text:
[324 U.S. 113, 114] Mr. L. W. Post, of Washington, D.C., for petitioner.
Mr. Edgar J. Bernheimer, of New York City, for respondent.
This is a companion case to Fidelity-Philadelphia Trust Co. v. Rothensies, 324 U.S. 108 , 65 S.Ct. 508. It too presents a question as to the proper valuation of the corpus of an inter vivos trust under Section 302(c) of the Revenue Act of 1926, 44 Stat. 9, 70, 26 U.S.C.A. Int.Rev. Acts, page 227.
1. The trust was to continue for the joint lives of two nieces and the life of the survivor of them unless terminated earlier under 4, infra.
2. The income was to be paid to the decedent for his life unless the trust terminated before his death.
3. If the decedent died prior to the termination of the trust leaving issue, the trust property was to be held in trust for the children or their issue, subject to decedent's right to reduce or cancel the amounts of the gifts by will or written instrument. Provisions were also made for a [324 U.S. 113, 115] $150,000 trust for the widow which is not in issue in this case.
4. During the continuance of the trusts the income was to be paid to the beneficiary named and upon the death of the beneficiary during the continuance of the trust the corpus was to be paid to the beneficiary's issue surviving, but if there be none, to the issue of the decedent surviving; if none, then to decednet's brother or sister or their issue.
5. Upon termination of the trust before the death of the decedent the corpus was to be paid over to decedent.
6. Upon termination of the trust after the death of the decedent but during the existence of any trust the corpus was to be paid to the life beneficiary.
The decedent at no time had any issue. At his death in 1937 at the age of 52, he was survived by the two nieces whose lives were to measure the maximum life of the trust. These nieces were then aged 18 and 25 respectively. He was also survived by his widow, a sister and issue of a deceased brother.
The Tax Court held that the entire amount of $157,452.82 was includable in the gross estate for purposes of the estate tax. 2 T.C. 21. But the court below reversed and remanded the case to the Tax Court with directions to include in the gross estate only $24,930.76-the value at the time of decedent's death of a remainder in the sum of $157,452.82 payable at all events upon the death of the survivor of two females, aged 18 and 25 respectively. 2 Cir., 144 F.2d 62.
The error of the court below is self-evident from our discussion in the Fidelity-Philadelphia Trust Co. case. The trust here was limited in duration to the lives of the decedent's two nieces. But if both nieces died before the decedent, the corpus would have been paid to the decedent rather than to the beneficiaries named in the trust instrument (in this instance the decedent's sister and the [324 U.S. 113, 116] issue of his deceased brother). Thus until decedent's death it was uncertain whether any of the corpus would pass to the beneficiaries or whether it would revert to the decedent. Decedent retaining a string attached to all the property until death severed it, the entire corpus was swept into the gross estate and was taxable accordingly.
There is no basis evident for deducting the value of the corpus for the period of the life expectancies of the two measuring lives, as was done by the court below. The estate tax is not based on the value of the reversionary interest of the decedent at the time of his death but on the value at the time of his death of the property to which that reversionary interest relates. It makes no difference how vested may be the remainder interests in the corpus or how remote or uncertain may be the decedent's reversionary interest. If the corpus does not shed the possibility of reversion until at or after the decedent's death, the value of the entire corpus on the date of death is taxable.
If the trust gave a life estate to the decedent and the remainder to his children, section 302(c) of the 1926 Act would not require the payment of a tax under the rule of May v. Heiner, 281 U.S. 238 , 50 S.Ct. 286, 67 A.L.R. 1244; Burnet v. Northern Trust Co., 283 U.S. 782 , 51 S. Ct. 342; McCormick v. Burnet, 283 U.S. 784 , 51 S.Ct. 343, and Hassett v. Welch, 303 U.S. 303 , 58 S.Ct. 559. The theory of May v. Heiner was that under those circumstances no interest in the property passed from the grantor to the remainderman on the grantor's death, since the title of the remainderman had been definitely fixed by the trust deed. We need not determine whether the rule of May v. Heiner should survive Helvering v. Hallock, 309 U.S. 106 , 60 S. Ct. 444, 125 A.L.R. 1368. See Paul, Federal Estate & Gift Taxation (1942) 7.15. For [324 U.S. 113, 117] in this case the grantor retained the right to reduce or cancel by will or written instrument the interests of the children; and the corpus would have been returned to the grantor if he survived his nieces. Hence it seems plain that the gifts over would take effect in possession or enjoyment only at or after the death of the grantor.


TENNESSEE Code Annotated § 66-11-203 mandates that a Prime/General Contractor must serve by registered mail a Contractor’s Notice To Owner to the prior to the commencement of the improvement of a property. It is also recommended that you send a copy of the Contractor’s Notice To Owner to the other legal parties on a project (Customer, Lender, Owner’s Agent).
Issue an Unconditional Waiver And Release Upon Final Payment to the Owner and any other legal parties requesting a copy after receiving full and final payment for labor or materials provided for a project. You forfeit your lien rights in the event you are not paid – issue only after payment clears the bank.
Issue an Unconditional Waiver And Release Upon Progress Payment to the Owner and any other legal parties requesting a copy after receiving partial payment for labor or materials provided for a project through a certain date. You forfeit your lien rights in the event you are not paid – issue only after payment clears the bank.
TENNESSEE Code Annotated § 66-11-145 mandates that a Notice Of Nonpayment must be served by the Subcontractor to the Owner ninety (90) days after the last day of the month where labor or materials were provided for the improvement of a project. It is also recommended that you send a copy of the Notice Of Nonpayment to the other legal parties on a project (Customer, Prime/General Contractor, Lender).
TENNESSEE Code Annotated § 66-11-117 mandates that a Notice Of Lien And Sworn Statement – Prime Contractor can be recorded at any time up to ninety (90) days after the completion of providing labor or materials or the completion of the entire project. It is recorded at the Register’s office in the county where a project you provided construction related labor, services, equipment or materials is located. A recorded copy of a Notice Of Lien And Sworn Statement must be sent to the Owner of the improved property, with copies being sent also to the other legal parties (Customer, Lender). A Prime Contractor has one year to foreclose after recording the Notice Of Lien And Sworn Statement.
TENNESSEE Code Annotated § 66-11-117 mandates that a Notice Of Lien And Sworn Statement – Subcontractor can be recorded at any time up to ninety (90) days after the completion of providing labor or materials or the completion of the entire project. It is recorded at the Register’s office in the county where a project you provided construction related labor, services, equipment or materials is located. A recorded copy of a Notice Of Lien And Sworn Statement must be sent to the Owner of the improved property, with copies being sent also to the other legal parties (General Contractor, Lender, Customer). A subcontractor has ninety (90) days after filing A Notice Of Lien And Sworn Statement to foreclose on the property after recording the Notice Of Lien And Sworn Statement.
TENNESSEE Code Annotated §12-4-205 mandates that Subcontractors must serve by Certified Mail or personal delivery a Notice Of Claim On Bond (Public Project) to the Public Entity (City, County, State, Public Authority) and the Prime Contractor within ninety (90) days after the completion of providing labor or materials or the completion of the entire project.
TENNESSEE Code Annotated § 66-11-143 mandates that an Owner or Owner’s representative (Agent, General\Prime Contractor) should record a Notice of Completion at the completion of a project with the Register of Deeds in the county in which the improvement is located. Prime Contractors and Subcontractors then have ten (10) days (residential) or thirty (30) days (commercial) to record a Notice Of Lien And Sworn Statement. If a Notice Of Completion is not recorded, a Notice Of Lien And Sworn Statement can be recorded at any time up to ninety (90) days after the completion of providing labor or materials or the completion of the entire project.


§110.2. English Language Arts and Reading, Kindergarten, Adopted 2017.
§110.3. English Language Arts and Reading, Grade 1, Adopted 2017.
§110.4. English Language Arts and Reading, Grade 2, Adopted 2017.
§110.5. English Language Arts and Reading, Grade 3, Adopted 2017.
§110.6. English Language Arts and Reading, Grade 4, Adopted 2017.
§110.7. English Language Arts and Reading, Grade 5, Adopted 2017.
�110.10. Implementation of Texas Essential Knowledge and Skills for English Language Arts and Reading, Elementary, Beginning with School Year 2009-2010.
�110.11. English Language Arts and Reading, Kindergarten, Beginning with School Year 2009-2010.
�110.12. English Language Arts and Reading, Grade 1, Beginning with School Year 2009-2010.
�110.13. English Language Arts and Reading, Grade 2, Beginning with School Year 2009-2010.
�110.14. English Language Arts and Reading, Grade 3, Beginning with School Year 2009-2010.
�110.15. English Language Arts and Reading, Grade 4, Beginning with School Year 2009-2010.
�110.16. English Language Arts and Reading, Grade 5, Beginning with School Year 2009-2010.
�110.17. Implementation of Texas Essential Knowledge and Skills for English Language Arts and Reading, Middle School, Beginning with School Year 2009-2010.
�110.18. English Language Arts and Reading, Grade 6, Beginning with School Year 2009-2010.
�110.19. English Language Arts and Reading, Grade 7, Beginning with School Year 2009-2010.
