Honda v. Clark

PETITIONER:Honda
RESPONDENT:Clark
LOCATION:Bellmawr, New Jersey Police Department

DOCKET NO.: 164
DECIDED BY: Warren Court (1965-1967)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit

CITATION: 386 US 484 (1967)
ARGUED: Feb 14, 1967
DECIDED: Apr 10, 1967

Facts of the case

Question

Audio Transcription for Oral Argument – February 14, 1967 in Honda v. Clark

Earl Warren:

Number 164, Ayako Honda et al., Petitioner, versus Nicholas deB. Katzenbach, Attorney General of the United States.

Mr. Rauh.

Joseph L.rauh, Jr.:

May it please the Court.

Petitioners are 4100 Japanese-American death claimants under the Trading with the Enemy Act who held Yen deposit certificates in the California branch of the Yokohama Specie Bank on the December 7, 1941.

On December 7th, after the Japanese attacked, the Government seized and ultimately liquidated all the assets of that bank in this country and there is about $10 million there as a result of the seizure and liquidation.

During the war, the class of people who are the claimants here were relocated out of this western states and that history needs no repetition here.

After the war, following this Court’s decision in Markham v. Cabell, the statute was amended to permit debt claimants to sue under the Trading with the Enemy Act against the assets which have been seized and liquidated and were there.

Two years following 1946, 7500 claimants were filed by the deposit holders in the California branch of the Yokohama Specie Bank.

So by 1948 or 1949, the Government was ready to act.

For the next decade, just elapsed while the Government was trying to figure out whether what rate to pay.

Potter Stewart:

May I ask you Mr. Rauh, because it’s not clear to me.

What were the certificates of deposit — what rights to the certificates of deposit give to the certificate holder that putting to one side, the very big event of World War II, what would’ve — what rights do they have?

Joseph L.rauh, Jr.:

They were non-negotiable certificates of deposit redeemable either here or in — either in a California Bank or in Japan.

Potter Stewart:

Here in dollars —

Joseph L.rauh, Jr.:

Yes.

Potter Stewart:

— or in (Voice Overlap) —

Joseph L.rauh, Jr.:

Well, it — that’s one of the arguments Your Honor.

But I’ll come — that’s — the Government says, no.

But the Government paid as though the answer was yes; that’s exactly the point.

Potter Stewart:

But I just —

Joseph L.rauh, Jr.:

You see, during this ten-year period, they litigated that issue.

The trial examiner said, in the Justice Department, this obligation was payable in dollars in California, therefore I say, it should be payable in the same rate as before so you get the same dollars back —

Potter Stewart:

That you put in.

Joseph L.rauh, Jr.:

— that you put in.

The Government overruled its own trial examiner and said, no, we’ll pay you the post war rate.

We’ll pay you only one-ninetieth, because it came to one-ninetieth, of the prewar rate.

And the Government said, no, that’s all we will pay you.

Potter Stewart:

The theory being that the —

Joseph L.rauh, Jr.:

That they were payable only in (Voice Overlap) —

Potter Stewart:

— that only in Yen, only in Yen.

Joseph L.rauh, Jr.:

Yes, Your Honor.

That’s their theory but I’ll show you what happened.

And they didn’t live up to their theory.

Potter Stewart:

But I just wondered if — so I can understand, what the certificate holders’ rights were quite apart from the —

Joseph L.rauh, Jr.:

That’s never been litigated because after it got to this Court in 1963 in your Court, Your Honors granted cert —

Potter Stewart:

It was (Voice Overlap) —

Joseph L.rauh, Jr.:

The Government run away and pay —

Potter Stewart:

Settled down with the —

Joseph L.rauh, Jr.:

— the other people.

Yes, Your Honor.

Well, then the —

Potter Stewart:

How was the — but this wasn’t an ordinary savings account?

Joseph L.rauh, Jr.:

No, sir.

Potter Stewart:

And is the main purpose I supposed of the depositor was to make money available in Japan for their relatives or —

Joseph L.rauh, Jr.:

No.

Potter Stewart:

— for themselves and (Voice Overlap) —

Joseph L.rauh, Jr.:

Or for themselves or their relatives save, that have been either way.

But there was a history in the trial examiner found that many people have been paid in dollars in this country.

Anyway, after the trial examiner held that you got your money back in dollars at the prewar rate and that he was overruled by justice and they said, the post war rate, they wrote a letter that everyone of these 7500 and they said, Your claim is perfectly good but all you can get is the post war rate which is one-ninetieth, and they made this representation on page 6 of the record in this letter they wrote.

We must pay you only one-ninetieth because that’s the rule of law under Deutsche Bank.

We have to just give you one-ninetieth.

So for a man who have a $100 Mr. Justice Stewart, the man who have a $100 that he put in, the Government in that letter offered him under the word must that that’s all they were legally authorized to do $1.18 plus interest.

A total of less than 2% of what he put in.

And —

Abe Fortas:

What’s the largest single claim here?

Joseph L.rauh, Jr.:

I’m afraid I don’t know Your Honor.

There are — I’m afraid that I don’t have that information Your Honor would like that I have to obtain — I simply do not know.

I know that these are —

Potter Stewart:

Typically they’re small amounts.

Joseph L.rauh, Jr.:

They’re typically — they’re small but I’m afraid I don’t have the answer to Your Honors —

Abe Fortas:

Well, if you could find out (Voice Overlap) —

Joseph L.rauh, Jr.:

I will submit it through the clerk.

Abe Fortas:

The action from your adversary, I’d wished you’d let the clerk know because he I’d like to know whether typical that — whether the typical claim is typical or whether there are some very large claims in —

Joseph L.rauh, Jr.:

I will object that Your Honor.

Potter Stewart:

What’s the — did you know what the total is if you’re right?

Joseph L.rauh, Jr.:

We don’t even know what the total is because actually we don’t — we rep — this is a class suit.

Potter Stewart:

Class suit.

Joseph L.rauh, Jr.:

We do not have the certificates or the retainers from most of the people.

Most these people are unrepresented except in so far as in a class action we represent them.

Potter Stewart:

Now, I — well, I understand the contentions made that there’s plenty of money available from the —

Joseph L.rauh, Jr.:

Oh!

Potter Stewart:

— seized assets.

Joseph L.rauh, Jr.:

Well, if there isn’t we would take what was left but I believe there is.

I believe that — the answer is, I have to say I believe that —

Potter Stewart:

I have to study the briefs to say that (Voice Overlap) —

Joseph L.rauh, Jr.:

I think there is and I think the Government does not challenge that.

Well, this letter of 1958 is a — well, if I may use the expression as a lulu.

They say you can have one-ninetieth of what you put in.

But you can’t even have that unless you file your original deposit certificate and then they say, Look, wouldn’t you fellows be better off if you went to Japan and took the 2% or less, it’s slightly under 2%.

The Government was more anxious even though it was a trustee of these funds to get rid of the claims, not to pay them.

So only 1800 out of the 7500 send in their money, their certificates, 1600 went to Japan through the withdrawal route and the 4100 that we represent here this morning in these class suit waived that they did nothing.

Why?

Most of them didn’t have lawyers.

Most of them have language difficulties.

The class of a certificate might be as much as one of the small claims, 17 years of delay and they were discouraged and they finally decided to wait and get whatever they could waiting.

Nothing again happened for three years.

Then that final schedule comes up and the final schedule doesn’t have the 4100 on it because they haven’t sent in the certificate of deposit.

The 1800 who had sent in their certificates of deposit were on the final schedule and they brought suit, that was the Abe case.

While the Abe case was pending, Your Honors granted certiorari in 1963 in the Aratani case involving the Sumitomo Bank and the identical question, what is the rate of exchange After Your Honors granted cert, the Government settled.

