Hughes v. Alexandria Scrap Corporation – Oral Argument – January 21, 1976

Media for Hughes v. Alexandria Scrap Corporation

Audio Transcription for Opinion Announcement – June 24, 1976 in Hughes v. Alexandria Scrap Corporation

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Warren E. Burger:

We will hear arguments next in 74-1607, Hughes against Alexandria Scrap Corporation.

Mr. Lord, you may proceed whenever you are ready.

Henry R. Lord:

Mr. Chief Justice and may it please the Court.

The plaintiff here of Virginia Corporation has attacked successfully up until this moment before a Three-Judge Court on Equal Protection and Commerce Clause grounds, a sub part of a single aspect of Maryland’s enlightened and comprehensive program unique in the nation for removing from the highways and junkyards of the State blighted automobiles.

The operative facts here although somewhat dreary and inelegant are nonetheless quite important to a full understanding of the program and of the constitutional claims at least in our view are relatively simple despite the fact that the appellee here has filed a 40-page statement of the case.

I would like to take 5 minutes to touch on those facts.

This program originated as a result of careful study made in 1967 by the Legislative Council of Maryland of the very problem that I have described a minute ago.

The counsel report is in the record and I think a reading of it will indicate the attention that was giving to the problem.

The counsel recognized that hulks accumulated on the lots of automobile wreckers throughout the State, largely because the free market mechanism at that time provided very little financial incentive to wreckers to place these vehicles in the hands of scrap processors for recycling.

Accordingly, a three-part program with both carrot and stick aspects was adopted in 1969.

Part one, required all wreckers to be licensed and it limited the wreckers in the way that they maintain their yards.

There were density requirements and stacking requirements as to heights of vehicles so that inspection could be done more readily and also — so that the blight would not be as obvious from the roads.

Warren E. Burger:

Mr. Lord, it might help some, as if you could raise the microphone a little bit in the event that—

Henry R. Lord:

Now, out-of-state processors were also licensed for the first time.

In fact, in the 1969 statute provided that wreckers had to be resident in the State of Maryland to be licensed but processors such as the plaintiff could be licensed no matter where they operated.

It being recognized that an out-of-state processor could contribute just as well to solving the environmental problem of Maryland by removing this hulks from the highways.

Now, as far as an out-of-state processor is concerned, the licensing requirements were and are identical, same fee, they must have the same sort of equipment.

The equipment, I think was described in an article which is in the record but very quickly a processors equipment must include a hydraulic bailer which is known in the trade as a gold finger machine, reduces an automobile to a 2 x 2 x 5 foot bail.

Or a shredder or what is known as sheers, that plus payment of the fee plus maintaining of at least a nominal office in the State, although records do not have to be kept there and compliance with other rather rudimentary Maryland regulations admit an out-of-state processor to the Maryland program.

William J. Brennan, Jr.:

I think the wrecker who must be a resident and a processor who may or may not be a resident, is that it?

Henry R. Lord:

That is correct.

William J. Brennan, Jr.:

And what does the wrecker do that a processor does it?

Henry R. Lord:

Well, a wrecker, your Honor is a person who takes possession of hulks of automobiles, holds them for resale for the value of all the wreck or of the parts.

And I think it is fair to say that a wrecker is very often the source of hulks to clients such as my Brother represents here today.

The processor, they are the source to the processor, one of several.

I suppose that is the next Equal Protection case we will have to defend is one based on that distinction.

But that distinction does not have to be before this Court.

We have already had one Equal Protection challenge and I will come to that in a minute.

Suffice it to say that Alexandria qualified and was licensed – so that is one part of the program.

Part two is the stick aspect and that is that there is a continuing fine assessed against a wrecker who maintains in his possession for more than a six months – for more than a one year period of vehicle more than ten years old.

Henry R. Lord:

So it becomes economically a liability to him to keep it there.

It is encouraging him to move it off to a processor.

And so it is really encouraging commerce at least in this aspect.

Now the third facet is the carrot, the carrot is the bounty, the bounty is payable if a licensed wrecker is involved, half to the licensed wrecker delivering the hulk, half to the processor.

In the event that there is no licensed wrecker, if some other source has brought the vehicle abandoned in Maryland to the processor, the entire $16 which is the current total, although it is varied over the years is paid to the processor.

It is an extra bonus in effect for ridding Maryland of another hulk vehicle.

William H. Rehnquist:

I take it that Maryland policy is directed not merely to getting the hulks off the highway right away but to getting them even off the wrecker’s private property because of –.

Henry R. Lord:

Exactly correct.

I would say there is an equal interest in both.

But the program, although the statute could be clear on this is restricted to hulks that have been abandoned in Maryland — any fair reading in the statute I think will indicate that.

And their definitions in the statute which I think support that.

Now, that is the program.

Now what has happened under the program is that in the five years of its existence, simple mathematics applied to the dollar figures in the records would indicate that at least a hundred thousand vehicles have been removed from the junkyards, to use Justice Rehnquist’s question, and the highways of the State, abandoned cars.

Now, who knows how many would have been removed if there had not been a bounty program but it is fair to say that a very high percentage of those are the result of the inducements already described.

Now, the record further shows that Alexandria has participated in this program from its inception and has received an excess of $219,000.00 of money from Maryland’s Treasury under the program.

Money, of course could not have received without the program it might have received the hulks and it might have received just as many of them.

But it would not have received the bounty because it was not in existence.

William J. Brennan, Jr.:

That is all bounty, is it not?

Henry R. Lord:

That is right.

William J. Brennan, Jr.:

Either the half shared with the wrecker or the whole?

Henry R. Lord:

Precisely, your Honor.

Now, as with any new and innovative program, the General Assembly since its inception has constantly monitored this program in the light of experience.

And a review of the Maryland Acts for the last several years will indicate that there have been at least a dozen amendments probably as many as a dozen-and-a-half to this program, different parts of it is. It is a complicated lengthy piece of statutory material.

One of these Amendments, Chapter 465 of the Laws of Maryland of 1974 is the subject of this case.

Now, the challenged Amendment does not relate in any way to the three-part program described.

It does not even relate to the entire bounty program.

It relates to the manner by which vehicles in a certain category and bear in mind that this bounty is available on all abandoned vehicles no matter whether it was an Aston Martin that just rolled off the assembly lines.

But the one category that is being complained about is an eight-year-old and inoperable vehicle which prior to the 74 Amendment for out-of-state processors could be received and a bounty paid thereon by virtue of something known as an indemnity agreement.

An agreement between the person delivering the vehicle to the processor and the processor himself executed of course at the door of the processors plant upon the delivery of the vehicle.

In effect holding harmless, the processor for any claims by prior person entitled.

