order did not come within the category of a "suspension," which, under Article 57(b), tolls the running of a sentence.
1. The case is not moot. MR. JUSTICE DOUGLAS' order, even if it did not constitute a "suspension" under Article 57(b), was sufficient to interrupt the running of petitioner's sentence under the rationale of § 97(c) of the Manual for Courts-Martial that a military prisoner who has been freed from confinement may not receive credit for time served during the period of his release. Pp. 395 U. S. 688-693.
2. Habeas corpus petitions from military prisoners should not be entertained by civilian courts until all available remedies within the military court system have been exhausted, Gusik v. Schilder, supra, and since this principle applies with equal force to ancillary matter such as the legality of petitioner's confinement pending completion of military review, petitioner's failure to exhaust his remedy in the Court of Military Appeals forecloses the relief requested here. Pp. 395 U. S. 693-698.
"Pending completion of appellate review, the accused will be confined in the United States Disciplinary Barracks, Fort Leavenworth, Kansas. "
At this point, petitioner's attorneys undertook two courses of action. On the one hand, they appealed the merits of petitioner's conviction to the Air Force Board of Review, which is the appellate military tribunal Congress has established to oversee the administration of criminal justice in petitioner's branch of the Armed Forces. On the other hand, they sought habeas corpus relief from the civilian courts, arguing that the Uniform Code of Military Justice required that petitioner be released from confinement pending the outcome of his military appeal.
At the present time, petitioner's appeal from his conviction is still pending in the higher reaches of the military court system. While the Air Force Board of Review has now affirmed the judgment of the court-martial, the Court of Military Appeals, the highest military tribunal, has agreed to review Captain Noyd's case. Petitioner does not suggest that we may properly interfere with the orderly process of military review by considering the merits of his conviction at this juncture. Rather, we are now only asked to vindicate his asserted right to remain free from confinement while the validity of his conviction is still being litigated in the appellate military courts.
Captain Noyd's effort to invoke the assistance of the civilian courts was precipitated by General Bond's order transferring petitioner to the disciplinary barracks at Fort Leavenworth. Shortly after the order was issued, and before it was carried out, petitioner sought a writ of habeas corpus from the United States District Court for the District of New Mexico, arguing that both his confinement at the Cannon Air Force Base and his proposed transfer to Fort Leavenworth were in violation of two provisions of the Uniform Code of Military Justice.
"No sentence which includes, unsuspended, a dishonorable or bad-conduct discharge, or confinement for one year or more, may be executed until affirmed by a board of review and, in cases reviewed by it, the Court of Military Appeals."
10 U.S.C. § 871(c). (Emphasis supplied.) Second, petitioner argued that Article 13 of the Code [Footnote 2] only authorized confinement of a convicted serviceman pending his appeal after the military has found that restraint is necessary to prevent the serviceman's flight from the jurisdiction. Since no such finding has been made in this case, petitioner argued that the civilian court should require his complete release.
The Government, in addition to opposing Captain Noyd's claims on the merits, argued that petitioner should be required to exhaust his military remedies before seeking habeas corpus relief from the civilian courts. The District Court, however, refused to apply the exhaustion principle in the present case, finding that the military court system did not provide petitioner with an adequate remedy by which he could test the validity of his confinement, pending appeal, in an expedited manner.
Both sides appealed to the Court of Appeals for the Tenth Circuit, which reversed the District Court's grant of partial relief. Relying on this Court's decision in Gusik v. Schilder, 340 U. S. 128 (1950), a unanimous panel held that the District Court could not properly grant petitioner any form of relief until he had first challenged the validity of his confinement before the appellate tribunals within the military system. The court emphasized that "the Court of Military Appeals has recently held that it possesses the power to issue a habeas corpus writ" if a serviceman could demonstrate that he was illegally restrained pending appeal, and it could perceive no justification for petitioner's failure to seek the military court's assistance. 402 F.2d 441, 442-443. We granted certiorari to consider the propriety of the application of the rule of Gusik v. Schilder in the circumstances of this case. 393 U. S. 1048 (1969).
scheduled to expire on December 26, 1968, [Footnote 4] he might well be released from custody before this Court would have an opportunity to pass upon his claims for relief pending his appeal to the military courts. In order to avoid the possibility of mootness, petitioner promptly requested the Court of Appeals to stay its mandate and order his release pending this Court's decision on his petition for certiorari. On December 6, the Court of Appeals agreed to stay its mandate, thereby keeping the District Court's order in effect, but refused to require the military to release Captain Noyd from custody at the Cannon Air Force Base.
"Any period of confinement included in a sentence of a court-martial begins to run from the date the sentence is adjudged by the court-martial, but periods during which the sentence to confinement is suspended shall be excluded in computing the service of the term of confinement."
"[t]he date the sentence of a court-martial is adjudged will mark the beginning of a sentence to confinement whether or not the accused had then been placed in confinement."
order did not expressly "suspend" petitioner's sentence, and so contends that the statutory exception is not applicable in this instance.
"Congress did not mention all contingencies which would prevent an accused from being credited with time served. Common sense suggests that, if an accused escaped from confinement, his period of service would be interrupted and he would be required to make up the time at the end of the period."
credit unless he is sure that his freedom will not be curtailed at a later date without a plenary hearing. Obviously, the statute's purpose will not be served in the present case, where Captain Noyd's liberty will only be limited once again after a full argument before the judiciary.
"A sentence to confinement . . . is continuous until the term expires, with certain exceptions. These exceptions include the following:"
"Periods during which the person undergoing such a sentence is absent without authority . . . or is erroneously released from confinement through misrepresentation or fraud on the part of the prisoner, or is erroneously released from confinement upon his petition for a writ of habeas corpus under a court order which is later reversed by a competent tribunal. . . ."
obtained his release from MR. JUSTICE DOUGLAS simply by showing that his chances of success on the merits were sufficiently great to warrant the grant of interlocutory relief. Surely, he is not entitled to more favorable sentencing treatment than the serviceman who has at least convinced one court that his claim to release is legally sound but whose arguments have not been upheld on appeal.
We hold that the principles of the Manual for Courts-Martial operated to interrupt the running of Captain Noyd's sentence at the time of his release on December 24, 1968, and hence that the case before us is not moot.
to correct, any interference by the federal court may be wholly needless. The procedure established to police the errors of the tribunal whose judgment is challenged may be adequate for the occasion. If it is, any friction between the federal court and the military or state tribunal is saved. . . . Such a principle of judicial administration is in no sense a suspension of the writ of habeas corpus. It is merely a deferment of resort to the writ until other corrective procedures are shown to be futile."
Id. at 340 U. S. 131-132. It is true, of course, that the principles of federalism which enlighten the law of federal habeas corpus for state prisoners are not relevant to the problem before us. Nevertheless other considerations require a substantial degree of civilian deference to military tribunals. In reviewing military decisions, we must accommodate the demands of individual rights and the social order in a context which is far removed from those which we encounter in the ordinary run of civilian litigation, whether state or federal. In doing so, we must interpret a legal tradition which is radically different from that which is common in civil courts.
It is for these reasons that Congress, in the exercise of its power to "make Rules for the Government and Regulation of the land and naval Forces," [Footnote 6] has never given this Court appellate jurisdiction to supervise the administration of criminal justice in the military. When, after the Second World War, Congress became convinced of the need to assure direct civilian review over military justice, it deliberately chose to confide this power to a specialized Court of Military Appeals so that disinterested civilian judges could gain, over time, a fully developed understanding of the distinctive problems and legal traditions of the Armed Forces.
Almost one year before petitioner sought habeas corpus relief from the Federal District Court sitting in New Mexico, the Court of Military Appeals had held that it would, in appropriate cases, grant the relief petitioner now demands from us. Levy v. Resor, 17 U.S.C.M.A. 135, 37 C.M.R. 399 (1967). [Footnote 7] Petitioner, however, has made no effort to invoke the jurisdiction of the Court of Military Appeals. Nevertheless, he would have civilian courts intervene precipitately into military life without the guidance of the court to which Congress has confided primary responsibility for the supervision of military justice in this country and abroad.
may invoke its habeas corpus jurisdiction, he must somehow obtain a lawyer willing and able to conduct a lawsuit in the Nation's Capital. It is said that this practical difficulty makes it clear that the Court of Military Appeals cannot provide petitioner with adequate relief.
This argument seems to us far too sweeping to be acceptable. Individuals convicted of crime in the civil judicial system are often obliged to appeal to state courts which are far distant from the place at which they are incarcerated. Nevertheless, this fact alone has never been considered sufficient to permit a federal district court to consider a petition for habeas corpus without demanding that the prisoner exhaust all of the presently available remedies offered by the State's appellate courts. Similarly, the fact that Captain Noyd is confined far from Washington, D.C. is not enough, standing alone, to permit him to circumvent the military court system.
ever suggested that it was impossible for him to obtain a lawyer who was willing to present an appropriate application before the Court of Military Appeals with the requisite dispatch.