�110.20. English Language Arts and Reading, Grade 8, Beginning with School Year 2009-2010.
§110.21. Implementation of Texas Essential Knowledge and Skills for English Language Arts and Reading, Middle School, Adopted 2017.
§110.22. English Language Arts and Reading, Grade 6, Adopted 2017.
§110.23. English Language Arts and Reading, Grade 7, Adopted 2017.
§110.24. English Language Arts and Reading, Grade 8, Adopted 2017.
�110.25. English Language Arts and Reading, Reading (Elective Credit).
�110.26. English Language Arts and Reading, Speech (Elective Credit).
�110.30. Implementation of Texas Essential Knowledge and Skills for English Language Arts and Reading, High School, Beginning with School Year 2009-2010.
�110.31. English Language Arts and Reading, English I (One Credit), Beginning with School Year 2009-2010.
�110.32. English Language Arts and Reading, English II (One Credit), Beginning with School Year 2009-2010.
�110.33. English Language Arts and Reading, English III (One Credit), Beginning with School Year 2009-2010.
�110.34. English Language Arts and Reading, English IV (One Credit), Beginning with School Year 2009-2010.
§110.35. Implementation of Texas Essential Knowledge and Skills for English Language Arts and Reading, High School, Adopted 2017.
§110.36. English Language Arts and Reading, English I (One Credit), Adopted 2017.
§110.37. English Language Arts and Reading, English II (One Credit), Adopted 2017.
§110.38. English Language Arts and Reading, English III (One Credit), Adopted 2017.
§110.39. English Language Arts and Reading, English IV (One Credit), Adopted 2017.
�110.46. Independent Study in English (One-Half to One Credit).
�110.47. Reading I, II, III (One-Half to Three Credits).
�110.48. College Readiness and Study Skills (One-Half Credit).
�110.49. Visual Media Analysis and Production (One-Half Credit).
�110.50. Contemporary Media (One Credit).
�110.51. Literary Genres (One-Half to One Credit).
�110.52. Creative Writing (One-Half to One Credit).
�110.53. Research and Technical Writing (One-Half to One Credit).
�110.54. Practical Writing Skills (One-Half to One Credit).
�110.55. Humanities (One-Half to Two Credits).
�110.57. Public Speaking I, II, III (One-Half to One Credit).
�110.58. Communication Applications (One-Half Credit).
�110.59. Oral Interpretation I, II, III (One to Three Credits).
�110.60. Debate I, II, III (One to Three Credits).
�110.61. Independent Study in Speech (One-Half to One Credit).
�110.62. Journalism (One-Half to One Credit).
�110.63. Independent Study in Journalism (One-Half to One Credit).
�110.64. Advanced Broadcast Journalism I, II, III (One-Half Credit to One Credit).
�110.65. Photojournalism (One-Half to One Credit).
�110.66. Advanced Journalism: Yearbook I, II, III/Newspaper I, II, III/Literary Magazine (One-Half to One Credit).
�110.81. Implementation of Texas Essential Knowledge and Skills for English Language Arts and Reading, Other High School English Language Arts and Reading Courses.
�110.83. Advanced Placement (AP) English Language and Composition (One Credit).
�110.84. Advanced Placement (AP) English Literature and Composition (One Credit).
�110.85. Advanced Placement (AP) International English Language (One Credit).
�110.86. International Baccalaureate (IB) Language Studies A: Language and Literature Standard Level (Two Credits).
�110.87. International Baccalaureate (IB) Language Studies A: Language and Literature Higher Level (Two Credits).
§110.88. Concurrent Enrollment in College Courses.
§110.89. International Baccalaureate (IB) Language Studies A: Literature Standard Level (Two Credits).
§110.90. International Baccalaureate (IB) Language Studies A: Literature Higher Level (Two Credits).
§110.91. International Baccalaureate (IB) Literature and Performance Standard Level (Two Credits).
§110.92. International Baccalaureate (IB) Philosophy Standard Level (Two Credits).
�110.93. International Baccalaureate (IB) Philosophy Higher Level (Two Credits).


Protecting the health and safety of residents does not allow a city to discriminate against interstate commerce if there are reasonable non-discriminatory alternatives that also can protect legitimate local interests.
Madison, Wisconsin prohibited the sale of pasteurized milk that had not been processed and bottled at an approved plant within five miles of the city. Dean Milk Co., which was based in Illinois, sold milk products in Illinois and Wisconsin. It maintained pasteurization plants that were 65 and 85 miles from Madison. The city did not allow it to sell its milk products as pasteurized there, however, for the sole reason that it had failed to comply with the geographical requirement in the ordinance.
The ordinance openly undermines interstate commerce because it is an effort to protect a local industry from competitors outside the area. There are plenty of adequate alternatives that the city reasonably could use to safeguard the health and safety of its residents. For example, it could send inspectors to observe the processes at the distant plants, or it could lawfully prevent milk from being sold in the city that did not meet the standards enforced at its plants. The city could base such a rule on the local ratings provided by the U.S. Public Health Service. Cities and states are not allowed to economically isolate themselves from the rest of the nation.
Decided under the dormant Commerce Clause doctrine, this decision examined whether the city had a less restrictive alternative available. Importantly, the law also discriminated against other milk from Wisconsin, so its tightly exclusionary effect placed an especially substantial burden on interstate commerce, and the limited numbers of actors that were benefited by it did not justify that burden.
Held: The ordinance unjustifiably discriminates against interstate commerce, in violation of the Commerce Clause of the Federal Constitution. Pp. 340 U. S. 350-357.
(a) Even in the exercise of its unquestioned power to protect the health and safety of its people, a municipality may not erect an economic barrier protecting a major local industry against competition from without the state if reasonable nondiscriminatory alternatives, adequate to conserve legitimate local interests, are available. P. 340 U. S. 354.
(b) In view of the reasonable and adequate alternatives which are available for the protection of the health and safety of the people of the municipality, the discrimination against interstate commerce inherent in the ordinance violates the Commerce Clause. Pp. 340 U. S. 354-356.
Held: as to the issue thus presented, the cause is remanded for further proceedings not inconsistent with the principles announced in the opinion of this Court. Pp. 340 U. S. 350-351, 340 U. S. 356-357.
257 Wis. 308, 43 N.W.2d 480, reversed.
over appellant's objections to its validity under the Federal Constitution. 257 Wis. 308, 43 N.W.2d 480. On appeal to this Court, reversed and remanded, p. 340 U. S. 357.
Appellant is an Illinois corporation engaged in distributing milk and milk products in Illinois and Wisconsin. It contended below, as it does here, that both the five-mile limit on pasteurization plants and the twenty-five-mile limit on sources of milk violate the Commerce Clause and the Fourteenth Amendment to the Federal Constitution. The Supreme Court of Wisconsin upheld the five-mile limit on pasteurization. [Footnote 3] As to the twenty-five-mile limitation the court ordered the complaint dismissed for want of a justiciable controversy. 257 Wis. 308, 43 N.W.2d 480 (1950). This appeal, contesting both rulings, invokes the jurisdiction of this Court under 28 U.S.C. § 1257(2).
raw milk production in excess of 600,000,000 pounds annually and more than ten times the requirements of Madison. Aside from the milk supplied to Madison, fluid milk produced in the county moves in large quantities to Chicago and more distant consuming areas, and the remainder is used in making cheese, butter, and other products. At the time of trial, the Madison milkshed was not of "Grade A" quality by the standards recommended by the United States Public Health Service, and no milk labeled "Grade A" was distributed in Madison.
The area defined by the ordinance with respect to milk sources encompasses practically all of Dane County, and includes some 500 farms which supply milk for Madison. Within the five-mile area for pasteurization are plants of five processors, only three of which are engaged in the general wholesale and retail trade in Madison. Inspection of these farms and plants is scheduled once every thirty days, and is performed by two municipal inspectors, one of whom is full-time. The courts below found that the ordinance in question promotes convenient, economical, and efficient plant inspection.
It is conceded that the milk which appellant seeks to sell in Madison is supplied from farms and processed in plants licensed and inspected by public health authorities of Chicago, and is labeled "Grade A" under the Chicago ordinance, which adopts the rating standards recommended by the United States Public Health Service.
Both the Chicago and Madison ordinances, though not the sections of the latter here in issue, are largely patterned after the Model Milk Ordinance of the Public Health Service. However, Madison contends, and we assume, that, in some particulars, its ordinance is more rigorous than that of Chicago.
Upon these facts, we find it necessary to determine only the issue raised under the Commerce Clause, for we agree with appellant that the ordinance imposes an undue burden on interstate commerce.
This is not an instance in which an enactment falls because of federal legislation which, as a proper exercise of paramount national power over commerce, excludes measures which might otherwise be within the police power of the states. See Currin v. Wallace, 306 U. S. 1, 306 U. S. 12-13 (1939). There is no pertinent national regulation by the Congress, and statutes enacted for the District of Columbia indicate that Congress has recognized the appropriateness of local regulation of the sale of fluid milk. D.C.Code, 1940, §§ 33-301 et seq. It is not contended, however, that Congress has authorized the regulation before us.