Henry R. Lord:

That is really what this case comes down to.

Now, prior to that amendment — we will come to this in a more clearly in the Equal Protection discussion.

Prior to that amendment, vehicles in that category could really be destroyed without any Due Process notions that traditionally have been applied.

The notice, the publication, all of which is carefully written into the first part of the statute was absent in this last part and if the Court would like to direct its attention to the statute, it is found in 17A in the appendix in 18A – I am sorry, 15A and 16A.

Now—

(Inaudible)

Henry R. Lord:

All of the language in caps are at 16A is the new language of the 74 Amendment.

As in artistically drafted as any piece of legislation one could imagine but I think all the parties here know what it means and we are interpreting it in a uniform matter.

All of the prior language which overflows to 15A and 16A says in essence only this, anybody who is licensed, unlicensed, resident or non-resident who comes into the possession of a vehicle, eight years old and inoperable can transfer that into the bounty program through a processor without the title and without notification procedures.

It is open-ended and really threatened to swallow up all of the carefully drafted aspects of the statute which are laid out at the prior ten or 15 pages of the record.

(Inaudible)

Henry R. Lord:

Well it would – I think it is fair to—

It might be your own vehicle?

Henry R. Lord:

Well, that is true but I think the record also states that the bulk of vehicles processed through the bounty program fall in that category.

Byron R. White:

(Inaudible) pretty quickly, would you not or?

Henry R. Lord:

Well, you may — I do not know your Honor.

But I think it is fair to say that as of couple of years ago less than 5% of the vehicles on the road were seven years old and older, something like that.

Now, it is this Amendment that is being challenged and it is being challenged obviously on two grounds.

But I think it is important before we go to the constitutional challenges to see exactly what that new statute, the amendment that is challenged does.

First of all it says, that for Maryland processors indemnity agreements are permitted to an announcement of Maryland Public Policy.

For the first time, there was no reference prior to that anywhere in that statute to indemnity agreements.

It may have been the practice and I understand it was although the–

Thurgood Marshall:

(Inaudible) now which is it?

Henry R. Lord:

The May has been deleted, that is a legislative symbology there and it now read shall.

And so, in each instance now with the Maryland processor indemnity agreement is required to be executed and submitted to the Motor Vehicle Administration.

Thurgood Marshall:

(Inaudible)

Henry R. Lord:

Maryland—

William J. Brennan, Jr.:

He must be a Maryland resident with a plant in the State?

Henry R. Lord:

That is correct your Honor.

William J. Brennan, Jr.:

I see.

William J. Brennan, Jr.:

If you had a Virginia resident with a plant in Maryland, he would not be a Maryland processor.

Henry R. Lord:

Well, I think that he may well be because what you are looking at for the public policy reason is whether an indemnity agreement executed in Maryland is valid public policy in Maryland.

And the indemnity agreement is executed at the processor’s plant.

If that plant is in Maryland, I think a good argument could be made that he would be all right, now the—

William J. Brennan, Jr.:

Now, if he has more than one plant, one in Maryland and one in Virginia, is he still alright?

Henry R. Lord:

Well, I would read that and I think my Brothers read it the same way that under this amendment to qualify Alexandria would have to open a plant in Maryland.

William J. Brennan, Jr.:

Would have to be —

Henry R. Lord:

It would not have to be as exclusive plant, and then you would have an indemnity agreement in each instance at that plan executed in a State.

All right—

Warren E. Burger:

— of the plant, not an legal residence status, is that right.

Henry R. Lord:

That is correct.

Now, the other aspect is that the manufacturer’s serial number or identification number must be sent in also, in effect added protections –

Byron R. White:

Just to clarify the tag on this, under — on these vehicles, these over eight-year-old vehicles, must the processor actually process the vehicle in a plant in Maryland or just have a plant in Maryland?

How do you consider that?

Henry R. Lord:

In this category?

Byron R. White:

Yes.

Henry R. Lord:

I think if we had a plant in Maryland and indemnity agreements were executed in Maryland he would be a Maryland processor for the purpose of that statue.

Byron R. White:

Even though he processed that particular car outside of Maryland?

Henry R. Lord:

Well, I think it would be where the indemnity agreement was entered into, your Honor.

One of the points on —

Byron R. White:

So, your answer is yes, so you would be all right if he processed that, crossed the line in some other State?

Henry R. Lord:

Well, I think the question really should be answered as to where the indemnity agreement is executed.

Now I think –

Byron R. White:

Let us assume that the indemnity agreement is executed in Maryland.

Henry R. Lord:

Well, the only way that would happen, your Honor is factually is by delivery to the plant in Maryland.

Because that is where the indemnity agreement would be executed and it is plaintiff’s position that he would have to open a processing plant in Maryland to qualify under this Amendment and I think that that is a fair reading–

Byron R. White:

Well, suppose a processor has a plant in Maryland and one just across the line in Virginia and he goes around and picks up wrecked cars and when he picks one up from an owner he gives an indemnity agreement right on the spot.

He has a plant in Maryland, they have just have to be close to his plant in Virginia so he takes it over in Virginia.

Henry R. Lord:

Well, I think to present the argument in its cleanest form, I think that the State’s position would be that that vehicle would have to be processed at the Maryland Plant.

Byron R. White:

(Inaudible).

Henry R. Lord:

And as a matter of practice that I know would happen in all instances.

William J. Brennan, Jr.:

I know that but tell me again, what is the significance of an indemnity agreement?

Henry R. Lord:

An indemnity agreement has places behind the processor as far as liability is concerned to seller, an unlicensed person could be anyone.

It says to the processor, if you take this vehicle, I am warning to you that I have title to it and that if you get into any kinds of further problems with the prior owner, I will indemnify you and hold you harmless.

And that of course is an incentive to the processor to take the car because he is not buying a lawsuit –

William H. Rehnquist:

Will that be simply executed by a wrecker to the processor or by a third party?

Henry R. Lord:

No, your Honor.

And that brings me to this aspect of the Equal Protection argument.

There are several other ways in which title can pass or evidence of title can pass, I think it is fair to say and I think we are all in agreement that in Alexandria’s case a Wrecker’s Certificate, a licensed wreckers certificate is the second most prevalent way that they receive vehicles.

Indemnity agreements was the first, a second was a Wrecker’s Certificate, which is a document obtained from Motor Vehicle Administration after the wrecker has established a Motor Vehicle Administration that he has evidence of title.

That becomes a titled document and that is the second way and a typical way that a wrecker passed its title to a processor.

And of course one of the arguments here is that the processor has that option still available to him.

And before I break on this point, I would like to get quickly to the State’s justification for this Amendment.