Accordingly, the judgment of the Court of Appeals is affirmed. In light of the substantial questions raised by petitioner, however, we think it plain that petitioner in no sense acted in bad faith when he failed to exhaust his military remedies before invoking the jurisdiction of the District Court. Consequently, we consider it appropriate for us to continue MR. JUSTICE DOUGLAS' order in effect until our mandate issues, in order to give petitioner an opportunity to present his arguments to the Court of Military Appeals. See 28 U.S.C. § 1651(a); cf. Phillips v. United States, 312 U. S. 246, 312 U. S. 254 (Mr. Justice Frankfurter). While it is true that Captain Noyd has only two days yet to serve on his sentence, he should not be required to surrender his freedom for even this short time unless it is found that the law so requires.
Before this incident took place, Captain Noyd sought to invoke the jurisdiction of the civilian federal courts in an effort to require the Air Force either to assign him to duties consistent with his beliefs or to dismiss him. The United States District Court for the District of Colorado denied relief because petitioner had not yet been court-martialed for refusing to obey orders, and so had not fully exhausted his remedies within the military system. Noyd v. McNamara, 267 F.Supp. 701 (1967). The Court of Appeals for the Tenth Circuit affirmed, 378 F.2d 538, and this Court denied certiorari, 389 U.S. 1022 (1967). The Courts of Appeals for the Second and Fifth Circuits have, however, subsequently decided that the exhaustion doctrine did not necessarily require a serviceman to await the military's decision to convene a court-martial before seeking relief in the civilian courts. Hammond v. Lenfest, 398 F.2d 705 (C.A.2d Cir.1968); In re Kelly, 401 F.2d 211 (C.A. 5th Cir.1968). Cf. Brown v. McNamara, 387 F.2d 150 (C.A.3d Cir.1967). We have not found it necessary to resolve this conflict among the circuits in order to decide the narrow issue in this case.
"Art. 13. Punishment prohibited before trial."
"Subject to section 857 of this title [Article 57 of the Code], no person, while being held for trial or the result of trial, may be subjected to punishment or penalty other than arrest or confinement upon the charges pending against him, nor shall the arrest or confinement imposed upon him be any more rigorous than the circumstances require to insure his presence, but he may be subjected to minor punishment during that period for infractions of discipline."
After the District Court held that petitioner could not be lawfully transferred to Fort Leavenworth, the military significantly increased the degree of restraint that was imposed upon Captain Noyd at the Cannon Air Force Base. Petitioner was permitted to see his family only twice each week, and was forbidden to leave his quarters except for narrowly limited purposes. See Letter Regarding Arrest in Quarters, from Col. George R. Doerr, Appendix 32-34.
While petitioner's one-year sentence began to run on March 9, 1968, when it was announced by the court-martial, the Air Force awarded him sentence credits for good behavior, thereby permitting him to obtain his release from custody after a period of some nine and one-half months.
"[s]tay heretofore granted by MR. JUSTICE DOUGLAS shall remain in effect pending issuance of judgment of this Court or until further order of this Court."
Constitution of the United States, Art. I, § 8, cl. 14.
"[t]he revised section extends the power to issue writs in aid of jurisdiction, to all courts established by Act of Congress, thus making explicit the right to exercise powers implied from the creation of such courts,"
we do not believe that there can be any doubt as to the power of the Court of Military Appeals to issue an emergency writ of habeas corpus in cases, like the present one, which may ultimately be reviewed by that court. A different question would, of course, arise in a case which the Court of Military Appeals is not authorized to review under the governing statutes. Cf. United States v. Bevilacqua, 18 U.S.C.C.A. 10, 39 C.M.R. 10 (1968).
Petitioner contends that our decisions in Toth v. Quarles, 350 U. S. 11 (1955); Reid v. Covert, 354 U. S. 1 (1957), and McElroy v. Guagliardo, 361 U. S. 281 (1960), justify his position that exhaustion of military remedies is not required in this case. The cited cases held that the Constitution barred the assertion of court-martial jurisdiction over various classes of civilians connected with the military, and it is true that this Court there vindicated complainants' claims without requiring exhaustion of military remedies. We did so, however, because we did not believe that the expertise of military courts extended to the consideration of constitutional claims of the type presented. Moreover, it appeared especially unfair to require exhaustion of military remedies when the complainants raised substantial arguments denying the right of the military to try them at all. Neither of these factors is present in the case before us.
In Levy v. Resor, supra, a petition for emergency relief was filed on June 20, 1967. The Court of Military Appeals promptly ordered oral argument and filed a full opinion on July 7, 1967. Both the petitioner and the Government indicate that a subsequent habeas corpus application filed by Captain Levy was ruled on by the Court of Military Appeals within five days after its submission.
Consequently, we need not decide how long a serviceman must wait for a decision on his application by the Court of Military Appeals before he may petition for a writ of habeas corpus from the appropriate civilian court.
The Government suggests that petitioner should also be required to exhaust a second remedy allegedly afforded him within the military system. It is said that Captain Noyd should have requested the Air Force Board of Review to release him pending the exhaustion of his rights of appeal. The Government, however, cites no decision of a Board of Review which asserts the power to grant emergency interlocutory relief prior to the Board's consideration of a case on the merits; nor are we referred to any statute which unequivocally grants this authority. In the absence of any attempt by the Boards of Review to assert such a power, we do not believe that petitioner may properly be required to exhaust a remedy which may not exist. Cf. Union Pacific R. Co. v. Weld County, 247 U. S. 282 (1918); Township of Hillsborough v. Cromwell, 326 U. S. 620 (1946).
exhaustion question. Petitioner should not have brought the custody question to the federal courts in the first place, and, by the same token, if, to preserve the issue, he desired suspension of his sentence or its equivalent, that matter also should have been presented first to the military tribunals, rather than to the District Court. I would dismiss the writ as improvidently granted.


text:
Art. 1º - Association of international, will assign as to WCNA WORLDWIDE GARGO NETWORK ASSOCIATION , established in February 7 th of 2001, is a civil society without lucrative economic objective of indeterminate time, will have its headquarters and forum in the city of São Paulo, Capital, that will prevail on this Statute.
To congregate the companies of jobs of international carriers that acts all in the domestic territory and international and will have its headquarters and forum in the city of São Paulo , Capital.
Achievement of its intentions, as much in the internal scope, as international being able filial it foreign entities.
To elaborate and to keep I register in cadastre brought up to date I contend useful information in that refers to the good development of the Associates.
To exert too many functions that will be determined in General meeting.
Art. 4º - The Associates will not assume responsibility some atinente the social obligations that can occur in the Entity`s management have any time.
Art. 5º - The right of representation of the Associate, for ends of fulfilling of elective offices together the Association.
To consider the admission of new Associates.
To appear to the General meetings, accepting and fulfilling its decisions; and to be present at the annual meetings.
To communicate the WCNA WORLDWIDE CARGO NETWORK ASSOCIATION any alterations in its social contract; f. too much constant duties in this Statute or that they come to be established.
Will be permited only one absence at the annual meetings or more of one when we receive a justification accepted by us.
Art. 8º - The condition of Associate Loses, the legal entity who to leave to have legal existence.
To disregard deliberation of the General meetings or statutory disposal.
Art. 10 - Annually, until the last day of the December month, a General meeting will become.
1º - The General meetings - usual or extraordinary, will be become fulfilled by means of invocation of the President, the respective invitation in obligatory character.
2º - In the cases of Statutory Alteration or extinguishing of the Association, they will be compelled, for in such a way, in Extraordinary General meeting.
Board of trustees: A member chosen for election, in the same Annual shareholders meeting that to acclaim the Direction.
1º - the position of Director or Advisory Council member will lose forcibly, that one that, in the condition of legal representative of an Associated Company, definitively to leave of the exercise of the activity that until then credenciava.
2º - the management Association will not have that, obligatorily, to inhabit in the Headquarters of the Association.
Only: The WCNA WORLDWIDE CARGO NETWORK ASSOCIATION will be valid obliged before third for the joint signature of two Directors.
To secretary the General meetings and meetings of Director.
To cultivate acts, to take care of all the correspondence, signing the forwarded ones, together with the President.
Art. 16 - The expenditures of the WCNA WORLDWIDE CARGO NETWORK ASSOCIATION will be that one destined to take care of to the accomplishments of its objectives and the administrative necessities.
Art. 17 - The dissolution of the Association, will be for deliberation of the convoked Extraordinary General meeting specifically to that necessity.

matches:
Art. 4
Art. 5
Art. 8
Art. 10
Art. 16
Art. 17


text:
HELVERING v. NATIONAL GROCERY CO.