And it settled in Abe for the full face value without interest, or you could put it half of the claim because the interest was about the same as the principle here.

Joseph L.rauh, Jr.:

They’ve had settled for 50 times the amount that we were offered, and I would just like to call Your Honors attention to a remarkable statement in the Government’s brief, read it on page 182, reading this at the bottom of page 22, reading as follows, The Attorney General did not repudiate his legal position thatpayment at the post war rate was required.

I most respectfully suggest when you pay 50 times the post war rate, when you pay the full amount of the pre-war rate without interest, it’s a little hard to say that you’re not repudiating your legal position that you only have to pay the post war rate.

William J. Brennan, Jr.:

Well, Mr. Rauh — what could he do?

Actually what could he do (Inaudible)?

Joseph L.rauh, Jr.:

He paid 50 —

William J. Brennan, Jr.:

I know he paid.

But did they say anything when they paid?

Joseph L.rauh, Jr.:

I —

William J. Brennan, Jr.:

As to why he was paying?

Joseph L.rauh, Jr.:

Not — well, he says he’s paying because he —

William J. Brennan, Jr.:

About that time, I’m talking about that —

Joseph L.rauh, Jr.:

I don’t know Your Honor.

There was no evidence in the record that I have —

William J. Brennan, Jr.:

Do you say because we have the case pending here?

Joseph L.rauh, Jr.:

Well, I — they said that now so I presume they said that then, this was a settlement.

But it was as said, there was no few dollars.

This was a settlement of 50 times the amount that we were offered and I say that was the representing — actually now they’re ready to pay on the Abe settlement of 50 times that to those that they have some feeling for like Mrs. Kendall who after Your Honors granted certiorari in our case.

Now, they’ve offered Mrs. Kendall repayment at the Abe rate.

William J. Brennan, Jr.:

Who is Mrs. Kendall?

Joseph L.rauh, Jr.:

She is the lady who is also a petitioner here, who didn’t get the final schedule because of a mistake of address, either on her part.

William J. Brennan, Jr.:

Is her name on it?

Joseph L.rauh, Jr.:

Her name was not on the schedule.

No.

William J. Brennan, Jr.:

Are they going to pay her?

Joseph L.rauh, Jr.:

Oh!

They’re ready to pay her now because it would be so unjust not to and I would abuse it here.

So now they say, We’ll pay –, it’s in the brief.

We’ll pay Mrs. Kendall at the Abe rate.

They’re not treating the Abe rate as some strange thing.

The Abe rate, a settled rate — well anyway, we went to them after the settlement was made with Abe and said, You know, treat us 4100 the same way that you treated them.

Joseph L.rauh, Jr.:

You’re a trustee of these funds.

You’ve got the money.

Give us the same they could — oh, no!

The statute of limitations bars you because you should’ve sued within 60 days of the final schedule.

We went — oh, and the only other thing they said about this was, we’re trying to get out business and it makes it more difficult to do it if we have to go through the 4100.

Only giving us the statute of limitations, as their reason why they could do that.

We brought at this class action.

We lost at two to one in the court below.

Potter Stewart:

I suppose there was a group who went to Japan or sent that, he’s got the money out of Japan.

Joseph L.rauh, Jr.:

Yes, Your Honor.

The Government here suggested that group that — we’re really — we’re not taking care of them too and that’s why we shouldn’t get anything.

But I’ve suggested there are some rather crocodile tears there since they’ve never offered them to us.

Furthermore, if the Government wants to take care of those two, our class suit as the Government points out contains two of those people.

And if they want to now settle with those people too, why of course, we will divide the funds as we have always felt the broadest possible distribution is right.

Potter Stewart:

But I’d understood though your claims on behalf of those who —

Joseph L.rauh, Jr.:

That’s correct.

Potter Stewart:

— the 4100 people —

Joseph L.rauh, Jr.:

That’s correct.

Potter Stewart:

(Inaudible)

Joseph L.rauh, Jr.:

That’s correct.

But the two petitioners do — two of our petitioners do have withdraw cards in so that if the Government wants to settle, it will be —

Potter Stewart:

But your argument doesn’t help them, does it?

Joseph L.rauh, Jr.:

It — as the Government wants to settle with them too we are not arguing to them.

Potter Stewart:

No.

Joseph L.rauh, Jr.:

That’s correct Your Honor.

Potter Stewart:

And your argument (Voice Overlap) —

Joseph L.rauh, Jr.:

We’re arguing for the 4100.

We’re arguing only for the 4100.

Potter Stewart:

And your argument doesn’t support the position of the people who did settle on ninetieth.

Joseph L.rauh, Jr.:

It might very well support their — it might very well support them too Your Honor because if a representation was made that all that they could legally pay was 2% and they paid 50 times that.

Joseph L.rauh, Jr.:

And I suggest these people relied on that representation.

I am not however —

Potter Stewart:

Representing them?

Joseph L.rauh, Jr.:

Representing them.

Now, there are —

Hugo L. Black:

Mrs. Kendall, she didn’t get the notice because of her address?

Joseph L.rauh, Jr.:

Because the wrong address and —

Hugo L. Black:

(Inaudible)

Joseph L.rauh, Jr.:

No, sir.

We got the final schedule Your Honor.

Hugo L. Black:

You got all the notice?

Joseph L.rauh, Jr.:

We got the notices.

Yes, Your Honor.

Now, we claim that there are four grounds of estoppel or tolling.

Now they overlap a little bit but there are really four separate in fair grounds.

The first place is the clearest estoppel.

They made a representation of 2%, we — they said it was a must representation, we can’t pay more, we relied on that.

We knew we can always get the 2% in Japan.

So we didn’t send in the certificates.

They changed their position.

Pay a 100% without interest or 50 times what they give us.

Another — no question but for this wrongful representation, we would have sent it in.

The Government’s erroneous representation does the whole thing and it’s a clear case of estoppel.

What’s the Government answer to this?

They say, You need a misrepresentation and you don’t have one here.

They’re wrong on both counts.

Under Burnett and Sterns of the cited cases you don’t need a misrepresentation but I don’t have to argue that because you do have a misrepresentation.

The misrepresentation was a statement that they can only pay 2%.

It doesn’t have to be willful.

The Glus case I respectfully suggest, that the Glus case is not a case of willful misrepresentation because Footnote 2 of Your Honors opinion in Glus says in so many words that the representations were either willful or unintentional.

Abe Fortas:

Well, that rep — that representation was not a willful misrepresentation or it was not a misrepresentation as of the time it was made in this —

Joseph L.rauh, Jr.:

It was a representation that was wrong if —

Abe Fortas:

Well, it was different —

Joseph L.rauh, Jr.:

It was not a willful misrepresentation Your Honor and I simply suggest that you don’t need a willful misrepresentation.

A mistake, a wrongful representation is sufficient and that’s what we have.

Fifth — as they said, we must only pay a 2% and then they offer a 100% to the others.

And the — really as trustees, they should’ve offered everybody.

That’s really what Judge Wright was saying in his dissent below.

There was not only estoppel, there was tolling.

It was perfectly reasonable for these people to wait while the Abe suit went forward.

The Government was on notice.

It was — it’s just like Burnett.

The Government was on notice in Burnett because it was the wrong venue.

The Government was on notice here that these people were making their claims and I don’t see that the ones in — a matter of fact, it’s a better case than Burnett and all — it all — or let me just suggest why it’s better than Burnett.

Small claimants mostly without lawyers, reason to expect that they would get the same treatment and finally and most important, that Government has these funds which they took from the bank, they’re the trustee of these funds for the deposit holders.

