn’t really answer, that answers only one of the questions didn’t it?

James O. Latturner:

Correct.

Potter Stewart:

Now let’s say the case is properly here on appeal it still leaves open whether or not the correct disposition for isn’t to save the case now become moot.

James O. Latturner:

Mr. Justice Stewart this case is in the same procedural position now as Fuentes versus Shevin was when this Court reached its opinion there.

In Fuentes, the property of the plaintiffs had already been replevied.

It was gone.

They did not get the property back.

They sued to enjoin the future enforcement and execution of the Replevin statutes.

Mr. Gonzalez’ automobile has been repossessed.

It is gone he will not get it back.

He has sued to enjoin the future enforces (Voice Overlap).

He’s been made whole and Fuentes’ plaintiffs have not been made whole.

James O. Latturner:

The Fuentes’ plaintiffs did not request damages.

They sued only for the future enforcement there.

And therefore it’s not the same as difference.

James O. Latturner:

It would not go to the injunctive relief that the question pending them both cases is the future enforcement because of the effect that this is going to the continuing enforcement was held on the plaintiffs and the class they represent.

The payment to the individual plaintiff here does not affect either of those issues.

William H. Rehnquist:

Mr. Latturner is it your position, I would respect our jurisdiction once the three-judge district court is convened, if it dismisses the case for any reason that is an amount to a denial of injunction and then you say its where our cases support?

James O. Latturner:

Yes, this case is on that question has so held in Lynch versus Household Finance that the dismissal of the case as a denial of all relief requesting including the injunction that comes here on direct appeal.

William H. Rehnquist:

For whatever reason?

James O. Latturner:

That is correct.

Thank you.

Warren E. Burger:

Thank you gentlemen.

The case is submitted.