"upon a consideration of all the relevant facts and circumstances, it appears that the matter is one which may appropriately be regulated in the interest of the safety, health and wellbeing of local communities. . . ."
may be affected. Milk Control Board v. Eisenberg Farm Products, 306 U. S. 346 (1939); see Baldwin v. G.A.F. Seelig, Inc., 294 U. S. 511, 294 U. S. 524 (1935).
But this regulation, like the provision invalidated in Baldwin v. G.A.F. Seelig, Inc., supra, in practical effect excludes from distribution in Madison wholesome milk produced and pasteurized in Illinois. "The importer . . . may keep his milk or drink it, but sell it he may not." Id. 294 U.S. at 294 U. S. 521. In thus erecting an economic barrier protecting a major local industry against competition from without the State, Madison plainly discriminates against interstate commerce. [Footnote 4] This it cannot do, even in the exercise of its unquestioned power to protect the health and safety of its people, if reasonable nondiscriminatory alternatives, adequate to conserve legitimate local interests, are available. Cf. Baldwin v. G.A.F. Seelig, Inc., supra, at 294 U. S. 524; Minnesota v. Barber, 136 U. S. 313, 136 U. S. 328 (1890). A different view, that the ordinance is valid simply because it professes to be a health measure, would mean that the Commerce Clause of itself imposes no limitations on state action other than those laid down by the Due Process Clause, save for the rare instance where a state artlessly discloses an avowed purpose to discriminate against interstate goods. Cf. H. P. Hood & Sons v. Du Mond, supra. Our issue, then, is whether the discrimination inherent in the Madison ordinance can be justified in view of the character of the local interests and the available methods of protecting them. Cf. Union Brokerage Co. v. Jensen, 322 U. S. 202, 322 U. S. 211 (1944).
determine the extent of enforcement of sanitary standards in the exporting area by verifying the accuracy of safety ratings of specific plants or of the milkshed in the distant jurisdiction through the United States Public Health Service, which routinely and on request spot checks the local ratings. The Commissioner testified that Madison consumers "would be safeguarded adequately" under either proposal, and that he had expressed no preference. The milk sanitarian of the Wisconsin State Board of Health testified that the State Health Department recommends the adoption of a provision based on the Model Ordinance. Both officials agreed that a local health officer would be justified in relying upon the evaluation by the Public Health Service of enforcement conditions in remote producing areas.
To permit Madison to adopt a regulation not essential for the protection of local health interests and placing a discriminatory burden on interstate commerce would invite a multiplication of preferential trade areas destructive of the very purpose of the Commerce Clause. Under the circumstances here presented, the regulation must yield to the principle that "one state, in its dealings with another, may not place itself in a position of economic isolation." Baldwin v. G.A.F. Seelig, Inc., supra, at 294 U. S. 527.
For these reasons, we conclude that the judgment below sustaining the five-mile provision as to pasteurization must be reversed.
issue, therefore, we vacate the judgment below and remand for further proceedings not inconsistent with the principles announced in this opinion.
"It shall be unlawful for any person, association or corporation to sell, offer for sale or have in his or its possession with intent to sell or deliver in the City of Madison, any milk, cream or milk products as pasteurized unless the same shall have been pasteurized and bottled in the manner herein provided within a radius of five miles from the central portion of the City of Madison otherwise known as the Capitol Square at a plant housing the machinery, equipment and facilities, all of which shall have been approved by the Department of Public Health."
"It shall be unlawful for any person to bring into or receive into the City of Madison, Wisconsin, or its police jurisdiction, for sale, or to sell, or offer for sale therein, or to have in storage where milk or milk products are sold or served, any milk or milk product as defined in this ordinance from a source not possessing a permit from the Health Commissioner of the City of Madison, Wisconsin."
"Only a person who complies with the requirements of this ordinance shall be entitled to receive and retain such a permit."
"On the filing of an application for a permit with the Health Commissioner, he shall cause the source of supply named therein to be inspected, and shall cause all other necessary inspections and investigations to be made. The Department of Public Health shall not be obligated to inspect and issue permits to farms located beyond twenty-five (25) miles from the central portion of the City of Madison otherwise known as the Capitol Square. . . ."
In upholding § 7.21, note 1 supra, the court relied upon the principles announced by it in Dyer v. City Council of Beloit, 250 Wis. 613, 27 N.W.2d 733 (1947), judgment vacated, 333 U.S. 825 (1948).
It is immaterial that Wisconsin milk from outside the Madison area is subjected to the same proscription as that moving in interstate commerce. Cf. Brimmer v. Rebman, 138 U. S. 78, 138 U. S. 82-83 (1891).
"Milk and milk products from points beyond the limits of routine inspection of the city of ______ may not be sold in the city of ______, or its police jurisdiction, unless produced and/or pasteurized under provisions equivalent to the requirements of this ordinance; provided that the health officer shall satisfy himself that the health officer having jurisdiction over the production and processing is properly enforcing such provisions."
"It is suggested that the health officer approve milk or milk products from distant points without his inspection if they are produced and processed under regulations equivalent to those of this ordinance, and if the milk or milk products have been awarded by the State control agency a rating of 90 percent or more on the basis of the Public Health Service rating method."
inspection possible. While we are not bound by these findings, I do not understand the Court to overturn them. Therefore, the fact that § 7.21, like all health regulations, imposes some burden on trade does not mean that it "discriminates" against interstate commerce.
the power of the people to guard the purity of their daily diet of milk.
One of the Court's proposals is that Madison require milk processors to pay reasonable inspection fees at the milk supply "sources." Experience shows, however, that the fee method gives rise to prolonged litigation over the calculation and collection of the charges. E.g., Sprout v. City of South Bend, 277 U. S. 163; Capitol Greyhound Lines v. Brice, 339 U. S. 542. To throw local milk regulation into such a quagmire of uncertainty jeopardizes the admirable milk inspection systems in force in many municipalities. Moreover, nothing in the record before us indicates that the fee system might not be as costly to Dean as having its milk pasteurized in Madison. Surely the Court is not resolving this question by drawing on its "judicial knowledge" to supply information as to comparative costs, convenience, or effectiveness.
that the provisions are "minimum" standards only. The Model Ordinance does not provide for continuous investigation of all pasteurization plants, as does § 7.21 of the Madison ordinance. Under § 11, moreover, Madison would be required to depend on the Chicago inspection system, since Dean's plants, and the farms supplying them with raw milk, are located in the Chicago milkshed. But there is direct and positive evidence in the record that milk produced under Chicago standards did not meet the Madison requirements.
From what this record shows, and from what it fails to show, I do not think that either of the alternatives suggested by the Court would assure the people of Madison as pure a supply of milk as they receive under their own ordinance. On this record, I would uphold the Madison law. At the very least, however, I would not invalidate it without giving the parties a chance to present evidence and get findings on the ultimate issues the Court thinks crucial -- namely, the relative merits of the Madison ordinance and the alternatives suggested by the Court today.


§ 279-2 Establishment of tax.
§ 279-3 Tax in addition to other taxes or fees.
§ 279-5 Absorption of tax by vendor prohibited.
§ 279-6 Collection of tax.
§ 279-7 Distribution of copies.
§ 279-8 Incorporation of recitals.
§ 279-10 Statement of purpose.
§ 279-11 Exemptions authorized to be implemented by Tax Assessor.
§ 279-12 Exemptions requiring application to the Town Council.
§ 279-13 Additional exemptions when property already subject to exemption.
§ 279-15 Revaluation during exemption period.
§ 279-16 Revision of base assessment during exemption period.
§ 279-17 Effective date; sunset provision.
§ 279-18 Prior actions superseded.
§ 279-19 Refund granted; filing with the Tax Assessor.
§ 279-20 Late filing refund.