[304 U.S. 282, 283] Messrs. James W. Morris, Asst. Atty. Gen., and Webster Atwell, of Dallas Tex., for petitioner.
Mr. J. D. Carpenter, Jr., of Jersey City, N.J., for respondent.
National Grocery Company is a New Jersey corporation, which operates chain stores. Since 1911 it has had $200,000 capital stock, all owned beneficially by Henry Kohl. In the year ending January 31, 1931, the corporation's books showed a net profit of.$682,850.38, after paying $104, 000 to Kohl as salary and the regular federal [304 U.S. 282, 284] corporation income tax of 12 per cent. Its surplus, as shown by its books, increased during the year from $7,245,824.26 to $7,938,965.54; that is $ 693,141.28. It paid no dividend.
The Commissioner of Internal Revenue, having found that the corporation had been availed of for the purpose of preventing the imposition of the surtax upon Kohl by permitting the gains and profits to accumulate, assessed upon it, under section 104, a deficiency tax of $477, 322.81 for the tax year, in addition to the regular corporation income tax, which had been paid. This amount, together with $37.87 admittedly due, constitutes the total deficiency assessment of $477,360.68.
'We find as a fact that the petitioner's accumulation of earnings was far in excess of the 'reasonable needs' of the corporate business.
The corporation then petitioned for a review by the Circuit Court of Appeals. It reversed the order of the Board; and did so on the ground that there was before the Board 'no proof, substantial or otherwise, to support its imposition of' the tax (page 935 of 92 F.2d). Certiorari was sought by the [304 U.S. 282, 286] Commissioner, who urged that in so deciding the court had departed from the accepted and usual course of judicial proceedings. We granted certiorari because of the importance in the administration of the revenue laws of the matter presented. 303 U.S. 630 , 58 S.Ct. 645, 82 L.Ed. --.
The corporation makes here two contentions in support of the judgment which were not discussed by the Court of Appeals. It challenges the constitutionality of the statute and also urges that in holding that there were 'gains and profits' the Commissioner and the Board of Tax Appeals misconstrued the statute. These contentions will be considered before examining the alleged lack of evidence to support the findings of the Board.
First. The National Grocery Company concedes that section 104 is constitutional as applied to a corporation organized for the purpose of preventing the imposition of surtaxes upon its shareholders;2 but urges five reasons why it should be held void as applied to a legitimate business corporation which is 'availed of' for the forbidden purpose. None of these reasons is sound.
1. It is said that the statute violates the Tenth Amendment because it interferes with the power to declare or to withhold dividends-a power which the State conferred upon the corporation. The statute in no way limits the powers of the corporation. It merely lays the tax upon corporations which use their powers to prevent imposition upon their stockholders of the federal surtaxes. 'Congress in raising revenue has incidental power to de- [304 U.S. 282, 287] feat obstructions to that incidence of taxes which it chooses to impose.' United Business Corporation v. Commissioner, 2 Cir., 62 F.2d 754, 756.
Kohl's personal income tax for the calendar year 1931 was $32,034.74. If he had included in his personal return of taxable income the corporation's entire net income for the fiscal year 1930-1931, an additional tax upon him of over $115,000 would have been due;3 and no tax would have been assessable against the corporation under section 104. For the statute expressly provides, in paragraph (d), that the corporation shall not be so taxed, if the stockholders make the return required to ensure the surtax: '(d) The tax imposed by this section shall not aply if all the shareholders of the corporation include (at the time of filing their returns) in their gross income their entire distributive shares, whether distributed or not, of the net income of the corporation for such year. Any amount so included in the gross income of a shareholder shall be treated as a dividend received. Any subsequent distribution made by the corporation out of the earnings or profits for such taxable year shall, if distributed to any shareholder who has so included in his gross income his distributive share, be exempt from tax in the amount of the share so included.' [304 U.S. 282, 288] 2. It is said that the statute is unconstitutional because the liability imposed is not a tax upon income, but a penalty designed to force corporations to distribute earnings in order to create a basis for taxation against the stockholders. If the business had been carried on by Kohl individually all the year's profits would have been taxable to him. If, having a partner, the business had been carried on as a partnership, all the year's profits would have been taxable to the partners individually, although these had been retained by the partnership undistributed. See Heiner v. Mellon, 304 U.S. 271 , 58 S.Ct. 926, 82 L.Ed . --, decided May 16, 1938. Kohl, the sole owner of the business, could not by conducting it as a corporation, prevent Congress, if it chose to do so, from laying on him individually the tax on the year's profits. 4 If it preferred, Congress could lay the tax upon the corporation, as was done by section 104. The penal nature of the imposition does [304 U.S. 282, 289] not prevent its being valid, as the tax was otherwise permissible under the Constitution. Compare Helvering v. Mitchell, 303 U.S. 391 , 58 S.Ct. 630.
Clearly retroactive assessment is no more objectionable here than in the case of penalties for fraud or negligence. Helvering v. Mitchell, supra. And since no minority stockholders are here involved, the last objection need not be considered. Del Castillo v. McConnico, 168 U.S. 674, 680 , 18 S.Ct. 229; Atlantic Refining o. v. Virginia, 302 U.S. 22, 27 , 58 S.Ct. 75, 77.
5. It is said that section 104 is void because it delegates to the Commissioner legislative power. The statute provides that if the corporation is availed of for the forbidden purpose, the tax 'shall be levied, collected, and paid'; and certain facts are made prima facie evidence of the existence of this purpose. No power is delegated to the Commissioner save that of finding facts upon evidence.
Second. The corporation contends, as a matter of statutory construction, that section 104 was not applicable [304 U.S. 282, 291] because there were no 'gains and profits' within the tax year. Conceding that net income of $863,787.22 was earned,6 it asserts that there were 'no gains and profits' because the depreciation in the securities owned, none of which were sold, exceeded $2,000,000. The argument is that the word 'gains' was not used as synonymous with 'profits', but to express contemplated unrealized increases or accession in net worth of the assets; and that assessability under section 104 depends not upon gains or profits- but upon the aggregate of gains (or losses) and profits, since prudent directors would take these into consideration in determining whether a dividend should be declared. Depreciation in any of the assets is evidence to be considered by the Commissioner and the Board in determining the issue of fact whether the accumulation of profits was in excess of the reasonable needs of the business. But obviously depreciation in the market value of securities which the corporation continues to hold does not, as matter of law, preclude a finding that the accumulation of the year's profits was in excess of the reasonable needs of the business.
Third. There was ample evidence to support the findings of the Board of Tax Appeals. The corporation held on January 31, 1930, bonds and stocks valued at $2,779,718.07; on January 31, 1931 it held $2,989,452.74-an increase of $209,734.67. The list of these bonds and stocks showed that they were in no way related to a grocery business. 7 That there was no need of accumu- [304 U.S. 282, 292] lating any part of the year's earnings for the purpose of financing the business was shown by the balance sheet. Comparing the cash on hand with the outstanding indebtedness it appears that the $1,332,332.28 cash on hand January 31, 1930 exceeded the $1,161,121.96 accounts payable, notes and mortgage, by $171,210.32. On January 31, 1931, the excess of cash over accounts payable was $1,136,820.55. These were then only $269,140.49; and the cash on hand was $1,405,961.04. The notes payable and the mortgage had been discharged.
Since Kohl was the sole owner of the corporation, the business would have been as well protected against unexpected demands for capital, and assured of capital for the purpose of any possible expansion, by his personal ownership of the securities as by the corporation's owning them. Moreover, no conceivable expansion could have utilized so large a surplus. 11 The high taxes were first imposed in 1919.12 After that time no dividend was paid until after the close of the taxable year here involved.
Thus, independently of the presumption prescribed in section 104(b) of the act, 26 U.S.C.A. 104 note there was ample evidence to support the Board's findings.
Fourth. The Court of Appeals, instead of limiting its review to ascertaining whether there was evidence to support the Board's findings and decision, made on all the evidence, as upon a trial de novo, in effect, an independent determination of the matters which had been in issue before the Board. The court was without power to do so. Helvering v. Rankin, 295 U.S. 123, 131 , 132 S., 55 S.Ct. 732, 736. To draw inferences, to weigh the evidence and to declare the result was the function of the Board. Hulburd v. Commissioner, [304 U.S. 282, 295] 296 U.S. 300, 306 , 56 S.Ct. 197, 200; Elmhurst Cemetery Co. v. Commissioner, 300 U.S. 37, 40 , 57 S.Ct. 324, 325.
Fifth. The court expressed the opinion that the Board failed to consider relevant and controlling facts, that it relied upon improper evidence in reaching its conclusion, and that it failed to make the findings required by the statute. There is nothing in the record to justify that view. The findings quoted above are specific. The Board was not obliged to accept as true Kohl's statement of his intention and purposes; or to accept as sound the opinion of his experts. It was error to reverse the decision of the Board. There is no occasion to remand the case to it for further consideration.