That’s — it’s — and I would therefore suggest that it’s an easy case after Burnett.

Thirdly, we should —

Potter Stewart:

This is in — Burnett, it wasn’t the Government, it was the New York Central Railroad in that (Voice Overlap) —

Joseph L.rauh, Jr.:

Well, it — I will get to it before I’m through that I don’t think there’s any different.

I don’t think the Government ought to treat people worse than the New York Central Railroad.

They do a good job of it themselves.

The Government’s involvement in petitioners delay adds to these things and I can’t — in the limited time available, do any better than explaining exactly why they didn’t — after all these discouragements, they didn’t send in there certificates in 1958.

It is hardly surprising that most of the claimants failed to send in their original certificates in response to the Government in solving an erroneous suggestion, 17 years after it seizure their rights that they could have no more then and should settle for 2%.

What is surprising is that the Government which delayed 20 years before it finally made its indispensable and undefended 2% offer they don’t claim it was right.

They paid the — 50 times that should even ask this Court to bar petitioner’s admittedly valid claims.

Now, that brings us to the fourth point.

Everybody at bar here admits these claims are valid.

The Government —

Abe Fortas:

Why do you call this insulting?

Why do you say insulting Mr. Rauh, this was an enemy alien seizure, wasn’t it?

Joseph L.rauh, Jr.:

This (Inaudible) —

Abe Fortas:

Is that right?

Is there any obligation on the part of the Government to pay these people concerned?

Joseph L.rauh, Jr.:

Oh, yes, sir.

Abe Fortas:

I mean, apart from the statute?

Joseph L.rauh, Jr.:

These were not — no, sir.

These were not — the claimants were not enemy alien.

The assets —

Abe Fortas:

(Inaudible)

Joseph L.rauh, Jr.:

— were taken but the claimants — were the claimants lost their lives in combat in World War II.

They were not — no one was claiming that these people were enemy aliens.

These are the debt claimants.

These are the deposit holders who had asked — who had rights against this.

This is the claimants themselves are all persons —

Abe Fortas:

Are all of the people whom in your group citizens?

Joseph L.rauh, Jr.:

They couldn’t by law at that time be — they all are now.

They are the group and our affidavit show us who became citizens as soon as the law would allow them.

They were residents here and became citizens since the law would allow them far from any hostility.

These are the people who were wronged by our Government.

These are the people who fought for their country despite all the odds that they had, if Your Honor please.

Potter Stewart:

No, if they aren’t citizens of the United States and if they were Japanese which was their country, which country —

Joseph L.rauh, Jr.:

They were permanent residents of the United States (Inaudible) —

Potter Stewart:

What their country —

Joseph L.rauh, Jr.:

— enabled by law to become citizens, who became citizens as soon as the law would allow it.

Potter Stewart:

Well, at this time, they were citizens of Japan, was it?

Joseph L.rauh, Jr.:

Yes, Your Honor.

Potter Stewart:

So they were enemy aliens.

Joseph L.rauh, Jr.:

In a — if — and so were the — in the sense — in the technical sense that the boys who fought in comrade team 442.

Oh yes, Your Honor.

The claims are admittedly valid — no, the Government is not arguing against the validity.

Joseph L.rauh, Jr.:

What they are saying is that some time despite all their action, despite all the efforts of the — that were made in the time, despite their delay, they can rely upon the defense of a statute of limitations even though the purpose of the statute of limitation is that there’s a stale claim.

There’s no stale claim here.

There’s no problem of defense against the stale claim.

The claim is admittedly valid so, you have all four of these reasons as a clear estoppel on a representation, as a clear tolling while waiting for this, the Government is involved in this as the claims that are admittedly valid.

And I just say there’s an overwhelming case of estoppel and tolling.

What’s the Government’s answer to this?

Well, that was the point.

The Government says as Your Honors said, We’re not like the New York Central Railroad.

The Government’s answer is, Because of sovereign immunity, we don’t have to do anything like anybody else does.

Tolling and estoppel don’t apply to us because of sovereign immunity.

Well, this is wrong for three reasons.

First, there was a taking.

A — I don’t believe that this Court would ever hold that equivocal that when you take a creditor’s — where you take his debtor’s assets away, you’re not doing anything to him.

When they took the assets of the bank away, they took away the chance of collecting the — on these deposits.

But then Congress said, We’ll pay you.

And Congress did not do this out of some kind of a feeling — of just benevolence.

Congress themselves said, this is the House Report.

But for the vesting of their debtors’ property, they would presumably have been able to pursue ordinary remedies against the debtors and they gave the debtors these opportunities and there is not one word, and I make this is very, very significant, there’s not one word suggesing that they were giving up their sovereign immunity.

And I respectfully suggest that they didn’t give up their sovereign immunity because they didn’t have it to start with.

This was sovereign liability because this was property taken.

This was property taken from residents here who had — who at that time were not able to be citizens as Your Honors suggest.

Finally, I do not suggest that once a waiver — I do not suggest that there’s one way or another on the final question which is involved in yesterday’s case, the Crown Coat case which finished this morning.

We don’t have to go that far but I don’t see any reason why you don’t have the — why — there should be a rule even in general principles that there isn’t a tolling against the Government.

I don’t see any reason why the Government should suddenly get out of tolling just because it is the Government estoppel and tolling once Congress waives immunity, there’s no evidence it wants to waive a little bit and not give them the full benefit of the tolling and the estoppel.

Now, I’d like to reserve the remainder of my time and simply suggest that we have here made an overwhelming case on the equitable and estoppel and tolling.

The only question that arises whether the Government gets special treatment of getting out of that and I see no reason where a constitutional issue arises or where Congress makes no slightest indication that it wants to bar tolling and indeed itself indicates that we want to do the fair thing and allows tolling in two instances as they’re set forth on page 24 of our brief.

(Inaudible)

Joseph L.rauh, Jr.:

The money goes into the War Claims Fund.

It would be no difference, if Your Honor please, if the money went into the general revenues.

The money goes to someone else instead of the people who have the deposits in the bank and who Congress said should get it.

Joseph L.rauh, Jr.:

Congress in 46 said, the deposits in the bank should go — the assets of the bank liquidated should go to the debt claimants on the bank.

It is true that if we don’t get it, it goes into the War Claims Fund.

It may very well go to some big — a concern with a claim against Germany or Japan overseas.

But if it wasn’t Congress’ intention that this be done and indeed the Government never made this point until in its briefed now.

When we went to the Government and said, You’re a trustee of these funds.

Give us the same treatment that you gave the Abe holders.

The two answers were statute of limitations and administrative convenience.

They never suggested at that time in any way should it reform that the money might go somewhere else.

Earl Warren:

Mr. Posner.

Richard A. Posner:

Mr. Chief Justice, and may it please the Court.

We asked for affirmance here on two independent grounds.

First, we invoked the settled rule that the Government may not be a estopped by the conduct of its officials to plead limitations as a defense.

This is because in a suit against the sovereign, the statute of limitations is jurisdictional and a warrant of jurisdiction may not be waived.

Now, there’s no constitutional issue in this case, there is no taking.

There was a seizure of some of the assets of the debtor, the Yokohama Bank.

The Yokohama Bank or its successor bank remained in existence, remained amenable to sue and as Mr. Rauh pointed out, many of these claimants had in fact sought recovery against the bank rather than against the vested property.

And now, I will leave further discussion of that broader principle on which we rely to our brief and turn to the narrower ground and that is that even where there’s a suit between private parties to which the doctrine of estoppel could properly be applied, there’s no factual basis for its invocation here for there was no arbitrariness and no injustice or unfairness in the manner in which the Government process these claims.