Because we have briefed thoroughly and urged this Court to accept our argument that Blake versus McClung under within its jurisdiction point Justice Harlan’s opinion of 1898 stands for the proposition that Alexandria simply cannot qualify for Equal Protection relief because it does not do business in Maryland.

It does not maintain a real office in Maryland, the only office is the home of its president. It is not incorporated in Maryland, does not pay taxes in Maryland.

All force with the McClung case and that case remains good law today.

It is been cited with approval several times.

(Inaudible)

Henry R. Lord:

That is fully briefed.

Now, I want to get though to the justifications under Equal Protection because they cut just as much towards the Commerce Clause argument as they do towards the Equal Protection argument.

Maryland wanted to do several things with this Amendment in 1974.

First of all, it wanted to legitimize a haphazard practice with respect to indemnity agreements.

It wanted to announce the principle that at least in Maryland, indemnity agreements were valid.

Your Honors know that there is a split of authority around the country on whether indemnity agreements are valid, public policy documents, they are for these purposes in Maryland.

Obviously, we can affect the public policy of Virginia or Pennsylvania and did not purport to.

That is why it is restricted to indemnity agreements in Maryland.

Now, it is interesting too that there are five other out-of-state processors who have gained the benefits over the years of the Maryland program but only one, Alexandria has brought this suit.

Now, the reason is, the other processors have just shifted their ground and it have obtained vehicles more readily under the Wrecker’s Certificate and had it relied on indemnity agreements.

This I think illustrates in response to an earlier question that this is an equal possibility.

Now, a second reason—

William H. Rehnquist:

Does the record show that their input is as great under these alternative methods as it was before?

Henry R. Lord:

The record indicates such as the record is on this point that for — in a couple of specific instances attested to by an affidavit of a Mr. Giddleson(ph), an officer of Alexandria that several towers have not delivered the quantity of vehicles after July 1, 1974 to Alexandria that they delivered prior to that.

But the record also shows that the money figures are unpersuasive and may help the State, there is no loss of revenue established, further establishes however, and equally, importantly that there other sources of vehicles and in fact those sources picked up after in Alexandria’s case after the 74 Amendment.

The second justification and under the McGowan, Dandridge, and San Antonio School District cases, these justifications are clearly satisfactory are that owners gain additional protection.

Because under these agreements, an owner can look to a Maryland processor, put yourself if you will in the situation of an owner whose vehicle has been wrongfully taken.

If it has been destroyed by an out-of-state processor with no contacts in Maryland, not subject to process in Maryland and our position is firmly contrary to a statement in the District Court’s opinion, Alexandria is not subject to process in Maryland under any fair reading of our long arm statute where this Court principles.

(Inaudible).

Henry R. Lord:

What I am saying you—

Byron R. White:

Did you not say that the State would be barred by the constitution to have a long arm statute that would reach them.

Henry R. Lord:

I have not got to that your Honor, what I am saying right now for a Maryland resident whose been wronged — whose car has been wrongfully destroyed in Virginia, he has no relief in the Maryland Courts but —

Byron R. White:

But under the existing Maryland Law —

Henry R. Lord:

That is right.

That is possible that that could be expanded and broadened in light of this Court Holdings but as it stands now he would have to go to Virginia to get relief.

Harry A. Blackmun:

This is the owner of an eight-year-old inoperable vehicle hulk.

Henry R. Lord:

Right.

Inoperable of course, could mean a that a part or two, was defective—

Harry A. Blackmun:

— Without an engine, among other things?

Henry R. Lord:

No, without an engine is one category, otherwise inoperable is a second category and that could simply mean that –.

(Inaudible)

Henry R. Lord:

I think, we have discussed that before our argument.

That may be pressing it.

Harry A. Blackmun:

(Inaudible)

Henry R. Lord:

But if it needed a new spark plug, I think it would be inoperable.

Harry A. Blackmun:

And if some of these are made of pure gold, this is such a valuable right on the part of the owner.

Henry R. Lord:

Well, I guess beauty is in the eye of beholder, your Honor.

I think if the owner is entitled, he may have a vehicle that he has been holding for a future appreciation in his mind at least.[Laughter]

(Inaudible)

Henry R. Lord:

I do not have any idea your Honor.

But what I am saying is since this statute has been in effect at least says that the owner can go against the Maryland processor and in effect there is a second string to his bow.

(Inaudible)

Henry R. Lord:

No.

(Inaudible)

Henry R. Lord:

The first reason is the legitimization of these agreements in the first place, only in Maryland.

The second is—

William J. Brennan, Jr.:

(Inaudible) Alexandria is a person for purpose of the—

Henry R. Lord:

That is correct.

William J. Brennan, Jr.:

Upon that premise but you do not concede.

Henry R. Lord:

And – but in—

Harry A. Blackmun:

(Inaudible) at all to keep the body payments within the state of Maryland?

Henry R. Lord:

Your honor, I do not see how can you define that for this record at all.

The simple way to—

Harry A. Blackmun:

The one reason would be that they might pick up Maryland income tax on them.

But they do not from Alexandria maybe I do not know.

Henry R. Lord:

I think that is an addition of justification, Your Honor.

It is but I think it raises questions that is simply are not in this case.

Harry A. Blackmun:

Precisely, it raises some constitutional questions.

Henry R. Lord:

Right.

Harry A. Blackmun:

And is that why you are avoiding it?

Henry R. Lord:

Not at all, I think all we have to show under Equal Protection is that there are rational reasons that legislators at least could have thought.

Harry A. Blackmun:

What is the third?

Henry R. Lord:

The third reason your Honor is that there is a tendency to have bounty payments come only on vehicles abandoned in Maryland if they are delivered to Maryland processors under indemnity agreement.

Remember now, the weakest possible evidence of title is an indemnity agreement.

And a position is here is that unlike the 56 vehicles that the State apparently wrongfully paid for on behalf of Alexandria scrap which were turned over to Alexander from the District of Columbia Police.

If Maryland processors subject to Maryland jurisdiction are receiving these vehicles under indemnity agreements.

There is a greater tendency that they will be vehicles abandoned in Maryland.

Now, I will come back in my remaining time to some of the other aspects of the case.

Thank you.

(Inaudible)

Henry R. Lord:

I am.

Warren E. Burger:

Mr. Ramsey.

Norman P. Ramsey:

Mr. Chief Justice and may it please the Court.

If I may so, I would like to lower this.

Mr. Lord stand somewhat taller than I do.

Warren E. Burger:

(Inaudible)

Norman P. Ramsey:

Very convenient, your Honor.

Let me address myself if I may to, one of the introductory subject matters which may be the grounds of some sort of confusion in this case.