Mr. Justice McREYNOLDS, and Mr. Justice BUTLER are of opinion that the judgment below should be affirmed.
[ Footnote 2 ] Citing United Business Corporation v. Commissioner, 2 Cir., 62 F.2d 754; A. D. Saenger, Inc., v. Commissioner, 5 Cir., 84 F.2d 23; Almours Securities, Inc., v. Commissioner, 5 Cir., 91 F.2d 427; Williams Inv. Co. v. United States, Ct.Cl., 3 F.Supp. 225. See, also, United States v. R. C. Tway Coal Co., 6 Cir., 75 F.2d 336; Keck Inv. Co. v. Commissioner, 9 Cir., 77 F.2d 244.
[ Footnote 3 ] It is not possible to calculate what Kohl's exact additional surtax liability would have been had he included the corporation's income for 1930-1931 in his personal return for 1931, since that return is not in evidence. A minimum figure, however, may be obtained. The corporation's 'net income', as defined in section 104, was $954,645.62. There must be deducted from this $103,654.47 for corporation income tax; and $100,000 was distributed as a dividend in 1931 and included in computing the tax paid by Kohl in that year. Even assuming that the remaining $750,991.15 would have constituted his entire net income for 1931, and that the maximum deduction of 15% of this amount for charitable contributions could have been taken, a surtax of $119,328.50 would have been due.
[ Footnote 4 ] The first statute which provided for taxation where corporate profits are accumulated for the purpose of preventing the imposition of surtaxes upon stockholders was the Tariff Act of 1913, section 2A, subd. 1, 38 Stat. 166. In that Act, in the Revenue Act of 1916, 3, 39 Stat. 758, and in the Revenue Act of 1918, 220, 40 Stat. 1072, the tax was laid upon the shareholder. In all later Revenue Acts, the tax is laid upon the corporation. 1921 Act, 220, 42 Stat. 247; 1924 Act, 220, 43 Stat. 277; 1926 Act, 220, 44 Stat. 34; 1928 Act, 104, 45 Stat. 814, 26 U.S.C.A. 104 note; 1932 Act, 104, 47 Stat. 195, 26 U.S.C.A. 104 note; 1934 Act , 102, 48 Stat. 702, 26 U.S.C.A. 104; 1936 Act, 102, 49 Stat. 1676, 26 U.S.C.A. 104 and note.
The Revenue Acts of 1918 and 1921, 218(e) and 218(d), 40 Stat. 1070, 42 Stat. 245, respectively, also taxed the shareholders of 'personal service corporations' like partners. Section 112(k) of the Revenue Act of 1932, 26 U.S.C.A. 112(i) and note, and section 112(i) of the Acts of 1934 and 1936, 26 U.S.C.A. 112(i), provide for the disregard of the corporate entity in certain cases where foreign corporations are used for the purpose of avoiding federal taxes. And section 201 of the Revenue Act of 1937, 50 Stat. 818, 26 U.S.C.A. 326 et seq., provides that the adjusted undistributed net income of foreign personal holding companies must be included in the gross income of their United States shareholders. Compare also Southern Pac. Co. v. Lowe, 47 U.S. 330, 336 , 38 S.Ct. 540; Gulf Oil Corporation v. Lewellyn, 248 U.S. 71 , 39 S.Ct. 35; Gregory v. Helvering, 293 U.S. 465 , 55 S.Ct. 266, 97 A.L.R. 1355.
[ Footnote 6 ] The corporation reported in its return an income of $863,471.67. This was increased by the Commissioner to $863,787.22, and is not now disputed.
[ Footnote 7 ] The stock held January 31, 1931, of the aggregate cost of $2,676, 061.47, consisted of issues of 147 different corporations. Of industrials there were 61. Of public utilities, 27. Of insurance companies, 18. Of investment trusts, 13. Of banks and trust companies, 28. There were, besides, government, municipal, railroad, public utility, industrial and miscellaneous bonds which cost $313,391.27.
[ Footnote 8 ] The profits for these years (after deducting federal corporation income taxes paid) are listed in note 9, infra.
[ Footnote 9 ] Kohl's individual returns were made on a calendar year cash basis. For the fisal year here in question, January 31, 1930 to January 31, 1931, the corporation's books showed a profit of.$682,850.38 after deducting Kohl's salary and the 12% corporation income tax paid. A dividend of $100, 000 was paid in 1931. Had the remaining $582,850.38 been entirely distributed in that year, Kohl would have incurred an additional surtax liability of $90,744.56, even if it be assumed that the additional distribution would have constituted his entire net income for that year and that the 15% maximum charitable contributions deduction could have been taken. (It is impossible to calculate what his exact surtax liability for 1931 would have been, inasmuch as his personal return for that year is not in evidence.) Compare note 3, supra.
[ Footnote 10 ] Compare A. D. Saenger, Inc., v. Commissioner, 5 Cir., 84 F.2d 23; United States v. R. C. Tway Coal Co., 6 Cir., 75 F.2d 336, 340.
[ Footnote 11 ] In the ten years the number of stores in the chain had been increased from 358 to 815. Even on Kohl's own estimate that 'including everything you have to have about $5000 per store,' this expansion could account for only $2,285,000 of the $5,742,455.35 of profits accumulated over that period.
[ Footnote 12 ] The Revenue Act of 1918, 40 Stat. 1057, which was not enacted until February 24, 1919, imposed a surtax of as much as 65% on income in excess of $1,000,000. The maximum rate under the Revenue Act of 1916, 39 Stat. 756, was only 13% on income in excess of $2,000,000.

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These petitions concern the Government’s general policy decision to reduce the number of non-Israelis employed in the ethnic restaurant industry. The Petitioners challenge a line of decisions reducing the number of permits for the employments of foreign cooks in ethnic and fusion restaurants, and later the requirement of a higher pay for the employee – which would reflect the expertise at the foundation of the restaurant’s wishes to employ that person – in order to secure a permit.
We are concerned with the issue of violating the freedom of occupation of an employer who is limited in employing foreign employees. The Petitioners’ primary claim objects to the restriction of employment from the economic aspect of the right to free occupation which includes the ability to pursue an occupation based on financial prospects of success. Those who can show that, due to a government restriction, they are no longer able to operate a profitable business, bear the burden to show that their freedom of occupation has been violated. The test ought to be objective and examine whether a reasonable business owner could continue to operate, as commonly acceptable, a business of that particular kind, despite the additional expenses resulting from the legal restrictions.
The economic aspect of the freedom of occupation goes beyond this right, as it involves financial interests of a party claiming to have been harmed. A business owner, even when unable to show that s/he was denied freedom of occupation, may have been harmed by the mere increase in business expenses. But even if the party claiming such harm was unable to meet the burden of proof, their matter might still be considered if instead they are able to show instead that a protected financial interest – even one of less weight than a basic constitutional right – is harmed. A protected interest is an issue that warrants shifting the burden to the state in order to show that the harm is lawful.
The evidence presented did not sufficiently lay the foundation for a violation of the right to free occupation, since the Government’s decisions do not eliminate employment of foreign employees, and the primary issue turns on the level of prospects of financial profitability in employing these employees under the new conditions, and detailed information as to the impact of the new policy was not presented. At this time, it is difficult to assess the impact of its implementation, and therefore the Petitioners have substantiated their conclusion as to a violation of their freedom of occupation. This is the case in regards to the question of the violation of the right to property as well. As for the issue of a harm to a protected financial interest, whose status is weaker than that of a constitutional right – there is no doubt that even were the Petitioners successful in continuing to operate their businesses under the new conditions, the policy will carry negative outcomes for their financial situation. The Petitioners do not have a guaranteed right to be permitted to employ workers for lower pay, but changing a policy that had been in place for years opens the necessary door to subjecting the decisions to the tests of a worthy purpose and of proportionality. Examining the decisions reveals they have a worthy purpose and that they are consistent with the requirements of the three proportionality tests. The Government’s policy was adopted after an extensive study of the issue and it is in line with its social and economical agenda and does not warrant judicial intervention. The State has demonstrated that at this stage the scales should tip in favor of its decisions, and has therefore met its burden to show that the infringements do not exceed the necessary. The claim for discrimination between employers, too, which is rooted in different rules that apply in each of the fields that rely on foreign employers, does not hold water at this time.