NONPRECEDENTIAL DISPOSITION To be cited only in accordance with Fed. R. App. P. 32.1 United States Court of Appeals For the Seventh Circuit Chicago, Illinois 60604 Submitted October 31, 2017* Decided November 7, 2017 Before DIANE P. WOOD, Chief Judge JOEL M. FLAUM, Circuit Judge DIANE S. SYKES, Circuit Judge No. 16 1701 EUGENE WARREN, Plaintiff Appellant, v. OFFICER WOODS, Defendant Appellee. Appeal from the United States District Court for the Central District of Illinois. No. 15 cv 1263 Sue E. Myerscough, Judge. O R D E R Illinois prisoner Eugene Warren appeals the dismissal of his complaint alleging that a correctional officer violated his Eighth Amendment rights by refusing to protect him from another inmate who threw urine at him. The district judge dismissed the case because Warren had not alleged that the officer knew in advance that the inmate would * The defendant was not served in the district court and is not participating in this appeal. (We do not know his first name, so we have used his title instead.) We have agreed to decide this case without oral argument because the brief and record adequately present the facts and legal arguments, and oral argument would not significantly aid the court. See FED. R. APP. P. 34(a)(2)(C). No. 16 1701 Page 2 attack him with urine. Because the judge should have given Warren a chance to amend his complaint to correct this omission, we vacate the judgment. In his complaint Warren alleges that an inmate has been drenching him in urine. He reports an incident from August 2014 when “my neighbor . . . was throwing cups of urine, piss in my cell. I asked to speak to a Lt. (white shirt), C/O Woods told me that I can’t see no Lt!” The judge screened the complaint under 28 U.S.C. § 1915A and considered whether Warren stated an Eighth Amendment claim that Officer Woods was deliberately indifferent to a substantial risk of harm from the urine. See Farmer v. Brennan, 511 U.S. 825 (1994). The judge decided that Warren did not state a claim and dismissed the case because Warren failed to plead that he warned Woods before he was “doused with urine.” The judge added that any amendment would be futile because “the facts of this case do not now, and even if replead, could not give rise to a constitutional claim.” On appeal Warren contends that the judge should have allowed him to proceed on his claim, and we agree. A prisoner states an Eighth Amendment claim by alleging that a prison guard knew about but ignored a substantial risk of serious harm from another inmate. See Billman v. Ind. Dep’t of Corrs., 56 F.3d 785, 788 (7th Cir. 1995); see also Gevas v. McLaughlin, 798 F.3d 475, 480 (7th Cir. 2015). The judge did not question whether getting splashed with someone else’s urine creates a serious risk of harm. Instead the judge observed that Warren did not allege that he notified Officer Woods in advance of the urine attack. But the judge should have given Warren a chance to supply that missing allegation because a sua sponte dismissal without one chance to fix a complaint raises “serious questions about fair access to the courts.” Luevano v. Wal Mart Stores, Inc., 722 F.3d 1014, 1022 (7th Cir. 2013); see also Kolupa v. Roselle Park Dist., 438 F.3d 713, 714 (7th Cir. 2006) (“Any decision declaring ‘this complaint is deficient because it does not allege X’ is a candidate for summary reversal, unless X is on the list in Fed. R. Civ. P. 9(b).”). We recognize that the judge thought that Warren could not possibly patch up his omission, but that is incorrect. Warren’s appellate brief illustrates why. In it Warren offers additional details of his encounters with Officer Woods and the urine throwing inmate in late 2014. These details make plausible his Eighth Amendment claim. He writes that between October and November 2014, he reported to Officer Woods that “my neighbor . . . was making threats to throw urine on me through the bars of my cell.” Woods, however, did nothing to protect Warren, telling him “I don’t care.” Instead Officer Woods ordered Warren to take down a plastic bag that Warren had hung for No. 16 1701 Page 3 “protection from getting assaulted with urine.” Later, as Warren had feared and warned, the inmate threw a cup of urine into Warren’s cell. The cup struck Warren in his face, splashing urine on his head and shirt. This cup throwing continued at least three times before another officer hauled the offending inmate to segregation. We may consider these allegations, though they appear in Warren’s appellate brief and not in his complaint. “A party who appeals from a Rule 12(b)(6) dismissal may elaborate on her allegations so long as the elaborations are consistent with the pleading.” See Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 555 (7th Cir. 2012). The appellate brief is consistent with the complaint because it elaborates on the offending inmate’s campaign to assault Warren with urine in late 2014. Although the first attack mentioned in the complaint occurred in August, the attack of three thrown cups described on appeal occurred soon after—around October—after Warren had warned Officer Woods of another impending attack. So Warren may proceed on a claim against Woods regarding the latter incident. We offer two observations about this case on remand. First, Warren says in his appellate brief that he intends to seek compensatory damages, but those are unavailable unless he proves that he suffered a physical injury. See 42 U.S.C. § 1997e(e). He has alleged that he suffered only “mentally and emotionally,” and in his appellate brief, he adds that he experienced “emotional and mental stress, anguish, [and] shock.” These injuries will not permit him to recover compensatory damages. But if the trier of fact believes his assertions, he may be awarded nominal damages, and if the trier finds that Woods’s conduct was willful and wanton, Warren may recover punitive damages. See Gray v. Hardy, 826 F.3d 1000, 1007 (7th Cir. 2016); Smith v. Peters, 631 F.3d 418, 421 (7th Cir. 2011). Second, after Warren files an amended complaint, the district court can examine whether getting splashed with another inmate’s urine constitutes serious harm. See Rhodes v. Chapman, 452 U.S. 337, 348 (1981). The judgment is VACATED, and the case is REMANDED. We further order that the strike that the district court assessed against Warren be removed.


text:
50 Children’s Legal Rights Journal [Vol. 38: 1 2018] show the reader how the current circuit split has caused problems at the IEP implementation stage. Part II of this paper will give an overview of the types of disabilities that are covered under the IDEA as well as the legislative and judicial history of the IDEA. Part III of this paper will discuss the circuit split and the recent Supreme Court decision in Endrew F. v. Douglas County School District. 6 Then, reasons why solving the circuit split through the judicial process does not solve the application problem will be addressed in Part IV. Finally, Part V will discuss possible solutions for solving this problem, and Part VI will conclude.
In San Antonio v. Rodriguez, the United States Supreme Court held that there is no Constitutional right to education. 7 While Rodriguez was a case about the state’s use of property tax to fund public schools, it is one of the seminal cases cited as the reason there is no fundamental right to a public education. Interestingly, just a year prior to Rodriguez, the Court recognized in Wisconsin v. Yoder that states have a legitimate interest in the education of their children. 8 Thus, any right to education would come from legislatures, and the responsibility of educating our youth rested in the states’ hands. 9 Education tailored to the individual needs of the child was traditionally only for the upper echelons of society. 10 It was not until the Civil Rights movement of the 1960s that Americans started to push for education for all students. 11 In Brown v. Board of Education, Chief Justice Warren said, "[I]t is doubtful that any child may reasonably be expected to succeed in life if he is denied the opportunity of an education." 12 Finally, we had a nation that cared about the education of our society, at least in the abstract.
6 See generally Endrew F., 137 S. Ct. 988.
7 San Antonio Indep. Sch. Dist. v. Rodriguez, 411 U.S. 1, 35 (1973) (holding that “[p]ublic education is not a ‘right’ granted to individuals by the Constitution”).
8 Margaret Condit, Remember the IDEA: A Call for Courts to Apply a Piecemeal Approach to Transition Litigation, 38 T. JEFFERSON L. REV. 6, 13 (2016) (citing Wisconsin v. Yoder, 406 U.S. 205, 213 (1972); see also Epperson v. Arkansas, 393 U.S. 97, 104 (1968). While invalidating an anti-evolution teaching statute on First Amendment grounds, the Court notes that “by and large, public education in our Nation is committed to the control of state and local authorities.” Id.
9 Condit, supra note 8, at 13; see generally U.S. Const. amend. X (granting states sovereign powers in certain areas). 10 See Dep’t of Educ., From There to Here: The Road to Reform of American High Schools at 1, https://www2.ed.gov/about/offices/list/ovae/pi/hsinit/papers/history.pdf (last visited Mar. 8, 2017) (“Until the 20th century, secondary education was a small-scale experience, largely reserved for the privileged, rather than the nearly universal democratic institution of today”); see also generally American Public Education: An Origin Story, EDUC. NEWS (Apr. 16, 2013), http://www.educationnews.org/education-policy-and-politics/american-public-education-an-origin-story.
11 Condit, supra note 8, at 14–15.
12 Brown v. Bd. of Educ., 347 U.S. 483, 493 (1954).
13 Idaho State Dep’t of Educ., Identification of Children with Disabilities (2017), http://www.sde.idaho.gov/sped/public-reporting/files/state-determination/StateStateid-datadisplay-2017bState-Data- Display.pdf.

matches: v. v. v. v. v. v. v. v.


Marcus T. Baumann, pro se.
John H. Ryley, Phoenix, Ariz., for appellees.
Before WRIGHT, POOLE, and WIGGINS, Circuit Judges.
On this appeal from the dismissal of a complaint seeking damages and equitable relief for denial of custodial release on a work furlough program, we are confronted initially with a jurisdictional question. Following oral argument, the parties were required to file additional memoranda on the question whether the district court made final disposition of all claims.
Although a litigant asserts that an order is final for purposes of appellate review, this court must determine sua sponte whether its jurisdiction is properly invoked. Hoohuli v. Ariyoshi, 741 F.2d 1169, 1171 n. 1 (9th Cir. 1984). The record reflects the district court's reasoning that summary judgment could be granted due to Baumann's failure to discharge his burden in opposing defendants' summary judgment motion.
On the merits, the district court believed that Harlow v. Fitzgerald, 457 U.S. 800, 102 S. Ct. 2727, 73 L. Ed. 2d 396 (1982), mandated summary disposition. Moreover, we are persuaded by representations made by the appellant and by counsel for the appellees that the district court intended to dispose of the entire case on immunity grounds. We have jurisdiction to reach the merits of this appeal and we affirm the judgment.
Baumann was convicted in Arizona state court of 25 counts relating to the sale of unregistered securities, in connection with the sale of fraudulent mortgages to unsuspecting purchasers. He was convicted also in federal court of four counts of mail fraud in connection with a land fraud scheme in Arizona. He was imprisoned in May 1978. He was released from federal custody in September 1981 and transferred to state prison.
In December 1981, despite approval by several strata of decision-makers, Baumann was denied a work release. In June 1982, a second work release hearing was cancelled. In July, he was denied a home furlough. He filed suit challenging the denial of his applications for furloughs and seeking declaratory and injunctive relief.