I think it was Mr. Justice White or Mr. Justice Brennan who inquired concerning the impact on wreckers and what a wrecker was.

The wrecker of course under this statutory scheme, I believe with Mr. Justice Brennan, the wrecker is a man who does in fact maintain a yard.

He is defined to be a man who maintains a yard.

The purpose of the yard being that he may take from those cars which he has on the yard, usable parts for the purpose of vending them to others who retain cars of the same vintage.

A tower however, term which Mr. Lord did not identify for the Court.

He is the gentleman who comes out on the highways, maintains no yard in which he stores vehicles which have been subject matter of wrecks, maintains no yard from which he vends spare parts but who simply tows in the total automobile off the beltway accident and it is irreparable, cannot be repaired and it is this tower who is not the subject matter of licensure under the Maryland organizations statutory structure, who is the large source of vehicle hulks.

He is also the large source, if the Court please, of those vehicles which make use of the indemnity agreement.

William J. Brennan, Jr.:

(Inaudible) you might tow the hulk either to a wrecker or a processor.

Norman P. Ramsey:

He could do either, Mr. Justice Brennan.

He could go either and if he goes to a processor, it was in this area that you will see the subject matter of appendices which are very detailed in analyzing Alexandria’s performance, where they got their vehicles from, their hulks I should say more properly, why it was that they felt that this constituted an impingement on the commerce, the interstate commerce because needless to say, sitting as this Court does in this District, Alexandria Scrap it is just over the Petomi, it is a relatively convenient location for the towing of hulks from that graveyard of automobiles that we call our beltway around Washington and it is a logical place to which vehicles may be towed as distinct from a wrecker taking them in by —

Thurgood Marshall:

How can the tower give it – does the tower give an indemnity?

Norman P. Ramsey:

He did, Mr. Justice Marshall and this is the basis.

Thurgood Marshall:

How can he?

He does not have title to that car, does he?

Norman P. Ramsey:

Sir?

Thurgood Marshall:

How does he get title?

Norman P. Ramsey:

Well, it would be an abandoned vehicle to which he would be giving title.

It would be in excess of eight years.

You know sir, that the statute talks about vehicles in excess of eight years of age without motor indicating that they have no longer serve a function as a automobile and have become an abandoned vehicle or otherwise totally inoperable.

And it is as—

William H. Rehnquist:

According to Mr. Lord they do not have to be without motor.

That is just one of several qualifications.

Without motor.

Norman P. Ramsey:

Without motor or inoperable otherwise totally inoperable.

Thurgood Marshall:

But it could be

Norman P. Ramsey:

Well, it could mean that Mr. Justice Marshall when in a spark plugs.

But in any event may I address myself to it and tell you the classic ways in which this might occur, sir.

In the event that you had a vehicle which you could not part with, and so I did what is on my mind, it simply died in your driveway and you wanted it towed away, you would have a title.

You might however, over for an excess of eight years not be able to locate that title.

Now what you want to go to the cost and expense of applying for a new title or a duplicate title for an ancient vehicle.

You might on the other hand suffer the ignominy of having parked in your front yard an abandoned motor vehicle which somebody else just pulled up and left which we see on the streets of our cities at all times utterly abandoned, stripped down by youngsters without wheels, without distributor, without spark plug, but a clearly abandoned vehicle, an abandoned property, and I am not of course, trying to teach the Court law as respects abandoned property.

But abandoned property signifies to us just that.

And the indemnity agreement really says to the processor.

I, a tower found this car under conditions which I deemed it to have been an abandoned vehicle.

If on the other hand there is any question raised, I sir will indemnify you.

Now, here is where Mr. Lord’s argument falls considerably short because he attempts to direct this Court’s intention to the necessity of having a Maryland agreement.

That agreement does not inure to the benefit of the State of Maryland.

That agreement inures to the benefit in my case of Alexandria Scrap and if Alexandria Scrap should make the mistake and again Justice Marshall I am back to line of inquiry that you addressed me sir, if I should, on behalf of Alexandria Scrap say to my client, yes sir, you may accept that indemnification and some judge or jury thereafter said, that chattel had not lost its true ownership and you are a converter of the chattel, I would suffer whatever the civil and/or criminal consequences which might follow, although, civil would be far more likely given the type chattel and the conditions under which it was found.

William H. Rehnquist:

Mr. Ramsey, I thought Mr. Lord’s argument was that if the processing of these hulks is limited to Maryland plants that the owner could at least have someone within that jurisdiction to go to and sue for the conversion.

Norman P. Ramsey:

The owner could — well, he has the same person or persons in this line to sue for the conversion.

Now keep in mind sir that—

William H. Rehnquist:

But if in the case of your client, if used processors in Alexandria, a Maryland claimant to the hulk is going to have to go into the Virginia Courts.

If Mr. Lord’s argument is right that the bounty is limited to Maryland processors he will have something within his own jurisdiction to sue.

Norman P. Ramsey:

That is Justice Rehnquist’s—

William H. Rehnquist:

Do you agree with that?

Norman P. Ramsey:

I – yes, but I stepped backward—

William H. Rehnquist:

You disagree?

Norman P. Ramsey:

I step back into your premise sir.

I do not agree with Mr. Lord’s argument because under the regulations as they are enacted in Maryland and as we have adhered to them we have an office in Maryland, our President lives in Maryland and we maintain a license under Maryland law and we may be reached by service of process by Maryland.

Thurgood Marshall:

But, we are being told by the Attorney Generals Office of Maryland that the Maryland long arm statute does not apply certainly, we are not going to seat here and decide a constitutional question trying to resolve that issue.

Norman P. Ramsey:

I do not think you need to Justice Rehnquist, but I think that this same issue was addressed by the Three-Judge Court which heard us below.

It is discussed by Judge Coffman who wrote the opinion for Three-Judge Court.

The fact of our licensure in Maryland and the fact of our office in Maryland is discussed by Judge Coffman and the Three-Judge Court had no difficulty whatsoever with the fact that Alexandria Scrap could be subjected to the Court processes of Maryland, none and I am saying to you sir that the structure of the Maryland Act and mind you, Mr. Lord attempts to direct your attention to the bounty program in its broad scope.

We say to you that the bounty program is not what this case is about.

Norman P. Ramsey:

If you read the record in this case you will find, gentlemen of the Court that when a $16.00 payment is made to a processor, fourteen of it goes back out to the tower who delivers the hulk to the processor.

The States brief would have this Court believe, understand, or find that we are in this business and are constructing a $1 million bailer or shredder and an enormous processing plant for the purpose of collecting bounties from the State of Maryland for hulk automobiles.

We are running a processing plant requiring some 50 to 60 thousand hulks a year.