5. Patai Lemon Grass Ramat Aviv Restaurant Ltd.
7. Honey and Cinnamon Lemon Grass Ltd.
8. Ginger – Lemon Grass Ltd.
9. Sheli veShel Michal Ltd.
16. The Red Asian Restaurant (2003) Ltd.
2. Peking Restaurant, Lahak Debi Dining and Events Ltd.
3. Yakuza Sushi Roll Restaurant Ltd.
4. Korusin (Malha) Restaurant, Ginossar Ethnic Ltd.
5. Lychee – We Are Different Food Restaurant Ltd.
 HCJ 5626/97 Lerner v. Director General of the Employment Service (1997) (unreported).
 HCJ 2836/98 Lerner v. Director General of the Employment Service. Minister of Labour and Welfare (1998) (unreported).
 HCJ 9647/02 Ben David v. Minister of the Interior (2003) (unreported).
 HCJ 3445/05 SushiMai Ltd. v. Ministry of Industry, Trade and Employment (2005) (unreported).
 CJ 5936/97 Lam v. Director General of the Ministry of Education, Culture and Sport  IsrSC 53(4) 673.
 HCJ 9722/04 Polgat Jeans Ltd. v. Government of Israel (2006) (not yet reported).
 HCJ 3872/93 Mitral Ltd. v. Prime Minister  IsrSC 57(5) 485.
 HCJ 9723/01 Levy v. Director of the Department of Industry and Services for Issuing Permits to Foreign Workers  IsrSC 57(2) 87.
 CA 6821/93 United Mizrahi Bank Ltd. v. Migdal Cooperative Village  IsrSc 49(4) 221.
 HCJ 4562/92 Zandberg v. Broadcasting Authority  IsrSC 50(2) 793.
 HCJ 4947/03 Beer Sheba Municipality v. Government of Israel (2006) (not yet reported).
 HCJ 4593/05 United Mizrahi Bank v. Prime Minister (2006) (not yet reported).
 HCJ 956/06 Association of Banks in Israel v. Minister of Communications (2007) (not yet reported).
 HCJ 5496/97 Mardi v. Minister of Agriculture  IsrSC 55(4) 540.
 CA 4912/91 Talmi v. State of Israel  IsrSC 48(1) 581.
 LCA 7678/98 Benefits Officer v. Doctori (2005) (not yet reported).
 CA 10078/03 Shatil v. State of Israel (2007) (not yet reported).
 HCJ 4638/07 Al-Aqsa Al-Mubarak Co. Ltd. v. Israel Electrical Corp. (2007) (not yet reported).
 CA Angel v. Bodesky  IsrSC 46(4) 434.
 CA 1639/01 Kibbutz Ma'ayan Zvi v. Krishov  IsrSC 58(5) 215.
 HCJ 366/03 Commitment to Peace and Social Justice Association v. Minister of Finance (2005) (not yet reported).
 HCJ 4769/90 Zidane v. Minister of Employment and Welfare  IsrSC 47(2) 147.
 CA 524/98 State of Israel v. Zion Insurance Co. Ltd.  IsrSC 52(2) 145.
 HCJ 6962/03 Media Most Co. Ltd. v. Cable and Satellite Broadcasting Council  IsrSC 59(3) 14.
 HCJ 4542/02 "Kav La'Oved" Association v. State of Israel (2006) (not yet reported).
 AAA 1347/07 Gorong v. Minister of the Interior (2007) (not yet reported).
 HCJ 10843/04 Helpline for Foreign Workers v. State of Israel (2007) (not yet reported).
1. The petitions before us concern the decision in principle of the Government to reduce the number of non-Israeli employees in the ethnic restaurant branch (various types of Asian restaurants). This policy was formulated more than a decade ago, and it has been the issue in several petitions filed in this Court (HCJ 5626/97 Lerner v. Director General of the Employment Service ; HCJ 2836/98 Lerner v. Director General of the Employment Service, Minister of Labor and Welfare ; HCJ 9647/02 Ben David v. Minister of the Interior ; HCJ 3445/05 SushiMai Ltd. v. Ministry of Industry, Trade and Employment ). At present, when the Government is taking concrete steps to implement the policy, it has once again been laid on the doorstep of this Court.
2. The petitioners, the owners of dining establishments, object to a string of decisions that were made between the years 2004-2007 in which, at the first stage, the number of permits for employing foreign chefs in ethnic and mixed restaurants was reduced, and later, the granting of a permit became conditional upon payment of a high wage to the worker, reflecting the expertise for which the restaurant sought to employ him. In 2009, it was decided that in this branch, it will be permitted to employ only foreign experts, i.e. workers with special skills, whose monthly wage will not be less than twice the national average wage – a sum which today is equal to 15,000 NIS (Government decision no. 2445 of 15 August 2004; no. 3021 of 6 January 2005; no. 4099 of 9 August 2005; no. 4617 of 29 December 2005; no. 446 of 12 September 2006 and no. 1205 of 15 February 2007).
Needless to say, this wage rate is several times the rate currently paid to migrant workers in this branch. It is no wonder, therefore, that these government decisions outraged the restaurateurs, and they were joined in their protest by others, including the Minister of Tourism and senior officials in his office, the Mayor of Jerusalem, the Chairman of the Knesset Finance Committee, members of the Knesset Economic Committee and other public officials. They all explained how much damage these decisions would cause, not only to the ethnic restaurant branch but to the entire Israeli economy. When their efforts failed and the Government persisted in its position, the petitioners sought the intervention of this Court, asking that we direct that the previously prevailing situation be restored, at least until they are able to recruit Israeli workers to replace those who are presently employed.
3. The petitioners estimate that the number of migrant workers required for the approximately 250 oriental restaurants operating in Israel today is 1,400. Without these workers, so it is claimed, these restaurants cannot exist: these workers are at the heart of the restaurants and they alone have the necessary expertise, as it were from the womb, in the preparation of the food that is served. The petitioners add that the government decisions inflict a mortal wound on the restaurateurs' freedom of occupation, and that although all agree that increasing the rate of employment of Israelis is a worthy cause, the measures that have been adopted to advance this cause are not proportionate. First, there is no connection between the cessation of employment of migrant workers and opening up of the branch to Israelis. Significant efforts have been invested by the Ethnic Restaurant Association, in conjunction with the Ministry of Industry, Trade and Employment, to train Israeli workers in the art of oriental cooking, but they have all been in vain. Israelis, even those who are involved in the culinary field, refuse to touch this work. The petitioners do, it is true, mention that in recent months, the Ministry of Industry – which is responsible for the training of replacement personnel – has been running a trial program to train some one hundred Israelis to work in the branch, but it will be many months before this program bears fruit, if at all.
The petitioners further argue that the ethnic restaurants in Israel provide a livelihood for thousands of local workers, including suppliers, service providers, agricultural workers and food manufacturers, and they make a real contribution to the tourism sector, which provides employment for many more Israelis. According to an expert opinion written by financial consultants and attached to petition HCJ 8146/07, in recent years the number of Israelis employed in the ethnic restaurant branch has increased at a significantly higher rate than the average rate of growth in other branches of the economy (P/26). Collapse of the branch as a result of government decisions will therefore entail damage that greatly outweighs the benefit gained by reducing the number of migrant workers. This is even more the case in view of the fact that the non-Israeli workers in the branch constitute only a minute proportion – no more than one percent – of all the foreign workers in the economy; moreover, in other branches the Government – surprisingly – has increased the numbers due to a shortage of workers. Even if the branch is not destroyed, the petitioners are concerned that the financial burden on their businesses will lead to a price increase and harm the population at large, and particularly the weak sectors, who will no longer be able to afford to eat in those restaurants. Furthermore, they argue, the ability of the public to enjoy the varied food culture available at present, in which the oriental restaurants play an ever-growing part, will be diminished.
The third argument of the petitioners is that it is possible to achieve the same objective by less harmful means, for example, by requiring them to employ a given number of Israelis for every foreign worker. In concrete terms, it was argued that the government edicts are arbitrary with respect both to the number of permits allocated and to the rate of pay that was fixed, and they were not preceded by consultations or discussions with people in the restaurant business. Why a non-Israeli chef should earn twice the average national wage is a puzzle to the petitioners. In fixing this wage, they complain, the Government did not draw a distinction between experts in the different branches of industry and services. The result, devoid of logic in their view, is that a foreign expert in the culinary field will earn an identical wage to that of his counterparts in the fields of medicine or engineering for example, in a manner that deviates significantly from the norm in the restaurant business.
The petitioners supported their petitions with the reports of several investigative committees that were set up by governments over the past decade; these committees recognized the special nature of the branch of ethnic restaurants and the importance of distinguishing it from other branches in which foreign workers are employed (Yankowitz Committee Report of 10 March 1996; Ben-Zvi Committee Report of 14 January 1998; Buchris Committee Report of 16 July 2001; Tal Committee Report of October 2002). Their position is also supported by the expert opinion of chef Israel Aharoni, which was attached to the petition in HCJ 8146/07, and which explained the complexity of the training required in oriental cookery and the importance of the continued employment of foreign chefs, even if Israelis learn the trade, due to the special nature of the ethnic kitchen and the working methods employed therein. Finally, the petitioners attached expert opinions from accountants who wrote that setting the wage of expert workers at a rate that is twice the average national wage will cause financial losses to a number of restaurants (P/24, P/25).
