United States v. Wells Fargo Bank

PETITIONER: United States
RESPONDENT: Wells Fargo Bank
LOCATION: Hustler Magazine Headquarters

DOCKET NO.: 86-1521
DECIDED BY: Rehnquist Court (1988-1990)

CITATION: 485 US 351 (1988)
ARGUED: Dec 08, 1987
DECIDED: Mar 23, 1988

Facts of the case


Media for United States v. Wells Fargo Bank

Audio Transcription for Oral Argument - December 08, 1987 in United States v. Wells Fargo Bank

William H. Rehnquist:

Mr. Wallace, you may proceed whenever you're ready.

Lawrence G. Wallace:

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

In this case, the Appellees are executors of estates that included among their property state or local public housing agency project notes.

The question before the Court is whether testamentary transfer of those project notes is exempt from the federal estate tax.

In urging that the testamentary transfer is not exempt, we have two grounds, either of which would independently support a judgment in our favor.

Our principal contention is that the transfer of such notes never was exempted from the federal estate tax by the Federal Housing Act of 1937, the so-called Wagner Act.

Our other contention is that even if they had been so exempted, Congress repealed that exemption in 1984 for taxpayers situated such as the Appellees, and that contrary to the District Court's holding, the application of that repealer provision was not unconstitutional.

There are three reasons why we urge that the Court should address our principal contention first, that the transfer never was exempt from federal estate tax.

The first is that if we are correct about this statutory issue, it avoids the necessity of addressing a constitutional contention or even the necessity of construing the effect of the 1984 Repealer Provision in light of the constitutional argument.

The second reason why we believe that question should be addressed first is that there are presently pending, the Internal Revenue Service has done a survey on this, 101 cases which would not be disposed of were the decision to rest on grounds of the scope or constitutionality of the 1984 Repealer Provision because there were 101 cases pending, either administratively or in the courts, with a total value of project notes at issue of slightly more than $90 million, in which the returns were filed after the Haffner decision came down in 1984, and no tax was reported as owing on these returns.

They are cases that would be controlled by whether or not Haffner was correctly decided, and--

Byron R. White:

Was that in the 7th Circuit?

Lawrence G. Wallace:

--That was the 7th Circuit case.

Byron R. White:

And did the Government just lie still for that or--

Lawrence G. Wallace:

We did not petition for writ of certiorari for Haffner.

We had no conflict in the circuits at that time, and Congress had already enacted a retroactive repealer.

Byron R. White:

--I see.

All right.

Lawrence G. Wallace:

So, we--

Byron R. White:

Rested on your expectation that you would win a case like this?

Lawrence G. Wallace:

--Well, we didn't think that our future course here would be enhanced by tacking certiorari denied on to the 7th Circuit's decision.

So, we did not petition there.

Now, this is not in our judgment an issue that should have to be briefed and argued twice in this Court and, therefore, there is some merit in deciding the issue that would dispose of all or the cases.

First, now it is true that we do not presently have a conflict in the circuits on that narrow question, but we do believe that the impetus of decisions has turned in our favor with this recent decision of the Tax Court by an eleven to five vote called Estate of Egger, which is referred to in our reply brief, and which we have furnished for the Court's convenience.

Harry A. Blackmun:

Mr. Wallace, the present case came up from the Tax Court, too, didn't it?

Lawrence G. Wallace:

The present case is from a District Court.

Harry A. Blackmun:

From the District Court.

Lawrence G. Wallace:

It's on appeal from the District Court for the Central District of California.

Harry A. Blackmun:

And Haffner came out of the Northern District of Illinois?

Lawrence G. Wallace:

That is correct.