And before I review the various events which lead up to this suit, I would mention one issue, one fact which seems to us extraneous to the legal issues here although it is — has been stressed heavily in petitioner’s briefs and that is the nationality of these claimants.

This suit does not arise from any measure taken by the Government against Japanese-Americans in World War II.

Section 34, the trading with the Enemy Act which is the statute in suit here is not a law which relates to any particular national group.

It is simply a provision for American creditors, whatever their national background — of enemy concerns whose property was vested.

Potter Stewart:

American citizen creditors or the residents of the United States?

Richard A. Posner:

No, this includes resident aliens who are not actually paroled or in turned under the Alien Enemy Act in World War II.

These individuals Mr. Rauh pointed out were residents rather than citizens at the (Voice Overlap) —

Earl Warren:

Suppose some of them had been American citizens, would your position be the same?

Richard A. Posner:

Yes, that would be the identical case, statute of — would apply identically, yes.

Potter Stewart:

It was the —

Richard A. Posner:

(Inaudible)

Potter Stewart:

— bank’s assets there received by the alien (Voice Overlap) —

Richard A. Posner:

That’s correct, yes (Voice Overlap) —

Potter Stewart:

— the bank clearly was a Japanese national?

Richard A. Posner:

Oh, yes.

There’s no dispute on the propriety of the taking, yes.

But many of Americans of every national background had — were creditors of these enemy enterprises.

Most of the thousands of people who have prosecuted claims under Section 34 (f) have not been Japanese-Americans.

In order —

Abe Fortas:

But the point — your point is, they were all treated the same, isn’t it?

Richard A. Posner:

Well, yes, I was about to say.

Nor is there any suggestion here that these claimants in the processing of their claims were treated any differently from all other claimants under Section 34 and in addition as we point out, the individuals who actually brought this litigation were represented at all relevant times by distinguished members of the California Bar who were kept apprised by the Alien Property Office of all the developments in their proceeding.

Now that aside, let me retrace the significant steps in the processing of these claims and try to —

Earl Warren:

Mr. Posner, I understood that Mr. Rauh to say that the — while some of these people were represented by him that the vast majority of them were very small certificate holders and were not represented by anyone.

Richard A. Posner:

That’s undoubtedly true.

What —

Earl Warren:

But were they represented by lawyers and that — have a legal advice available to them?

Richard A. Posner:

Well one point is this, in order to bring this class action on behalf of these 4100 claimants, all one needed was a single representative of the class, a single individual and a number of individuals, how many I don’t know but at least the named plaintiffs here did have counsel.

Now as I will go on to show that even with respect to individuals who didn’t have counsel, we believe that the notice that was given by the Government here was all that the statute or that fairness they require, and I’ll try to explain that at greater length.

Now, I begin with the letter which Mr. Rauh mentioned, which the Alien Property Office sent to all claimants including the petitioners here and where they had counsel — of record their counsel.

In 1959, notify me — that was the amount that the office was prepared to allow and outlining the procedures of four payment and the judicial remedies that they would have and this letter is printed at pages 6 and at 29 of the record, and the letter made four points.

First of all, it reported the ruling of the office that the claims could not be allowed in full because of the post war decline in the value of the Yen.

I stressed the letter — stated what the Department of Justice had decided on this legal question.

It did not say that — it did not represent that in fact a payment could only be made at that rate because it went on to explain that there were judicial remedies for — of individuals who were not satisfied with the Department’s ruling.

Now, in this — the rule in question has been described by petitioners as an arbitrary one in which the Government later repudiated and I — it maybe helpful to explain briefly what this issue was.

These claimants had deposited dollars in the American branches of the Yokohama Bank and had received in exchange certificates, interest bearing, certificates of deposits, six months certificates deposit which recited and recited only that the bank was making a deposit of Yen in its home office in Japan and that the certificate could be repay — would be repaid in Japan in Yen.

Now of course, when these depositors asked for their money back from the Alien Property Office, they were asking for dollars and it was necessary to translate this yen obligation into dollars.

Abe Fortas:

Excuse me Mr. Posner.

You mean to say that under the certificate of deposit as you understand that repayment could be demanded only in yen?

Richard A. Posner:

On the face of the certificate, that is clear.

Now — and it was because the certificate was unequivocal on its face that the Government relied upon the rule of the Deutsche Bank case, opinion by Mr. Justice Holmes which holds that obligations — which held incidentally in the context of an Alien Property Bank Deposit case arising from World War I, that an obligation payable in foreign currency in a foreign country.

In that case, the creditor takes the risk of currency fluctuation right to the day of judgment.

Now, it’s true that there was a practice of these Japanese banks on the West Coast of repurchasing certificates in dollars.

Richard A. Posner:

Now, it’s a question, a difficult question, whether what the banks were doing was simply accommodating customers or whether in fact the banks practice a very — the obligation on this certificate and made it an obligation to repay in dollars.

This is a closed question — it has never been authoritatively resolved that I stressed that it’s a genuine question, and when the Alien Property Office resolved it in favor of the post war rate, it was not acting arbitrarily, it had a reasonable legal basis for its action.

Now, this matter in 1959 went on to inform each claimant that if he desired payment of his claim in the amount allowed, he should submit his original certificates of deposit to the Alien Property Office or if he’d lost or mislead them, an affidavit stating that he had not received payment elsewhere.

This also was not an arbitrary requirement.

It was not a mere barrier placed in the path of people trying to collect their money because, the area — the office knew that many of these claimants had sought a recovery directly from the bank in Japan and the office felt that it ought not pay claims that had already been satisfied.

Now thirdly, the letter informed each claimant that actual payment of the claim would have to await the compilation of a final schedule which listed all claims and hereto, for — this is incidentally expressly required by the statute and this toois not an arbitrary requirement far —

Byron R. White:

But Mr. Posner, could I ask you?

The statute of limitations on which you rely, that contains 34 (f)?

Richard A. Posner:

That’s correct.

Byron R. White:

And that that applies — 34 (f) applies in the schedule provisions apply only where their — where the assets are less than the claims?

Richard A. Posner:

That’s correct.

Byron R. White:

Now is that true here?

Richard A. Posner:

That’s the situation here because —

Byron R. White:

Well, how can there ever be any money left over to go to some war claims claimants?

Richard A. Posner:

Well, you see the original client — the statute, being that is the insolvency provision of Section 34 (f) is triggered by the face of the claim by the potential liability that the —

Byron R. White:

Well, if you got to pay off with the post war rate — would the claims — would the funds still be insolvent?

Richard A. Posner:

Oh, had we — had the payment been made at the post war rate, probably not, but —

Byron R. White:

Well, (Voice Overlap) —

Richard A. Posner:

— when the —

Byron R. White:

Not that you ever insist on a statute of limitations against these people?

Richard A. Posner:

The statute have the —

Byron R. White:

The condition of the statute just isn’t satisfied and if they — if you —

Richard A. Posner:

No, no.

Byron R. White:

If you say, we’re going to pay you off at the post war rate which you did, why is there any insolvencies?

Richard A. Posner:

The Government said that in its view, payment should be made at the post war rate.

There were still a question whether a Court —

Byron R. White:

No, but on that statement, right then and there accepting it was the claim — was the (Inaudible).

Richard A. Posner:

No but we — but the Government had —

Byron R. White:

Alright no, then 34 (f) doesn’t apply.

Richard A. Posner:

No.

Richard A. Posner:

No, no, no be that — 34 (f) wouldn’t use — to apply 34 (f), if you look at the face of the claim because you do not know how much of that claim will ultimately be allowed.