4. "Freedom of occupation is the freedom to employ or not to employ", stated Justice D. Dorner in CJ 5936/97 Lam v. Director General of the Ministry of Education, Culture and Sport  (at p. 682), following Aharon Barak, who wrote at greater length: "A law that imposes an obligation to employ violates freedom of occupation. A law that requires not to employ violates freedom of occupation" (Interpretation of Law 3, 597 (1994). See also Ran Hirschl, "Israel's 'Constitutional Revolution': The Legal Interpretation of Entrenched Civil Liberties in an Emerging Neo-Liberal Economic Order", 46 Am. J. Comp. L. 427, 440 (1998)). Nevertheless, in HCJ 9722/04 Polgat Jeans Ltd. v. Government of Israel , this Court chose not to decide on the question of violation of the freedom of occupation of an employer who is restricted in the employment of foreign workers (per Justice A. Procaccia, para. 21).
This is the basic issue in the case at hand, and in providing a normative answer to it, two aspects of restriction of employment must be considered. The first is that aspect within the parameters of which the employment of foreign workers whose knowledge or skills are vital for the operation of the businesses in Israel is prohibited – whether absolutely or by a substantial reduction of the number of permits issued. These workers, as such, are not different from any other resource that is vital for the business, and the restriction of which threatens to negate the employer's ability to operate it (cf. HCJ 3872/93 Mitral Ltd.. v. Prime Minister , at p. 505). And what is the restriction of a businessman's ability to obtain the resources necessary for operating his business, if not a violation of his freedom of occupation?
'The policy of employment of foreign workers, with all the restrictions that apply by virtue thereof, must take into consideration, inter alia, the basic right of a person to freedom of occupation, and the possible violation of this right where his business requires the employment of foreign workers for whom it is difficult, or impossible, to find replacements amongst local workers …. In the implementation of its general policy, the competent authority ought to consider, inter alia, the occupational requirement of the individual, [and] the extent to which his business is liable to suffer if he is not permitted to employ a foreign worker' (per Justice A. Procaccia in HCJ 9723/01 Levy v. Director of the Department of Industry and Services for Issuing Permits to Foreign Workers , at pp. 93, 95).
Another dimension of the restriction of employment draws upon the economic aspect of the right to freedom of employment. This right, where it involves a commercial enterprise in which a person wishes to engage, also relates to the ability to engage in it under conditions of economic profitability. A person who proves that he is no longer able to run a profitable business due to a governmental restriction has lifted the burden of proving that his freedom of occupation has been violated. The criterion ought to be objective, and it should examine whether a reasonable business owner could continue operating a business of a particular type at an acceptable level, despite the additional costs incurred as a result of the legal restriction. Relevant here are rules that restrict the employer's freedom of occupation in that they fix the wage conditions applicable to his workers, including those wages that raise his wage bill in a manner that forces him to reduce the number of workers. Indeed, "the question of whether the decision of the authority constitutes a violation of freedom of occupation must be examined materially and not formally. Freedom of occupation is [also] violated when the decision of the authorities indirectly affects the realization of freedom of occupation in practice" (Lam v. Director General of the Ministry of Education, Culture and Sport , at pp. 681, 693). At the same time, however, we will recall that the State is not under an obligation to create conditions of economic profitability, but only to refrain from actions that counteract such conditions.
5. The economic aspect of freedom of occupation extends even beyond the bounds of this right, for it involves financial interests of the person who claims to have been injured. The owner of a business, even if he is unable to prove that his freedom of occupation has been denied, may be harmed by the very fact that his business has become more expensive. What shall we call such harm? Does it amount to the restriction of a constitutional right to property, or is it positioned at a lower normative level? Does this additional cost, which in some aspects resembles costs that are incurred by virtue of the tax laws, bite into the property of the businessman? In the overall accounting, does it take something away from him? And to whom does this additional sum that must be paid "belong"? These are difficult and complicated questions. They involve different conceptions of the right to property. They confront a nuclear concept of the term "property" with a wider understanding of it. They raise the question of whether regulatory aspects of the actions of an administrative authority, upon the existence of which the ability of the businessman to realize his economic interest is largely dependent, violate his constitutional right. They deal with the relationship between the owner of a business and his environment (Charles A. Reich, "The New Property", 73 Yale L.J. 733, 772 (1964)); Yoseph M. Edrey, "Constitutional and Normative Obstacles for the New Tax Legislation" 8 Taxes vol. 6 (1994) a20, 25; Joshua Weisman, "Constitutional Protection of Property: 42 Hapraklit 258, 267 (1995); Aharon Yoran, "The Extent of Constitutional Protection of Property and Judicial Intervention in Economic Legislation" 28 Mishpatim 443, 447 (1997); Eyal Gross, "Property Rights as Constitutional Rights and Basic Law: Human Dignity and Liberty" 21 Iyunei Mishpat 405, 410, 438 (1998); Gregory S. Alexander, "The Social-Obligation Norm in American Property Law", 94(4) Cornell L. Rev. 745 (May, 2009) and refs. therein).
Not for nothing did this Court refrain from ruling on issues such as these, when they arose in the past. "Does protection of property", asked Justice I. Zamir rhetorically, "also extend to restrictions on employment contracts, such as a provision concerning the minimum wage?" (CA 6821/93 United Mizrahi Bank Ltd. v. Migdal Cooperative Village , at p. 470. See also President A. Barak, ibid. at p. 431; HCJ 4562/92 Zandberg v. Broadcasting Authority , at p. 816; HCJ 4947/03 Beer Sheba Municipality v. Government of Israel , per Justice D. Beinisch, at paras. 7-8; HCJ 4593/05 United Mizrahi Bank v. Prime Minister , per President A. Barak, at para. 9); HCJ 956/06 Association of Banks in Israel v. Minister of Communications , per Justice E. Hayut, at para. 7). Indeed, the question of the damage to property and the extent of its protection requires extensive examination, and necessitates in-depth consideration of legal questions, both theoretical and practical, that are not simple.
'Protection is generally granted to vested rights. In certain circumstances, however, the interest of reliance or the need to fulfill legitimate expectations also justify the granting of protection to an interest that does not amount to a right in the accepted sense or to an interest that has not yet crystallized into such a right' (HCJ 5496/97 Mardi v. Minister of Agriculture , at p. 552. See also CA 4912/91 Talmi v. State of Israel , at p. 625; LCA 7678/98 Benefits Officer v. Doctori , per Justice A. Procaccia, at para. 20).
6. When a governmental action violates a right or a protected interest, recourse to administrative law to examine the constitutionality of that action is justified. This involves an examination of the purpose of the action and the extent of the harm that it causes, and use is made of tools that originate in the criteria of the limitation clause in the Basic Laws (HCJ 4541/94 Miller v. Minister of Defense , at p. 138). These tools render the review of administrative actions more precise, and facilitate the judicial decision-making process (HCJ 3648/97 Stamka v. Minister of the Interior , at p. 777; CA 10078/03 Shatil v. State of Israel , at para. 22 of my judgment). Their efficacy, as well as the need to invest the process of judicial review in all its aspects of the administrative enterprise with a systematic and consistent character, justify their application both when a constitutional right is affected, and when a right or a protected interest which have a lesser normative status are affected (HCJ 5016/96 Horev v. Minister of Transport , at p. 43; HCJ 4638/07 Al-Aqsa Al-Mubarak Co. Ltd. v. Israel Electrical Corp. , per Justice U. Fogelman, at para. 8).
Even though identical tools are used for the examination, the distinction between violating a constitutional right and a value of a lower status finds expression in the contents that are revealed by application of these tools. I am referring mainly to the third criterion of proportionality, i.e. the "narrow" criterion, that places on one side of the scales the benefit of the administrative action and on the other, the damage, in all its aspects. Clearly, where the right that has been violated is a constitutional right, the other side – counterbalancing the violation – must be more heavily weighted.
Assessment of the harm and determination of constitutionality require both a factual and a normative basis. We refer to the facts particularly at the stage of identifying the violation, in determining its magnitude and in examining proportionality. Most of the factual issues can only be resolved on the basis of information submitted by the parties to the court and proved in their evidence, since the judicial body is generally lacking independent tools with which to establish facts (CA Angel v. Bodesky , at p. 437; CA 1639/01 Kibbutz Ma'ayan Zvi v. Krishov , at p. 273; Barak supra, at p. 479). At first, the burden of submitting the information is borne by the petitioner, who is claiming a violation of a right. If he is successful, the burden moves onto the shoulders of the administrative authority, which must show that the violation is lawful (United Mizrahi Bank Ltd. v. Migdal Cooperative Village , at p. 428, per President Barak; HCJ 366/03 Commitment to Peace and Social Justice Association v. Minister of Finance , paras. 10, 18 of my judgment). The factual examination need not necessarily reflect hindsight. A well-founded expectation that a factual development will eventuate is sufficient. However, the person making a claim about a situation that has not yet occurred bears the burden, which at times is not light, of showing a real chance that his expectations will be realized.