On August 4, 1982, Judge Bilby found that Baumann had a protectible liberty interest in work release and ordered a work release hearing to be held within 30 days. About August 18, Baumann was granted parole and on September 8 he was released. His suit for declaratory and injunctive relief was dismissed as moot.
Baumann then filed a civil rights suit under 42 U.S.C. § 1983 seeking equitable relief and damages for violation of his constitutional rights. The district court granted summary judgment in favor of the defendants.
Our task in reviewing a summary judgment is "identical to that of the trial court." M/V American Queen v. San Diego Marine Construction Corp., 708 F.2d 1483, 1487 (9th Cir. 1983). Viewing the evidence in the light most favorable to Baumann, we must determine under a de novo standard whether there are no genuine issues of material fact and whether the defendants are entitled to judgment as a matter of law. Id.; Fruehauf Corp. v. Royal Exchange Assurance of America, Inc., 704 F.2d 1168, 1171 (9th Cir. 1983).
Baumann contends that the denial of his work and home furloughs constituted a deprivation of liberty without due process, in violation of the Fourteenth Amendment.
The threshold question in due process analysis is whether a constitutionally protected interest is implicated. Meachum v. Fano, 427 U.S. 215, 223-24, 96 S. Ct. 2532, 2537-38, 49 L. Ed. 2d 451 (1976). Not every "grievous loss" suffered at the hands of the state will require the procedural protection of constitutional due process. Id. at 224, 96 S. Ct. at 2538. A prisoner has no independent constitutional right to conditional release before the expiration of a valid sentence. Greenholtz v. Inmates of the Nebraska Penal and Correctional Complex, 442 U.S. 1, 7, 99 S. Ct. 2100, 2103, 60 L. Ed. 2d 668 (1979).
A state may create a constitutionally protected liberty interest by establishing regulatory measures that impose substantive limitations on the exercise of official discretion. Hewitt v. Helms, 459 U.S. 460, 470-71, 103 S. Ct. 864, 870-71, 74 L. Ed. 2d 675 (1983). To establish a protected interest, a prisoner must show " 'that particularized standards or criteria guide the State's decisionmakers.' " Olim v. Wakinekona, 461 U.S. 238, 249, 103 S. Ct. 1741, 1747, 75 L. Ed. 2d 813 (1983) (quoting Connecticut Board of Pardons v. Dumschat, 452 U.S. 458, 467, 101 S. Ct. 2460, 2466, 69 L. Ed. 2d 158 (1981) (Brennan, J., concurring)). There must be "objective and defined criteria" which the decision-maker is required to respect. Id.
The statistical probability that a particular treatment will be applied does not generate constitutional protection. Connecticut Board of Pardons v. Dumschat, supra, 452 U.S. at 465, 101 S. Ct. at 2464. Unspoken understandings are unprotected. Jago v. Van Curen, 454 U.S. 14, 20, 102 S. Ct. 31, 35, 70 L. Ed. 2d 13 (1981).
Published prison regulations may create a protected interest. Olim v. Wakinekona, supra, 461 U.S. at 249-50, 103 S. Ct. at 1747-48. It is unclear whether unpublished administrative policy statements may do so. The Supreme Court has not considered that issue, but circuit courts generally have held that explicit written pronouncements may create a protected interest. See Lucas v. Hodges, 730 F.2d 1493, 1501-04 (D.C. Cir.), vacated as moot, 738 F.2d 1392 (D.C. Cir. 1984) (per curiam) (reviewing cases). Contra id. at 1507-08 (Starr, J., dissenting in part).
An issue left open by the Supreme Court in Greenholtz v. Inmates of the Nebraska Penal and Correctional Complex, supra, is whether state standards governing prison release must eliminate all discretion in decision-making to create a protected liberty interest. In Greenholtz, the Court characterized the conditional release decision as a subtle, predictive judgment, based on subjective appraisal of many elusive considerations. Id. 442 U.S. at 8-10, 99 S. Ct. at 2104-2105. The possibility of parole creates only a hope, not protected by due process. Id. at 11, 99 S. Ct. at 2105. However, the Court found that Nebraska created a protected interest in parole by mandating that parole "shall" be granted, "unless" one of four specially designated exceptions applied. Id. at 11-12, 99 S. Ct. at 2105-2106. The Court emphasized the uniqueness of the Nebraska parole statute and cautioned that whether any other state statute created a liberty interest would have to be decided on a case-by-case basis. Id. at 12, 99 S. Ct. at 2106.
We are persuaded that the unique "shall/unless" formula of the Nebraska statute was decisive in Greenholtz. Boothe v. Hammock, 605 F.2d 661, 664 (2d Cir. 1979). No protected entitlement to release exists unless a state scheme includes that formula. Id. Guidelines used to structure the exercise of discretion in making release decisions do not create a protected interest. Id. Accordingly, this circuit joins the majority of other circuits that endorse a restrictive interpretation of Greenholtz. E.g., Slocum v. Georgia State Board of Pardons & Paroles, 678 F.2d 940, 941 (11th Cir.), cert. denied, 459 U.S. 1043, 103 S. Ct. 462, 74 L. Ed. 2d 612 (1982); Candelaria v. Griffin, 641 F.2d 868, 869-70 (10th Cir. 1981) (citing cases); Williams v. Briscoe, 641 F.2d 274, 277 (5th Cir.), cert. denied, 454 U.S. 854, 102 S. Ct. 299, 70 L. Ed. 2d 147 (1981). See generally Brandon v. District of Columbia Board of Parole, 734 F.2d 56, 61-62 (D.C. Cir. 1984), cert. denied, --- U.S. ----, 105 S. Ct. 811, 83 L. Ed. 2d 804 (1985) (noting circuit conflict, declining to choose sides).
Baumann asserts that Winsett v. McGinnes, 617 F.2d 996 (3d Cir. 1980) (en banc), cert. denied, 449 U.S. 1093, 101 S. Ct. 891, 66 L. Ed. 2d 822 (1981), controls the disposition of this case. There, the Third Circuit held that guidelines setting out the goals of prison programs established perimeters limiting the exercise of officials' discretion. Id. at 1006-07. The court reasoned that a liberty interest arises when a prisoner meets the work release eligibility requirements and release would be consistent with established work release policy. Id. at 1007. We reject the Third Circuit's reasoning in Winsett.
Published regulations establish the broad objectives of all furlough programs of the Arizona Department of Corrections (ADOC).1 The eligibility standards for application for a furlough also are provided by published regulation.2 Those regulations do not include substantive criteria specifically limiting the discretion of officials in making decisions concerning a particular application.
The ADOC Internal Management Policy and Procedure Manual includes Policy No. 432, which provides a specific procedure for handling work furlough applications. By statute, any Arizona rule not filed with the Secretary of State is voiD. Ariz. Rev.Stat.Ann. Sec. 41-1004. However, the state cannot arbitrarily deny privileges based on the lack of regulations if it grants privileges under unfiled regulations to other prisoners. Brown v. State, 117 Ariz. 476, 479, 573 P.2d 876 (1978). If Policy No. 432 creates a protected interest, its unfiled status will not bar Baumann's claims.
Policy Statement No. 432 provides specifically that the grant of a furlough is "at the sole discretion of the Director in accordance with [the] procedures." The statement's procedural structure alone does not establish a constitutionally protected interest. Hewitt v. Helms, supra, 459 U.S. at 471, 103 S. Ct. at 871.
Arizona has established no mandatory standard comparable to the "shall/unless" release standard in Greenholtz. On the contrary, the standards are basic and general. The clear intent is to leave the work release decision to official discretion. The Supreme Court's general policy is one of noninterference with prison officials' release decisions. See Dumschat, 452 U.S. at 464, 101 S. Ct. at 2464. We hold that Baumann has no constitutionally protected liberty interest in custodial release on work or home furlough.
In Harlow v. Fitzgerald, 457 U.S. at 818, 102 S. Ct. at 2738, the Supreme Court held that "government officials performing discretionary functions generally are shielded from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known."
The district court here found the state officials immune because there was no clearly established constitutional right to work release at the time Baumann's was denied. Because the recognition of a constitutional right would occur only under the Third Circuit's minority position in Winsett, the existence of that right could not have been clearly established. Baumann's due process claim was properly dismissed.
Baumann contends that prison officials denied his furlough in violation of his rights under the equal protection clause because he was a member of the class of "notorious white collar criminals." U.S. Const. amend. XIV. The officials deny that a policy against early release of white collar criminals was in effect at the time Baumann applied for furloughs.
Assuming that policy did exist at the time, it would violate the equal protection clause only if it did not have a rational relationship to a legitimate state interest. See Dandridge v. Williams, 397 U.S. 471, 485-86, 90 S. Ct. 1153, 1161-62, 25 L. Ed. 2d 491 (1970); Brandon, 734 F.2d at 60. States are not prohibited from imposing special treatment on a class of offenses. Skinner v. Oklahoma, 316 U.S. 535, 540, 62 S. Ct. 1110, 1112, 86 L. Ed. 1655 (1942); United States ex rel. Scott v. Illinois Parole & Pardon Board, 669 F.2d 1185, 1191 (7th Cir.), cert. denied, 459 U.S. 1048, 103 S. Ct. 468, 74 L. Ed. 2d 617 (1982).