The Alien Property Custodian did not know that his post war exchange rate would be sustained in the Courts had it been rejected, had all of these claimants been entitled to collect that the prewar rate that would have more than exhausted the fund.

The fund was not large enough for all these claims.

Byron R. White:

Well, what — where do you — but what — what do you suppose the purposes of putting the 60-day statute of limitations in 34 (f).

That’s — that short of — that sort of limitation is true.

What’s the purpose of — what’s its function in that context?

Richard A. Posner:

Its function is to permit the fund, the account, the alien property account of the particular debtor to be wound up (Voice Overlap) —

Byron R. White:

To be equitably allocated (Voice Overlap) —

Richard A. Posner:

And equitably allocated.

Byron R. White:

— at an earlier date.

Richard A. Posner:

That’s correct.

Now you see, —

Byron R. White:

But then —

Richard A. Posner:

— before payment was made to anybody here, there was this lawsuit brought by a large group of claimants.

Byron R. White:

What do you think of — an ordinary bankruptcy, there’s — there are limitations theory and people have to file their claims in a certain time would’ve been — if so happens, is there any assets left over.Late filers can get paid.

You think some such a rule should be applied here where there are obviously assets left over.

Richard A. Posner:

There —

Byron R. White:

And the choice is between paying these people or some claims funds.

Richard A. Posner:

That’s — well, that — that is true and that’s a — that I think is a significant point.

To skip ahead momentarily, when the Government made the settlement with the 60 — with the 1800 claimants who had submitted their original certificates and we brought a suit against the Alien Property Office challenging this exchange rate.

When it did that, it gave them $6 million.

It assumed that this was the end of the Yokohama Bank Alien Property account and that the surplus could then be paid over to the War Claims Fund.

And one of the purposes of the Alien Property Program is to create a fund to the satisfaction of war claims because the Alien Property — vested property is the only source of that fund.

In other words, there was reliance by the Government on the fact that the settlement with the 1800 wound up the entire account.

Byron R. White:

You got this — this is much — the question I asked you, wouldn’t really go to whether or that — perhaps whether you could — at what rate you have — might have to pay but on your position — your position is that you needn’t even pay these people the 2%.

This is the question of whether you them 100% some off dollar or 2%, you say, you don’t need to pay them anything because the statute of limitations have run off.

Richard A. Posner:

Correct.

Byron R. White:

Right.

I’m just wondering if I —

Abe Fortas:

Is it your understanding Mr. Posner that all of these people, at least the main claimants here brought this class action were represented in 1961 by a law firm.

Abe Fortas:

I noticed that the letter, Exhibit A appearing on page 69 of the record, copy of that was sent to a well known law firm?

Richard A. Posner:

That’s true.

The retainer agreement which was filed with this Alien Property Office, was filed in 1955 on behalf of all these individuals who brought suit.

What should be — Mr. Posner —

Earl Warren:

Mr. Posner, how much was paid out by the Government and how much was left of the — after they trade it out?

Richard A. Posner:

$6 million was paid including counsel fees to the plaintiffs who sued and there’s about $11 million remaining.

Earl Warren:

How much?

Richard A. Posner:

$11 million.

Earl Warren:

$11 million —

Richard A. Posner:

Yes.

Earl Warren:

Whether these claims amounted to —

Richard A. Posner:

No one is precisely sure but it is believed that they could be satisfied out of this fund.

There’s some question about these additional 1600 individuals who filed notices of cancellation indicating that they would seek recovery in Japan.

In fact, according to the Alien Property Officials, many of these people did not.

It is believed did not recover — did not go against the Japanese banks.

So there are some questions whether the fund might be strained if you include them.

There are also a number of other Japanese claimants against another bank who — for whom there are no more vested assets available.

William J. Brennan, Jr.:

Mr. Posner, perhaps I misunderstood you.

Did you say that this letter at page 6 was not a representation that all that a claimant could receive was an amount computed at the post war rate?

Richard A. Posner:

We don’t read it as that, but the paragraph —

William J. Brennan, Jr.:

Well, may I ask —

Richard A. Posner:

Excuse me.

William J. Brennan, Jr.:

I don’t — I’m looking at the first paragraph.

Does the current rate of exchange of 361.55 yen to one dollar must be used in converting the yen into a dollar amount, I’ve read the rest of the letter and I (Voice Overlap) —

Richard A. Posner:

Well, I think —

William J. Brennan, Jr.:

— even if they would suggest that that doesn’t mean exactly what it says?

Richard A. Posner:

I think that has to be read in light of the proceeding sentence which states that the Director of the Alien Property Office decided a decision the Attorney General had declined —

William J. Brennan, Jr.:

Yes.

Richard A. Posner:

— to review that claims based on such certificates should be allowed at the post war rate.

Thus, the current rate of exchange must be used.

Richard A. Posner:

I take it that it thus means that under the decision of the Alien Property Office, the current rate must be used and that is the only rate under which the department was offering payment.

William J. Brennan, Jr.:

Well, if I’d been the recipient of this letter, have been a depositor, are you suggesting that I would’ve read that and said, Well, that really doesn’t mean that I am entitled only to — payment of post war rate, and — I can get something more?

Richard A. Posner:

I think that one would read it to mean that the department was not prepared to pay any larger rate but on the top of the next page, page 7, in pointing out that payments cannot be made until the final schedule was mailed.

It points out that within 60 days after the issuance of the schedule, any agreed compliant may file a judicial proceeding.

And I assume that a person who disagreed with the department’s application of the post war rate would consider himself highly aggrieved by the schedule that was mailed and I point out that 18 — a suit was brought in timely fashion by individual —

William J. Brennan, Jr.:

That is the response of this letter?

Richard A. Posner:

By individuals who had received the identical letter.

William J. Brennan, Jr.:

Yes.

Richard A. Posner:

And who had awaited the mailing of the final schedule and within 60 days not liking the size of the claim that was shown on the schedule for them.

William J. Brennan, Jr.:

And does that — are those the 1800 claims the Government had been settled?

Richard A. Posner:

That’s correct.

William J. Brennan, Jr.:

Are you going to tell us whether there’s any record of the considerations which prompted the payment of 90 times more than a seven-eleven they might get?

Of 50 times, whatever it is?

Richard A. Posner:

There’s nothing in the printed record of this case as to the Department’s motivations —

William J. Brennan, Jr.:

Well, suppose we — what do we suppose we infer with the department’s holding?

Richard A. Posner:

Well, judging from the — and I’m reluctant to go outside the reference state what were the considerations that the department — that motivated the department but judging from the face of the statutory scheme.

First of all, this Court having granted the claimant’s petition for certiorari and the case being a closed one, there was no assurance of a Government victory.

This made a settlement at 50 cents on the dollar —

William J. Brennan, Jr.:

Well, may I ask you if I may interrupt then Mr. Posner.

I take it that — are you suggesting if a — the case had not been — have been mooted and we had decided it against the Alien Property Custodian’s inclusion not only 50 cent.

We had said no — the decision — from the case that resulted here and a decision that know a 100% or something is required.

You’d still be taking the same position I gather as to these two?

Richard A. Posner:

Yes.

The position would the same.

William J. Brennan, Jr.:

If you’d have said the 100% could only go to those who had actually (Inaudible) —

Richard A. Posner:

Yes, we — we see no invidious distinction — discrimination between individuals who have bring timely suits and those who fail to do so.

But what I am — what I do want to suggest is that when the Government settled on 50 cents on a dollar and on a basis would seem to leave a large surplus for the War Claims Fund.

And I stress again, that one of the purposes of the Alien Property Program is to create a fund from the proceeds of vested property for the War Claims Fund.