Our constitutional complaint is that when the legislature of Maryland attempts to deprive our plant of the right to compete on an even footing in interstate commerce with those processors and intrastate commerce who also want 60 thousand hulks a year to keep their gold finger machine as Mr. Lord described it, the one that takes a car and crams into a 2X2X5 bail.

We want them and they want them.

It is fair to say (Inaudible)

Norman P. Ramsey:

Certainly sir.

William J. Brennan, Jr.:

That $219,000.00 that apparently Alexandria received in bounty, I think Mr. Lord told us—

Norman P. Ramsey:

That is correct sir.

William J. Brennan, Jr.:

Are you suggesting that 7/8th of that has gone back to towers?

Norman P. Ramsey:

I am suggesting sir that the record will sustain me in saying that it is essentially 7/8th of it has gone back to the persons who delivered them to us because we analyze, Mr. Lord and you will notice this dichotomy really between the State’s approach and the approach of Alexandria in this case.

We are talking or we are – I am unfortunately asking the Court to bring together divergent views of trains running on somewhat separate track.

The State keeps talking about the money we have gotten.

We kept talking about the hulks we have not gotten because it is the hulk which is the subject matter of commerce.

It is the hulk which Maryland has affixed an added value to by its bounty program.

They have made it to the person who gathers it out of the woods, off the street, out of the side yard of your home if you have abandoned it.

It is to that hulk that they have affixed this added value.

William H. Rehnquist:

But why is that not entirely consistent with the Commerce Clause Mr. Ramsey.

It seems to me it is one thing for Maryland to say that to prohibit you from shipping something out of Maryland.

But if Maryland wants to bid up the price of hulks within Maryland, I would think that is quite consistent with our prior cases.

Norman P. Ramsey:

I think it is not Justice Rehnquist, although having reviewed the various Commerce Clause cases in preparation for the argument.

The Commerce Clause cases diverged in many respect but it essentially says this, we as a licensed person participating in this program in accordance with the laws of Maryland and in the interstate have distinct from intrastate aspects of it are entitled to be treated even handedly and to have our fair shot at the market.

They cannot appreciate the value of the hulk.

And then say that by virtue of appreciation of the value of the hulk only a Maryland processor may have a crack at those appreciated hulks where we are in the State.

Now, you are mixing admittedly or I am mixing, you are not sir, Equal Protection and Commerce Clause but the cases and considerations do tend to merge and overlap with each other.

William H. Rehnquist:

What do you think is your strongest case supporting your position on the Commerce Clause from this Court?

Norman P. Ramsey:

On the Commerce Clause, I think the Court will note and it is not difficult to note the repetition and consider —

William H. Rehnquist:

Are you going to answer the question?

Norman P. Ramsey:

I am sir.

Considerable comeback to the of Hood, Polar Ice Cream, Dean Milk, Baldwin, Seeling, these are in the milk field essentially, Justice Rehnquist you will recall.

Norman P. Ramsey:

And the Pike against Bruce Church which is the Arizona cantaloupe packing case and Halliburton Oil which is — that is the group of cases which I think you will find essentially are the heartland of our Commerce Clause argument.

William H. Rehnquist:

They were all prohibitions though by the State against doing something rather than simply bidding up the price, were they not?

Norman P. Ramsey:

I do not think that that is a fair description of the totality of the opinions, Justice Rehnquist.

I think that is the posture in which the State has attempted to put them but I do not believe that that fairly states the scope of the cases as this Court has laid them down in connection with —

Harry A. Blackmun:

So is that a valid distinction between the deadline of cases in this one?

Norman P. Ramsey:

Is there any valid distinction?

Harry A. Blackmun:

So – even if they are prohibitions.

Norman P. Ramsey:

Yes, sir.

Harry A. Blackmun:

Does it make them any less valid precedent in your favor here?

Norman P. Ramsey:

I think not sir.

Mr. Justice Blackmun, as you would note sir, when you intermix the concepts of each of these various cases and where the Court has talked in terms of a prohibition in a given instances being constitutionally interdicted obviously the thrust of the opinion may tend that way.

We submit however, sir, that they are equally valid in support of our current position which I think is the precise answer to the exact question which you addressed to me sir.

Harry A. Blackmun:

Well, I was trying to shore up your argument a little bit.

Let me go back to a factual difference.

I think Mr. Lord says that this bounty is fifty-fifty and you say its – but—

Norman P. Ramsey:

I have misled you slightly sir by the way I have put it.

If you have a wrecker who delivers under a Wrecker’s Certificate, that is the wrecker, the man with the yard who strips the car for parts.

It is split eight to the wrecker and eight to the processor.

On the other hand if you have an unlicensed, a tower, the gentleman I earlier started to describe, the man who picks up the inoperative cars but who does not retain them for use or cannibalizing for parts, then $16.00 goes to the processor and the processor rebates and has for years 14 of the 16 to the man who delivered to him.

Have I clarified the problem, Justice Blackmun?

Harry A. Blackmun:

(Inaudible) we are not quibbling about facts here.

Norman P. Ramsey:

No.

I think there is no disagreement between the parties that there was a distinction between a wrecker and the tower.

No disagreements of the statutory structure, carries an eight and eight breakup where it is a wrecker who delivers the hulk and you can visualize the logic of it.

He is presumably cannibalized the hulk down.

Harry A. Blackmun:

(Inaudible) takes his 1908 Maxwell before Alexandria Scrap and it dies at your front door and you take it over and there is not any antique value to it, who gets the money?

Norman P. Ramsey:

That would be – if a tower brought it in—

Harry A. Blackmun:

He drove it up and it dies in the front door–

Norman P. Ramsey:

If he personally drove it up then he would – we would talk to him about the market value of a scrap hulk at that point. We would not talk bounty.

He is not qualified to get bounty.

Norman P. Ramsey:

He is not a wrecker, he is not a tower, he is not anything in the delivery market.

He is an owner.

And may I say sir, if you drove your own car up to Alexandria, we would talk to you sir on the basis of what is the going value of an automobile of this particular — and that – now you are talking—

Harry A. Blackmun:

That is why you would get the bounty then? [Laughter]

Norman P. Ramsey:

I am not — get anything from Justice Blackmun’s car.

We would get the body and we would pay you what might be called fair market value your Honor. That would be the answer to that.

Byron R. White:

If he knew you, you are going to get $16.00.

He might want a little more than the – would without that.

Norman P. Ramsey:

If it were Jack Benny, and he was still alive, God bless him, I think he would probably want 20, Justice White, but I think we would resist but I think he would ask for it.

William J. Brennan, Jr.:

One more question, did I understand that you said the larger proportion of the hulks that Alexandria acquires in Maryland come from towers?