Legitimate state interests involved in early prison release decisions include general and special deterrence and promoting public respect for the administration of justice. The type of offense involved is rationally related to the need for deterrence. Block v. Potter, 631 F.2d 233, 238 (3d Cir. 1980). The type of offense is related also to public perception of the fairness of the administration of justice. See Pugliese v. Nelson, 617 F.2d 916, 918-19 (2d Cir. 1980).
The Eighth Amendment, applicable to the states through the Fourteenth, establishes limits on the conditions that states may impose on prisoners. Rhodes v. Chapman, 452 U.S. 337, 344-45, 101 S. Ct. 2392, 2397-98, 69 L. Ed. 2d 59 (1981). The "cruel and unusual" standard is flexible and dynamic, based on "the evolving standards of decency that mark the progress of a maturing society." Id. at 345-46, 101 S. Ct. at 2398-99 (quoting Trop v. Dulles, 356 U.S. 86, 101, 78 S. Ct. 590, 598, 2 L. Ed. 2d 630 (1958) (plurality opinion)); Wright v. Rushen, 642 F.2d 1129, 1133 (9th Cir. 1981). Prison conditions must not be "grossly disproportionate to the severity of the crime" nor involve the "wanton and unnecessary infliction of pain." Rhodes, 452 U.S. at 347, 101 S. Ct. at 2399.
General limitation of jobs and educational opportunities is not considered punishment. Id. at 348, 101 S. Ct. at 2400; Hoptowit v. Ray, 682 F.2d 1237, 1254-55 (9th Cir. 1982). Sensory deprivation or excessive limitation of activity may constitute an Eighth Amendment violation. Hoptowit, 682 F.2d at 1257-58.
Baumann argues that the emotional trauma and financial injury caused by the denial of anticipated work release, along with the additional nine months of incarceration before his parole, was "torture" forbidden by the Eighth Amendment. His disappointment does not offend the standards of decency in modern society.
Baumann challenges the prison officials' cancellation of work furlough hearings and their failure to provide a hearing after ordered to do so by Judge Bilby. These claims are meritless. Within the 30-day period prescribed by Judge Bilby, Baumann was granted parole and his claim for work release became moot.
Baumann contends that a conspiracy to violate his civil rights existed among prison officials and the Arizona Attorney General. Since no violation of his civil rights occurred, the conspiracy claim is meritless.
B. Compliance with the eligibility and request requirements does not guarantee approval of a request for furlough. Exceptions to the criteria set out in Paragraph A must be directed to the Superintendent of the Institution. The Superintendent will approve or disapprove the recommended exception to the criteria.


Argued: April 2 and 3, 1957.
Mr. C. Edward Rhetts, Washington, D.C., for the petitioner.
Mr. Donald B. MacGuineas, Washington, D.C., for the respondent.
At the time of his discharge in 1951, Service had been a Foreign Service Officer for some sixteen years, during ten of which, 19351945, he had served in various capacities in China. In April 1945, shortly after his return to this country, Service became involved in the so-called Amerasia investigation through having furnished to one Jaffe, the editor of the Amerasia magazine, copies of certain of his Foreign Service reports. Two months later, Service, Jaffe and others were arrested and charged with violating the Espionage Act, 1 but the grand jury, in August 1945, refused to indict Service. He was thereupon restored to active duty in the Foreign Service, from which he had been on leave of absence since his arrest, and returned to duty in the Far East.
From then on Service's loyalty and standing as a security risk were under recurrent investigation and review by a number of governmental agencies under the provisions of Executive Order No. 9835, 2 establishing the President's Loyalty Program, and otherwise. He was accorded successive 'clearances' by the State Department in each of the years 1945, 1946 and 1947, 3 and a fourth clearance in 1949 by that Department's Loyalty Security Board, which, however, was directed by the Loyalty Review Board of the Civil Service Commission, when the case was examined by it on 'post-audit,' 4 to prefer charges against Service and conduct a hearing thereon. This was done, and on October 6, 1950, after extensive hearings, the Department Board concluded that 'reasonable grounds do not exist for belief that * * * Service is disloyal to the Government of the United States * * *,' and that '* * * he does not constitute a security risk to the Department of State.' These findings were approved by the Duputy Under Secretary of State, acting pursuant to authority delegated to him by the Secretary. 5 Again, however, the Loyalty Review Board, on post-audit, remanded the case to the Department Board for further consideration. 6 Such consideration was had, this time under the more stringent loyalty standard established by Executive Order No. 10241, 7 amending the earlier Executive Order No. 9835, and again the Department Board, on July 31, 1951, decided favorably to Service. This determination was likewise approved by the Deputy Under Secretary. However, on a further post-audit, the Loyalty Review Board decided to conduct a new hearing itself, which resulted this time in the Board's finding that there was a reasonable doubt as to Service's loyalty, and in its advising the Secretary of State, on December 13, 1951, that in the Board's opinion Service 'should be forthwith removed from the rolls of the Department of State' and that 'the Secretary should approve and adopt the proceedings' had before the Board. 8 On the same day the Department notified Service of his discharge, effective at the close of business on the following day.
'2. On December 13, 1951, I received a letter from the Chairman of the Loyalty Review Board of the Civil Service Commission submitting to me that Board's opinion, dated December 12, 1951, in the case of John S. Service, a Foreign Service officer of the Department of State and the plaintiff in this action.
'3. On that same day I considered what action should be taken in the light of the opinion of the Loyalty Review Board, recognizing that whatever action taken would be of utmost importance to the administration of the Government Employees Loyalty Program. I understood that the responsibility was vested in me to make the necessary determination under both Executive Order No. 9835, as amended, and under Section 103 of Public Law 188, 82d Congress, as to what action to take.
'4. Acting in the exercise of the authority vested in me as Secretary of State by Executive Order 9835, as amended by Executive Order 10241, and also by Section 103 of Public Law 188, 82d Congress ( 65 Stat. 575, 581), I made a determination to terminate the services of Mr. Service as a Foreign Service Officer in the Foreign Service of the United States.
While cross-motions for summary judgment were pending before the District Court, this Court rendered its decision in Peters v. Hobby, 349 U.S. 331, 75 S.Ct. 790, 99 L.Ed. 1129, holding that under Executive Order No. 9835, the Loyalty Review Board had no authority to review, on post-audit, determinations favorable to employees made by department or agency authorities, or to adjudicate individual cases on its own motion. On the authority of that decision, the District Court declared the finding and opinion of the Loyalty Review Board respecting Service to be a nullity, and directed the Civil Service Commission to expunge from its records the Board's finding that there was reasonable doubt as to his loyalty. But since petitioner's removal rested not only upon Executive Order No. 9835, as amended, but also upon the McCarran Rider, the District Court sustained petitioner's discharge as a valid exercise of the 'absolute discretion' conferred upon the Secretary by the latter provision, and granted summary judgment in favor of respondents in all other respects. 12 The Court of Appeals affirmed, 98 U.S.App.D.C. 268, 235 F.2d 215, and this Court granted certiorari, 352 U.S. 905, 77 S.Ct. 147, 1 L.Ed.2d 115, because of the importance of the questions involved to federal administrators and employees alike.
Petitioner here attacks the validity of the termination of his employment on two separate grounds: First, he contends that the Secretary's exercise of discretion was invalid since the findings and opinion of the Loyalty Review Board, upon which alone the Secretary acted, were void, because they were rendered without jurisdiction 13 and were based upon procedures assertedly contrary to due process of law. Even conceding that the Secretary's powers under the McCarran Rider were such that he was not required to state the grounds for his decision, petitioner urges, his decision cannot stand because he did in fact rely upon grounds that are invalid. See Securities and Exchange Commission v. Chenery Corp., 318 U.S. 80, 63 S.Ct. 454, 87 L.Ed. 626; Perkins v. Elg. 307 U.S. 325, 59 S.Ct. 884, 83 L.Ed. 1320. Second, petitioner contends that the Secretary's action is subject to attack under the principles established by this Court's decision in United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260, 74 S.Ct. 499, 98 L.Ed. 681, namely, that regulations validly prescribed by a government administrator are binding upon him as well as the citizen, and that this principle holds even when the administrative action under review is discretionary in nature. Regulations relating to 'loyalty and security of employees' which had been promulgated by the Secretary, petitioner asserts, were intended to govern discharges effected under the McCarran Rider as well as those effected under Executive Order No. 9835, as amended, and because those regulations were violated by the Secretary in this case, so petitioner claims, him dismissal by the Secretary cannot stand. Since, for reasons discussed hereafter, we have concluded that petitioner's second contention must be sustained, we do not reach the first.
We think it is not open to serious question that the departmental Regulations upon which petitioner relies were applicable to McCarran Rider discharges as well as to those effected pursuant to the Loyalty-Security program. The terms of the Regulations, the fact that the Department itself proceeded in this very case under those Regulations down to the point of petitioner's discharge, representations made by the State Department to Congress relating to its practices under the McCarran Rider, and the announced wish of the President to the effect that McCarran Rider authority should be exercised subject to procedural safeguards designed to protect 'the personal liberties of employees,' all combine to lead to that conclusion. We also think it clear that these Regulations were valid, so far as their validity is put in issue by the respondents in this case.