This 50 —

Earl Warren:

At the expense — does the Government tend to do that at the expense of people whose property was taken if the fund is big enough to repay them?

Richard A. Posner:

Well, if the proper — to the extent that the property was property of the enemy of enemy concerns.

Yes, those proceeds go to the War Claims Fund to the extent that there are valid claims of Americans against the fund.

Those claims must be paid before the net proceeds are covered into the fund.

Earl Warren:

With these valid claims?

Richard A. Posner:

These were not valid claims because the statute of limitation is finished —

Earl Warren:

For any reason other than the statute of limitations?

Richard A. Posner:

No.

Were there no statute of limitations problem, the Government would have offered them the same settlement as those litigants who would sue.

The Government here is in the position of a trustee since a purpose of the Alien Property Program is to create a fund for war claimants.

The Government does not feel that it ought to waive, if it could waive valid legal defenses against creditors.

And the feeling, if the belief was and is that individuals who will adequately and fully apprise of their judicial remedies had failed to bring timely suit were not entitled to participate in the settlement the distinction being one of the most fundamental in the law between those who pressed their rights and those who sleep on their rights.

Earl Warren:

Well, it go a little deeper than that.

What was the purpose of the Congress in directing that these people be reimbursed?

Was it to the extent of the funds available?

Richard A. Posner:

Correct.

Earl Warren:

Or was it to get by as cheaply as it could so it could put money into the warfront?

Richard A. Posner:

I wouldn’t put it in terms of getting by as cheaply as it could but I’ve — I would submit that it was the understanding of Congress that the Government would interpose any legal to — advice.

As a matter fact, it’s expressing the statute that the Government may interpose any legal defense which the debtor himself would’ve had to the claim just as a trustee in bankruptcy.

Earl Warren:

But the general purpose however was that if the fund was large enough that it should be used to reimburse in full those people whose property have been taken, was it not?

Richard A. Posner:

Well, not those whose property had been taken.

They were dealt within another provision but those who were creditors, those who had claims —

Hugo L. Black:

Well, let’s say the people in —

Richard A. Posner:

Yes.

Hugo L. Black:

— the people in this situation.

Richard A. Posner:

In this situation.

I don’t — we don’t find any purpose to require the Government to pay untimely claims which —

Earl Warren:

Pay what?

Richard A. Posner:

To pay claims which cannot be enforced because of the statute of limitations?

Earl Warren:

No I — I didn’t ask that.

I’m talking about the general purpose of the statute was to do equity whether — its not to these people whose property had been taken during the war and who through war had no right to regain their property and that it should be done on equitable terms after the matter had been processed by the proper United States agencies?

Richard A. Posner:

Certainly, the Government is required to pay claims that are valid.

Our position is only that claims that were not prosecuted within the time — limitations in the statute are not valid claims we cannot be paid.

And I point out, by stressing this connection that the issue —

Earl Warren:

Then you would (Voice Overlap) —

Richard A. Posner:

— the underlined issue —

Earl Warren:

You make no point of it then that we are — that if you were not to prevail that this is depriving the war fund that you spoke of, the money that it’s just entitled to — under the — according to the intention of Congress?

Richard A. Posner:

We don’t — we would not agree that — I’m not sure I understood your question but we would not agree that there was any purpose to pay untimely claims.

There is a statute of limitations in the Act and we assumed that it must be complied with.

Earl Warren:

Well —

Richard A. Posner:

And again I stress, not only in this 1958 letter which was sent to all of these claimants and to counsel for those who had counsel.

But again, in 1961 when the final schedule was mailed to everybody, to all of these claimants.

It in — this is a one page letter, this at page 34 of the record which stated explicitly, that anyone who deemed himself agreed by the final schedule had 60 days within which to bring suit and the class here involved individuals whose claims did not appear on the schedule because they had not submitted the original certificates.

New per — had — we’re given adequate notice, ample notice that they had 60 days in which to sue.

Why didn’t sue, we don’t know?

Many others similarly situated, this other class of 1,800 did.

My only point is that their failure to sue promptly cannot be laid at the door of the Government had not (Voice Overlap) —

William J. Brennan, Jr.:

I suppose Mr. Posner, if all of the claimants here or being depositors in the Specie Bank instead of being individuals when this happened had been American municipalities or American states or the United States Government itself and had neglected to do the things that you’re talking about you’d say that they will approve it from any recovery notwithstanding the fact that there are points available with this (Inaudible).

Richard A. Posner:

That’s correct and I will just stress in reply to that as I said earlier that it has never been suggested that the Alien Property Office treated these claimants or Japanese-Americans generally, any differently, from any corporate or other individuals having claims under Section 34 (f).

Abe Fortas:

Mr. Posner, I suppose that — I beg your pardon.

I suppose that in terms of policy, the objective of Congress so the real issue here is whether this money goes to these particular claimants against the Yokohama Specie Bank or goes into the War Claims Fund.

That’s what will happen to the (Voice Overlap) —

Richard A. Posner:

That is the ultimate outcome.

Abe Fortas:

That’s the problem here and as I understand it, you’re saying that the Government did not feel that liberty to waive the statute of limitations so similar that you could — the Alien Property Custodian didn’t feel that way because what it’d be doing then would be in fact taking money from the War Claims Fund and using it for the purposes of paying people who — my hypothesis did not have a — strictly go right to it because of their failure to file their claims in time?

Richard A. Posner:

That’s correct.

And there’s an additional answer to that and that is that when the Government settled with the original group of plaintiffs.

It was on the understanding that this would wind up the account and leave a surplus for the War Claims Fund.

Has the Government not relied on the 60 days statute of limitations as excluding any possibility, any further liability on the account it might not have settled or it might have settled on different terms.

And this underlines the practical importance in this situation of having a rigid date, a bar date after which the office can with confidence wind up the account and distribute it among the various beneficiaries.

Byron R. White:

Mr. Posner, if a — assuming that an account like this is not insolvent that there’s $10 millions available for claims and there’re only $8 million in claims.

And claims were filed and the custodian disallows the one that — for one reason or another.

Byron R. White:

Is there any position for that to disallowed claimants to sue or as he gets precluded by the administrative determination?

And if he can sue, what’s the statute of limitations?

Richard A. Posner:

The — I’m not sure I wholly understand but the individuals who are represented here are people who did not submit the original certificate.

Byron R. White:

I understand.

Richard A. Posner:

That is to say they did not prosecute —

Byron R. White:

I understand.

Richard A. Posner:

— their administrative remedy.

Byron R. White:

What I’m trying to find out is if — the situation — a situation to which 34 (f) does not apply, is there another statute of limitations on suit in those — I know 34 (f) sets 60-day?

Richard A. Posner:

Oh, 34 (d) — the — this — its 34 (e), this — the provision which relates to none (Inaudible) — to solvent —

Byron R. White:

Alright.

Richard A. Posner:

— death claims provides for suit within 60 days after the — a custodian has mailed his determination to the claimant.

The only difference in terms of the statute of limitations between the two provisions has been in the case of the insolvent fund.

The statute doesn’t run until the custodian has brought up his final schedule showing all (Voice Overlap) —

Byron R. White:

And 34 (f) says no suits under the — those provided for here, I gather.

Richard A. Posner:

Yes.

No suit can be prosecuted except in conformity with the provisions of the statute.

Earl Warren:

Mr. Posner, I’m not sure I quite understand the reason for the Government telling these people that 2% — they must give them only 2% and then thereafter settled for 25 or 50 times that much with the (Inaudible) —

Richard A. Posner:

Well —

Earl Warren:

— with the others.

Richard A. Posner:

Well Your Honors, it’s the kind of problem that arises customably in the Government.