Norman P. Ramsey:

That is correct and that is enlarged in our brief and that is —

William J. Brennan, Jr.:

And what is the percentage, roughly between towers and wreckers?

Norman P. Ramsey:

About 2:1 sir.

Harry A. Blackmun:

I see.

Norman P. Ramsey:

And you will find a full schedule of where we got them, who he got them from and a number of hulks that you got from each the category in the—

Harry A. Blackmun:

But does an owner who thinks that he had his car stolen illegally, does he have a cause of action on the indemnity against the — say against the tower who picked it up?

Norman P. Ramsey:

I suspect sir if you are talking about — we are back into that esoteric field of who can get title from a thief and I think the answer has always been nobody.

Therefore, what passed on through that chain would be a claimed right and asserted right to the property in the hulk but in fact nobody after the owner from whom it was stolen could acquire a genuine title.

Harry A. Blackmun:

Well, I am wondering if Maryland says we are trying to put — among other things with this rule, we are trying to protect an owner so that he will have somebody in the State of Maryland that he can come to.

Norman P. Ramsey:

Yes.

Harry A. Blackmun:

As per the indemnity agreement runs from the fellow who brought it in —

Norman P. Ramsey:

To the processor?

Harry A. Blackmun:

To the processor.

Norman P. Ramsey:

That is correct sir.

Right now the only way in which that would be helpful as a qualified processor and Alexandria remains a qualified processor under Maryland law right down to today.

But we would have filed with the Department the title, the VIN plate, the Vehicle Identification Number plate, the indemnity agreement.

We would show by that indemnity agreement that Alexandria Scrap, a processor which has an office in Silver Spring, Maryland and holds a license under the regs received a 1969 automobile which Mr. Justice White believes is stolen from his front yard and that it was received from Joseph Smith Hauling Company.

Now, when you come to us sir and say, I think my car was stolen, nobody had good title, the department would be able to tell you that Joseph Smith of Rockville was the tower who hauled it away, Alexandria Scrap was the processor who compressed it into a 2 x 2 x 5—

Byron R. White:

But really, if you could get at the fellow who gave the indemnity agreement and if he was any good, it would not make any difference who the processor was.

Norman P. Ramsey:

Well, I think that is correct.

Norman P. Ramsey:

It is the old deep pocket doctrine, which one would you look to for the easiest collection.

But as a practical matter, if you wanted to get to us you have us in Maryland and you have us under the thumb of the Maryland Vehicle Administration just as surely as you have everybody else because of the office, our presidency—

William J. Brennan, Jr.:

(Inaudible) that issues on condition that you be available for a process?

Norman P. Ramsey:

It is, well, Mr. Justice Brennan, in the early stages it was, if you had a plant of a certain type and you had to have an office —

William J. Brennan, Jr.:

This is what I mean Mr. Ramsey, often if you come into a State, you get the license from the State only on condition that—

Norman P. Ramsey:

Yes.

William J. Brennan, Jr.:

You will accept process and that–

Norman P. Ramsey:

It is not stated in terms of process, it is stated in terms of maintain an office in the State and you have to certify where that office is.

William J. Brennan, Jr.:

(Inaudible)

Norman P. Ramsey:

Well, this is what a Three-Judge Court in effect said, here they are, these are the circumstances under which this particular process, they find itself.

Now insofar as the comments made by Mr. Lord concerning the justifications under the Equal Protection aspects of the argument, we have addressed the Equal Protection aspects of the argument and addressed them fully in the brief which we have filed.

And we submit that there can be shown to be no rational basis for what the State says it was doing.

The operative —

William J. Brennan, Jr.:

(Inaudible)

Norman P. Ramsey:

Well, we think we fully answered that Mr. Justice Brennan in connection with it, it essentially turns itself on essentially what we are talking about earlier.

We are licensees.

They let us in.

They laid down their conditions.

We met them, there we are and we ought to be entitled to be treated fairly and with no invidious discrimination against us while we are within that State and operating.

If what they are trying to do and I suggest to the Court that what the real problem with this case is this.

The State’s brief describes and State Counsel below in argument before the Three-Judge Court handedly conceded that when this statute, which we have before the Court here today, went in to the legislature of Maryland it did not discriminate against out-of-staters.

It did not Gentlemen of the Court, restrict the payments of bounty to cars found abandoned within Maryland.

It does not today. It has to do with cars formerly titled in Maryland, title and abandonment spot are two entirely different things.

William H. Rehnquist:

Well, wait a minute Mr. Ramsey, under your theory then cars formerly titled in Maryland but presently being driven or on Vermont or new Hampshire would be subject to the Maryland Law, does that make much sense?

Norman P. Ramsey:

No.

You are—

William H. Rehnquist:

— to get hulks of the —

Norman P. Ramsey:

Now, yours is a reduction to the absurd sir and I am willing to agree that it does reduce it to the absurd.

But you have got to visualize that what we are really confronted here in Maryland is the problem of the District of Columbia.

That is to say, Maryland —

William H. Rehnquist:

What interest does Maryland have in getting better-looking junkyards in the District of Columbia.

Norman P. Ramsey:

No, no, no.

Now you have moved one aspect of the act into the other aspect of the act.

It does not deal with wrecker sir.

William H. Rehnquist:

Well, I think it is you – you are the one that is doing that moving.

Norman P. Ramsey:

I am talking about the towers, when a tower comes out of D.C. with a car with a Maryland title, the access and the inquiry that the Court has put to me, I submit is why did the State say it was interested in cars titled in Maryland.

That is was what the act said, it does not say cars abandoned in Maryland.

As to wreckers’ yards, it says yes.

We are cleaning out our own wreckers’ yards.

But as to vehicles such as these indemnity agreement type vehicles, it talks in terms of titled in not abandoned in nor had the State nor had the administrator, nor had the legislature, nor had anybody and this was conceded in colloquy before the Three-Judge Court.

Nobody had ever said that it was required that these cars be abandoned in Maryland.

Byron R. White:

(Inaudible) construe this statute?

Norman P. Ramsey:

They construed it as violative of both the Commerce Clause and Equal Protection sir

Byron R. White:

I know, but did they first – how did they – does the bounty reach cars abandoned outside Maryland?

Norman P. Ramsey:

They clearly say and Judge Miller I think put the spots right on in the colloquy, yes it would and today a processor —

Byron R. White:

As long as they were titled the Three-Judge Court construed the Maryland law to mean that?

Norman P. Ramsey:

That is what it says and that is the way they read it, sir.

William H. Rehnquist:

(Inaudible) in the District Court about those two affidavits where Judge Coffman said that it is suggested that there are some recovered from the District of Columbia.