In May and September 1951, prior to the time of petitioner's discharge, the Regulations were revised, and the amended § 391 provided even more explicitly than the original that the procedures and standards established were intended to govern exercise of the authority granted by the McCarran Rider. After stating in the first subsection 17 that the Regulations were adopted to implement the Department's policy that 'no person be employed in the Department 18 who is disloyal or who constitutes a security risk,' the section continues in the next two subsections 19 to state in effect that the Regulations relating to the handling of loyalty cases were promulgated in accordance with Executive Order No. 9835, and that those relating to security cases were promulaged under the authority of the Act of August 26, 1950 20 and the McCarran Rider. 21 The phrase 'so far as possible,' in reference to McCarran Rider authority, was deleted. The Regulations thus drew upon all the sources of authority available to the Secretary with reference to such cases, and purported to set forth definitively the procedures and standards to be followed in their handling.
The administrative proceedings held in petitioner's case were unquestionably conducted on the premise that the Regulations were applicable in this instance. The charges were based on the Regulations, and a copy of the Regulations was sent to Service along with the letter of charges. The hearing was scheduled under § 395 of the 1949 Regulations. In its opinion exonerating Service, the Department Board noted, following the Regulations, that 'the issues here are (1) loyalty, and (2) security risk.' The Board's favorable recommendations came twice before the Deputy Under Secretary for review under §§ 395.6 and 396.7 of these Regulations, and were approved by him. Later, before the Civil Service Commission's Loyalty Review Board, an additional charge was added to the Department's original charges by stipulation of the parties, and the stipulation expressly referred to §§ 392.2 and 393.1a of the Regulations. Indeed, at no time during any of the administrative proceedings in this case was there any suggestion that the Regulations were not applicable to the entire proceedings and binding upon all parties to the case.
'* * * The policy of the Department prior to the passage of the McCarran rider was that if there was reasonable doubt as to an employee's loyalty, his employment was required to be terminated. The McCarran rider freed the hands of the Department in making this policy effective. Basically any reasonable doubt of an employee's loyalty if based on substantial evidence was to be resolved in favor of the Government. After enactment of the McCarran rider the Department did not contemplate that the legislation required or that the people of this country would countenance the use of 'Gestapo' methods or harassment or persecution of loyal employees who were American citizens on flimsy evidence or hearsay and innuendo. The Department proceeded to develop appropriate procedures designed to implement fully and properly the authority granted the Department under the McCarran rider.
'The McCarran rider * * * was the first of a series of provisions included in each subsequent appropriation act which authorized the Secretary of State in his absolute discretion to 'terminate the employment of any officer or employee of the Department of State or of the Foreign Service of the United States whenever he shall deem such termination necessary or advisable in the interests of the United States.' Accordingly, effective during the 1947 fiscal year, and each fiscal year thereafter, the Department considered the McCarran rider as an additional standard for dealing with security problems in the Department. * * * In (its) considered view the McCarran rider was subject to procedural limitations. The McCarran rider was not interpreted as permitting reckless discharge or the exercise of arbitrary whims.
'I am sure you will agree that in exercising the discretion conferred upon you by Section 1213, every effort should be made to protect the national security without unduly jeopardizing the personal liberties of the employees within your jurisdiction. Procedures designed to accomplish these two objectives are set forth in Public Law 733, 81st Congress, which authorizes the summary suspension of civilian officers and employees of various departments and agencies of the Government, including the Department of State.
The respondents' second agrument is that the Regulations refer explicitly to discharges based on loyalty and security grounds, but make no reference to discharges deemed 'necessary or advisable in the interests of the United States'the sole McCarran Rider standardand hence were not applicable to such discharges. But, as has already been demonstrated, both the Regulations and their historical context show that the Regulations were applicable to McCarran Rider discharges, at least to the extent that they were based on loyalty or security grounds, and we do not see how it could seriously be considered, as the respondents now seem to urge, that Service was not discharged on such grounds. The Secretary's affidavit, 26 and also the Department's formal notice to Service of his discharge, 27 both of which, among other things, refer to Executive Order No. 9835 as well as to the McCarran Rider as authority for the Secretary's action, unmistakably show that the discharge was based on such grounds.
Preliminarily, it must be noted that the parties are in dispute as to which of the two sets of Regulationsthose of 1949 or those of 1951is applicable to petitioner's case, assuming, as we have held, that one or the other must govern. The departmental proceedings against petitioner were begun and were conducted under the 1949 Regulations. However, prior to petitioner's discharge in December 1951, the revised Regulations of May and September 1951 had become effective, and it is under those Regulations, the respondents say, that Service's discharge must be judged. 28 On the other hand, the petitioner contends that the 1949 Regulations remained applicable to his case, since he was not advised of the existence of the 1951 Regulations until after his discharge had been accomplished and the present court proceedings had been commenced. 29 However, it is unnecessary for us to make a choice between the two sets of Regulations, for we find the manner in which petitioner was discharged to have been inconsistent with both. A. The 1949 Regulations.
From this survey, three things appear as to the handling of loyalty and security cases under the 1949 Regulations which are of significance in this case. First, following the decision of the Deputy Under Secretary upon a determination of the Department Loyalty Security Board, there was to be an appeal to the Secretary only if the Deputy's action had been adverse to the employee. In other words, under these Regulations the action of the Deputy Under Secretary, if favorable to the employee, was to be final, the Secretary reserving to himself power to act further only if his Deputy's action was unfavorable to the employee. 35 Second, there was likewise an appeal to the Loyalty Review Board from the Secretary's decision only if his action was adverse to the employee. Again, in other words, a decision of the Secretary favorable to the employee was to be final, and immune from further action by the Loyalty Review Board on post-audit, a rule since confirmed by our decision in Peters v. Hobby, supra. Third, the Secretary reserved the right to deal with such a case under his McCarran Rider authority, outside the Regulations, only in instances where, upon an employee's appeal to the Loyalty Review Board from an unfavorable decision by the Secretary, the decision of that body was favorable to the employee.
Granted, as the respondents argue, that these Regulations gave the petitioner (a) no right of appeal to the Secretary from the Deputy Under Secretary's favorable decision, and (b) no right of appeal at all from the action of the Loyalty Review Board, it does not follow, as the respondents then argue, that the Secretary was free to dismiss the petitioner. For, as has already been observed, the Regulatiosn left the Secretary functus officio with respect to such cases once the Deputy Under Secretary had made a determination favorable to the employee. So here when the Deputy Under Secretary approved the Loyalty Security Board's action of July 31, 1951, clearing the petitioner, under these Regulations the case against Service was closed. 36 Hence Service's subsequent discharge by the Secretary must be deemed to have been in contravention of these 1949 Regulations. 37 The situation under the 1949 Regulations was thus closely analogous to that which obtained in Accardi v. Shaughnessy, supra. There, the Attorney General bound himself not to exercise his discretion until he had received an impartial recommendation from a subordinate board. Here, the Secretary bound himself not to act at all in cases such as this, except upon appeal by employees from determinations unfavorable to them. We see no relevant ground for distinction.
The 'authority referred to in section 391.3,' as we have already noted, included the McCarran Rider. 38 In light of the former Secretary's affidavit 39 there is no room for dispute that no attempt was made to comply with this section of the Regulations, 40 as indeed the respondents' brief virtually concedes.
The respondents argue that this provision was not violated in petitioner's case because 'the only decision to which Section 393.1 relates is that the removal of the officer or employee involved is 'necessary or advisable in the interest of national security," the standard laid down in the Act of August 26, 1950, 41 and that '(n)othing in this section purports to prescribe the procedure to be followed in determining that removal is 'necessary or advisable in the interests of the United States," the standard contained in the McCarran Rider. But since § 391.3, which is incorporated by reference into § 393.1, specifically subjected the exercise of the Secretary's McCarran Rider authority, in such cases as this, to the operation of the 1951 Regulations, it seems clear that the necessary effect of § 393.1 was to subject the exercise of that authority to the substantive standards prescribed by that section, namely, those established by the Act of August 26, 1950, 42 and also to the procedural requirements that such cases must be decided 'on all the evidence' and 'after consideration of the complete file, arguments, briefs, and testimony presented.' The essential meaning of the section, in other words, was that the Secretary's decision was required to be on the merits. While it is of course true that under the McCarran Rider the Secretary was not obligated to impose upon himself these more rigorous substantive and procedural standards, neither was he prohibited from doing so, as we have already held, and having done so he could not, so long as the Regulations remained unchanged, proceed without regard to them.
Judgment of Court of Appeals reversed and case remanded to District Court with directions.
Act of June 15, 1917, c. 30, 40 Stat. 217, as amended, now 18 U.S.C.A. §§ 791794, 2388.
12 Fed.Reg. 1935, 5 U.S.C.A. § 631 note.
See Peters v. Hobby, 349 U.S. 331, 339348, 75 S.Ct. 790, 794, 798, 99 L.Ed. 1129, for a discussion of the then-existing 'post-audit' procedure.
See 354 U.S. 382386, 77 S.Ct. 11621164 and note 16, infra.