An example would be a claim under the Social Security Act.

If you file a claim with the Social Security Administration and there legal counsel makes a determination that you’re not entitled to be paid, they will send you a letter saying, I’m sorry.

We can’t pay you under our view of the law.

Now, then you have 60 days there as here to go into Court and challenge that determination as arbitrary or as unlawful.

Now very frequently, when the Government is sued like any litigant, like any defendant act as the matter proceeds through the courts.

The Government assesses its chances of victory in terms of offers per settlements that are made and very frequently compromise this case just like other litigants.

When it does so like any other litigant, the Government does not necessarily either capitulate, here it didn’t capitulate that it paid only half of the — a man’s claimed and nor does it acknowledge that from the very outset it had made an error and acted arbitrarily.

As a matter fact —

Earl Warren:

Or did the (Voice Overlap) —

Richard A. Posner:

— there is no — it did not.

Earl Warren:

— did it make the settle because it thought it had acted arbitrarily?

Richard A. Posner:

No, absolutely not.

The Government had prevailed in the District Court and the Court of Appeals and on a very technical issue having to do with the rule of — with the application of the Duetsche Bank opinion.

There was room for a court to go either way and the Government felt that while victory wasn’t assured for.

On the other hand, neither was defeat and therefore did not simply pay these people what they were asking and capitulate.

It bargained for a — what seemed like a fair 50-50 settlement.

The Government has never acknowledged and does not acknowledge now that the Alien Property Office was wrong.

Let alone arbitrary in its determination that the post war rate had to apply because the certificate on its face said that this was an obligation payable in yen in Japan.

It is — and it is not a case where a misrepresentation was made that it was ever suggested to these individuals that the Government absolutely would not pay except at this low rate.

Of course the possibility remained open and it was alluded to in the very first letter that the courts would compel the Government to pay more or that in the event of the — a judicial attack, the Government as a matter of prudence and good executive management would compromise before a final judgment.

Earl Warren:

But isn’t there a difference between this and the instance you raised here, it isn’t the question as to whether the claim is just in amount.

It’s a question of what you should do and must do under the law, and you told these people that you must pay them only 2% as a matter of law.

Now, you’d won all the way to say in the lower courts, I didn’t know the mere granting of search in the case because the Government do change its positions radically as it did — we didn’t hear when it operates to the — with the detriments of a lot of other people who are equally entitled to such amount of money.

Richard A. Posner:

Mr. Chief Justice, when we — when the Government compromise this case after certiorari was granted we didn’t — it was not done because the Government felt that the granting of certiorari was tantamount to a reversal of the decisions below.

But because a settlement offer was made and the settlement offer seem reasonable under circumstances but the effect of this settlement —

Earl Warren:

Why would it be reasonable if as a matter of law the department felt that it could not pay more than 2%?

Richard A. Posner:

Because the department was afraid that the Supreme Court might not agree with its feel of the law as happens many times.

Earl Warren:

And then were back to the (Inaudible) [Laughter].

We’re back in the circle, aren’t we?

Richard A. Posner:

No.

I think not.

I think the fact of compromise is not a repudiation of the litigant’s original position.

It is not a confession of error nor did the settlement I might add prejudice the individuals here.

As far as the legal issues are concern, it seems to me they would be identical if the case had proceeded to a final judgment and they had received their — all their money.

We would still be arguing that the present claims were time barred.

Earl Warren:

But then you might have been in a different legal position in this case, if you had lost the other case and this Court had held that your — they were entitled to a 100%?

Richard A. Posner:

I don’t think it would have change the facts because —

Earl Warren:

I said it might?

Richard A. Posner:

I would have to venture the view that it could not because the — this Court’s adjudication would have affected only those claimants who had sued within the 60-day period.

And it could not — an appeal taken by one group of or a litigation on behalf of one class that does not — and knew it to the benefit of those who have unfortunately slept on their rights.

Earl Warren:

Very well.

Mr. Rauh.

Joseph L.rauh, Jr.:

I just like to clear up one facts of question.

Your Honors heard the Government concede that most of people didn’t have lawyers but the Government counsel suggested that all the name plaintiffs did have lawyers.

That’s absolutely untrue and I would like to — Your Honors please to do me the courtesy of looking at the page 16 of the green brief.

On page 16 of the green brief, you will see that four names were added as names — it’s the reply brief that four names were added as a plaintiff — named plaintiffs on page 16 of the green brief and that the Government concedes that the last three did not have counsel at any time.

In other words that — not only didn’t the bulk of these people have counsel but the named plaintiffs didn’t have counsel so much for the questions of —

William J. Brennan, Jr.:

Some of them did?

Joseph L.rauh, Jr.:

Some of them did.

Yes, Your Honor.

William J. Brennan, Jr.:

Including some of the parties for this litigation?

Joseph L.rauh, Jr.:

Yes, Your Honor.

They did and my point about that would be that the counsel as well as the man reasonably thought that the — there was only one issue here.

What would the rate of pay be?

This was — I can say there’s — with a smile on my face I was not in the case at that time.

But counsel of — the counsels were in the case reasonably thought that since there’s only one issue.

The issue of the rate when that issue was settled its going to apply to everybody.

Now I’m afraid Mr. Justice Fortas, I didn’t satisfy your question about whether these people, these resident aliens, these Japanese-Americans were protected by the Constitution.

I believe they are protected by the Fifth Amendment to due process.

I believe that those who were not paroled or interned are treated both by the Constitution and by the statute as to save our citizens and that their rights are protected there, and that this was — which was a clear taking of the assets underlying their debts which is really had cost the — the lost of funds, caused the devaluation clearly raises a constitutional provi — and that constitutional point which is only satisfied by a provision for fair return at the Society International Ray Rogers that there must be a fair procedure for return, I say what happened here was not a fair procedure.

Mr. Justice White, you used the word late filers.

I just like to point out, we were on time filing.

We filed in time.

We were treated as such.

We simply didn’t bring the suit at that time because we thought we would get the same protection that the others got because it was only one issue.

As far as the war claims issue is concern Mr. Chief Justice that was never raised until in this Court.

The war claims issue is an afterthought, when we asked to be treated the same, they said, No.

The statute of limitations bars you and we’re not going to go through this.

We want to wind up.

The war claims is an afterthought brought in here that is irrelevant because the real purpose of the statute was to treat, give the assets.

Joseph L.rauh, Jr.:

These aren’t assets that alarm —

Abe Fortas:

I don’t understand here Mr. Rauh, excuse me.

You say you — your — the people that you represent filed — made timely filing of their claims?

Joseph L.rauh, Jr.:

Yes, Your Honor.

Abe Fortas:

So that they would be in — if that’s so, they would be entitled to the 2% or whatever it is when the (Voice Overlap) —

Joseph L.rauh, Jr.:

Oh, we get that in Japan.

Yes, Your Honor.

I’ve never said we could —

Abe Fortas:

No.

No, not in Japan, not Japan but under this letter?

Joseph L.rauh, Jr.:

Well, (Voice Overlap) —

Abe Fortas:

It’s in the record?

Joseph L.rauh, Jr.:

No.

We had to send in the certificates to deposit Your Honor, we didn’t send those in.

Abe Fortas:

Well, then you — then what you’re saying now and I want to be clear about this Mr. Rauh.

What you’re saying now is that there was a timely filing but that the claim was not perfected.

Is that what you’re telling us?

Joseph L.rauh, Jr.:

The claim, there was a timely filing, the claim was dismissed Your Honor when we didn’t get send in the certificates of deposit.

That’s correct.

Abe Fortas:

Alright.

Joseph L.rauh, Jr.:

That’s true.