'Tackling the issue of foreign workers is complex. It involves taking into consideration a wide range of interests. It involves taking into consideration the foreign workers themselves, their employers, and the needs of the Israeli economy and Israeli society as a whole. It gives rise to difficult professional, economic and social questions that require responses on different planes. In these circumstances, the intervention of the court in the selection of measures by the administrative authority for dealing with the issue confronting it will be narrow and limited' (Polgat Jeans Ltd. v. Government of Israel , at para. 14).
Armed with all the above, I am now able to examine the arrangement that is the subject of this case.
8. The phenomenon of migrant workers has a significant impact on the Israeli economy and on the employment market in general. Even those who support the phenomenon cannot deny the complex problems to which it gives rise, some of which are interconnected. Several of them have been dealt with in past judgments of this court (HCJ 4542/02 "Kav La'Oved" Association v. State of Israel ; AAA 1347/07 Gorong v. Minister of the Interior ; HCJ 10843/04 Helpline for Foreign Workers v. State of Israel ), and it will suffice to mention the detriment to the employment of Israeli workers, the rate of pay that is dragged downwards due to the effect of cheap labor, the negative treatment of the "foreign" worker – the few legal protections result in consistently decreasing his marketability – and the problems of the existence of a large sector that is not perceived to be an integral part of Israeli society, although it has lived and functioned within the society for many years. After a long period in which governments in Israel ignored these problems, a policy for dealing with them began to take shape. There will be those who argue with the degree of success of this policy, with the suitability of the measures that are adopted within its framework or with the conceptions on which it is based. But it would seem that it is no longer possible to avoid the conclusion that without regulatory intervention, no response will be found for the whole set of problems as described, in that market forces alone are inadequate to provide a solution, as reality has proved time after time. In order for this policy to succeed, it must take a comprehensive view of the issue. This is no simple task that has been laid on the shoulders of the State, in view of the complexity of the problems, the myriad interests and interested parties that are involved, and the direct and indirect effects of any policy that will be adopted on the economy, on society and on the individual.
9. Do the decisions that are the subject of this proceeding have an inordinately damaging effect on the protected interests of the individual, i.e. of the restaurateur who wishes to employ foreign chefs? We are concerned, first and foremost, with the factual question. The petitioners laid on our doorstep – as I mentioned above – evidence of a violation of their freedom of employment – a violation which according to them has already occurred and will become even more severe in future. In my view, however, the material that was submitted does not constitute sufficient grounds for the existence of a violation of this constitutional right, in any of the aspects presented above.
First, it is clear that the government decisions do not prevent the restaurateurs from employing foreign workers. Permits will be issued, even if their number will be lower than in the past and even if the cost involved in obtaining them is higher. I have not found in the petitions, nor even in the oral pleadings, a claim that the number of permits for the employment of foreign experts in each restaurant is not in keeping with the required number of workers. The petitioners do not argue that even were they prepared to accept the pecuniary decree, the number of permits offered to them would not meet their employment needs. Indeed, the Government does not wish to deny the restaurateurs the ability to benefit from the particular characteristics of those workers – which give them, at least at present, an advantage over the employment of Israelis, and I am referring to the knowledge, the skills, the work ethic and even to appearance and language. On the contrary, in acknowledging that these workers have special characteristics that render them sought after in the local restaurant sector, the Government seeks to entrench their position such that on the one hand, a person who does not meet these special criteria will not be employed, and on the other, those who are employed will be suitably recompensed. This policy, so it has already been ruled, attributes suitable weight to the interest of the employer in allocating permits for the employment of foreign workers (Polgat Jeans Ltd. v. Government of Israel , at para. 15).
The crux of the matter is, therefore, the economic profitability of employing those workers under the new conditions, and in practice - the relationship between the commercial advantages inherent in their employment and the cost to the employer. There is no doubt that setting a wage rate at twice the national average greatly increases the latter component. But will the effect on the benefit that the employment of those workers brings to the business be so drastic as to negate the profitability of the enterprise? I cannot deduce this from the information that was submitted by the petitioners. The expert opinions relating specifically to a limited number of restaurants – four out of two hundred and fifty (P/24) – which, it was argued, would face financial loss, do not suffice, nor does the general statement that this would be the fate of "many other restaurants" (P/25). What is required is specific data on the effect of the new policy on this branch, and the petitioners did not provide this. More importantly, the expert opinions that were submitted relate to the existing system of management of the restaurants. Nothing in the data that was presented indicates that it is not possible to operate an ethnic restaurant successfully, in a reasonable manner, even with the new rates of pay.
At the present time it is difficult to say whether implementation of the new policy will deprive the ethnic restaurants in Israel of their ability to exist as profitable enterprises or affect their special cultural character, or whether the petitioners will succeed in finding a solution for the problems that have arisen, particularly if the State provides some support. The unknowns are numerous. Is the wage that is currently paid to non-Israeli chefs reflective of their true market power? Is the price level at the ethnic restaurants, and their number, in keeping with the demand for the service that they offer? Will the new policy, along with the effort that is being invested in the training of Israelis in the art of ethnic cookery, lead to an opening up of the branch to Israeli labor? Will the owners succeed in adapting themselves to the new regulatory policy? These and other questions require solutions in real life. I have not been offered even the beginning of a satisfactory answer to them, and therefore I cannot establish that the petitioners laid the grounds for a conclusion concerning a violation of their freedom of employment. The same applies with respect to the question of a violation of a property right, which was not even mentioned in the petitioners' pleadings. They did not base their petitions on this issue, and did not submit evidence to prove it. What they omitted, the court will not complete in their stead.
10. The foundation has not, therefore, been laid for determining that any of the constitutional rights of the petitioners has been violated. Things are different with respect to the question of damage to a protected economic interest, the status of which is inferior to that of a constitutional right. There is no doubt that even if the petitioners succeed in keeping their businesses operating under the new conditions, the direct effect of the new policy – the need to pay a wage that is higher than the norm and an increase in costs – will worsen their financial situation. Indeed, the petitioners have no vested right to be permitted to employ workers at low wages, but a change in the policy that prevailed for many years, in the framework of which the wages of foreign workers were not dealt with, provides the required opening for putting the decisions to the tests of proper purpose and proportionality.
I have already discussed the proper nature of the purpose, and we are therefore left with the question of proportionality. In my view, the State succeeded in showing that its decisions were compatible with the requirements of all three tests of proportionality. First, at the present time and as long as reality has not proved otherwise, there is no basis for challenging the assumption concerning the existence of a rational connection between the policy that is implemented and the purpose that the government wishes to achieve. Support for the State position can be found not only in the dictates of common sense, but also in the data that was submitted by learned Counsel for the State, Adv. M. Zuk, which relates to what is happening in other branches in which foreign workers are employed. The data indicates a clear connection between the change in the rate of employment of non-Israeli workers, and the change in the number of Israeli workers employed in the agricultural sector (para. 56 in the State's response) and in the construction sector (para. 55). In the latter sector, the results of the government policy to limit the dimensions of employment migration, which led to a significant increase in the number of Israelis who were employed, was demonstrated (ibid.). The argument of the petitioners concerning the exclusive characteristics of the restaurant business is not devoid of logic, but they will have to back it up with factual data, which at present they do not have.
11. On the matter of the alternative measure, I will mention again the combined aims of the government policy: to increase the number of Israelis employed; to narrow the gap between the value of labor of the employee – Israeli and non-Israeli – and between the rate of pay he receives, and to reduce the number of foreign workers who are not essential to the employer. I find it difficult to envisage any alternative to the solution adopted by the State that could achieve these aims. The petitioners' proposal to employ a certain number of Israelis per each foreign worker does not meet the requirement, since it would appear that a fundamental element in achieving those aims is raising the status of the said field of employment. In these circumstances, the foreign workers would continue to be employed at low rates of pay, similarly low pay would be offered to Israelis, and the latter will continue to shun this field of employment. As for the rate of pay that was set, it would appear that any rate that was set would have been arbitrary to some extent, for in the nature of such things it is difficult to quantify precisely the value of the employment of foreign experts in each of the restaurants, as it is in relation to each of the other branches of labor. The main thing, in my view, is that the rate which is set is acceptable and not obviously excessive. Finally, I will say that the new arrangement has been implemented gradually, and it has not struck the petitioners like a thunderbolt out of the blue. In this way, undoubtedly, the detrimental effect on them has been reduced in a manner befitting the rationale underlying the second criterion of proportionality.