But it meant that that was not critical to the Court’s decision.

Norman P. Ramsey:

It was an irrelevant fact Justice Rehnquist was what this Court was really saying because never had there been any regulation, any statutory requirement or any other requirement that the car be abandoned in Maryland in order to be the subject of (Inaudible) and counsel for the State conceded that.

The Regs show it.

The statute shows it.

And that was what Mr. Judge Coffman was addressing himself to as respect to that.

Now, as respects to where it was claimed that both, two processors had submitted the same VIN plate or may claim on the same car with no absolutely no evidence in the record that our men did not in fact process that our man was not the one who did process.

And that was what Judge Coffman said on that Justice Rehnquist, I think you will find in the opinion of the Three-Judge Court.

But in essence, what this Court did was analyze what was before it and say that there are no relevant or material considerations.

And that this is not a rational basis for the States Amendment because a practical matter, if the statute has never been enforced this way.

The Regs have never been enforced this way.

It is simply has not work this way and to say now that this is rational basis is simply not supportable and it is not a rational basis for what was claimed to be the discrimination which was admitted to exist.

John Paul Stevens:

Mr. Ramsey, just going back to your Commerce argument for a moment, are there any cases other than this one dealing with the problem of whether the payment of a subsidy can ever be a burden in interstate commerce?

Norman P. Ramsey:

I have no knowledge and my research did not develop a case which dealt with a bounty payment as such, Justice Stevens and I cannot answer you any affirmative.

William H. Rehnquist:

Equal Protection point, let me pursue the same line of inquiry that Justice Stevens just asked you about, if a Western State is having problems with coyotes and passes a bounty law which you may or may not be familiar with, so much ahead for killing coyotes, is there any constitutional problems that limits that bounty to its own residents?

Norman P. Ramsey:

I would say if it, you are talking now, I may not live in a Western State but I have watched gun smoke and things that sort of enough to have a passing familiarity with the concept.

My answer to that would be that so long as there was no invidious discrimination against someone who was a licensed bounty hunter, this would put it in our category.

If you license a bounty hunter and the guy is in there hunting you ought to treat him fairly with every other bounty hunter.

William H. Rehnquist:

Supposing on his license you say you are out-of-state and you can hunt but you are not entitled to the bounty.

Norman P. Ramsey:

Right.

You would be requiring – your Home State of Arizona, let us say would require that the coyote be shot in Arizona by an Arizona citizen delivered to an Arizona sheriff and then you get your $2.00 or whatever it may be.

William H. Rehnquist:

Ten dollars.

Norman P. Ramsey:

I would not, I would think you would come back Justice Rehnquist to the essential problem of whether the coyote as such is an article of commerce.

Scrap we think is fully established on this record.

William H. Rehnquist:

Well this Equal Protection and I am saying—

Norman P. Ramsey:

You are talking Equal Protection.

William H. Rehnquist:

No.

Norman P. Ramsey:

As a respect to Equal Protection, I think it would be a much closer argument that you could restrict to the citizens of Arizona and require them to shoot them there, turn them in there and get to bounty there..

And to be a citizens of the State in which the coyote was in fact captured so to speak.

And I do not think you could stop me of a Maryland necessarily from coming in there, if I moved in, and had a residence as distinct from the citizenship.

If you were putting in terms of citizenship I would—

Byron R. White:

What if the Maryland wanted to make sure there is enough fresh milk to supply the needs of its citizens and it decided that it would subsidize dairy farmers in Maryland, its own dairy farmers in Maryland.

Norman P. Ramsey:

Yes, sir.

Byron R. White:

And that made it worth their while but it just will not pay — will not subsidize the production of milk outside the State of Maryland.

Norman P. Ramsey:

Yes, sir.

Byron R. White:

And what it does then is to immediately exclude from the market just for economic reasons.

There is no formal exclusion but for economic reasons that excludes from the market milk producers from Virginia.

Norman P. Ramsey:

Yes sir.

Byron R. White:

And the —

Norman P. Ramsey:

Well, not subsidized, there is no —

Byron R. White:

They are not just subsidized and the milk that used to flow into Maryland from Virginia Dairy Farms no longer flows there as the result of the bounty, so called.

Norman P. Ramsey:

Well, I think Justice White you pose the other side of the problem of the category of Commerce Clause cases that I relied on which–

Byron R. White:

Here comes the Virginia milk producer in and saying, this law burdens interstate commerce.

Norman P. Ramsey:

I think this Court has dealt with the converse of it, that is to say where the Virginia wish to come in and buy the Maryland milk in order — that is the New York milk producers case and the Boston—

Byron R. White:

But Maryland does not try to keep them out, they say, send it all in — you just have to compete in our market, that is all.

Norman P. Ramsey:

That is correct.

But there is no—

Byron R. White:

We think you have good and nice fresh milk and if you want to sell it here, sell it.

Norman P. Ramsey:

I do not think you—

Byron R. White:

Maryland and Virginia fellows says, awfully sorry, I cannot compete with you.

Norman P. Ramsey:

That is correct.

It does—

Byron R. White:

Because of your bounty.

Norman P. Ramsey:

He does not choose to come in.

But that is a supplement which they are giving to their own citizens in that sense.

And all I am saying is that when you admit us to participate in your market as we have been admitted in the past that you cannot then impinge on interstate commerce.

We as one of the leading representatives of interstate commerce separated by a bridge from Maryland, that is what it amounts to and not even a bridge because I think the rivers in Maryland’s but the—

Byron R. White:

What is wrong with Maryland saying, look we want enough automobile processors and enough people who will process these cars.

We want enough of them around to get the job done.

And to make sure they are going to get the job done, we are going to give them a little bounty if as long they have got plants here and when then we can make sure they are going to get the job done.

We have just been subsidizing our milk farmers and we know how much it were.

How well it works.

So we are going to make sure we grow up enough plants inside here to get the job done.

And we are not just going to give it to any body else.

Norman P. Ramsey:

I would think sir that then you would be dead on my case in part and I think you would be guilty of a situation in which Commerce Clause would impact that particular arrangement.

Byron R. White:

(Inaudible) but in the car case.

Norman P. Ramsey:

Sir.

Byron R. White:

Well, the State could do it in the milk case but not in the car case.

Norman P. Ramsey:

Well, I think there are differences between those two illustrations which the Court has posed to me and I simply submit that on the second of the illustration which you gave me, you would be in problems as respect to Commerce Clause.

In the first of them you would be further away but you might be subjects to attacks such as in the Hood case and in the Seeling case where you had the retention for own use within own State to the disadvantage of one of the Sister States who seek to serve its market out of your available resources.