Abe Fortas:

And so it’s not just the manner of you’re not having brought coinage in the — within a specified time?

Joseph L.rauh, Jr.:

I think it just — it is the only thing the Government relies on is the fact we didn’t bring the court action because we could have lost the court action when they issued the schedule in 61 without us on it.

We could have brought the court action at that time.

We didn’t — we’re — but just remember —

Abe Fortas:

Now not — for just a second.

As this case — do the posture of this case now then and as I understand it is that you’re not entitled to anything according to the Government’s view because your claim was dismissed?

Joseph L.rauh, Jr.:

Because we did not bring suit within 60 days after the schedule was filed in 61 Your Honor.

Abe Fortas:

Alright.

So we have before us two issues as I understand it.

Abe Fortas:

One is the statute of limitations whether that was — the Government has estopped her, there was tolling or what not?

And the other — the others question is to the amount of recovery if you recover at all, is that right?

Joseph L.rauh, Jr.:

I don’t think you have the second Your Honor.

I think the Government has made clear its stands ready to pay anybody who is not barred or who if it’s told.

They’re ready to pay him.

Well, you see they’re not only —

Abe Fortas:

So they’re ready to pay you what?

Joseph L.rauh, Jr.:

At the Abe rate.

Which is not the total —

No.

And we’re only doing —

Abe Fortas:

— prewar rate, is that right?

Joseph L.rauh, Jr.:

Oh, yes.

I made myself clear, we’re only suing for the Abe settlement.

Abe Fortas:

I understand that but I’m — what I’m saying to you is that you’re not making any issue then of the Government’s statement to you that, if you got a claim, I’ll pay you at the Abe rate.

We will not pay you at the full prewar rate, is that right?

Joseph L.rauh, Jr.:

Precisely.

We are not making an issue of that.

If this Court holds as I have urged it to hold that the Government is estopped or their limitations is tolled, I understand the Government because they’ve never argued anything.

They would pay us at the Abe rate.

They are already preparing to pay Mrs. Kando, one of the named petitioners who didn’t get the schedule at the Abe rate.

The Abe rate is now (Voice Overlap) —

Abe Fortas:

But you’re still indignant because the letter when it was sent out to your clients’ awkward payment at the post war rate, is that right?

Joseph L.rauh, Jr.:

Yes, Your Honor.

I guess it — I wouldn’t indicate —

Abe Fortas:

Even though that you’re now willing to take, I gather you’re now willing to acquiesce and take 50% of the prewar rate, is that right?

Joseph L.rauh, Jr.:

Your Honors, 50% of the pre — of what — no, it’s a 100% of the prewar rate Your Honor.

They — its 50% of prewar plus interest.

They paid the Abe people what they thought — what they put in in dollars?

They didn’t get — what they lost was their interest —

William J. Brennan, Jr.:

What was the interest rate?

Joseph L.rauh, Jr.:

I presume it would be 6% Your Honor and that came to about the same as the —

William J. Brennan, Jr.:

Well what you’re saying Mr. Rauh, if I have put a $100 in, what I got was a $100 back $50 on principle and $50 on interest?

Joseph L.rauh, Jr.:

Or a $100 on principle and no interest which ever (Voice Overlap) —

William J. Brennan, Jr.:

May I ask this one question.

If in fact you had taken or sought judicial review within the 60-day period, would not the Government have defended in any event on the ground that are these folks had not filed their certificates before the date when the schedule came out?

Joseph L.rauh, Jr.:

They might have Your Honor.

I don’t think —

Byron R. White:

Well, would they have had a defense?

Joseph L.rauh, Jr.:

I don’t know whether they would’ve had defense.

They would’ve argued.

And again, I — while you’ve been here if I have been retained, I would’ve been here arguing that that was estopped and tolled the same way.

But they would’ve — they couldn’t had a defense (Voice Overlap) —

William J. Brennan, Jr.:

Well, I gather the people who got the Abe rate the 1800 are all people who did two things.

They had filed their certificates before the schedule was published and they also sought judicial review after the schedule, did they not?

Joseph L.rauh, Jr.:

That’s correct.

And Your Honor must remember that only 1800 out of 7500 did that though.

You can say what you want about this letter not being insolvent.

But only 1800 did send it in and the 4100 here who didn’t send it in, who Mr. Posner suggests that slept on their rights and I just conclude if I may with the suggestion that when it is suggested that someone slept on their rights for waiting two and a half years to bring a suit when the Government waited over 20 years to make any (Voice Overlap) —

William J. Brennan, Jr.:

Yes, but the plaintiff gets — what I’m wondering about is whether they slept on the rights earlier suggests to the — fairly to seek judicial review, is it really a just to the failure to file the certificate?

Joseph L.rauh, Jr.:

Well, the Government here is — were addressing it to the failure to bring the suit.

That they argued to us in — before but in their brief here they addressed it solely, there’s a sentence I’ve seen in the brief.

It says, this is done solely because of the statute of limitation which we say is tolled and estopped for the four reasons which I gave.

And if the Government to, especially on the constitutional taking situation and we do urge that these people who have suffered so much and (Voice Overlap) —

William J. Brennan, Jr.:

And you would say with the constitutional taking if — in the situation I put through Mr. Posner, all these depositors in the American municipalities or states or —

Joseph L.rauh, Jr.:

Oh, I think they are in the same plates except we got a better equity in the sense that they’re small people whose — the savings (Inaudible) and who had suffered so much at the hands of the Government.

Byron R. White:

Well Mr. Rauh, you really can’t speak for everyone in terms of saying that all you’re suing for is the Abe settlement.

You’re entitled to sue, your not valid by the statute of limitations.

I’m not sure any judge would recommend during this — on the issues of this case become a statute of limitation would bind everybody?

Joseph L.rauh, Jr.:

At page 5 of our complaint — at the page of the record of our complaint, we asked if they be paid in the same conversion ratio as the plaintiffs in (Inaudible) v. Kennedy.

Joseph L.rauh, Jr.:

We did that because of this reason, we felt that the —

Byron R. White:

Yes, but you don’t speak for all the people who withdrew their claim?

Joseph L.rauh, Jr.:

We — I can’t — we have a class suit in which the –

Byron R. White:

You don’t report — represent those people that were paid off in yen?

Joseph L.rauh, Jr.:

In Japan?

No, Your Honor.

There are 1600 people there and I suggested earlier that the Government had mention them and said, isn’t too bad about them and why should we paid because of them.

And my suggestion was the two of our –we are not, as I’ve explained to Mr. Justice Stewart, we are not —

Byron R. White:

I understand.

Joseph L.rauh, Jr.:

— making that point but we are saying that the Government really now want to settle this after Your Honors rule if it should be favorable to us.

We do have two of our plaintiffs who are in that category —

Byron R. White:

But you have — all the people that in this class you represent would be bound by your representations here, if that — if we just assume that you won this case and extends the statute of limitations is not far to your suit.

Some of your clients discharged you and said, we want our own lawyer and furthermore, we won’t be bound by that.

If were not — we’re going litigate and if cert is granted again on the Duetsche Bank issue?

Joseph L.rauh, Jr.:

I cannot say on a class suit what would happen.

You always has — Your Honor knows and as it imply, you always have to give notice.

If we were to win we go back to the District Court.

They’d have to give notice to everyone and if someone were going to complain, I’m not going to say they would.

I am of course bound to argue that for the complaint namely that the — all we are entitled to is the Abe settlement.

That’s all we sued for.

We sued for that because we felt the Government was a trustee of funds they had seized which funds would have paid our deposit holders and which therefore they should now pay to us.

We therefore sued for the exact amount because we felt they were the trustee for all the claimants.

Thank you.