12. As for the balance of benefit: here, too, the petitioners are hindered by the absence of factual data which could indicate the extent of anticipated damage in all the areas that they claim. At present, the basis has not been established for the claim whereby the policy that has been adopted will reduce the number of Israelis employed, because it will affect the leisure culture of the public, harm the tourist industry or widen the gap between the different classes in Israel. All that has been placed on the side of the drawbacks is the added costs to the restaurateurs – an economic interest which prima facie, and from a normative aspect, does not counterbalance the potential benefit in realizing the government aims. The balance that was struck is not without foundation. It is not unreasonable. Its source does not lie in some governmental caprice, but rather, in policy that was formulated after extensive investigation of the subject, and which is compatible with the economic and social agenda of the Government. It does not, therefore, warrant judicial intervention. How the balance of benefit will appear with the passage of time and as the results of the selected process become clear, only time will tell. At the present point in time, the State has succeeded, in my opinion, in showing that this balance tilts in favor of its decisions, and with this it has fulfilled its obligation to demonstrate that the harm caused by these decisions does not exceed that which is required.
13. I also find the claim of discrimination between employers, which is based on the different rules governing each of the branches requiring foreign workers, to be unsubstantiated at present. This is a dual-pronged argument: first, that the policy of reducing the number of permits was not implemented in relation to other occupations, i.e. a similar norm should have been instituted not only in relation to restaurants but in all the branches that avail themselves of foreign workers; secondly, the determination in relation to the wage that must be paid is not sufficiently sensitive to the special characteristics of the branch of ethnic restaurants, which is to say that the branches should have been differentiated. The reason for dismissing the claim of discrimination, in both its aspects, does not lie in this apparent contradiction, but in arguments touching upon the substance of the matter.
First, in relation to the number of permits: It has already been ruled that each branch in the economy has its own needs, and each branch has a policy befitting its own context.
'Policy relating to branches is directly influenced by the needs of the branch for personnel of different types, and it changes from branch to branch in accordance with the structure, the requirements and the particular problems of each. This is a matter of different arrangements that are engendered by different requirements, and this does not give rise to a claim of discrimination' (Polgat Jeans Ltd. v. Government of Israel , at para. 17).
Accordingly, it is possible to adopt a policy that distinguishes between the different branches on the basis of the degree of necessity of employing non-Israeli workers. In the case before us, the Government decided that in the industrial and services sectors, insofar as there is a need for employing non-Israelis, it is experts that are required. These, as I have already ruled, are available to the restaurateurs, as long as they fulfill the wage requirements.
'In the industrial sector, the arrangement for issuing permits for the employment of foreign workers with special expertise is built on high wages. In the fields of agriculture and construction, the arrangement is built on the employment of workers with regular skills. This difference reflects on the level of wages paid to the workers' (Polgat Jeans Ltd. v. Government of Israel , at para. 17).
At the same time, I will emphasize what seems to me to be obvious, i.e. that the declarations of the State concerning the common normative basis for its policy in each of the branches that have recourse to migrant workers, cannot remain on paper alone. Wherever the State encounters difficulty in standing by its word and realizing the aims that served as its beacon in this matter – and I need only mention the discussion in the abovementioned case of Helpline for Foreign Workers v. State of Israel  – it will have difficulty in remaining convincing about its proper management of the whole issue.
14. If I saw fit to dwell further on any of the arguments of the petitioners, it would be on the matter of the right of pleading, or what they call the "duty to consult" prior to the said decisions being taken. As the petitioners themselves demonstrated, the formation of the present policy was preceded by a long process of investigation throughout which – as transpires from the appendices to the petitions – the petitioners expressed their position openly, by means of a serious lobby of public figures, with appearances in committees charged with the subject and in letters that were sent to the competent bodies. In these circumstances, there is no doubt that their position did not remain unheard, and it is as well-known as it need be to the decision-makers. Thus the purpose underlying the right to plead has been realized.
I do not make light of the petitioners' concerns. It is natural that a person looks out for his own interests. It is also natural that the owner of a business strives to maximize his profits. But the Government – with a wide perspective – sought to provide a response to problems that extend beyond the particular concern of the petitioners, and the latter have not, as yet, succeeded in showing that they cannot adapt themselves to this policy, or that its disadvantages, overall, outweigh its advantages. The burden of proof required for establishing grounds for judicial intervention has therefore not been lifted.
For this reason, I propose to my colleagues that we deny the petitions and cancel the interim order that was issued. I further propose that we obligate the petitioners, in each of the petitions, to pay the respondents costs in the amount of 20,000 NIS.
Decided as per the judgment of Justice E. E. Levy.

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text:
IN RE: JUSTICE OF the PEACE Veronica FRANKLIN November 27, 2007 No. 2007-O-1425.
STATE v. SHAW November 27, 2007 No. 2006-KO-2467.
BOREL v. YOUNG November 27, 2007 No. 2007-C-0419.
IN RE: Walter J. LeBLANC November 27, 2007 No. 2007-B-1353.
STATE v. REYNOLDS November 21, 2007 No. 2007-KP-0641.
JOHNSON v. UNIVERSITY MEDICAL CENTER IN LAFAYETTE November 21, 2007 No. 07-CC-1683.
STATE v. HYDE November 21, 2007 No. 07-OK-1314.
FIRST NATIONAL BANK OF PICAYUNE v. PEARL RIVER FABRICATORS INC November 16, 2007 No. 2006-CC-2195.
STATE v. SIMS November 16, 2007 No. 2007-KK-2216.
STATE v. KNIGHTEN November 16, 2007 No. 2007-KK-1061.
HARRIS III v. STOGNER November 9, 2007 No. 2007-CC-1451.
IN RE: Barrett B. DALY. November 9, 2007 No. 2007-B-1053.
IN RE: David M. DICKSON. November 7, 2007 No. 2007-B-0733.
STATE v. DODSON November 2, 2007 No. 2007-K-0057.
STATE v. MATTHIS November 2, 2007 No. 2007-KP-0691.
STATE v. CLESI November 2, 2007 No. 2007-K-0564.
STATE v. COLEMAN November 2, 2007 No. 2006-KA-0518.

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text:
IN RE: Darrell W. ASHY. October 26, 2001 No. 2001-OB-2687.
IN RE: Michael F. BARRY. October 26, 2001 No. 2001-B-1722.
STATE v. MILLER October 26, 2001 No. 2000-K-1657.
IN RE: James Ashley VAUGHAN. October 26, 2001 No. 2001-B-1948.
IN RE: Anthony HOLLIS. October 17, 2001 No. 2001-B-2127.
PERRON v. EVANGELINE PARISH POLICE JURY October 16, 2001 No. 2001-C-0603.
BELLE PASS TERMINAL INC v. JOLIN INC October 16, 2001 No. 2001-C-0149.
SHELTON v. STANDARD 700 ASSOCIATES 700 October 16, 2001 No. 2001-C-0587.
WILLIAMS v. WATSON ABC October 16, 2001 No. 2001-C-0495.
METRO RIVERBOAT ASSOCIATES INC v. LOUISIANA GAMING CONTROL BOARD October 16, 2001 No. 2001-C-0185.
STATE v. DUNCAN October 16, 2001 No. 99-KA-2615.
STATE v. FLEURY October 16, 2001 No. 2001-KA-0871.
AMIN v. BAKHATY October 16, 2001 No. 2001-C-1967.
HUNTER v. WAL MART SUPERCENTER OF NATCHITOCHES October 16, 2001 No. 2001-C-0299.
WILLIAMS v. JACKSON PARISH HOSPITAL October 16, 2001 No. 2000-C-3170.
BENNETT v. KRUPKIN October 16, 2001 No. 2001-C-0209.
RICHARD v. MIKE HOOKS INC October 16, 2001 No. 2001-C-0145.
SHELL PIPELINE CORPORATION v. KENNEDY October 16, 2001 No. 2000-OC-3207.
ANDERSON v. AVONDALE INDUSTRIES INC October 16, 2001 No. 2000-CC-2799.
IN RE: Victor J. BARBIERI. October 12, 2001 No. 2001-B-1496.
STATE v. WALKER October 12, 2001 No. 2000-K-3200.
SYLVE v. KAPPA ALPHA PSI FRATERNITY October 10, 2001 No. 2001-CC-2726.
IN RE: Jay J. SZUBA. October 5, 2001 No. 2001-B-1877.
STATE v. TRAHAN October 5, 2001 No. 99-K-3470.
IN RE: Richard E. HOLLEY. October 5, 2001 No. 2001-B-1876.

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