And the Constitution in fact permit us to go from State to State, free of improper impediments against their right to deal.

Court please, I note that I am in the closing minutes of my presentation and I would simply return to one additional point made by Mr. Lord in connection with 56 units which he says on the record were wrongfully paid for to Alexandria.

I will submit that upon examination of the record you will not find evidence that Alexandria was paid for any units.

Norman P. Ramsey:

It was improper to pay it for, these again revert to the substance of Mr. Lord’s argument that if you pick a car up out of Maryland that you need must restrict the right to receive bounty.

Now, for the Courts benefit in the record although not printed in your appendix at pages, record pages 261 through 266 the Court will find specimens of indemnity agreements which were agreed to be the forms which were and had been in use.

Upon checking those indemnity agreements accepted by the State of Maryland, you will note that Alexandria Scrap was the only one whose indemnity agreement showed where the vehicle was picked up.

All other indemnity agreements simply showed the license number, the make and the model.

There was nothing, no question raised as respect where these vehicles had been abandoned in order to accept indemnity agreements from various persons who had participated in the program.

And I thank the Court very much.

Warren E. Burger:

Do you have anything Mr. Lord?

Henry R. Lord:

Yes, your Honor.

I think I have a couple of minutes remaining.

Warren E. Burger:

Yes.

Henry R. Lord:

I am talking about the Commerce Clause.

Warren E. Burger:

You have six minutes.

Henry R. Lord:

Thank you, Your Honor.

I would like to pick up a point raised by Mr. Justice Blackmun and Mr. Justice Stevens relating to the Commerce Clause.

The State’s position is that this case stands alone because, first of all, it does not relate to a milk industry as all the other cases seem to.

But secondly because this is a subsidy program established by the State of Maryland.

And the argument presented here, I think is unique in this Court, namely that a subsidy program established by the State that has yielded enormous sums of money no matter how split up that money has been at the whim of the plaintiff in this case and now acclaims that its receiving less than it was receiving before.

You have to look at this 1974 Amendment as part and parcel of the 1969 Legislation and indeed all the amendments to that legislation and treated as if everything passed at one time and then apply the test under Commerce Clause and Equal Protection to it.

And the State submits that the statute pass its muster under both Equal Protection and Commerce Clause.

Now, also under the Commerce Clause the real market here is not eight-year-old hulks abandoned in Maryland, entitled in Maryland.

The market is, in the anti-trust sense, scrap that is the commerce.

Now, there is no burden on interstate commerce as such here.

There is an alleged burden on one who allegedly participates in interstate commerce namely the plaintiff.

Now, Pike versus Bruce Church Company is a perfect case in point to illustrate what I am about to say.

That leads you to the conclusion, those facts lead to the conclusion, that is an incidental burden which is permissible we submit and as long as local legitimate public interest are served, this dovetails, the Equal Protection arguments and the Commerce Clause arguments and in fact if you want to see large industries that were hit in the pocket book, do not look at Alexandria Scrap because they have not established it.

Look at the American Can Company who has closed up its Washington plant.

When Aragon passed the law that says, that you cannot get a rebate on one-way cans anymore.

Look at Proctor and Gamble, this case cited in our reply brief in the Seventh Circuit which attacked the City of Chicago’s Anti-phosphate Ordinance.

There is a demonstrable financial loss in the short run and immediate.

It is not demonstrated in this record.

Henry R. Lord:

I do not want to quarrel with this record because what is before the Court is in effect something—

Warren E. Burger:

(Inaudible)

Henry R. Lord:

The allegations Your Honor, in those cases were that they were discriminatory because the Court found otherwise but there were some serious allegations because of the distances from the market, that for instance the American Can case particularly, you simply could not compete effectively in that market because you are too far away from it.

Similar secondary arguments were raised in the Proctor and Gamble case, there was a secondary effect on all the markets outside of Chicago.

Court found that that did not present a Commerce Clause claim.

Now, I do want to say something about this point of the office, of this company because I had not thought it would become so important but it has.

The brief states that the Office of Alexandria Scrap in Maryland in fact is on Ellsworth Drive in Silver Spring and it is the home of the President.

They do not even call it—

Warren E. Burger:

(Inaudible)

Henry R. Lord:

The Three-Judge Court found that there was an office in Maryland in compliance with the –

Warren E. Burger:

(Inaudible)

Henry R. Lord:

And that is the point that I want to come to right now.

(Inaudible)

Henry R. Lord:

They certainly did your Honor.

(Inaudible)

Henry R. Lord:

I certainly think you can your Honor because—

(Inaudible)

Henry R. Lord:

I do not know that you do but I do not know that the Three-Judge Court reaches out and takes an issue that was never argued and never was below.

(Inaudible)

Henry R. Lord:

That is true.

But it is not a fact-finding. It is a legal finding and it is simply wrong.

And I do not see why Your Honors cannot review that fact finding the way—

(Inaudible)

Henry R. Lord:

I mean that legal findings, sir.

(Inaudible)

Henry R. Lord:

No you do not Honor.

But this is a Federal Court interpreting Maryland law on a point never raised and tied to that Mr. Justice Brennan is the fact that very ardently below Alexandria urged and it is all over the record below.

That it was not doing business in Maryland and this ties back of course to the—

(Inaudible) .

Henry R. Lord:

To have a license your Honor.

Henry R. Lord:

But that is not doing a business.

Thurgood Marshall:

What does a license show the office to be?

Henry R. Lord:

The license shows as Maryland addressed I think, the Silver Spring address.

Thurgood Marshall:

But at one time you recognized that have an office and now you see they do not.

Henry R. Lord:

That is what —

Thurgood Marshall:

It is the same state of Maryland.

Henry R. Lord:

An office for Fourteenth Amendment purposes is what I am talking about here doing business your Honor.

And I submit that this simply does not qualify.

That is the one alleged contact with Maryland.

Thurgood Marshall:

(Inaudible) they have license to do business.

Henry R. Lord:

They have a license to accept money in Virginia from the bounty program.

Thurgood Marshall:

Do business.

Henry R. Lord:

Not to do business.

Thurgood Marshall:

Where is the license in the record?

Henry R. Lord:

License is in the record.

(Inaudible)

Henry R. Lord:

They are an out-of-state processor not doing business in Maryland.

Now, what I started to say before is that the Court below, at the behest of the Court below, the State’s motion for dismissal for lack of a substantial federal question was converted into a cross motion for summary judgment.

The state sees no need to remand this case.

The State stands now as it did then on that motion to dismiss, neither of the two constitutional arguments raised by the plaintiff will survive scrutiny.

Thank you.

Warren E. Burger:

Thank you gentleman.

The case is submitted.