This action was based on 'supplementary information * * * received from the Federal Bureau of Investigation,' the nature of which does not appear in the record.
16 Fed.Reg. 3690, 5 U.S.C.A. § 631 note.
'The Department of State announced today that the Loyalty Review Board of the Civil Service Commission has advised the Department that this Board has found a reasonable doubt as to the loyalty of John Stewart Service, Foreign Service Officer.
'Today's decision of the Loyalty Review Board is based on the evidence which was considered by the Department's Board and found to be insufficient on which to base a finding of 'reasonable doubt' as to Mr. Service's loyalty or security. Copies of the Opinions of both Boards are attached.
'The Department of State's Loyalty Security Board, on July 31, 1951, had reaffirmed its earlier findings that Service was neither disloyal nor a security risk, and the case had been referred to the Loyalty Review Board for post-audit on September 4, 1951. The Loyalty Review Board assumed jurisdiction of Mr. Service's case on October 9, 1951.
'The Opinion of the Loyalty Review Board stressed the points made above by the Chairmanthat is, it stated that the Board was not required to find and did not find Mr. Service guilty of disloyalty, but it did find that his intentional and unauthorized disclosure of confidential documents raised reasonable doubt as to his loyalty. The State Department Board while censoring (sic) Mr. Service for indiscretions, believed that the experience Mr. Service had been through as a result of his indiscretions in 1945 had served to make him far more than normally security conscious. It found also that no reasonable doubt existed as to his loyalty to the Government of the United States. On this point the State Department Board was reversed.
'The Chairman of the Loyalty Review Board has requested the Secretary of State to advise the Board of the effective date of the separation of Mr. Service. This request stems from the provisions of Executive Orders 9835 and 10241which established the President's Loyalty Programand the Regulations promulgated thereon. These Regulations are binding on the Department of State.
The District Court's opinion is unreported. Actually, the Secretary could be considered to have power to discharge petitioner as he did only by virtue of the McCarran Rider. Petitioner was an officer in the Foreign Service of the United States, and as such was entitled to the protection of the Foreign Service Act of 1946, as amended. 22 U.S.C. 801 et seq., 22 U.S.C.A. § 801 et seq. That statute authorizes the Secretary of State to separate officers from the Foreign Service 'for unsatisfactory performance of duty,' id., § 1007, or for 'misconduct or malfeasance,' id., § 1008. However, under both sections, an officer may not be separated without a hearing before the Board of the Foreign Service established by § 211 of the Act, 22 U.S.C. 826, 22 U.S.C.A. § 826, and his unsatisfactory performance of duty or misconduct must be established at that hearing. No such hearing was ever afforded petitioner. Executive Order No. 9835 did not vest any additional authority in the heads of administrative agencies to discharge employees. It merely established new standards and procedures for effecting discharges under whatever independent legal authority existed for those discharges. Cf. Cole v. Young, 351 U.S. 536, 543544, 76 S.Ct. 861, 866, 867, 100 L.Ed. 1396. The only statutory provision which could be deemed to authorize the Secretary to dismiss petitioner without observance of the provisions of the Foreign Service Act was therefore the McCarran Rider. The latter provision thus was an indispensable supplement to the Department's authority if it was to proceed against petitioner under the Loyalty-Security Regulations as it did. See 354 U.S. 376, 77 S.Ct. 1159, infra.
See Peters v. Hobby, supra, 349 U.S. at pages 342343, 75 S.Ct. at pages 795, 796, 99 L.Ed. 1129.
This qualification is without significance here in view of the fact that the petitioner's case before the Department was handled, down to the time of his discharge by the Secretary, under these Regulations. See 354 U.S. 376, 77 S.Ct. 1159, infra. Moreover, this phrase was deleted in the 1951 revision of the Regulations, as we note hereafter, 354 U.S. 376, 77 S.Ct. 1159, infra, and the respondents have insisted here that the 1951 revision is controlling, see 354 U.S. 382, 77 S.Ct. 1162, infra.
We follow the parties in this case in using interchangeably the terms 'Deputy Under Secretary' and 'Assistant SecretaryAdministration.' When the Department's 1949 Regulations were promulgated, the official charged with duties under them was the 'Assistant SecretaryAdministration.' At some time thereafter, however, that official's functions were apparently transferred to a Deputy Under Secretary. Cf. Act of May 26, 1949, §§ 3, 4, 63 Stat. 111, 22 U.S.C.A. § 811a, 5 U.S.C.A. § 151c. To avoid confusion, we have used exclusively the latter title in the text of this opinion, regardless of its technical correctness in the particular instance.
'391.1 Policy.' For the Department's 1951 Regulations see U.S. Department of State, Manual of Regulations and Procedures (1951), Vol. I, § 390 et seq.
'Department' is defined as including 'the Foreign Service of the United States.' § 391.3.
This statute is referred to in the subsection as 'Public Law 733, 81st Congress,' being the Act of August 26, 1950, 64 Stat. 476, 5 U.S.C. 221, 223, 5 U.S.C.A. §§ 221, 223, which gave to the State Department, among other departments and agencies of the Government, suspension and dismissal powers over their civilian employees when deemed necessary 'in the interest of the national security of the United States.' Cf. Cole v. Young, 351 U.S. 536, 76 S.Ct. 861, 100 L.Ed. 1396.
S.Rep.No.2108, 81st Cong., 2d Sess., 1516 (emphasis supplied).
98 U.S.App.D.C. 271, 235 F.2d at page 218.
I.e., § 19(c) of the Immigration Act of 1917, as amended: 'In the case of any alien (other than one to whom subsection (d) is applicable) who is deportable under any law of the United States and who has proved good moral character for the preceding five years, the Attorney General may * * * suspend deportation of such alien if he is not ineligible for naturalization or if ineligible, such ineligibility is solely by reason of his race, if he finds (a) that such deportation would result in serious economic detriment to a citizen or legally resident alien who is the spouse, parent, or minor child of such deportable alien; or (b) that such alien had resided continuously in the United States for seven years or more and is residing in the United States upon the effective date of this Act.' 62 Stat. 1206, 8 U.S.C. (1946 ed., Supp. V) § 155(c), now 8 U.S.C.A. § 1254.
See 354 U.S. 368, 369, 77 S.Ct. 1155, supra.
'The Secretary of State was advised today by the Chairman of the Loyalty Review Board of the U.S. Civil Service Commission that the Loyalty Review Board has found that there is a reasonable doubt as to your loyalty to the Government of the United States. This finding was based on the intentional and unauthorized disclosure of documents and information of a confidential and nonpublic character within the meaning of subparagraph d of Paragraph 2 of Part V of Executive Order 9835, as amended. The Loyalty Review Board further advised that it found no evidence of membership on your part in the Communist Party or in any organizations on the Attorney General's list.
'Pursuant to the foregoing, the Secretary of State, under the authority of Executive Order 9835, as amended, and Section 103 of Public Law 188, 82nd Congress, has directed me to terminate your employment in the Foreign Service of the United States as of the close of business December 14, 1951.
The respondents argue that the proper rule to be applied is that of Vandenbark v. Owens-Illinois Glass Co., 311 U.S. 538, 61 S.Ct. 347, 85 L.Ed. 327, holding that a change in the applicable law after a case has been decided by a nisi prius court, but before decision on appeal, requires the appellate court to apply the changed law. And see Ziffrin, Inc. v. United States, 318 U.S. 73, 63 S.Ct. 465, 87 L.Ed. 621.
Petitioner argues that the decisions cited in note 28, supra, are not in point here because, inter alia, the changed regulations were invalid as to him under the Federal Register Act, 49 Stat. 502, 44 U.S.C. 307, 44 U.S.C.A. § 307, and the Administrative Procedure Act, 60 Stat. 238, 5 U.S.C. 1002, 5 U.S.C.A. § 1002, because not published in the Federal Register.
'* * * I am in full charge of loyalty matters and * * * am fully prepared to deal with these charges.
'Gen. George C. Marshall, as Secretary of State, vested in me full responsibility and authority for carrying out the loyalty and security program of the Department of State, and I have continued to exercise the same responsibility and authority under Secretary Dean Acheson.
'If the Assistant SecretaryAdministration or the Secretary of State shall, during his consideration of any case, decide affirmatively that an officer or employee is not disloyal and does not constitute a security risk and that his case should be closed, such officer or employee shall be restored to duty, if suspended, and the record shall show such decision.' In holding as we do we by no means imply that under these Regulations the action of the Deputy Under Secretary had the effect of 'closing' petitioner's case irrevocably and beyond hope of recall. No doubt proper steps could have been taken to reopen it in the Department. But, consistent with his Regulations, we think that the Secretary could in no event have discharged the petitioner, as he did here, without the required action first having been taken by the Department's Loyalty Security Board and the Deputy Under Secretary.
See 354 U.S. 375, 376, 77 S.Ct. 1158, supra.
We do not, of course, imply that the Regulations precluded the Secretary from discharging any individual without personally reading the 'complete file' and considering 'all the evidence.' No doubt the Secretary could delegate that duty. But nothing of the kind appears to have been done here.
Because of this conclusion it is unnecessary to deal with the other respects in which petitioner claims his discharge violated the 1951 Regulations.
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